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
1000 South 21st Street
Fort Smith, AR 72901
-----------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
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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
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*Set forth the amount on which the filing fee is calculated and state how
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
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was paid previously. Identify the previous filing by registration
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ARKANSAS BEST CORPORATION
April 11, 1994
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 10, 1994 at 1:00 p.m. at 1000
South 21st Street, Fort Smith, Arkansas 72901. 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 48, FORT SMITH, ARKANSAS 72902
ARKANSAS BEST CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 10, 1994
To the Shareholders:
The Annual Meeting of Shareholders of Arkansas Best Corporation, a Delaware
corporation, will be held at 1000 South 21st Street, Fort Smith, Arkansas
72901 on Tuesday, May 10, 1994 at 1:00 p.m. for the following purposes:
1. To elect two Class II directors for terms to expire at the 1997 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 as independent auditors
for fiscal year 1994;
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 14, 1994 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 11, 1994 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 10, 1994 ("1994 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
1993 Annual Report to Shareholders are being mailed to shareholders
beginning on or about April 11, 1994. ABC's principal place of business is
1000 South 21st Street, Fort Smith, Arkansas 72901, and its telephone
number is 501/785-6000.
RECORD DATE
The Board has fixed the close of business on March 14, 1994 as the record
date for the 1994 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 1994 Annual Meeting.
VOTING SHARES
On the record date, there were 19,200,077 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 1994 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
1994 Annual Meeting of Shareholders whose members' terms will expire at the
1997 Annual Meeting of Shareholders, two in the class whose members' terms
will expire at the 1995 Annual Meeting of Shareholders, and two in the
class whose members' terms will expire at the 1996 Annual Meeting of
Shareholders.
It is intended that the shares represented by the accompanying proxy will
be voted at the 1994 Annual Meeting for the election of nominees Arthur J.
Fritz, Jr. and John H. Morris as the two directors in the class of
directorships whose members' terms will expire in 1997, unless the proxy
specifies otherwise. Each nominee has indicated his willingness to serve
as a member of the Board, if elected.
If, for any reason not presently known, Messrs. Fritz and/or Morris will
not be available for election at the time of the 1994 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 1994 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 1994 Annual
Meeting.
Name Age Business Experience
CLASS II -- Term Expires May 1994
Arthur J. Fritz, Jr. 53 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, is Chairman of
LogiCorp Inc., 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.
DIRECTORS OF THE COMPANY
Name Age Business Experience
John H. Morris 50 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. Mr. Morris is
a Director of Landstar Systems, Inc.
CLASS III -- Term Expires May 1995
Frank Edelstein 68 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 53 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 President of ABF Freight System, Inc.
("ABF") since 1979 and Chief Executive
Officer of Treadco, Inc. since June 1991.
Mr. Young has been a Director of the Company
since 1970, a Director of ABF since 1966, and
a Director of Treadco, Inc. since June 1991.
Mr. Young also is a Director of Mosler, Inc.
DIRECTORS OF THE COMPANY
Name Age Business Experience
CLASS I -- Term Expires May 1996
William A. Marquard 74 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, and Earle M. Jorgensen
Co.
Alan J. Zakon, Ph.D 58 Dr. Zakon has been a Director of the
Company since February 1993. Dr. Zakon
currently is a Managing Director of Bankers
Trust Company, 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 a Director of Augat
Corporation, Autotote Corporation, Boyle
Leasing Technologies, Inc., Hechinger
Corporation, and Laurentian Capital
Corporation, and is a former member of the
Advisory Committee to the Stanford University
Graduate School of Business.
*Reference to the "Company" for years prior to 1988 means Arkansas Best
Holdings Corp., the former holding company which was merged into the
Company on February 26, 1993.
BOARD OF DIRECTORS AND COMMITTEES
The business of the Company is managed under the direction of the Board of
Directors. The Board meets on a regularly scheduled basis four times a
year to review significant developments affecting the Company and to act on
matters requiring Board approval. It also holds special meetings when an
important matter requires Board action between scheduled meetings. The
Board met four times and acted by unanimous written consent three times
during 1993. During 1993, 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
1993 are described below. The Board does not have a committee for
nomination of directors. The Board nominates persons to be nominees 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 1993.
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 1993.
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 1993.
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 3, 1993, for
7,500 shares of the Company's Common Stock at a fair market value exercise
price of $9.50 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 14, 1994, 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) 2,485,900 12.96
82 Devonshire Street
Boston, MA 02109
State of Wisconsin Investment Board (2) 1,812,500 9.44
P. O. Box 7842
Madison, WI 53707
MacKay-Shields Financial Corporation (3) 1,242,984 6.40
9 West 57th Street
New York, NY 10019
Pioneering Management Corporation (4) 975,000 5.08
60 State Street
Boston, MA 02114
Neuberger & Berman (5) 958,300 5.03
605 Third Avenue
New York, NY 10158
Shares Percentage
Beneficially of Shares
Owned Outstanding
(ii) Name Position
Robert A. Young III (6)(7)(8) Director, President,
Chief Executive Officer 2,005,639 10.4
William A. Marquard (9) Director 141,048 *
John H. Morris (10) Director 109,015 *
Arthur J. Fritz, Jr. (11) Director 32,971 *
Frank Edelstein (12) Director 4,823 *
Alan J. Zakon Director 5,000 *
Donald L. Neal (7) Senior Vice President 55,940 *
David E. Stubblefield (7) Senior Vice President 83,910 *
Jerry A. Yarbrough (7) Senior Vice President 83,910 *
John R. Meyers (7) Vice President 20,978 *
E. George Myers (14) Vice President 6,993 *
Richard F. Cooper (7) Vice President 4,196 *
R. David Slack (7) Vice President 3,297 *
(iii) All Directors and Executive Officers as a Group (13) 2,557,720 13.3
*Less than 1%
<FN>
<F1>
(1) According to the most recent Schedule 13G it has provided to the
Company, FMR Corp. has, through certain subsidiaries or other entities
it controls, the following voting and investment powers with respect
to such shares: (a) sole voting power, 35,500; (b) shared voting
power, none; (c) sole investment power, 2,485,900; (d) shared
investment power, none. One wholly-owned subsidiary, Fidelity
Management & Research Company, is the beneficial owner of 2,477,700
shares or 12.91% of the Company's Common Stock.
<F2>
(2) According to the most recent Schedule 13G it has provided to the
Company, the State of Wisconsin Investment Board has the following
voting and investment powers with respect to such shares: (a) sole
voting power, 1,812,500; (b) shared voting power, not applicable; (c)
sole investment power, 1,812,500; (d) shared investment power, not
applicable.
<F3>
(3) According to the most recent Schedule 13G it has provided to the
Company, MacKay-Shields Financial Corporation beneficially owns
1,015,400 shares of the Company's Common Stock and could acquire
227,584 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, 1,242,984; (c) sole investment
power, not applicable; (d) shared investment power, 1,242,984.
<F4>
(4) According to the most recent Schedule 13G it has provided to the
Company, Pioneering Management Corporation has the following voting
and investment powers with respect to such shares: (a) sole voting
power, 975,000; (b) shared voting power, none; (c) sole investment
power, none; (d) shared investment power, 975,000.
<F5>
(5) 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.
<F6>
(6) The business address for such person is c/o Arkansas Best Corporation,
1000 South 21st Street, Fort Smith, Arkansas 72901.
<F7>
(7) Excludes shares allocated to such stockholder's Investment Plan
account. As of March 14, 1994, shares allocated to the Investment Plan
accounts of Mr. Young and all executive officers and directors as a
group were 1,099 and 4,311 shares, respectively. Mr. Young disclaims
beneficial ownership of such shares.
<F8>
(8) 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).
<F9>
(9) Mr. Marquard indirectly beneficially owns 10,000 shares (less than 1%)
of Treadco's outstanding common stock.
<F10>
(10) Mr. Morris indirectly owns all 109,015 shares as co-trustee of the
John H. Morris and Sharon L. Morris Family Trust.
<F11>
(11) Includes 11,993 shares held by Trayjen, L.P., which are indirectly
owned by Mr. Fritz by virtue of his status as general partner.
<F12>
(12) Mr. Edelstein indirectly owns all 4,823 shares as joint trustee of the
Edelstein Living Trust.
<F13>
(13) All directors and executive officers of the Company as a group may be
deemed to beneficially own, directly or indirectly, approximately
2,340,800 shares of Treadco common stock.
<F14>
(14) Includes 4,196 shares owned by Mr. Myers' IRA account.
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.* 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 53 See previous description. 29
President-Chief
Executive Officer
Donald L. Neal 63 Mr. Neal has been Senior Vice President of the 35
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 46 Mr. Meyers has been Vice President-Treasurer 21
Vice President- of the Company since 1979. Mr. Meyers also has
Treasurer been Treasurer of ABF Freight System, Inc.
("ABF"), the Company's largest subsidiary, since
1979 and Treasurer of Treadco since June 1991.
Years
at the
Name Age Business Experience Company**
David E. Stubblefield 56 Mr. Stubblefield has been Senior Vice President- 34
ABF Senior Vice Marketing of ABF since 1979, and a director of
President-Marketing ABF since 1985.
Jerry A. Yarbrough 55 Mr. Yarbrough has been Senior Vice President- 25
ABF Senior Vice Operations of ABF since 1979, and director of
President-Operations ABF since 1985. Mr. Yarbrough is also Chairman
of the Board and President of Data-Tronics Corp.,
another subsidiary of the Company.
Richard F. Cooper 42 Mr. Cooper has been Vice President-Risk Management 10
Vice President-Risk of the Company since April 1991 and Vice
Management, General President-General Counsel since 1986. Mr. Cooper
Counsel and Secretary has been Secretary since 1987. Mr. Cooper
also has been Secretary of ABF since 1987 and
Secretary of Treadco since June 1991.
R. David Slack 51 Mr. Slack has been Vice President-Comptroller of 24
Vice President- the Company since January 1990. From January 1989
Comptroller to January 1990, Mr. Slack was Comptroller. Prior
to 1989, Mr. Slack was a director in the Accounting
Department.
E. George Myers 57 Mr. Myers has been Vice President-Human Resources 35
Vice President- of the Company since November 1990. Prior to
Human Resources November 1990, Mr. Myers was a Regional Vice
President-Operations of ABF.
<FN>
<F1>
* Reference to the "Company" for years prior to 1988 means Arkansas Best
Holdings Corp., the former holding company which was merged into the
Company on February 26, 1993.
<F2>
** 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 1993.
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) ($) (#)(3) ($) ($)(2)(4)
Robert A. Young III 1993 $330,000 - - - - - $77,215
President and Chief 1992 300,000 53,261 - - 54,600 - 98,094
Executive Officer 1991 295,833 - - - - - -
Donald L. Neal 1993 159,000 - - - - - 101,409
Senior Vice President- 1992 145,000 53,261 - - 20,500 - 60,971
Chief Financial 1991 132,500 - - - - - -
Officer
David E. Stubblefield 1993 159,000 - - - - - 34,177
Senior Vice President- 1992 145,000 53,261 - - 20,500 - 34,422
Marketing and 1991 132,500 - - - - - -
Director of ABF
Jerry A. Yarbrough 1993 159,000 - - - - - 29,780
Senior Vice President- 1992 145,000 53,261 - - 20,500 - 28,413
Operations and 1991 132,500 - - - - - -
Director of ABF
John R. Meyers 1993 121,900 - - - - - 8,834
Vice President- 1992 111,667 32,367 - - 15,700 - 10,258
Treasurer 1991 103,308 - - - - - -
Richard F. Cooper 1993 121,900 - - - - - 8,167
Vice President- 1992 111,667 32,367 - - 15,700 - 8,815
Risk Management, 1991 103,308 - - - - - -
General Counsel
and Secretary
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Name Other Restricted Underlying
and Annual Stock Options/ LTIP All Other
Principal Salary Bonus Compensation Award(s) SARs Payouts Compensation
Position Year ($) ($)(1) ($)(2) ($) (#)(3) ($) ($)(2)(4)
R. David Slack 1993 121,900 - - - - - 13,106
Vice President- 1992 111,667 32,367 - - 15,700 - 15,074
Comptroller 1991 103,308 - - - - - -
E. George Myers 1993 121,900 - - - - - 16,994
Vice President- 1992 111,667 32,367 - - 15,700 - 16,471
Human Resources 1991 103,308 - - - - - -
<FN>
<F1>
(1) Reflects bonus earned during the fiscal year. Bonuses are normally paid
during the next fiscal year.
<F2>
(2) Disclosure of Other Annual Compensation and All Other Compensation is
not required for 1991.
<F3>
(3) Options to acquire shares of Common Stock.
<F4>
(4) "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
$2,249; $2,123; $2,123; $2,123; $1,543; $1,543; $1,543; and $1,543 for
each named executive, respectively; (ii) amounts accrued under the
Company's Supplemental Benefit Plan of $63,591; $74,665; $26,533;
$22,897; $7,018; $6,436; $11,066; and $14,092 for each named executive,
respectively; and (iii) amounts accrued under Deferred Salary Agreements of
$11,375; $24,621; $5,521; $4,760; $273; $188; $497; and $1,359 for each
named executive, respectively. The Deferred Salary Agreements are not
performance-based incentive plans.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTIONS/SAR VALUES
The following table provides information related to options exercised by the
named executive officers during the 1993 fiscal year and the number and value
of options held at fiscal year end. The Company does not have any
outstanding stock appreciation rights.
Number of Securities
Shares Underlying Unexercised Options/ In-the-Money Options/SARs
Acquired Value SARs at Fiscal Year-End (#) at Fiscal Year-End ($)(1)
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
Robert A. Young III - - 10,920 43,680 $51,870 $207,480
Donald L. Neal - - 4,100 16,400 19,475 77,900
David E. Stubblefield - - 4,100 16,400 19,475 77,900
Jerry A. Yarbrough - - 4,100 16,400 19,475 77,900
John R. Meyers - - 3,140 12,560 14,915 59,660
Richard F. Cooper - - 3,140 12,560 14,915 59,660
R. David Slack - - 3,140 12,560 14,915 59,660
E. George Myers - - 3,140 12,560 14,915 59,660
<FN>
<F1>
(1) The closing price for the Company's Common Stock as reported by the
NASDAQ Stock Market on December 31, 1993 was $15.625. Value is
calculated on the basis of the difference between the option exercise
price and $15.625 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 Incentive Plan is 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. No
Incentive Plan bonuses were paid for 1993.
(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 members of the executive management team. 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.
The Company believes that the effectiveness of its philosophy is reflected
in its retaining an executive management team that: (i) led the Company to
exceed $1 billion in revenues in 1993 for the first time in its history;
(ii) grew ABF, the Company's primary operating subsidiary, to become the
fifth largest motor carrier of general commodities in the United States from
the 48th largest in 1965; (iii) produced the best operating ratio in 1993
among ABF and its Peer Group (based on 1993 reports filed with the
Interstate Commerce Commission); and (iv) successfully managed the Company
through four years (1988-92) of being financially highly leveraged.
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
1992 1992 1993
Arkansas Best Corporation 100.00 108.21 112.20
Peer Group 100.00 91.20 88.87
Nasdaq Market Index 100.00 107.89 129.42
========================================
Source: Media General Financial Services
The above comparisons assume $100 was invested on May 13, 1992 in the
Company's Common Stock and each of the foregoing indices and assumes
reinvestment of dividends. Following the Company's initial public offering,
its Common Stock commenced trading on the Nasdaq Stock Market on May 13,
1992; therefore, five-year data are unavailable. All calculations have been
prepared by Media General Financial Services. The shareholder return shown
on the graph above is not necessarily indicative of future performance.
The Company considers itself a 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:
Roadway Services, Inc.; Consolidated Freightways, Inc.; Yellow Freight
System, Inc. of Delaware; 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 PLAN
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 Table are: Robert A. Young
III, 29 years; Donald L. Neal, 35 years; John R. Meyers, 21 years; David E.
Stubblefield, 34 years; Jerry A. Yarbrough, 25 years; E. George Myers, 35
years; Richard F. Cooper, 10 years; and R. David Slack, 24 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 $200,000
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 and their 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 has recommended that the
shareholders approve, an amendment (the "Option Plan Amendment") to the
Company's 1992 Stock Option Plan (the "1992 Plan"). This amendment would
provide for the automatic grant of non-qualified stock options to certain
non-employee directors of the Company while serving on the 1992 Plan's Stock
Option Committee, as described below under "Description of Option Plan
Amendment." The Option Plan Amendment does not increase the number of
shares authorized to be issued under the 1992 Plan.
Description of 1992 Plan
The 1992 Plan, which was adopted by the Board of Directors on March 13,
1992, provides that up to 1,000,000 shares of Common Stock are available for
awards of incentive and nonqualified stock options to directors and key
employees of the Company and subsidiaries. Any shares subject to
unexercised portions of options granted under the 1992 Plan that have
terminated may be regranted under new options.
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 14,
1994, options for 583,800 shares of Common Stock have been granted under the
1992 Plan, all of which are still outstanding. On March 14, 1994 the last
reported sale price of the Common Stock was $13.75.
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. Directors who serve on the Committee are not eligible for
discretionary grants under the 1992 Plan, but are automatically granted
NQSOs to purchase 7,500 shares in each calendar year in which ABF Freight
System, Inc.'s Interstate Commerce Commission's Operating Ratio is 95% or
less. As noted above, the Board of Directors has approved a proposed
amendment that would provide for the unconditional automatic grant of NQSOs
to directors on the Committee. See "Description of Option Plan Amendment"
below.
No NQSO shares have been granted under the 1992 Plan to directors on the
Committee.
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 will generally 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.
The Option Plan Amendment provides that a NQSO of 7,500 shares of the
Company's Common Stock will automatically be granted to each director who is
then serving on the Committee, as follows: (i) May 12, 1994, and (ii) the
first trading day after January 1st of each year, commencing in 1995. The
exercise price of the options would be 100% of the fair market value of the
Company's Common Stock, determined as provided in the 1992 Stock Option
Plan. If the Option Plan Amendment is adopted, Messrs. Edelstein, Fritz,
and Zakon as the current Committee members would be eligible to receive such
option grants in 1994.
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 1994 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 OPTION PLAN BENEFITS
Name and Position Number of Units (1)
Robert A. Young III, Director and President -
Chief Executive Officer (2)(3)
Donald L. Neal, Senior Vice President -
Chief Financial Officer (2)(3)
David E. Stubblefield, ABF Senior Vice
President - Marketing (2)(3)
Jerry A. Yarbrough, ABF Senior Vice
President - Operations (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)
Arthur J. Fritz, Jr., Director Nominee,
Committee Member 7,500
John H. Morris, Director Nominee (2)(4)
Non-Executive Director Group 22,500 (4)
Executive Group (2)(3)
Non-Executive Officer Employee Group (2)(5)
<FN>
<F1>
(1) Number of options to be granted during 1994 to the named individual or
group under the 1992 Plan as proposed to be amended by the Option Plan
Amendment.
<F2>
(2) Number of, and recipients of, options to be granted under the 1992 Plan
are at the Committee's discretion and therefore are not determinable.
None of these individuals would receive option grants as a result of
the Option Plan Amendment.
<F3>
(3) For information concerning the number of options previously granted to
each executive officer under the 1992 Plan, see "EXECUTIVE COMPENSATION
- AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-
END OPTIONS/SAR VALUES."
<F4>
(4) Three members of this group, Messrs. Edelstein, Fritz, and Zakon, are
Committee members and would each receive options for 7,500 shares of
the Company's Common Stock under the Option Plan Amendment. Two
members of this group, Messrs. Marquard and Morris, are not Committee
members and would not receive any option grants as a result of the
Option Plan Amendment. For information concerning the number of
options previously granted to Messrs. Morris and Marquard under the
1992 Plan, see "BOARD OF DIRECTORS AND COMMITTEES - Director
Compensation."
<F5>
(5) Under the 1992 Plan, thirty-seven members of this group received a
total of 372,700 option shares on July 22, 1992 at a fair market value
exercise price of $10.875 per share, and two members of this group
received a total of 17,200 option shares on January 26, 1994 at a fair
market value exercise price of $13.875 per share. None of this group
would 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 outside directors.
The affirmative vote of a majority of the shares entitled to vote at the
1994 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 served as independent auditors for the Company for
the fiscal year ended December 31, 1993. Pursuant to the recommendation of
the Audit Committee, the Board has appointed that firm to continue in that
capacity for the fiscal year 1994, and recommends that a resolution be
presented to shareholders at the 1994 Annual Meeting to ratify that
appointment.
In the event the shareholders fail to ratify the appointment of Ernst &
Young, the Board will appoint other independent public accountants as
auditors. Representatives of Ernst & Young will attend the 1994 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 1994 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 1994 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 1995 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 12, 1994 to be
considered. Proposals should be addressed to Richard F. Cooper, Secretary,
Arkansas Best Corporation, 1000 South 21st Street, Fort Smith, AR 72901. 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, 1993, without charge. Direct written requests to:
Randall M. Loyd, Director, Financial Reporting, Arkansas Best Corporation,
1000 South 21st Street, Fort Smith, AR 72901.
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY
Fort Smith, Arkansas RICHARD F. COOPER
Date: April 11, 1994 Secretary
ARKANSAS BEST CORPORATION
LIST OF EXHIBITS
Exhibit
No. Page
99.1 Arkansas Best Corporation Proxy Card
99.2 Arkansas Best Corporation Stock Option Plan
99.3 Amendment to the Arkansas Best Corporation
Stock Option Plan