Document:

exh1027.htm

EXHIBIT 10.27

Grant # «Number»

PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT

 

This Performance-Based Restricted Stock Unit Agreement (“Agreement”) is made and entered into as of «Option_Date_x» (the “Grant Date”)
by and between Computer Sciences Corporation, a Nevada corporation (the “Company”), and «Name_x», a full-time employee of the Company and/or one or more of its subsidiaries (the “Employee”).

 

WHEREAS, pursuant to the Company’s «Plan_x» Stock Incentive Plan (the “Plan”), the Company granted to the Employee, and the Employee accepted, a restricted stock unit redeemable in shares of common stock, par value $1.00 per share,
of the Company (the “Common Stock”), upon the terms and conditions set forth in the Performance-Based Restricted Stock Unit Agreement, dated May 27, 2008, which terms, conditions and restrictions were approved by the committee of the Board of Directors administering the Plan (the “Committee”) (such grant hereinafter referred to as the “Prior Grant”);

 

WHEREAS, the Committee has determined to cancel the Prior Grant and to replace it with the Replacement Grant, as defined below;

 

WHEREAS, pursuant to the Company’s Plan, the Company desires to grant to the Employee, and the Employee desires to accept, the Replacement Grant upon the terms and conditions set forth herein, which terms, conditions and restrictions have been approved by the Committee;

 

NOW, THEREFORE, in consideration of the foregoing recital and the covenants set forth herein, the parties hereto hereby agree as follows:

 

The Company hereby grants to the Employee, and the Employee hereby accepts, a restricted stock unit redeemable by the delivery of shares of Common Stock, together with Dividend Equivalents (as hereinafter defined) to the Employee (or after the Employee's death, the beneficiary designated by the Employee for such purpose), which restricted stock unit
shall be subject to all of the terms and conditions set forth in this Agreement, including, without limitation, those set forth in Schedule “RSU6-2PS” attached hereto and incorporated herein by this reference (the “RSU” and sometimes referred to herein as the “Replacement Grant”).  The Committee has designated the RSU as a "Performance-Based Award" under the Plan.

 

The number of shares of Common Stock to be delivered upon redemption of the RSU ("RSU Shares") shall be between 0% and 200%, inclusive, of «Shares_Granted_x» shares
(the "Target Shares") and, except as otherwise provided in this Agreement, shall be determined by the Committee pursuant to Appendix A to this Agreement based on the Company's performance during FY2010 ("Fiscal Year 1") and FY2011 ("Fiscal Year 2").

 

Except as otherwise provided in this Agreement, the RSU shall be redeemed on the earlier of (a) the third Trading Day (as hereinafter defined) after the date upon which the Company files with the U.S. Securities and Exchange Commission the Company's Annual Report on Form 10-K for Fiscal Year 2, or (b)  March 15 of the calendar year following
the calendar year in which Fiscal Year 2 ends (the "Scheduled Redemption Date").

 

The term “Dividend Equivalents” shall mean, with respect to each RSU Share being delivered by the Company upon redemption of the RSU, or cancelled by the Company in payment of withholding taxes, an amount in cash equal to the aggregate amount of all regular cash dividends paid on a share of Common Stock during the period between the Grant
Date and the date of such redemption or cancellation, together with interest thereon at the rate credited to amounts deferred under the Company’s Deferred Compensation Plan, as such rate may be changed from time to time.

 

The term "Trading Day" means a day that the principal United States national securities exchange on which the Common Stock is listed or admitted to trading is open.

 

In consideration of the receipt of the Replacement Grant, the Employee waives all rights under, and agrees to the cancellation of, the Prior Grant.

 

  

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EXHIBIT 10.27

 

 

COMPUTER SCIENCES CORPORATION

 

/s/ Michael W. Laphen

By ______________________________

    Michael W. Laphen

    President and Chief Executive Officer

 

 

/s/ Michael J. Mancuso

By ______________________________

     Michael J. Mancuso

     Vice President and Chief Financial Officer

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the Grant Date.

 

EMPLOYEE

 

___________________________________________

«Name_x»

 

	
The Employee acknowledges receipt of the Plan and a Prospectus relating to the RSU, and further acknowledges that he or she has reviewed this Agreement and the related documents and accepts the provisions thereof.

___________________________________________

«Name_x»

«Address_Line_1»

«Address_Line_2»

«Address_Line_3»

«Address_Line_4»

«Address_Line_5»

  

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EXHIBIT 10.27

 

 

PERFORMANCE-BASED RESTRICTED STOCK UNIT SCHEDULE RSU6-2PS

 

ADDITIONAL TERMS AND CONDITIONS

 

1. Forfeiture Obligations.

 

(a) Certain Definitions.  For
purposes of this Agreement, the following terms shall have the following meanings:

 

(i) “Redemption Date” shall mean, with respect to each RSU Share, the date upon which the RSU was redeemed by the delivery of such RSU Share to the Employee or the date upon which such RSU
Share was cancelled in payment of Taxes (as hereinafter defined).

 

(ii) “Measurement Period” shall mean, with respect to each Redemption Date, the period set forth in Section 1(c)(i) or (ii) hereof, respectively.

 

(iii) The “Fair Market Value” of an RSU Share on any date shall be equal to the last sale price, regular way, of a share of Common Stock on such date (or in case the principal United States
national securities exchange on which the Common Stock is listed or admitted to trading is not open on such date, the next preceding date upon which it is open), or in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on such securities exchange.

 

(b) Refund of Stock Value.  If
any of the events set forth in Section 1(c)(i) or (ii) hereof shall occur during the Measurement Period for any Redemption Date, then the Employee shall immediately deliver to the Company an amount in cash equal to the aggregate Fair Market Value, determined as of such Redemption Date, of all RSU Shares which were delivered to the Employee or cancelled in payment of Taxes on such Redemption Date.

 

(c) Triggering Events.  The
events referred to in Section 1(b) hereof are as follows:

 

(i) Competing With the Company after Voluntary Termination of Employment and Prior to
Six Months after a Redemption Date.  The Employee participating, as a director, officer, employee, agent, consultant or greater than 5% equityholder (collectively, “Participating”), in any of the following during the period of time commencing on the date upon which the Employee's status as a full-time employee of the Company or its affiliates is voluntarily terminated (the “Voluntary
Employment Termination Date”), there being a presumption that any termination of employment is voluntary, and continuing until six months after a Redemption Date (for the purpose of such event, and with respect to each such Redemption Date, the “Measurement Period”):

 

  

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EXHIBIT 10.27

 

 

(A) Participating in any manner in any enterprise that competes with, or is becoming a competitor of, the Company (if the Employee is a Corporate Employee) or any operating business unit of the Company
in which the Employee has been employed within one year prior to the Voluntary Employment Termination Date (if the Employee is not a Corporate Employee) in any city in which the Company or such business unit, respectively, provides services or products on the Voluntary Employment Termination Date; or

 

(B) Participating in any other organization or business, which organization or business, or which Participation therein, is or is becoming otherwise prejudicial to or in conflict with the interests
of the Company.

 

(ii) Engaging in Certain Activities after Voluntary or Involuntary Termination of Employment
and Prior to One Year after a Redemption Date.  The Employee engaging in any of the following activities during the period of time commencing on the date upon which the Employee's status as a full-time employee of the Company or its affiliates is voluntarily or involuntarily terminated (the “Employment Termination Date”) and continuing until one year after a Redemption Date (for the purpose
of such events, and with respect to each such Redemption Date, the “Measurement Period”):

 

(A) Solicitation of Customers or Prospective Customers.  Directly
or indirectly soliciting any of the following with respect to any of the services or products that the Company or any of its affiliates then provide to customers:

 

(1) any person or entity that the Employee knew to be a customer of the Company or any of its affiliates; or

 

(2) any person or entity whose business the Employee solicited on behalf of the Company or its affiliates during the one-year period preceding the Employment Termination Date.

 

(B) Solicitation or Hiring of Employees.  Directly
or indirectly soliciting or hiring any person who then is an employee of the Company or any of its affiliates.

 

(C) Disclosure of Confidential Information.  Use,
or disclosure, communication or delivery to any person or entity, of any confidential business information or trade secrets that the Employee obtained during the course of his or her employment with the Company or any of its affiliates (collectively, “Confidential Information”).  Confidential Information includes, without limitation, the following:

 

  

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EXHIBIT 10.27

 

 

(1) non-public financial information;

 

(2) non-public operational information, including, without limitation, information relating to business or market strategies, pricing policies and methodologies, research and development plans, or the
introduction of new services or products;

 

(3) information regarding employees, including, without limitation, names, addresses, contact information and compensation;

 

(4) information regarding customers and suppliers, including, without limitation, names, addresses, contact information and requirements, and the terms and conditions of the business arrangements with
such customers and suppliers;

 

(5) information regarding potential acquisitions or dispositions of businesses or products; and

 

(6) information relating to proprietary technological or intellectual property, or the operational or functional features or limitations thereof.

 

(d) Release of Forfeiture Obligations.

 

(i) Notwithstanding the foregoing, the Employee shall be released from (A) all of his or her obligations under Section 1(b) hereof in the event that a Change of Control (as hereinafter defined) occurs
within three years prior to the Employment Termination Date, and (B) some or all of his or her obligations under Section 1(b) hereof in the event that the Committee (if the Employee is an executive officer of the Company) or the Company's Chief Executive Officer (if the Employee is not an executive officer of the Company) shall determine, in their respective sole discretion, that such release is in the best interests of the Company.

 

(ii) “Change in Control” shall mean the consummation of a “change in the ownership” of Computer Sciences Corporation, a “change in effective control” of Computer Sciences
Corporation or a “change in the ownership of a substantial portion of the assets” of Computer Sciences Corporation, in each case, as defined in Section 409A of the U.S. Internal Revenue Code and the regulations thereunder.

 

(e) Effect on Other Rights and Remedies.  The
rights of the Company set forth in this Section 1 shall not limit or restrict in any manner any rights or remedies which the Company or any of its affiliates may have under law or under any separate employment, confidentiality or other agreement with the Employee or otherwise with respect to the events described in Section 1(c) hereof.

 

  

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EXHIBIT 10.27

 

 

(f) Reasonableness.  The
Employee agrees that the terms and conditions set forth in this Agreement are fair and reasonable and are reasonably required for the protection of the interests of the Company.  If, however, in any judicial proceeding any provision of this Agreement is found to be so broad as to be unenforceable, the Employee and the Company agree that such provision shall be interpreted to be only so broad as to be enforceable.

 

2. Accelerated Redemption of the RSU; Cancellation of the RSU.

 

(a) Termination of Employment at Age 62 or Older Other than for Cause with at least 10
Years of Service; Approved Termination.

 

(i) If, prior to the redemption of the RSU in full:

 

(A) the Employee's status as a full-time employee of the Company or any of its subsidiaries is terminated after the end of Fiscal Year 1 at age 62 or older for no reason, or for any reason other than
Cause (as hereinafter defined), death or Disability (as hereinafter defined), , and the Employee shall have been (or for any other purpose shall have been treated as if he or she had been) a continuous full-time employee of the Company or its subsidiaries for at least 10 years immediately prior to the date of termination of full-time status, or

 

(B) the Employee's status as a full-time employee of the Company or any of its subsidiaries is terminated and such termination is specifically approved by the Committee for purposes of this Section 2(a),

 

then, the Company shall redeem the RSU in accordance with Appendix A to this Agreement, without pro ration, on the Scheduled Redemption Date.

 

(ii) “Cause” shall mean: (A) fraud, misappropriation, embezzlement or other act of material misconduct against the Company or any of its affiliates; (B) conviction of a felony involving a
crime of moral turpitude; (C) willful and knowing violation of any rules or regulations of any governmental or regulatory body material to the business of the Company; or (D) substantial and willful failure to render services in accordance with the terms of his or her employment (other than as a result of illness, accident or other physical or mental incapacity), provided that (X) a demand for performance of services has been delivered to the Employee in writing by the Employee's supervisor at least 60 days
prior to termination identifying the manner in which such supervisor believes that the Employee has failed to perform and (Y) the Employee has thereafter failed to remedy such failure to perform.

 

  

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EXHIBIT 10.27

 

 

(b) Death or Disability.  If,
prior to the Scheduled Redemption Date, the Employee's status as a full-time employee of the Company or any of its subsidiaries is terminated by reason of the death or Disability of the Employee, then, one calendar month after the Employment Termination Date:

 

(i) the Company shall redeem the RSU in full, without pro ration ; and

 

(ii) the number of RSU Shares to be delivered upon such redemption shall be equal to the Target Shares.

 

"Disability" shall mean the Employee has become “disabled,” as such term is defined in Section 409A of the U.S. Internal Revenue Code and the regulations thereunder.

 

(c) Cancellation of RSU upon Other Termination of Employment.  If,
prior to the last day of Fiscal Year 2, the Employee's status as a full-time employee of the Company or any of its subsidiaries is voluntarily or involuntarily terminated other than pursuant to Section 2(a)(i) or (b) hereof, then the RSU shall automatically be cancelled as of the close of business on the Employment Termination Date.

 

(d) Change of Control. Immediately
prior to a Change of Control:

 

(i) the Company shall redeem the RSU in full, without pro ration; and

 

(ii) the number of RSU Shares to be delivered upon such redemption shall be equal to the Target Shares.

 

3. Payment of Taxes.

 

(a) If the Company and/or the Employee's employer (the “Employer”) are obligated to withhold an amount on account of any federal, state or local tax imposed as a result of the grant or redemption
of the RSU pursuant to this Agreement (collectively, “Taxes”), including, without limitation, any federal, state or other income tax, or any F.I.C.A., state disability insurance tax or other employment tax (the date upon which the Company and/or the Employer becomes so obligated shall be referred to herein as the “Withholding Date”), then the Employee shall pay to the Company on the Withholding Date, the minimum aggregate amount that the Company and the Employer are so obligated to withhold,
as such amount shall be determined by the Company (the “Minimum Withholding Liability”), which payment shall be made by the automatic cancellation by the Company of a portion of the RSU Shares (such shares to be valued on the basis of the aggregate Fair Market Value thereof on the Withholding Date, plus the value of the Dividend Equivalents associated with such shares on the Withholding Date); provided that the RSU Shares to be cancelled shall be those that would otherwise have been delivered to the
Employee the soonest upon redemption of the RSU; and provided further, however, that the Employee may instead pay to the Company, by check or wire transfer delivered or made within one business day after the Withholding Date, an amount equal to or greater than the Minimum Withholding Liability.

 

(b) The Employee acknowledges that neither the Company nor the Employer has:

 

  

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EXHIBIT 10.27

 

 

(i) except to the extent specifically set forth in a prospectus delivered by the Company to the Employee together with this Agreement, made any representation or given any advice to the Employee with
respect to the realization or recognition of any Taxes by the Employee; or

 

(ii) undertaken or agreed to structure the RSU, or the grant of the RSU, to reduce or eliminate the Employee's liability or potential liability for Taxes.

 

4. Certain Corporate Transactions.  In
the event that the outstanding securities of any class then comprising the RSU Shares are increased, decreased or exchanged for or converted into cash, property and/or a different number or kind of securities, or cash, property and/or securities are distributed in respect of such outstanding securities, in either case as a result of a reorganization, merger, consolidation, recapitalization, reclassification, dividend (other than a regular, quarterly cash dividend) or other distribution, stock split, reverse stock
split or the like, then, unless the Committee shall determine otherwise, the term "RSU Shares," as used in this Agreement, shall, from and after the date of such event, include such cash, property and/or securities so distributed in respect of the RSU Shares, or into or for which the RSU Shares are so increased, decreased, exchanged or converted.

 

5. Effect of Section 409A of the U.S. Internal Revenue Code.  Notwithstanding
anything to the contrary in this Agreement, if, upon the advice of its counsel, the Company determines that the redemption of an RSU Share pursuant to this Agreement is or may become subject to the additional tax under Section 409A(a)(1)(B) of the U.S. Internal Revenue Code or any other taxes or penalties imposed under Section 409A ("409A Taxes") as applicable at the time such redemption is otherwise required under this Agreement, then:

 

(a) such redemption shall be delayed until the date that is six months after the date of the Employee's “separation from service” (as such term is defined under Section 409A) with the Employer,
or such shorter period that, in the opinion of such counsel, is sufficient to avoid the imposition of 409A Taxes (the "Payments Delay Period"); and

 

(b) if all or any part of such RSU Share has been converted into cash pursuant to Section 4 hereof, then:

 

(i) upon redemption of such RSU Share, such cash shall be increased by an amount equal to interest thereon for the Payments Delay Period at a rate equal to the 120-month rolling average yield to maturity
of the index called the "Merrill Lynch U.S. Corporates, A Rated, 15+ Years Index" (or any successor index, or if neither exists, the most similar index which does exist) as of December 31 of the year preceding the year in which the Payments Delay Period commences, compounded annually; and

 

  

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EXHIBIT 10.27

 

 

(ii) the Company shall fund the payment of such cash to the Employee upon redemption of such RSU Share, including the interest to be paid with respect thereto (collectively, the “Delayed Cash Payment”),
by establishing and irrevocably funding a trust for the benefit of the Employee.  Such trust shall be a grantor trust described in Section 671 of the U.S. Internal Revenue Code and intended not to cause tax to be incurred by the Employee until amounts are paid out from the trust to the Employee.  The trust shall provide for distribution of amounts to the Employee in order to pay taxes, if any, that become due on the amounts as to which payment is being delayed during the Payment Delay
Period pursuant to this Section 5, but only to the extent permissible under Section 409A of the U.S. Internal Revenue Code without the imposition of 409A Taxes.  The establishment and funding of such trust shall not affect the obligation of the Company to pay the Delayed Cash Payment pursuant to this Section 5.

 

6. Transferability.  Neither
the RSU nor any interest therein may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner.

 

7. Data Privacy.

 

(a) In order to implement, administer, manage and account for the Employee's participation in the Plan, the Company and/or the Employer may:

 

(i) collect and use certain personal data regarding the Employee, including, without limitation, the Employee's name, home address and telephone number, work address
and telephone number, work e-mail address, date of birth, social insurance or other identification number, term of employment, employment status, nationality and tax residence, and details regarding the terms and conditions, grant, vesting, cancellation, termination and expiration of all restricted stock units and other stock-based incentives granted, awarded or sold to the Employee by the Company (collectively, the “Data”);

 

(ii) transfer the Data, in electronic or other form, to employees of the Company and its subsidiaries, and to third parties, who are involved in the implementation,
administration and/or management of, and/or accounting for, the Plan, which recipients may be located in the Employee's country or in other countries that may have different data privacy laws and protections than the Employee's country;

 

(iii) transfer the Data, in electronic or other form, to a broker or other third party with whom the Employee has elected to deposit any RSU Shares issued in redemption
of the RSU; and

 

(iv) retain the Data for only as long as may be necessary in order to implement, administer, manage and account for the Employee's participation in the Plan.

 

  

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EXHIBIT 10.27

 

 

(b) The Employee hereby consents to the collection, use, transfer and retention of the Data, as described in this Agreement, for the exclusive purpose of implementing,
administering, managing and accounting for the Employee's participation in the Plan.

 

(c) The Employee understands that by contacting his or her local human resources representative, the Employee may:

 

(i) view the Data;

 

(ii) correct any inaccurate information included within the Data;

 

(iii) request additional information regarding the storage and processing of the Data

 

(iv) request a list with the names and addresses of any potential recipients of the Data; and

 

(v) under certain circumstances and with certain consequences, prevent further use, transfer, retention and/or processing of the Data.

 

8. Plan.  The
RSU is granted pursuant to the Plan, as in effect on the Grant Date, and are subject to all the terms and conditions of the Plan, as the same may be amended from time to time; provided, however, that no such amendment shall deprive the Employee, without his or her consent, of the RSU or of any of the Employee's rights under this Agreement.  The interpretation and construction by the Committee of the Plan, this Agreement and such rules and regulations as may be adopted by the Committee for the purpose
of administering the Plan shall be final and binding upon the Employee.  Until the RSU is redeemed in full, the Company shall, upon written request therefor, send a copy of the Plan, in its then-current form, to the Employee.

 

9. Employment Rights.  No
provision of this Agreement shall (a) be deemed to form an employment contract or relationship with the Company or any of its subsidiaries, (b) confer upon the Employee any right to be or continue to be in the employ of the Company or any of its subsidiaries, (c) affect the right of the Employer to terminate the employment of the Employee, with or without cause, or (d) confer upon the Employee any right to participate in any employee welfare or benefit plan or other program of the Company or any of its subsidiaries
other than the Plan.  The Employee hereby acknowledges and agrees that the Employer may terminate the employment of the Employee at any time and for any reason, or for no reason, unless applicable law provides otherwise or unless the Employee and the Employer are parties to a written employment agreement that expressly provides otherwise.

 

10. Nature of Company Restricted Stock Unit Grants.  The
Employee acknowledges and agrees that:

 

(a) the Plan was established voluntarily by the Company, it is discretionary in nature and it may be modified, suspended or terminated by the Company at any time, as provided in the Plan and this Agreement;

 

  

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EXHIBIT 10.27

 

 

(b) the Company grants restricted stock units voluntarily and on an occasional basis, and the receipt of the RSU by the Employee does not create any contractual or other right to receive any future grant
of restricted stock units, or any benefits in lieu of a grant of restricted stock units;

 

(c) all decisions with respect to future grants of restricted stock units by the Company will be made in the sole discretion of the Company;

 

(d) the Employee is voluntarily participating in the Plan;

 

(e) restricted stock units are an extraordinary item which do not constitute compensation of any kind for services rendered to the Company or the Employer, and which are outside the scope of the Employee's
employment contract, if any;

 

(f) restricted stock units are not part of normal or expected compensation or salary for any purposes, including, without limitation, for purposes of calculating any severance, resignation, termination,
redundancy or end-of-service payments, or any bonuses, long-service awards or pension or retirement benefits, or any similar payments;

 

(g) the future value of the RSU is unknown and cannot be predicted with certainty; and

 

(h) the Employee hereby indemnifies the Company and the Employer against, and irrevocably releases and holds them harmless from, any claim or entitlement to compensation or damages arising from the cancellation
of the RSU in accordance with this Agreement, or any diminution in the value of the RSU.

 

11. Successors.  This
Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns, on the one hand, and the Employee and his or her heirs, beneficiaries, legatees and personal representatives, on the other hand.

 

12. Entire Agreement; Amendments and Waivers.  This
Agreement embodies the  entire understanding and agreement of the parties with respect to the subject matter hereof, and no promise, condition, representation or warranty, express or implied, not stated or incorporated by reference herein, shall bind either party hereto.  None of the terms and conditions of this Agreement may be amended, modified, waived or canceled except by a writing, signed by the parties hereto specifying such amendment, modification, waiver or cancellation.  A
waiver by either party at any time of compliance with any of the terms and conditions of this Agreement shall not be considered a modification, cancellation or consent to a future waiver of such terms and conditions or of any preceding or succeeding breach thereof, unless expressly so stated.

 

13. Severability.  Any
provision of this Agreement which is invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement invalid, illegal or unenforceable in any other jurisdiction.

 

  

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EXHIBIT 10.27

 

 

14. Governing Law; Consent to Jurisdiction.  This
Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nevada, United States of America, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.  Any action, suit or proceeding to enforce the terms and provisions of this Agreement, or to resolve any dispute or controversy arising under or in any way relating to this Agreement, may
be brought in the state courts for the County of Washoe, State of Nevada, United States of America, and the parties hereto hereby consent to the jurisdiction of such courts.  If the Employee has received this or any other document related to the Plan translated into a language other than English, and the translated version is different than the English version, the English version will control.

 

 

 

  

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EXHIBIT 10.27

 

 

Appendix A

 

PERFORMANCE MATRIX

 

The number of RSU Shares to be delivered upon redemption of the RSU on the Scheduled Redemption Date, expressed as a percentage of the Target Shares, will be determined by the Committee based upon the Company's performance during Fiscal Years 2010-2011 pursuant to the performance matrix set forth below.

 

Except as set forth in Section 2(a)(i) of the Agreement, if the Employee is not a full-time employee of the Company and/or one or more of its subsidiaries during all of Fiscal Years 2010-2011, then the number of RSU Shares otherwise deliverable upon redemption of the RSU will be pro rated on an actual-days basis.

 

In determining the number of RSU Shares, performance criteria shall be adjusted to omit the effects of extraordinary items, gain or loss on the disposal of a business segment (other than provisions for operating losses or income during the phase-out period), unusual or infrequently occurring events or transactions that have been publicly disclosed and
the cumulative effects of changes in accounting principles, all as determined in accordance with U.S. GAAP. The Committee may not waive the achievement of the applicable performance goals, and may not increase or decrease the number of RSU Shares determined under the performance matrix set forth below, except for those adjustments described in the preceding paragraphs.

 

Revenue performance will be measured against the performance of a Peer Index of 31 companies in the Federal and commercial sectors. The entities comprising the Federal sector are:

 

	
1.  
	
Boeing - Global Services and Support and the Network and Space Systems Segments

	
2.  
	
CACI

 

	
3.  
	
Dynamics Research Corp.

 

	
4.  
	
General Dynamics - Information Systems and Technology Segment

 

	
5.  
	
L-3 - Government Services and the Aircraft Modernization and Maintenance Segment

 

	
6.  
	
Lockheed Martin - Information Systems & Global Services Segment

 

	
7.  
	
ManTech

 

	
8.  
	
MAXIMUS, Inc.

 

	
9.  
	
NCI, Inc.

 

	
10.  
	
Northrop Grumman - Information Systems, Technical Services Segment

 

	
11.  
	
Raytheon - Intelligence and Information Systems, Technical Services, and the Network Centric Systems Segments

 

	
12.  
	
SAIC

 

	
13.  
	
SRA

 

	
14.  
	
Stanley, Inc.

 

The entities comprising the Commercial sector are:

	
1.  
	
Accenture

 

	
2.  
	
Affiliated Computer Services

 

	
3.  
	
ATOS Origin

 

	
4.  
	
Automatic Data Processing

 

	
5.  
	
Cap Gemini

 

 

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EXHIBIT 10.27

	
6.  
	
CGI

 

	
7.  
	
Cognizant

 

	
8.  
	
Convergys

 

	
9.  
	
Deutsche Telekom - System Solutions Segment

 

 

	
10.  
	
HP – Services and the EDS Segments

 

	
11.  
	
IBM  - the Global Services Segment

 

	
12.  
	
Perot Systems

 

	
13.  
	
Siemens - IT Solutions and Services Segment

 

	
14.  
	
Syntel Inc

 

	
15.  
	
TCS

 

	
16.  
	
Unisys

 

	
17.  
	
Wipro

 

Calculations under, and changes and adjustments to, the Index may be made only in accordance with procedures established by the Committee.

 

 

 

 

 

  

14exh10_3.htm

EXHIBIT 10.3

 

 

FROZEN FOOD EXPRESS INDUSTRIES, INC.

 

 

2005 STOCK INCENTIVE PLAN

 

 

(As Amended and Restated Effective May 20, 2009)

 

Frozen Food Express Industries, Inc. (the "Corporation") has previously established the Frozen Food Express Industries, Inc. 2005 Stock Incentive Plan, effective May 5, 2005 (the "Plan").  Effective upon approval by the stockholders of the Corporation, the Plan has been amended and
restated herein.  The purpose of the Plan is to:

 

 

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

 

 

	
(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 Corporation's other stockholders through compensation alternatives based on the Corporation's common stock;

 

and thereby promote the long-term financial interest of the Corporation and its Subsidiaries, including the growth in value of the Corporation'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, Stock Unit, Performance Share 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" of any Stock means, as of any date, the last sale price for such Stock as reported by the NASDAQ stock market on the date or, if Stock is not traded on that date, on the next preceding date on which Stock was traded.

 

 

	
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 2,700,000 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 1,000,000 out of such 2,700,000 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).  Notwithstanding the foregoing, upon the grant of Stock Appreciation Rights that are to be settled in shares of Stock, the number of Rights awarded (and not the “net” number of shares of Stock issued upon exercise of the Rights) shall be considered awarded from the pool of authorized shares of Stock available under the Plan.

 

 

	
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  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 2.1 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.  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 construe the respective Award Agreements and the Plan; (f) to make determinations of the Fair Market Value of the Stock pursuant to the Plan; (g) 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 or take any action that would disqualify an award for the performance-based compensation exception under Section 162(m) of the Code; and (h) 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.  Neither the Board nor
the Committee may accelerate the vesting of an Award of Restricted Stock, Stock Units or Performance Shares, except in the event of a Holder’s death, Disability or Normal Retirement. Neither the Board nor the Committee may, without further approval of the stockholders of the Corporation, reduce the exercise price of a Stock Option or the grant value of a Stock Appreciation Right, except in accordance with the adjustments pursuant to Section 9.

 

 

SECTION 4. ELIGIBILITY AND TERMS OF AWARDS

 

 

	
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 it 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 or Stock Appreciation Rights 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
	
Vesting of Awards.  Restricted Stock, Restricted Stock Units and Performance Shares shall be subject to the following minimum vesting requirements.  If the vesting of such Awards is not based on the achievement of one or more performance conditions, such Awards will vest over a minimum period of three years after the date of grant.  If the vesting of Awards is based on the achievement of
one or more performance conditions, such Awards will vest over a minimum period of one year after the date of grant.  Vesting over a three-year period will  include periodic graded vesting over such period. With respect to Awards that otherwise would be subject to the minimum vesting requirements, and notwithstanding those requirements, up to five percent (5%) of such Awards may be granted as non-performance-based Awards with vesting terms not conforming to the three-year minimum vesting requirement.  Notwithstanding
the foregoing, these minimum vesting requirements may be accelerated or waived in the event of an Eligible Individual’s death, Disability or Normal Retirement, or in the event of a Change in Control of the Company.

 

 

 

 

	
        
	
4.5
	
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.

 

	
        
	
4.6
	
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 4.6(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.

 

   4.7    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, extend or renew outstanding
Options granted under the Plan, and (b) 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.  Neither the Board nor the Committee may, without further approval of the stockholders of the Corporation, reduce the exercise price of a Stock Option, except in accordance with the adjustments pursuant to Section 9.  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.

 

 

	
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 Paragraph 4.4 and 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)  
	
A Holder whose employment or service with the Corporation 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.

 

 

	
(c)  
	
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.”

 

	
(d)  
	
At the end of the Restricted Period for Restricted Stock, such Restricted Stock will be transferred free of all restrictions to the Holder (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 Paragraph 4.4 and 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.  The term of a Stock Unit or a Performance Share shall be no more than ten years from the date of grant.

 

 

	
7.3  
	
Payment.  The Committee 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 Committee will determine the number of earned Performance Shares to be paid in cash and the number to be paid in Stock.  For Performance Shares awarded in shares of Stock, one share of Stock will be paid for each share earned.  For Performance Shares awarded in cash, cash will be paid for each share earned equal to (a) its initial cash value, (b) the Fair Market Value of a share of Stock at the end
of the performance period, or (c) the Fair Market Value of a share of Stock averaged for a number of days determined by the Committee.

 

 

	
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.

 

 

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 ten years from the date of grant.  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, the number of shares of Stock authorized pursuant to Paragraph 2.1 for issuance under the Plan, and the maximum number of shares of Stock subject to Options or Rights that may be granted to any Eligible Individual in any single fiscal year 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 or Rights 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 Stock Option (or other kind of shares or unit of other securities) and the base price for Stock Appreciation Rights subject to then outstanding Options or Rights shall be reduced proportionately, without changing the aggregate purchase price or value as to which outstanding Options or Rights 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 or Rights 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 Stock Option (or other kind
of shares or unit of other securities) and the base price for Stock Appreciation Rights subject to then outstanding Options or Rights shall be increased proportionately, without changing the aggregate purchase price or value as to which outstanding Options or Rights 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 or Rights that may be granted to any eligible Individual in any single fiscal year of the Corporation.  The Committee shall 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  
	
Change 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).  Notwithstanding the foregoing, upon a Change in Control, the Board shall, in its discretion, have the power to:

 

 

	
(a)  
	
provide, upon written notice to Holders, that any or all Stock Option and Stock Appreciation Right Awards that are currently exercisable must be exercised within the time period specified in the notice and that all such Awards not exercised as of the expiration of such period shall be terminated without consideration; or

 

 

	
(b)  
	
redeem in whole or in part any one or more of the outstanding Awards (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 Change in Control, 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).

 

 

	
9.3  
	
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).

 

 

 

 

 

	
(c)  
	
If a Restructure 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).

 

 

	
9.4  
	
Notice to Holders.  The Corporation shall promptly notify each Holder of any election or action taken by the Corporation under Paragraph 9.2 or 9.3.  In the event of any election or action taken by the Corporation pursuant to Paragraph 9.2 or 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 Paragraph 9.2 or 9.3, including, without limitation,
any redemption of an Award as of the consummation of a Change in Control or a Restructure.  Any cash payment to be made by the Corporation pursuant to Paragraph 9.2 or 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 Change in Control or Restructure notwithstanding that
the payment of the redemption price may occur subsequent to the consummation.

 

 

 

	
9.5  
	
Notice to Holders.  The Corporation shall promptly notify each Holder of any election or action taken by the Corporation under Paragraph 9.2 or 9.3.  In the event of any election or action taken by the Corporation pursuant to Paragraph 9.2 or 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 Paragraph 9.2 or 9.3, including, without limitation,
any redemption of an Award as of the consummation of a Change in Control or a Restructure.  Any cash payment to be made by the Corporation pursuant to Paragraph 9.2 or 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 Change in Control or Restructure notwithstanding that
the payment of the redemption price may occur subsequent to the consummation.

 

 

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 Eligible Individual 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"), 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 Option or 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.

 

  

  

  

 

	
10.20  
	
Prohibition on Deferred Compensation.  It is the intention of the Corporation that no Award shall be “deferred compensation” subject to Code section 409A unless and to the extent that the Committee specifically determines otherwise, and the Plan and the terms and conditions of all Awards shall be interpreted accordingly.  The
terms and conditions governing any Awards that the Committee determines will be subject to Code section 409A, including any rules for elective or mandatory deferral of the delivery of cash or shares of Stock pursuant thereto, shall be set forth in the applicable Award agreement, and shall comply in all respects with Code section 409A.  Notwithstanding any provision herein to the contrary, any Award issued under the Plan that constitutes a deferral of compensation under a “nonqualified deferred
compensation plan” as defined under Code section 409A(d)(1) and is not specifically designated as such by the Committee shall be modified or cancelled to comply with the requirements of Code section 409A, including any rules for elective or mandatory deferral of the delivery of cash or shares of Stock pursuant thereto.

 

 

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 or Rights 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.  Neither the Board nor the Committee may, without further approval of the stockholders of the Corporation, reduce the exercise price of a Stock Option or the grant value of a Stock Appreciation Right, except in accordance with the adjustments pursuant to Section 9.  Neither the Board nor the Committee may accelerate the vesting of an Award of Restricted Stock, Stock Units or Performance Shares, except in the event of a  Holder’s
death, Disability or Normal Retirement.

 

 

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.

 

  

  

  

IN WITNESS WHEREOF, Frozen Food Express Industries, Inc., acting by and through its officer hereunto duly authorized, has executed this instrument, this the 20th day of May, 2009.

 

FROZEN FOOD EXPRESS INDUSTRIES, INC.

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

Stoney M. Stubbs, Jr.

President

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