Arkansas Best 401(k) and DC Retirement Plan

Transcription

1 Arkansas Best 401(k) and DC Retirement Plan Summary Plan Description and Prospectus Publication Date: June 1, 2011

2 SUMMARY PLAN DESCRIPTION AND PROSPECTUS INTRODUCTION This booklet explains in non-technical language how the Arkansas Best 401(k) and DC Retirement Plan (the Plan ) works. Any word which is capitalized has a special meaning and is defined in this Summary Plan Description ( SPD ) or the Plan. This booklet also constitutes a Prospectus for purposes of the Arkansas Best Company Stock Fund as one of the Plan investment options. For more detailed information about the Plan, you should examine the official Plan documents which are available from the Plan Administrator. In the event of any conflict between this SPD/Prospectus and the official Plan documents, the official Plan documents will control. This booklet describes the Plan as amended through January 1, The Plan was originally effective July 1, 1988, and was most recently restated in its entirety, effective January 1, Arkansas Best Corporation (the Company ) may amend the Plan from time to time. In addition, changes in federal tax and labor law may change some of the provisions of the Plan. Several companies affiliated with the Company have adopted the Plan for the benefit of their employees with different provisions for example, Company Matching Deposits, Special Post-2005 DC Contributions, and vesting. If your employer has adopted individual Plan provisions, you will find a separate schedule included with this SPD that is designed for your particular employer, which will override anything in the main body of this SPD to the contrary. Terms which are capitalized in the attached schedule which are not otherwise defined in that schedule are defined in the actual Plan document. You will need to refer to the Plan for more detail. COPIES OF THE PLAN DOCUMENTS ARE AVAILABLE FOR INSPECTION, AND COPIES MAY BE OBTAINED UPON WRITTEN REQUEST FOR A DUPLICATION CHARGE. FOR MORE INFORMATION, PLEASE CONTACT: RETIREMENT SERVICES P.O. BOX FORT SMITH, AR Phone: (479) Fax: (479) retirementservices@abf.com i

3 TABLE OF CONTENTS SUMMARY PLAN DESCRIPTION AND PROSPECTUS... i INTRODUCTION... i TABLE OF CONTENTS... ii INVESTING FOR YOUR FUTURE... 1 IMPORTANT INFORMATION ABOUT THE PLAN... 2 PLAN PARTICIPATION... 3 ELIGIBILITY... 3 WHEN PARTICIPATION BEGINS... 3 LEAVE OF ABSENCE... 3 NAMING A BENEFICIARY... 3 HOW MONEY GOES INTO YOUR ACCOUNT... 5 YOUR CONTRIBUTIONS... 5 CATCH-UP CONTRIBUTIONS... 5 ABOUT PRETAX AND ROTH CONTRIBUTIONS... 6 ANNUAL TAX SAVINGS ESTIMATES... 7 CHANGING, STOPPING OR RESTARTING CONTRIBUTIONS... 7 COMPANY MATCH... 7 POST-2005 SPECIAL DC DEPOSITS... 8 PROFIT SHARING DEPOSITS... 8 ROLLOVERS... 8 VESTING OF BENEFITS... 9 RESTORATION OF FORFEITURES HOW YOUR ACCOUNT IS INVESTED INVESTMENT OPTIONS ADDITIONAL INFORMATION ABOUT INVESTMENT FUNDS YOUR VOTING RIGHTS FOR THE INVESTMENT FUNDS VOTING ARKANSAS BEST COMMON STOCK CONFIDENTIALITY PROCEDURES COMPANY STOCK CHANGING YOUR INVESTMENT CHOICES HOW PLAN ACCOUNT VALUES ARE DETERMINED STATEMENTS WITHDRAWALS IN-SERVICE WITHDRAWALS Page ABC 401(k) SPD ii

4 Table of Contents (Continued) Page HARDSHIP WITHDRAWALS EARLY WITHDRAWALS BY RESERVISTS ROTH IN-PLAN CONVERSIONS HOW TO TAKE A WITHDRAWAL LOANS HOW MUCH YOU CAN BORROW PURCHASE OF A PRIMARY RESIDENCE FEES REPAYING YOUR LOAN SOURCE AND REINVESTMENT OF LOAN FUNDS PAYMENT OF YOUR ACCOUNT RETIREMENT, SEPARATION, COURT ORDER WHEN YOUR PLAN ACCOUNT IS PAID REQUESTING PAYMENT QUALIFIED ROTH DISTRIBUTIONS IF YOU HAVE MONEY INVESTED IN ABC STOCK IN YOUR ACCOUNT NET UNREALIZED APPRECIATION LIFE INSURANCE POLICIES PAYSOP ACCOUNT IF YOU DO NOT REQUEST PAYMENT PAYMENT DUE TO A COURT ORDER (DIVORCE) CAN MY ALTERNATE PAYEE UNDER A QDRO GET AN IMMEDIATE DISTRIBUTION OF MY PLAN BENEFITS? UNCLAIMED BENEFITS IF A PAYMENT IS DENIED SITUATIONS THAT COULD LIMIT OR DELAY YOUR BENEFITS LIMITATIONS ON CONTRIBUTIONS IF THE PLAN ENDS MERGERS, CONSOLIDATIONS OR TRANSFERS NO COVERAGE BY THE PENSION BENEFIT GUARANTY CORPORATION THINGS YOU SHOULD KNOW ASSIGNMENT OF BENEFITS OVERPAYMENT EMPLOYMENT RIGHTS LAWS GOVERNING THIS PLAN CONTINUANCE OF THE PLAN HOW THE PLAN IS ADMINISTERED THE PLAN TRUSTEES AND INVESTMENT MANAGERS RESPONSIBILITY FOR INVESTMENT CHOICES ABC 401(k) SPD iii

5 Table of Contents (Continued) Page INVESTMENT EXPENSES YOUR RIGHTS UNDER ERISA PROSPECTUS CERTAIN INFORMATION CERTAIN RESTRICTIONS ON THE RESALE OF SHARES CERTAIN RESTRICTIONS ON PURCHASE AND SALE OF SHARES WITHIN THE PLAN INCORPORATION OF CERTAIN INFORMATION BY REFERENCE HISTORICAL STOCK DATA SCHEDULE OF PLAN FEES ABC 401(k) SPD iv

6 INVESTING FOR YOUR FUTURE Through this Plan you can direct the Company to set aside as much as 69 % (subject to certain legal and Plan limitations) of your Compensation (your contributions) into an account for your retirement. In general, if your Company has adopted a match provision, the Company rewards your savings efforts by matching a portion of the dollars you save. Your contributions and the Company match are invested according to your choice of investment options that are available under the Plan. In addition to the Company match, your Company may make a discretionary special contribution known as Post-2005 Special DC Deposits. Employees are generally eligible for this special contribution if they were hired or employed after December 31, 2005, and are employed on the last day of the applicable Plan Year, as discussed further below. Your Company may also elect to make a discretionary Company Profit Sharing Deposit that will be allocated to Participants having at least 1,000 hours of service with the Company for the Plan Year in question and are employed on the last day of the Plan Year. Pretax and Roth (after tax) contributions to the Plan and any Matching Deposits, Company Profit Sharing Deposit or Post-2005 Special DC Deposits are based on your Compensation. Your Compensation is your Form W-2 compensation (subject to certain exclusions) paid to you by your Company for services, and generally includes all wages and salary, bonuses, overtime pay, shift differential pay, premium time pay, commissions and contributions made to this Plan up to the limits set by law. Your Compensation excludes certain amounts, such as moving expenses, expense allowances, fringe benefits (cash and noncash), deferred compensation, welfare benefits, severance pay, or any Compensation paid prior to the date on which you become a participant in this Plan, as determined by the Plan Administrator. Compensation does not include any Compensation in excess of a legal limit. In 2011, the legal limit is $245,000. The $245,000 limit may be adjusted by the Internal Revenue Service ( IRS ) to reflect changes in the cost of living or as required by law. Compensation also includes any elective deferrals under any cafeteria plan or 401(k) plan and differential wage payments received with respect to any period during which the individual is performing service in the uniformed services. Saving through the Plan also allows special tax advantages. You postpone paying federal income taxes on your Pretax contributions, on Company Match (if applicable), Company Profit Sharing Deposit (if applicable), Post-2005 Special DC Deposits (if applicable) and on the earnings thereon including earnings on Roth contributions until you take your investment out of the Plan. You also postpone state and local income taxes in most cases. In addition, if you take a qualified Roth distribution, the earnings on your Roth contributions will not be subject to tax. Withdrawals under the Plan before age 59½ are limited and may be subject to income tax and early distribution penalties. However, you may be able to borrow from your savings and pay your Account under the Plan ( Plan Account ) back with interest, but without taxes or penalties. The Plan is known as a 401(k) plan. This refers to the Internal Revenue Code ( Code ) section that provides for employer-sponsored, tax-deferred savings programs _3 1

7 IMPORTANT INFORMATION ABOUT THE PLAN Plan Sponsor and Plan Administrator Employer Identification Number ( EIN ) Official Plan Name Plan Number 002 Plan Type Plan Year Arkansas Best Corporation (also Company ) P.O. Box Fort Smith, AR (479) Arkansas Best 401(k) and DC Retirement Plan Defined contribution plan: profit sharing/401(k) Calendar year Original Effective Date July 1, 1988 Restated Effective Date January 1, 2010 Plan Trustee Trustee for Life Insurance Policies Agent for Service of Legal Process Investment Manger for Target Date Strategies Diversified Investment Advisors ( Diversified ) 440 Mamaroneck Ave. Harrison, NY The Plan is administered by the Plan Administrator with the help of the Plan Trustee. The Plan Trustee is also the Plan s record keeper. The Plan Trustee can be reached for recordkeeping services (i.e., change of investment options, loans, your Plan Account value, and Plan distributions) at or Massachusetts Fidelity Trust Company 4333 Edgewood Road NE Cedar Rapids, IA Massachusetts Fidelity Trust Company is the trustee only with respect to the life insurance policies held under the Plan. Arkansas Best Corporation P.O. Box Fort Smith, AR (479) Legal process may be served on the Plan Administrator or the Plan Trustee. FiduciaryVest, LLC 211 Perimeter Center Parkway, Suite 1010 Atlanta, GA Note: Certain other corporations affiliated with Arkansas Best Corporation have also adopted the Plan for their employees. A complete list of these corporations is available from the Retirement Services Department. These corporations and the Plan Sponsor may be referred to in this document as the Company, collectively or singularly, as the context requires _3 2

8 PLAN PARTICIPATION ELIGIBILITY You are an eligible employee who may participate in the Plan if you are an employee of Arkansas Best Corporation or an adopting affiliated company. You are not eligible to participate in the Plan if you are: a casual employee, unless you complete 1,000 hours of service during your first anniversary year or any succeeding calendar year, a leased employee, or an employee who does not receive regular compensation from the Company, or a member of a collective bargaining unit, if your retirement benefits were the subject of good faith bargaining, unless your collective bargaining unit has bargained for coverage under the Plan. WHEN PARTICIPATION BEGINS You participate in the Plan through Pretax and Roth Contributions only if you want to. The Company will make Profit Sharing Deposits and the Special DC Contributions automatically, regardless of whether you make Pretax or Roth Contributions. Eligible employees may begin participation in the Plan at any time following date of hire. To enroll, call Diversified at or log onto Diversified s participant website at LEAVE OF ABSENCE You can remain an active participant in the Plan during an approved paid leave of absence. This means you can continue to make Pretax and Roth Contributions into your Plan Account while you are on paid leave. If you go on unpaid leave, your active participation in the Plan will be suspended. You will be considered an inactive participant, and your money will remain in the Plan. Your contributions will automatically resume when you return from an approved, unpaid leave. You may rejoin the Plan if you are reemployed after separating from service. NAMING A BENEFICIARY You may designate the person or persons to receive your benefits in the event of your death a beneficiary. You may name any person, institution or your estate (or you may name a number of parties) as your beneficiary (or beneficiaries). Such designation must be made in such form as prescribed by the Plan Administrator. You can complete your beneficiary designation at If you have been married to the same person for at least one (1) year at the time of your death, all of your benefits will be paid to your spouse unless your _3 3

9 spouse has executed a qualified consent. A qualified consent is a statement made in writing, on a form provided by the Plan Administrator, and signed in the presence of a notary public, consenting to the payment of your benefits to someone other than your spouse. Once your spouse signs a qualified consent, the beneficiary of this qualified consent cannot be changed unless your spouse agrees in advance in writing on the qualified consent form that the beneficiary may be changed, or unless another qualified consent is signed by your spouse. Your spouse may not revoke a qualified consent. Each qualified consent is effective only for that spouse. For example: suppose your first spouse signed a qualified consent stating he or she did not want to be the beneficiary of your Plan Account under the Plan and agreed to your naming your son as beneficiary. If you were to marry again, your second spouse would be the beneficiary and not your son, because the qualified consent issued by your first spouse would not be binding on your second spouse. Your second spouse, however, could sign a qualified consent naming your son as beneficiary, if he or she so desired. If you are married and your spouse has consented to the naming of another beneficiary but the beneficiary you designated predeceases you, your spouse will be your beneficiary. If you are not married at the time of your death and you failed to name a beneficiary, the Plan Administrator may pay your benefits to your heirs or your estate, or may choose to have a court determine to whom payments should be made _3 4

10 HOW MONEY GOES INTO YOUR ACCOUNT YOUR CONTRIBUTIONS You can direct your Company to take from 1% to 69% of your Compensation and deposit it, in whole percentages, into your Plan Account. This same percentage will be taken each pay period from your Compensation until you reach the annual Pretax and Roth Contribution combined limit (discussed below), your employment ends, or you otherwise change your deposit percentage. To request an enrollment packet for the Plan, contact Diversified at Your Pretax contributions are deducted from your paycheck before federal income tax and most state and local income taxes are calculated. This gives you more take-home pay, compared to saving with after-tax dollars such as in a bank account or savings and loan. For Roth contributions, you pay taxes at the time the deposit is made, but you will not have to pay taxes when you receive a distribution of your Roth contributions (including earnings). Current tax law limits the amount of Pretax and Roth Contributions that can be made to the Plan each year. This limit is adjusted periodically by the IRS. The IRS dollar limit for 2011 is $16,500. The maximum that can be deposited each year is the lesser of this limit or 69% of your Compensation. In addition, the Plan must pass government-established tests to assure it does not provide a disproportionately higher benefit to highly compensated employees, compared to the benefit available to other employees. To assure passage of the tests, your Company may reduce the employee Pretax and Roth Contributions of highly compensated employees. See the Limitations on Contributions section for more information. CATCH-UP CONTRIBUTIONS The IRS allows catch-up deferral contributions for qualifying participants who attain age 50 before the close of the calendar year in which the Catch-Up Contribution is made. Catch-Up Contributions can only be made if your contributions are limited by at least one of the following limitations: IRS Annual Contribution Limit ($16,500 in 2011), or Plan s Annual Contribution Limit of 69%, or Highly Compensated Employee Limit. (As defined by the IRS, an employee is considered highly compensated in 2011 if his or her earnings exceeded $110,000 in 2010, or if he or she was at any time during the Plan Year or during the preceding Plan Year, with respect to a participating company, a five percent owner. Please contact the Plan Administrator if you need additional information concerning the Highly Compensated Employee Limit. These limits may be adjusted by the IRS) _3 5

11 The maximum Catch-Up Contribution that you can make in 2011 is $5,500. To make a Catch- Up Contribution, you must meet the above requirements and must make a single combined deferral election together with your 401(k) elective contributions. The percentage that you elect to withhold from your annual pay must be high enough to maximize your Pretax and Roth contributions and to make your Catch-Up Contributions. For example, if you make $100,000 dollars in annual salary, then you would have to elect to defer 17% or more of your pay to make a Catch-Up Contribution. In this example, if you wished to make a $3,500 Catch-Up Contribution, then you would have to elect to withhold 20% of your pay ($16,500 for Pretax and Roth contributions and $3,500 for Catch-Up Contributions). The excess over your Pretax and Roth contribution limit is automatically allocated to your Catch-Up Contributions (up to the Catch-Up limit). To start or change your 401(k) contribution percentage, log onto or call Diversified at ABOUT PRETAX AND ROTH CONTRIBUTIONS By directing the Company to make Pretax Contributions to the Plan, you reduce your current taxes. It works this way: The Company deducts the money from your paycheck before federal income taxes are withheld, and where permitted, before state and local income taxes are withheld. This reduces the amount of your pay that is subject to federal and possibly state and local income taxes. Keep in mind, however, that you will be subject to income taxes on your Pretax Contributions and any resulting investment earnings as ordinary income at the point in time you withdraw them from the Plan. (See below for further tax information.) While Pretax Contributions reduce your current Compensation for income tax purposes, they do not affect the amount of Compensation used to calculate other Compensation-related benefits or the amount of Compensation subject to employment taxes (i.e. Social Security tax). Your Social Security taxes also are based on your unreduced Compensation, so your Social Security taxes and your Social Security benefits are not affected by Pretax Contributions to the Plan. By directing the Company to make Roth Contributions to the Plan, you reduce your future taxes. It works this way: The Company deducts the money from your paycheck after federal income taxes are withheld, and after state and local income taxes are withheld. Keep in mind, however, that you will not be subject to income taxes on your Roth Contributions or any resulting investment earnings at the point in time you take a qualified withdrawal from the Plan. (See page 22 for information about qualified Roth distributions) Roth Contributions do not affect the amount of Compensation used to calculate other Compensation-related benefits or the amount of Compensation subject to employment taxes (i.e. Social Security tax) _3 6

12 ANNUAL TAX SAVINGS ESTIMATES The following table shows the amount of federal income tax savings you could realize by making Pretax Contributions. Estimate your deferral amount and then determine your federal tax bracket. During 2011, there are six (6) marginal income tax brackets: 10%, 15%, 25%, 28%, 33% and 35%. Examples of federal income tax savings are shown in the applicable column: Annual Your Tax Bracket Contributions 15% 25% $ 500 $ 75 $ , , , , , ,000 5, ,250 Your actual tax savings depends on your (and your spouse s) total income for one year, and your deductions, exemptions and credits. You should consult your own tax advisor for personalized advice. CHANGING, STOPPING OR RESTARTING CONTRIBUTIONS You can change the percentage you are contributing into the Plan, restart your contributions, or stop your contributions at any time. Simply call Diversified at or access your Plan Account online at The change will become effective as soon as administratively practicable after you request the change. COMPANY MATCH Your Company may choose, in the Company s discretion, to contribute a set amount of money for every dollar you contribute to your Plan Account as a Pretax or Roth Contribution, up to a certain percentage of your eligible Compensation contributed to the Plan. This is called the Company Match. There will be no Company Match with respect to Catch-Up Contributions. Company Match is paid to your Plan Account in cash as of the last day of each Plan Year (December 31). Your Company can, at its discretion, choose not to contribute a Company Match for a particular Plan Year. The Company Match will be allocated to the funds and in the proportions as you have selected for your Pretax Contributions. REMINDER: Several Companies adopted the Plan for the benefit of their employees with different Plan provisions which may include different percentage rates for the Company Match. If your Company has adopted individual Plan provisions, you will find a separate schedule included with this SPD that is designed for your particular Company _3 7

13 POST-2005 SPECIAL DC DEPOSITS Each Company may, in its sole discretion, contribute an additional amount to the Plan, known as Post-2005 Special DC Deposits, to be allocated to the eligible employee participants of such Company. You become eligible to receive Post-2005 Special DC Deposits on or after January 1, 2006 when you (i) first become an employee of a Participating Company on or after January 1, 2006, (ii) are rehired as an employee of a Participating Company on or after January 1, 2006, or (iii) become eligible to participate in the Plan on or after January 1, 2006, as explained above (provided, however, that any person included in a collective bargaining agreement will only be eligible to receive Post-2005 Special DC Deposits if provided for in such person s collective bargaining agreement). If your Company makes such Post-2005 Special DC Deposits, you must be employed by your Company on the last day of the Plan Year, or retire, die or become disabled during the Plan Year to be eligible for such Post-2005 Special DC Deposits. If your Company makes Post-2005 Special DC Deposits and you meet these requirements, you are eligible for a contribution even if you did not make Pretax or Roth Contributions to the Plan for the Plan Year. If any such contribution is made, you will be notified. PROFIT SHARING DEPOSITS Each Company may, in its sole discretion, contribute an additional amount to the Plan, known as a Profit Sharing Deposit, to be allocated to the eligible employee participants of such Company. Should your Company choose to make a Profit Sharing Deposit, you must have completed one thousand (1,000) hours of service for the Company during the Plan Year and be employed by such Company on the last day of the Plan Year, or retire, die or become disabled during the Plan Year. If your Company makes a Profit Sharing Deposit and you meet these requirements, you are eligible for a contribution even if you did not make Pretax or Roth Contributions to the Plan for the Plan Year. If any such contribution is made, you will be notified. ROLLOVERS Assets may also go into your Plan Account in one other way through a Rollover. A Rollover is a transfer of funds from any of the following eligible retirement plans under the applicable Code provision: (a) plan (e.g., 401(k), including a designated Roth 401(k)) (a) plan (b) plan 4. Conduit individual retirement account or annuity ( IRA ) (rollover IRA) 5. Governmental 457(b) plan 6. Non-conduit IRA including (i) a traditional IRA, (ii) a Simplified Employee Pension plan (SEP-IRA), or (iii) a savings incentive match plan for employees ( SIMPLE IRA ) distribution made more than two years from the date of initial participation in the SIMPLE IRA. Generally, a nondeductible or after-tax IRA contribution cannot be rolled over. If you have any questions about which IRA funds can be rolled over, please contact the Administrator _3 8

14 To apply for a Rollover, you must submit a Rollover Form to Diversified along with your Rollover check. You should call Diversified at or go online to to request an Incoming Rollover Request Form. Investment choices for Rollovers must be designated on the Incoming Rollover Request Form. VESTING OF BENEFITS Vesting Generally To be vested means to have a non-forfeitable right to, or to own. If you are fully (100%) vested in your Plan Account balance, then you own all of the funds in that Plan Account; however, you still are limited as to when you may access those funds without penalty. You are always fully vested in amounts attributable to your Pretax and Roth Contributions and Rollovers (if any). Also, unless your Company has a separate vesting schedule to be fully vested in the funds attributable to your Company Match, Post-2005 Special DC Deposits and Profit Sharing Deposits, you must have completed three Vesting Years of Service with the Company or an affiliated company. An affiliated company is a trade or business under common control with the Company and is based on the rules and regulations of Section 414 of the Code. If you terminate employment due to total disability, death (or if you die while performing qualified military service as defined by the 414(u) Code), or if you separate from service on or after your Normal Retirement Date under the Plan, you will be fully vested in your entire Plan Account regardless of how many Vesting Years of Service have been credited to you. Disability is based upon determination by the Social Security Administration. Your Normal Retirement Date is your 65th birthday. You can continue to work after your Normal Retirement Date and remain a participant in the Plan. Vesting Year of Service You will ordinarily receive a Vesting Year of Service for each year (i.e., 365-day period) that you work for the Company or an affiliated company, beginning on your first date of employment, or re-employment. If you quit working for the Company or an affiliated company and return within one year (i.e., 365-day period); you generally will receive a Vesting Year of Service during your absence. However, you will generally not be granted a Vesting Year of Service during an absence if you do not return to work for the Company or an affiliated company before twelve (12) months beginning on the date you left work on your leave of absence. Additionally, you will not receive more than one Vesting Year of Service if you work simultaneously for the Company or one of its affiliated companies. Vesting Schedule The vested percentage of the amounts attributable to your Company Match, Profit Sharing Deposits and Post-2005 Special DC Deposits will be calculated according to the following chart: Vesting Years of Service Percentage of Account Less than 3 years 0% 3 years or more 100% _3 9

15 REMINDER: Several Companies adopted the Plan for the benefit of their employees with different plan provisions which may include different vesting schedules. If your Company has adopted individual Plan provisions, you will find a separate schedule included with this SPD that is designed for your particular Company. Forfeitures In general, if you terminate employment and are not fully (100%) vested in your Plan Account, you will forfeit all of the amounts attributable to Company Match, Post-2005 Special DC Deposits and Profit Sharing Deposits. If you separate from service and have not yet received a final distribution of your Plan Account, the nonvested amounts attributable to your Company Match, Post-2005 Special DC Deposits and Profit Sharing Deposits will generally be forfeited after you incur five consecutive One-Year Periods of Severance. If you are 0% vested in your entire Plan Account or you receive a distribution of your Plan Account to the extent vested, you will generally forfeit amounts attributable to Company Match, Post-2005 Special DC Deposits and Profit Sharing Deposits as of the date you receive a distribution. If you are 0% vested you are treated as having taken a distribution on the date you separated from service and your nonvested balance is forfeited as of that date. RESTORATION OF FORFEITURES In general, if you return to employment prior to incurring five (5) consecutive One-Year Periods of Severance, amounts that have been forfeited may be restored. Such restoration will occur if you repay the amounts in full (if any) that were distributed to you before the earliest to expire of: (i) the last day of the five-year period beginning on your reemployment date, or (ii) a period of five (5) consecutive One-Year Periods of Severance starting on the date on which you received such distribution. If you were not vested when you terminated employment and therefore did not receive a distribution, the repayment requirement does not apply. If you meet these conditions, the amounts that were forfeited will automatically be restored to your Plan Account. In general, forfeitures will be used first to reduce the amount of Company Match, then to pay fees and expenses, next to reduce discretionary match, then to reduce any contribution required to fund Post-2005 Special DC Deposits, and finally to reduce Profit Sharing Deposits, respectively, owed to the Plan. A One-Year Period of Severance generally means a twelve (12) consecutive month period during which you separate from active employment or do not return from a leave of absence, unless you are absent from work for any period because: of your pregnancy, of the birth of your child, of adoption or placement for adoption of your child, or for the purpose of caring for your child _3 10

16 HOW YOUR ACCOUNT IS INVESTED All funds are held in a Trust Fund. These assets are used for the exclusive benefit of Plan participants. You choose how to invest your Plan Account from among a number of investments options, which includes a diverse list of primarily mutual funds as well as the Arkansas Best Stock Fund. You can elect to invest your Plan Account all in one option (except for the Arkansas Best Stock Fund and brokerage account investments which each have a 25% limit), or you can split your contribution amount among any of the options in whole percentages. To help achieve retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Spreading your assets among different types of investments can help you achieve a favorable rate of return, while minimizing your overall risk of losing money. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or another particular security, to perform poorly. If you invest more than 20% of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk. In deciding how to invest your retirement savings, you should take into account all of your assets, including any retirement savings outside of the Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals, and different tolerances for risk. It is also important to periodically review your investment portfolio, your investment objectives, and the investment options under the Plan to help ensure that your retirement savings will meet your retirement goals. If you do not choose from the investment options, then all amounts in your account will automatically be invested in the Plan s default fund, which is a targeted-retirement-date investment. For all contributions made after January 1, 2011, the Plan s default funds are the Target Date Strategies which are asset allocation strategies managed by FiduciaryVest, LLC. If your contributions are invested automatically for you, then you can still change your investment funds without any financial penalty. INVESTMENT OPTIONS The Plan currently offers several investment options administered through Diversified. However, the Plan Administrator may, at any time, determine that it is in the best interest of participants to add, discontinue or change the investment options offered by the Plan. For additional information about the investment options, log onto or call Diversified at _3 11

17 A Special Note About Brokerage Accounts In addition to the mutual funds, the Plan also offers a brokerage account as an investment option. The brokerage accounts allow you to invest your contributions in practically any stock, bond, or mutual fund offered through a brokerage platform for qualified retirement plans. You will be responsible for all brokerage fees and related transaction costs. You make all your own investment decisions, and no one monitors your investments for you. The brokerage account option is designed for sophisticated investors that are willing to take additional risks with their investments. Please note that a maximum of 25% of your Plan Account can be invested through a brokerage account. You may want to consider investing through the brokerage account if you: Are very familiar with investing and investment concepts. Have the time to closely monitor your portfolio and make changes to fit your investment plan and needs for retirement. Want to invest in specific stocks, bonds, or mutual funds outside the otherwise available investment options. Are willing to pay the transaction fees associated with trading and certain other transactions. ADDITIONAL INFORMATION ABOUT INVESTMENT FUNDS Diversified will automatically provide you with a Prospectus the first time you invest in a mutual fund. There is no load or commission charge when you elect to invest your Account in any of the investment funds. Information concerning the annual operating expenses of each of the mutual funds is contained in each fund s prospectus. On request, Diversified will also furnish: more detailed information concerning the composition and value of the investment portfolio of each of the funds a description of the annual operating expenses of each investment alternative (e.g., investment management fees, administrative fees, transaction costs) which reduce the rate of return to participants and beneficiaries, and the aggregate amount of such expenses expressed as a percentage of average net assets of the designated investment alternative, a list of the assets comprising the portfolio of each investment alternative which constitute plan assets, the value of each such asset (or the proportion of the investment alternative which it comprises), and, with respect to each such asset which is a fixed rate investment contract issued by a bank, savings and loan association or insurance company, the name of the issuer of the contract, the term of the contract and the rate of return on the contract, information concerning the value of shares or units in designated investment alternatives available to participants and beneficiaries under the plan, as well as the _3 12

18 past and current investment performance of such alternatives, determined, net of expenses, on a reasonable and consistent basis, information concerning the value of shares or units in designated investment alternatives held in the account of the participant or beneficiary, a current prospectus on each fund which includes information regarding the fund s annual operating expenses and the fund s current and historical investment performances, and information regarding the value of your Plan Account balances. Before you make your investment decisions, you should carefully consider your investment goals against the potential rewards and risks of each fund by reviewing each fund s updated prospectus. The Trustee will provide quarterly updates on the funds investment performance. You can obtain this information at any time by logging onto or by calling Diversified at Important: You should be aware that your investment decisions will ultimately affect the retirement benefits to which you will become entitled. The Company and the Plan Trustee cannot provide you with investment advice, nor are they obligated to reimburse you for any investment loss that may occur as a result of your investment decisions. There is no guarantee that any of the investment options available in the Plan will retain their value or appreciate. YOUR VOTING RIGHTS FOR THE INVESTMENT FUNDS As a participant with a Plan Account at Diversified, you have the right to direct the voting of any mutual fund shares in your Plan Account. You will receive voting information and a proxy card before any vote. VOTING ARKANSAS BEST COMMON STOCK In the event any matter requiring a vote of the shareholders of Arkansas Best Corporation arises, you will be provided information regarding the matter, and have the opportunity to designate how shares attributed to your account shall be voted. To the extent you do not specify how shares shall be voted, the Trustee generally will not vote or tender any shares for which voting or tender instructions are not received. CONFIDENTIALITY PROCEDURES Note that information regarding your holding of employer stock and the voting of shares attributed to you will be kept confidential and how you vote will not be disclosed to your employer. In the event you are requested to vote, tender, or exchange the shares of Company stock attributed to your account, you will receive written information requesting your response, which you will send directly to an individual unaffiliated with your employer for tabulation and transmission to the Trustee. The name and address of the Plan fiduciary responsible for monitoring the compliance of these confidentiality requirements is Michael R. Johns, Vice _3 13

19 President General Counsel and Corporate Secretary, c/o Arkansas Best Corporation, 3801 Old Greenwood Road, Fort Smith, AR and the telephone number is (479) ARKANSAS BEST STOCK FUND You can invest in the Arkansas Best Stock Fund through the 401(k) Plan, but it is not a mutual fund or a diversified managed investment option. Rather, because it s an investment in a single security, it has the highest degree of volatility/risk of any investment option in the Plan. Please note that you may only invest up to a maximum of 25% of your account balance in the Arkansas Best Stock Fund. CHANGING YOUR INVESTMENT CHOICES If you wish to change your election of investment choices, you may: change your choices of funds for future deposits and contributions, and redirect previously invested amounts from one fund to another. To change your investment decisions, simply go online at or call Diversified at If you call Diversified by 3:00 p.m. CST, your change will be processed using that day s closing Net Asset Value (NAV) for each fund involved. Otherwise, the change will be based on the closing NAV of each fund on the next business day. HOW PLAN ACCOUNT VALUES ARE DETERMINED Each type of money in your Account is maintained and reported separately: Your Pretax Contributions Your Roth Contributions Rollovers Company Match Post-2005 Special DC Deposits Company Profit Sharing Deposits If a Profit Sharing Deposit or Post-2005 Special DC Deposit is made, you will be notified. The value of your Plan Account is determined on each business day based on the market value of the funds in which the monies are invested. STATEMENTS Each quarter you will receive a personal statement via U.S. mail unless you have elected to receive your statements online at The quarterly _3 14

20 statement will show the closing balance from the previous quarter, summary of transactions since that date, and your balance as of the end of the most recent quarter. This will allow you to see how your Account s current value is changing. You can also judge whether your investment choices still reflect your personal financial objectives. You can access a current statement at any time by logging onto Diversified s website at IMPORTANT: If you move or if your address changes, please notify Retirement Services in writing or log onto ABFatwork.com and submit an address change. Your new address will then be updated with Diversified _3 15

21 WITHDRAWALS IN-SERVICE WITHDRAWALS The Plan is intended to provide you a long-term savings opportunity for your future benefit. IRS regulations allow you to withdraw any amount from your Account while you are an active employee at any time after you reach the age of 59½. These withdrawals after age 59½ are called in-service withdrawals. IRS regulations do not allow withdrawals while you are still employed before that age unless you qualify for a Hardship Withdrawal. If you take an inservice withdrawal, 20% of the withdrawal may be withheld for income tax. HARDSHIP WITHDRAWALS You may qualify for a Hardship Withdrawal, if you experience a severe financial emergency and cannot satisfy your financial need from any other source of funds including a loan from this Plan. These withdrawals before age 59½ due to a severe financial emergency are called Hardship Withdrawals. Hardship Withdrawals are taxable in the year of distribution. When you take a Hardship Withdrawal, 10% of the withdrawal may be withheld for income tax (the actual income tax you owe may be more or less than 10%) and you may also be required to pay a 10% penalty tax. Please check with your tax advisor to determine whether you will owe the 10% penalty tax due to your Hardship Withdrawal. You may not roll over your Hardship Withdrawal to any other qualified plan. (See below for more information on Direct Rollovers.) If you qualify for a Hardship Withdrawal, you may only withdraw the amount you need to satisfy your financial need plus the taxes due thereon. (You will have to pay taxes on the amount that you withdraw.) The maximum you may withdraw is the value of your own Pretax and Roth Contributions and the value of the Rollover contributions you have made. Hardship Withdrawals cannot include any earnings generated by your own Pretax and Roth Contributions until you reach age 59½ or otherwise take a final distribution from the Plan. Diversified determines whether you qualify for a Hardship Withdrawal and determines the amount to be distributed to meet your need, based on legal requirements for Hardship Withdrawals. A financial emergency or extreme hardship is defined as one of the following: unreimbursed medical expenses for you or an immediate family member (example documentation includes medical bills incurred in the last 90 days that show the insurance payment), tuition, related educational fees and/or room and board expenses for post-secondary education for you, your spouse, children or other dependents (example documentation includes proof of dependency, proof of enrollment and expenses incurred with enrollment), the cost of purchasing your principal residence (excluding mortgage payments) (example documentation includes down payment amount and estimated closing costs), _3 16

22 expenses to prevent the eviction from or foreclosure on your principal residence (example documentation includes copy of the eviction or foreclosure notice with the amount needed to prevent the eviction or foreclosure, a future date as to when the event will occur and contact information regarding the company initiating the eviction or foreclosure), payments for burial or funeral expenses for your spouse, parents, children or other dependents (example documentation includes proof of death (death certificate) and expenses from the appropriate establishment), or expenses for the repair of damage to your principal residence due to unforeseeable circumstances beyond your control (example documentation includes proof of loss to the principal residence as a result of a catastrophic event which must be identifiable, unexpected and or unusual (i.e., fire, storm, theft, etc.), and a statement from insurance company stating they will or will not coverage damages to the property). EARLY WITHDRAWALS BY RESERVISTS In addition to the above normal withdrawals, military reservists ordered or called to active duty for more than 179 days after September 11, 2001, may receive penalty-free distributions of their contributions to the Plan during such duty (normal income taxes still apply). Moreover, military reservists may contribute such amounts to their IRA (on an after-tax basis) within two years after the end of their active duty, without regard to the normal dollar limitations that would otherwise apply. ROTH IN-PLAN CONVERSIONS If you are eligible to take an in-service withdrawal other than a Hardship Withdrawal you may elect to transfer your withdrawal amount to a Roth rollover contribution account in the Plan. If you choose this option, your withdrawal will be converted to and treated as Roth Contributions for all purposes under the Plan. Any such amount will be treated as a taxable withdrawal in the year of conversion. HOW TO TAKE A WITHDRAWAL To initiate a withdrawal from your 401(k) Account, call Diversified at A phone representative will take your information and will send you a pre-printed form via U.S. mail. You are to sign the appropriate form and in the case of a Hardship Withdrawal attach any required documentation supporting the amount and reason for the withdrawal. The form and documentation should be sent to Diversified as instructed in the Hardship Withdrawal packet. Important: If proper documentation verifying the amount you wish to withdraw for a Hardship Withdrawal is not submitted, all of your information will be returned to you and the withdrawal denied _3 17

23 LOANS Borrowing from your Plan Account provides you access to your money while preserving your savings for retirement. Your Plan Account investments are liquidated to provide the loan funds. However, your Plan Account balance will be restored as you repay the loan. You pay no taxes on a loan unless you default in repayment. The interest you pay on the loan goes back into your own Plan Account. Employees in a no-pay status, such as those on family medical leave or military leave, may take a loan and send loan repayments by a cashier s check or money order according to the terms of the loan in order to prevent default. You should contact Retirement Services at if you are on a leave of absence to ensure your record at Diversified is updated accordingly. Alternatively, if you are on an unpaid leave of absence, you may elect to suspend your loan repayments for up to one year. However, interest will continue to accrue during the suspension period. Once you return from your leave, the outstanding principal loan balance and accrued interest will be reamortized with repayment extended to the maximum of a five-year period (from the date the loan began, excluding the leave of absence), regardless of the length of the leave of absence. The frequency and the amount of periodic installments may not be less than the amount required under the terms of the original loan. If you re on a leave of absence due to military service, loan repayments may be suspended for the length of your military leave. Once you return to work from military duty, the loan repayment must resume, and the loan must be repaid thereafter in substantially level installments and reamortized to a maximum of a five-year period (from the date the loan began, but not counting the leave for military service; (thus, due to military service, loans can be extended beyond 5 years)). Upon return from leave, the frequency and amount of periodic installments may not be less than the amount required under the terms of the original loan. To apply for a loan, log on to Diversified s website at or call Diversified at A phone representative will take all of your information for processing. Generally, participants will receive the funds in seven to ten working days. HOW MUCH YOU CAN BORROW The amount of money you can borrow from your Plan Account is subject to certain rules: You can have only one loan outstanding at a time. The minimum amount you may borrow is $1,000. The maximum amount of any loan is the lesser of one-half the Vested Plan Account value or $50,000, less your highest loan balance in the last 12 months. Your Roth Contributions Account balance may not be distributed to you as a loan. However, the amount is included in your Account value for calculating the maximum loan amount. Therefore your maximum loan amount is the lesser of your non-roth Account value or 50% _3 18

24 of your Vested Plan Account value. For instance if your Vested Plan Account value is $50,000 and your Roth Contribution Account is $10,000, your maximum loan is $25,000. However, if your Roth Contribution Account was $30,000 and therefore your non-roth Account was $20,000 ($50,000- $30,000), your maximum loan amount would be $20,000. PURCHASE OF A PRIMARY RESIDENCE In general, the term of a loan cannot exceed five (5) years. However, if you are borrowing money to purchase a primary residence, the term of the loan may be extended up to ten (10) years. If you choose to extend the term beyond five years, then documentation concerning the purchase (e.g., the purchase contract and other related documents) must be submitted to Diversified along with the signed promissory note received from Diversified. If these items are not received by Diversified, the loan will not be processed. FEES Generally there is a $75.00 fee charged against your Plan Account at the time a loan is made. The Company and/or the Trustee may modify this fee from time to time. A schedule of Plan fees is enclosed at the end of this booklet. REPAYING YOUR LOAN The terms of the loan cover the following: Repayment period You can request to pay back a loan for up to five years. If the loan is for purchasing your principal residence, you can request up to a 10-year term. Method of payment You repay your loan through regular after-tax payroll deductions. If you leave the Company before repaying your loan, or if you fail to make payments for any other reason, the loan balance will be treated as an early withdrawal and, as such, may be subject to income and penalty taxes. You remain responsible for meeting all terms of the loan if you do not receive regular paychecks during an unpaid leave of absence. Early repayment There is no penalty for early repayment of your loan balance. Contact Diversified to find out your loan s cash payoff amount. To pay off your loan, please call Diversified at to set up a bank draft or mail a money order or cashier s check made payable to Diversified Investment Advisors to the following address: Diversified Investment Advisors P.O. Box Newark NJ Interest rate An interest rate of prime + 2% is charged for loans. The Plan Administrator determines the interest rate. The interest rate in effect when you take a loan remains the same throughout your loan period. (Keep in mind that all interest is credited back to your Account you are paying interest to yourself.) _3 19