EXHIBIT 10.3
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this “Agreement”) is entered into on  _______ to
be effective for all purposes on  _______ (the “Effective Date”), by and between
Arkansas Best Corporation, a Delaware corporation (the “Company”), and  _______ 
(“Director”).
W I T N E S S E T H:
WHEREAS, public companies have experienced increasing difficulty in obtaining
directors’ and officers’ liability insurance, significantly higher premiums than
had historically been charged, and reductions in the coverage of such insurance;
and
WHEREAS, the Company currently maintains such insurance but there can be no
assurance that such insurance will be available to the Company and Director in
the future; and
WHEREAS, the Company, in order to induce Director to serve or to continue to
serve the Company, has agreed to provide Director with the benefits contemplated
by this Agreement;
NOW, THEREFORE, in consideration of the promises, conditions, representations
and warranties set forth herein, the Company and Director hereby agree as
follows:
1. Definitions. The following terms, as used herein, shall have the following
respective meanings.
“Change in Control” shall be deemed to have occurred if (i) any “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (“the Act”)), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 20% or more of the total
voting power represented by the Company’s then outstanding voting securities,
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease, for any reason, to constitute a majority of the
Board of Directors, (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 60% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for sale or disposition by the Company of all or substantially all of the
Company’s assets.

 

 

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“Claim” means any threatened, pending or completed action, suit or proceeding,
or any inquiry or investigation, whether conducted by or on behalf of the
Company or any other party, that Director in good faith believes might lead to
the institution of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other.
“Covered Act” means any breach of duty, neglect, error, misstatement, misleading
statement, omission or other act done or wrongfully attempted by Director or any
of the foregoing alleged by any claimant or any event or occurrence related to
the fact that Director is or was a director, officer, employee, agent or
fiduciary of the Company or is or was serving at the request of the Company as a
director, officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other entity. For purposes of this
Agreement, the Company agrees that Director’s service on behalf of or with
respect to any subsidiary of the Company shall be deemed to be at the request of
the Company.
“Determination” means a determination, based on the facts known at the time, by:
(i) a majority vote of a quorum of disinterested directors;
(ii) special, independent legal counsel in a written opinion prepared at the
request of a majority of a quorum of disinterested directors or to pursuant to
Section 4(a);
(iii) a majority of the disinterested stockholders of the Company; or
(iv) a final adjudication by a court of competent jurisdiction.
“Determined” shall have a correlative meaning.
“Excluded Claim” means any Claim:
(i) based upon or attributable to Director gaining in fact any personal profit
or advantage to which Director is not entitled;
(ii) for the return by Director of any remuneration paid to Director without the
previous approval of the stockholders of the Company which is illegal;

 

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(iii) for an accounting of profits in fact made from the purchase and sale by
Director of securities of the Company within the meaning of Section 16 of the
Act or similar provisions of any state law;
(iv) resulting from Director’s knowingly fraudulent, dishonest or willful
misconduct;
(v) for which indemnification is prohibited by applicable law; or
(vi) initiated by Director, other than a Claim solely seeking enforcement of the
Company’s indemnification obligations to Director or a Claim authorized by the
Board of Directors.
“Expenses” means any expense incurred by Director as a result of a Claim or
Claims made against him for Covered Acts including, without limitation,
attorneys’ fees and all other costs, expenses and obligations paid or incurred
in connection with investigating, defending, being a witness in, or
participating in (including on appeal), or preparing to defend, be a witness in,
or participate in any Claim relating to any Covered Act, but shall not include
Fines.
“Fines” means any fine, penalty or, with respect to an employee benefit plan,
any excise tax or penalty assessed with respect thereto.
“Losses” means any amount that Director is legally obligated to pay as a result
of a Claim or Claims made against him for Covered Acts including, without
limitation, damages and judgments and sums paid in settlement of a Claim or
Claims, but shall not include Fines.
2. Maintenance of Directors’ and Officers’ Liability Insurance.
(a) The Company hereby covenants and agrees that, so long as Director shall
continue to serve as a director of the Company and thereafter so long as
Director shall be subject to any Claim for any Covered Act, the Company, subject
to Section 2(c), shall use its reasonable best efforts to maintain in full force
and effect directors’ and officers’ liability insurance.
(b) In all policies of directors’ and officers’ liability insurance maintained
by the Company, Director shall be named as an insured in such a manner as to
provide Director the same rights and benefits, subject to the same limitations,
as are accorded to the Company’s directors or officers most favorably insured by
such policy.
(c) The Company shall have no obligation to maintain directors’ and officers’
liability insurance if the Board of Directors of the Company determines in good
faith that such insurance is not reasonably available, the premium costs for
such insurance is disproportionate to the amount of coverage provided, or the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit.

 

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3. Indemnification. The Company shall indemnify Director and hold him harmless
from any and all Losses, Expenses and Fines to the fullest extent authorized,
permitted or not prohibited (i) by the General Corporation Law of the State of
Delaware (the “GCL”), or any other applicable law (including judicial,
regulatory or administrative interpretations or readings thereof), the Company’s
Restated Certificate of Incorporation or Amended and Restated Bylaws as in
effect on the date hereof, or (ii) by any amendment thereof or other statutory
provisions authorizing or permitting such indemnification that is adopted after
the date hereof, subject to the further provisions of this Agreement. In the
event that after the date hereof the Company provides any greater right of
indemnification, in any respect, to any other person serving as an officer or
director of the Company, then such greater right of indemnification shall inure
to the benefit of and shall be deemed to be incorporated in this Agreement.
4. Excluded Coverage.
(a) The Company shall have no obligation to indemnify Director for and hold him
harmless from any Loss, Expense or Fine which has been Determined to constitute
an Excluded Claim, provided that in the event of a Change in Control, then with
respect to all matters thereafter arising concerning the rights of Director to
indemnity payments and Expense advances under this Agreement, or under any other
agreements, charter provisions or bylaws now or hereafter in effect relating to
Claims for Covered Acts, a Determination with respect to an Excluded Claim shall
be made only by a court of competent jurisdiction or by special, independent
legal counsel selected by Director and approved by the Company (which approval
shall not be unreasonably withheld), and who has not otherwise performed
services for the Company or Director. In the event that Director and the Company
are unable to agree on the selection of the special, independent legal counsel,
such special, independent legal counsel shall be selected by lot from among at
least five law firms designated by Director, having more than thirty-five
(35) attorneys and having a rating of “av” or better in the then current
Martindale-Hubbell Law Directory. Such selection shall be made in the presence
of Director (and Director’s legal counsel or either of them, as Director may
elect). Such special, independent legal counsel, among other things, shall
determine whether and to what extent Director would be permitted to be
indemnified under applicable law and shall render its written opinion to the
Company and Director to such effect.
If there has been a Determination that the Company is not obligated to indemnify
Director as a result of an Excluded Claim (whether by special, independent legal
counsel or otherwise), Director shall have the right to commence litigation in
any court in the State of Delaware having subject matter jurisdiction thereof,
and in which venue is proper, challenging any such Determination; provided that
the Company shall be entitled to be reimbursed by Director (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid with respect to
such Excluded Claim (only upon a final judicial Determination that Director is
not entitled to indemnification made with respect thereto as to which all rights
of appeal there from have been exhausted or lapsed) and the Company shall be
obligated to indemnify or advance any additional amounts to Director until such
a judicial Determination has been made.

 

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(b) The Company shall use its best efforts to make any Determination
contemplated herein promptly. Upon request by Director, in connection with any
matter for which indemnification or reimbursement may be sought hereunder, the
Company agrees to promptly make a Determination whether such matter constitutes
an Excluded Claim. In this connection, the Company agrees:
(i) if the Determination is to be made by a majority of disinterested directors
of the Company or a committee thereof, such Determination shall be made not
later than fifteen (15) days after a written request for a Determination (a
“Request”) is delivered to the Company by Director;
(ii) if the Determination is to be made by special, independent legal counsel,
such Determination shall be made not later than twenty (20) days after a Request
is delivered to the Company by Director; and
(iii) if the Determination is to be made by the stockholders of the Company,
such Determination shall be made not later than ninety (90) days after a Request
is delivered to the Company by Director.
The failure to make a Determination within the above-specified time periods
shall constitute a Determination approving full indemnification or reimbursement
of Director. All costs of making the Determination shall be borne solely by the
Company.
(c) The Company shall have no obligation to indemnify Director and hold him
harmless for any Loss, Expense or Fine to the extent that Director is actually
and finally reimbursed for such Loss, Expense or Fine by the Company pursuant to
the Company’s Bylaws or otherwise.
(d) The Company shall have no obligation to indemnify Director and hold him
harmless for any Fines to the extent that such indemnification is prohibited by
the GCL.
5. Indemnification Procedures.
(a) Promptly after receipt by Director of notice of the commencement of or the
threat of commencement of any Claim, Director shall, if indemnification with
respect thereto is being sought from the Company under this Agreement, notify
the Company of the commencement thereof, provided that failure to so notify the
Company shall not relieve the Company from any liability that it may have to
Director under this Agreement unless such failure materially and adversely
affects the rights of the Company thereunder.
(b) If, at the time of the receipt of such notice, the Company has directors’
and officers’ liability insurance in effect, the Company shall give prompt and
proper notice of the commencement of such Claim to the insurer. The Company
shall thereafter take all necessary or desirable action to pay or to cause such
insurer to pay, on behalf of Director, all Losses, Expenses and Fines payable as
a result of such Claim in accordance with the terms of such policies.

 

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(c) To the extent the Company does not, at the time of the commencement of or
the threat of commencement of such Claim, have applicable directors’ and
officers’ liability insurance, or if the full amount of any Expenses arising out
of such action, suit or Claim will not be payable under such insurance then in
effect, the Company shall be obligated to pay the Expenses relating to any such
Claim in advance of the final disposition thereof to the fullest extent
permitted by law and the Company, if appropriate, shall be entitled to assume
the defense of such Claim, with counsel satisfactory to Director, upon the
delivery to Director of written notice of its election so to do. After delivery
of such notice, the Company will not be liable to Director under this Agreement
for any legal or other Expenses subsequently incurred by Director in connection
with such defense other than reasonable costs of investigation, provided that
Director shall have the right to employ his counsel in any such Claim but the
fees and expenses of such counsel incurred after delivery of notice from the
Company of its assumption of such defense shall be at the Director’s expense,
provided further that if (i) the employment of counsel by Director has been
previously authorized by the Company, (ii) Director shall have reasonably
concluded that there may be a conflict of interest between the Company and
Director in the conduct of any such defense, or (iii) the Company shall not, in
fact, have employed counsel to assume the defense of such action, the fees and
expenses of counsel shall be at the expense of the Company.
(d) All payments on account of the Company’s indemnification obligations under
this Agreement shall be made promptly, but in any event within thirty (30) days
of Director’s written request therefor, provided that all payments on account of
the Company’s obligations under Paragraph 5(c) of this Agreement prior to the
final disposition of any Claim, shall be made within ten (10) days of Director’s
written request therefor.
(e) Director agrees that he will reimburse the Company for all Losses, Expenses
and Fines paid by the Company on behalf of Director in connection with any Claim
against Director in the event and only to the extent that a Determination shall
have been made by a court in a final adjudication from which there is no further
right of appeal that the Director is not entitled to be indemnified by the
Company for such amounts because the Claim is an Excluded Claim or because
Director is otherwise not entitled to payment under this Agreement.
6. Final Determination; Settlement. The Company shall pay all Losses or Fines
for which Director is indemnified hereunder upon final determination thereof.
The Company shall have no obligation to indemnify Director under this Agreement
for any amounts paid in settlement of any Claim effected without the Company’s
prior written consent. The Company shall not settle any claim in any manner
which would impose any Fine or any obligation on Director without Director’s
written consent. Neither the Company nor Director shall unreasonably withhold
their consent to any proposed settlement.

 

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7. Rights Not Exclusive. The rights provided hereunder shall not be deemed
exclusive of any other rights to which Director may be entitled under any
charter provision, bylaw, agreement, vote of stockholders or of disinterested
directors or otherwise, both as to action in his official capacity and as to
action in any other capacity by holding such office, and shall continue after
Director ceases to serve the Company as a director. To the extent that a change
in the GCL (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent of the parties hereto that Director shall enjoy by
this Agreement the greater benefits so afforded by that change. Director’s
rights under this Agreement shall not be diminished by any amendment to the
charter or bylaws, or of any other agreement or instrument to which Director is
not a party, and shall not diminish any other rights that Director now or in the
future has against the Company.
8. Partial Indemnity. If Director is entitled under any provision of this
Agreement to indemnification by the Company for some, but not all, of Director’s
Expenses, Fines or Losses, the Company shall indemnify Director for the portion
thereof to which Director is entitled.
9. Contribution.
(a) Contribution Payment. To the extent the indemnification provided for under
any provision of this Agreement is Determined not to be permitted under
applicable law, the Company, in lieu of indemnifying Director, shall, to the
fullest extent permitted by law, contribute to the amount of any and all
Expenses, Fines or Losses incurred or paid by Director for which such
indemnification is not permitted. The amount the Company contributes shall be in
such proportion as is appropriate to reflect the relative fault of Director, on
the one hand, and of the Company and any and all other parties (including
officers and directors of the Company other than Director) who may be at fault
(collectively, including the Company, the “Third Parties”), on the other hand.
(b) Relative Fault. The relative fault of the Third Parties and the Director
shall be determined (i) by reference to the relative fault of Director as
determined by the court or other governmental agency or (ii) to the extent such
court or other governmental agency does not apportion relative fault, through a
Determination after giving effect to, among other things, the relative intent,
knowledge, access to information, and opportunity to prevent or correct the
relevant events, of each party, and other relevant equitable considerations. The
Company and Director agree that it would not be just and equitable if
contribution were determined by pro rata allocation or by any other method of
allocation that does take account of the equitable considerations referred to in
this Section 9(b).
10. No Presumption. For purposes of this Agreement, the termination of any Claim
by judgment, order, settlement (whether with or without court approval), or
conviction, or upon a plea of nolo contendere, or its equivalent, or an entry of
an order of probation prior to judgment shall not create a presumption (other
than any presumption arising as a matter of law that the parties may not
contractually agree to disregard) that Director did not meet any particular
standard of conduct or have any particular belief or that a court has determined
that indemnification is not permitted by applicable law.

 

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11. Enforcement.
(a) Director’s right to indemnification shall be enforceable by Director only in
the state courts of the State of Delaware and shall be enforceable
notwithstanding any adverse Determination. In any such action, if a prior
adverse Determination has been made, the burden of proving that indemnification
is required under this Agreement shall be on Director. The Company shall have
the burden of proving that indemnification is not required under this Agreement
if no prior adverse Determination shall have been made.
(b) In the event that any action is instituted by Director under this Agreement
to enforce or interpret any of the terms of this Agreement or to seek recovery
under any directors’ and officers’ liability insurance policies maintained by
the Company, Director shall be entitled to be paid all costs and expenses
(including reasonable counsel fees) and, if requested by Director, the Company
shall advance those costs and expenses to Director, that are incurred by
Director with respect to such action, unless the court determines that each of
the material assertions made by Director as a basis for such action were not
made in good faith, were frivolously presented for improper purpose, without
evidentiary support, or otherwise santionable under Federal Rule of Civil
Procedure No. 11 or an analogous rule or law, and provided further, that if a
court makes such a finding, Director shall reimburse the Company for all amounts
previously advanced to Director pursuant to this Section 11(b).
12. Severability. In the event that any provision of this Agreement is
determined by a court to require the Company to do or to fail to do an act which
is in violation of applicable law, such provision shall be limited or modified
in its application to the minimum extent necessary to avoid a violation of law,
and, as so limited or modified, such provision and the balance of this Agreement
shall be enforceable in accordance with its terms.
13. Choice of Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.
14. Consent to Jurisdiction. The Company and Director each hereby irrevocably
consent to the jurisdiction of the courts of the State of Delaware for all
purposes in connection with any action or proceeding that arises out of or
relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of Delaware.
15. Successors and Assigns. This Agreement shall be (i) binding upon all
successors and assigns of the Company (including any transferee of all or
substantially all of its assets and any successor by merger or otherwise by
operation of law) and (ii) shall be binding on and inure to the benefit of the
heirs, personal representatives, and estate of Director.
16. Amendment. No amendment, modification, termination or cancellation of this
Agreement shall be effective unless made in a writing signed by each of the
parties hereto.

 

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17. Subrogation. In the event of payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
the Director, who shall execute all instruments required and shall do everything
that may be necessary to secure such rights, including the execution of such
documents as may be necessary to enable the Company effectively to bring suit to
enforce such rights.
18. Counterparts. This Indemnification Agreement may be executed in multiple
counterparts.
IN WITNESS WHEREOF, the Company and Director have executed this Agreement as of
the day and year first above written to be effective for all purposes on the
Effective Date.

              ARKANSAS BEST CORPORATION
 
       
 
  By:     
 
     
 
    Name:  
 
    Title:  
 
             
 
  Director -  
 
       

 

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