Document:

Exhibit 10.3 Executive Bonus-Restricted Stock Plan

EXHIBIT 10.3

 

FFE
TRANSPORATION SERVICES, INC.

2005
EXECUTIVE BONUS AND RESTRICTED STOCK PLAN

 

This
Executive Bonus and Restricted Stock Plan (hereafter this “Plan”), dated as of
January 1, 2005 (the “Effective Date”), by FFE Transportation Services, Inc., a
Delaware corporation (“FFE”) which is a wholly-owned subsidiary of FFE, Inc.
(“Inc.”), a Delaware corporation which is a wholly-owned subsidiary of Frozen
Food Express Industries, Inc. (“Industries”), a Texas corporation, for the
benefit of certain officers of FFE.

PURPOSE

FFE has
established this Plan for the benefit of specified officers of FFE in order to
enhance the benefits to the covered officers, allow the officers to share in the
growth of FFE through the appreciation in the value of the common stock of
Industries, and to provide the officers with greater incentive to promote the
grown of Industries’ shareholder value. The purpose of the Plan is to align the
financial interests of key officers of FFE with those of Industries’
shareholders through the use of awards, payable in the common stock of
Industries, upon the attainment of predetermined performance goals.

TERMS

1. DEFINITION.
For the purposes of this Plan, the following terms shall have the meanings set
forth below: 

(a) The term
“Committee” shall mean a committee of the Board of Directors of Industries,
which shall consist of not less than two persons who are “Non-Employee
Directors” as defined in Rule 16b-3(b)(3) under the Securities Exchange Act of
1934 and who meet such additional criteria as the Board of Directors of
Industries shall determine so that any incentive bonuses paid pursuant to this
Plan shall be exempt from the limitation set forth in Section 162(m) of the
Internal Revenue Code of 1986, as amended. 

(b) The term
“Compensation” shall mean a Participant’s base compensation (as determined by
the Committee) for the specified period and shall exclude any non-recurring
compensation such as bonus payments.

(c) The term
“Fair Market Value” shall mean the closing sales price of the securities per
share, as reported in the Wall Street Journal (or, if not so reported, as
otherwise reported by the National Association of Securities Dealers Automated
Quotation System) as of the date in question.

(d) The term
“Operating Ratio” shall mean with respect to any particular Participant, the
ratio of Industries’, or one or more of its operating entities’ or groups’, as
set forth on Exhibit A attached to this Plan, operating expenses to operating
revenues for the applicable fiscal year, as adjusted by the Committee for such
specific items, if any, that the Committee in its sole discretion deems
appropriate.

(e) The term
“Participant” shall mean each officer of FFE, including without limitation, any
officer of Industries that is an officer of FFE, whose name is set forth on
Exhibit A.

2. DETERMINATION
OF BONUS. With respect to each fiscal year commencing with fiscal year 2005,
each Participant shall be entitled to an incentive bonus (“Bonus”) calculated
pursuant to a formula determined on the basis of such Participant’s Operating
Ratio targets and specified percentages of such Participant’s Compensation, if
the Committee certifies that the applicable target has been obtained. The
targets and percentages for all Participants are shown on Exhibit A attached to
this Plan. On or before the last day of any fiscal year, the Committee may, in
its sole discretion, redetermine who will be a Participant (provided that such
person must be an officer of FFE) for the subsequent fiscal year and the
Operating Ratio targets and percentages to be used to calculate the
Participants’ Bonuses for the subsequent fiscal year by amending Exhibit A
attached to this Plan.

3. PAYMENT
OF BONUS AND ISSUANCE OF RESTRICTED STOCK.

(a) Each
Participant’s Bonus for any fiscal year shall be paid by FFE to such Participant
as soon as practicable after the consolidated financial statements of Industries
for such fiscal year have been prepared. [Note:
Section 409A will require either that (i) the bonus be paid within 2 1⁄2 months
after the close of the fiscal year, or (ii) if paid at a later date, then the
payment date must be a fixed date, ie., on May 1, and cannot be
accelerated.]

(b) In
addition to the payment of any Bonus to a Participant, FFE shall award shares of
Restricted Stock to each Participant under the Industries’ 2005 Stock Incentive
Plan (the “Stock Incentive Plan”). The number of shares of Restricted Stock
shall be equal to 50% of the amount of the Participant’s Bonus for that fiscal
year divided by the applicable Share Value. The applicable Share Value shall
mean the amount that is the lower of (i) the Fair Market Value of a share of
Stock as of the last business day of the fiscal year immediately preceding the
fiscal year for which the Participant’s Bonus was awarded and (ii) the
average of the Fair Market Values of a share of Stock as of the last business
day of each calendar month of the fiscal year for which the Participant’s Bonus
was awarded.

(c) Shares of
Restricted Stock shall be awarded to a Participant as of the last business day
of the fiscal year for which the Participant’s Bonus was awarded (the “Grant
Date”).

(d) If the
specified bonus percentage for a Participant’s Operating Ratio for any fiscal
year is a negative number, no award for the fiscal year will be made. Rather,
the Committee shall have the option to reduce each Participant’s Compensation
for the next calendar year, or for such other period as the Committee may
determine, by such percentage.

4. ADJUSTMENT
TO NUMBER OF SHARES OF RESTRICTED STOCK. 

If the
Operating Ratio applicable to a Participant for the fiscal year ended
December 31, 2005 is less than 96 percent and the Committee certifies
thereto, the Participant’s restricted stock grant shall be increased as of the
end of such fiscal year by the number of shares set forth opposite the name of
such Participant on Exhibit B attached to this Plan. 

5. VESTING
OF RESTRICTED STOCK.

(a) The
shares of Restricted Stock awarded to Participants shall vest over a three-year
period, one-third on each anniversary of the Grant Date, provided that the
Participant remains employed by FFE or a related corporation on the vesting
date.

(b) If a
Participant dies while employed by FFE or a related corporation, 100% of his
shares of Restricted Stock awarded under this Plan shall become
vested.

(c) The terms
and conditions of the Restricted Stock award shall be set forth in an Award
Agreement and shall be subject to the provisions of the Stock Incentive
Plan.

6. NON-TRANSFERABILTY.
Neither the shares of Restricted Stock nor any rights and benefits granted in
this Plan may be transferred, assigned, pledged, or hypothecated in any manner,
by operation of law or otherwise, other than by will or by the laws of descent
or distribution or pursuant to a qualified domestic relations order as defined
by the Internal Revenue Code of 1986, as amended (“Internal Revenue Code”), or
Title I of the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder, and shall not be subject to execution, attachment, or
similar process.

7. NO
FIDUCIARY RELATIONSHIP. The Boards of Directors and the officers of FFE,
Industries and Inc. shall have no duty to manage or operate in order to maximize
the benefits granted to the Participants hereunder, but rather shall have full
discretionary power to make all management and operational decisions based on
their determination of their respective best interest. This Plan shall not be
construed to create a fiduciary relationship between such Boards or the officers
of FEE, Industries or Inc. and the Participant.

8. GOVERNING
LAW. This Plan shall be governed by and construed in accordance with the laws of
the State of Texas.

9. NO
EMPLOYMENT GUARANTEE. Nothing in this Plan shall be construed as an employment
contract or a guarantee of continued employment. The rights of any Participant
shall only be those as are expressly set forth in this Plan.

10. ADMINISTRATION.
The Committee shall administer this Plan and shall have the authority, in its
sole and absolute discretion, (a) to adopt, amend and rescind administrative and
interpretative rules and regulations relating to the Plan, (b) to determine the
Participants and the terms under which they may participate in this Plan, (c) to
make all other determinations, perform all other acts, and exercise all other
powers and authority necessary or advisable for administering the Plan,
including the delegation of those ministerial acts and responsibilities as the
Committee deems appropriate.

11. TAXES.
FFE shall be entitled to deduct from amounts payable hereunder any sums required
by federal, state, or local tax law to be withheld with respect to such
payments.

12. AMENDMENT.
In addition to the amendments to this Plan contemplated by Section 2, the Board
of Directors may amend or terminate this Plan in its sole
discretion.

13. GENERAL
CREDFITOR STATUS. The Participants shall, in no event, be regarded as standing
in any position, if at all, other than as a general creditor of FFE with respect
to any rights derived from the existence of this Plan and shall receive only
FFE’s unfunded and unsecured promise to pay benefits under this
Plan.

14. CAPTIONS.
The captions in this Plan are inserted for convenience of reference only and in
no way define, describe or limit the scope or intent of this Plan or any of the
provisions hereof.

15. SEVERABILITY.
If any provision of this Plan is held to be illegal, invalid or unenforceable
under present or future laws, such provision shall be fully severable and shall
not invalidate the remaining provisions of this Plan, and the remaining
provisions of this Plan shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance
from this Plan.

16. COSTS.
All expenses and costs incurred in connection with the operation of this Plan
shall be borne by FFE.

 

FROZEN
FOOD EXPRESS INDUSTRIES, INC.

 

By: /s/ Stoney M. Stubbs, Jr.

Name: STONEY M. STUBBS, JR.

Title:  Chairman of the
Board

 

INCENTIVE
BONUS CALCULATION

Participants:
Stoney M. (Mit) Stubbs, Jr., Charles G. Robertson and F. Dixon McElwee,
Jr.

Operating
Ratio Targets and Bonus Percentages Applicable to all
Participants:

	
      Operating
      

      Ratio

       of
      Industries
	
      Participant’s

      Bonus
      Percentage

      For
      2005

	
      100.0
      or more
	
      -15%

	
       99.9-96.1
	
      0
      

	
      96.0-95.6
	
      10

	
      95.5-95.1
	
      20

	
      95.0-94.6
	
      30

	
      94.5-94.1
	
      40

	
      94.0-93.6
	
      50

	
      93.5-93.1
	
      60

	
      93.0-92.6
	
      70

	
      92.5-92.1
	
      80

	
      92.0-91.6
	
      90

	
      91.5
      or less
	
      100Exhibit 10.4 Stock Incentive Plan

EXHIBIT 10.4

 

FROZEN
FOOD EXPRESS INDUSTRIES, INC.

2005
STOCK INCENTIVE PLAN

PURPOSE
OF PLAN

The
Frozen Food Express Industries, Inc. 2005 Stock Incentive Plan (the "Plan") has
been established as a complete amendment and restatement of the Frozen Food
Express Industries, Inc. 2002 Incentive and Nonstatutory Option Plan (the “Prior
Plan”) by Frozen Food Express Industries, Inc. (the "Company") to:

 

	(a)  	
      Attract
      and retain employees of the Company and certain consultants and advisors
      to provide services to the Company;

 

 

	(b)  	
      Motivate
      participating employees and consultants, by means of appropriate
      incentives, to achieve long-range goals;

 

 

	(c)  	
      Provide
      incentive compensation opportunities which are competitive with those of
      our peer group of corporations; and

 

 

	(d)  	
      Further
      identify Holders’ interests with those of the Company's other stockholders
      through compensation alternatives based on the Company's common
      stock;

 

and
thereby promote the long-term financial interest of the Company and its
Subsidiaries, including the growth in value of the Company's equity and
enhancement of long-term stockholder return.

 

SECTION
1.  DEFINITIONS

 

 

	1.1  	
      "Award"
      means the grant of any Option, share of Restricted Stock, Restricted Stock
      Unit or Stock Appreciation Right under the Plan, whether granted singly,
      in combination, or in tandem, to a Holder pursuant to the terms,
      conditions, and limitations that the Committee may establish in order to
      fulfill the objectives of the Plan.

 

 

	1.2  	
      "Award
      Agreement" means the written agreement between the Corporation and a
      Holder evidencing the terms, conditions, and limitations of the Award
      granted to that Holder.

 

 

	1.3  	
      "Board
      of Directors" means the board of directors of the
    Corporation.

 

 

	1.4  	
      "Business
      Day" means any day other than a Saturday, a Sunday, or a day on which
      banking institutions in the State of Texas are authorized or obligated by
      law or executive order to close.

 

 

	1.5  	
      "Change
      in Control" means the event that is deemed to have occurred
      if:

 

 

	(a)  	
      any
      "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
      Act) that does not currently own a five percent (5%) or greater equity
      interest in the Corporation or in any Related Corporation becomes the
      "beneficial owner" (as determined pursuant to Rule 13d-3 under the
      Exchange Act), directly or indirectly, of securities of the Corporation or
      of any Related Corporation representing fifteen percent (15%) or more of
      the combined voting power of the Corporation's or Related Corporation's,
      as the case may be, then outstanding voting securities;
  or

 

 

	(b)  	
      a
      change in the composition of the Board of Directors occurring within a two
      (2) year period, as a result of which members of the Incumbent Board cease
      to constitute at least a majority of the Board of Directors;
      or

 

 

	(c)  	
      the
      Corporation or any Related Corporation shall merge with or consolidate
      into any other corporation, other than a merger or consolidation which
      would result in the holders of the Voting Securities of the Corporation or
      any Related Corporation, as the case may be, outstanding immediately prior
      thereto holding immediately thereafter securities representing more than
      sixty percent (60%) of the combined voting power of the Voting Securities
      of the Corporation or any Related Corporation, as the case may be, or such
      surviving entity (or its ultimate parent, if applicable) outstanding
      immediately after such merger or consolidation;
or

 

 

	(d)  	
      the
      stockholders of the Corporation or any Related Corporation approve a plan
      of complete liquidation of the Corporation or any Related Corporation or
      the consummation of an agreement for the sale or disposition by the
      Corporation or any Related Corporation of all or substantially all of the
      Corporation's or Related Corporation's assets and such plan or agreement
      becomes effective, other than a liquidation or sale which would
      result in the Corporation directly or indirectly owning such interest or
      assets.

 

 

	1.6  	
      "Code"
      means the Internal Revenue Code of 1986, as
amended.

 

 

	1.7  	
      "Committee"
      means the committee appointed pursuant to Section 3 by the Board of
      Directors to administer this Plan.

 

 

	1.8  	
      "Corporation"
      means Frozen Food Express Industries, Inc., a Texas
      corporation.

 

 

	1.9  	
      "Date
      of Grant" has the meaning given it in Paragraph
4.3.

 

 

	1.10  	
      "Disability"
      has the meaning given it in Paragraph 10.5.

 

 

	1.11  	
      "Effective
      Date" means the first date that the Plan has been approved by both the
      Board of Directors and the stockholders of the Corporation, as provided in
      Paragraph 11.1.

 

 

	1.12  	
      "Eligible
      Individual" means (a) a Key Employee or (b) any other Person that the
      Committee designates as eligible for an Award (other than for Incentive
      Options) because the Person performs bona fide consulting or advisory
      services for the Corporation or any of its Subsidiaries (other than
      services in connection with the offer or sale of securities in a
      capital-raising transaction) and the Committee determines that the Person
      has a direct and significant effect on the financial development of the
      Corporation or any of its Subsidiaries.

 

 

	1.13  	
      "Employee"
      means any employee of the Corporation or of any of its Subsidiaries,
      including officers and directors of the Corporation who are also employees
      of the Corporation or of any of its
Subsidiaries.

 

 

	1.14  	
      "Exchange
      Act" means the Securities Exchange Act of 1934, or any successor law, as
      it may be amended from time to time.

 

 

	1.15  	
      "Exercise
      Notice" has the meaning given it in Paragraph
5.5.

 

 

	1.16  	
      "Exercise
      Price" has the meaning given it in Paragraph
5.4.

 

 

	1.17  	
      "Fair
      Market Value" means, for a particular day, the market price of the Stock,
      determined by the Committee in good faith on such basis as it deems
      appropriate. Whenever possible, the determination of Fair Market Value by
      the Committee shall be based on the prices reported in the Wall Street
      Journal. Such determination shall be conclusive and binding on all
      persons.

 

 

	1.18  	
      "Holder"
      means an Eligible Individual to whom an Award has been granted or such
      Eligible Individual's Permitted Transferee.

 

 

	1.19  	
      "Incentive
      Option" means an incentive stock option as defined under Section 422 of
      the Code and regulations thereunder.

 

 

	1.20  	
      "Incumbent
      Board" means the individuals who, as of the Effective Date, constitute the
      Board of Directors and any other individual who becomes a director of the
      Corporation after that date and whose election or appointment by the Board
      of Directors or nomination for election by the Corporation's stockholders
      was approved by a vote of at least a majority of the directors then
      comprising the Incumbent Board.

 

 

	1.21  	
      "Key
      Employee" means any Employee whom the Committee identifies as having a
      direct and significant effect on the performance of the Corporation or any
      of its Subsidiaries.

 

 

	1.22  	
      "Non-Employee
      Director" has the meaning given it in Rule
16b-3.

 

 

	1.23  	
      "Nonstatutory
      Option" means a stock option that does not satisfy the requirements of
      Section 422 of the Code or that is designated at the Date of Grant or in
      the applicable Award Agreement to be an option other than an Incentive
      Option.

 

 

	1.24  	
      "Non-Surviving
      Event" means an event of Restructure as described in either subparagraph
      (b) or (c) of Paragraph 1.35.

 

 

	1.25  	
      "Normal
      Retirement" means the separation of the Holder from employment with the
      Corporation and its Subsidiaries on account of retirement at any time on
      or after the date on which the Holder reaches age sixty-five
      (65).

 

 

	1.26  	
      "Option"
      means either an Incentive Option or a Nonstatutory Option, or
      both.

 

 

	1.27  	
      "Outside
      Director" has the meaning given it under Section 162(m) of the
      Code.

 

 

	1.28  	
      “Performance
      Shares” has the meaning ascribed to it in Section
7.

 

 

	1.29  	
      "Permitted
      Transferee" means an Eligible Individual's spouse, children, or
      grandchildren, a trust established by the Eligible Individual for the
      benefit of the Eligible Individual and/or his or her spouse, children, or
      grandchildren, a family partnership or limited liability company whose
      partners or members are the Eligible Individual, his or her spouse,
      children, or grandchildren, and/or a trust that would be a Permitted
      Transferee, or any other Person, the transfer to whom has been approved by
      the Committee in its sole discretion.

 

 

	1.30  	
      "Person"
      means any person or entity of any nature whatsoever, specifically
      including (but not limited to) an individual, a firm, a company, a
      corporation, a partnership, or a trust or other entity. A Person, together
      with that Person's affiliates and associates (as those terms are defined
      in Rule 12b-2 under the Exchange Act for purposes of this definition
      only), and any Persons acting as a partnership, limited partnership, joint
      venture, association, syndicate or other group (whether or not formally
      organized), or otherwise acting jointly or in concert or in a coordinated
      or consciously parallel manner (whether or not pursuant to any express
      agreement), for the purpose of acquiring, holding, voting or disposing of
      securities of the Corporation with that Person, shall be deemed a single
      "Person."

 

 

	1.31  	
      "Plan"
      means the Corporation's 2005 Stock Incentive Plan, as it may be amended
      from time to time.

 

 

	1.32  	
      "Related
      Corporation" shall mean FFE, Inc., a Delaware corporation and wholly-owned
      subsidiary of the Corporation, and FFE Transportation Services, Inc., a
      Delaware corporation and wholly-owned subsidiary of FFE,
    Inc.

 

 

	1.33  	
      "Restricted
      Period" has the meaning ascribed to it in Section
6.

 

 

	1.34  	
      "Restricted
      Stock" has the meaning ascribed to it in Section
6.

 

 

	1.35  	
      "Restructure"
      means the occurrence of anyone or more of the
following:

 

 

	(a)  	
      The
      merger or consolidation of the Corporation with any Person, whether
      effected as a single transaction or a series of related transactions, with
      the Corporation remaining the continuing or surviving entity of that
      merger or consolidation and the Stock remaining outstanding and not
      changed into or exchanged for stock or other securities of any other
      Person or of the Corporation, cash, or other
property;

 

 

	(b)  	
      The
      merger or consolidation of the Corporation with any Person, whether
      effected as a single transaction or a series of related transactions,
      with

 

 

	(i)  	
      the
      Corporation not being the continuing or surviving entity of that merger or
      consolidation or

 

 

	(ii)  	
      the
      Corporation remaining the continuing or surviving entity of that merger or
      consolidation but all or a part of the outstanding shares of Stock of the
      Corporation being changed into or exchanged for stock or other securities
      of any other Person or of the Corporation, or into cash or other property;
      or

 

 

	(c)  	
      The
      transfer, directly or indirectly, of all or substantially all of the
      assets of the Corporation (whether by sale, merger, consolidation,
      liquidation or otherwise) to any Person whether effected as a single
      transaction or a series of related
transactions.

 

 

	1.36  	
      "Rule
      16b-3" means Rule 16b-3 under Section 16(b) of the Exchange Act, or any
      successor rule, as it may be amended from time to
time.

 

 

	1.37  	
      "Securities
      Act" means the Securities Act of 1933, or any successor law, as it may be
      amended from time to time.

 

 

	1.38  	
      "Stock"
      means the Corporation's authorized common stock, par value $1.50 per
      share, as described in the Corporation's Articles of Incorporation as it
      exists at the Effective Date, or any other securities that are substituted
      for the Stock as provided in Section 9.

 

 

	1.39  	
      "Stock
      Appreciation Right" has the meaning ascribed to it in Section
      8.

 

 

	1.40  	
      "Stock
      Units" has the meaning ascribed to it in Section
7.

 

 

	1.41  	
      "Subsidiary"
      means, with respect to any Person, any corporation or other entity of
      which a majority of the voting power of the voting equity securities or
      equity interest is owned, directly or indirectly, by that
      Person.

 

 

	1.42  	
      "Total
      Shares" has the meaning given it in Paragraph
9.2.

 

 

	1.43  	
      "Voting
      Securities" means any securities that are entitled to vote generally in
      the election of directors, in the admission of general partners, or in the
      selection of any other similar governing
body.

 

 

SECTION
2.  SHARES OF
STOCK SUBJECT TO THE PLAN

 

 

	2.1  	
      Maximum
      Amount of Shares. Subject to the provisions of Paragraph 2.6 and
      Section 9 of the Plan, the aggregate number of shares of Stock that
      may be issued, transferred or exercised pursuant to Awards under the Plan
      shall be 850,000 shares. Notwithstanding the foregoing, the maximum number
      of shares of Stock that may be issued in the form of Restricted Stock,
      Stock Units or Performance Shares under the Plan shall be no more than
      500,000 out of such 850,000 shares.

 

 

	2.2  	
      Reduction
      in Available Shares. In computing the total number of shares available at
      a particular time for Awards under the Plan, there shall be counted
      against the limitations stated in Paragraph 2.1 the number of shares of
      Stock awarded or subject to issuance upon exercise or settlement of Awards
      and the number of shares of Stock that have been awarded or issued upon
      exercise or settlement of Awards (except as otherwise provided in
      Paragraph 2.3).

 

 

	2.3  	
      Restoration
      of Unused and Surrendered Shares. If Stock subject to any Award is not
      issued or transferred, or ceases to be issuable or transferable for any
      reason, including (but not exclusively) because an Award is forfeited,
      terminated, expires unexercised, or is exchanged for other Awards, the
      shares of Stock that were subject to that Award shall no longer be charged
      against the number of available shares provided for in Paragraph 2.2 and
      shall again be available for issue, transfer, or exercise pursuant to
      Awards under the Plan to the extent of such forfeiture, termination,
      expiration, or other cessation of its subjection to an
    Award.

 

 

	2.4  	
      Description
      of Shares. The shares to be delivered under the Plan shall be made
      available from (a) authorized but unissued shares of Stock, (b) Stock held
      in the treasury of the Corporation, or (c) previously issued shares of
      Stock reacquired by the Corporation, including shares purchased on the
      open market, in each situation as the Board of Directors or the Committee
      may determine from time to time in its sole
discretion.

 

 

	2.5  	
      Registration
      and Listing of Shares. From time to time, the Board of Directors and
      appropriate officers of the Corporation shall and are authorized to take
      whatever actions are necessary to file required documents with
      governmental authorities, stock exchanges, and other appropriate Persons
      to make shares of Stock available for issuance pursuant to
      Awards.

 

 

	2.6  	
      Reduction
      in Outstanding Shares of Stock. Nothing in this Section 2 shall impair the
      right of the Corporation to reduce the number of outstanding shares of
      Stock pursuant to repurchases, redemptions, or otherwise; provided,
      however, that no reduction in the number of outstanding shares of Stock
      shall (a) impair the validity of any outstanding Award, whether or not
      that Award is fully exercisable or fully vested or (b) impair the status
      of any shares of Stock previously issued pursuant to an Award or
      thereafter issued pursuant to a then--outstanding Award as duly
      authorized, validly issued, fully paid, and nonassessable
      shares.

 

 

SECTION
3.  ADMINISTRATION
OF THE PLAN

 

 

	3.1  	
      Committee.
      The Committee shall administer the Plan with respect to all Eligible
      Individuals who are subject to Section 162(m) of the Code. The Board of
      Directors may administer the Plan with respect to all other Eligible
      Individuals or may delegate all or part of that duty to the Committee.
      Except for references in Paragraphs 3.1, 3.2, and 3.3 and unless the
      context otherwise requires, references herein to the Committee shall also
      refer to the Board of Directors. The Committee shall be constituted so
      that, as long as Stock is registered under Section 12 of the Exchange Act,
      each member of the Committee shall be both a Non-Employee Director and an
      Outside Director and so that the Plan in all other applicable respects
      will qualify transactions related to the Plan for the exemptions from
      Section 16(b) of the Exchange Act provided by Rule 16b-3, to the extent
      exemptions thereunder may be available, and for the performance-based
      compensation exception under Section 162(m) of the Code. If the Committee
      is nevertheless not so constituted, then the Plan shall be administered,
      and each grant of Awards to Eligible Individuals who are subject to
      Section 16(b) of the Exchange Act shall be approved, by the Board of
      Directors. No discretion regarding Awards to Eligible Individuals who are
      subject to Section 16(b) of the Exchange Act or Section 162(m) of the Code
      shall be afforded to a person who is not both a Non-Employee Director and
      an Outside Director. The number of persons that shall constitute the
      Committee shall be determined from time to time by a majority of all the
      members of the Board of Directors, but shall be no less than two
      persons.

 

 

	3.2  	
      Duration,
      Removal, Etc. The members of the Committee shall serve at the pleasure of
      the Board of Directors, which shall have the power, at any time and from
      time to time, to remove members from or add members to the Committee.
      Removal of a member from the Committee may be with or without cause. Any
      individual serving as a member of the Committee shall have the right to
      resign from membership in the Committee by at least three days prior
      written notice to the Board of Directors. The Board of Directors, and not
      the remaining members of the Committee, shall have the power and authority
      to fill vacancies on the Committee, however caused. The Board of Directors
      shall promptly fill any vacancy that causes the number of members of the
      Committee to be below two or any other number that Rule 16b-3 or Section
      162(m) may require from time to time.

 

 

	3.3  	
      Meetings
      and Actions of Committee. The Board of Directors shall designate which of
      the Committee members shall be the chairman of the Committee. If the Board
      of Directors fails to designate a Committee chairman, the members of the
      Committee shall elect one of the Committee members as chairman, who shall
      act as chairman until he ceases to be a member of the Committee or until
      the Board of Directors elects a new chairman. The Committee shall hold its
      meetings at those times and places as the chairman of the Committee may
      determine. At all meetings of the Committee, a quorum for the transaction
      of business shall be required, and a quorum shall be deemed present if at
      least a majority of the members of the Committee are present. At any
      meeting of the Committee, each member shall have one vote. All decisions
      and determinations of the Committee shall be made by the majority vote or
      majority decision of all of its members present at a meeting at which a
      quorum is present; provided, however, that any decision or determination
      reduced to writing and signed by all of the members of the Committee shall
      be as fully effective as if it had been made at a meeting that was duly
      called and held. The Committee may make any rules and regulations for the
      conduct of its business that are not inconsistent with the provisions of
      the Plan, the Certificate of Incorporation, the By-laws of the
      Corporation, Rule 16b-3 and the performance-based compensation exception
      under Section 162(m) of the Code, so long as either is applicable, as the
      Committee may deem advisable.

 

 

	3.4  	
      Committee's
      Powers. Subject to the express provisions of the Plan, Rule 16b-3 and the
      performance-based compensation exception under Section 162(m) of the Code,
      the Committee shall have the authority, in its sole and absolute
      discretion, (a) to adopt, amend, and rescind administrative and
      interpretive rules and regulations relating to the Plan; (b) to determine
      the Eligible Individuals to whom, and the time or times at which, Awards
      shall be granted; (c) to determine the number of shares of Stock that
      shall be the subject of each Award; (d) to determine the terms and
      provisions of each Award Agreement (which need not be identical),
      including provisions defining or otherwise relating to (i) the term and
      the period or periods and extent of exercisability of the Options, (ii)
      the extent to which the transferability of shares of Stock issued or
      transferred pursuant to any Award is restricted, (iii) the effect of
      termination of employment on the Award, and (iv) the effect of approved
      leaves of absence (consistent with any applicable regulations of the
      Internal Revenue Service); (e) to
      accelerate the time of exercisability or vesting of any Award that has
      been granted; (f) to construe the respective Award Agreements and the
      Plan; (g) to make determinations of the Fair Market Value of the Stock
      pursuant to the Plan; (h) to delegate its duties under the Plan to such
      agents as it may appoint from time to time, provided that the Committee
      may not delegate its duties with respect to making Awards to Eligible
      Individuals who are subject to Section 16(b) of the Exchange Act or take
      any action that would disqualify an award for the performance-based
      compensation exception under Section 162(m) of the Code; and (i) to make
      all other determinations, perform all other acts, and exercise all other
      powers and authority necessary or advisable for administering the Plan,
      including the delegation of those ministerial acts and responsibilities as
      the Committee deems appropriate. Subject to Rule 16b-3 and the
      performance--based compensation exception under Section 162(m) of the
      Code, the Committee may correct any defect, supply any omission or
      reconcile any inconsistency in the Plan, in any Award, or in any Award
      Agreement in the manner and to the extent it deems necessary or desirable
      to carry the Plan into effect, and the Committee shall be the sole and
      final judge of that necessity or desirability. The determinations of the
      Committee on the matters referred to in this Paragraph 3.4 shall be final
      and conclusive.

 

 

SECTION
4: ELIGIBILITY AND PARTICIPATION

 

 

	4.1  	
      Eligible
      Individuals. Awards may be granted pursuant to the Plan only to persons
      who are Eligible Individuals at the time of the grant thereof.
      

 

 

	4.2  	
      Grant
      of Awards. Subject to the express provisions of the Plan, the Committee
      shall determine which Eligible Individuals shall be granted Awards from
      time to time. In making grants, the Committee shall take into
      consideration the contribution the potential Holder has made or may make
      to the success of the Corporation or its Subsidiaries and such other
      considerations as the Board of Directors may from time to time specify.
      The Committee shall also determine the number of shares subject to each of
      the Awards and shall authorize and cause the Corporation to grant Awards
      in accordance with those determinations; provided, however, that no
      Eligible Individual shall be granted Options in any single fiscal year of
      the Corporation, the total number of shares subject to which exceed
      100,000 shares.

 

 

	4.3  	
      Date
      of Grant. The date on which the Committee completes all action resolving
      to offer an Award to an individual, including the specification of the
      number of shares of Stock to be subject to the Award, shall be the date on
      which the Award covered by an Award Agreement is granted (the "Date of
      Grant"), even though certain terms of the Award Agreement may not be
      determined at that time and even though the Award Agreement may not be
      executed until a later time. In no event shall a Holder gain any rights in
      addition to those specified by the Committee in its grant, regardless of
      the time that may pass between the grant of the Award and the actual
      execution of the Award Agreement by the Corporation and the
      Holder.

 

 

	4.4  	
      Award
      Agreements. Each Award granted under the Plan shall be evidenced by
      an Award Agreement that is executed by the Corporation and the
      Eligible Individual to whom the Award is granted incorporating those terms
      that the Committee shall deem necessary or desirable. More than one Award
      may be granted under the Plan to the same Eligible Individual and be
      outstanding concurrently. In the event an Eligible Individual is granted
      both one or more Incentive Options and one or more Nonstatutory Options,
      those grants shall be evidenced by separate Award Agreements, one for each
      of the Incentive Option grants and one for each of the Nonstatutory Option
      grants.

 

 

	4.5  	
      Limitation
      for Incentive Options. Notwithstanding any provision contained herein to
      the contrary, (a) a person shall not be eligible to receive an Incentive
      Option unless he is an Employee of the Corporation or a corporate
      Subsidiary (but not a partnership Subsidiary), and (b) a person shall not
      be eligible to receive an Incentive Option if, immediately before the time
      the Option is granted, that person owns (within the meaning of Sections
      422 and 425 of the Code) stock possessing more than ten percent of the
      total combined voting power or value of all classes of stock of the
      Corporation or a Subsidiary. Nevertheless, subparagraph 4.5(b) shall not
      apply if, at the time the Incentive Option is granted, the Exercise Price
      of the Incentive Option is at least one hundred and ten percent (110%) of
      Fair Market Value and the Incentive Option is not, by its terms,
      exercisable after the expiration of five years from the Date of Grant.
      

 

 

	4.6  	
      No
      Right to Award. The adoption of the Plan shall not be deemed to give any
      person a right to be granted an Award.

 

 

SECTION
5.  TERMS AND
CONDITIONS OF OPTIONS

 

All
Options granted under the Plan shall comply with, and the related Award
Agreements shall be deemed to include and be subject to, the terms and
conditions set forth in this Section 5 (to the extent each term and condition
applies to the form of Option) and also to the terms and conditions set forth in
Sections 9 and 10; provided, however, that the Committee may authorize an Award
Agreement that expressly contains terms and provisions that differ from the
terms and provisions set forth in Paragraphs 9.2 and 9.3 and any of the terms
and provisions of Section 10 (other than Paragraph 10.10) .

 

	5.1  	
      Number
      of Shares. Each Award Agreement shall state the total number of shares of
      Stock to which it relates.

 

 

	5.2  	
      Vesting.
      Each Award Agreement shall state the time or periods in which or the
      conditions upon satisfaction of which, the right to exercise the Option or
      a portion thereof shall vest and the number of shares of Stock for which
      the right to exercise the Option shall vest at each such time, period, or
      fulfillment of condition.

 

 

	5.3  	
      Expiration
      of Options. Nonstatutory Options and Incentive Options may be exercised
      during the term determined by the Committee and set forth in the Award
      Agreement; provided that no Option shall be exercised after the expiration
      of a period of ten years commencing on the Date of Grant of such
      Option.

 

 

	5.4  	
      Exercise
      Price. Each Award Agreement shall state the exercise price per share of
      Stock (the "Exercise Price"). The Exercise Price per share of Stock
      subject to an Option shall not be less than the greater of (a) the par
      value per share of the Stock or (b) 100% of the Fair Market Value per
      share of the Stock on the Date of Grant of the Option.

 

 

	5.5  	
      Method
      of Exercise. The Option shall be exercisable only by written notice of
      exercise (the "Exercise Notice") delivered to the Corporation during the
      term of the Option, which notice shall (a) state the number of shares of
      Stock with respect to which the Option is being exercised, (b) be signed
      by the Holder of the Option or, if the Holder is dead or Disabled, by the
      person authorized to exercise the Option pursuant to Paragraphs 10.3, 10.5
      or 10.7, (c) be accompanied by the Exercise Price for all shares of Stock
      for which the Option is exercised, and (d) include such other information,
      instruments, and documents as may be required to satisfy any other
      condition to exercise contained in the Award Agreement. The Option shall
      not be deemed to have been exercised unless all of the requirements of the
      preceding provisions of this Paragraph 5.5 have been
      satisfied.

 

 

	5.6  	
      Incentive
      Option Exercises. During the Holder's lifetime, only the Holder may
      exercise an Incentive Option.

 

 

	5.7  	
      Medium
      and Time of Payment. The Exercise Price of an Option shall be payable in
      full upon the exercise of the Option (a) in cash or by an equivalent means
      acceptable to the Committee, (b) on the Committee's prior consent
      (expressed in the original Award Agreement in the case of any Incentive
      Option), by surrendering or attesting to ownership of shares of Stock
      owned by the Holder (including shares received upon exercise of the Option
      or restricted shares already held by the Holder) and having a Fair Market
      Value equal to the aggregate Exercise Price payable in connection with
      such exercise, or (c) by any combination of clauses (a) and (b). If the
      Committee elects to accept shares of Stock in payment of all or any
      portion of the Exercise Price, then (for purposes of payment of the
      Exercise Price) those shares of Stock shall be deemed to have a cash value
      equal to their aggregate Fair Market Value determined as of the date of
      the delivery of the Exercise Notice. If the Committee elects to accept
      shares of restricted Stock in payment of all or any portion of the
      Exercise Price, then an equal number of shares issued pursuant to the
      exercise shall be restricted on the same terms and for the restriction
      period remaining on the shares used for
payment.

 

 

	5.8  	
      Payment
      with Sale Proceeds. In addition, at the request of the Holder and to the
      extent permitted by applicable law, the Committee may (but shall not be
      required to) approve arrangements with a brokerage firm under which that
      brokerage firm, on behalf of the Holder, shall pay to the Corporation the
      Exercise Price of the Option being exercised, and the Corporation shall
      promptly deliver the exercised shares to the brokerage firm. To accomplish
      this transaction, the Holder must deliver to the Corporation an Exercise
      Notice containing irrevocable instructions from the Holder to the
      Corporation to deliver the stock certificates directly to the broker. Upon
      receiving a copy of the Exercise Notice acknowledged by the Corporation,
      the broker shall sell that number of shares of Stock an amount sufficient
      to pay the Exercise Price and any withholding obligations due. The broker
      shall then deliver to the Corporation that portion of the sale necessary
      to cover the Exercise Price and any withholding obligations due. The
      Committee shall not approve any transaction of this nature if the
      Committee believes that the transaction would give rise to the Holder's
      liability for short-swing profits under Section 16(b) of the Exchange
      Act.

 

 

	5.9  	
      Payment
      of Taxes. The Committee may, in its discretion, require a Holder to pay to
      the Corporation (or the Corporation's Subsidiary if the Holder is an
      employee of a Subsidiary of the Corporation), at the time of the exercise
      of an Option, the amount that the Committee deems necessary to satisfy the
      Corporation's or its Subsidiary's current or future obligation to withhold
      federal, state or local income or other taxes that the Holder incurs by
      exercising an Option. Upon the exercise of an Option requiring tax
      withholding, a Holder may (a) direct the Corporation to withhold from the
      shares of Stock to be issued to the Holder the number of shares necessary
      to satisfy the Corporation's minimum statutory obligation to withhold
      taxes, that determination to be based on the shares' Fair Market Value as
      of the date on which tax withholding is to be made; (b) deliver to the
      Corporation sufficient shares of Stock (based upon the Fair Market Value
      at date of withholding) to satisfy the Corporation's tax withholding
      obligations, based on the shares' Fair Market Value as of the date of
      exercise; or (c) deliver sufficient cash to the Corporation to
      satisfy its tax withholding obligations. Holders who elect to use such a
      stock withholding feature must make the election at the time and in the
      manner that the Committee prescribes. The Committee may, in its sole
      discretion, deny any Holder's request to satisfy withholding obligations
      through Stock instead of cash. In the event the Committee subsequently
      determines that the aggregate Fair Market Value (as determined above) of
      any shares of Stock withheld as payment of any tax withholding obligation
      is insufficient to discharge that tax withholding obligation, then the
      Holder shall pay to the Corporation, immediately upon the Committee's
      request, the amount of that deficiency. Upon the disposition (within the
      meaning of Code Section 424(c)) of shares of Stock acquired pursuant to
      the exercise of an Incentive Option prior to the expiration of the holding
      period requirements of Code Section 422(a)(1), the Holder shall be
      required to give notice to the Corporation of such disposition and the
      Corporation shall have the right to require the Holder to pay to the
      Corporation the amount of any taxes that are required by law to be
      withheld with respect to such disposition.

 

 

	5.10  	
      Limitation
      on Aggregate Value of Shares That May Become First Exercisable During Any
      Calendar Year Under an Incentive Option. Except as is otherwise provided
      in Paragraph 9.2, with respect to any Incentive Option granted under this
      Plan, the aggregate Fair Market Value of shares of Stock subject to an
      Incentive Option and the aggregate Fair Market Value of shares of Stock or
      stock of any Subsidiary (or a predecessor of the Corporation or a
      Subsidiary) subject to any other incentive stock option (within the
      meaning of Section 422 of the Code) of the Corporation or its Subsidiaries
      (or a predecessor corporation of any such corporation) that first
      become purchasable by a Holder in any calendar year may not (with
      respect to that Holder) exceed $100,000, or such other amount as may be
      prescribed under Section 422 of the Code or applicable regulations or
      rulings from time to time. As used in the previous sentence, Fair Market
      Value shall be determined as of the date the Incentive Option is granted.
      For purposes of this Paragraph 5.10, "predecessor corporation" means
      (a) a corporation that was a party to a transaction described in
      Section 425(a) of the Code (or which would be so described if a
      substitution or assumption under that Section had been effected) with the
      Corporation, (b) a corporation which, at the time the new incentive stock
      option (within the meaning of Section 422 of the Code) is granted, is
      a Subsidiary of the Corporation or a predecessor corporation of any
      such corporations, or (c) a predecessor corporation of any such
      corporations. Failure to comply with this provision shall not impair the
      enforceability or exercisability of any Option, but shall cause the excess
      amount of shares to be reclassified in accordance with the
      Code.

 

 

	5.11  	
      No
      Fractional Shares. The Corporation shall not in any case be required to
      sell, issue, or deliver a fractional share with respect to any Option. In
      lieu of the issuance of any fractional share of Stock, the Corporation
      shall pay to the Holder an amount in cash equal to the same fraction (as
      the fractional Stock) of the Fair Market Value of a share of Stock
      determined as of the date of the applicable Exercise
    Notice.

 

 

	5.12  	
      Modification,
      Extension and Renewal of Options. Subject to the terms and conditions of
      and within the limitations of the Plan, Rule 16b-3, the performance-based
      compensation exception of Section 162(m) of the Code, and any consent
      required by the last sentence of this Paragraph 5.12, the Committee may
      (a) modify, vest, extend or renew outstanding Options granted under the
      Plan, (b) accept the surrender of Options outstanding hereunder (to the
      extent not previously exercised) and authorize the granting of new Options
      in substitution for outstanding Options (to the extent not previously
      exercised), and (c) amend the terms of an Incentive Option at any time to
      include provisions that have the effect of changing the Incentive Option
      to a Nonstatutory Option. Nevertheless, without the consent of the
      Holder, the Committee may not modify any outstanding Options so as to
      specify a higher or lower Exercise Price or accept the surrender of
      outstanding Incentive Options and authorize the granting of new Options in
      substitution therefor specifying a higher or lower Exercise Price. In
      addition, no modification of an Option granted hereunder shall, without
      the consent of the Holder, alter or impair any rights or obligations under
      any Option theretofore granted hereunder to such Holder under the Plan
      except, with respect to Incentive Options, as may be necessary to satisfy
      the requirements of Section 422 of the Code or as permitted in clause (c)
      of this Paragraph 5.12.

 

 

	5.13  	
      Other
      Agreement Provisions. The Award Agreements authorized under the Plan shall
      contain such provisions in addition to those required by the Plan
      (including, without limitation, restrictions or the removal of
      restrictions upon the exercise of the Option and the retention or transfer
      of shares thereby acquired) as the Committee may deem advisable. Each
      Award Agreement shall identify the Option evidenced thereby as an
      Incentive Option or Nonstatutory Option, as the case may be, and no Award
      Agreement shall cover both an Incentive Option and a Nonstatutory Option.
      Each Award Agreement relating to an Incentive Option granted hereunder
      shall contain such limitations and restrictions upon the exercise of the
      Incentive Option to which it relates as shall be necessary for the
      Incentive Option to which such Award Agreement relates to constitute an
      incentive stock option, as defined in Section 422 of the
    Code.

 

 

SECTION
6.  TERMS AND
CONDITIONS OF RESTRICTED STOCK

 

All
shares of Restricted Stock granted under the Plan shall comply with, and the
related Award Agreements shall be deemed to include and be subject to, the terms
and conditions set forth in this Section 6 and also to the terms and conditions
set forth in Sections 9 and 10; provided, however, that the Committee may
authorize an Award Agreement that expressly contains terms and provisions that
differ from the terms and provisions set forth in Paragraphs 9.2 and 9.3
and any of the terms and provisions of Section 10 (other than
Paragraph 10.10). 

 

	6.1  	
      Definition.
      Restricted Stock awards are grants of Stock to Eligible Individuals, the
      vesting of which is subject to a required period of employment or service
      as a consultant, and any other conditions set forth in the Award
      Agreement.

 

 

	6.2  	
      Terms
      and Conditions of Awards. 

 

 

	(a)  	
      Restricted
      Stock awarded to Holders may not be sold, assigned, transferred, pledged
      or otherwise encumbered, except as hereinafter provided, for a period of
      10 years or such shorter period as the Board may determine, but not less
      than one year, after the time of the award of such stock (the "Restricted
      Period"). Except for such restrictions, the Holder as owner of such shares
      shall have all the rights of a stockholder, including but not limited to
      the right to vote such shares and, except as otherwise provided by the
      Board, the right to receive all dividends paid on such
    shares.

 

 

	(b)  	
      The
      Board may in its discretion, at any time after the date of the award of
      Restricted Stock, adjust the length of the Restricted Period to account
      for individual circumstances of a Holder or group of Holders, but in no
      case shall the length of the Restricted Period be less than one
      year.

 

 

	(c)  	
      Except
      as otherwise determined by the Board in its sole discretion, a Holder
      whose employment or service with the Company and all Related Corporations
      terminates prior to the end of the Restricted Period for any reason shall
      forfeit all shares of Restricted Stock remaining subject to any
      outstanding Restricted Stock Award.

 

 

	(d)  	
      Each
      certificate issued in respect of shares of Restricted Stock awarded under
      the Plan shall be registered in the name of the Holder and, at the
      discretion of the Board, each such certificate may be deposited in a bank
      designated by the Board. Each such certificate shall bear the following
      (or a similar) legend:

 

"The
transferability of this certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture) contained in the
Frozen Food Express Industries, Inc. 2005 Stock Incentive Plan and an agreement
entered into between the registered owner and Frozen Food Express Industries,
Inc. A copy of such plan and agreement is on file in the office of the Secretary
of Frozen Food Express Industries, Inc., 1145 Empire Central Place, Dallas,
Texas 75247.”

 

	(e)  	
      At
      the end of the Restricted Period for Restricted Stock, such Restricted
      Stock will be transferred free of all restrictions to a Participant (or
      his or her legal representative, beneficiary or
heir).

 

 

SECTION
7.  TERMS AND
CONDITIONS OF STOCK UNITS AND PERFORMANCE SHARE AWARDS

 

All Stock
Units and Performance Shares granted under the Plan shall comply with, and the
related Award Agreements shall be deemed to include and be subject to, the terms
and conditions set forth in this Section 7 and also to the terms and conditions
set forth in Sections 9 and 10; provided, however, that the Committee may
authorize an Award Agreement that expressly contains terms and provisions that
differ from the terms and provisions set forth in Paragraphs 9.2 and 9.3 and any
of the terms and provisions of Section 10 (other than
Paragraph 10.10).

 

	7.1  	
      Definition.
      A “Stock Unit” Award is the grant of a right to receive shares of Stock in
      the future. A “Performance Share” Award is a grant of shares of Stock or
      Stock Units which is contingent on the achievement of performance or other
      objectives during a specified period. The number of Performance
      Shares earned, and the value received for them, will be contingent on the
      degree to which the performance measures established at the time of the
      initial award are met.

 

 

	7.2  	
      Terms
      and Conditions of Awards. For each Holder, the Board will determine the
      timing of awards; the number of Stock Units or Performance Shares awarded;
      the performance measures used for determining whether the Performance
      Shares are earned; the performance period during which the performance
      measures will apply; the relationship between the level of achievement of
      the performance measures and the degree to which Performance Shares are
      earned; whether, during or after the performance period, any revision to
      the performance measures or performance period should be made to reflect
      significant events or changes that occur during the performance period;
      the number of earned Performance Shares that will be paid in cash and/or
      shares of Stock; and whether dividend equivalents will be paid on Stock
      Units or Performance Shares, either currently or on a deferred
      basis.

 

 

	7.3  	
      Payment.
      The Board will compare the actual performance to the performance measures
      established for the performance period and determine the number of shares
      of Stock to be issued. Payment for Performance Shares earned shall be
      wholly in cash, wholly in Stock or in a combination of the two, in a lump
      sum or installments, and subject to vesting requirements and such other
      conditions as the Board shall provide. The Board will determine the number
      of earned Performance Shares to be paid in cash and the number to be paid
      in Stock. For Performance Shares payable in shares of Stock, one share of
      Stock will be paid for each share earned, or cash will be paid for each
      share earned equal to either (a) the Fair Market Value of a share of Stock
      at the end of the performance period or (b) the Fair Market Value of the
      Stock averaged for a number of days determined by the Board. For
      Performance Shares awarded in cash, the value of each share earned will be
      paid in its initial cash value, or shares of Stock will be distributed
      based on the cash value of the shares earned divided by (a) the Fair
      Market Value of a share of Stock at the end of the performance period or
      (b) the Fair Market Value of a share of Stock averaged for a number of
      days determined by the Board.

 

 

	7.4  	
      Retirement,
      Death or Termination. A Holder whose employment or service with the
      Corporation and Related Corporations terminates because of Normal
      Retirement or death either (i) during a performance period, or (ii) prior
      to the delivery date for Stock Units, shall be entitled to the prorated
      value of earned Performance Shares or Stock Units, at the conclusion of
      the performance period (or the deferred delivery date) based on the ratio
      of the months the Holder was employed (or during which he rendered
      services as a consultant) during the period to the total months of the
      performance period (or from the date of the award of the Stock Units until
      the deferred delivery date). If the Holder’s employment or service with
      the Corporation and Related Corporations terminates for any reason other
      than Normal Retirement or death (i) during a performance period, or
      (ii) prior to the delivery date for Stock Units, the Performance Shares or
      Stock Units will be forfeited on the date his employment or service
      terminates. Notwithstanding the foregoing provisions of this Paragraph
      7.4, the Board may determine that the Holder will be entitled to receive
      all or any portion of the Performance Shares or Stock Units that he or she
      would otherwise receive, and may accelerate the determination and payment
      of the shares or units or make such other adjustments as the Board, in its
      sole discretion, deems desirable.

 

 

SECTION
8.  TERMS AND
CONDITIONS OF STOCK APPRECIATION RIGHTS

 

All Stock
Appreciation Rights granted under the Plan shall comply with, and the related
Award Agreements shall be deemed to include and be subject to, the terms and
conditions set forth in this Section 8 and also to the terms and conditions set
forth in Sections 9 and 10; provided, however, that the Committee may authorize
an Award Agreement that expressly contains terms and provisions that differ from
the terms and provisions set forth in Paragraphs 9.2 and 9.3 and any of the
terms and provisions of Section 10 (other than
Paragraph 10.10).

 

	8.1  	
      Definition.
      A Stock Appreciation Right is an award that may be granted on a
      stand-alone basis or in tandem with an Incentive Option or a Nonstatutory
      Option, and entitles the Holder to receive an amount equal to the
      difference between the Fair Market Value of the shares of Stock at the
      time of exercise of the Stock Appreciation Right and the Fair Market Value
      of the shares of Stock on the Date of Grant of the Stock Appreciation
      Right, subject to the following provisions of this Section
    8.

 

 

	8.2  	
      Exercise.
      A Stock Appreciation Right may be exercised under the applicable terms and
      conditions of the Award Agreement. A Stock Appreciation Right shall
      entitle the Holder to receive, upon the exercise of the Stock Appreciation
      Right, shares of Stock (valued at their Fair Market Value at the time of
      exercise), in an amount equal in value to the excess of the Fair Market
      Value of the shares of Stock subject to the Stock Appreciation Right as of
      the date of such exercise over the Fair Market Value of the shares of
      Stock as of the Date of Grant of the Stock Appreciation Right. The
      exercise of a Stock Appreciation Right that is granted in tandem with an
      Option will result in the surrender of the related Incentive Option or
      Nonstatutory Option and, unless otherwise provided by the Board in its
      sole discretion, the exercise of an Option granted in tandem with a Stock
      Appreciation Right will result in the surrender of the related Stock
      Appreciation Right.

 

 

	8.3  	
      Expiration
      Date. The "Expiration Date" with respect to a Stock Appreciation Right
      shall be determined by the Board, but shall be not later than the
      Expiration Date for any tandem Option. If neither the right nor the tandem
      Option is exercised before the end of the day on which the right ceases to
      be exercisable, such right shall be deemed exercised as of such date and
      payment shall be made to the holder in shares of Stock (valued at their
      Fair Market Value at the time of exercise).

 

 

SECTION
9.  ADJUSTMENT
PROVISIONS

 

 

	9.1  	
      Adjustment
      of Awards and Authorized Stock. The terms of an Award and the number of
      shares of Stock authorized pursuant to Paragraph 2.1 for issuance under
      the Plan shall be subject to adjustment, from time to time, in accordance
      with the following provisions:

 

 

	(a)  	
      If
      at any time or from time to time, the Corporation shall subdivide as a
      whole (by reclassification, by a Stock split, by the issuance of a
      distribution on Stock payable in Stock or otherwise) the number of shares
      of Stock then outstanding into a greater number of shares of Stock, then
      (i) the maximum number of shares of Stock available for the Plan as
      provided in Paragraph 2.1 shall be increased proportionately, and the kind
      of shares or other securities available for the Plan shall be
      appropriately adjusted, (ii) the number of shares of Stock (or other kind
      of shares or securities) that may be acquired under any Award shall be
      increased proportionately, (iii) the maximum number of shares of Stock
      subject to Options that may be granted to any Eligible Individual in any
      single fiscal year of the Corporation shall be increased proportionately,
      and (iv) the Exercise Price for each share of Stock (or other kind of
      shares or unit of other securities) subject to then outstanding Options
      shall be reduced proportionately, without changing the aggregate purchase
      price or value as to which outstanding Options remain exercisable or
      subject to restrictions.

 

 

	(b)  	
      If
      at any time or from time to time, the Corporation shall consolidate as a
      whole (by reclassification, reverse Stock split, or otherwise) the number
      of shares of Stock then outstanding into a lesser number of shares of
      Stock, (i) the maximum number of shares of Stock available for the Plan as
      provided in Paragraph 2.1 shall be decreased proportionately, and the kind
      of shares or other securities available for the Plan shall be
      appropriately adjusted, (ii) the number of shares of Stock (or other kind
      of shares or securities) that may be acquired under any Award shall be
      decreased proportionately, (iii) the maximum number of shares of Stock
      subject to Options that may be granted to any Eligible Individual in any
      single fiscal year of the Corporation shall be decreased proportionately,
      and (iv) the Exercise Price for each share of Stock (or other kind of
      shares or unit of other securities) subject to then outstanding Options
      shall be increased proportionately, without changing the aggregate
      purchase price or value as to which outstanding Options remain exercisable
      or subject to restrictions.

 

 

	(c)  	
      In
      the event of any other change in the outstanding shares of Stock of the
      Corporation by reason of any spinoff, recapitalization, merger,
      consolidation, combination, extraordinary dividend, exchange of shares or
      other change affecting the outstanding shares of Stock as a class without
      the Corporation’s receipt of consideration, appropriate adjustments shall
      be made to (i) the aggregate number of shares of Stock with respect to
      which awards may be made under the Plan, (ii) the terms and the number of
      shares and/or the price per share of any outstanding Options, Stock
      Appreciation Rights, Restricted Stock and Stock Units and Performance
      Share Awards, and (iii) the maximum number of shares of Stock subject to
      Options that may be granted to any eligible Individual in any single
      fiscal year of the Corporation. The Committee may also make adjustments
      described in (i)-(iii) of the previous sentence in the event of any
      distribution of assets to shareholders other than a normal cash dividend.
      Adjustments, if any, and any determination or interpretations made by the
      Committee shall be final, binding and conclusive. For purposes of this
      Paragraph 9.1, conversion of any convertible securities of the Corporation
      shall not be deemed to have been effected without receipt of
      consideration. Except as expressly provided herein, no issuance by the
      Corporation of shares of any class or securities convertible into shares
      of any class, shall affect, and no adjustment by reason thereof shall be
      made with respect to, the number or price of shares subject to an
      Award.

 

 

	(d)  	
      Whenever
      the number of shares of Stock subject to outstanding Awards and the price
      for each share of Stock subject to outstanding Awards are required to be
      adjusted as provided in this Paragraph 9.1, the Committee shall promptly
      prepare a notice setting forth, in reasonable detail, the event requiring
      adjustment, the amount of the adjustment, the method by which such
      adjustment was calculated, and the change in exercise price and the number
      of shares of Stock, other securities, cash or property subject to each
      Award after giving effect to the adjustments. The Committee shall promptly
      give each Holder such a notice.

 

 

	(e)  	
      Adjustments
      under subparagraphs 9.1(a), (b) and (c) shall be made by the Committee,
      and its determination as to what adjustments shall be made and the extent
      thereof shall be final, binding and conclusive. No fractional interest
      shall be issued under the Plan on account of any such
      adjustments.

 

 

	9.2  	
      Changes
      in Control. Any Award Agreement may provide that, upon the occurrence of
      a Change in Control, all outstanding Options, shares of Restricted
      Stock, Stock Units, Performance Share Awards and Stock Appreciation Rights
      shall immediately become fully vested and exercisable in full, including
      that portion of any Award that pursuant to the terms and provisions of the
      applicable Award Agreement had not yet become exercisable, earned or
      vested (the total number of shares of Stock as to which an Award is
      exercisable upon the occurrence of a Change in Control is referred to
      herein as the "Total Shares"). If a Change in Control involves a
      Restructure or occurs in connection with a series of related transactions
      involving a Restructure and if such Restructure is in the form of a
      Non-Surviving Event and as a part of such Restructure shares of stock,
      other securities, cash or property shall be issuable or deliverable in
      exchange for Stock, then the Holder of an Award shall receive or be
      entitled to purchase (in lieu of the Total Shares that the Holder would
      otherwise receive or be entitled to purchase) the number of shares of
      stock, other securities, cash or property to which that number of Total
      Shares would have been entitled in connection with such Restructure (and
      at an aggregate Exercise Price equal to the Exercise Price that would have
      been payable if that number of Total Shares had been purchased on the
      exercise of the Option immediately before the consummation of the
      Restructure).

 

 

	9.3  	
      Restructure
      and No Change in Control. In the event a Restructure should occur at any
      time while there is any outstanding Award hereunder and that Restructure
      does not occur in connection with a Change in Control or in connection
      with a series of related transactions involving a Change in Control,
      then:

 

 

	(a)  	
      no
      outstanding Option, shares of Restricted Stock, Stock Units, Performance
      Share Awards or Stock Appreciation Rights shall become vested or
      exercisable merely because of the occurrence of the Restructure;
      and

 

 

	(b)  	
      in
      the Committee’s discretion, the Corporation may (but shall not be required
      to) take any one or more of the following
actions:

 

 

	(i)  	
      accelerate
      in whole or in part the time of the vesting and exercisability of any one
      or more of the outstanding Awards so as to provide that those Awards shall
      be vested and exercisable before, upon, or after the consummation of the
      Restructure;

 

 

	(ii)  	
      if
      the Restructure is in the form of a Non-Surviving Event, cause the
      surviving entity to assume in whole or in part any one or more of the
      outstanding Awards upon such terms and provisions as the Committee deems
      desirable; or

 

 

	(iii)  	
      redeem
      in whole or in part any one or more of the outstanding Options, Stock
      Units, Performance Share Awards or Stock Appreciation Rights (whether or
      not then exercisable) in consideration of a cash payment, as such payment
      may be reduced for tax withholding obligations as contemplated in
      Paragraphs 5.9 and 10.14 in an amount equal to the Fair Market Value
      determined as of a date immediately preceding the consummation of the
      Restructure, of the aggregate number of shares of Stock subject to the
      Award and as to which the Award is being redeemed (in excess of the
      Exercise Price in the case of an Option, or the Fair Market Value of the
      shares of Stock at the Date of Grant in the case of a Stock
      Appreciation Right). 

 

 

	9.4  	
      The
      Corporation shall promptly notify each Holder of any election or action
      taken by the Corporation under this Paragraph 9.3. In the event of any
      election or action taken by the Corporation pursuant to this Paragraph 9.3
      that requires the amendment or cancellation of any Award Agreement, as may
      be specified in any notice to the Holder thereof, that Holder shall
      promptly deliver that Award Agreement to the Corporation in order for that
      amendment or cancellation to be implemented by the Corporation and the
      Committee. The failure of the Holder to deliver any such Award Agreement
      to the Corporation as provided in the preceding sentence shall not in any
      manner effect the validity or enforceability of any action taken by the
      Corporation and the Committee under this Paragraph 9.3, including, without
      limitation, any redemption of an Award as of the consummation of a
      Restructure. Any cash payment to be made by the Corporation pursuant to
      this Paragraph 9.3 in connection with the redemption of any outstanding
      Awards shall be paid to the Holder thereof currently with the delivery to
      the Corporation of the Award Agreement evidencing that Award; provided,
      however, that any such redemption shall be effective upon the consummation
      of the Restructure notwithstanding that the payment of the redemption
      price may occur subsequent to the consummation. If all or any portion of
      an outstanding Award is to be exercised or vested upon or after the
      consummation of a Restructure that is in the form of a Non-Surviving Event
      and as a part of that Restructure shares of stock, other securities, cash
      or property shall be issuable or deliverable in exchange for Stock, then
      the Holder of the Award shall thereafter be entitled to receive or
      purchase (in lieu of the number of shares of Stock that the Holder would
      otherwise be entitled to receive or purchase) the number of shares of
      stock, other securities, cash or property to which such number of shares
      of Stock would have been entitled in connection with the Restructure (and,
      for Options, at an aggregate Exercise Price equal to the Exercise Price
      that would have been payable if that number of Total Shares had been
      purchased on the exercise of the Option immediately before the
      consummation of the Restructure). 

 

 

	9.5  	
      Notice
      of Change in Control or Restructure. The Corporation shall attempt to keep
      all Holders informed with respect to any Change in Control or Restructure
      or of any potential Change in Control or Restructure to the same extent
      that the Corporation's stockholders are informed by the Corporation of any
      such event or potential event.

 

 

SECTION
10.  ADDITIONAL
PROVISIONS

 

 

	10.1  	
      Termination
      of Employment. If a Holder is an Eligible Individual because the Holder is
      an Employee and if that employment relationship is terminated for any
      reason other than the Holder's death or Disability (hereafter defined),
      then any and all Awards held by that Holder in the Holder's capacity as an
      Employee as of the date of the termination shall become null and void as
      of the date of the termination; provided, however, that the portion, if
      any, of any and all Awards held by the Holder that are exercisable as of
      the date the Holder's employment is terminated shall be exercisable by
      that Holder for a period of the lesser of (a) the remainder of the
      term of the Award or (b) ninety (90) days following the date of the
      Holder's termination. Any portion of an Award not exercised upon the
      expiration of the periods specified in (a) or (b) shall be null and
      void.

 

 

	10.2  	
      Other
      Loss of Eligibility. If a Holder is an Eligible Individual because the
      Holder is serving in a capacity other than as an Employee and if that
      capacity is terminated for any reason other than the Holder's death, then
      any and all Awards held by the Holder that were granted because of that
      capacity as of the date of the termination shall become null and void as
      of the date of the termination; provided, however, that the portion, if
      any, of any and all Awards held by the Holder that are exercisable as of
      the date the Holder ceases to serve in such capacity shall be exercisable
      by that Holder for a period of the lesser of (a) the remainder of the term
      of the Award or (b) ninety (90) days following the date the Holder ceases
      to serve in such capacity. Any portion of an Award not exercised upon the
      expiration of the periods specified in (a) or (b) shall be null and
      void.

 

 

	10.3  	
      Death.
      Upon (a) the death of a Holder who is an Eligible Individual because the
      Holder is an Employee, during the Holder's employment or within ninety
      (90) days following the Holder's retirement described in Paragraph 10.4
      below, or (b) the death of a Holder who is an Eligible Individual because
      the Holder is serving in a capacity other than as an Employee, then
      any and all Awards held by the Holder that are not yet exercisable as of
      the date of the Holder's death shall become null and void as of the date
      of death; provided, however, that the portion, if any, of any and all
      Awards held by the Holder that are exercisable as of the date of death
      shall be exercisable by that Holder's legal representatives, legatees or
      distributees for a period of the lesser of (a) the remainder of the term
      of the Award or (b) one year following the date of the Holder's death. Any
      portion of an Award not exercised upon the expiration of the periods
      specified in (a) or (b) shall be null and void. Except as expressly
      provided in this Paragraph 10.3, no Award held by a Holder shall be
      exercisable after the death of that Holder.

 

 

	10.4  	
      Retirement.
      If a Holder is an Eligible Individual because the Holder is an Employee
      and that employment relationship is terminated by reason of the Holder's
      Normal Retirement, then the portion, if any, of any and all Awards held by
      the Holder that are not yet vested or exercisable as of the date of that
      retirement shall become null and void as of the date of retirement;
      provided, however, that the portion, if any, of any and all Awards held by
      the Holder that are vested and exercisable as of the date of that
      retirement shall be exercisable for a period of the lesser of (a) the
      remainder of the term of the Award or (b) 90 days following the date of
      retirement.

 

 

	10.5  	
      Disability.
      If a Holder is an Eligible Individual because the Holder is an Employee
      and if that employment relationship is terminated by reason of the
      Holder's Disability, then the portion, if any, of any and all Awards held
      by the Holder that are not yet vested or exercisable as of the date of
      that termination for Disability shall become null and void as of the date
      of termination; provided, however, that the portion, if any, of any and
      all Awards held by the Holder that are vested and exercisable as of the
      date of that termination shall survive the termination for the lesser of
      (a) the original term of the Award or (b) one year following the date of
      termination, and the Award shall be exercisable by the Holder, his
      guardian, or his legal representative. "Disability" shall have the meaning
      given it in the employment agreement of the Holder; provided, however,
      that if that Holder has no employment agreement, "Disability" shall mean a
      physical or mental impairment of sufficient severity that, in the opinion
      of the Corporation, either the Holder is unable to continue performing the
      duties he performed before such impairment or the Holder's condition
      entitles him to disability benefits under any insurance or employee
      benefit plan of the Corporation or its Subsidiaries and that impairment or
      condition is cited by the Corporation as the reason for termination of the
      Holder's employment.

 

 

	10.6  	
      Leave
      of Absence. With respect to an Award, the Committee may, in its sole
      discretion, determine that any Holder who is on leave of absence for any
      reason will be considered to still be in the employ of the Corporation,
      provided that rights to that Award during a leave of absence will be
      limited to the extent to which those rights were earned or vested when the
      leave of absence began.

 

 

	10.7  	
      Transferability
      of Awards. Incentive Options, Stock Units and Performance Share Awards,
      and, during the period of restriction, Restricted Stock awarded under the
      Plan are not transferable except as designated by the Participant by will
      or by the laws of descent and distribution. Incentive Options may be
      exercised during the lifetime of the Holder only by the Holder or his
      guardian or legal representative. If provided in the Award agreement,
      Nonstatutory Options and Stock Appreciation Rights may be transferred by a
      Holder to Permitted Transferees, and may be exercised either by the
      Holder, his guardian or legal representative and as otherwise permitted
      under the laws of descent and distribution, or by a Permitted
      Transferee.

 

 

	10.8  	
      Forfeiture
      and Restrictions on Transfer. Each Award Agreement may contain or
      otherwise provide for conditions giving rise to the forfeiture of the
      Stock acquired pursuant to an Award or otherwise and may also provide for
      those restrictions on the transferability of shares of the Stock acquired
      pursuant to an Award or otherwise that the Committee in its sole and
      absolute discretion may deem proper or advisable. The conditions giving
      rise to forfeiture may include, but need not be limited to, the
      requirement that the Holder render substantial services to the Corporation
      or its Subsidiaries for a specified period of time. The restrictions on
      transferability may include, but need not be limited to, options and
      rights of first refusal in favor of the Corporation and stockholders of
      the Corporation other than the Holder of such shares of Stock who is a
      party to the particular Award Agreement or a subsequent holder of the
      shares of Stock who is bound by that Award
Agreement.

 

 

	10.9  	
      Delivery
      of Certificates of Stock. Subject to Paragraph 10.10, the Corporation
      shall promptly issue and deliver a certificate representing the number of
      shares of Stock as to which an Option or Stock Appreciation Right has been
      exercised after the Corporation receives an Exercise Notice and upon
      receipt by the Corporation of the Exercise Price, if applicable, and any
      tax withholding as may be requested. The value of the shares of Stock
      transferable because of an Award under the Plan shall not bear any
      interest owing to the passage of time, except as may be otherwise provided
      in an Award Agreement. If a Holder is entitled to receive certificates
      representing Stock received for more than one form of Option under the
      Plan, separate Stock certificates shall be issued with respect to
      Incentive Options and Nonstatutory Options.

 

 

	10.10  	
      Conditions
      to Delivery of Stock. Nothing herein or in any Award granted hereunder or
      any Award Agreement shall require the Corporation to issue any shares with
      respect to any Award if that issuance would, in the opinion of counsel for
      the Corporation, constitute a violation of the Securities Act or any
      similar or superseding statute or statutes, any other applicable statute
      or regulation, or the rules of any applicable securities exchange or
      securities association, as then in effect. At the time of any exercise of
      an Option, the Corporation may, as a condition precedent to the exercise
      of such Option, require from the Holder (or in the event of his death, his
      legal representatives, heirs, legatees, or distributees) such written
      representations, if any, concerning the Holder's intentions with regard to
      the retention or disposition of the shares of Stock being acquired
      pursuant to the Option and such written covenants and agreements, if any,
      as to the manner of disposal of such shares as, in the opinion of counsel
      to the Corporation, may be necessary to ensure that any disposition by
      that Holder (or in the event of the Holder's death, his legal
      representatives, heirs, legatees, or distributees), will not involve a
      violation of the Securities Act or any similar or superseding statute or
      statutes, any other applicable state or federal statute or regulation, or
      any rule of any applicable securities exchange or securities association,
      as then in effect.

 

 

	10.11  	
      Securities
      Act Legend. Certificates for shares of Stock, when issued, may have the
      following legend, or statements of other applicable restrictions, endorsed
      thereon, and may not be immediately
transferable:

 

 

THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE SHARES
MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED
OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO THE ISSUER (WHICH,
IN THE DISCRETION OF THE ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION
WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS.

 

This
legend shall not be required for shares of Stock issued pursuant to an effective
registration statement under the Securities Act.

 

	10.12  	
      Legend
      for Restrictions on Transfer. Each certificate representing shares issued
      to a Holder pursuant to an Award granted under the Plan shall, if
      such shares are subject to any transfer restriction, including a right of
      first refusal, provided for under this Plan or an Award Agreement, bear a
      legend that complies with applicable law with respect to the restrictions
      on transferability contained in this Paragraph 10.12, such
    as:

 

 

THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY IMPOSED BY THAT CERTAIN INSTRUMENT ENTITLED "FROZEN FOOD EXPRESS
INDUSTRIES, INC. 2005 STOCK INCENTIVE PLAN" AS ADOPTED BY FROZEN FOOD EXPRESS
INDUSTRIES, INC. (THE "CORPORATION") ON __________, 2005, AND
AN AGREEMENT THEREUNDER BETWEEN THE CORPORATION AND (HOLDER) DATED
_______________, 20__, AND
MAY NOT BE TRANSFERRED, SOLD, OR OTHERWISE DISPOSED OF EXCEPT AS THEREIN
PROVIDED. THE CORPORATION WILL FURNISH A COPY OF SUCH INSTRUMENT AND AGREEMENT
TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE ON REQUEST TO THE
CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED
OFFICE.

 

 

	10.13  	
      Rights
      as a Stockholder. A Holder shall have no right as a stockholder with
      respect to any shares covered by his Award until a certificate
      representing those shares is issued in his name. No adjustment shall be
      made for dividends (ordinary or extraordinary, whether in cash or other
      property) or distributions or other rights for which the record date is
      before the date that certificate is issued, except as contemplated by
      Section 9. Nevertheless, dividends and dividend equivalent rights may be
      extended to and made part of any Award denominated in Stock or units of
      Stock, subject to such terms, conditions, and restrictions as the
      Committee may establish. The Committee may also establish rules and
      procedures for the crediting of interest on deferred cash payments and
      dividend equivalents for deferred payment denominated in Stock or units of
      Stock.

 

 

	10.14  	
      Payment
      of Taxes. All awards and payments under the Plan are subject to
      withholding of all applicable taxes, which withholding obligations may be
      satisfied through the surrender of shares of Stock which the Holder
      already owns, or to which a Holder is otherwise entitled under the Plan.
      When a Holder is entitled to receive shares of Stock pursuant to the
      exercise of a Stock Appreciation Right or with respect to an award of
      Restricted Stock, Stock Units and Performance Shares pursuant to the Plan,
      the Corporation shall have the right to require the Holder to pay to the
      Corporation the amount of any taxes that it is required to withhold with
      respect to such shares, or, in lieu thereof, to retain, or sell without
      notice, a sufficient number of such shares to cover the amount required to
      be withheld.

 

 

	10.15  	
      Furnish
      Information. Each Holder shall furnish to the Corporation all information
      requested by the Corporation to enable it to comply with any reporting or
      other requirement imposed upon the Corporation by or under any applicable
      statute or regulation.

 

 

	10.16  	
      Obligation
      to Exercise. The granting of an Award hereunder shall impose no obligation
      upon the Holder to exercise the same or any part
  thereof.

 

 

	10.17  	
      Remedies.
      The Corporation shall be entitled to recover from a Holder reasonable
      attorneys' fees incurred in connection with the enforcement of the terms
      and provisions of the Plan and any Award Agreement whether by an action to
      enforce specific performance or for damages for its breach or
      otherwise.

 

 

	10.18  	
      Information
      Confidential. As partial consideration for the granting of each Award
      hereunder, the Holder shall agree with the Corporation that he will keep
      confidential all information and knowledge that he has relating to the
      manner and amount of his participation in the Plan; provided, however,
      that such information may be disclosed as required by law and may be given
      in confidence to the Holder's spouse, tax and financial advisors, or to a
      financial institution to the extent that such information is necessary to
      secure a loan. In the event any breach of this promise comes to the
      attention of the Committee, it shall take into consideration that breach
      in determining whether to recommend the grant of any future Award to that
      Holder, as a factor militating against the advisability of granting any
      such future Award to that individual.

 

 

	10.19  	
      Consideration.
      No Option shall be exercisable with respect to a Holder unless and until
      the Holder shall have paid cash or property to, or performed services for,
      the Corporation or any of its Subsidiaries that the Committee believes is
      equal to or greater in value than the par value of the Stock subject to
      such Award.

 

 

SECTION
11.  EFFECTIVENESS,
DURATION AND AMENDMENT OF PLAN

 

 

	11.1  	
      Effectiveness.
      The Plan shall not be effective unless and until it has been approved by
      both the Board of Directors and the holders of a majority of the shares of
      Stock of the Corporation present or represented by proxy and entitled to
      vote at the meeting of the stockholders of the Corporation at which the
      Plan is presented for stockholder approval. No Awards may be granted prior
      to the Effective Date.

 

 

	11.2  	
      Duration.
      No Awards may be granted hereunder after the date that is ten (10) years
      from the earlier of (a) the Effective Date and (b) the date the Plan is
      approved by the stockholders of the
Corporation.

 

 

	11.3  	
      Amendment
      and Termination. The Board of Directors may, insofar as permitted by law,
      with respect to any shares which, at the time, are not subject to Awards,
      suspend or discontinue the Plan or revise or amend it in any respect
      whatsoever, and may amend any provision of the Plan or any Award Agreement
      to make the Plan or the Award Agreement, or both, comply with Section
      16(b) of the Exchange Act and the exemptions from that Section in the
      regulations thereunder, or the performance-based compensation exception of
      Section 162(m) of the Code. The Board of Directors may also amend, modify,
      suspend or terminate the Plan for the purpose of meeting or addressing any
      changes in other legal requirements applicable to the Corporation or the
      Plan or for any other purpose permitted by law. The Plan may not be
      amended without the consent of the holders of a majority of the shares of
      Stock then outstanding to (a) increase materially the aggregate
      number of shares of Stock that may be issued under the Plan or the maximum
      number of shares subject to Options that may be granted to any Eligible
      Individual in any single fiscal year of the Corporation (except for
      adjustments pursuant to Section 9 of the Plan), (b) increase materially
      the benefits accruing to Eligible Individuals under the Plan, or (c)
      modify materially the requirements of eligibility for participation in the
      Plan; provided, however, that such amendments may be made without the
      consent of stockholders of the Corporation if changes occur in law or
      other legal requirements (including 16b-3) that would permit
      otherwise.

 

 

SECTION
12.  GENERAL

 

 

	12.1  	
      Application
      of Funds. The proceeds received by the Corporation from the sale of shares
      pursuant to Options may be used for any general corporate
      purpose.

 

 

	12.2  	
      Right
      of the Corporation and Subsidiaries to Terminate Employment. Nothing
      contained in the Plan, or in any Award Agreement, shall confer upon any
      Holder the right to continue in the employ of the Corporation or any
      Subsidiary, or interfere in any way with the rights of the Corporation or
      any Subsidiary to terminate the Holder's employment at any
      time.

 

 

	12.3  	
      No
      Liability for Good Faith Determinations. Neither the members of the Board
      of Directors nor any member of the Committee shall be liable for any act,
      omission, or determination taken or made in good faith with respect to the
      Plan or any Award granted under it, and members of the Board of Directors
      and the Committee shall be entitled to indemnification and reimbursement
      by the Corporation in respect of any claim, loss, damage, or expense
      (including attorneys' fees, the costs of settling any suit, provided such
      settlement is approved by independent legal counsel selected by the
      Corporation, and amounts paid in satisfaction of a judgment, except a
      judgment based on a finding of bad faith) arising therefrom to the full
      extent permitted by law and under any directors and officers liability or
      similar insurance coverage that may from time to time be in effect. This
      right to indemnification shall be in addition to, and not a limitation on,
      any other indemnification rights any member of the Board of Directors or
      the Committee may have.

 

 

	12.4  	
      Other
      Benefits. Participation in the Plan shall not preclude the Holder from
      eligibility in any other stock or stock option plan of the Corporation or
      any Subsidiary or any old age benefit, insurance, pension, profit sharing
      retirement, bonus, or other extra compensation plans that the Corporation
      or any Subsidiary has adopted, or may, at any time, adopt for the benefit
      of its Employees. Neither the adoption of the Plan by the Board of
      Directors nor the submission of the Plan to the stockholders of the
      Corporation for approval shall be construed as creating any limitations on
      the power of the Board of Directors to adopt such other incentive
      arrangements as it may deem desirable, including, without limitation, the
      granting of stock options and the awarding of stock and cash otherwise
      than under the Plan, and such arrangements may be either generally
      applicable or applicable only in specific
cases.

 

 

	12.5  	
      Exclusion
      From Pension and Profit-Sharing Compensation. By acceptance of an Award
      (whether in Stock or cash), as applicable, each Holder shall be deemed to
      have agreed that the Award is special incentive compensation that will not
      be taken into account in any manner as salary, compensation or bonus in
      determining the amount of any payment under any pension, retirement or
      other employee benefit plan of the Corporation or any Subsidiary. In
      addition, each beneficiary of a deceased Holder shall be deemed to have
      agreed that the Award will not affect the amount of any life insurance
      coverage, if any, provided by the Corporation or a Subsidiary on the life
      of the Holder that is payable to the beneficiary under any life insurance
      plan covering employees of the Corporation or any
    Subsidiary.

 

 

	12.6  	
      Execution
      of Receipts and Releases. Any payment of cash or any issuance or transfer
      of shares of Stock to the Holder, or to his legal representative, heir,
      legatee, or distributee, in accordance with the provisions hereof, shall,
      to the extent thereof, be in full satisfaction of all claims of such
      persons hereunder. The Committee may require any Holder, legal
      representative, heir, legatee, or distributee, as a condition precedent to
      such payment, to execute a release and receipt therefor in such form as it
      shall determine.

 

 

	12.7  	
      Unfunded
      Plan. Insofar as it provides for Awards of cash and Stock, the Plan shall
      be unfunded. Although bookkeeping accounts may be established with respect
      to Holders who are entitled to cash, Stock or rights thereto under the
      Plan, any such accounts shall be used merely as a bookkeeping convenience.
      The Corporation shall not be required to segregate any assets that may at
      any time be represented by cash, Stock or rights thereto, nor shall the
      Plan be construed as providing for such segregation, nor shall the
      Corporation nor the Board of Directors nor the Committee be deemed to be a
      trustee of any cash, Stock or rights thereto to be granted under the Plan.
      Any liability of the Corporation to any Holder with respect to a grant of
      cash, Stock or rights thereto under the Plan shall be based solely upon
      any contractual obligations that may be created by the Plan and any Award
      Agreement; no such obligation of the Corporation shall be deemed to be
      secured by any pledge or other encumbrance on any property of the
      Corporation. Neither the Corporation nor the Board of Directors nor the
      Committee shall be required to give any security or bond for the
      performance of any obligation that may be created by the
    Plan.

 

 

	12.8  	
      No
      Guarantee of Interests. Neither the Committee nor the Corporation
      guarantees the Stock of the Corporation from loss or
      depreciation.

 

 

	12.9  	
      Payment
      of Expenses. All expenses incident to the administration, termination, or
      protection of the Plan, including, but not limited to, legal and
      accounting fees, shall be paid by the Corporation or its Subsidiaries;
      provided, however, the Corporation or a Subsidiary may recover any
      and all damages, fees, expenses, and costs arising out of any actions
      taken by the Corporation to enforce its rights under this
      Plan.

 

 

	12.10  	
      Corporation
      Records. Records of the Corporation or its Subsidiaries regarding the
      Holder's period of employment, termination of employment and the reason
      therefor, leaves of absence, re-employment, and other matters shall be
      conclusive for all purposes hereunder, unless determined by the Committee
      to be incorrect.

 

 

	12.11  	
      Information.
      The Corporation and its Subsidiaries shall, upon request or as may be
      specifically required hereunder, furnish or cause to be furnished, all of
      the information or documentation which is necessary or required by the
      Committee to perform its duties and functions under the
    Plan.

 

 

	12.12  	
      Corporation
      Action. Any action required of the Corporation shall be by resolution of
      its Board of Directors or by a person authorized to act by resolution of
      the Board of Directors.

 

 

	12.13  	
      Severability.
      If any provision of this Plan is held to be illegal or invalid for any
      reason, the illegality or invalidity shall not affect the remaining
      provisions hereof, but such provision shall be fully severable and the
      Plan shall be construed and enforced as if the illegal or invalid
      provision had never been included herein. If any of the terms or
      provisions of this Plan conflict with the requirements of Rule 16b-3 (as
      those terms or provisions are applied to Eligible Individuals who are
      subject to Section 16(b) of the Exchange Act) or Section 422 of the Code
      (with respect to Incentive Options), then those conflicting terms or
      provisions shall be deemed inoperative to the extent they so conflict with
      the requirements of Rule 16b-3 or Section 422 of the Code. With respect to
      Incentive Options, if this Plan does not contain any provision required to
      be included herein under Section 422 of the Code, that provision shall be
      deemed to be incorporated herein with the same force and effect as if that
      provision had been set out at length herein; provided, further, that, to
      the extent any Option that is intended to qualify as an Incentive Option
      cannot so qualify, that Option (to that extent) shall be deemed
      a Nonstatutory Option for all purposes of the
Plan.

 

 

	12.14  	
      Notices.
      Whenever any notice is required or permitted hereunder, such notice must
      be in writing and personally delivered or sent by mail. Any notice
      required or permitted to be delivered hereunder shall be deemed to be
      delivered on the date on which it is personally delivered, or, whether
      actually received or not, on the third Business Day after it is deposited
      in the United States mail, certified or registered, postage prepaid,
      addressed to the person who is to receive it at the address which such
      person has theretofore specified by written notice delivered in accordance
      herewith. The Corporation or a Holder may change, at any time and from
      time to time, by written notice to the other, the address which it or he
      had previously specified for receiving notices. Until changed in
      accordance herewith, the Corporation and each Holder shall specify as its
      and his address for receiving notices the address set forth in the Award
      Agreement pertaining to the shares to which such notice
      relates.

 

 

	12.15  	
      Waiver
      of Notice. Any person entitled to notice hereunder may waive such
      notice.

 

 

	12.16  	
      Successors.
      The Plan shall be binding upon the Holder, his legal representatives,
      heirs, legatees, and distributees, and Permitted Transferees, upon the
      Corporation, its successors, and assigns, and upon the Committee, and its
      successors.

 

 

	12.17  	
      Headings.
      The titles and headings of Sections and Paragraphs are included for
      convenience of reference only and are not to be considered in construction
      of the provisions hereof.

 

 

	12.18  	
      Governing
      Law. All questions arising with respect to the provisions of the Plan
      shall be determined by application of the laws of the State of Texas
      except to the extent Texas law is preempted by federal law. Questions
      arising with respect to the provisions of an Award Agreement that are
      matters of contract law shall be governed by the laws of the state
      specified in the Award Agreement, except to the extent Texas corporate law
      conflicts with the contract law of such state, in which event Texas
      corporate law shall govern. The obligation of the Corporation to deliver
      or sell Stock hereunder is subject to applicable laws and to the approval
      of any governmental authority required in connection with the
      authorization, issuance, sale, or delivery of such
  Stock.

 

 

	12.19  	
      Word
      Usage. Words used in the masculine shall apply to the feminine where
      applicable, and wherever the context of this Plan dictates, the plural
      shall be read as the singular and the singular as the
    plural.

 

FROZEN
FOOD EXPRESS INDUSTRIES, INC.

 

By: /s/ Stoney M. Stubbs, Jr.

Name: STONEY M. STUBBS, JR.

Title:  Chairman of the Board

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