ARKANSAS BEST CORPORATION
STOCK OPTION PLAN
1. Purpose
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The purpose of the Arkansas Best Corporation Stock Option Plan
(hereinafter called the "Plan") is to advance the interests of Arkansas Best
Corporation (hereinafter called the "Company") by strengthening the ability
of the Company to attract and retain key personnel of high caliber through
encouraging a sense of proprietorship by means of stock ownership.
Certain options granted under this Plan are intended to qualify as
"incentive stock options" pursuant to Section 422 of the Internal Revenue
Code of 1986 (the "Code"), while certain other options granted under the Plan
will constitute nonqualified options.
2. Definitions
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As used in this Plan, and in any Option Agreement, as hereinafter
defined, the following terms shall have the following meanings, unless the
context otherwise requires:
(a) "Common Stock" shall mean the common stock of the Company, par
value $.01 per share.
(b) "Date of Grant" shall mean the date on which a stock option is
granted pursuant to this Plan.
(c) "Disinterested Director" shall mean a director who is not,
during the one year prior to service as an administrator of the Plan, granted
or awarded an option pursuant to the Plan or any other plan of the Company or
any of its affiliates (except as provided in Section 4(b) of this Plan and as
may be permitted by the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules promulgated thereunder).
(d) "Fair Market Value" shall mean the closing sale price (or
average of the quoted closing bid and asked prices if there is no closing
sale price reported) of the Common Stock on the date specified as reported by
NASDAQ National Market System or by the principal national stock exchange on
which the Common Stock is then listed. If there is no reported price
information for such date, the Fair Market Value will be determined by the
reported price information for the Common Stock on the day nearest preceding
such date.
(e) "Optionee" shall mean the person to whom an option is granted
under the Plan or who has obtained the right to exercise an option in
accordance with the provisions of the Plan.
(f) "Plan Adoption Date" means the date on which the Plan is
adopted by the Board of Directors of the Company.
(g) "Subsidiary" shall mean any now existing or hereafter
organized or acquired corporation of which more than fifty percent (50%) of
the issued and outstanding voting stock is owned or controlled directly or
indirectly by the Company or through one or more Subsidiaries of the Company.
3. Shares Subject to the Plan
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The aggregate amount of Common Stock for which options may be granted
under this Plan shall not exceed 2,000,000 shares of Common Stock. Such
shares may be authorized and previously unissued shares or previously issued
shares that have been reacquired by the Company. Any shares subject to
unexercised portions of options granted under this Plan which shall have
terminated, been cancelled or expired may again be subject to options under
this Plan.
4. Administration
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(a) Notwithstanding anything to the contrary, to the extent
necessary to comply with the requirements of Rule 16b-3 under the Exchange
Act (or any successor thereto), the Plan shall be administered by the Board
of Directors, if each member is a Disinterested Director, or, at the option
of the Board of Directors, a committee of two or more Disinterested Directors
appointed by the Board of Directors of the Company (the group responsible for
administering the Plan is referred to herein as the "Committee"). Options
may be granted under this Section 4(a) only by the unanimous agreement of the
members of the Committee. Stock Option Agreements ("Option Agreements"), in
the form as approved by the Committee, and containing such terms and
conditions not inconsistent with the provisions of this Plan as shall have
been determined by the Committee, may be executed on behalf of the Company by
the Chairman of the Board, the President or any Vice President of the
Company. Except with respect to Section 4(b) of this Plan, the Committee
shall have complete authority to construe, interpret and administer the
provisions of the Plan and the provisions of the Option Agreements relating
to options granted hereunder; to prescribe, amend and rescind rules and
regulations pertaining to the Plan; and to make all other determinations
necessary or deemed advisable in the administration of the Plan. The
determinations, interpretations and constructions made by the Committee shall
be final and conclusive.
(b) Members of the Committee shall be specified by the Board of
Directors, and shall consist solely of Disinterested Directors and as such
shall not be eligible to receive options to purchase Common Stock pursuant to
Section 4(a) of the Plan. On May 12, 1994, and on the first trading day
after (i) January 1, 1995, and (ii) each January 1st thereafter, each
Disinterested Director serving as a Committee Member shall automatically be
granted nonqualified options to purchase 7,500 shares of the Company's Common
Stock at an exercise price per share equal to the closing price of the Common
Stock on the date of such automatic grant. This Section 4(b) shall not be
amended more than once every six months, other than to comport with changes
in the Code or the rules promulgated thereunder.
5. Eligibility
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Incentive stock options to purchase Common Stock may be granted under
Section 4(a) of the Plan to such key employees of the Company or its
Subsidiaries (including any director who is also a key employee of the
Company or one or more of its Subsidiaries) as shall be determined by the
Committee. Beginning with the Company's regular Board of Directors' meeting
in January, 1998, and at each regular Board of Directors' January meeting
thereafter, each Disinterested Director serving as a Committee member shall
automatically be granted nonqualified options to purchase 10,000 shares of
the Company's Common Stock. In the event that the Company does not have a
regular Board of Directors' meeting in January of any year, then the
automatic grant shall be made as of the last trading day of that January.
The exercise price per share shall be equal to the closing price of the
Common Stock on the date of such automatic grant. The Committee shall
determine which persons are to be granted options under Section 4(a) of the
Plan, the number of options, the number of shares subject to each option, the
exercise price or prices of each option, the vesting and exercise period of
each option, whether an option may be exercised as to less than all of the
Common Stock subject thereto, and such other terms and conditions of each
option, if any, as are not inconsistent with the provisions of this Plan. In
addition, the Committee may, in its sole discretion, provide for vesting of
stock options to accelerate upon a change in control of the Company and
enable an employee to "put" the excess of the fair market value over the
exercise price of the options to the Company in the event of a change in
control in conformity with the rules and regulations promulgated under the
Exchange Act. In connection with the granting of incentive stock options,
the aggregate Fair Market Value (determined at the Date of Grant of an
incentive stock option) of the shares with respect to which incentive stock
options are exercisable for the first time by an Optionee during any calendar
year (under all such plans of the Optionee's employer corporation and its
parent and subsidiary corporations as defined in Section 424 of the Code)
shall not exceed $100,000 or such other amount as from time to time provided
in Section 422(d) of the Code or any successor provision. In connection with
the granting of options under this Plan, the aggregate number of shares of
Common Stock issuable to any single Optionee shall not exceed the number of
shares subject to the Plan referred to in Section 3.
6. Exercise Price
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The purchase price or prices for Common Stock subject to an option (the
"Exercise Price") granted pursuant to Section 4(a) of the Plan shall be
determined by the Committee at the Date of Grant; provided, however, that (a)
the Exercise Price for any option shall not be less than 100% of the Fair
Market Value of the Common Stock at the Date of Grant, and (b) if the
Optionee owns more than 10 percent of the total combined voting power of all
classes of stock of the Company or its parent or any of its subsidiaries, as
more fully described in Section 422(b)(6) of the Code or any successor
provision (such stockholder is referred to herein as a "10-Percent
Stockholder"), the Exercise Price for any incentive stock option granted to
such Optionee shall not be less than 110% of the Fair Market Value of the
Common Stock at the Date of Grant.
7. Term of Stock Options and Limitations on Right to Exercise
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No incentive stock option granted pursuant to Section 4(a) of this Plan
shall be exercisable (a) more than five years after the Date of Grant with
respect to a 10-Percent Stockholder, and (b) more than ten years after the
Date of Grant with respect to all persons other than 10-Percent Stockholders.
No nonqualified stock option granted pursuant to Section 4(a) of this Plan
shall be exercisable more than ten years after the Date of Grant. Subject to
the conditions set forth in Section 4(b) of this Plan, nonqualified stock
options granted to members of the Committee pursuant to Section 4(b) of this
Plan shall be exercisable for ten years, except that in the event of death or
termination of such member as a director of the Company or a Subsidiary, such
nonqualified stock options shall only be exercisable for one year following
the date of such member's death or termination (or, if shorter, the remaining
term of the option). The Company shall not be required to issue any
fractional shares upon the exercise of any options granted under this Plan.
No Optionee nor his legal representatives, legatees or distributees, as the
case may be, will be, or will be deemed to be, a holder of any shares subject
to an option unless and until said option has been exercised and the purchase
price of the shares in respect of which the option has been exercised has
been paid. An option shall not be exercisable except by the Optionee or by a
person who has obtained the Optionee's rights under the option by will or
under the laws of descent and distribution.
8. Termination of Employment
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The Committee shall determine at the Date of Grant what conditions shall
apply to the exercise of an option granted under Section 4(a) in the event an
Optionee shall cease to be employed by the Company or a Subsidiary for any
reason. In the event of the death of an Optionee while in the employ or
while serving as a director of the Company or a Subsidiary, the option
theretofore granted to him shall be exercisable by the executor or
administrator of the Optionee's estate, or if the Optionee's estate is not in
administration, by the person or persons to whom the Optionee's rights shall
have passed under the Optionee's will or under the laws of descent and
distribution, within the year next succeeding the date of death or such other
period as may be specified in the Option Agreement, but in no case later than
the expiration date of such option, and then only to the extent that the
Optionee was entitled to exercise such option at the date of his death.
Neither this Plan nor any option granted hereunder is intended to confer upon
any Optionee any rights with respect to continuance of employment or other
utilization of his services by the Company or by a Subsidiary, nor to
interfere in any way with his right or that of his employer to terminate his
employment or other services at any time (subject to the terms of any
applicable contract).
9. Dilution or Other Adjustments
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In the event that there is any change in the Common Stock subject to
this Plan or subject to options granted hereunder as the result of any stock
dividend on, dividend of or stock split or stock combination of, or any like
change in, stock of the same class or in the event of any change in the
capital structure of the Company, the Board of Directors or the Committee
shall make such adjustments with respect to options, or any provisions of the
Plan, as it deems appropriate to prevent dilution or enlargement of option
rights.
10. Expiration and Termination of the Plan
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Options may be granted at any time under Section 4(a) of the Plan and as
specified under Section 4(b) of the Plan prior to December 31, 2001, as long
as the total number of shares which may be issued pursuant to options granted
under this Plan does not (except as provided in Section 9 above) exceed the
limitations of Section 3 above. This Plan may be abandoned, suspended or
terminated at any time by the Board of Directors of the Company except with
respect to any options then outstanding under the Plan.
11. Restrictions on Issuance of Shares
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(a) The Company shall not be obligated to sell or issue any shares
upon the exercise of any option granted under this Plan unless:
(i) the shares with respect to which such option is being
exercised have been registered under applicable federal securities
laws or are exempt from such registration;
(ii) the prior approval of such sale or issuance has been
obtained from any state regulatory body having jurisdiction; and
(iii) in the event the Common Stock has been listed on any
exchange, the shares with respect to which such option is being
exercised have been duly listed on such exchange in accordance with
the procedure specified therefor.
If the shares to be issued upon the exercise of any option granted under the
Plan are intended to be issued by the Company in reliance upon the exemptions
from the registration requirements of applicable federal securities laws, the
Optionee, if so requested by the Company, shall furnish to the Company such
evidence and representations, including an opinion of counsel, satisfactory
to it, as the Company may reasonably request.
(b) No option granted pursuant to the Plan shall be transferable
by the Optionee other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or the rules
thereunder.
(c) Any Common Stock issued to an officer or director of the
Company pursuant to the exercise of an option granted pursuant to the Plan
shall not be transferred until at least six months have elapsed from the Date
of Grant of such option to the date of disposition of the Common Stock
underlying such option.
(d) The Board of Directors or Committee may impose such other
restrictions on the ownership and transfer of shares issued pursuant to this
Plan as it deems desirable; any such restrictions shall be set forth in any
Option Agreement entered into hereunder.
12. Proceeds
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The proceeds to be received by the Company upon exercise of any option
granted under this Plan may be used for any proper purposes.
13. Amendment of the Plan
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Except as provided in Section 4(b) of the Plan, the Board of Directors
may amend the Plan from time to time in such respects as it may deem
advisable in its sole discretion or in order that the options granted
hereunder shall conform to any change in applicable laws, including tax laws,
or in regulations or rulings of administrative agencies or in order that
options granted or stock acquired upon exercise of such options may qualify
for simplified registration under applicable securities or other laws;
provided, however, that no amendment may be made without the consent of
stockholders which would materially (a) increase the benefits accruing to
participants under the Plan, (b) increase the number of securities which may
be issued under the Plan, other than in accordance with Section 9 hereof, or
(c) modify the requirements as to eligibility for participation in the Plan.
14. Payment Upon Exercise
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Upon the exercise of any option granted under the Plan, the Company may
make financing available to the Optionee for the purchase of the Common Stock
that may be acquired pursuant to the exercise of such option on such terms as
the Committee shall specify. An Optionee may pay the Exercise Price of the
shares of Common Stock as to which an option is being exercised by the
delivery of cash, a certified or cashier's check or by the delivery of shares
of Common Stock having a Fair Market Value on the date of exercise at least
equal to the Exercise Price.
Any option granted under the Plan may be exercised by a broker-dealer
acting on behalf of an Optionee if (a) the broker-dealer has received from
the Optionee or the Company a fully and duly endorsed agreement evidencing
such option, together with instructions signed by the Optionee requesting the
Company to deliver the shares of Common Stock subject to such option to the
broker-dealer on behalf of the Optionee and specifying the account into which
such shares should be deposited, (b) adequate provision has been made with
respect to the payment of any withholding taxes due upon such exercise, and
(c) the broker-dealer and the Optionee have otherwise complied with
Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any successor
provision.
15. Stockholders' Approval
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The Plan has been approved by a majority of the stockholders of the
Company.
16. Liability of the Company
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Neither the Company, its directors, officers or employees, nor any of
the Company's Subsidiaries which are in existence or hereafter come into
existence, shall be liable to any Optionee or other person if it is
determined for any reason by the Internal Revenue Service or any court having
jurisdiction that any incentive stock options granted hereunder do not
qualify for tax treatment as incentive stock options under Section 422 of the
Code.