-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LkGPjpKVeRlyC4546cRWhgfhLBblL6YlfCS+WFdPoCcne4A2KhA7qPKx9WuZFTf5 EvQ+8H+SXIL+qYJg4nCayA== 0000894405-96-000006.txt : 19960409 0000894405-96-000006.hdr.sgml : 19960409 ACCESSION NUMBER: 0000894405-96-000006 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960509 FILED AS OF DATE: 19960408 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: 96544900 BUSINESS ADDRESS: STREET 1: 3801 OLD GREENWOOD RD CITY: FORT SMITH STATE: AR ZIP: 72903 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, 1996 To the Shareholders of Arkansas Best Corporation: You are cordially invited to attend the Annual Meeting of Shareholders of Arkansas Best Corporation on Thursday, May 9, 1996 at 9:00 a.m. at 3801 Old Greenwood Road, Fort Smith, Arkansas 72903. A notice of the meeting, a proxy card and a proxy statement containing information about the matters to be acted upon are enclosed. It is important that your shares be represented at the meeting. We look forward to the Annual Meeting of Shareholders and we hope you will attend the meeting or be represented by proxy. WE URGE YOU TO SIGN AND DATE YOUR ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID ENVELOPE EVEN IF YOU ARE PLANNING TO ATTEND THE MEETING. William A. Marquard Robert A. Young III Chairman of the Board President-Chief Executive Officer ARKANSAS BEST CORPORATION, POST OFFICE BOX 10048 FORT SMITH, ARKANSAS 72917-0048 ARKANSAS BEST CORPORATION NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held May 9, 1996 To the Shareholders: The Annual Meeting of Shareholders of Arkansas Best Corporation, a Delaware corporation, will be held at 3801 Old Greenwood Road, Fort Smith, Arkansas 72903 on Thursday, May 9, 1996 at 9:00 a.m. for the following purposes: I. To elect two Class I directors for terms to expire at the 1999 Annual Meeting of Shareholders; II. To ratify the appointment of Ernst & Young LLP as independent auditors for fiscal year 1996; III. To act upon such other matters as may properly be brought before the meeting affecting the business and affairs of the Company. Only shareholders of record at the close of business on March 11, 1996 will be entitled to notice of and to vote at the meeting or any adjournment thereof. PLEASE COMPLETE, SIGN AND DATE YOUR ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. By Order of the Board of Directors, Fort Smith, Arkansas Richard F. Cooper April 10, 1996 Secretary ARKANSAS BEST CORPORATION PROXY STATEMENT This Proxy Statement is furnished to the shareholders of Arkansas Best Corporation ("ABC" or the "Company"), in connection with the solicitation of proxies on behalf of the ABC Board of Directors (the "Board") to be voted at the Annual Meeting of Shareholders on May 9, 1996 ("1996 Annual Meeting") for the purposes set forth in the accompanying Notice of Meeting. This Proxy Statement and Notice of Meeting, the related proxy card and the 1995 Annual Report to Shareholders are being mailed to shareholders beginning on or about April 10, 1996. ABC's principal place of business is 3801 Old Greenwood Road, Fort Smith, Arkansas 72903, and its telephone number is 501/785-6000. RECORD DATE The Board has fixed the close of business on March 11, 1996 as the record date for the 1996 Annual Meeting. Only shareholders of record on that date will be entitled to vote at the meeting in person or by proxy. PROXIES The proxies named on the enclosed proxy card were appointed by the Board to vote the shares represented by the proxy card. Upon receipt by the Company of a properly signed and dated proxy card, the shares represented thereby will be voted in accordance with the instructions on the proxy card. If a shareholder does not return a signed proxy card, his or her shares cannot be voted by proxy. Shareholders are urged to mark the ovals on the proxy card to show how their shares are to be voted. If a shareholder returns a signed proxy card without marking the ovals, the shares represented by the proxy card will be voted as recommended by the Board herein and in the proxy card. The proxy card also confers discretionary authority to the proxies to vote on any other matter not presently known to management that may properly come before the meeting. Any proxy delivered pursuant to this solicitation is revocable at the option of the person(s) executing the same (i) upon receipt by the Company before the proxy is voted of a duly executed proxy bearing a later date, (ii) by written notice of revocation to the Secretary of the Company received before the proxy is voted or (iii) by such person(s) voting in person at the 1996 Annual Meeting. VOTING SHARES On the record date, there were 19,515,758 shares of common stock outstanding and entitled to vote ("Common Stock"). Each share of Common Stock is entitled to one vote. The holders in person or by proxy of a majority of the total number of the shares of Common Stock shall constitute a quorum for purposes of the 1996 Annual Meeting. PROPOSAL I. ELECTION OF DIRECTORS The Board is divided into three classes of directorships, with directors in each class serving staggered three-year terms. At each annual meeting of shareholders, the terms of directors in one of the three classes expire. At that annual meeting of shareholders, directors are elected in a class to succeed the directors whose terms expire, the terms of the directors so elected to expire at the third annual meeting of shareholders thereafter. Pursuant to the Company's Certificate of Incorporation, the Board has fixed the number of directorships at six: two in the class to be elected at the 1996 Annual Meeting of Shareholders whose members' terms will expire at the 1999 Annual Meeting of Shareholders, two in the class whose members' terms will expire at the 1997 Annual Meeting of Shareholders, and two in the class whose members' terms will expire at the 1998 Annual Meeting of Shareholders. It is intended that the shares represented by the accompanying proxy will be voted at the 1996 Annual Meeting for the election of nominees William A. Marquard and Alan J. Zakon, Ph.D. as the two directors in the class of directorships whose members' terms will expire in 1999, unless the proxy specifies otherwise. Each nominee has indicated his willingness to serve as a member of the Board, if elected. If, for any reason not presently known, Messrs. Marquard and/or Zakon will not be available for election at the time of the 1996 Annual Meeting, the shares represented by the accompanying proxy may be voted for the election in his/their stead of substitute nominee(s) designated by the Board or a committee thereof, unless the proxy withholds authority to vote for all nominees. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL. Assuming the presence of a quorum, to be elected a nominee must receive the affirmative vote of the holders of a majority of the Common Stock present, in person or by proxy, at the 1996 Annual Meeting. DIRECTORS OF THE COMPANY The following information relates to the nominees named above and to the other persons whose terms as directors will continue after the 1996 Annual Meeting. Name Age Business Experience CLASS I -- Term Expires May 1996 William A. Marquard 76 Mr. Marquard has been Chairman of the Board and a Director of the Company since November 1988 and a Director of Treadco, Inc. since June 1991. In April 1992, Mr. Marquard was elected as a Director of the Board of Kelso & Company, Inc. From 1971 to 1983, Mr. Marquard was President and Chief Executive Officer of American Standard Inc. and from 1979 to 1985, he was Chairman of the Board of American Standard Inc. Mr. Marquard resumed his position as Chairman of the Board of American Standard Inc. in February 1989 until March 31, 1992 when he was named Chairman Emeritus. Mr. Marquard also became Chairman of the Board of ASI Holding Corporation in February 1989 until March 31, 1992, when he was named Chairman Emeritus. Mr. Marquard is Chairman of the Board of Mosler, Inc., and a Director of Americold Corporation, Earle M. Jorgensen Co., and EarthShell Container Corporation. Alan J. Zakon, Ph.D 60 Dr. Zakon has been a Director of the Company since February 1993. Dr. Zakon was a Managing Director of Bankers Trust Company through March, 1995, for which he previously served as Chairman, Strategic Policy Committee from 1989 to 1990. From 1980 to 1986, Dr. Zakon was President of Boston Consulting Group before being named its Chairman in 1986, having previously served as Consultant from 1967 to 1969 and Vice President from 1969 to 1980. Dr. Zakon is currently serving as a member of the Board of Directors of several companies, including Augat Corporation, Hechinger Corporation, and Vice Chairman of the Board of Autotote Corporation, and is a former member of the Advisory Committee to the Stanford University Graduate School of Business. CLASS II -- Term Expires May 1997 Arthur J. Fritz, Jr. 55 Mr. Fritz has been a Director of the Company since April 1989. From 1971 to 1986, Mr. Fritz was President of Fritz Companies, Inc. and its Chairman from 1986 to 1988. Mr. Fritz has served as Chairman of JABAR Enterprises since October 1988 and is a Director of Intercargo Corporation and Landstar Systems, Inc. Mr. Fritz is former President and Chairman of the National Association of Customs Brokers and Freight Forwarders of America. John H. Morris 52 Mr. Morris has been a Director of the Company since July 1988 and a Director of Treadco, Inc. since June 1991. Mr. Morris currently serves as President of The Gordon + Morris Group. Mr. Morris served as a Managing Director of Kelso & Company, Inc. from March 1989 to March 1992, was a General Partner from 1987 to March 1989, and prior to 1987 was a Vice President. Prior to 1985, Mr. Morris was President of LBO Capital Corp. CLASS III -- Term Expires May 1998 Frank Edelstein 70 Mr. Edelstein has been a Director of the Company since November 1988. Mr. Edelstein currently provides consulting services to Kelso & Company, Inc. and to The Gordon + Morris Group. Mr. Edelstein served as a Vice President of Kelso & Company, Inc. from 1986 to March 1992. Prior to 1986, he served as Chairman and President of International Central Bank & Trust Company and CPI Pension Services, Inc., as well as Senior Vice President, Financial Services Group, at Continental Insurance Corporation. He also has held positions as Corporate Vice President, Automatic Data Processing, Inc. and Executive Vice President of Olivetti Corporation of America. Mr. Edelstein also is a Director of Americold Corporation, Ceradyne, Inc., and IHOP Corp. Robert A. Young III 55 Mr. Young has been a Director of the Company since 1970 and Chief Executive Officer of the Company since August 1988, President since 1973 and was Chief Operating Officer from 1973 to 1988. Mr. Young also has been a Director of Treadco, Inc. since June 1991. Mr. Young also is a Director of Mosler, Inc. BOARD OF DIRECTORS AND COMMITTEES The business of the Company is managed under the direction of the Board of Directors. The Board meets on a regularly scheduled basis four times a year to review significant developments affecting the Company and to act on matters requiring Board approval. It also holds special meetings when an important matter requires Board action between scheduled meetings. The Board met five times during 1995. During 1995, each member of the Board participated in at least 75% of all Board and applicable committee meetings held during the period for which he was a Director. The Board has established Audit, Executive Compensation and Development, and Stock Option committees to devote attention to specific subjects and to assist it in the discharge of its responsibilities. The functions of those committees, their current members and the number of meetings held during 1995 are described below. The Board does not have a committee for nomination of directors. The Board nominates candidates for director. Audit Committee. The Audit Committee recommends to the Board the appointment of the firm selected to be independent public accountants for the Company and monitors the performance of such firm; reviews and approves the scope of the annual audit and quarterly reviews and evaluates with the independent public accountants the Company's annual audit and annual consolidated financial statements; reviews with management the status of internal accounting controls; and evaluates problem areas having a potential financial impact on the Company which may be brought to its attention by management, the independent public accountants or the Board. Messrs. Edelstein, Fritz, Morris, and Zakon currently are members of the Audit Committee. The Audit Committee met twice during 1995. Executive Compensation and Development Committee. The Executive Compensation and Development Committee is responsible for reviewing executive management's performance and for determining appropriate compensation. Messrs. Marquard, Morris and Young currently are members of the Executive Compensation and Development Committee. The Executive Compensation and Development Committee met twice during 1995. Stock Option Committee. The Stock Option Committee administers the Company's Incentive Stock Option Plan ("Stock Option Plan"). The Stock Option Committee has the power to determine from time to time the individuals to whom options shall be granted, the number of shares to be covered by each option, and the time or times at which options shall be granted. Messrs. Fritz, Edelstein, and Zakon currently are members of the Stock Option Committee. The Stock Option Committee met twice during 1995. Director Compensation. Mr. Young, as an officer of the Company, receives no compensation for services as a director or committee member. Mr. Marquard, as Chairman, receives a $62,500 annual retainer and other non-employee directors receive a $25,000 annual retainer. Each non-employee director receives $1,000 for each Board meeting attended and for each meeting of a committee of the Board attended, if the committee meeting is held other than in conjunction with a Board meeting. Messrs. Edelstein, Fritz and Zakon, as members of the Stock Option Committee, each received automatic stock options under the Company's 1992 Stock Option Plan on January 3, 1995, for 7,500 shares of the Company's Common Stock at a fair market value exercise price of $12.75 per share. Messrs. Marquard and Morris, non-employee Directors, each received stock options under the Company's 1992 Stock Option Plan on January 31, 1995 for 7,500 shares of the Company's Common Stock at a fair market value of $12.25 per share. On each anniversary date of the grant, 20% of the options vest and thereafter can be exercised through the tenth year after the grant date. PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP The following table sets forth certain information concerning beneficial ownership of the Company's Common Stock as of March 11, 1996, by (i) each person who is known by the Company to own beneficially more than five percent (5%) of the outstanding shares of Common Stock, (ii) each director and named executive officer of the Company and (iii) all directors and executive officers as a group.
Shares Percentage Beneficially of Shares Owned Outstanding (i) Name / Address State of Wisconsin Investment Board (1) 1,912,500 9.8 P. O. Box 7842 Madison, WI 53707 MacKay-Shields Financial Corporation (2) 1,794,572 9.2 9 West 57th Street New York, NY 10019 Sound Shore Management, Inc. (3) 1,689,500 8.7 8 Sound Shore Drive Greenwich, CT 06836 Shares Percentage Beneficially of Shares Owned Outstanding (ii) Name Position Robert A. Young III (4)(5)(6)(7) Director, President, Chief Executive Officer 2,069,828 10.6 William A. Marquard (5)(8) Director 167,048 * John H. Morris (5)(9) Director 115,015 * Arthur J. Fritz, Jr. (5)(10) Director 48,971 * Frank Edelstein (5)(11) Director 10,823 * Alan J. Zakon (5) Director 11,000 * Donald L. Neal (5)(6)(13) Senior Vice President 69,084 * David E. Stubblefield (5)(6)(12) President-CEO, ABF 99,059 * Lary R. Scott Executive Vice President 10,000 * Richard F. Cooper (5)(6) Vice President 13,999 * R. David Slack (5)(6) Vice President 13,428 * (iii) All Directors and Executive Officers as a Group (12 total) 2,630,755 13.5 *Less than 1% (1) According to the most recent Schedule 13G it has provided to the Company, the State of Wisconsin Investment Board has the following voting and investment powers with respect to such shares: (a) sole voting power, 1,912,500; (b) shared voting power, not applicable; (c) sole investment power, 1,912,500; (d) shared investment power, not applicable. (2) According to the most recent Schedule 13G it has provided to the Company, MacKay-Shields Financial Corporation beneficially owns 1,694,000 shares of the Company's Common Stock and could acquire 100,572 shares of the Company's Common Stock upon conversion of the Company's Preferred Stock, and has the following voting and investment powers with respect to such shares: (a) sole voting power, not applicable; (b) shared voting power, 1,794,572; (c) sole investment power, not applicable; (d) shared investment power, 1,794,572. (3) According to the most recent Schedule 13G it has provided to the Company, Sound Shore Management, Inc. has the following voting and investment powers with respect to such shares: (a) sole voting power, 1,518,000; (b) shared voting power, not applicable; (c) sole investment power, 1,689,500; (d) shared investment power, not applicable. (4) The business address for such person is c/o Arkansas Best Corporation, 3801 Old Greenwood Road, Fort Smith, Arkansas 72903. (5) Includes vested stock option shares of Common Stock, purchasable within sixty (60) days, as follows: Messrs. Young, 32,760; Marquard, 6,000; Morris, 6,000; Fritz, 6,000; Edelstein, 6,000; Zakon, 6,000; Neal, 12,300; Stubblefield, 14,300; Cooper, 9,420; and Slack, 9,420. (6) Includes shares allocated through March 13, 1996, to Investment Plan accounts as follows: Messrs. Young, 1,429; Neal, 844; Stubblefield, 849; Cooper, 753; and Slack, 711, each of whom disclaims beneficial ownership of such shares. (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). (8) Mr. Marquard directly owns 10,000 shares (less than 1%) of Treadco's outstanding common stock. (9) Mr. Morris indirectly owns 109,015 shares as co-trustee of the John H. Morris and Sharon L. Morris Family Trust. (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. (11) Mr. Edelstein indirectly owns 4,823 shares as joint trustee of the Edelstein Living Trust. (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. (13) Excludes 4,000 shares of the Company's Series A Preferred Stock owned by Mr. Neal that are not entitled to be voted at the 1996 Annual Meeting. EXECUTIVE OFFICERS OF THE COMPANY The following table sets forth the name, age, principal occupation and business experience during the last five years of each of the current executive officers of the Company and its largest subsidiary. The executive officers serve at the pleasure of the Board. For information regarding ownership of the Common Stock by the executive officers of the Company, see "PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP." There are no family relationships among directors and executive officers of the Company or its subsidiaries. Name Age Business Experience Robert A. Young III 55 See previous description. President-Chief Executive Officer Lary R. Scott 59 Mr. Scott was appointed the Company's Executive Vice Executive Vice President in December 1995. President He has also been Chairman of the Board of WorldWay Corporation since May 1994 and Vice Chairman and Chief Executive Officer of WorldWay since 1993. WorldWay has been a wholly owned subsidiary of the Company since August 1995; prior to that, it was a publicly traded company. For approximately two years prior to joining WorldWay, Mr. Scott served as a transportation consultant. Prior to that time, he was President and Chief Executive Officer of Consolidated Freightways, Inc. Mr. Scott serves on boards of directors of Mayflower Group, Inc. and The Clorox Company. Donald L. Neal 65 Mr. Neal has been Senior Vice President of Senior Vice President- the Company since 1979 and Chief Financial Chief Financial Officer since 1984. Prior to 1984, Mr. Neal Officer was Senior Vice President-Comptroller. Mr. Neal has been Vice President-Chief Financial officer of Treadco, Inc. ("Treadco"), a subsidiary of the Company, since June 1991. David E. Loeffler 49 Mr. Loeffler was appointed the Company's Vice President- Vice President-Treasurer in December 1995. Treasurer Mr. Loeffler was appointed Treasurer of Treadco in December 1995. From 1992 to 1995 Mr. Loeffler was a private investor and in investment management. From 1983 to 1992 he was Senior Vice President - Finance and Administration and Chief Financial Officer for Yellow Freight System, Inc. David E. Stubblefield 58 Mr. Stubblefield has been President and ABF President- Chief Executive Officer of ABF Freight Chief Executive System, Inc. ("ABF"), the Company's largest Officer subsidiary, since January 1, 1995, and a Director of ABF since 1985. From 1979 through 1994, Mr. Stubblefield was Senior Vice President-Marketing of ABF. Richard F. Cooper 44 Mr. Cooper has been Vice President- Vice President- Administration since 1995, Vice President- Administration Risk Management of the Company from April General Counsel and 1991 to 1995 and Vice President-General Secretary Counsel since 1986. Mr. Cooper has been Secretary since 1987. Mr. Cooper also has been Secretary of Treadco since June 1991. R. David Slack 53 Mr. Slack has been Vice President- Vice President- Comptroller of the Company since January Comptroller 1990. From January 1989 to January 1990, Mr. Slack was Comptroller. Prior to 1989, Mr. Slack was a director in the Accounting Department. EXECUTIVE COMPENSATION The following table sets forth information regarding compensation paid during each of the Company's last three fiscal years to the Company's Chief Executive Officer and each of the Company's four other most highly compensated executive officers, based on salary and bonus earned during 1995.
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 ($) ($)(2) ($) ($) (#)(3) ($) ($(4) Robert A. Young III 1995 $375,000 $ - - - - - $ 89,977 President and Chief 1994 362,500 33,079 - - - - 89,977 Executive Officer 1993 330,000 - - - - - 77,215 Lary R. Scott 1995 96,660(1) - - - - - 849,161 Executive Vice 1994 - - - - - - - President 1993 - - - - - - - Donald L. Neal 1995 180,250 - - - - - 134,574 Senior Vice President- 1994 169,167 33,079 - - - - 150,962 Chief Financial 1993 159,000 - - - - - 101,409 Officer David E. Stubblefield 1995 250,000 - - - 10,000 - 48,391 ABF President-Chief 1994 169,167 33,079 - - - - 48,391 Executive Officer 1993 159,000 - - - - - 34,177 Richard F. Cooper 1995 133,750 - - - - - 12,462 Vice President- 1994 125,667 18,001 - - - - 12,219 Administration, 1993 121,900 - - - - - 8,167 General Counsel and Secretary R. David Slack 1995 133,750 - - - - - 23,321 Vice President- 1994 125,667 18,001 - - - - 23,078 Comptroller 1993 121,900 - - - - - 13,106 (1)Reflects base salary paid Mr. Scott since the Company's purchase of WorldWay Corporation in August 1995. (2)Reflects bonus earned during the fiscal year. Bonuses are normally paid during the next fiscal year. (3) Options to acquire shares of Common Stock. (4)"All Other Compensation" includes the following for Messrs. Young, Neal, Stubblefield, Cooper and Slack, (i) Company matching of contributions to the Company's Employees Investment Plan of $1,500; $1,500; $1,500; $1,500; and $1,500 for each named executive, respectively; (ii) amounts accrued under the Company's Supplemental Benefit Plan of $57,770; $62,179; $24,105; $5,846; and $10,053 for each named executive, respectively; and (iii) amounts accrued under Deferred Salary Agreements of $30,707; $70,895; $22,786; $5,116; and $11,768 for each named executive, respectively. The Deferred Salary Agreements are not performance-based incentive plans. For Mr. Scott, it includes a one-time payment of amounts in settlement of his stock option, employment and severance agreements, resulting from the Company's purchase of WorldWay Corporation in August 1995.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTIONS/SAR VALUES The following table provides information related to options exercised by the named executive officers during the 1995 fiscal year and the number and value of options held at fiscal year end. The Company does not have any outstanding stock appreciation rights.
Number of Securities Shares Underlying Unexercised Options/ In-the-Money Options/SARs Acquired Value SARs at Fiscal Year-End (#) at Fiscal Year-End ($)(1) Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable Robert A. Young III 32,760 21,840 Donald L. Neal 12,300 8,200 David E. Stubblefield 12,300 18,200 Richard F. Cooper 9,420 6,280 R. David Slack 9,420 6,280 (1) The closing price for the Company's Common Stock as reported by the NASDAQ Stock Market on December 29, 1995 was $7.875. Value is calculated on the basis of the difference between the option exercise price and $7.875 multiplied by the number of shares of Common Stock underlying the option.
OPTIONS/SAR GRANTS TABLE The following table provides information related to options granted to the named executive officers during 1995.
Potential Realizable Value at Assumed Annual Rate of Stock Price Appreciation Individual Grants for Option Term (1) (a) (b) (c) (d) (e) (f) (g) % of Total Options/SARs Exercise Options/SARs Granted to or Base Granted Employees in Price Expiration Name (#)(2)(3)(4) Fiscal Year ($/sh)(5) Date 5%($) 10%($) David E. Stubblefield 10,000 100.0% $12.750 1/2/05 $80,198 $203,235 (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. (2) Options granted in 1995 are exercisable starting 12 months after the grant date, with 20% of the shares covered thereby becoming exercisable at that time and with an additional 20% of the option shares becoming exercisable on each successive anniversary date, with full vesting occurring on the fifth anniversary date. (3) The options were granted for a term of 10 years, subject to earlier termination in certain events related to termination of employment. (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. (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.
REPORT ON EXECUTIVE COMPENSATION BY THE EXECUTIVE COMPENSATION AND DEVELOPMENT COMMITTEE AND STOCK OPTION COMMITTEE The Company is engaged in the highly competitive and evolving freight transportation industry. To be able to continue its past growth and succeed in the future, the Company believes it must be able to retain its executive management team and to attract additional qualified executives when needed. The Company's philosophy that compensation of the executive management team should be materially linked to both operating and stock price performance with the goal of enhancing the value of the Company is administered by its Executive Compensation and Development Committee ("Compensation Committee") and its Stock Option Committee. The Compensation Committee is comprised of Messrs. Marquard, Morris, and Young and the Stock Option Committee is comprised of Messrs. Edelstein, Fritz, and Zakon. All Committee Members are non-employee directors except Mr. Young, who is the Company's President-Chief Executive Officer. The Compensation Committee, at its discretion, reviews and grants all forms of executive compensation except stock options. The Stock Option Committee, at its discretion, grants stock options to the executive group pursuant to the Company's stock option plan which was previously approved by the Company's Board of Directors and shareholders. In furtherance of the Company's philosophy, the executive management team's compensation is primarily composed of the following blend of short-term and long-term items, all designed to motivate daily, annual and multi-year executive performance that results in increased value of the Company for its shareholders: (i) Base Salary. The Compensation Committee reviews and sets the base salaries of the Company's executive officers, normally on an annual basis. In setting salary levels, the Compensation Committee considers a variety of subjective and objective criteria such as: variety of experience and years of service with the Company; special expertise and talents of the individual; recent and historical operating results of the Company; industry and general economic conditions which may affect the Company's performance; and the Compensation Committee members' knowledge and experience in determining appropriate salary levels and total compensation programs for executives. (ii) Incentive Plan. The Company's Incentive Plan sets a specific annual goal which, if met, results in a bonus being paid to each member of the executive management team. The 1995 Incentive Plan was based on achieving budgeted annual pre-tax profit for the Company. If the goal is met, then each participant, including the named executive group, would earn an incentive payment equal to the following percentages of their base salary: President, 60%; Senior Vice President, 50%; Vice Presidents, 45%; and Department Directors, 25%. Additional incentive pay would be earned by multiplying incentive earned when budgeted pre-tax profit was met by the percentage that actual pre-tax profit exceeded the budgeted goals. Incentive Plan bonuses were not paid for 1995 (see "SUMMARY COMPENSATION TABLE"). (iii) Stock Option Plan. The Stock Option Committee is responsible for the granting of stock options to the executive group under the Company's 1992 Stock Option Plan ("1992 Plan"). Under current stock option agreements with the named executives, the grant's value to the optionee is equal to the public trading price of the Company's stock. The optionee vests in 20% of the total shares granted on each of the five subsequent anniversary dates of the grant, and has up to 10 years from the date of the grant to exercise part or all of his grant. The Company believes that this combination of 20% annual vesting with a 10- year exercise period blends its desire to tie the optionee's motivation under the stock option grant to both short-term and long- term performance of the Company's stock. Under the 1992 Plan, the Stock Option Committee generally has discretion regarding size, recipients and other non-exercise-price terms and conditions of grants. Such discretion allows, but does not require, the Stock Option Committee to consider prior stock option grants to executives when considering new grants. Stock option grants made to the executive group have been based on advice from an independent consultant and on the judgement of the Stock Option Committee members. (iv) Deferred Salary Agreements. The Company has Deferred Salary Agreements with certain Company and subsidiaries' executives. The Company believes these Deferred Salary Agreements have aided it in retaining these individuals who average over 25 years of employment with it or its subsidiaries or in the transportation industry and have acquired experience, knowledge and contacts of considerable value to it. See "TERMINATION OF EMPLOYMENT AGREEMENTS" section for additional information. The Company believes that the Chief Executive Officer ("CEO") is the leader of the executive management team, and therefore the Compensation Committee and Stock Option Committee apply the same philosophy as discussed above to the CEO's compensation package. The members of the executive management team have, throughout their tenure, acquired substantial individual stock ownership in the Company. The Company believes its philosophy has built an experienced, motivated executive management team whose compensation package and stock ownership, both personal and through stock option grants, are closely linked to the interest of the Company's shareholders. EXECUTIVE COMPENSATION AND DEVELOPMENT COMMITTEE STOCK OPTION COMMITTEE William A. Marquard Arthur J. Fritz, Jr. John H. Morris Frank Edelstein Robert A. Young III Alan J. Zakon This Report will not be deemed to be incorporated by reference in any filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates this Report by reference. 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 Return Return Return Return Return May 1992 1992 1993 1994 1995 Arkansas Best Corporation 100.00 108.21 112.20 87.34 56.93 Peer Group 100.00 91.15 89.00 86.42 76.53 Nasdaq Market Index 100.00 107.89 129.42 135.88 176.24
The above comparisons assume $100 was invested on May 13, 1992 in the Company's Common Stock and each of the foregoing indices and assumes reinvestment of dividends. Following the Company's initial public offering, its Common Stock commenced trading on the Nasdaq Stock Market on May 13, 1992; therefore, five-year data are unavailable. All calculations have been prepared by Media General Financial Services. The shareholder return shown on the graph above is not necessarily indicative of future performance. During 1995, the Company considered itself primarily a long-haul less-than- truckload ("LTL") motor carrier of general commodities. Accordingly, the Company believes it is important that its performance be compared to that of other long-haul LTL motor carriers. Therefore, companies in the peer group are as follows: Caliber Systems, Inc. (formerly Roadway Services, Inc.); Consolidated Freightways, Inc.; and Yellow Corporation of Delaware. The Performance Graph will not be deemed to be incorporated by reference in any filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates the graph by reference. RETIREMENT AND SAVINGS PLANS Non-union employees of the Company who fulfill a minimum age and service requirement are eligible to participate in the Company's Retirement Plan which generally provides fixed benefits payable in annuity form upon retirement at age 65. Benefits also may be paid in the form of a lump sum at the participant's election. Credited years of service for each of the individuals named in the EXECUTIVE COMPENSATION - SUMMARY COMPENSATION TABLE ("Executive Compensation Table") are: Robert A. Young III, 31 years; Lary R. Scott, 0 years; Donald L. Neal, 37 years; David E. Stubblefield, 36 years; Richard F. Cooper, 12 years; and R. David Slack, 26 years. Benefits are based upon a participant's years of service with the Company and average total monthly earnings (exclusive of extraordinary remuneration and expense allowances and subject to the annual Code limitation after 1988 of $150,000 as adjusted to reflect cost of living increases) during any five consecutive calendar years during the participant's employment with the Company since 1980 which will give the participant the highest average monthly earnings. Benefits also are subject to certain other limitations in the Code. The following table illustrates the total estimated annual benefits payable from the Retirement Plan and the Company's Supplemental Benefit Plan (see below) upon retirement at age 65, in the form of a single life annuity, to persons in the specified compensation and years-of-service classifications. Benefits listed in the table are not subject to any deductions for Social Security or other offset amounts.
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 which are of considerable value to the Company. The amounts of deferred salary vary according to the individual and according to age at retirement or other termination of employment and are to be paid in 120 equal monthly installments after termination of the individual's employment. The amounts payable under the deferred salary agreements are not vested and are subject to forfeiture under certain circumstances. The Company has purchased life insurance on each of the individuals which will substantially reimburse it for the cost of the agreements. The Executive Compensation Table includes the amount accrued annually for each named executive under these agreements. CERTAIN TRANSACTIONS AND RELATIONSHIPS Stockholders' Agreement. Pursuant to the terms of a Stockholders' Agreement, the Company has agreed that it will offer Robert A. Young III the right to include shares of the Company's Common Stock he owns in certain registration statements filed by the Company (the "Piggy-back Rights"). The Company will indemnify Mr. Young for securities law liabilities in connection with any such offering, other than liabilities resulting from information furnished in writing by Mr. Young. The Company is obligated to pay all expenses incurred in connection with the registration of shares of Company Common Stock in connection with the Piggy-back Rights, excluding underwriters' discounts and commissions. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 The Company's executive officers, directors, and persons who own more than 10% of a registered class of the Company's equity securities are required to file, under the Securities Exchange Act of 1934, reports of ownership and changes of ownership with the Securities and Exchange Commission. Based solely on information provided to the Company, the Company believes that during the preceding year its executive officers, directors, and 10% shareholders have complied with all applicable filing requirements, except Mr. Marquard, who reported on February 9, 1996 the public market purchase of 10,000 shares of the Company's Common Stock on December 21, 1995. PROPOSAL II. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS The firm of Ernst & Young LLP served as independent auditors for the Company for the fiscal year ended December 31, 1995. Pursuant to the recommendation of the Audit Committee, the Board has appointed that firm to continue in that capacity for the fiscal year 1996, and recommends that a resolution be presented to shareholders at the 1996 Annual Meeting to ratify that appointment. In the event the shareholders fail to ratify the appointment of Ernst & Young LLP, the Board will appoint other independent public accountants as auditors. Representatives of Ernst & Young LLP will attend the 1996 Annual Meeting. They will have the opportunity to make a statement and respond to appropriate questions from shareholders. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL. OTHER MATTERS The Board does not know of any matters that will be presented for action at the 1996 Annual Meeting other than those described above and matters incident to the conduct of the meeting. If, however, any other matters not presently known to management should come before the 1996 Annual Meeting, it is intended that the shares represented by the accompanying proxy will be voted on such matters in accordance with the discretion of the holders of such proxy. COST OF SOLICITATION The cost of soliciting proxies will be borne by the Company. Proxies may be solicited by directors, officers, or regular employees of the Company in person, by telephone, telegram, or other means. The Company has retained Corporate Investor Communications, Inc. to assist in the solicitation and sending of proxy material. The Company will pay approximately $1,000 for these services. SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING Pursuant to Securities and Exchange Commission regulations, shareholder proposals submitted for next year's proxy statement must be received by the Company no later than the close of business on December 11, 1996 to be considered. Proposals should be addressed to Richard F. Cooper, Secretary, Arkansas Best Corporation, 3801 Old Greenwood Road, Fort Smith, AR 72903. In order to prevent controversy about the date of receipt of a proposal, the Company strongly recommends that any shareholder wishing to present a proposal submit the proposal by certified mail, return receipt requested. GENERAL Upon written request, the Company will provide shareholders with a copy of its Annual Report on Form 10-K to the Securities and Exchange Commission (including financial statements and schedules thereto) for the fiscal year ended December 31, 1995, without charge. Direct written requests to: Randall M. Loyd, Director, Financial Reporting, Arkansas Best Corporation, 3801 Old Greenwood Road, Fort Smith, AR 72903. PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY Fort Smith, Arkansas RICHARD F. COOPER Date: April 10, 1996 Secretary EX-99 2 ARKANSAS BEST CORPORATION Proxy Solicited by the Board of Directors for the Annual Meeting of Shareholders -- May 9, 1996 Donald L. Neal and Richard F. Cooper, jointly and severally, each with the power of substitution and revocation, are hereby authorized to represent the undersigned, with all powers which the undersigned would possess if personally present, to vote all shares the undersigned is entitled to vote at the Annual Meeting of Shareholders of Arkansas Best Corporation to be held at 3801 Old Greenwood Road, Fort Smith, Arkansas 72903, at 9:00 A.M. CDT on Thursday, May 9, 1996, and at any postponements or adjournments of that meeting, as set forth below, and in their discretion upon any other business that may properly come before the meeting. This proxy will be voted as specified or, if no choice is specified, will be voted FOR the election of the nominees named and FOR each of the other proposals specified herein. ** CONTINUED AND TO BE SIGNED ON REVERSE SIDE ** 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: William A. Marquard and Alan J. Zakon [] [] []________________________________ FOR AGAINST ABSTAIN 2. To ratify the appointment of Ernst & Young LLP as the Company's independent certified public accountants. [] [] [] PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHERE APPLICABLE, INDICATE OFFICIAL POSITION OR REPRESENTATIVE CAPACITY. Date: ___________________________ ___________________________________ SIGNATURE ___________________________________ SIGNATURE PLEASE VOTE, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
-----END PRIVACY-ENHANCED MESSAGE-----