EXHIBIT 10.1
ARKANSAS BEST CORPORATION
EXECUTIVE OFFICER
ANNUAL INCENTIVE COMPENSATION PLAN
As Established Effective January 1, 2005
SECTION 1. ESTABLISHMENT AND
PURPOSE
1.1 ESTABLISHMENT OF THE
PLAN
Arkansas Best Corporation, a
Delaware corporation, hereby establishes an annual incentive
compensation plan to be known as the “Executive Officer
Annual Incentive Compensation Plan” (the “Plan”),
as set forth in this document. The Plan permits annual cash awards
to Executive Officers of the Company and Subsidiaries, based on the
achievement of pre-established performance goals. The Plan shall
become effective as of January 1, 2005 (the “Effective
Date”) and shall remain in effect until terminated as
provided in Section 11 herein.
1.2 PURPOSE
The purposes of the Plan are to:
(a) retain and attract qualified individuals by rewarding
those practices which enhance the financial performance of the
Company; (b) encourage teamwork among Executive Officers in
various segments of the Company; (c) reward performance with
pay that varies in relation to the extent to which the
pre-established goals are achieved; and (d) ensure that the
compensation paid under this Plan qualifies for the
“performance based compensation” exemption under Code
Section 162(m).
SECTION 2. DEFINITIONS
The following terms shall have
the meanings set forth below whenever used in this document and,
when the defined meaning is intended, the term is
capitalized:
2.1 “ABC” means
Arkansas Best Corporation.
2.2 “BASE SALARY”
means, as to any specific Plan Year, an Executive Officer’s
base salary paid in the fiscal year for which the annual incentive
is earned. Base salary shall not be reduced by any voluntary salary
reductions or any salary reduction contributions made to any salary
reduction plan, defined contribution plan or other deferred
compensation plans of the Company.
2.3 “BOARD” OR
“BOARD OF DIRECTORS” means the ABC Board of
Directors.
2.4 “CHANGE IN
CONTROL” means, unless the Committee or the Board provides
otherwise, the occurrence of any of the following
events:
(i) The
acquisition by any individual, entity or group (within the meaning
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
as amended (the “ Exchange Act ”)) (a “
Person ”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 35% or
more of either (i) the then outstanding Shares (the “
Outstanding Company Common Stock ”) or (ii) the
combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the “ Outstanding Company Voting Securities ”);
provided, however, that for purposes of this subsection (i), the
following acquisitions will not constitute a Change in Control:
(A) any acquisition directly from the Company, (B) any
acquisition by the Company, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or
(D) any acquisition by any corporation pursuant to a
transaction that constitutes a Merger of Equals as defined in
subsection (iii) of this Section 2(d).
(ii) In any
12-month period, the individuals who, as of the beginning of the
12-month period, constitute the Board (the “ Incumbent
Board ”) cease for any reason to constitute at least a
majority of the Board of Directors; provided, however, that any
individual becoming a director subsequent to the Effective Date
whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board will be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of
Directors.
(iii) Consummation
of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the
Company or any of its subsidiaries (each, a “ Business
Combination ”), in each case, unless such Business
Combination constitutes a Merger of Equals. A Business Combination
will constitute a “ Merger of Equals ” if,
following such Business Combination, (A) all or substantially
all of the individuals and entities that were the beneficial
owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries) (the “ Resulting
Corporation ”) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding the
Resulting Corporation and its affiliates or any employee benefit
plan [or related trust] of the Resulting Corporation and its
affiliates) beneficially owns, directly or indirectly, 35% or more
of, respectively, the then-outstanding shares of common stock of
the Resulting Corporation or the combined voting power of the then
outstanding voting securities of the Resulting Corporation except
to the extent that such ownership existed with respect to the
Company prior to the Business Combination, and (C) at least a
majority of the members of the board of directors of the Resulting
Corporation (the “ Resulting Board ”) were
members of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board of Directors,
providing for such Business Combination; or
(iv) The sale
or other disposition of all or substantially all of the assets of
the Company to any Person, other than a transfer to (A) any
corporation or other Person of which a majority of its voting power
or its voting equity securities or equity interest is owned,
directly or indirectly, by the Company or (B) any corporation
pursuant to a transaction that constitutes a Merger of Equals as
defined in subsection (iii) of this
Section 2(d).
(v) A
complete liquidation or dissolution of the Company.
Notwithstanding anything herein
to the contrary, in no event shall amounts in respect of Awards
that, as determined by the Committee in its sole discretion,
provide for the deferral of compensation, be distributed upon a
Change in Control prior to the occurrence of either a “change
in the ownership or effective control” of the Company or in
the “ownership of a substantial portion of the assets”
of the Company within the meanings ascribed to such terms in
Treasury Department regulations or other guidance issued under
Section 409A of the Code.”
2.5 “CODE” means the
Internal Revenue Code of 1986, as amended.
2.6 “COMMITTEE” means
a committee of two (2) or more individuals, all of whom shall
be “outside directors” within the meaning of the
regulations under Code Section 162(m), appointed by the Board
to administer the Plan, pursuant to Section 3
herein.
2.7 “COMPANY” means
Arkansas Best Corporation, a Delaware corporation, (including, as
appropriate, any and all Subsidiaries) and any successor
thereto.
2.8 “DISABILITY”
means a physical or mental condition resulting from bodily injury,
disease or mental disorder, which constitutes a disability under
the terms of the Company’s Short Term Disability
Policy.
2.9 “EFFECTIVE DATE”
means the date the Plan becomes effective, as set forth in
Section 1.1 herein.
2.10 “EMPLOYEE” means
a full-time, salaried employee of the Company or a
Subsidiary.
2.11 “EXCHANGE ACT”
means the Securities Exchange Act of 1934, as amended from time to
time, or any successor act thereto.
2.12 “EXECUTIVE
OFFICER” means an Employee who, as of the last day of the
applicable Plan Year, is covered by the compensation limitations of
Code Section 162(m) or the regulations issued
thereunder.
2.13 “FINAL AWARD”
means the actual award earned during a Plan Year by an Executive
Officer.
2.14 “INDIVIDUAL AWARD
OPPORTUNITY” means the various levels of incentive award
compensation which an Executive Officer may earn under the Plan
including Target Incentive Awards, as established by the Committee
pursuant to Section 5.
2.15 “PLAN YEAR”
means the Company’s fiscal year.
2.16 “RETIREMENT”
means termination from active employment with the Company and its
Subsidiaries (a) at or after age 55 and with at least ten
(10) years of service with the Company and its Subsidiaries,
or (b) at or after age 65.
2.17 “SUBSIDIARY”
means any corporation in which ABC, or a Subsidiary of ABC, owns
fifty percent (50%) or more of the total combined voting power of
all classes of stock.
2.18 “TARGET INCENTIVE
AWARD” means the award that may be paid to an Executive
Officer when “targeted” performance results, as
established by the Committee, are attained.
SECTION 3. ADMINISTRATION
3.1 THE COMMITTEE. The
Compensation Committee of the Board shall initially administer the
Plan. Subject to the terms of this Plan, the Board may appoint a
successor Committee to administer the Plan. The members of the
Committee shall be appointed by, serve at the discretion of, and
must be independent members of the Board.
3.2 AUTHORITY OF THE COMMITTEE.
Subject to the provisions herein, the Committee shall have full
power to certify after the end of each Plan Year the Employees who
qualify as Executive Officers; determine the size and types of
performance measurements and goals, Individual Award Opportunities
and Target Incentive Awards; determine the terms and conditions of
Individual Award Opportunities in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or
instrument entered into under the Plan; establish, amend, or waive
rules and regulations for the Plan’s administration; and
amend the terms and conditions of any outstanding Individual Award
Opportunities to the extent such terms and conditions are within
the sole discretion of the Committee as provided in Section 11
herein. Further,
