Exhibit 10.1
MEMORANDUM OF UNDERSTANDING ON THE
ABF FREIGHT SYSTEM, INC.
WAGE REDUCTION — JOB SECURITY PLAN
April 14, 2010
ABF Freight System, Inc. (“ABF” or “the Company” or “the Employer”) and the
Teamsters National Freight Industry Negotiating Committee (“TNFINC”) of the
International Brotherhood of Teamsters (the “IBT” or the “Union”) hereby
establishes The Wage Reduction — Job Security Plan (hereinafter the “Plan”) for
the benefit of all of ABF’s employees. This Plan has been developed for the
express purpose of allowing the Employer the ability to compete and provide job
security for IBT bargaining unit employees. This Plan is not, and is not
intended to be, a plan governed by the Employee Retirement Income Security Act
of 1974, as amended; rather, this Plan is an amendment to the 2008-13 National
Master Freight Agreement and its applicable supplemental agreements
(collectively “the NMFA”) per Section 4 below that has been referred to as a
Plan by the parties.
     1. Employee Eligibility. During the period in which the Plan is effective
(as set forth in Section 4 below), each IBT bargaining unit employee of the
Employer shall participate in the Plan. For purposes of the Plan, unless
expressly stated to the contrary, the term “employee” means an IBT bargaining
unit employee who is on the seniority list and is scheduled to perform work for
the Employer when called, including regular full-time employees, a probationary
employee, a regular employee on lay off status and casuals, and including
employees who work on a percentage basis less than 40 hours per week.
     2. Wage Reduction. (a) Effective on the first payroll period following the
date of ratification of this Plan, the Employer shall reduce by 15% the
employees’ gross wages or earnings paid, including the increases to wages
described below in this Section 2 and the reduced wages in Section 9 below. Such
wage reduction and/or reduced earnings shall include overtime and any premium
pay, vacation, sick pay, holiday pay, funeral leave, jury duty, other pay for
time not worked, and any other monies paid after the effective date of this
Plan. Wage and mileage rate increases outlined in Article 33 of the NMFA,
including increases effective April 1, 2011, and

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April 1, 2012 shall also be reduced by 15%. On March 31, 2013, the wage
reduction contained in this Plan shall be eliminated, and the wages under the
NMFA shall revert to the full rate which would be in effect under the NMFA on
March 31, 2013 without the wage reduction.
(b) In the event the Employer’s publicly disclosed operating ratio is below
97.00 for any calendar year during the life of this Plan, or, alternatively, in
the event the Employer’s EBITDA exceeds $99.5 million for any calendar year
during the life of this Plan, the wage reduction in effect on April 1 of the
following year will be reduced by 5% on that date.
     3. Equal Sacrifice of Non-Bargaining Unit Employees and Their
Participation.
(a) All non-bargaining unit employees (including management) will participate
equally in the Plan, and the Employer will share the burden of sacrifices among
all IBT bargaining unit and non-bargaining unit employees (including
management), in each case, as described in this Section 3(a). The Employer must
reduce the total compensation (defined as wages plus health and welfare and
pension or retirement benefits) of all non-bargaining unit employees (including
management) by the same percentage reduction (an “Equal Reduction”) in total
compensation as is being applied to IBT bargaining unit employees.
Non-bargaining unit employees (including management) shall not be provided any
discretionary bonus payments during the life of this Plan (these are distinct
from the pre-existing incentive and performance based pay plans that are
expressly allowed to continue, as noted in the final paragraph of Section 10
below). In determining the Equal Reduction for non-bargaining unit employees
under this Plan, the Employer may include the monetary value of the following
concessions imposed on non-bargaining unit employees starting on January 1,
2008:

(1)   Deferral of 2008 wage increases from January to April and associated
reductions in 401(k) company match and reduction in pension benefit due to lower
base pay;   (2)   Changes in health care plan premium, office visit co-pay,
medical co-insurance and prescription drug generic co-pay effective January 1,
2008;   (3)   No wage increases in 2009 and associated reductions in 401(k)
company match and pension benefit due to lower base pay;

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(4)   Changes in health care plan premium, tobacco-use surcharge and deductible
effective January 1, 2009;   (5)   No defined contribution pension plan payments
in 2009;   (6)   No wage increases in 2010 and associated reductions in defined
benefit pension plan benefits due to lower base pay;   (7)   No 401 (k) company
match in 2010;   (8)   No defined contribution pension plan payments in 2010;
and,   (9)   Increase in health care plan premium, tobacco-use surcharge
increase and prescription drug deductible increase effective January 1, 2010.

Effective the first pay period following the date of ratification of this Plan,
additional wage and benefit concessions must be imposed on non-bargaining unit
employees to the extent needed to create an Equal Reduction. The Employer agrees
not to increase wages (including bonuses) and benefits of current non-bargaining
unit employees (including management) as an overall percentage beyond the
effective overall total compensation percentage increases to be received by the
bargaining unit employees. This shall not prevent the Employer from providing
targeted increases to individual employees if necessary, in the Employer’s
judgment to operate the business, or in the event of promotions, so long as the
overall total compensation increases are within the effective overall total
compensation percentage increases to be received by the bargaining unit
employees (consistent with Equal Reduction). This shall not prevent the Employer
from paying variable, performance based compensation as the Employer has paid in
past practice. If it becomes necessary to exceed this overall percentage
increase limit in order to retain employees for the efficient continued
operation of the business, the Employer will request approval from the
Subcommittee established in Section 6 below. The Employer will be permitted to
reinstate merit increases in 2011, provided that Employer’s financial condition
can support any increase to base wages.
(b) The Employer and TNFINC agree to use their reasonable best efforts to
achieve equal sacrifice in the total compensation of employees covered by
non-Teamster and non-NMFA collective bargaining agreements.

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     4. Effective Date; Relation to Collective Bargaining Agreement. This Plan
will be effective on the first pay period following the date of its ratification
and will be mandatory for all employees, since job security is the number one
asset the Employer, the Union and the employees all hope to share equally. This
Plan will be submitted for secret ballot vote of all bargaining unit employees,
and shall be put into effect if 50% plus one (1) of the bargaining unit
employees voting, vote to adopt the Plan. The Plan will be effective on the
first pay period following the date of ratification and the wages will be
reduced beginning on that date (the “Effective Date”). This Plan terminates on
March 31, 2013. This Plan is incorporated by reference into and shall be a part
of the 2008-2013 National Master Freight Agreement and its Supplements
(collectively referred to as “the NMFA”).
     5. Health, Welfare and Pension Contributions. The Employer agrees to
continue to pay the full Health, Welfare and Pension contributions and increases
in said contributions set forth in the NMFA and other Teamster bargaining
agreements that accept the terms of this Plan and will continue for the life of
this Plan to be signatory to such bargaining agreements. This Plan shall not be
used by the Employer or the Union in future negotiations as a basis for arguing
in favor of continuing or discontinuing the Employer’s participation in the
various Teamsters Pension Trusts which cover NMFA employees.
     6. Subcommittee to Monitor and Maintain Compliance. For purposes of
monitoring and maintaining compliance with the terms of this Plan, the parties
will establish a four person Subcommittee consisting of the Chairman of TNFINC
or his designee, the Co-Chairman of TNFINC or his designee, the Employer’s
President or his designee and another officer of Employer or his designee. The
Subcommittee shall meet quarterly or more frequently, if necessary, to exchange
and discuss pertinent data, including but not limited to relevant payroll and
related information, the reinvestment of capital into the Employer, and any and
all subjects related to the financial operations of the Employer. The
Subcommittee’s decision regarding the interpretation of this Plan shall be final
and binding.
     7. Dispute Settlement. Disputes pertaining to the Plan are subject to the
grievance procedure contained in the NMFA. However, any grievance filed
hereunder, by either party, shall be referred initially to the Subcommittee
established in Section 6 for disposition. If the Subcommittee fails to reach
agreement, the matter will be referred to the Chairman of TNFINC and the
President of the Employer in accordance with Article 8, Section 2(b)(2) of the
NMFA. If the Chairman of TNFINC and the

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President of the Employer are unable to resolve the matter, the 30 additional
days provided in Article 8, Section 2(b)(2) of the NMFA shall be considered as
exhausted and the remaining provisions of Article 8, Section 2 shall govern.
     8. Participation. An employee begins or continues participation in the Plan
on the date of Plan implementation or the first day of the pay period following
his/her first day of casual, regular and/or probationary employment.
     9. New Hire.
A. Non-CDL Qualified Employees
Non-CDL qualified employees (excluding mechanics) hired after, or already in
progression, on the effective date of the Plan begin participation in the Plan
on their first day of employment at the following wage progression:

          Maximum Wage Reduction Time of Service   from New Hire Rate Above  
After Reduction in Section 2
Effective First Day of Employment
  Receive 70% of NMFA Wages  
Effective First Day plus One (1) Year
  Receive 75% of NMFA Wages  
Effective First Day plus Two (2) Years
  Receive 80% of NMFA Wages  
Effective First Day plus Three (3) Years
  Receive 100% of NMFA Wages

“NMFA Wages” means the NMFA rate for the applicable job classification after the
agreed upon wage reduction.
B. CDL Qualified or Mechanics
CDL qualified employees and mechanics hired after, or already in progression, on
the effective date of the Plan begin participation in the Plan

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on their first day of employment at the following wage progression:

          Maximum Wage Reduction Time of Service   from New Hire Rate Above  
After Reduction in Section 2
Effective First Day of Employment
  Receive 85% of NMFA Wages   
Effective First Day plus One (1) Year
  Receive 90% of NMFA Wages   
Effective First Day plus Two (2) Years
  Receive 95% of NMFA Wages  
Effective First Day plus Three (3) Years
  Receive 100% of NMFA Wages

“NMFA Wages” means the NMFA rate for the applicable job classification after the
agreed upon wage reduction.
     10. Earnings Plus Plan. Effective at the beginning of the next payroll
period following ratification by Employer’s bargaining unit employees and
continuing until March 31, 2013, all regular employees (including bargaining
unit, non-bargaining unit, and management employees) will participate in the
Earnings Plus Plan. Under the Earnings Plus Plan, employees paid on a weekly
basis will be paid a percentage of their pay earned during the weeks ending in
the quarter consistent with the table below. Salaried employees will be paid a
percentage of their pay earned for the three months of the quarter. Payments
will be made during the month following the end of the fiscal quarter when
Employer’s publicly disclosed operating ratio is below 99.00 for the quarter.
Earnings Plus Plan

                              Payment Public OR   % of Pay *   Example**
99.00
    0.00 %   $ 0  
98.00
    1.00 %   $ 131  
97.00
    2.00 %   $ 263  
96.00
    3.00 %   $ 394  
95.00
    3.00 %   $ 394  
94.00
    6.00 %   $ 789  
93.00
    9.00 %   $ 1,183  

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                              Payment Public OR   % of Pay *   Example**
92.00
    12.00 %   $ 1,578  
91.00
    15.00 %   $ 1,972  
90.00
    18.00 %   $ 2,367  
89.00
    21.00 %   $ 2,761  
88.00
    24.00 %   $ 3,156  
87.00
    27.00 %   $ 3,550  
86.00
    30.00 %   $ 3,944  
85.00
    33.00 %   $ 4,339  
84.00
    36.00 %   $ 4,734  

and so forth for each additional point.
 

*   Formula:

      OR   Formula
96.00 to 98.99
  (99.00 — Actual OR) x 1.00 = % of Pay 
95.00 to 95.99
  3.00% of Pay 
Below 95.00
  (96.00 — Actual OR) x 3.00 = % of Pay 

For example, at an OR of 97.3 the % of pay would be 1.7%; at an OR of 94.1 the %
of pay would be 5.7%
 

**   Payment example is based on (i) Regular Time of 40 hrs per week at
$20.03/hr; plus, (ii) Over Time of 7 hrs per week at $30.04/hr.

Example calculation:
Payout at 91.0 O.R.= ((40 x $20.03) + (7 x $30.04)) x 13 wks x 15% = $1,972.
     To save payment processing costs, any quarterly payment amount under the
Earnings Plus Plan of less than $50.00 will be deferred until the total deferred
amount is $50.00 or more or until 1 year has elapsed.
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     Should the Earnings Plus Plan be ratified during a fiscal quarter, payments
for that quarter will be pro-rated accordingly based on the number of weeks in
the quarter.
     If for any reason wages revert to NMFA rates before March 31, 2013, then
this Earnings Plus Plan shall be immediately terminated, but employees will be
fully vested in the prorated share of the profits for the period of the wage
reduction.
     In order to maintain the high performance levels of the past, Employer’s
current incentive plans for non-bargaining unit employees will remain in place
and co-exist with the Earnings Plus Plan.
     11. Employee Option to Purchase Stock. In lieu of the receipt of wages due
under the Earnings Plus Plan in Section 10 above, employees may voluntarily
elect to use their wages earned under the Plan to purchase Arkansas Best
Corporation (“ABC”) stock utilizing the existing employee stock purchase plan.
In the event the Earnings Plus Plan triggers payouts, and in the event
bargaining unit recipients elect to take the payout in stock instead of cash,
the Company will allow employees to use either the existing employee stock
purchase plan or put the stock into their 401(k) plan subject to IRS limitations
on (a) overall annual contributions that are allowed and (b) IRS limitations on
the amount of ABC stock that can be put into individual 401(k) accounts. If at
the time this occurs there are any legal obstacles to implementing this 401(k)
option, the Subcommittee shall meet to work out an agreeable alternative to
effectuate this objective as close as possible.
     12. Resignation, Retirement or Other Termination of Employment. Any
employee who resigns, retires or otherwise incurs a termination of employment,
whether voluntary or involuntary, during the term of the Plan shall receive a
pro rata distribution in accordance with Section 10 of this Plan based upon the
date of his/her resignation, retirement or other termination of employment. In
the event of death, any pro rata distribution shall be paid to the employee’s
estate.
     13. Extension of Recall for Laid off Teamsters. The NMFA (Article 5,
Section l(b)) is amended to increase the recall rights of bargaining unit
employees on layoff as of the effective date of this Plan or who become laid off
during the term of the Plan, from five (5) years to ten (10) years.
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     14. Access to Employer Financial Records. The Employer shall submit
quarterly and annual financial statements in the format of the appropriate DOT
report (formerly the BTS report) to the Subcommittee established by Section 6,
and TNFINC reserves the right on an annual basis to examine records of the
Employer which are reasonably required to monitor Employer compliance with this
Plan or utilize an independent auditor of its choice to do the same. In
consideration of the fact that TNFINC was permitted to review the Employer’s
financial records in connection with the negotiation of this Plan, the periodic
quarterly financial review shall commence with the first full quarter after the
effective date of this Plan and the first annual review of financial statements
shall commence with a review of 2010 statements, as the 2009 statements were
reviewed by a financial advisor selected by TNFINC as part of the negotiation of
this Plan. Notwithstanding any request to the contrary, given applicable privacy
laws and policies and for the protection of its bargaining and non-bargaining
unit employees alike, the Employer will not share employee specific compensation
information with the Subcommittee, TNFINC, or the Union other than the
compensation information that Employer is required to publicly provide pursuant
to Securities and Exchange Commission regulation. The Union, however, retains
the right to obtain compensation data on classes or groupings of non-bargaining
unit employees to ensure compliance with the “Equal Reduction” requirement in
Section 3 of this Plan. In the event an independent auditing firm is utilized by
TNFINC, the Employer shall pay such independent auditor for such annual audit up
to a maximum of ten thousand dollars ($10,000). As a condition of being provided
such statements, books and audit, TNFINC and the Subcommittee (and any
accountant or auditor engaged on its behalf) must agree to maintain the
confidentiality of any Employer financial statements and reports for the
protection of the Employer, and to execute a reasonable confidentiality
agreement if requested by the Employer in such form as the Employer may
reasonably require.
There shall be no inter-company charges initiated under the Plan for the purpose
of defeating the Plan. The Employer will not change accounting assumptions or
practices, except as required to conform to governmental regulations, generally
accepted accounting principles or for legitimate business reasons; and in no
event will such assumptions or practices be changed to evade or defeat the
purposes of this Plan.
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     15. Work Preservation. The Employer agrees not to establish or buy any new
non-union regular route common carrier entity without the prior approval of the
Union. The Employer agrees that it will not use any of the savings and other
economic benefits derived from this Plan to provide capital to its parent
corporation for the acquisition or expansion of any operations not covered by
the NMFA that will not benefit ABF. The Employer also agrees that it will not
transfer bargaining unit work to any location outside of the United States. This
Section 15 does not apply to the maintenance of existing operations or any
existing contractual commitments. The Subcommittee created in Section 6 of this
Plan will review the Employer’s compliance with this Section.
     16. Relationship to Banking Facilities. The Employer will not enter into
any modification, expansion or amendment of its current arrangements with
financial institutions or enter into new credit agreements with other lenders
except on ordinary, reasonable and customary terms and conditions and at
reasonable market rates of interest. The Subcommittee will be given reports of
same at its quarterly meetings, and will be provided with contemporaneous notice
of any material increases in the Company’s credit lines or other borrowing. Any
disputes on such changes to credit lines or other borrowing must be resolved by
the Subcommittee within 30 days of the contemporaneous notice.
     In the event the Employer requires additional funds to satisfy its
liquidity needs beyond those needs which exist on the date of ratification of
this Plan, the Employer must obtain such additional funds by modifying,
expanding or amending its current arrangements with financial institutions or by
entering into new credit agreements with other lenders.
     17. Termination/Amendment. The Employer agrees not to terminate the Plan
before the termination date without approval of the Union. However, if the Plan
is terminated with approval of the Union at any time, wage levels will revert or
snap back to the full NMFA on a prospective basis and all other provisions of
this Plan shall be null and void on a prospective basis, including (without
limitation) Section 3. This Plan by its terms expires no later than March 31,
2013, including all provisions hereof. If, during the term of this Plan, the
Employer increases its fulltime, active Teamster workforce by 20% or more from
the level of fulltime, active Teamsters employed in the NMFA bargaining unit on
the effective date of this Plan, the Union reserves the right to terminate this
Plan with 30 days written notice; provided, the Union agrees to duly consider
the profitability of the Company, or lack thereof, before terminating the Plan.
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     18. Bankruptcy Protection. The purpose of this Plan is to make a financial
accommodation for the benefit of the Employer, within the meaning of
Section 365(e)(2) of the Bankruptcy Code. Accordingly, if the Employer files a
Chapter 7 or 11 bankruptcy petition or is placed in involuntary bankruptcy
proceeding, this Plan is automatically terminated and wages reverted to full
NMFA on a prospective basis, unless the Union agrees in writing to continue the
Plan, and all other provisions of this Plan shall be null and void on a
prospective basis, including (without limitation) Section 3.
     19. Type of Agreement. This Plan shall be applicable to the NMFA and its
Supplements, which have been agreed to by the Employer and TNFINC.
     20. Expedited Election Agreement. The parties to this Plan agree to the
attached Appendix I containing a Letter of Understanding for an Expedited
Election Agreement to be used in the event that any Local Union affiliated with
the International Brotherhood of Teamsters obtains signed authorization cards
from a majority of the employees of any non-union carrier, which the Employer,
its parent or holding company or subsidiaries of the Employer buys or maintains
consistent with Section 15 of this Plan.
     21. Current Ownership. If a Change of Control of Employer (as defined
below) occurs other than through a confirmation of a plan of reorganization in a
Chapter 11 proceeding, this Plan is automatically terminated and wages reverted
to full NMFA on a prospective basis unless the Union agrees in writing to
continue the Plan, and all other provisions of this Plan shall be null and void
on a prospective basis, including (without limitation) Section 3. For the
purposes of this Section 21, a “Change of Control,” shall be deemed to have
taken place if a third person, including a “group” as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, purchases
or otherwise acquires shares of Arkansas Best Corporation (“ABC”) after the date
of this Agreement that, together with stock held by such person or group,
constitutes more than 50 percent of the total voting power of the stock of where
the current directors of ABC (or directors that they nominate or their nominees
nominate) no longer continue to hold more than 50% of the voting power of the
board of directors).
     22. Severability. The invalidity or unenforceability of any provision of
this Plan shall not affect the validity or enforceability of any other
provisions of this Plan, which shall remain in full force and effect.

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     23. References. As used in this Plan, unless the context expressly requires
the contrary, references to “Sections” means the sections and subsections of
this Plan; references to a “party” means the Employer or the Union; references
to the plural mean singular, and vice versa, and references to an “Appendix”
means an appendix to this Plan, which shall become an integral part of this
Plan.
In Witness of the foregoing Plan, the parties hereby acknowledge the Plan as a
tentative agreement pending Employer and ABC board approval and
two-man/membership ratification:
ABF Freight System, Inc.:

     
By:
  /s/ Wesley B. Kemp

 
   
Date:
  4/16/2010

Teamsters National Freight Industry Negotiating Committee:

     
By:
  /s/ Tyson Johnson

 
   
Date:
  4/16/2010

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APPENDIX I
Letter of Understanding
Between
ABF Freight System, Inc.
And
Teamsters National Freight Industry Negotiating Committee
EXPEDITED ELECTION AGREEMENT
Whenever any Local Union affiliated with the International Brotherhood of
Teamsters (hereinafter the “Union”) believes it represents a majority of the
employees of any non-union carrier, which ABF Freight System, Inc. (hereinafter
“the Employer”), its parent or holding company or subsidiaries of the Employer
buys or maintains, in a terminal unit based on authorization cards it has
obtained which would constitute an appropriate bargaining unit under normally
recognized standards governing bargaining units under the National Labor
Relations Board (“NLRB”), the parties agree that the following process will be
exclusively utilized to resolve the issue of representation. Any dispute
involving this procedure discussed below shall be subject to the grievance and
arbitration procedure of this Agreement:

(a)   Demand for Recognition. An authorized representative of the Union will
make a written “demand for recognition” in the unit described above where it
claims a majority status. Upon such demand, the third party neutral described in
paragraph (b) below shall verify the majority status. In the alternative, the
Union may elect to file a RC petition with the NLRB, in which case the normal
rules and procedures of the NLRB (instead of those set forth in paragraph (b)-
(f) below) shall govern the remaining conduct of the organizing and election
process.

(b)   Prompt Election. Employer and Union representatives will immediately
arrange for a neutral third party (FMCS mediator or other, as mutually agreed)
to conduct a secret ballot election within seven (7) working days (excluding
Saturdays, Sundays, and recognized Holidays) of the receipt of the “demand for
recognition.”

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(c)   Secret Ballot Election. The election will normally be arranged to occur at
the Employer’s terminal and will be conducted by the third party utilizing
postings, ballots and election rules similar to those utilized by the NLRB. The
parties will mutually agree on postings, ballots and other forms to be used
under this Letter of Understanding.

(d)   Eligible Voters. The parties will apply National Labor Relations Act
standards on issues of voter eligibility.

(e)   Quiet Period/No Campaigning. From the time the Employer receives the
demand for recognition until the election is held, no Employer or Union
representative will campaign in any manner (letters, calls, meetings, home
visits, postings, etc.) to attempt to influence the secret ballot votes of
employees voting in the election. Communications during this quiet period shall
include only the following:

  (i)   mutually agreed postings setting forth the details of the election; and
    (ii)   each employee eligible to vote will be given a copy of this Letter of
Agreement.

(f)   Honoring Results. Following the election, the neutral third party will
provide a written “certification of results” which will be final and binding on
the parties. Should the Union prevail (receive a majority of the ballots cast by
eligible voters), the Employer and the Union will commence good faith bargaining
on the terms of a collective bargaining agreement. If the Union fails to receive
a majority of the votes, a one year “election bar” will apply before another
election can be conducted in that group of employees.

(g)   Exclusive Process/No Strikes. The Union agrees that this Letter
constitutes the exclusive process that will apply for claimed representation of
any group of employees at terminal locations and that no recognitional strikes,
picketing or job actions of any kind will be authorized or utilized against the
Employer or its parent or holding company or any subsidiary thereof to attempt
to force recognition over any such issue. The exclusive procedure set forth in
this letter shall apply and supersede any right to engage in any alternative

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    conduct to gain representation of employees that may be permitted under the
labor agreement or at law.

     Wherefore, the parties have set their hand to this Agreement this 16th day
of April 2010.

      /s/ Tyson Johnson   /s/ Wesley B. Kemp
Representative for
  Representative for
TNFINC
  ABF Freight System, Inc.

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