-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XZQ09Cm+hB7VO5YYykaKuj5PEWhrqVS4d30EeBDpe6U3Sg1Os/F1HKBBMWeL6JQz XQDTcapWXqswPvCKprsXaw== 0000894405-95-000004.txt : 19950414 0000894405-95-000004.hdr.sgml : 19950414 ACCESSION NUMBER: 0000894405-95-000004 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950509 FILED AS OF DATE: 19950410 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARKANSAS BEST CORP /DE/ CENTRAL INDEX KEY: 0000894405 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 710673405 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-19969 FILM NUMBER: 95527743 BUSINESS ADDRESS: STREET 1: 1000 SOUTH 21 ST CITY: FORT SMITH STATE: AR ZIP: 72901 BUSINESS PHONE: 5017856000 MAIL ADDRESS: STREET 1: P O BOX 48 CITY: FORT SMITH STATE: AR ZIP: 72902 DEF 14A 1 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ______) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 ARKANSAS BEST CORPORATION ----------------------------------------------- (Name of Registrant as Specified In Its Charter) Richard F. Cooper Secretary 3801 Old Greenwood Road Fort Smith, AR 72903 ----------------------------------------- (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box): [X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2) [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3) [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11:* 4) Proposed maximum aggregate value of transaction: *Set forth the amount on which the filing fee is calculated and state how it was determined. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: ARKANSAS BEST CORPORATION April 10, 1995 To the Shareholders of Arkansas Best Corporation: You are cordially invited to attend the Annual Meeting of Shareholders of Arkansas Best Corporation on Tuesday, May 9, 1995 at 9:00 a.m. at 3801 Old Greenwood Road, Fort Smith, Arkansas 72903. A notice of the meeting, a proxy card and a proxy statement containing information about the matters to be acted upon are enclosed. It is important that your shares be represented at the meeting. We look forward to the Annual Meeting of Shareholders and we hope you will attend the meeting or be represented by proxy. WE URGE YOU TO SIGN AND DATE YOUR ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID ENVELOPE EVEN IF YOU ARE PLANNING TO ATTEND THE MEETING. William A. Marquard Robert A. Young III Chairman of the Board President-Chief Executive Officer ARKANSAS BEST CORPORATION, POST OFFICE BOX 10048 FORT SMITH, ARKANSAS 72917-0048 ARKANSAS BEST CORPORATION NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held May 9, 1995 To the Shareholders: The Annual Meeting of Shareholders of Arkansas Best Corporation, a Delaware corporation, will be held at 3801 Old Greenwood Road, Fort Smith, Arkansas 72903 on Tuesday, May 9, 1995 at 9:00 a.m. for the following purposes: 1. To elect two Class III directors for terms to expire at the 1998 Annual Meeting of Shareholders; 2. To approve an amendment to the Arkansas Best Corporation 1992 Stock Option Plan; 3. To ratify the appointment of Ernst & Young LLP as independent auditors for fiscal year 1995; 4. To act upon such other matters as may properly be brought before the meeting affecting the business and affairs of the Company. Only shareholders of record at the close of business on March 13, 1995 will be entitled to notice of and to vote at the meeting or any adjournment thereof. PLEASE COMPLETE, SIGN AND DATE YOUR ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. By Order of the Board of Directors, Fort Smith, Arkansas Richard F. Cooper April 10, 1995 Secretary ARKANSAS BEST CORPORATION PROXY STATEMENT This Proxy Statement is furnished to the shareholders of Arkansas Best Corporation ("ABC" or the "Company"), in connection with the solicitation of proxies on behalf of the ABC Board of Directors (the "Board") to be voted at the Annual Meeting of Shareholders on May 9, 1995 ("1995 Annual Meeting") for the purposes set forth in the accompanying Notice of Meeting. This Proxy Statement and Notice of Meeting, the related proxy card and the 1994 Annual Report to Shareholders are being mailed to shareholders beginning on or about April 10, 1995. ABC's principal place of business is 3801 Old Greenwood Road, Fort Smith, Arkansas 72903, and its telephone number is 501/785-6000. RECORD DATE The Board has fixed the close of business on March 13, 1995 as the record date for the 1995 Annual Meeting. Only shareholders of record on that date will be entitled to vote at the meeting in person or by proxy. PROXIES The proxies named on the enclosed proxy card were appointed by the Board to vote the shares represented by the proxy card. Upon receipt by the Company of a properly signed and dated proxy card, the shares represented thereby will be voted in accordance with the instructions on the proxy card. If a shareholder does not return a signed proxy card, his or her shares cannot be voted by proxy. Shareholders are urged to mark the ovals on the proxy card to show how their shares are to be voted. If a shareholder returns a signed proxy card without marking the ovals, the shares represented by the proxy card will be voted as recommended by the Board herein and in the proxy card. The proxy card also confers discretionary authority to the proxies to vote on any other matter not presently known to management that may properly come before the meeting. Any proxy delivered pursuant to this solicitation is revocable at the option of the person(s) executing the same (i) upon receipt by the Company before the proxy is voted of a duly executed proxy bearing a later date, (ii) by written notice of revocation to the Secretary of the Company received before the proxy is voted or (iii) by such person(s) voting in person at the 1995 Annual Meeting. VOTING SHARES On the record date, there were 19,513,708 shares of common stock outstanding and entitled to vote ("Common Stock"). Each share of Common Stock is entitled to one vote. The holders in person or by proxy of a majority of the total number of the shares of Common Stock shall constitute a quorum for purposes of the 1995 Annual Meeting. 1. ELECTION OF DIRECTORS The Board is divided into three classes of directorships, with directors in each class serving staggered three-year terms. At each annual meeting of shareholders, the terms of directors in one of the three classes expire. At that annual meeting of shareholders, directors are elected in a class to succeed the directors whose terms expire, the terms of the directors so elected to expire at the third annual meeting of shareholders thereafter. Pursuant to the Company's Certificate of Incorporation, the Board has fixed the number of directorships at six: two in the class to be elected at the 1995 Annual Meeting of Shareholders whose members' terms will expire at the 1998 Annual Meeting of Shareholders, two in the class whose members' terms will expire at the 1996 Annual Meeting of Shareholders, and two in the class whose members' terms will expire at the 1997 Annual Meeting of Shareholders. It is intended that the shares represented by the accompanying proxy will be voted at the 1995 Annual Meeting for the election of nominees Frank Edelstein and Robert A. Young III as the two directors in the class of directorships whose members' terms will expire in 1998, unless the proxy specifies otherwise. Each nominee has indicated his willingness to serve as a member of the Board, if elected. If, for any reason not presently known, Messrs. Edelstein and/or Young will not be available for election at the time of the 1995 Annual Meeting, the shares represented by the accompanying proxy may be voted for the election in his/their stead of substitute nominee(s) designated by the Board or a committee thereof, unless the proxy withholds authority to vote for all nominees. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL. Assuming the presence of a quorum, to be elected a nominee must receive the affirmative vote of the holders of a majority of the Common Stock present, in person or by proxy, at the 1995 Annual Meeting. DIRECTORS OF THE COMPANY The following information relates to the nominees named above and to the other persons whose terms as directors will continue after the 1995 Annual Meeting. Name Age Business Experience CLASS III -- Term Expires May 1995 Frank Edelstein 69 Mr. Edelstein has been a Director of the Company since November 1988. Mr. Edelstein currently provides consulting services to Kelso & Company, Inc. and to The Gordon + Morris Group. Mr. Edelstein served as a Vice President of Kelso & Company, Inc. from 1986 to March 1992. Prior to 1986, he served as Chairman and President of International Central Bank & Trust Company and CPI Pension Services, Inc., as well as Senior Vice President, Financial Services Group, at Continental Insurance Corporation. He also has held positions as Corporate Vice President, Automatic Data Processing, Inc. and Executive Vice President of Olivetti Corporation of America. Mr. Edelstein also is a Director of Americold Corporation, Ceradyne, Inc., IHOP Corp., and DMI, Inc. Robert A. Young III 54 Mr. Young has been Chief Executive Officer of the Company since August 1988, President since 1973 and was Chief Operating Officer from 1973 to 1988. Mr. Young also has been Chief Executive Officer of Treadco, Inc. since June 1991. Mr. Young has been a Director of the Company since 1970 and a Director of Treadco, Inc. since June 1991. Mr. Young also is a Director of Mosler, Inc. CLASS I -- Term Expires May 1996 William A. Marquard 75 Mr. Marquard has been Chairman of the Board and a Director of the Company since November 1988 and a Director of Treadco, Inc. since June 1991. In April 1992, Mr. Marquard was elected as a Director and Vice Chairman of the Board of Kelso & Company, Inc. From 1971 to 1983, Mr. Marquard was President and Chief Executive Officer of American Standard Inc. and from 1979 to 1985, he was Chairman of the Board of American Standard Inc. Mr. Marquard resumed his position as Chairman of the Board of American Standard Inc. in February 1989 until March 31, 1992 when he was named Chairman Emeritus. Mr. Marquard also became Chairman of the Board of ASI Holding Corporation in February 1989 until March 31, 1992, when he was named Chairman Emeritus. Mr. Marquard is a Director of Mosler, Inc., Americold Corporation, Earle M. Jorgensen Co., and EarthShell Container Corporation. Name Age Business Experience Alan J. Zakon, Ph.D 59 Dr. Zakon has been a Director of the Company since February 1993. Dr. Zakon was a Managing Director of Bankers Trust Company through March, 1995, for which he previously served as Chairman, Strategic Policy Committee from 1989 to 1990. From 1980 to 1986, Dr. Zakon was President of Boston Consulting Group before being named its Chairman in 1986, having previously served as Consultant from 1967 to 1969 and Vice President from 1969 to 1980. Dr. Zakon is currently serving as a member of the Board of Directors of several companies, including Augat Corporation, Autotote Corporation, Hechinger Corporation, and Laurentian Capital Corporation, and is a former member of the Advisory Committee to the Stanford University Graduate School of Business. CLASS II -- Term Expires May 1997 Arthur J. Fritz, Jr. 54 Mr. Fritz has been a Director of the Company since April 1989. From 1971 to 1986, Mr. Fritz was President of Fritz Companies, Inc. and its Chairman from 1986 to 1988. Mr. Fritz has served as Chairman of JABAR Enterprises since October 1988 and is a Director of Intercargo Corporation and Landstar Systems, Inc. Mr. Fritz is former President and Chairman of the National Association of Customs Brokers and Freight Forwarders of America. John H. Morris 51 Mr. Morris has been a Director of the Company since July 1988 and a Director of Treadco, Inc. since June 1991. Mr. Morris currently serves as President of The Gordon + Morris Group. Mr. Morris served as a Managing Director of Kelso & Company, Inc. from March 1989 to March 1992, was a General Partner from 1987 to March 1989, and prior to 1987 was a Vice President. Prior to 1985, Mr. Morris was President of LBO Capital Corp. BOARD OF DIRECTORS AND COMMITTEES The business of the Company is managed under the direction of the Board of Directors. The Board meets on a regularly scheduled basis four times a year to review significant developments affecting the Company and to act on matters requiring Board approval. It also holds special meetings when an important matter requires Board action between scheduled meetings. The Board met five times and acted by unanimous written consent eight times during 1994. During 1994, each member of the Board participated in at least 75% of all Board and applicable committee meetings held during the period for which he was a director, except Mr. Fritz, who missed two meetings. The Board has established Audit, Executive Compensation and Development, and Stock Option committees to devote attention to specific subjects and to assist it in the discharge of its responsibilities. The functions of those committees, their current members and the number of meetings held during 1994 are described below. The Board does not have a committee for nomination of directors. The Board nominates candidates for director. Audit Committee. The Audit Committee recommends to the Board the appointment of the firm selected to be independent public accountants for the Company and monitors the performance of such firm; reviews and approves the scope of the annual audit and quarterly reviews and evaluates with the independent public accountants the Company's annual audit and annual consolidated financial statements; reviews with management the status of internal accounting controls; evaluates problem areas having a potential financial impact on the Company which may be brought to its attention by management, the independent public accountants or the Board; and evaluates all public financial reporting documents of the Company. Messrs. Edelstein, Fritz, Morris, and Zakon currently are members of the Audit Committee. The Audit Committee met once during 1994. Executive Compensation and Development Committee. The Executive Compensation and Development Committee is responsible for reviewing executive management's performance and for determining appropriate compensation. Messrs. Marquard, Morris and Young currently are members of the Executive Compensation and Development Committee. The Executive Compensation and Development Committee met once during 1994. Stock Option Committee. The Stock Option Committee administers the Company's Incentive Stock Option Plan ("Stock Option Plan"). The Stock Option Committee has the power to determine from time to time the individuals to whom options shall be granted, the number of shares to be covered by each option, and the time or times at which options shall be granted. Messrs. Fritz, Edelstein, and Zakon currently are members of the Stock Option Committee. The Stock Option Committee met once during 1994. Director Compensation. Mr. Young, as an officer of the Company, receives no compensation for services as a director or committee member. Mr. Marquard, as Chairman, receives a $62,500 annual retainer and $1,000 for each Board meeting attended and for each meeting of a committee of the Board attended. Other non-employee directors receive a $25,000 annual retainer and $1,000 for each Board meeting attended and for each meeting of a committee of the Board attended. Non-employee directors each received stock options on May 12, 1994, for 7,500 shares of the Company's Common Stock at a fair market value exercise price of $12.125 per share. On each anniversary date of the grant, 20% of the options vest and thereafter can be exercised through the tenth year after the grant date. PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP The following table sets forth certain information concerning beneficial ownership of the Company's Common Stock as of March 13, 1995, by (i) each person who is known by the Company to own beneficially more than five percent (5%) of the outstanding shares of Common Stock, (ii) each director and named executive officer of the Company and (iii) all directors and executive officers as a group.
Shares Percentage Beneficially of Shares Owned Outstanding (i) Name / Address FMR Corp. (1) 2,813,305 14.65 82 Devonshire Street Boston, MA 02109 State of Wisconsin Investment Board (2) 1,813,000 9.44 P. O. Box 7842 Madison, WI 53707 MacKay-Shields Financial Corporation (3) 2,051,685 10.50 9 West 57th Street New York, NY 10019 Neuberger & Berman (4) 958,300 5.03 605 Third Avenue New York, NY 10158 Sound Shore Management, Inc. (5) 1,101,000 5.06 8 Sound Shore Drive Greenwich, CT 06836 (ii) Name Position Robert A. Young III (6)(7)(8)(9) Director, President, Chief Executive Officer 2,028,582 10.4 William A. Marquard (7)(10) Director 142,548 * John H. Morris (7)(11) Director 110,515 * Arthur J. Fritz, Jr. (7)(12) Director 34,471 * Frank Edelstein (7)(13) Director 6,323 * Alan J. Zakon (7) Director 6,500 * Donald L. Neal (7)(8) Senior Vice President 64,791 * David E. Stubblefield (7)(8)(14) President-CEO, ABF 92,765 * Jerry A. Yarbrough (7)(8)(15) Senior Vice President, ABF 92,877 * John R. Meyers (7)(8) Vice President 27,839 * E. George Myers (7)(8) Vice President 13,815 * Richard F. Cooper (7)(8) Vice President 10,907 * R. David Slack (7)(8) Vice President 10,125 * (iii) All Directors and Executive Officers as a Group (16) 2,642,058 13.5 *Less than 1% (1) According to the most recent Schedule 13G it has provided to the Company, FMR Corp. has, through certain subsidiaries or other entities it controls, the following voting and investment powers with respect to such shares: (a) sole voting power, 404,905; (b) shared voting power, none; (c) sole investment power, 2,813,305; (d) shared investment power, none. One wholly-owned subsidiary, Fidelity Management & Research Company, is the beneficial owner of 2,408,400 shares or 12.54% of the Company's Common Stock. (2) According to the most recent Schedule 13G it has provided to the Company, the State of Wisconsin Investment Board has the following voting and investment powers with respect to such shares: (a) sole voting power, 1,813,000; (b) shared voting power, not applicable; (c) sole investment power, 1,813,000; (d) shared investment power, not applicable. (3) According to the most recent Schedule 13G it has provided to the Company, MacKay-Shields Financial Corporation beneficially owns 1,892,700 shares of the Company's Common Stock and could acquire 158,985 shares of the Company's Common Stock upon conversion of the Company's Preferred Stock, and has the following voting and investment powers with respect to such shares: (a) sole voting power, not applicable; (b) shared voting power, 2,051,685; (c) sole investment power, not applicable; (d) shared investment power, 2,051,685. (4) According to the most recent Schedule 13G it has provided to the Company, Neuberger & Berman has the following voting and investment powers with respect to such shares: (a) sole voting power, 801,300; (b) shared voting power, 130,000; (c) sole investment power, none; (d) shared investment power, 958,300. (5) According to the most recent Schedule 13G it has provided to the Company, Sound Shore Management, Inc. has the following voting and investment powers with respect to such shares: (a) sole voting power, 1,022,300; (b) shared voting power, not applicable; (c) sole investment power, 1,101,000; (d) shared investment power, not applicable. (6) The business address for such person is c/o Arkansas Best Corporation, 3801 Old Greenwood Road, Fort Smith, Arkansas 72903. (7) Includes vested stock option shares of Common Stock, purchasable within sixty (60) days, as follows: Messrs. Young, 21,840; Marquard, 1,500; Morris, 1,500; Fritz, 1,500; Edelstein, 1,500; Zakon, 1,500; Neal, 8,200; Stubblefield, 8,200; Yarbrough, 8,200; Meyers, 6,280; Myers, 6,280; Cooper, 6,280; and Slack, 6,280. (8) Includes shares allocated through March 13, 1995, to Investment Plan accounts as follows: Messrs. Young, 1,103; Neal, 651; Stubblefield, 655; Yarbrough, 767; Meyers, 581; Myers, 542; Cooper, 581; and Slack, 548, each of whom disclaims beneficial ownership of such shares. (9) Mr. Young directly owns 10,000 shares (less than 1%) of Treadco, Inc.'s ("Treadco") outstanding common stock. Because Mr. Young is a director and greater than 10% stockholder of the Company, Mr. Young may be deemed to be the indirect beneficial owner of all shares of Treadco owned by the Company (2,319,700 shares or 46.4% of the total number of shares outstanding). (10) Mr. Marquard directly owns 10,000 shares (less than 1%) of Treadco's outstanding common stock. (11) Mr. Morris indirectly owns 109,015 shares as co-trustee of the John H. Morris and Sharon L. Morris Family Trust. (12) Includes 11,993 shares held by Trayjen, L.P., which are indirectly owned by Mr. Fritz by virtue of his status as general partner. (13) Mr. Edelstein indirectly owns 4,823 shares as joint trustee of the Edelstein Living Trust. (14) Mr. Stubblefield has been President and Chief Executive Officer of ABF Freight System, Inc. ("ABF"), a subsidiary of the Company, since January 1, 1995. From 1979 through 1994, Mr. Stubblefield was Senior Vice President - Marketing of ABF. (15) Effective January 1, 1995, Mr. Yarbrough resigned from ABF and was appointed Chairman and Chief Executive Officer of Integrated Distribution, Inc., another subsidiary of the Company. (16) All directors and executive officers of the Company as a group may be deemed to beneficially own, directly or indirectly, approximately 2,340,700 shares of Treadco common stock.
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.
Years at the Name Age Business Experience Company* Robert A. Young III 54 See previous description. 30 President-Chief Executive Officer Donald L. Neal 64 Mr. Neal has been Senior Vice President ofthe 36 Senior Vice President- Company since 1979 and Chief Financial Officer Chief Financial Officer since 1984. Prior to 1984, Mr. Neal was Senior Vice President-Comptroller. Mr. Neal has been Vice President-Chief Financial officer of Treadco, Inc. ("Treadco"), a subsidiary of the Company, since June 1991. John R. Meyers 47 Mr. Meyers has been Vice President-Treasurer 22 Vice President-Treasurer of the Company since 1979. Mr. Meyers also has been Treasurer of Treadco since June 1991. David E. Stubblefield 57 Mr. Stubblefield has been President and Chief 35 ABF President- Executive Officer of ABF Freight System, Inc. Chief Executive Officer ("ABF"), the Company's largest subsidiary, since January 1, 1995, and a Director of ABF since 1985. From 1979 through 1994, Mr. Stubblefield was Senior Vice President- Marketing of ABF. Richard F. Cooper 43 Mr. Cooper has been Vice President-Risk 11 Vice President-Risk Management of the Company since April 1991 and Management, General Vice President-General Counsel since 1986. Counsel and Secretary Mr. Cooper has been Secretary since 1987. Mr. Cooper also has been Secretary of Treadco since June 1991. R. David Slack 52 Mr. Slack has been Vice President-Comptroller 25 Vice President-Comptroller of the Company since January 1990. From January 1989 to January 1990, Mr. Slack was Comptroller. Prior to 1989, Mr. Slack was a director in the Accounting Department. E. George Myers 58 Mr. Myers has been Vice President-Human 36 Vice President- Resources of the Company since November 1990. Human Resources Prior to November 1990, Mr. Myers was a Regional Vice President-Operations of ABF. * Includes years at subsidiaries.
EXECUTIVE COMPENSATION The following table sets forth information regarding compensation paid during each of the Company's last three fiscal years to the Company's Chief Executive Officer and each of the Company's other most highly compensated executive officers, based on salary and bonus earned during 1994. SUMMARY COMPENSATION TABLE
Long-Term Compensation Annual Compensation Awards Payouts (a) (b) (c) (d) (e) (f) (g) (h) (i) Securities Name Other Restricted Underlying and Annual Stock Options/ LTIP All Other Principal Salary Bonus Compensation Award(s) SARs Payouts Compensation Position Year ($) ($)(1) ($) ($) (#)(2) ($) ($)(3) Robert A. Young III 1994 $362,500 $33,079 - - - - $89,977 President and Chief 1993 330,000 - - - - - 77,215 Executive Officer 1992 300,000 53,261 - - 54,600 - 98,094 Donald L. Neal 1994 169,167 33,079 - - - - 150,962 Senior Vice President- 1993 159,000 - - - - - 101,409 Chief Financial Officer 1992 145,000 53,261 - - 20,500 - 60,971 David E. Stubblefield 1994 169,167 33,079 - - - - 48,391 Senior Vice President-Marketing 1993 159,000 - - - - - 34,177 and Director of ABF 1992 145,000 53,261 - - 20,500 - 34,422 Jerry A. Yarbrough (4) 1994 169,167 33,079 - - - - 41,163 Senior Vice President-Operations 1993 159,000 - - - - - 29,780 and Director of ABF 1992 145,000 53,261 - - 20,500 - 28,413 John R. Meyers 1994 125,667 18,001 - - - - 14,584 Vice President-Treasurer 1993 121,900 - - - - - 8,834 1992 111,667 32,367 - - 15,700 - 10,258 Richard F. Cooper 1994 125,667 18,001 - - - - 12,219 Vice President-Risk Management, 1993 121,900 - - - - - 8,167 General Counsel and Secretary 1992 111,667 32,367 - - 15,700 - 8,815 R. David Slack 1994 125,667 18,001 - - - - 23,078 Vice President-Comptroller 1993 121,900 - - - - - 13,106 1992 111,667 32,367 - - 15,700 - 15,074 E. George Myers 1994 125,667 18,001 - - - - 38,137 Vice President-Human Resources 1993 121,900 - - - - - 16,994 1992 111,667 32,367 - - 15,700 - 16,471 (1) Reflects bonus earned during the fiscal year. Bonuses are normally paid during the next fiscal year. (2) Options to acquire shares of Common Stock. (3) "All Other Compensation" includes the following for Messrs. Young, Neal, Stubblefield, Yarbrough, Meyers, Cooper, Slack and Myers, (i) Company matching of contributions to the Company's Employees Investment Plan of $1,500; $1,500; $1,500; $1,500; $1,257; $1,257; $1,257 and $1,257 for each named executive, respectively; (ii) amounts accrued under the Company's Supplemental Benefit Plan of $57,770; $67,832; $24,105; $20,801; $6,375; $5,846; $10,053 and $12,802 for each named executive, respectively; and (iii) amounts accrued under Deferred Salary Agreements of $30,707; $81,630; $22,786; $18,862; $7,222; $5,116; $11,768; and $24,078 for each named executive, respectively. The Deferred Salary Agreements are not performance-based incentive plans. (4) Effective January 1, 1995, Mr. Yarbrough resigned from ABF and was appointed Chairman and Chief Executive Officer of Integrated Distribution, Inc., another subsidiary of the Company.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTIONS/SAR VALUES The following table provides information related to options exercised by the named executive officers during the 1994 fiscal year and the number and value of options held at fiscal year end. The Company does not have any outstanding stock appreciation rights.
Number of Securities Shares Underlying Unexercised Options/ In-the-Money Options/SARs Acquired Value SARs at Fiscal Year-End (#) at Fiscal Year-End ($)(1) Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable Robert A. Young III - - 21,840 32,760 $27,300 $40,950 Donald L. Neal - - 8,200 12,300 10,250 15,375 David E. Stubblefield - - 8,200 12,300 10,250 15,375 Jerry A. Yarbrough - - 8,200 12,300 10,250 15,375 John R. Meyers - - 6,280 9,420 7,850 11,775 Richard F. Cooper - - 6,280 9,420 7,850 11,775 R. David Slack - - 6,280 9,420 7,850 11,775 E. George Myers - - 6,280 9,420 7,850 11,775 (1) The closing price for the Company's Common Stock as reported by the NASDAQ Stock Market on December 30, 1994 was $12.125. Value is calculated on the basis of the difference between the option exercise price and $12.125 multiplied by the number of shares of Common Stock underlying the option.
REPORT ON EXECUTIVE COMPENSATION BY THE EXECUTIVE COMPENSATION AND DEVELOPMENT COMMITTEE AND STOCK OPTION COMMITTEE The Company is engaged in the highly competitive and evolving freight transportation industry. To be able to continue its past growth and succeed in the future, the Company believes it must be able to retain its executive management team and to attract additional qualified executives when needed. The Company's philosophy that compensation of the executive management team should be materially linked to both operating and stock price performance with the goal of enhancing the value of the Company is administered by its Executive Compensation and Development Committee ("Compensation Committee") and its Stock Option Committee. The Compensation Committee is comprised of Messrs. Marquard, Morris, and Young and the Stock Option Committee is comprised of Messrs. Edelstein, Fritz, and Zakon. All Committee Members are non-employee directors except Mr. Young, who is the Company's President-Chief Executive Officer. The Compensation Committee, at its discretion, reviews and grants all forms of executive compensation except stock options. The Stock Option Committee, at its discretion, grants stock options to the executive group pursuant to the Company's stock option plan which was previously approved by the Company's Board of Directors and shareholders. In furtherance of the Company's philosophy, the executive management team's compensation is primarily composed of the following blend of short-term and long-term items, all designed to motivate daily, annual and multi-year executive performance that results in increased value of the Company for its shareholders: (i) Base Salary. The Compensation Committee reviews and sets the base salaries of the Company's executive officers, normally on an annual basis. In setting salary levels, the Compensation Committee considers a variety of subjective and objective criteria such as: variety of experience and years of service with the Company; special expertise and talents of the individual; recent and historical operating results of the Company; industry and general economic conditions which may affect the Company's performance; and the Compensation Committee members' knowledge and experience in determining appropriate salary levels and total compensation programs for executives. Based on publicly available information, the Compensation Committee believes the executives' base salaries to be at about 75 percentile of its Peer Group, as defined in the "STOCK PERFORMANCE GRAPH" section. (ii) Incentive Plan. The Company's Incentive Plan, variations of which have been in place for over 20 years, sets a specific annual goal which, if met, results in a bonus being paid to each member of the executive management team. The 1994 Incentive Plan was based on achieving budgeted annual operating income for ABF Freight System, Inc. ("ABF"), the Company's primary operating subsidiary. If the goal is met, then each participant, including the named executive group, shares in the bonus pool based on the percentage of each person's base salary to the aggregate of all participants' base salaries. Incentive Plan bonuses were paid for 1994 (see "SUMMARY COMPENSATION TABLE"). (iii) Stock Option Plan. The Stock Option Committee is responsible for the granting of stock options to the executive group under the Company's 1992 Stock Option Plan ("1992 Plan"). Under current stock option agreements with the named executives, the grant's value to the optionee is directly based on the public trading price of the Company's stock. The optionee vests in 20% of the total shares granted on each of the five subsequent anniversary dates of the grant, and has up to 10 years from the date of the grant to exercise part or all of his grant. The Company believes that this combination of 20% annual vesting with a 10-year exercise period blends its desire to tie the optionee's motivation under the stock option grant to both short-term and long-term performance of the Company's stock. Under the 1992 Plan, the Stock Option Committee generally has discretion regarding size, recipients and other non-exercise-price terms and conditions of grants. Such discretion allows, but does not require, the Stock Option Committee to consider prior stock option grants to executives when considering new grants. Stock option grants made to the executive group have been based on advice from a consultant from Ernst & Young and on the judgement of the Stock Option Committee members. (iv) Deferred Salary Agreements. The Company has Deferred Salary Agreements with certain Company and subsidiaries' executives. The Company believes these Deferred Salary Agreements have aided it in retaining these individuals who average over 26 years of employment with it or its subsidiaries and have acquired experience, knowledge and contacts of considerable value to it. See "TERMINATION OF EMPLOYMENT AGREEMENTS" section for additional information. The Company believes that the Chief Executive Officer ("CEO") is the leader of the executive management team, and therefore the Compensation Committee and Stock Option Committee apply the same philosophy as discussed above to the CEO's compensation package. The members of the executive management team have, throughout their tenure, acquired substantial individual stock ownership in the Company. The Company believes its philosophy has built an experienced, motivated executive management team whose compensation package and stock ownership, both personal and through stock option grants, are closely linked to the interest of the Company's shareholders. EXECUTIVE COMPENSATION AND DEVELOPMENT COMMITTEE STOCK OPTION COMMITTEE William A. Marquard Arthur J. Fritz, Jr. John H. Morris Frank Edelstein Robert A. Young III Alan J. Zakon This Report will not be deemed to be incorporated by reference in any filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates this Report by reference. 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.
COMPARISON OF CUMULATIVE TOTAL RETURN Among Arkansas Best Corporation, Nasdaq Market Index & Peer Group Base May Return Return Return 1992 1992 1993 1994 Arkansas Best Corporation 100.00 108.21 112.20 87.34 Peer Group 100.00 91.20 88.85 85.88 Nasdaq Market Index 100.00 107.89 129.42 135.88
The above comparisons assume $100 was invested on May 13, 1992 in the Company's Common Stock and each of the foregoing indices and assumes reinvestment of dividends. Following the Company's initial public offering, its Common Stock commenced trading on the Nasdaq Stock Market on May 13, 1992; therefore, five-year data are unavailable. All calculations have been prepared by Media General Financial Services. The shareholder return shown on the graph above is not necessarily indicative of future performance. The Company considers itself primarily in the business of providing and arranging long-haul less-than-truckload ("LTL") transportation of general commodities. Accordingly, the Company believes it is important that its performance be compared to that of other long-haul LTL transporters of general commodities. Therefore, companies in the peer group are as follows: Roadway Services, Inc.; Consolidated Freightways, Inc.; Yellow Corporation; and Carolina Freight Corp. The Performance Graph will not be deemed to be incorporated by reference in any filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates the graph by reference. RETIREMENT AND SAVINGS PLANS Non-union employees of the Company who fulfill a minimum age and service requirement are eligible to participate in the Company's Retirement Plan which generally provides fixed benefits payable in annuity form upon retirement at age 65. Benefits also may be paid in the form of a lump sum at the participant's election. Credited years of service for each of the individuals named in the EXECUTIVE COMPENSATION - SUMMARY COMPENSATION TABLE ("Executive Compensation Table") are: Robert A. Young III, 30 years; Donald L. Neal, 36 years; John R. Meyers, 22 years; David E. Stubblefield, 35 years; Jerry A. Yarbrough, 26 years; E. George Myers, 36 years; Richard F. Cooper, 11 years; and R. David Slack, 25 years. Benefits are based upon a participant's years of service with the Company and average total monthly earnings (exclusive of extraordinary remuneration and expense allowances and subject to the annual Code limitation after 1988 of $150,000 as adjusted to reflect cost of living increases) during any five consecutive calendar years during the participant's employment with the Company since 1980 which will give the participant the highest average monthly earnings. Benefits also are subject to certain other limitations in the Code. The following table illustrates the total estimated annual benefits payable from the Retirement Plan and the Company's Supplemental Benefit Plan (see below) upon retirement at age 65, in the form of a single life annuity, to persons in the specified compensation and years-of-service classifications. Benefits listed in the table are not subject to any deductions for Social Security or other offset amounts. Participants also are entitled to receive income from employee contributions, if any, plus 7 1/2% interest in addition to the amounts shown.
Highest Five Years Average Years of Service Compensation 15 20 25 30 35 $ 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
In December 1987, the Company also established the Arkansas Best Corporation Supplemental Benefit Plan for the purpose of supplementing benefits under the Company's Retirement Plan. The Code places limits on the amount of income participants may receive under the Company's Retirement Plan. In order to compensate for those limitations and for reductions in the rate of benefit accruals from the 1985 formula under the Company's Retirement Plan, the Supplemental Benefit Plan will pay sums in addition to amounts payable under the Retirement Plan to eligible participants. Participation in the Supplemental Benefit Plan is limited to employees of the Company who are participants in the Company's Retirement Plan and who are also either officers at or above the rank of vice president of the Company or are designated as participants in the Supplemental Benefit Plan by the Company's Board. The amount due to each participant in the Supplemental Benefit Plan is the actuarial equivalent of the excess of (1) the payment due under the Company's Retirement Plan as in effect on January 1, 1985, as amended, but without regard to any amendments that decrease the rate of benefit accruals and without regard to any Code limitations, or the current Retirement Plan without regard to any Code limitations if more; over (2) the actual benefit received from the Retirement Plan. This payment will be made in a single cash sum within 30 days following the participant's termination of employment. Amounts attributable to the Supplemental Benefit Plan are included in the pension table set forth above. The Company has agreed to provide reimbursement for otherwise unreimbursed medical expenses to certain employees of the Company and its subsidiaries, including the individuals named in the Executive Compensation Table. These benefits are presently covered by an insurance program and commence at retirement and continue for the life of the employee (and spouse or other eligible dependents). TERMINATION OF EMPLOYMENT AGREEMENTS The Company has deferred salary agreements with certain management employees of the Company and its subsidiaries, including the named executives, due to their tenure, experience, knowledge and contacts of considerable value to the Company. The amounts of deferred salary vary according to the individual and according to age at retirement or other termination of employment and are to be paid in 120 equal monthly installments after termination of the individual's employment. The amounts payable under the deferred salary agreements are not vested and are subject to forfeiture under certain circumstances. The Company has purchased life insurance on each of the individuals which will substantially reimburse it for the cost of the agreements. The Executive Compensation Table includes the amount accrued annually for each named executive under these agreements. CERTAIN TRANSACTIONS AND RELATIONSHIPS Stockholders' Agreement. Pursuant to the terms of a Stockholders' Agreement, the Company has agreed that it will offer Robert A. Young III the right to include shares of the Company's Common Stock he owns in certain registration statements filed by the Company (the "Piggy-back Rights"). The Company will indemnify Mr. Young for securities law liabilities in connection with any such offering, other than liabilities resulting from information furnished in writing by Mr. Young. The Company is obligated to pay all expenses incurred in connection with the registration of shares of Company Common Stock in connection with the Piggy-back Rights, excluding underwriters' discounts and commissions. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 The Company's executive officers, directors, and persons who own more than 10% of a registered class of the Company's equity securities are required to file, under the Securities Exchange Act of 1934, reports of ownership and changes of ownership with the Securities and Exchange Commission. Based solely on information provided to the Company, the Company believes that during the preceding year its executive officers, directors, and 10% shareholders have complied with all applicable filing requirements. 2. AMENDMENT TO THE 1992 STOCK OPTION PLAN The Board of Directors has approved, and recommends that the shareholders approve, an amendment (the "Option Plan Amendment") to the Company's 1992 Stock Option Plan (the "1992 Plan"). This amendment (i) provides an additional one million shares of the Company's authorized but unissued Common Stock to be available for issuance under the 1992 Plan, and (ii) ensures the 1992 Plan's qualification as a "performance based" plan under Section 162(m) of the Internal Revenue Service Code ("IRS Code"), as described below under "Description of Option Plan Amendment." Description of 1992 Plan The 1992 Plan, which was adopted by the Board of Directors on March 13, 1992, provided that up to 1,000,000 shares of Common Stock were available for awards of incentive and nonqualified stock options to directors and key employees of the Company and subsidiaries. Any shares subject to unexercised portions of options granted under the 1992 Plan that have terminated may be regranted under new options. As of March 13, 1995, 335,160 shares of Common Stock were available to be granted under the 1992 Plan. The following is a summary of certain provisions of the 1992 Plan. General. Options granted under the 1992 Plan may be either "incentive stock options" ("ISOs") that meet the qualifications of Section 422 of the Internal Revenue Code of 1986, as amended, or nonqualified stock options ("NQSOs") that do not meet the qualifications of Section 422. A maximum of 1,000,000 shares of Common Stock (subject to certain anti-dilution provisions) may be subject to options under the 1992 Plan. As of March 13, 1995, options for 661,400 shares of Common Stock are outstanding and options for 3,440 shares have been exercised. On March 13, 1995 the last reported sale price of the Common Stock was $12.125. Administration. To the extent necessary to comply with the requirements of Rule 16b-3 of the Securities Exchange Act of 1934 ("Rule 16b-3"), the 1992 Plan may be administered by the Board of Directors, or, at the option of the Board of Directors, by a committee of two or more qualifying, non-employee directors. The 1992 Plan is currently administered by a committee (the "Committee") consisting of Messrs. Edelstein, Fritz, and Zakon. To the extent permitted under Rule 16b-3, the Committee has complete authority to construe, interpret and administer the provisions of the 1992 Plan, to determine which persons are to be granted options and the terms and conditions of such option grants, and to make all other determinations necessary or deemed advisable in the administration of the 1992 Plan. Eligibility. Eligibility to participate in the 1992 Plan is limited to employees and directors of the Company and its subsidiaries as determined by the Committee. The Company has six directors and 39 Company and subsidiary employees who have received grants under the 1992 Plan. Directors who serve on the Committee are not eligible for discretionary grants under the 1992 Plan, but are automatically granted NQSOs of 7,500 shares in each calendar year. Terms of Options; Limitations on Exercise Right. The exercise price of options will be set by the Committee but must be at least the fair market value of the Common Stock on the date of grant (and not less than 110% of the fair market value in the case of an ISO granted to an optionee owning 10% or more of the Common Stock of the Company). Generally, options are not exercisable after the expiration of ten years from the date of grant (or five years in the case of ISOs granted to an optionee owning 10% or more of the Common Stock of the Company). The exercise price for the options may be paid by the delivery of cash, a certified cashier's check, or, at the Company's option, by the delivery of shares of Common Stock having a fair market value (on the date preceding exercise) equal to the exercise price. The Company may make financing available to the optionee on such terms as the Committee shall specify. An option may not be exercised except by the optionee or by a person who has obtained the optionee's rights under the option by will or under the laws of descent and distribution or pursuant to a qualified domestic relations order. Except with respect to Committee members, the 1992 Plan permits the Board of Directors or the Committee to accelerate vesting upon a change of control and enables an option holder to "put" the excess of the then fair market value over the exercise price of the options to the Company. Termination of Employment. The Committee will determine at the time an option is granted what conditions will apply to the exercise of the option in the event the holder ceases to be an employee of the Company or any of its subsidiaries for any reason. In the event of the death of an option holder while employed by or serving as a director of the Company or any of its subsidiaries, the option will be exercisable within the year next succeeding the date of death or such other period as may be specified in the option agreement, but in no case later than the expiration date of the option. Amendment and Termination. The Board of Directors may amend, abandon, suspend or terminate the 1992 Plan or any portion thereof at any time; provided, however, that, to the extent required by Rule 16b-3 and the Securities and Exchange Commission's interpretations and releases under Rule 16b-3, no amendment can be made without stockholder approval that would materially (i) increase the benefits accruing to participants under the 1992 Plan, (ii) increase the number of securities that may be issued under the 1992 Plan (other than pursuant to the anti-dilution provisions), or (iii) modify the requirements regarding eligibility for participation in the 1992 Plan. Certain Federal Income Tax Considerations. An optionee receiving ISOs will not realize any taxable income, and the Company will not be entitled to a federal income tax deduction, at the time of the option grant. Moreover, generally speaking, no taxable income will be realized and the Company will not be entitled to a federal income tax deduction at the time the ISO is exercised. However, there may be certain alternative minimum tax consequences to the optionee resulting from the exercise of an ISO. Upon a sale of the Common Stock acquired upon exercise of an ISO, the optionee generally will realize a capital gain or capital loss, and the Company will receive no deduction, so long as the sale does not occur within two years of the date of the grant of the ISO or within one year from the date the shares were transferred to the optionee upon the exercise of the ISO. An optionee receiving NQSOs will not realize any taxable income, and the Company will not be entitled to any federal income tax deduction, at the time of the option grant. At the time the NQSO is exercised, the optionee generally will realize ordinary income in an amount equal to the excess of the fair market value of the Common Stock on the date of exercise over the option exercise price paid. The Company generally will be entitled to a corresponding federal income tax deduction. Description of Option Plan Amendment The following is a summary of the provisions of the Option Plan Amendment. As of March 13, 1995, 335,160 shares of Common Stock were available for grant under the 1992 Plan. The Option Plan Amendment would make an additional one million shares of the Company's authorized but unissued shares of Common Stock available for grant under the 1992 Plan. IRS Code Section 162(m) generally limits the corporate deductibility of executive compensation to less than $1 million. An exception to this $1 million deductibility limit is compensation derived from "performance based" stock option plans. The Company's 1992 Plan was established prior to the effective date of Section 162(m), and, therefore, certain language needs to be added to the 1992 Plan to ensure that it meets the technical requirements of the "performance based" exception to the Section 162(m) limitations. It should be noted that to date all grants under the 1992 Plan to employees have been "incentive stock options" (ISO's) which are not affected by Section 162(m)'s deductibility limitation. See "Certain Federal Income Tax Considerations" above. The proposed Option Plan Amendment would comply with Section 162(m)'s requirement that the 1992 Plan specify the "maximum number of shares with respect to which options or rights may be granted during a specified period to any employee," by amending Section 5 of the 1992 Plan to provide that in connection with the granting of any options under the 1992 Plan, the aggregate number of shares to be granted to any single employee shall not exceed the number of shares subject to the 1992 Plan. Summary of 1992 Plan (as proposed to be amended). The following table sets forth, to the extent determinable, the number of options that will be received by certain individuals and groups during 1995 under the 1992 Plan if the Option Plan Amendment is approved, and options previously granted under the 1992 Plan. The dollar value of options to be awarded under the 1992 Plan is not determinable; the exercise price of the options will be at least 100% of the fair market value of the Common Stock on the date of grant. For certain information concerning the potential realizable value of options outstanding under the 1992 Plan, see "EXECUTIVE COMPENSATION - AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTIONS/SAR VALUES."
1992 STOCK OPTION PLAN BENEFITS Name and Position Number of Units Robert A. Young III, Director Nominee and President - Chief Executive Officer (2)(3) Donald L. Neal, Senior Vice President - Chief Financial Officer (2)(3) David E. Stubblefield, ABF President - CEO (2)(3) Jerry A. Yarbrough, ABF Senior Vice President (1)(2)(3) Richard F. Cooper, Vice President - Risk Management, General Counsel (2)(3) John R. Meyers, Vice President - Treasurer (2)(3) E. George Myers, Vice President - Human Resources (2)(3) R. David Slack, Vice President - Comptroller (2)(3) Frank Edelstein, Director Nominee (2)(4) Non-Executive Director Group (2)(4) Executive Group (2)(3) Non-Executive Officer Employee Group (2)(5) (1) Effective January 1, 1995, Mr. Yarbrough resigned from ABF and was appointed Chairman and Chief Executive Officer of Integrated Distribution, Inc., another subsidiary of the Company. (2) Number of, and recipients of, options to be granted under the 1992 Plan are at the Committee's discretion and therefore are not determinable. None of these individuals would automatically receive option grants as a result of the Option Plan Amendment. (3) For information concerning the number of options previously granted to each named executive officer under the 1992 Plan, see "EXECUTIVE COMPENSATION - AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTIONS/SAR VALUES." (4) For information concerning the number of options previously granted to individual Non-Executive Directors under the 1992 Plan, see "BOARD OF DIRECTORS AND COMMITTEES - Director Compensation." (5) Under the 1992 Plan, thirty-seven members of this group received a total of 372,700 option shares on July 22, 1992 at a fair market value exercise price of $10.875 per share, and two members of this group received a total of 17,200 option shares on January 26, 1994 at a fair market value exercise price of $13.875 per share. None of this group would automatically receive option grants as a result of the Option Plan Amendment.
The Board of Directors believes that the Option Plan Amendment to the 1992 Plan is in the best interest of the Company and its shareholders and is necessary to enable it to attract and retain qualified directors and key employees of the Company and subsidiaries. The affirmative vote of a majority of the shares entitled to vote at the 1995 Annual Meeting is necessary for approval of the Option Plan Amendment. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL. 3. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS The firm of Ernst & Young LLP served as independent auditors for the Company for the fiscal year ended December 31, 1994. Pursuant to the recommendation of the Audit Committee, the Board has appointed that firm to continue in that capacity for the fiscal year 1995, and recommends that a resolution be presented to shareholders at the 1995 Annual Meeting to ratify that appointment. In the event the shareholders fail to ratify the appointment of Ernst & Young LLP, the Board will appoint other independent public accountants as auditors. Representatives of Ernst & Young LLP will attend the 1995 Annual Meeting. They will have the opportunity to make a statement and respond to appropriate questions from shareholders. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL. OTHER MATTERS The Board does not know of any matters that will be presented for action at the 1995 Annual Meeting other than those described above and matters incident to the conduct of the meeting. If, however, any other matters not presently known to management should come before the 1995 Annual Meeting, it is intended that the shares represented by the accompanying proxy will be voted on such matters in accordance with the discretion of the holders of such proxy. COST OF SOLICITATION The cost of soliciting proxies will be borne by the Company. Proxies may be solicited by directors, officers, or regular employees of the Company in person, by telephone, telegram, or other means. The Company has retained Corporate Investor Communications, Inc. to assist in the solicitation and sending of proxy material. The Company will pay approximately $1,000 for these services. SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING Pursuant to Securities and Exchange Commission regulations, shareholder proposals submitted for next year's proxy statement must be received by the Company no later than the close of business on December 11, 1995 to be considered. Proposals should be addressed to Richard F. Cooper, Secretary, Arkansas Best Corporation, 3801 Old Greenwood Road, Fort Smith, AR 72903. In order to prevent controversy about the date of receipt of a proposal, the Company strongly recommends that any shareholder wishing to present a proposal submit the proposal by certified mail, return receipt requested. GENERAL Upon written request, the Company will provide shareholders with a copy of its Annual Report on Form 10-K to the Securities and Exchange Commission (including financial statements and schedules thereto) for the fiscal year ended December 31, 1994, without charge. Direct written requests to: Randall M. Loyd, Director, Financial Reporting, Arkansas Best Corporation, 3801 Old Greenwood Road, Fort Smith, AR 72903. PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY Fort Smith, Arkansas RICHARD F. COOPER Date: April 10, 1995 Secretary ARKANSAS BEST COPRORATION LIST OF EXHIBITS Exhibit No. Page 99.1 Arkansas Best Corporation Proxy Card 99.2 Arkansas Best Corporation Stock Option Plan 99.3 Admendment to the Arkansas Best Corporation Stock Option Plan EX-99 2 ARKANSAS BEST CORPORATION Proxy Solicited by the Board of Directors for the Annual Meeting of Shareholders -- May 9, 1995 Donald L. Neal and Richard F. Cooper, jointly and severally, each with the power of substitution and revocation, are hereby authorized to represent the undersigned, with all powers which the undersigned would possess if personally present, to vote all shares the undersigned is entitled to vote at the Annual Meeting of Shareholders of Arkansas Best Corporation to be held at 3801 Old Greenwood Road, Fort Smith, Arkansas 72903, at 9:00 A.M. CDT on Tuesday, May 9, 1995, and at any postponements or adjournments of that meeting, as set forth below, and in their discretion upon any other business that may properly come before the meeting. This proxy will be voted as specified or, if no choice is specified, will be voted FOR the election of the nominees named and FOR each of the other proposals specified herein. ** CONTINUED AND TO BE SIGNED ON REVERSE SIDE ** ARKANSAS BEST CORPORATION PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [] FOR all nominees, except vote WITHHELD withjeld from FOR all from all the following nominees nominees nominee(s): 1. Nominees: Frank Edelstein . and Robert A. Young III [] [] [] FOR AGAINST ABSTAIN 2. Amendment to Arkansas Best Corporation 1992 Stock Option Plan [] [] [] FOR AGAINST ABSTAIN 3. To ratify the appointment of Ernst & Young LLP as the Company's independent certified public accountants. [] [] [] PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHERE APPLICABLE, INDICATE OFFICIAL POSITION OR REPRESENTATIVE CAPACITY. Date: ___________________________ ___________________________________ SIGNATURE ___________________________________ SIGNATURE PLEASE VOTE, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. EX-99 3 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. 3. Shares Subject to the Plan The aggregate amount of Common Stock for which options may be granted under this Plan shall not exceed 1,000,000 shares of Common Stock. Such shares may be authorized and previously unissued shares or previously issued shares that have been reacquired by the Company. Any shares subject to unexercised portions of options granted under this Plan which shall have terminated, been cancelled or expired may again be subject to options under this Plan. 4. Administration (a) Notwithstanding anything to the contrary, to the extent necessary to comply with the requirements of Rule 16b-3 under the Exchange Act (or any successor thereto), the Plan shall be administered by the Board of Directors, if each member is a Disinterested Director, or, at the option of the Board of Directors, a committee of two or more Disinterested Directors appointed by the Board of Directors of the Company (the group responsible for administering the Plan is referred to herein as the "Committee"). Options may be granted under this Section 4(a) only by the unanimous agreement of the members of the Committee. Stock Option Agreements ("Option Agreements"), in the form as approved by the Committee, and containing such terms and conditions not inconsistent with the provisions of this Plan as shall have been determined by the Committee, may be executed on behalf of the Company by the Chairman of the Board, the President or any Vice President of the Company. Except with respect to Section 4(b) of this Plan, the Committee shall have complete authority to construe, interpret and administer the provisions of the Plan and the provisions of the Option Agreements relating to options granted hereunder; to prescribe, amend and rescind rules and regulations pertaining to the Plan; and to make all other determinations necessary or deemed advisable in the administration of the Plan. The determinations, interpretations and constructions made by the Committee shall be final and conclusive. (b) Members of the Committee shall be specified by the Board of Directors, and shall consist solely of Disinterested Directors and as such shall not be eligible to receive options to purchase Common Stock pursuant to Section 4(a) of the Plan. On May 12, 1994, and on the first trading day after (i) January 1, 1995, and (ii) each January 1st thereafter, each Disinterested Director serving as a Committee Member shall automatically be granted nonqualified options to purchase 7,500 shares of the Company's Common Stock at an exercise price per share equal to the closing price of the Common Stock on the date of such automatic grant. This Section 4(b) shall not be amended more than once every six months, other than to comport with changes in the Code or the rules promulgated thereunder. 5. Eligibility Incentive stock options to purchase Common Stock may be granted under Section 4(a) of the Plan to such key employees of the Company or its Subsidiaries (including any director who is also a key employee of the Company or one or more of its Subsidiaries) as shall be determined by the Committee. Nonqualified stock options to purchase Common Stock may be granted under Section 4(a) of the Plan to such key employees or directors of the Company or its Subsidiaries as shall be determined by the Committee. The Committee shall determine which persons are to be granted options under Section 4(a) of the Plan, the number of options, the number of shares subject to each option, the exercise price or prices of each option, the vesting and exercise period of each option, whether an option may be exercised as to less than all of the Common Stock subject thereto, and such other terms and conditions of each option, if any, as are not inconsistent with the provisions of this Plan. In addition, the Committee may, in its sole discretion, provide for vesting of stock options to accelerate upon a change in control of the Company and enable an employee to "put" the excess of the fair market value over the exercise price of the options to the Company in the event of a change in control in conformity with the rules and regulations promulgated under the Exchange Act. In connection with the granting of incentive stock options, the aggregate Fair Market Value (determined at the Date of Grant of an incentive stock option) of the shares with respect to which incentive stock options are exercisable for the first time by an Optionee during any calendar year (under all such plans of the Optionee's employer corporation and its parent and subsidiary corporations as defined in Section 424 of the Code) shall not exceed $100,000 or such other amount as from time to time provided in Section 422(d) of the Code or any successor provision. 6. Exercise Price The purchase price or prices for Common Stock subject to an option (the "Exercise Price") granted pursuant to Section 4(a) of the Plan shall be determined by the Committee at the Date of Grant; provided, however, that (a) the Exercise Price for any option shall not be less than 100% of the Fair Market Value of the Common Stock at the Date of Grant, and (b) if the Optionee owns more than 10 percent of the total combined voting power of all classes of stock of the Company or its parent or any of its subsidiaries, as more fully described in Section 422(b)(6) of the Code or any successor provision (such stockholder is referred to herein as a "10-Percent Stockholder"), the Exercise Price for any incentive stock option granted to such Optionee shall not be less than 110% of the Fair Market Value of the Common Stock at the Date of Grant. 7. Term of Stock Options and Limitations on Right to Exercise No incentive stock option granted pursuant to Section 4(a) of this Plan shall be exercisable (a) more than five years after the Date of Grant with respect to a 10-Percent Stockholder, and (b) more than ten years after the Date of Grant with respect to all persons other than 10-Percent Stockholders. No nonqualified stock option granted pursuant to Section 4(a) of this Plan shall be exercisable more than ten years after the Date of Grant. Subject to the conditions set forth in Section 4(b) of this Plan, nonqualified stock options granted to members of the Committee pursuant to Section 4(b) of this Plan shall be exercisable for ten years, except that in the event of death or termination of such member as a director of the Company or a Subsidiary, such nonqualified stock options shall only be exercisable for one year following the date of such member's death or termination (or if shorter, the remaining term of the option). The Company shall not be required to issue any fractional shares upon the exercise of any options granted under this Plan. No Optionee nor his legal representatives, legatees or distributees, as the case may be, will be, or will be deemed to be, a holder of any shares subject to an option unless and until said option has been exercised and the purchase price of the shares in respect of which the option has been exercised has been paid. An option shall not be exercisable except by the Optionee or by a person who has obtained the Optionee's rights under the option by will or under the laws of descent and distribution. 8. Termination of Employment The Committee shall determine at the Date of Grant what conditions shall apply to the exercise of an option granted under Section 4(a) in the event an Optionee shall cease to be employed by the Company or a Subsidiary for any reason. In the event of the death of an Optionee while in the employ or while serving as a director of the Company or a Subsidiary, the option theretofore granted to him shall be exercisable by the executor or administrator of the Optionee's estate, or if the Optionee's estate is not in administration, by the person or persons to whom the Optionee's rights shall have passed under the Optionee's will or under the laws of descent and distribution, within the year next succeeding the date of death or such other period as may be specified in the Option Agreement, but in no case later than the expiration date of such option, and then only to the extent that the Optionee was entitled to exercise such option at the date of his death. Neither this Plan nor any option granted hereunder is intended to confer upon any Optionee any rights with respect to continuance of employment or other utilization of his services by the Company or by a Subsidiary, nor to interfere in any way with his right or that of his employer to terminate his employment or other services at any time (subject to the terms of any applicable contract). 9. Dilution or Other Adjustments In the event that there is any change in the Common Stock subject to this Plan or subject to options granted hereunder as the result of any stock dividend on, dividend of or stock split or stock combination of, or any like change in, stock of the same class or in the event of any change in the capital structure of the Company, the Board of Directors or the Committee shall make such adjustments with respect to options, or any provisions of the Plan, as it deems appropriate to prevent dilution or enlargement of option rights. 10. Expiration and Termination of the Plan Options may be granted at any time under Section 4(a) of the Plan and as specified under Section 4(b) of the Plan prior to December 31, 2001, as long as the total number of shares which may be issued pursuant to options granted under this Plan does not (except as provided in Section 9 above) exceed the limitations of Section 3 above. This Plan may be abandoned, suspended or terminated at any time by the Board of Directors of the Company except with respect to any options then outstanding under the Plan. 11. Restrictions on Issuance of Shares (a) The Company shall not be obligated to sell or issue any shares upon the exercise of any option granted under this Plan unless: (i) the shares with respect to which such option is being exercised have been registered under applicable federal securities laws or are exempt from such registration; (ii) the prior approval of such sale or issuance has been obtained from any state regulatory body having jurisdiction; and (iii) in the event the Common Stock has been listed on any exchange, the shares with respect to which such option is being exercised have been duly listed on such exchange in accordance with the procedure specified therefor. If the shares to be issued upon the exercise of any option granted under the Plan are intended to be issued by the Company in reliance upon the exemptions from the registration requirements of applicable federal securities laws, the Optionee, if so requested by the Company, shall furnish to the Company such evidence and representations, including an opinion of counsel, satisfactory to it, as the Company may reasonably request. (b) No option granted pursuant to the Plan shall be transferable by the Optionee other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder. (c) Any Common Stock issued to an officer or director of the Company pursuant to the exercise of an option granted pursuant to the Plan shall not be transferred until at least six months have elapsed from the date of grant of such option to the date of disposition of the Common Stock underlying such option. (d) The Board of Directors or Committee may impose such other restrictions on the ownership and transfer of shares issued pursuant to this Plan as it deems desirable; any such restrictions shall be set forth in any Option Agreement entered into hereunder. 12. Proceeds The proceeds to be received by the Company upon exercise of any option granted under this Plan may be used for any proper purposes. 13. Amendment of the Plan Except as provided in Section 4(b) of the Plan, the Board of Directors may amend the Plan from time to time in such respects as it may deem advisable in its sole discretion or in order that the options granted hereunder shall conform to any change in applicable laws, including tax laws, or in regulations or rulings of administrative agencies or in order that options granted or stock acquired upon exercise of such options may qualify for simplified registration under applicable securities or other laws; provided, however, that no amendment may be made without the consent of stockholders which would materially (a) increase the benefits accruing to participants under the Plan, (b) increase the number of securities which may be issued under the Plan, other than in accordance with Section 9 hereof, or (c) modify the requirements as to eligibility for participation in the Plan. 14. Payment Upon Exercise Upon the exercise of any option granted under the Plan, the Company may make financing available to the Optionee for the purchase of the Common Stock that may be acquired pursuant to the exercise of such option on such terms as the Committee shall specify. An Optionee may pay the Exercise Price of the shares of Common Stock as to which an option is being exercised by the delivery of cash, a certified or cashier's check or by the delivery of shares of Common Stock having a Fair Market Value on the date of exercise at least equal to the Exercise Price. Any option granted under the Plan may be exercised by a broker-dealer acting on behalf of an Optionee if (a) the broker-dealer has received from the Optionee or the Company a fully- and duly-endorsed agreement evidencing such option, together with instructions signed by the Optionee requesting the Company to deliver the shares of Common Stock subject to such option to the broker-dealer on behalf of the Optionee and specifying the account into which such shares should be deposited, (b) adequate provision has been made with respect to the payment of any withholding taxes due upon such exercise, and (c) the broker-dealer and the Optionee have otherwise complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any successor provision. 15. Stockholders' Approval The Plan has been approved by a majority of the stockholders of the Company. 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. EX-99 4 AMENDMENT TO THE ARKANSAS BEST CORPORATION STOCK OPTION PLAN The Arkansas Best Corporation Stock Option Plan (the "Plan") is hereby amended as follows: 1. The Plan is hereby amended by replacing the number "1,000,000" with the number "2,000,000" in the first sentence of Section 3. 2. The Plan is hereby amended by adding the following to the end of Section 5: "In connection with the granting of options under this Plan, the aggregate number of shares of Common Stock issuable to any single Optionee shall not exceed the number of shares subject to the Plan referred to in Section 3." IN WITNESS WHEREOF, Arkansas Best Corporation, acting by and through its officers hereunto duly authorized, has executed this Amendment to the Plan, to be effective the 9th day of May, 1995. ARKANSAS BEST CORPORATION By: _____________________________________ Robert A. Young III President and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----