Frozen Food Express Industries DEF 14A Definitive proxy

FROZEN FOOD EXPRESS INDUSTRIES, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON MAY 18, 2011

TO THE SHAREHOLDERS OF

FROZEN FOOD EXPRESS INDUSTRIES, INC.:

Notice is hereby given that the 2011 annual meeting of shareholders of Frozen Food Express Industries, Inc., a Texas corporation (the “Company”), will be held on Wednesday, May 18, 2011, at 2:00 p.m., Central time, in the Las Colinas Country Club, 4400 North O’Connor Boulevard, Irving, TX 75062-2796, for the following purposes:

1.		To elect three Class I directors for a three-year term, or until their respective successors are elected and qualified;
2.		To ratify the selection of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2011;
3.		To provide an advisory vote on compensation of the Company’s named executive officers as disclosed in the enclosed proxy statement under “Executive Compensation;”
4.		To provide an advisory vote on how often the Company conducts an advisory vote on the compensation of the Company’s named executive officers, with the Company recommending a triennial vote; and
5.		To transact such other business as may properly be brought before the Annual Meeting or any adjournment thereof.

We encourage you to attend the 2011 annual meeting in person. Whether or not you plan to attend the meeting, please complete, date, sign and return the accompanying proxy or vote using the telephone or Internet at your earliest convenience.

The proxy statement and annual report to shareholders are also available on our hosted website at http://www.cfpproxy.com/6412. For additional related information, please refer to the "Important Notice of Electronic Availability of Materials for the Shareholder Meeting to be held on May 18, 2011" in the enclosed proxy statement.

Shareholders of record at the close of business on March 23, 2011, are entitled to notice of, and to vote at, the 2011 annual meeting or any adjournment of the meeting. A list of all shareholders entitled to vote at the meeting is on file and available for inspection by shareholders at our corporate offices, located at 1145 Empire Central Place, Dallas, Texas 75247.

	By Order of the Board of Directors

Dallas, Texas	LEONARD W. BARTHOLOMEW
April 19, 2011	Corporate Secretary

TABLE OF CONTENTS

General Information		1
Outstanding Capital Stock; Principal Shareholders		5
Equity Compensation Plan Information		7
Executive Officers		7
Corporate Governance		8
Board of Directors-Meetings and Committees		8
Director Attendance at the Annual Meetings of Shareholders		9
Board Leadership Structure and Role in Risk Oversight		9
Compensation Risk Assessment		10
Consideration of Director Nominees; Nominating and Corporate Governance Committee		10
Procedures for Recommendations of Director Nominees by Shareholders		11
Shareholder Communications with the Board		11
Audit Committee		12
Related Party Transactions Policy		12
Compensation Committee		14
Compensation Committee Interlocks and Insider Participation		14
Nominating and Corporate Governance Committee		14
Proposal 1: Election of Directors		15
Information Concerning Nominees and Directors		15
Director Nominees-Class I (Term Ending 2011)		16
Director Continuing in Office-Class II (Term Ending 2012)		17
Director Continuing in Office -Class III (Term Ending 2013)		18
Compensation Discussion and Analysis		20
Executive Compensation Philosophy, Strategy and Objectives		20
2010 Compensation Decisions		21
Competitive Market		22
Role of the Compensation Committee		22
Role of Management		23
Role of the Compensation Consultant		23
Executive Compensation Components		23
Other Compensation Considerations		27
Committee Decisions on Executive Officer Compensation for 2011		27
Change in Control Agreements		27
Report of the Compensation Committee of the Board of Directors		29
Executive Compensation		30
2010 Summary Compensation Table		30
2010 All Other Compensation Table		31
2010 Grants of Plan-Based Awards Table		32
Outstanding Equity Awards at Fiscal Year Ended 2010 Table		33
2010 Option Exercises and Stock Vested Table		34
2010 Non-Qualified Deferred Compensation Table		34
Potential Payments Upon Termination		34
2010 Director Compensation Table		35
Transactions with Management and Directors		36
Report of the Audit Committee of the Board of Directors		36
Audit Committee Members		37
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm		38
Audit and Non-Audit Fees		38
Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services		38
Proposal 3: Advisory Vote on Executive Compensation		39
Proposal 4: Advisory Vote on Frequency of Conducting Advisory Vote on Executive Compensation		40
Section 16(a) Beneficial Ownership Reporting Compliance		41
Shareholder Proposals for the 2012 Annual Meeting		41

FROZEN FOOD EXPRESS INDUSTRIES, INC.

1145 Empire Central Place

Dallas, Texas 75247

Telephone: (214) 630-8090

Proxy Statement for Annual Meeting of

Shareholders to be Held on May 18, 2011

ABOUT THE MEETING

·	What is a proxy?
·	What is the difference between a "shareholder of record" and a "street name" holder?
·	Why did I receive more than one proxy card?
·	Who is qualified to vote?
·	How many shares of common stock may vote at the annual meeting?
·	Who can sign the proxy?
·	How do I Vote if I am a Shareholder of Record?
·	How do I Vote Shares Held in Street Name by a Broker, Bank or Other Nominee?
·	Can I vote in person at the annual meeting?
·	What are the Board's recommendations on how I should vote?
·	What are my choices when voting?
·	How will my shares be voted if I do not specify how they should be voted?
·	What vote is required to approve each proposal?
·	What constitutes a quorum ?
·	Can I change my vote after I have mailed in my proxy card?
·	Who will count the votes?
·	Who pays the cost of this proxy solicitation?
·	Is this proxy statement the only way that proxies are being solicited?

This proxy statement, the accompanying proxy card and the annual report to shareholders for the year ended December 31, 2010, of Frozen Food Express Industries, Inc. ("we", "us" or the "Company") are being mailed on or about April 19, 2011. Our Board of Directors (the "Board" or “Board of Directors”) is soliciting your proxy to vote your shares at the annual meeting of shareholders or any adjourned sessions of the meeting to be held on May 18, 2011, at 2:00 p.m., Central time, in the Las Colinas Country Club, 4400 North O’Connor Boulevard, Irving, TX 75062-2796. You can find directions to the annual meeting on the outside back cover of this proxy statement. The Board is soliciting your proxy to give all shareholders of record the opportunity to vote on matters that will be presented at the annual meeting, even if shareholders are not able to attend the meeting. All proxies in the enclosed form that are properly executed and received by us before or at the annual meeting and not revoked will be voted at the annual meeting or any adjournments in accordance with the instructions on the proxy. Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is voted. Proxies may be revoked by (i) filing with our Corporate Secretary, at or before the taking of the vote at the annual meeting, a written notice of revocation bearing a later date than the date of the proxy, (ii) duly executing a subsequent proxy relating to the same shares and delivering it to our Corporate Secretary before the annual meeting or (iii) attending the annual meeting and voting in person (although attendance at the annual meeting will not in and of itself constitute a revocation of a proxy). This proxy statement provides you with information on these matters to assist you in voting your shares.

IMPORTANT NOTICE OF ELECTRONIC AVAILABILITY OF MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD MAY 18, 2011

This proxy statement and the Company’s annual report for the year ended December 31, 2010 are also available electronically on our hosted website at http://www.cfpproxy.com/6412.

To access and review the materials made available electronically:

·	Go to: http://www.cfpproxy.com/6412.

·	Click the “Proxy Statement.pdf” link.

We encourage you to review all of the important information contained in the proxy materials before voting. If you would like to attend the annual meeting in person, please refer to the inside back cover of this proxy statement.

What is a proxy?

A proxy is your legal designation of another person to vote on your behalf. By completing and returning the enclosed proxy card, you are giving the proxies appointed by our Board and identified on the proxy card the authority to vote your shares in the manner you indicate on your proxy card.

What is the difference between a "shareholder of record" and a "street name" holder?

These terms describe how your shares are held. If your shares are registered directly in your name with our transfer agent and registrar, you are a "shareholder of record". If your shares are held in the name of a broker, bank, trust or other nominee as a custodian, you are a "street name" holder.

Why did I receive more than one proxy card?

You will receive multiple proxy cards if you hold your shares in different ways (e.g., joint tenancy, trusts, custodial accounts) or in multiple accounts. If your shares are held in "street name", you will receive your proxy card or other voting information from your broker or other custodian, and you will return your proxy card or cards to your broker or other custodian. You should complete and sign each proxy card you receive.

Who is qualified to vote?

You are qualified to receive notice of, and to vote at, the annual meeting if you owned shares of our common stock, par value $1.50 per share, at the close of business on March 23, 2010, the record date for the annual meeting.

How many shares of common stock may vote at the annual meeting?

As of the record date, there were 17,565,467 shares of common stock outstanding and entitled to vote. Each share of our common stock is entitled to one vote regarding each matter presented.

Who can sign the proxy?

If a shareholder is a company, the accompanying proxy should be signed in its full company name by its president or other authorized officer, who should indicate his or her title. If a shareholder is a partnership, the proxy should be signed in the partnership name by an authorized person. If stock is registered in the name of two or more trustees or other persons, the proxy should be signed by each of them. If stock is registered in the name of a decedent, the proxy should be signed by an executor or an administrator. The executor or administrator should attach to the proxy appropriate instruments showing his or her qualification and authority. Proxies signed by a person as agent, attorney, administrator, executor, guardian or trustee should indicate such person's full title following his or her signature.

How do I Vote if I am a Shareholder of Record?

If you are a shareholder of record mark the enclosed proxy card, date and sign it, and return it in the enclosed postage-paid envelope.

If you are a record holder and you sign your proxy card without giving specific instructions, your shares will be voted in accordance with the recommendations of our Board (“FOR” all three of our nominees to the Board, “FOR” ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year 2011, “FOR” the approval of the advisory (non-binding) resolution on executive compensation and for conducting the advisory vote on executive compensation TRIENNIALLY).

How do I Vote Shares Held in Street Name by a Broker, Bank or Other Nominee

If your shares are held in street name by a broker, bank, or other nominee, you may direct your vote by submitting your voting instructions to your broker, bank, or other nominee. Please refer to the voting instructions provided by your account manager. Your broker or other nominee is not permitted to vote your shares on election of directors unless you provide voting instructions. Brokers also do not have discretionary authority to vote on the advisory (non-binding) resolution to approve executive compensation or on the advisory (non-binding) resolution on the frequency of the vote to approve executive compensation unless you provide voting instructions. Therefore, to be sure your shares are voted, please instruct your broker or other nominee as to how you wish it to vote.

Can I vote in person at the annual meeting?

If you are a shareholder of record, you may vote your shares in person at the annual meeting. If you hold your shares in street name, you must obtain a proxy from your broker, banker, trustee or nominee, giving you the right to vote the shares at the annual meeting.

What are the Board's recommendations on how I should vote?

The Board recommends that you vote:

FOR the election of each of the three nominees to serve as directors on the Board of Directors for a three-year term;

FOR the ratification of the selection of Grant Thornton LLP as our independent registered public accounting firm for the 2011 fiscal year;

FOR the approval of the advisory (non-binding) resolution on executive compensation; and

FOR conducting the advisory vote on executive compensation triennially.

What are my choices when voting?

With respect to:

	Proposal 1 -	You may (i) vote “FOR” electing all Director nominees as a group, (ii) withhold your vote on all Director nominees as a group or (iii) vote “FOR” electing Director nominees as a group except those nominees identified by you in the appropriate area on the proxy card.
	Proposal 2 -	You may vote “FOR” or “AGAINST” the ratification of the selection of Grant Thornton LLP as the Company’s independent auditor for fiscal year ending December 31, 2011, or you may elect to abstain from voting.
	Proposal 3 -	You may vote “FOR” or “AGAINST” the approval of the compensation of the Company’s named executive officers as described in this proxy statement under “Executive Compensation,” or you may elect to abstain from voting.
	Proposal 4 -	You may vote to conduct an advisory vote on the compensation of the Company’s named executive officers (i) every three years, (ii) every two years, (iii) every year, or you may elect to abstain from voting.

How will my shares be voted if I do not specify how they should be voted?

If you sign and return a proxy card but fail to give voting instructions, the proxy agents will vote your shares in accordance with the recommendations of our Board of Directors. The Board of Directors recommends you vote FOR the election of each of the three nominees to serve as directors on the Board of Directors for a three-year term, FOR ratification of the selection of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2011, FOR the advisory (non-binding) resolution to approve executive compensation, and FOR the advisory (non-binding) resolution to vote on the frequency that the shareholders have an advisory vote on executive compensation every three years. The proxy agents will vote according to their best judgment on any other matter that properly comes before the Annual Meeting. At present, the Board of Directors does not know of any other such matters.

What vote is required to approve each proposal?

Election of directors. Under our Amended and Restated Bylaws (as heretofore amended, the "Bylaws"), the presence, in person or by proxy, of the holders of a majority of the outstanding shares of our common stock entitled to vote is necessary to constitute a quorum at the annual meeting. Upon establishment of a quorum at the annual meeting, Directors will be elected by a plurality of the votes of the issued and outstanding shares of our common stock represented in person or by proxy at the annual meeting and entitled to vote on Proposal 1. In a plurality voting, the nominee who receives the most votes for his or her election is elected. If you do not instruct your broker how to vote with respect to this itm, your broker may not vote with respect to this proposal.

Ratification of independent registered public accounting firm. Under our Bylaws, the affirmative vote of a majority of the total number of votes cast at the meeting is needed to ratify the selection of Grant Thornton LLP as our independent registered public accounting firm.

Advisory resolution on the compensation of the Company’s named executive officers. Under our Bylaws, the affirmative vote of a majority of the total number of votes cast at the meeting is needed to approve the advisory resolution on the compensation of the Company’s named executive officers. Abstentions will count as votes cast on this proposal, but will not count as votes “FOR” the proposal. Therefore, abstentions will have the same effect as votes “against” the proposal. Additionally, broker non-votes will not be considered to have voted on this proposal, and therefore will have no effect on the proposal. The individuals named as proxies on the enclosed proxy card will vote your proxy “FOR” this proposal unless you instruct otherwise on the proxy or you will withhold authority to vote.

Frequency of the shareholder vote to approve the compensation of the Company’s named executive officers. The time period that receives the affirmative vote of a plurality of the votes of the issued and outstanding shares of our common stock represented in person or by proxy at the annual meeting and entitled to vote will be considered passed. Abstentions and broker non-votes will have no effect on the proposal.

What constitutes a quorum?

In order for business to be conducted at the meeting, a quorum must be present in person or represented by valid proxies. For each of the proposals to be presented at the meeting, a quorum consists of the holders of a majority of the shares of common stock issued and outstanding on March 23, 2011, the record date, or at least 8,782,734 shares.

Shares of common stock represented in person or by proxy (including “broker non-votes” and shares that abstain or do not vote with respect to a particular proposal to be voted upon) will be counted for the purpose of determining whether a quorum exists at the meeting for that proposal.

If a quorum is not present, the meeting will be adjourned until a quorum is obtained.

Can I change my vote after I have mailed in my proxy card?

You may revoke your proxy by doing one of the following:

·	by sending a written notice of revocation to our Corporate Secretary that is received prior to the annual meeting, stating that you revoke your proxy;
·	by signing a later-dated proxy card and submitting it so that it is received prior to the annual meeting; or
·	by attending the annual meeting and voting your shares in person.

Who will count the votes?

Representatives from Registrar and Transfer Company, our transfer agent, will count the votes. Our Corporate Secretary will serve as our inspector of election at the annual meeting.

Who pays the cost of this proxy solicitation?

We pay the costs of soliciting proxies. Upon request, we will reimburse brokers, dealers, banks, trustees and other nominees for reasonable expenses incurred in forwarding these proxy materials to beneficial owners of shares of our common stock.

Is this proxy statement the only way that proxies are being solicited?

No. In addition to mailing these proxy materials on behalf of our Board, certain of our Directors, officers or employees may solicit proxies by telephone, facsimile, e-mail or personal contact. They will not be specifically compensated for doing so.

If you have any further questions about voting or attending the annual meeting please contact our Corporate Secretary at secretary@ffex.net or by telephone at 1-800-569-9200.

OUTSTANDING CAPITAL STOCK; PRINCIPAL SHAREHOLDERS

At the close of business on the March 23, 2011, the record date, there were 17,565,467 shares of our common stock outstanding and entitled to be voted at the annual meeting. The following table sets forth certain information as of the record date, except as otherwise indicated, with respect to (i) each person known to our management to be the beneficial owner of more than 5% of our common stock; (ii) each Director and Director nominee; (iii) each “named executive officer” (as defined in Item 402(a)(3) of Regulation S-K, the "NEOs") identified in the Summary Compensation Table and (iv) all current Directors and executive officers as a group.

		Shares Beneficially Owned (1)
Beneficial Owner	Address	Number			Percent
Beneficial Owners of More than 5%
Hawkshaw Capital Management, LLC	400 Madison Avenue, 14th Floor New York, NY 10017		1,842,220	(2)	10.49	%
Stoney M. Stubbs, Jr.	158 Jellico Circle Southlake, TX 76092		1,779,171	(3)	10.13	%
Sarah M. Daniel	612 Linda El Paso, TX 79922		1,717,642	(4)	9.78	%
Lucile W. Knight	104 South Commerce St. Lockhart, TX 78644		1,620,200	(5)	9.22	%
Dimensional Fund Advisors, LP	Palisades West, Building One 6300 Bee Cave Road Austin, TX 78746		1,413,813	(6)	8.05	%
FMR LLC	82 Devonshire Street Boston, MA 02109		1,337,657	(7)	7.62	%
Frozen Food Express Industries, Inc. 401(k) Savings Plan, by Delaware Charter Guarantee & Trust Company, as Trustee	1013 Centre Road Wilmington, DE 19805		1,173,786	(8)	6.68	%
DePrince, Race & Zollo, Inc.	250 Park Ave South, Ste 250 Winter Park, FL 32789		1,136,025	(9)	6.47	%
Directors, Nominees and NEOs
Stoney M. Stubbs, Jr.			1,779,171	(3)	10.13	%
S. Russell Stubbs			415,197	(10)	2.36	%
John T. Hickerson			149,285	(11)	*
Brian R. Blackmarr			49,332	(12)	*
John R. McManama			35,168	(13)	*
Jerry T. Armstrong			28,044	(14)	*
T. Michael O'Connor			23,707	(15)	*
W. Mike Baggett			18,450	(16)	*
Barrett D. Clark			12,343	(17)	*
Kevin K. Kilpatrick			7,191	(18)	*
All Directors and Executive Officers as a Group (10 persons)			2,517,888	(19)	14.33	%

* Less than 1%.

(1)	Except as otherwise noted, all shares are held directly, and the owner has sole voting and investment power.
(2)	Information concerning the number of shares owned by Hawkshaw Capital Management, LLC is as of December 31, 2010 and was obtained from a Schedule 13G/A filed on February 14, 2011.
(3)	Includes 386,027 shares issuable pursuant to options exercisable within 60 days of March 23, 2011, 2,740 shares of restricted stock for which Mr. Stoney M. Stubbs, Jr. has voting power, 10,606 shares allocated to his account in the Frozen Food Express Industries, Inc. 401(k) Savings Plan, 28,300 shares allocated to his account in the FFE Transportation Services, Inc. 401(k) Wrap Plan, 69,705 shares held in his IRA and 1,012,256 shares held in family partnerships controlled by Mr. Stoney M. Stubbs, Jr.
(4)	Information concerning the number of shares owned by Ms. Daniel is as of August 19, 2009 and was obtained from a Schedule 13D/A filed on August 19, 2009. Ms. Daniel has sole voting and dispositive power over 53,590 shares, joint voting and dispositive power with her husband over 45,092 shares and shared voting and dispositive power with Ms. Knight over 1,321,332 shares owned by Weller Investment, Ltd. and 297,628 shares owned by Two Sisters LLC.
(5)	Information concerning the number of shares owned by Ms. Knight is as of August 19, 2009 and was obtained from a Schedule 13D/A filed on August 19, 2009. Ms. Knight has sole voting and dispositive power over 1,240 shares and shared voting and dispositive power with Ms. Daniel over 1,321,332 shares owned by Weller Investment Ltd. and 297,628 shares owned by Two Sisters LLC.
(6)	Information concerning the number of shares owned by Dimensional Fund Advisors, LP is as of December 31, 2010 and was obtained from a Schedule 13G/A filed on February 11, 2011.
(7)	Information concerning the number of shares owned by FMR LLC, the successor to FMR Corp. is as of December 31, 2010 and was obtained from a Schedule 13G/A filed on February 11, 2011. Fidelity Management & Research Company (“Fidelity”), a wholly-owned subsidiary of FMR LLC and an investment adviser is the beneficial owner of 1,337,657 shares or our common stock, as a result of acting as investment adviser to various investment companies. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, each has sole power to dispose of the 1,337,657 shares.
(8)	Information concerning the number of shares owned by Frozen Food Express Industries, Inc. 401(k) Savings Plan, by Delaware Charter Guarantee & Trust Company, as Trustee, is as of December 31, 2010, and was obtained from a Schedule 13G/A filed February 8, 2011.
(9)	Information concerning the number of shares owned by DePrince, Race & Zollo, Inc. is as of December 31, 2010 and was obtained from a Schedule 13G filed on February 11,2011.
(10)	Includes 50,000 shares issuable pursuant to options exercisable within 60 days of March 23, 2011, 94,700 shares of restricted stock for which Mr. S. Russell Stubbs has voting power, 41,689 shares allocated to his account in the Frozen Food Express Industries, Inc. 401(k) Savings Plan, 6,835 shares allocated to his account in the FFE Transportation Services, Inc. 401(k) Wrap Plan, 1,112 shares held in a partnership controlled by Mr. S. Russell Stubbs, 5,727 shares held by his spouse and 6,116 shares held in irrevocable trusts of which Mr. S. Russell Stubbs is the trustee.
(11)	Includes 91,150 shares of restricted stock for which Mr. Hickerson has voting power, 4,891 shares allocated to his account in the Frozen Food Express Industries, Inc. 401(k) Savings Plan and 5,832 shares allocated to his account in the FFE Transportation Services, Inc. 401(k) Wrap Plan.
(12)	Includes 5,625 shares issuable pursuant to options exercisable within 60 days of March 23, 2011 and 7,192 shares of restricted stock for which Mr. Blackmarr has voting power.
(13)	Includes 33,350 shares of restricted stock for which Mr. McManama has voting power and 452 shares allocated to his account in the FFE Transportation Services, Inc. 401 (k) Wrap Plan.
(14)	Includes 13,125 shares issuable pursuant to options exercisable within 60 days of March 23, 2011 and 7,192 shares of restricted stock for which Mr. Armstrong has voting power.
(15)	Includes 5,625 shares issuable pursuant to options exercisable within 60 days of March 23, 2011 and 7,192 shares of restricted stock for which Mr. O'Connor has voting power.
(16)	Includes 2,409 shares issuable pursuant to options exercisable within 60 days of March 23, 2011 and 7,192 shares of restricted stock for which Mr. Baggett has voting power.
(17)	Includes 7,192 shares of restricted stock for which Mr. Clark has voting power.
(18)	Includes 6,333 shares of restricted stock for which Mr. Kilpatrick has voting power.
(19)	Includes 462,811 shares issuable pursuant to options exercisable within 60 days of March 23, 2011, 264,233 shares of restricted stock with voting power, 57,186 shares allocated to the Frozen Food Express Industries, Inc. 401(k) Savings Plan 41,419 shares allocated to the FFE Transportation Services, Inc, 401(k) Wrap Plan, 1,013,368 shares held by family partnerships, 5,727 shares held by a spouse, and 6,116 shares held by trusts.

EQUITY COMPENSATION PLAN INFORMATION

The following table presents information concerning our compensation plans under which shares of our common stock are authorized for issuance as of December 31, 2010:

		Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		897,000		$6.40		894,000

We have two equity compensation plans approved by security holders: (i) the Amended and Restated Frozen Food Express Industries, Inc. 2005 Stock Incentive Plan (the “2005 Stock Incentive Plan”) and (ii) the Amended and Restated Non-Employee Director Restricted Stock Plan (the “Director Plan).

The 2005 Stock Incentive Plan, as amended and restated, was approved by the Company’s shareholders on May 20, 2009. The 2005 Stock Incentive Plan has a ten-year term and a total of 2,700,000 shares are reserved for issuance under it, except that no more than 1,000,000 shares of common stock may be awarded in the form of shares of restricted stock, stock units, or performance shares. The 2005 Stock Incentive Plan provides for the grant of incentive stock options, nonstatutory options, shares of restricted stock, stock appreciation rights ("SARs"), stock units and performance share awards to key employees, including officers and directors who may be employees, and non-employee consultants or advisors. The 2005 Stock Incentive Plan is administered by our Compensation Committee, which has full authority, subject to the terms of the 2005 Stock Incentive Plan, to determine award recipients the number of shares of common stock represented by each award, the date or dates on which options and SARs are granted and exercisable, the exercise and base price of options and SARs, and the date or dates at which shares of restricted stock, stock units or performance shares will be issued, vested or exercisable.

For additional information regarding the Director Plan, see “2010 Director Compensation Table” on page 35.

EXECUTIVE OFFICERS

The table below sets forth certain information regarding our principal officers including our current executive officers:

Name	Age	Position
Stoney M. Stubbs, Jr. (1)	74	Chairman of the Board and Former Chief Executive Officer
S. Russell Stubbs (1)	47	Chief Executive Officer and President
John T. Hickerson	59	Executive Vice President, Chief Operating Officer
John R. McManama	58	Senior Vice President and Chief Financial Officer

(1)

Mr. Stoney M. Stubbs, Jr. retired as Chief Executive Officer (“CEO”) effective at the end of day February 28, 2011. Mr. Stubbs will remain on the company’s Board of Directors, continuing his role as Chairman of the Board. Mr. Stubbs will be replaced as CEO by S. Russell Stubbs, who will also retain his position as President of the company.

See Stoney M. Stubbs, Jr.’s biography under Proposal 1: Election of Directors.

See S. Russell Stubbs’ biography under Proposal 1: Election of Directors.

See John T. Hickerson’s biography under Proposal 1: Election of Directors.

John R. McManama – 58

Mr. McManama is our Senior Vice President and Chief Financial Officer since May 19, 2010 and previously served as Vice President and Interim Chief Financial Officer since November 6, 2009. Mr. McManama is a Certified Public Accountant. He previously served as Vice President of Finance since April 2009, Vice President of Strategic Planning since April 2008 of FFE Transportation Services, Inc. and Director of Operations of FFE Logistics Inc. since November 2007, both wholly-owned subsidiaries of the Company. From September 2007 until October 2007, Mr. McManama was President and Chief Executive Officer of Blue Wing Global Logistics and from August 2006 until September 2007, he was their Chief Financial Officer. From April 2005 until July 2006, he was Vice President of Finance for Central Freight Lines, Inc. Mr. McManama is a graduate of the University of Alabama, Birmingham and has an MBA from the University of Houston.

CORPORATE GOVERNANCE

We are committed to having sound corporate governance principles. Having such principles is essential to running our business with integrity and maintaining our credibility with our customers, our vendors, our employees, our shareholders and the general public. Our Board of Directors has adopted charters for the following standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. The charters for these committees, as well as our Code of Business Conduct and Ethics (the “Code of Ethics”) and our Policy Regarding Related Party Transactions may be accessed under "Documents & Charters" under subsection "Corporate Governance" within our "Investors" section of our website at www.ffex.net. You may also request copies of these documents, without charge, from our Corporate Secretary. Such requests should be directed to our Corporate Secretary at Frozen Food Express Industries, Inc., 1145 Empire Central Place, Dallas, Texas 75247 or emailed to secretary@ffex.net.

The Code of Ethics applies to all of our Directors and employees, including the principal executive officer, principal financial officer, principal accounting officer or controller and other persons performing similar functions. The Code of Ethics addresses all NASDAQ Stock Market ("NASDAQ") content requirements and includes provisions addressing conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of our assets, compliance with our policies, and with laws, rules and regulations. No waivers of the Code of Ethics were requested or granted in 2010.

The Board, its standing committees and management remain committed to proactive pursuit of best practices of corporate governance, accountability and transparency. Our website has links to our filings with the Securities and Exchange Commission (the "SEC"), including all Forms 3, 4 or 5 filed pursuant to Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act"). Additional information may be accessed under the “Investors” section of our website at www.ffex.net, including information on the composition and functions of our Board of Directors and its committees and instructions for submission of shareholder communications to the Board.

Board of Directors - Meetings and Committees

Our Bylaws provide that our Board shall consist of nine Directors. The Board has affirmatively certified that none of our six non-employee Directors (Jerry T. Armstrong, W. Mike Baggett, Brian R. Blackmarr, Barrett D. Clark, Kevin K. Kilpatrick and T. Michael O'Connor) has any material relationship with us (either directly or as a partner, shareholder or officer of an organization that has a relationship with us) and is independent within the meaning of NASDAQ director independence standards. Accordingly, a substantial majority of the Board is currently independent, which is consistent with the SEC rules and the NASDAQ director independence standards.

Our Board met in person or by teleconference five times during the year ended December 31, 2010. Our Board has three standing committees: the Audit, Compensation, and Nominating and Corporate Governance Committees, each of which selected a committee chairman from its members. Only independent Directors serve on the Board's standing committees. During 2010, each incumbent Director attended at least 75% of the meetings held by our Board of Directors and the committees of which he was a member. The membership of each of the committees and the number of meetings held by each committee during 2010 is reflected in the following table:

Name of Independent Director

Audit

Compensation

Nominating

Jerry T. Armstrong

Chairman

W. Mike Baggett

Chairman

Brian R. Blackmarr

Chairman

Barrett D. Clark

Kevin Kilpatrick

T. Michael O’Connor

Number of committee meetings in Fiscal 2010

X = Committee member

Director Attendance at the Annual Meetings of Shareholders

Absent unusual circumstances, we expect all our Directors to attend all annual meetings of shareholders. All Directors attended our 2010 annual meeting.

Board Leadership Structure and Role in Risk Oversight

Our Board consists of nine board members, six of whom are independent within the meaning of NASDAQ listing standards. Key to the Company’s risk oversight are the requirements that all Board members who comprise the membership of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee must be independent. Each of these three committees is lead by a committee chairman. The agenda for each committee meeting is set by the chairman, and each committee is required to report on its work to the full Board. Our independent directors meet in executive session as often as they deem appropriate, typically coinciding with regular Board meetings. In addition, the independent directors have a regularly scheduled annual meeting scheduled around the timing of our shareholders meeting. Jerry T. Armstrong presides as chairman of our independent director meetings and Brian R. Blackmarr keeps the meeting minutes. On February 23, 2011, the Board of Directors approved the Amended and Restated Bylaws, separating the positions of Chairman of the Board and Chief Executive Officer, allowing the company to have a non-executive Chairman of the Board in addition to the Chief Executive Officer. This structure provides the flexibility to allow one person to serve in both capacities or to fill each position with a different individual. Following his resignation as the Chief Executive Officer in February 2011, Stoney M. Stubbs, Jr. has remained on the company’s Board of Directors, continuing his role as Chairman of the Board.

The Board is responsible for oversight of our risk management. Much of this is managed by the Audit Committee as required by the Audit Committee Charter. The Audit Committee is responsible for reviewing with management financial and enterprise risk, including guidelines related to how this risk is managed; critical accounting policies; company compliance programs; internal control and supervision of the Internal Audit department; discussions and reviews with the independent registered public accounting firm; review of reports from legal counsel; approval of earnings releases and external reporting; and other reviews as deemed necessary or directed by the Audit Committee Charter. The Audit Committee is responsible for communication of all functions to the full Board of Directors. The Nominating and Corporate Governance Committee, in conjunction with the Audit Committee, is responsible for risk assessment as it relates to corporate governance and the Code of Ethics. The Company’s Code Compliance Officer reports to the Nominating and Corporate Governance Committee. The Compensation Committee assesses risks related to any compensation programs.

The full Board of Directors receives regular reports from the Company’s Vice President of Risk Management concerning all risk management programs. Additionally, the independent directors of the Board review all legal issues that could present significant risk to the Company. The Board of Directors believes that the work performed by all Board committees and required reporting by corporate management, as well as the leadership provided by the Chairman and Chief Executive Officer provides effective oversight of the Company’s risk management function.

We believe that the make-up of the Board, with a majority of independent directors who meet regularly as an independent body and provide leadership through the independent committees they chair, coupled with dividing the positions of non-executive Chairman of the Board and Chief Executive Officer between two individuals with extensive experience within the Company, provides the most effective form of leadership going forward for the Company. This structure provides both a non-executive to oversee the Board of Directors and a clear lead executive of our Company, who may be seen by our shareholders, customers, business partners and employees as providing strong leadership for the Company and within our industry and as a fervent member of our communities.

Compensation Risk Assessment

Our compensation programs have been designed with features that discourage executives from taking unnecessary and excessive risks. We have reviewed our compensation policies and practices for all employees and concluded that any risks arising from our policies and programs are not reasonably likely to have a material adverse effect on the Company. We believe our programs reflect sound risk management practices including:

·	using a variety of compensation vehicles to provide a balance of long-and short-term incentives with fixed and variable components;
·	capping our Discretionary Bonus Plan awards at 100% of compensation;
·	providing for the Compensation Committee to have discretion over pre-tax targets and percentages to be used to calculate bonuses for the subsequent fiscal year under the Executive Plan, providing the bonuses are exempt from the limitation set forth in Section 162(m) of the Code; and
·	providing for our restricted stock awards to vest over many years, so while the potential compensation an executive can receive through the restricted stock awards is tied directly to appreciation of our stock price, taking excessive risk for a short term gain is incompatible with an executive officer maximizing the value of equity incentive awards over the long term.

Consideration of Director Nominees; Nominating and Corporate Governance Committee

The responsibilities of the Nominating and Corporate Governance Committee (”NCGC”) include certain corporate governance activities in connection with the administration of the Code of Ethics. The NCGC’s charter outlines its primary responsibilities. Our NCGC consists of W. Mike Baggett (Chairman), Brian Blackmarr and Barrett D. Clark, each of whom is independent within the meaning of the NASDAQ listing standards. The NCGC met one time in the last fiscal year. The NCGC has the responsibility to periodically assess, develop and communicate with our Board concerning the appropriate criteria for nominating and appointing Directors, including our Board's size and composition, applicable listing standards and laws, individual Director performance, expertise, experience, willingness to serve actively, number of other public and private company boards on which a Director candidate serves, consideration of Director nominees timely proposed by shareholders in accordance with our Bylaws and other appropriate factors. Other specific duties and responsibilities of our NCGC include recommending to our Board the individuals to be nominated for election as Directors at each annual meeting of shareholders, identifying and recommending to our Board the appointees to be selected by the Board for service on the committees of the Board, retaining and terminating any search firm used to identify Director candidates, overseeing an annual review of the performance of the full Board and performing any other activities our Board considers appropriate. Our Board considers the recommendations of the NCGC with respect to the nominations of directors to the Board, but otherwise retains authority over the identification of nominees. Candidates to serve on our Board of Directors are considered based upon various criteria, such as ethics, business and professional activities, relevant business expertise, available time to carry out our Board's duties, conflicts of interest, service on other boards and commitment to our overall performance. The NCGC will make an effort to maintain representation on our Board of members who have substantial and direct experience in areas of importance to us. The NCGC has not considered racial or ethnic diversity in evaluating possible directors. It does not believe race or ethnic background is relevant to a person’s qualifications to serve on the Board. While it recognizes the benefits of diversity of training and experience, it does not believe that race or ethnic background significantly affect a person’s ability to contribute to our Board. The Nominating and Corporate Governance Committee Charter is available under "Documents & Charters" under subsection "Corporate Governance" within our "Investors" section of our internet website at www.ffex.net.

Procedures for Recommendations of Director Nominees by Shareholders

Our NCGC is charged with the responsibility, among others, of recommending to the Board the individuals to be nominated for election as directors at each annual meeting of stockholders. Following a recommendation by the NCGC, all of our Directors participate in the consideration of nominees for our Board. In addition to the nominating duties performed by NCGC under its charter, our Board has adopted the nomination policy described in this section for the consideration of Director candidates whose names are submitted by our shareholders. If you wish to submit candidates for consideration at our 2012 annual meeting, you should send the following information to our Corporate Secretary at Frozen Food Express Industries, Inc., 1145 Empire Central Place, Dallas, Texas 75247 on or before December 21, 2011:

·	your name and address as it appears on our books and records; the number and class of shares you own beneficially and of record, the length of period held and proof of ownership of such shares;
·	name, age and address of the candidate;
·	a detailed resume describing, among other things, the candidate's educational background, occupation, employment history, and material outside commitments (e.g., memberships on other boards and committees, charitable foundations, etc.);
·	any information regarding any relationships between us and the candidate within the last three years;
·	any information relating to such candidate that is required to be disclosed in solicitations of proxies for election of Directors in an election contest, or is otherwise required, in each case pursuant to the Exchange Act, and rules adopted thereunder;
·	a description of any arrangements or understandings between you and such candidate;
·	a supporting statement which describes the candidate's reasons for seeking election to our Board, and documents his or her ability to satisfy the Director qualifications; and
·	a signed statement from the candidate, confirming willingness to serve on our Board.

Our Corporate Secretary will promptly forward such materials to the NCGC and will maintain copies of such materials for future reference by the NCGC for use when nominating persons for election or when filling vacant Board positions.

If a vacancy arises or if our Board decides to expand its membership, our NCGC will seek recommendations of potential candidates from a variety of sources (which may include incumbent Directors, shareholders, our management and third-party consultants). At that time, the NCGC will consider potential candidates submitted by shareholders in accordance with the procedures described above. The NCGC will then evaluate each potential candidate's educational background, employment history, outside commitments and other relevant factors to determine whether he or she is potentially qualified to serve on our Board. The NCGC will seek to identify and recruit the best available candidates and intends to evaluate qualified shareholder candidates on the same basis as those submitted by other sources.

After completing this process, our NCGC will determine whether one or more candidates are sufficiently qualified to warrant further investigation. If the process yields one or more desirable candidates, the NCGC will rank them by order of preference, depending on their respective qualifications and our needs. The NCGC will then contact the desired candidate(s) to evaluate their potential interest and to schedule interviews. All such interviews will be held in person and will include only the candidate and the NCGC. Any travel expenses incurred by the candidate may be at the expense of the candidate, at the discretion of the NCGC. Based upon interview results, the candidate's qualifications and appropriate background checks, the NCGC will then decide whether it will recommend the candidate's nomination to the full Board.

Shareholder Communications with the Board

Our Board has adopted the following procedures for shareholders to send communications to the full Board or individual Directors.

Shareholders seeking to communicate with our Board should submit their comments in writing to our Corporate Secretary at Frozen Food Express Industries, Inc., 1145 Empire Central Place, Dallas, Texas 75247 or by email to secretary@ffex.net. Our Corporate Secretary will forward all such communications (excluding routine advertisements and business solicitations and communications that the Corporate Secretary deems not a bona fide shareholder communication) to each member of our Board, or if applicable, to the individual Director(s) named in the correspondence. Subject to the following, the Chairman of the Board and our independent Directors will receive copies of such shareholder communications, including those addressed to individual Directors, unless such communications address allegations of misconduct or mismanagement on the part of the Chairman of the Board. In such an event, our Corporate Secretary will first consult with and receive the approval of our independent Directors before disclosing or otherwise discussing the communication with the Chairman of the Board.

We reserve the right to screen materials sent to our Directors for potential security risks or harassment purposes, and we also reserve the right to verify stock ownership status before forwarding communications to our Board.

Our Corporate Secretary will determine the appropriate timing for forwarding shareholder communications to our Directors. He or she will consider each communication to determine whether it should be forwarded promptly or compiled and sent with other communications and other Board materials in advance of the next scheduled Board meeting.

Shareholders can also communicate with our Board at the annual meeting of shareholders.

Audit Committee

We have established and maintain an Audit Committee in accordance with the rules promulgated under the Exchange Act. Our Audit Committee assists our Board of Directors in fulfilling its responsibilities for general oversight of the integrity of our financial statements, the qualifications of our independent registered public accounting firm, compliance with legal and regulatory requirements, our internal audit function and internal controls over financial reporting. This Committee works closely with management as well as our independent auditors and currently consists of Jerry T. Armstrong (Chairman), W. Mike Baggett, Barrett D. Clark and T. Michael O'Connor, all of whom meet the independence criteria of audit committee members prescribed by the NASDAQ listing standards' financial literacy requirements. Our Board has determined that Mr. Armstrong meets the requisite SEC criteria to qualify as an audit committee financial expert. Our Audit Committee met nine times during 2010. The Committee operates pursuant to a written charter that has been approved and adopted by our Board and is reviewed and reassessed annually by the Committee. The Audit Committee Charter is available under "Documents & Charters" under subsection "Corporate Governance" within our "Investors" section of our internet website at www.ffex.net. The “Report of the Audit Committee” is included herein and appears on page 36 of this proxy statement.

Related Party Transactions Policy

The Board has adopted written policies and procedures for the review of all “Related Party Transactions”, which include any relationship, arrangement, or transaction or any series of similar relationships, arrangements or transactions involving an amount exceeding $25,000 between the Company and any of our executive officers, directors, director nominees or 5% shareholders or their immediate family members (collectively, “Related Parties”).

All Related Party Transactions proposed to be entered into by the Company must be reported to the Company’s Chief Financial Officer who is required to submit a recommendation to the Audit Committee for review. If the Audit Committee recommends approval of the Related Party Transaction, such recommendation is required to be submitted to the independent directors of the Board (the “Independent Board”) meeting in executive session for review. The Related Party Transaction must be approved by a majority of the members of the Independent Board prior to the effectiveness or consummation of the transaction, whenever practicable. If the Chief Financial Officer determines that advance approval of a Related Party Transaction is not practicable under the circumstances, the Audit Committee who is required to review the Related Party Transaction at its next meeting and, in its discretion, may recommend ratification of the Related Party Transaction at the next meeting of the Independent Board or at the next meeting following the date that the Related Party Transaction comes to the attention of the Chief Financial Officer; provided, however, that the Chief Financial Officer is required to present a Related Party Transaction arising in the time period between meetings of the Audit Committee to the chair of the Audit Committee, who is required to review and may approve the Related Party Transaction, subject to ratification by the Audit Committee and by the Independent Board at the next meeting of the Committee and the Independent Board. Any Related Party Transaction that is not recommended by the Audit Committee and approved by the Independent Board prior to its effectiveness or consummation and that is not subsequently ratified by the Audit Committee and the Independent Board at the next meeting shall be voidable at the option of the Independent Board and all persons subject to the policy are required to take all necessary action to unwind any Related Party Transaction voided by the Audit Committee or the Independent Board on terms that are fair to the Company and its shareholders.

A Related Party Transaction reviewed will be considered approved or ratified if it is recommended by the Audit Committee and approved by the Independent Board in accordance with the standards set forth in the policy after full disclosure of the Related Party's interests in the Related Party Transaction. As appropriate, the Audit Committee and the Independent Board are required to review and consider the following:

●	the Related Party's relationship to the Company and interest in the Related Party Transaction (as an approximate dollar value, without regard to profit or loss);

●	the approximate total dollar value involved in the Related Party Transaction;

●	whether the Related Party Transaction was undertaken in the ordinary course of business of the Company;

●	whether the Related Party Transaction is proposed to be, or was, entered into on the terms no less favorable to the Company than terms that could have been reached with an unrelated third party;

●	whether the Related Party Transaction would impair the independence, pursuant to Nasdaq Rule 5605(a)(2), or any successor rule, of a Director on the Independent Board;

●	whether the Related Party Transaction would require a waiver of our Code of Ethics;

●	the terms on which the Related Party offers the products or services involved in the Related Party Transaction to unrelated parties;

●	the purpose, and the potential benefits to the Company, of the Related Party Transaction; and

●	any other information regarding the Related Party Transaction or the Related Party in the context of the proposed Related Party Transaction that would be material to investors and shareholders of the Company in light of the particular Related Party Transaction.

The Board has determined that the following transactions and circumstances do not create a material direct or indirect interest on the part of the Related Party and are not, therefore, Related Party Transactions:

●	transactions available to all employees generally or to all employees in the same category;

●	interests arising solely from the ownership of a class of the Company’s equity securities if all holders of that class of equity securities receive the same benefit on a pro rata basis;

●

transactions involving compensation to an executive officer (a) if the compensation is required to be reported in the Company’s proxy statement under the compensation disclosure requirements in Item 402 of Regulation S-K; or (b) if the compensation would be required to be reported in the Company’s proxy statement under the compensation disclosure requirements in Item 402 Regulation S-K if the executive officer was also a “named executive officer” (as defined in Item 402 of Regulation S-K), and the Compensation Committee of the Board approved (or recommended that the Board approve) such compensation, except that subsection (b) of this paragraph would be considered a Related Party Transaction if such executive officer is also an immediate family member of another executive officer or Director of the Company;

●	transactions involving compensation to a Director for services as a Director of the Company if such compensation will be reported pursuant to Item 402(k) of Regulation S-K; and

The Policy Regarding Related Party Transactions is available under "Documents & Charters" under subsection "Corporate Governance" within our "Investors" section of our internet website at www.ffex.net.

Compensation Committee

The principal functions of our Compensation Committee are to review and approve executive officer compensation and employee compensation matters, including matters regarding our various benefit plans, independently or in conjunction with our Board, as appropriate. Specific duties and responsibilities include, among others, reviewing and approving objectives relevant to executive officer compensation, evaluating performance and determining the compensation of each executive officer in accordance with those objectives, approving and amending our incentive compensation and stock option program and recommending compensation arrangements for our Directors. To fulfill its responsibilities, the Committee met nine times during 2010. The Committee currently consists of Brian R. Blackmarr (Chairman), W. Mike Baggett and Kevin K. Kilpatrick, all of whom meet the independence criteria prescribed by NASDAQ. The Committee has adopted a charter, and it is available under "Documents & Charters" under subsection "Corporate Governance" within our "Investors" section of our internet website at www.ffex.net. The “Report of the Compensation Committee” is included herein and appears on page 29 of this proxy statement.

Compensation Committee Interlocks and Insider Participation

As of December 31, 2010, no member of our Compensation Committee is involved in a relationship requiring disclosure as an interlocking executive officer/director under Item 404 of Regulation S-K.

Nominating and Corporate Governance Committee

The principal functions of the Nominating and Corporate Governance Committee ("NCGC") are to screen individuals who are eligible and qualified to serve on the Board and to recommend those individuals to the full Board, oversee our corporate governance standards and our Code of Ethics. Only people who have been screened and recommended by the NCGC can be considered by the Board for either interim appointment to the Board, or for nomination for election by shareholders to the Board of Directors. The NCGC met one time during 2010. The NCGC currently consists of Chairman W. Mike Baggett, Brian R. Blackmarr and Barrett D. Clark, each of whom meet the independence criteria prescribed by NASDAQ. The NCGC adopted a charter and it is available under "Documents & Charters" under subsection "Corporate Governance" within our "Investors" section of our internet website at www.ffex.net.

PROPOSAL 1: ELECTION OF DIRECTORS

Our Bylaws provide that our Board shall consist of nine Directors. Each year, the Directors in one of the three classes are elected to serve for a three-year term. At the 2011 Annual Meeting, three Class I directors are nominated for election for a three-year term or until their successors are elected and qualified. The current term for Class II Directors will expire at the 2012 annual meeting of shareholders and the current term for Class III Directors will expire at the 2013 annual meeting of shareholders.

Upon the recommendation of the NCGC, the Board of Directors proposes the following nominees, all of whom are currently serving as Class I directors, be elected as Class I directors for three-year terms expiring in 2014:

	Barrett D. Clark
	Kevin K. Kilpatrick
	S. Russell Stubbs

The Board recommends that you vote FOR the election of all three individuals who have been nominated to serve as a Director. Unless otherwise instructed, the persons named as proxies will vote all proxies received FOR the election of the persons named as nominees in this proxy statement. If you wish to give specific instructions with respect to the voting of Directors, you may do so by indicating your instructions on your proxy or voting instruction card.

If, at the time of the annual meeting, any of the nominees should be unable or decline to serve, the discretionary authority provided in the proxy will be used to vote for a substitute or substitutes as may be designated by the NCGC and our Board. The Board of Directors has no reason to believe that any substitute nominee or nominees will be required.

Information Concerning Nominees and Directors

Our directors bring a broad range of leadership and experience to the boardroom and regularly contribute to the dialogue involved in effectively overseeing and guiding the business and affairs of the Company. Our Board consists of two employees of the Company, our Chief Executive Officer and President, and our Chief Operating Officer, one non-employee, non-independent director and six non-employee independent directors. Though the members of the Board have been selected to provide a wide range of viewpoints, the atmosphere of our Board is professional and collaborative. Preparation, engagement and participation are expected from our directors and we insist on high personal and professional ethics, integrity and values. All of our current directors and nominees satisfy such requirements. The Board has adopted Corporate Governance Guidelines, which are observed by all directors. With a diverse mix of experience, backgrounds and skill sets, the Board believes it is well positioned to represent the best interests of the shareholders. The principal occupation, specific experience, qualifications, attributes or skills and certain other information about the nominees and other directors whose terms of office continue after the annual meeting are set forth on the following pages.

Director Nominees — Class I (Term Ending 2011)

Barrett D. Clark, Director since 2007

Mr. Clark, 38, is Managing Partner of Clark Cattle Company, a ranching operation with holdings throughout the United States and Mexico, since 1995. He also manages Trinity Country Real Estate, a land investment and brokerage company with domestic and international property holdings. Additionally, Mr. Clark sits on the oversight board of Breck Operating, Inc., a privately-owned oil and gas operating company with properties in 17 states and Canada.

Mr. Clark brings significant experience in managing large multi-location operations. His background in agricultural products and ranching provides significant insight into the workings of bringing commodity driven products to market. He is an experienced negotiator, which he has used to the Company’s benefit in various Board assignments. Mr. Clark has been very active in the improvements made to the Company’s corporate governance initiatives. Mr. Clark serves on both our Audit Committee and NCGC and is a graduate of the Texas Christian University, M.J. Neeley School of Business.

Kevin K. Kilpatrick, Director since 2009

Mr. Kilpatrick, 57, is Chairman and Chief Executive Officer of DFW Paving LLC, a concrete and asphalt company that he formed in 2006. Mr. Kilpatrick has twenty years executive level experience as a corporate executive and entrepreneur. Over a twenty year period at PESCOR Plastics as Vice President, and later President, he led the company to an annualized sales growth of over $50 million, leading to a merger with Berry Plastics. During his time at Berry Plastics, Mr. Kilpatrick developed several proprietary cup designs, including the Coca Cola Contour Cup which sold over one billion units. He was also co-owner and Executive Vice President of Sky USA Precision Manufacturing LLC, which specializes in full service precision machining to the commercial, military and aerospace industries.

Mr. Kilpatrick brings to the Board, and Company, the entrepreneurial expertise that has successfully launched two companies in disparate industries. Mr. Kilpatrick has proven expertise in sales and marketing, operations, finance and new product development. In his executive roles, Mr. Kilpatrick has developed strategic third party alliances for the benefit of his companies. His position as an executive in the construction industry provides experience in capital intensive organizations within challenging, high-turnover employment environments. Mr. Kilpatrick brings a strong customer service background that is well suited to the challenges of the transportation industry. Mr. Kilpatrick serves on our Compensation Committee and is a graduate of Texas Christian University.

S. Russell Stubbs, Chief Executive Officer and President, Director since 2005

Mr. Stubbs, 47, has served as our Chief Executive Officer and President since March 1, 2011 and previously served as our President beginning on January 15, 2010. Previously, he served as Senior Vice President and Chief Operating Officer beginning on May 17, 2006. Mr. Stubbs served as President of Lisa Motor Lines, Inc., our dedicated truckload subsidiary, from 1999 until 2006. He joined FFE Transportation Services, Inc., our primary operating subsidiary, in 1986 as a management trainee. Mr. Stubbs has significant experience in both our less-than-truckload (“LTL”) operations and truckload (“TL”) operations. While at Lisa Motor Lines, he oversaw the acquisition and consolidation of two separate companies, Middleton Transportation Company and Great Western Express. In 1996, Mr. Stubbs demonstrated the versatility of his talents by leading an eighteen month project to design, test and implement a new operating system for the company’s truckload operations. In 1999 Mr. Stubbs was asked to assume the position of President of Lisa Motor Lines with the goal to grow the Company and enhance profitability. Over the next several years, Lisa grew by thirty-three percent with steady margin improvement.

Through his twenty-five years of service to the Company, a complex temperature controlled transportation and logistics enterprise, Mr. Stubbs brings to the Board and the Company a unique comprehension of our strategies and operations. This understanding of transportation extends beyond the Company through his involvement in various state and national transportation organizations. Mr. Stubbs has served as Chair of the Texas Motor Transportation Association (TMTA), Chair of the TMTA Foundation and Chair of the Regulatory and Advisory Committee of the Truckload Carriers Association (TCA). Mr. Stubbs now serves on the Executive Committee and as an Officer of the TCA. He has also been very active in the American Trucking Association. In 2009, Mr. Stubbs was recognized with the Leadership Award by the TMTA. Mr. Stubbs has been a Board member of the Company for five years and graduated from Texas A&M University. He is the son of Stoney M. Stubbs, Jr., our non-executive Chairman of the Board since March 1, 2011, a Class III Director and a former Chief Execute Officer of the Company.

Director Continuing in Office — Class II (Term Ending 2012)

Brian R. Blackmarr, Director since 1990

Mr. Blackmarr, 69, has been President and Chief Executive Officer of Fusion Laboratories, Inc., an information technology services and proprietary software company, since January 2002. Mr. Blackmarr, a Registered Professional Engineer and Certified Arbitrator, is a widely known consultant in software and technical services. He has brought several software products to market and has conducted professional seminars on a variety of technical topics in five continents. Mr. Blackmarr founded B.R. Blackmarr and Associates, the predecessor to Fusion Laboratories, Inc. He has also served on the IT Advisory Council for Texas Tech University.

Mr. Blackmarr’s extensive technology experience has been beneficial in providing guidance to the Company and Board of Directors in information technology related matters as the transportation industry has become more dependent on technology to improve service and hold costs in check. His experience in marketing, product development and as a business founder and entrepreneur contributes greatly to corporate strategy and governance. Mr. Blackmarr has been a major contributor to the Board, and Company, for two decades. Mr. Blackmarr serves as the Chairman of our Compensation Committee and serves as a member of our NCGC. He is a graduate of The University of Texas at Austin, holding both a Bachelor of Science and a Masters of Science in Mechanical and Industrial Engineering.

W. Mike Baggett, Director since 1998

Mr. Baggett, 64, is Chairman Emeritus and Shareholder of Winstead PC, a Dallas-based business law firm of 300 lawyers, from 2006, and was their Chairman and Chief Executive Officer from 1992. He has successfully argued six published opinions of the Texas Supreme Court and has tried over fifty commercial claims at the trial level. Mr. Baggett is a well known author and lecturer before judicial conferences, bar associations, law schools, trade and industry groups. His expertise in law includes commercial and securities litigation, and he is Board Certified in Civil Trial Law.

His thirty-eight years of experience as an attorney for public and private entities provides valuable guidance to our Company and our Board of Directors in all aspects of corporate law, corporate governance and finance. Mr. Baggett’s almost thirteen years as a member of the Board allows him significant insight and experience to help shape the direction of the Company. Mr. Baggett serves as the Chairman of our NCGC and serves as a member of both our Audit Committee and Compensation Committee. Mr. Baggett is a graduate of Texas A&M University in accounting, and the Baylor School of Law, cum laude.

John T. Hickerson, Executive Vice President and Chief Operating Officer, Director since 2009

Mr. Hickerson, 59, has been our Executive Vice President and Chief Operating Officer since January 15, 2010 and previously served as Senior Vice President and Chief Marketing Officer of the Company beginning on February 25, 2009. Additionally, he served as Senior Vice President and Chief Marketing Officer of FFE Transportation Services since September 26, 2007 and as President of FFE Logistics, Inc. since January 15, 2007, both wholly-owned subsidiaries of the Company. From January 2006 until January 2007, Mr. Hickerson was Chairman and CEO of Pacer Transport, Inc. From January 2004 until November 2005, he was Vice President of Domestic Intermodal at Burlington Northern Sante Fe Railway. Mr. Hickerson’s experience also includes tenures at Con-Way Transportation Services as President of Con-Way Southern Express from 1989 through 2002 and as President of the Roadway Regional Group in 2003. He also served on the Board of Directors for Blue Wing Global Logistics in 2006 and 2007.

Mr. Hickerson brings over thirty-one years of diversified transportation experience to the Company and the Board of Directors. He has served as Chairman of the Texas Motor Transportation Association, as Texas State Vice President of the American Trucking Association, on the Board of Directors of the Texas Chamber of Commerce and is currently a member of the Texas Motor Transportation Association Executive Advisory Board. In addition, Mr. Hickerson’s extensive background in diversified transportation sales and operations gives him a unique perspective for his leadership position on the Board and in the Company. Mr. Hickerson graduated from Centenary College and received post graduate education through the UCLA Anderson School of Business and Columbia University’s Senior Executive Program.

Director Continuing in Office — Class III (Term Ending 2013)

Stoney M. Stubbs, Jr., Chief Executive Officer, Director since 1980

Mr. Stubbs, 74, has been our non-executive Chairman of the Board since March 1, 2011 and previously served as Chairman of the Board and Chief Executive Officer beginning on January 15, 2010. He previously served as Chairman of the Board, President and Chief Executive Officer since 1980. Mr. Stubbs joined the company in 1960 as a management trainee and subsequently advanced through the organization until ultimately being appointed to Chairman, President and Chief Executive Officer in 1980. Mr. Stubbs has extensive experience in the transportation industry, having served as Chairman of the Truckload Carriers Association and the Texas Motor Transportation Association. Mr. Stubbs continues to serve on the Board of Directors of the Truckload Carriers Association and the Advisory Committee for the Texas Motor Transportation Association, as well as serving as Vice President at large for the American Trucking Association. Mr. Stubbs has been honored with Leadership Awards from the Truckload Carrier Association and the Texas Motor Transportation Association.

Mr. Stubbs brings five decades of experience in the transportation industry, as an industry leader and served as our Chairman of the Board, President and Chief Executive Officer for over 30 years. Mr. Stubbs graduated from Texas A&M University and is the father of S. Russell Stubbs, our Chief Executive Officer, President and a Class I Director.

T. Michael O’Connor, Director since 1992

Mr. O’Connor, 56, is a fifth generation South Texas rancher, entrepreneur and businessman. He has been Chief Executive Officer of O’Connor Ranch, with interests in agriculture and energy, since 1990. He is currently serving as Sheriff of Victoria County Texas, since January 2005. Mr. O’Connor currently serves as President of the South Texas Coastal Sheriff’s Alliance consisting of twenty-four counties in South Texas. He is also Chairman of the Law Enforcement Alliance Project and a member of the Project Safe Neighborhood Task Force of the Southern District through the United States Attorney’s Office. Mr. O’Connor serves on the Ethics and Standards Committee of the National Sheriff’s Association. Mr. O’Connor is a former Vice Chairman of the Texas A&M University System Board of Regents and served on the Texas State Government Management Task Force. He was appointed to serve on the Texas Border Security Council by Governor Rick Perry in 2007, which advises on homeland security issues. He has more than thirty years experience in law enforcement and as a successful businessman.

Mr. O’Connor brings expertise in governance, leadership, safety, security and ethics to our Board. His knowledge and leadership in law enforcement and border security provides direction to the Company’s South Texas and border operations. Over the past thirty years, Mr. O’Connor has been actively involved in various businesses and agencies related to agriculture, banking, energy, higher education and law enforcement, which have allowed him to gain experience in the areas of enterprise restructuring, policy and procedures, budgeting, audit review, investments and acquisitions. Mr. O’Connor has over eighteen years of experience on our Board and has in-depth knowledge of the company’s operations and needs. Mr. O’Connor is also a member of our Audit Committee. Mr. O’Connor is a graduate of Texas A&M University.

Jerry T. Armstrong, Director since 2003

Mr. Armstrong, 72, has been Chairman, Chief Executive Officer and Director of Wind Associates, Inc., a private investment and management company, since 1997. From June 1988 to June 1997, Mr. Armstrong was Chairman, President and Chief Executive Officer of Merchants, Inc., and from February 1984 until June 1988, he was President and Chief Executive Officer of the Wedge Group, Inc., both parent corporations of diversified transportation companies. He also served on the Board of Directors of Landstar System, Inc. from March 1991 until May 1994. Over a forty-nine year career, Mr. Armstrong held chief executive positions with and served on the boards of ANR Freight Systems, Inc., Garrett Freight Lines, Inc., Riss International, Inc., Landair Corporation and Johnson Motor Lines, Inc., all transportation related companies.

His extensive career in transportation and leadership roles in large trucking entities provides Mr. Armstrong with the experience and wisdom to be an effective member of our Board of Directors. Mr. Armstrong serves as the Chair of our Audit Committee and is an Audit Committee financial expert. He is a graduate of the University of South Alabama and received post graduate education through the senior executive program at the Wharton School of Business at the University of Pennsylvania.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU

VOTE FOR THE ELECTION OF MESSRS. CLARK, KILPATRICK AND STUBBS

AS DIRECTORS

PROPOSAL 1 ON PROXY CARD.

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Compensation Philosophy, Strategy and Objectives

The principal objectives of our executive compensation programs are to attract, motivate and retain the services of executives who can lead the Company to achieve its business goals and deliver value for its shareholders. The Company’s business goals include consistently favorable financial performance, preservation of a strong balance sheet and strategic and opportunistic enhancement of our asset base, with a focus on long-term growth in profitability. Our Compensation Committee has established the following compensation philosophies in support of these objectives:

Aligning the interests of the executives and shareholders. We believe it is important to tie a substantial portion of each executive’s compensation to the market performance of our stock in order to closely align the interests of our executives with the interests of shareholders. For this reason, annual and long-term incentives, which are partially or fully based on our earnings, performance and stock appreciation, are significant components of compensation for each named executive officer (“NEO”).

Providing competitive performance-based compensation. We believe that our executive compensation program should reward executives when performance results meet or exceed stated financial goals. We annually evaluate the performance and effectiveness of each NEO and a substantial portion of each NEO’s compensation (including base salary) is contingent on our achieving short-term financial goals and increasing long-term value for our shareholders. We also periodically review long-term and currently-paid compensation of our NEOs relative to compensation trends and practices in general taking into consideration the economic conditions and other external events affecting our operations and levels of executive compensation of other comparable companies.

Our executive compensation programs were severely impacted during fiscal years 2010 and 2009, as our targets were not met, and no bonuses were paid to our NEOs. The majority of our revenues are produced by truckload and less-than truckload (“LTL”) services. In 2010, our truckload services suffered from a driver shortage in the marketplace and our inability to hire and retain a sufficient number of drivers to grow our fleet from the reduced level of the fourth quarter of 2009. The driver shortage impacting the company’s weekly average trucks in service by a shortage of 155 trucks compared to 2009. This negatively impacted total truckload revenue, which decreased $18.1 million, or 8.7%, to $188.9 million from $207.0 million in 2009. Our LTL services produced a 3.9% increase in shipments and a 1.1% increase in weight per shipment, total tonnage increased 5.0% allowing our LTL revenue to increase $1.4 million, or 1.3%, to $110.5 million from $109.1 million compared to 2009. The Company made extensive efforts to trim overhead costs, improve capacity utilization and support pricing initiatives. While many of these efforts were successful throughout the year, some of these initiatives will not be realized until the economy further stabilizes.

Despite the economic challenges facing the economy and the industry in which the Company operates, the Compensation Committee believes fiscal year 2010 showed significant improvement. Among the Company’s successes and accomplishments during 2010 were the following:

·	improved our net loss 27.3 % to $11.9 million compared to $16.4 million in 2009;
·	increased average revenue per truck 3% to 3,221 compared to 3,129 in 2009;
·	decreased operating expenses 2.9% to $386.5 million compared to $398.0 million in 2009;
·	increased less-than-truckload revenue $1.4 million, or 1.3%, to $110.5 million from $109.1 million in 2009 due a 3.9% increase in shipments, a 1.1% increase in weight per shipment and a 5.0% increase in total tonnage;
·	received the highest safety rating available from the Department of Transportation’s on-site audit of our safety rules and procedures; and
·	the opening of the FFE Driver Academy in Fort Worth, TX on January 31, 2011 to improve our ability to add drivers in 2011 and beyond.

2010 Compensation Decisions

During 2010, the Compensation Committee with the assistance of PricewaterhouseCoopers LLP (“PwC”) completed a comprehensive review and analysis of NEO’s compensation and board compensation. It included salary, annual incentive bonus and long-term incentive recommendations for our NEO’s during a three year succession process, which began in 2010, where Stoney M. Stubbs, Jr., Chairman of the Board (“Chairman”) and Chief Executive Officer (“CEO”) would assume the role of non-employee Chairman and S. Russell Stubbs would assume the role of CEO and President, which resulted in the following recommendations that were approved by the Board of Directors:

·	The continuation of the existing compensation package, with no adjustments, for Stoney M. Stubbs, Jr. for the remainder of fiscal year 2010.
·	Effective July 1, 2010, the annual salaries of S. Russell Stubbs, John T. Hickerson and John R. McManama will be $315,000, $300,000, and $225,000, respectively. For further discussion see “—Base Salary” on page 23 of this proxy statement.
·	A one-time 2010 promotion bonus granted in restricted stock to S. Russell Stubbs, John T. Hickerson and John R. McManama in the amount of 17,500, 12,100 and 8,200 shares, respectively, to be vested over a 3-year period (1/3 per year). For further discussion see “—Long-term Incentive Compensation and Other Share-Based Payments on page 25 of this proxy statement.
·	The NEO’s Annual Incentive (“AI”) bonus paid under the Amended 2005 Executive Cash Bonus Plan (“the 2005 Executive Cash Bonus Plan”) for participants S. Russell Stubbs (President), John T. Hickerson (COO) and John R. McManama (CFO) will be based on performance and be paid in cash. The basis for this AI bonus will be the Company’s pretax income. For example, the AI bonus payable if $1 million pre-tax income was achieved in 2010 for S. Russell Stubbs would be his base salary of $291,344 (see “—2010 Summary Compensation Table” on page 30 of this proxy statement) times the Participant’s Percentage Payout of 70% from the below table, resulting in an AI bonus of $203,941. The 2005 Executive Cash Bonus Plan’s provisions continue the long-standing Company policy that no AI bonus will be paid to NEOs in the event of negative pretax annual earnings; therefore, there were no AI bonuses paid for 2010. The AI bonus schedule is as follows:

		Participant's
		Percentage Payout (2)
	Pre-tax Income(1)	President	COO	CFO
	$0	58.3%	50.0%	41.7%
Target	$1,000,0000	70.0%	60.0%	50.0%
	$2,000,0000	81.7%	70.0%	58.3%
	$3,000,0000	93.3%	80.0%	66.7%
	$4,000,0000	105.0%	90.0%	75.0%
	$5,000,0000	116.7%	100.0%	83.3%

(1)	Pre-tax income is net of AI bonus.
(2)	AI Bonuses’ are a percent of the respective participant’s current annual salary and participant’s earned bonus percentage shall be extrapolated between the established target levels.

·	The NEO’s Long-Term Incentive (“LTI”) bonus payable under the Company’s Amended and Restated 2005 Stock Incentive Plan (the “2005 Stock Incentive Plan”) will be made in restricted stock with one half of the amount to be guaranteed and vested over a three year period and one half to be vested conditionally over a three year period based on achieving a diluted earnings per share (“DEPS”) goal relative to the defined peer group (see “—Competitive Market” below for the companies comprising the defined peer group). Diluted earnings per share is computed by dividing net income by the sum of the weighted average number of common shares outstanding plus all additional common shares that would have been outstanding if potentially dilutive common shares related to stock options and other dilutive securities had been issued.
·	The total 2010 LTI granted to S. Russell Stubbs, John T. Hickerson and John R. McManama is 48,200, 33,500 and 22,600 shares, respectively. For further discussion see “—Long-term Incentive Compensation and Other Share-Based Payments” on page 25 of this proxy statement.
·	The Company’s non-employee Directors’ compensation was modified July 1, 2010, as recommended by PwC. For further discussion see “—2010 Director Compensation Table” on page 35 of this proxy statement.

The annual salaries for S. Russell Stubbs, John T. Hickerson and John R. McManama were increased to $365,000, $330,000 and $247,500, respectively, effective January 1, 2011. For further discussion see “—Committee Decisions on Executive Officer Compensation for 2011” on page 27 of this proxy statement.

Competitive Market

We periodically benchmark NEO compensation to ensure that the compensation paid to our NEOs is reasonable and competitive. Our philosophy is to target NEOs compensation at approximately the 50th percentile (median) range of our competitive market group as defined below. In 2010, PwC completed a review and analysis of compensation of our top four executives as compared to several peer companies’ executives holding equivalent positions or having similar responsibilities as our NEOs.

The peer companies utilized in the 2010 analysis are engaged in similar lines of business as we are and are of similar size as measured by revenue, market capitalization, total assets and number of employees. The peer group was approved by our Compensation Committee and consisted of the following ten companies:

·	Celadon Group Inc.	·	Quality Distribution Inc.
·	Covenant Transportation Group Inc.	·	SAIA Inc.
·	Knight Transportation Inc.	·	Universal Truckload Services
·	Marten Transport Ltd.	·	U.S.A. Truck Inc
·	P.A.M. Transportation Services Inc	·	Vitran Corporation

We analyzed our CEO and CFO compensation (overall, base salary, annual incentive and long-term incentives) relative to the 50th percentile, or median, of the peer group benchmark data. We targeted our COO compensation between the 50th percentile and the 75th percentile. Because of the changes in our management structure, our COO position responsibilities are much broader than a benchmark COO.

While we use the data to ensure competitiveness and reasonableness, we usually do not rely solely on benchmarking in establishing executive compensation levels. However due to the change in management structure, we relied almost exclusively on PwC’s study recommendations to align NEOs compensation in 2010. For additional information regarding the recommendations from PwC see “—2010 Compensation Decisions.”

Subsequent to the end of our 2010 fiscal year, S. Russell Stubbs and John T. Hickerson transitioned to higher level positions within our Company, assuming the job responsibilities of CEO and President and Executive Vice President, Chief Operating Officer, respectively.

Role of the Compensation Committee

Our Compensation Committee operates independently of management and currently consists of three Directors, all of whom are independent under applicable NASDAQ and SEC standards. The Compensation Committee receives recommendations from our CEO regarding the compensation of NEOs (other than the CEO).

The Committee consists of Brian Blackmarr (Chairman), W. Mike Baggett, and Kevin K. Kilpatrick. Our Board determined that each member of the Compensation Committee is an “Outside Director” for purposes of Section 162(m) of the Internal Revenue Code of 1986 (the “Code”). The Compensation Committee is responsible for establishing and administering our executive compensation plans as well as continually monitoring the adherence to and effectiveness of those plans, including:

·	reviewing the structure and competitiveness of our executive compensation programs to attract and retain superior executive officers, motivate executive officers to achieve business goals and objectives, and align the interests of executive officers with the long-term interests of our shareholders;
·	reviewing and evaluating annually the performance of executive officers in light of our goals and objectives and approving their compensation packages, including base salaries, annual incentive and stock based compensation and perquisites;
·	monitoring the effectiveness of our equity-based and incentive bonus plans and approving annual financial targets for executive officers and other employees bonuses;

·	determining whether to award incentive bonuses that qualify as “performance-based compensation” for executive officers whose compensation is covered by Code Section 162(m), the elements of such compensation, whether performance goals have been attained and, if appropriate, certifying in writing prior to payment of such compensation that the performance goals have been met;
·	reviewing and evaluating periodically the adequacy of compensation for our independent Directors; and
·	administering our equity compensation plan for our independent Directors.

Role of Management

We believe that it is important to have our CEO’s input in the design of compensation programs for his direct reports. The CEO reviews his direct reports’ compensation programs annually with the Compensation Committee, recommending adjustments based on marketplace trends, inflation, internal equity, external competitiveness, business and motivational challenges and opportunities facing the Company and its executives. In particular, he considers base salary a critical component of compensation to remain competitive and retain his executives, especially when market factors, such as freight demand, lag behind supply of industry-wide capacity and pre-established goals for an annual incentive bonus have not been attained for several years. All final decisions regarding compensation for the CEO’s direct reports listed in the Summary Compensation Table are made by the Compensation Committee.

The CEO does not make recommendations with regard to his own compensation. The Compensation Committee is solely responsible for making recommendations to the Board of Directors with respect to CEO compensation.

Role of the Compensation Consultant

An independent review of our NEO’s compensation and outside Director’s compensation was performed by PwC beginning in March 2010. For additional information regarding the recommendations from PwC, see “—2010 Compensation Decisions.” PwC also provides tax services to the Company. They are financially independent with over 5,000 HR practitioners in their firm and are not dependent on fees provided by the Company for tax services. PwC’s compensation team does not receive any revenue from other services PwC provides to the Company, and they do not consult with other PwC staff serving the Company on other projects; therefore fees paid for tax services do not affect real or perceived professional independence in this compensation project. In 2010, payments to PwC for compensation consulting did not exceed $120,000. Their review included a proxy analysis of the peer group companies (identified on page 22). The report included an analysis of base salary, annual incentive (structure and payouts), and long term incentives (structure and payouts). We relied almost exclusively on PwC’s study recommendations to align NEOs compensation in 2010 because of the change in our management structure.

Executive Compensation Components

For 2010, the principal components of compensation for each NEO were:

·	base salary;
·	annual cash incentive;
·	long-term incentive compensation (restricted stock awards); and
·	perquisites and other benefits.

We endeavor to strike an appropriate balance between these principal components for purposes of allocating between long-term and currently-paid compensation. Such determinations are made by reference to compensation trends and practices in general, and by reference to the Defined Peer Group in particular. The annual cash incentive is based on the Company’s performance as measured by pre-tax income and long-term incentive compensation is based on an annual calculation of the Company’s DEPS versus the DEPS of the Defined Peer Group.

Base Salary

Base salary is considered a critical component of compensation at all levels. The appropriate establishment of this component relative to the marketplace is essential to enable us to attract and retain qualified individuals, which is critical in the current competitive industry market. Base salaries provide a stable source of income regardless of stock price performance so that our NEOs can focus on a variety of important business metrics in addition to our stock price.

The annual salaries paid to our NEOs are set based on the assessment of each executive’s overall contribution to the achievement of our business objectives, respective responsibilities, longevity with the Company as well as comparisons to comparable positions in peer group companies as provided periodically by an external market study.

We implemented a three year succession plan in 2010 to transition Stoney M. Stubbs, Jr. to the position of non-employee Chairman of the Board, S. Russell Stubbs to the position of Chief Executive Officer and President, and John T. Hickerson to the position of Executive Vice President and Chief Operating Officer (“COO”). On January 10, 2010, S. Russell Stubbs was promoted to President and John T. Hickerson was promoted to Executive Vice President and COO. On May 19, 2010, John R. McManama assumed the role of Senior Vice President and Chief Financial Officer (“CFO”). Their salaries were not adjusted until our executive compensation review was completed by PwC. Effective July 1, 2010, the annual base salaries of S. Russell Stubbs, John T. Hickerson and John R. McManama were increased to $315,000, $300,000 and $225,000, respectively. The annual base salary for Stoney M. Stubbs, Jr. remained the same in 2010 as his responsibilities were transitioned to S. Russell Stubbs and John T. Hickerson. The annual base salaries of S. Russell Stubbs and John T. Hickerson were increased to reflect the changes in their responsibilities due to the retirement of Stoney M. Stubbs, Jr. John R. McManama’s annual salary was increased because he assumed increased responsibilities associated with his promotion to CFO. These amounts were recommended by PwC as a result of their compensation study and were approved by the Compensation Committee and the Board of Directors.

Annual Incentive Compensation

In February 2009, the Compensation Committee recommended, and the Board of Directors approved, the terms of the FFE Transportation Services, Inc. Amended 2005 Executive Incentive Bonus and Restricted Stock Plan (the “Executive Plan”). For fiscal year 2010, the Compensation Committee recommended, and the Board of Directors approved, that the compensation to Stoney M. Stubbs Jr. remain unchanged. In such, the Executive Plan, which was terminated on December 30, 2010 provided incentive bonus opportunities for Stoney M. Stubbs Jr. based upon pre-established pre-tax income levels. Pre-tax income is equal to total revenues less total operating expenses including interest income, gains (losses) from the sale of equipment and other non-operating expenses for Company. Pre-tax income may be adjusted by the Committee for such specific items, if any, that the Compensation Committee in its sole discretion deems appropriate.

The Executive Plan provided Stoney M. Stubbs, Jr. a maximum annual cash bonus opportunity that is equal to 125% of base salary, a holiday bonus (one-week base salary) and an automobile allowance ($6,000). The earned bonus percentage is extrapolated between the established target levels. For example, if pre-tax income is $2,000,000, which falls between the $1,500,000 and $3,000,000 pre-tax income targets and 15% and 30% bonus percentages, respectively, 20% is the extrapolated bonus percentage. The $2,000,000 is 2/3 ($2,000,000 divided by $3,000,000) of the next pre-tax income target and 2/3 of the next bonus percentage or 20% (2/3 times 30%).

The following table sets forth the applicable pre-tax income targets and various cash award payout levels for 2010:

	Pre-tax Income	Participant’s Bonus Percentage
	$1,500,000	15%
	$3,000,000	30%
	$5,000,000	50%
	$7,500,000	70%
	$10,000,000	80%
	$12,500,000	90%
	$13,100,000	100%
	$14,000,000 or greater	125%

In addition to the cash award, the Executive Plan grants shares of restricted stock valued at 50% of the dollar amount of Stoney M. Stubbs, Jr.’s cash award, based upon the lower of (i) the closing sales price of our common stock on the last business day of the fiscal year immediately preceding the fiscal year for which the bonus is awarded or (ii) the average of the closing sales price of our common stock as of the last business day of each month during the year for which the bonus is awarded. For example, if the cash award was $100,000 and the company’s per share stock price was $10.00 (the lower of (i) and (ii) above) then the restricted stock award is 5,000 shares ($100,000 cash award times 50% restricted stock value divided by $10 the per share stock price). The restricted stock awards vest over a three-year period, one-third on each anniversary of the date granted. Pre-tax income targets were not met in 2010 and no bonuses were awarded to Stoney M. Stubbs, Jr. under the Executive Plan in 2010.

A new Annual Incentive (AI) bonus paid under the Amended 2005 Executive Cash Bonus Plan was approved for S. Russell Stubbs, John T. Hickerson and John R. McManama for 2010. It entitles each such NEO to an incentive bonus calculated pursuant to a formula determined on the basis of such NEO’s pre-tax income targets and specified percentages of such NEO’s compensation, if the Committee certifies that the applicable target has been obtained. The targets and percentages for S. Russell Stubbs, John T. Hickerson and John R. McManama see the “—2010 Compensation Decisions” on page 21 of this proxy statement. Pre-tax income targets were not met in 2010, and no bonuses were awarded to S. Russell Stubbs, John T. Hickerson and John R. McManama under the Amended 2005 Executive Cash Bonus Plan.

All of our NEOs also participate, along with all our FFE employees, in the FFE Transportation Services, Inc. 1994 Incentive Bonus Plan (the "Incentive Plan") through which the Compensation Committee awards annual cash bonuses, not to exceed three weeks of base pay, based upon a formula giving effect to the efficiencies of operation as evidenced by the operating ratio of FFE. The operating ratio means the percentage of FFE’s adjusted operating expenses to its operating revenues for the applicable fiscal year. The operating ratio is a measure utilized across our industry to indicate the operational efficiency of a company. The Incentive Plan was approved by our shareholders effective April 22, 1999. Operating ratio targets were not met in 2010 and no bonuses were awarded under the Incentive Plan.

In addition, to the above annual incentive plans, we have the Frozen Food Express Industries, Inc. Discretionary Bonus Plan (the "Discretionary Plan"). The Discretionary Plan was approved by the Board of Directors to reward our NEO’s for exceptional performance even when targets were not met due to external factors that affect our industry such as an economic recession, severe weather and rapid increases in the cost of fuel and insurance. The Discretionary Plan entitles each of our NEOs to a discretionary bonus up to an amount equal to 100% of their respective base compensation, commencing with fiscal year 2009 and each subsequent fiscal year, as the Compensation Committee deems appropriate. During 2010, the Compensation Committee did not award our NEOs a discretionary bonus.

Long-Term Incentive Compensation and Other Share-Based Payments

An additional longstanding objective of our Compensation Committee has been to motivate, reward and retain our NEOs by means of equity compensation. Because the value of equity awards over time is wholly dependent on our stock price, we believe equity awards represent a meaningful incentive for each NEO to create long-term value for our shareholders. This approach is in keeping with our overall compensation philosophy of granting equity awards to key personnel in an effort to instill shareholder perspective and values in their performance and to provide a strong retention element in compensation. Both stock options and restricted stock grants can be used to motivate, reward and retain our executive officers and management employees through potential share value appreciation and equity accumulation. Although equity accumulation is generally encouraged, we do not have any specific security ownership requirements or guidelines for our NEOs.

The 2005 Stock Incentive Plan encourages participants to focus on our long-term performance and provides an opportunity for each NEO and other key personnel to be aligned with shareholders through grants of stock options or restricted stock. Under the 2005 Stock Incentive Plan, discretionary equity awards are considered periodically by our Compensation Committee. In determining the awards, the Compensation Committee considers the level of individual contributions, the impact of such contributions on long-term shareholder value and the need to provide a strong retentive component in NEO and key employee compensation.

In 2005, we introduced performance-based restricted stock awards concurrent with our adoption of Financial Accounting Standards Board Statement No. 123R, which changed the way we account for new grants of stock options. Although vesting of our restricted stock awards are determined by the Committee, the majority of the awards granted vest ratably over a five year period beginning on the first anniversary of the date of grant. Restricted stock is awarded to NEOs under the Executive Plan. In addition, restricted stock is awarded to attract, motivate and retain our key employees. We believe these performance-based restricted stock awards further align the NEO’s compensation program with the interests of our shareholders.

On August 18, 2010, we granted a one-time promotion bonus in restricted stock to each of S. Russell Stubbs, John T. Hickerson and John R. McManama for 17,500, 12,100 and 8,200 shares, respectively, to be vested over a 3-year period (1/3 per year). The fair value at date of the grant of the restricted stock awards to each of S. Russell Stubbs, John T. Hickerson and John R. McManama was $52,675, $36,421 and $24,682, respectively. Each of Messrs. Stubbs, Hickerson and McManama received promotions in 2010, and we delayed changing any of their compensation until the PwC study was completed. This restricted stock award was recommended by PwC and made in conjunction with their annual salary increases to compensate them for their increased responsibilities resulting from the change in our management structure.

On August 18, 2010, the Compensation Committee recommended, and our Board of Directors approved, a bonus payable under the 2005 Stock Incentive Plan in restricted stock with one half of the amount to be guaranteed and vest over a 3-year period and one-half to be performance based and defined as (Target) shares to be vested conditionally over a three year period based on achieving a DEPS goal relative to the Defined Peer Group. The total 2010 LTI shares of restricted stock awarded to each of S. Russell Stubbs, John T. Hickerson and John R. McManama was 48,200, 33,500 and 22,600 shares, respectively. These amounts were recommended by PwC as a result of their compensation study and approved by the Compensation Committee and the Board of Directors.

The percentage of Target Shares awarded under the LTI bonus will be based on an annual calculation of the Company’s DEPS versus the DEPS of the defined peer group. The basis for the number of shares of the restricted stock award will be as follows (1) 100% of Target Shares upon reaching the median of the defined peer group DEPS for the year (2) 50% of Target Shares upon reaching the 25th percentile of the defined peer group DEPS and (3) 150% of Target Shares upon reaching the 75th percentile of the defined peer group DEPS. The NEO’s LTI bonus of shares of restricted stock will be prorated for achieving a DEPS falling within the 50% to 150% of the Target share range. There will be no LTI bonus of restricted stock awarded below the 25th percentile and the LTI bonus of shares of restricted stock will not exceed 150% of the Target shares. If performance goals are not achieved in the specified period, restricted stock not earned in that period will no longer be available.

Perquisites and Other Benefits

Perquisites. Our Compensation Committee has determined that perquisites provided to our NEO’s should be limited. In line with our compensation philosophy and aligned with our shareholder interests, our NEOs are offered few benefits that are not otherwise available to all of our employees. Our perquisites include:

·	supplemental medical coverage;
·	automobile allowance;
·	club membership dues;
·	travel and lodging for spouses of NEOs attending company or industry events;
·	personal use of company-provided cellular phones; and
·	tax gross-ups for taxable perquisites.

Other Benefits. We provide the executives with various benefits that are generally available on the same cost-sharing basis to many employees of the Company. These benefits include:

·	medical, dental and vision insurance;
·	group life insurance;
·	short-term disability insurance;
·	long-term disability insurance;
·	tuition reimbursement; and
·	Employee Assistance Program.

In addition to the above benefits, each NEO is eligible to participate in the FFE Transportation Services Restated Wrap Plan (the "Wrap Plan"), which is an unfunded deferred compensation arrangement not subject to the annual reporting and disclosure requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"). The assets and liabilities of the Wrap Plan are contained in a Rabbi Trust. The Wrap Plan mirrors our 401(k) Plan and is designed to defer taxation of retirement benefits that exceed limits established by the ERISA discrimination rules for our highly compensated employees. At the end of each year, to the extent that our highly compensated employees’ contributions and our matching contributions are allowed by ERISA in the 401(k) Plan, applicable Wrap Plan assets are transferred to the 401(k) Plan while the excess remains in the Wrap Plan. Our match was suspended on April 6, 2009 and previously was limited to 25% of the employees’ contribution, not to exceed 1% of compensation for both the Wrap Plan and the 401(k) Plan.

Both the employee and employer Wrap Plan contributions are directed by the NEOs and may be invested in either our stock or alternative investments at the election of the participant.

Stoney M. Stubbs, Jr. is also a participant in the 1999 Executive Bonus and Phantom Stock Plan, which was replaced by the Executive Plan and the 1993 Supplemental Executive Retirement Plan (collectively, the "Retirement Plans"), which was replaced by the Wrap Plan. These Retirement Plans are also unfunded deferred compensation arrangements not subject to the annual reporting and disclosure requirements of ERISA. The Retirement Plans’ value is based on the number of phantom shares in the Retirement Plans multiplied by our stock price. These Retirement Plans are closed to new participants and our contributions are limited to equivalent phantom shares in lieu of any cash dividends.

Other Compensation Considerations

Deductibility of Executive Compensation. Section 162(m) of the Code, generally disallows a tax deduction to publicly-owned companies for compensation over $1 million paid individually to chief executive officers and the three other most highly-compensated officers, unless such compensation meets certain specific requirements. Awards paid under our Discretionary Plan may not meet these specific requirements under Section 162(m). None of our NEOs’ compensation paid during 2010 exceeded $1 million. The Compensation Committee determines that all bonuses paid pursuant to the Executive Plan shall be exempt from the limitation set forth in Section 162(m) of the Code.

Split Dollar Agreement. We previously entered into a Split Dollar Agreement (the "Split Agreement") with the Stubbs Irrevocable 1995 Trust (the “Trust”) for the benefit of Stoney M. Stubbs, Jr., our non-executive Chairman and former Chief Executive Officer. Under the Split Agreement, we agreed to make premium payments for a split dollar life insurance policy, and the Trust agreed to repay such premiums on the earlier of surrender or cancellation of each policy for its cash value or upon payment of a death benefit. Due to changes in the law, accounting rules and other pertinent factors, during 2002, our Board terminated such obligation to pay premiums beyond 2002, but retained our right to recover the premiums that were paid at that time. Payments that we made for the benefit of Mr. Stubbs Jr. to compensate him for adverse consequences resulting from the revised arrangement for fiscal year 2010 are $45,717 and included in the Salary column in the “2010 Summary Compensation Table” on page 30 of this proxy statement.

Committee Decisions on Executive Officer Compensation for 2011

The comprehensive review and analysis of NEO’s compensation by PwC completed in 2010 included a potential 3-year succession process where Stoney M. Stubbs, Jr., Chairman of the Board and Chief Executive Officer during 2010, would assume the role of non-employee Chairman and S. Russell Stubbs would assume the role of Chief Executive Officer and President. This resulted in the following recommendations to the Board of Directors:

·	Annual salaries for each of S. Russell Stubbs, John T. Hickerson and John R. McManama of $365,000, $330,000 and $247,500, respectively, were approved effective January 1, 2011. S. Russell Stubbs annual salary increase resulted from the PwC study, which aligned his compensation as CEO and President at the 50th percentile range of our defined peer group. John T. Hickerson and John R. McManama each received a 10% increase in annual salaries for their continued performance in restoring the company to profitability.
·	Total LTI restricted stock awards in 2011 for each of S. Russell Stubbs, John T. Hickerson and John R. McManama of 46,200, 40,600 and 21,700 shares, respectively were approved on February 23, 2011 by the Compensation Committee and our Board.
·	Effective with Stoney M. Stubbs, Jr’s. retirement from the Company on March 1, 2011, we approved an annual Board retainer to him as Chairman of the Board of $100,000, an annual award of shares of restricted stock equivalent to $50,000 per year that vest over a three year period (1/3 per year), $1,000 per Board meeting attended and $750 per telephonic meeting attended.

Change in Control Agreements

In June 2000, our Board approved a change in control program for our NEOs, non-executive officers and certain other corporate employees. The Board based its approval on the recommendation of our Compensation Committee. Our recommendation was based, in part, on consultations with third-party consultants, and was not in anticipation of, or in response to, any particular transaction or process.

We have entered into Amended and Restated Change in Control Agreements (the "Control Agreements") with our NEOs, as well as with certain other officers of our operating divisions and subsidiaries. All Control Agreements are substantially in the same form and provide that NEO parties thereto are entitled to receive payments if their employment is terminated without cause or if they resign with good reason within specified periods following the occurrence of certain events deemed to involve a change in control of the Company (as described in the Control Agreements). Each Control Agreement provides for a lump sum payment and continuation of benefits in case of (but not limited to) an involuntary termination without cause or for good reason. Section 280G of the Code disallows a deduction by the employer for certain compensation paid upon a change in control. Based on estimated change in control payments that would have been made had a change in control occurred on December 31, 2010, all NEOs would have certain amounts disallowed for deduction by us.

The Control Agreements provide that if a NEO party thereto:

(i)	is terminated by the Company without cause during the six-month transition period following a change in control;
(ii)	resigns for “good reason” (as defined in the Control Agreements) during the transition period; or
(iii)	resigns for any reason during the ten day period following a change in control or during the thirty day period following the transition period;

the Company is required to provide the NEO with certain payments and benefits, including:

	(a)	payment of accrued and unpaid base salary, car allowance and holiday bonus at the date of termination plus accrued and unpaid bonus, if any, for the prior fiscal year plus pro-rata Bonus for the current year. The Bonus is an amount equal to ninety percent (90%) of base pay for the year of termination of employment plus an amount equal to the Incentive Bonus Plan’s (as defined in the Control Agreements) total incentive bonus payable under the plan for the year of termination of employment;
	(b)	payment of a lump sum amount equal to the sum of 2.9 times the executive officer’s annual pay, which is the sum of an amount equal to the sum of the annual base salary at the time of Change in Control, the current annual car allowance and holiday bonus plus an amount equal to the bonus as defined above;
	(c)	payment of the unvested account balance under the Company’s 401(k) Plan and Wrap Plan;
	(d)	continued participation, at the same premium rate charged when actively employed, in the Company’s employee welfare plans, until the expiration of two years following the change in control or payment of the cash equivalent;
	(e)	vesting of all restricted stock and stock options on change of control;
	(f)	"gross-up" payments, if applicable, in the amount necessary to satisfy any excise tax imposed on the NEO by the Code; and
	(g)	continuation of medical and life insurance benefits, or cash equal to premiums for the same periods as the severance multiple.

The Control Agreements also provide for certain restrictions for NEOs in connection with payments under the Control Agreements, consisting, among others, of (i) a covenant not to compete against the Company for a one year period and (ii) a covenant not to solicit Company employees for a two year period following the NEO’s termination of employment.

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

The Compensation Committee of the Board of Directors has reviewed and discussed the preceding section of this proxy statement entitled "Compensation Discussion and Analysis" with management. Based on this review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2010.

/s/ Brian Blackmarr (Chairman)

/s/ W. Mike Baggett

/s/ Kevin Kilpatrick

The Compensation Committee Report and references to the independence of Directors, are not deemed to be "soliciting material" or "filed" with the SEC, are not subject to the liabilities of Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any of the filings made previously or in the future by our Company under the Exchange Act or the Securities Act of 1933 (except to the extent we specifically incorporate any such information into a document that is filed).

EXECUTIVE COMPENSATION

2010 Summary Compensation Table

Set forth below is information with respect to the compensation paid by us for services rendered during 2010, 2009 and 2008 to each NEO. NEOs that also serve on our Board of Directors receive no additional compensation for that service.

Name and Principal Position	Year	Salary(1)		Bonus(2)		Stock Awards (3)		Non-Equity Incentive Plan Compen-sation (4)		All Other Compen-sation (7)		Total
Stoney M. Stubbs, Jr. (5)	2010	$	408,766	$	3,930	$	-	$	-	$	12,462	$	425,158
Chairman	2009		408,764		7,861		178,000		-		22,021		616,646
Chief Executive Officer (until March 1, 2011)	2008		396,718		7,347		-		-		30,891		434,956

S. Russell Stubbs	2010		291,344		3,029		125,216		-		21,207		440,796
President	2009		267,322		5,141		178,000		-		23,766		474,229
Chief Executive Officer (since March 1, 2011)	2008		254,683		4,716		-		-		25,083		284,482

John T. Hickerson	2010		278,248		2,885		86,839		-		31,479		399,451
Executive Vice President	2009		260,016		4,926		260,800		-		28,362		554,104
Chief Operating Officer

John R. McManama (6)	2010		207,633		2,163		58,695		-		6,829		275,320
Senior Vice President	2009		151,596		10,654		17,800		-		12,656		192,706
Chief Financial Officer

(1)	Amounts in this column are 26 bi-weekly payrolls, except 27 bi-weekly payrolls in 2008. See “Compensation Discussion and Analysis – Committee Decisions on Executive Compensation for 2010” for information relating to salary increases. The Salary listed for Stoney M. Stubbs, Jr. also includes $45,717 paid to him to compensate him for adverse consequences resulting from a revised arrangement regarding the Split Dollar Agreement. See "Compensation Discussion and Analysis – Other Compensation Considerations – Split Dollar Agreement" for additional information.
(2)	Amounts in this column are Christmas Bonuses equal to one-half week’s salary in 2010 and one-week’s salary in 2009 and 2008. The amount for Mr. McManama includes a $7,000 guaranteed bonus earned in 2008 and paid in 2009.
(3)	With the exception of ignoring the impact of the forfeiture rate relating to service based vesting conditions; these amounts represent the aggregate grant date fair value of restricted stock units for 2010, 2009 and 2008, respectively. These amounts do not represent the actual amounts paid to or realized by the NEO for these awards during 2010, 2009 or 2008. The value as of the grant date for restricted stock units is recognized over the number of days of service required for the grant to become vested.
(4)	Amounts shown in this column represent bonuses relating to performance paid out to our NEOs under the Executive Plan.
(5)	Mr. Stoney M. Stubbs, Jr. retired as Chief Executive Officer effective at the end of day February 28, 2011. Mr. Stubbs remains on the Company’s Board of Directors, continuing his role as Chairman of the Board. Mr. Stubbs has been replaced as Chief Executive Officer by S. Russell Stubbs, who has also retained his position as President of the Company.
(6)	Mr. John R. McManama was elected Senior Vice President and Chief Financial Officer and Treasurer, effective May 19, 2010, after serving as the Company’s Interim Chief Financial Officer since November 6, 2009.
(7)	Amounts shown in this column include the following benefits.

2010 All Other Compensation Table

Name		Supple-mental Medical (a)		401(k) Wrap Company Match (b)		Personal Financial Services (c)		Spouse Travel (d)		Car Allow-ance		Club Dues		Company Paid Services (e)			Total
Stoney M. Stubbs, Jr.	2010	$	4,986	$	-	$	-	$	-	$	6,000	$	1,325	$	151	$	12,462
	2009		8,443		958		4,136		-		6,000		2,238		246		22,021
	2008		8,358		2,300		10,164		985		6,000		2,814		270		30,891

S. Russell Stubbs	2010		9,236		-		-		4,430		6,000		1,325		216		21,207
	2009		11,571		632		2,734		2,049		6,000		-		780		23,766
	2008		7,573		2,300		8,520		-		6,000		-		690		25,083

John T. Hickerson	2010		13,433		-		-		2,875		6,000		8,955		216		31,479
	2009		11,418		645		-		2,065		6,000		7,485		750		28,363

John R. McManama	2010		685		-		-		-		6,000		-		144		6,829
	2009		5,778		416		-		-		6,000		-		462		12,656

(a)	We maintain an Exec-U-Care Medical Reimbursement Plan, which provides additional health insurance protection for certain of our key employees, in addition to the group health and life insurance policies provided to all employees.
(b)	Our matching contribution was suspended on April 6, 2009. Previously, it was equal to 25% of the executive contribution each pay period up to a maximum of 1% of executive salary. Executive contributions are limited to the annual 401(k) elective deferral limit, as defined by the associated plan.
(c)	Represents the value of certain tax and other professional services performed for the personal benefit of Stoney. M. Stubbs Jr. and R. Russell Stubbs by a member of our finance staff. Also included are payments to third parties for various professional services and computer software used in connection with such services. This allocation was based on the amount of time the member of our finance staff spent on providing these services relative to his annual base salary. These services ceased in February 2009 and will no longer be provided to any executive officer of the Company.
(d)	Spouse travel and related gross up of taxes when applicable for business purposes.
(e)	Personal use of company provided cell phones.

2010 Grants of Plan-Based Awards Table

The following table provides the maximum bonuses payable in cash and Restricted Stock under the Executive Plan and the Incentive Plan. For additional information regarding the Executive Plan and the Incentive Plan, see “Compensation Discussion and Analysis – Executive Compensation Components - Annual Incentive Compensation” on page 24. There were no payouts under the Executive Plan or the Incentive Plan based on to our 2010 performance.

	Grant	Estimated Future Payouts Under Non-Equity Incentive Plan Awards						Estimated Future Payouts Under Equity Incentive Plan Awards						All Other Stock Awards: Number of Shares of Stock or		Grant Date Fair Value of Stock
Name	Date	Threshold		Target (2)		Maximum		Threshold		Target (3)		Maximum		Units (3)		Awards
Stoney M. Stubbs, Jr.(1)	1/01/2010	$	-	$	125,609	$	546,954		-		19,032		79,299		-	$	-

S. Russell Stubbs	1/01/2010		-		271,824		373,794		-		24,100		36,150		41,600		125,216

John T. Hickerson	1/01/2010		-		222,598		306,073		-		16,750		25,125		28,850		86,839

John R. McManama	1/01/2010		-		138,491		190,400		-		11,300		16,950		19,500		58,695

(1)	Stoney M. Stubbs, Jr. participated in the Executive Plan and target share amounts are 30% of the total sum of salary, Christmas bonus and car allowance based on 2008 performance because the target amounts are not determinable.
(2)	S. Russell Stubbs, John T. Hickerson and John R. McManama participate in the Amended 2005 Executive Cash Bonus Plan and target amounts are 93.3%, 80.0% and 66.7%, respectively, of salary based on 2008 performance because the target amounts are not determinable.
(3)	Includes time based annual long-term incentive awards and a one-time grant of restricted stock that each vest over three years (1/3 per year) as follows:

Name	Long-Term Incentive Grant	One-Time Promotion Grant		Total
S. Russell Stubbs	24,100		17,500	41,600
John T. Hickerson	16,750		12,100	28,850
John R. McManama	11,300		8,200	19,500

Outstanding Equity Awards as Fiscal Year Ended 2010 Table

The following table presents information concerning outstanding equity incentive awards held by each NEO as of December 31, 2010 under our equity incentive plans:

	Option Awards (1)				Stock Awards (2)
Name	Securities Underlying Unexercised Options Exercisable	Option Exercise Price		Option Expiration Date	Shares or Units of Stock That Have Not Vested	Market Value of Shares or Units of Stock That Have Not Vested
Stoney M. Stubbs, Jr.	70,000	$	10.59	12/16/2015
	50,000		6.71	5/12/2014
	90,000		2.40	5/14/2013
	176,027		2.08	2/13/2012	25,000		110,250

S. Russell Stubbs	25,000		10.59	12/16/2015
	10,000		6.71	5/12/2014
	15,000		2.40	5/14/2013	81,600		359,856

John T. Hickerson	-		-	-	84,850		374,189

John R. McManama	-		-	-	23,500		103,635

(1)

As of December 31, 2010, all outstanding options under our equity incentive plans were fully vested.

(2)

All restricted stock granted in 2009 has a five-year vesting schedule (1/5 per year), except for shares held by Stoney M. Stubbs, Jr., our Chief Executive Officer as of the end of fiscal 2010, vests over two-years (1/2 per year). Restricted stock granted in 2010 has a three-year vesting schedule (1/3 per year). The following table represents the vesting date of the unvested restricted stock held by each NEO shown above:

Grant Date	Vest Date	Stoney M. Stubbs, Jr.		S. Russell Stubbs		John T. Hickerson		John R. McManama
1/21/2009	1/21/2011		-		-		4,000		-
	1/21/2012		-		-		4,000		-
	1/21/2013		-		-		4,000		-
	1/21/2014		-		-		4,000		-
2/25/2009	2/25/2011		25,000		10,000		10,000		1,000
	2/25/2012		-		10,000		10,000		1,000
	2/25/2013		-		10,000		10,000		1,000
	2/25/2014		-		10,000		10,000		1,000
08/18/2010	8/18/2011		-		13,866		9,616		6,500
	8/18/2012		-		13,867		9,617		6,500
	8/18/2013		-		13,867		9,617		6,500

2010 Option Exercises and Stock Vested Table

The following table provides information concerning the exercise of options during the last fiscal year and the vesting of shares of restricted stock during the last fiscal year for each NEO:

	Option Awards			Stock Awards
Name	Number of Shares Acquired on Exercise	Value Realized on Exercise		Number of Shares Acquired on Vesting	Value Realized on Vesting
Stoney M. Stubbs, Jr.	196,299	$	202,188	25,000	$	82,500
S. Russell Stubbs	9,261		12,780	10,000		33,000
John T. Hickerson	-		-	21,501		70,278
John R. McManama	-		-	1,000		3,300

2010 Non-Qualified Deferred Compensation Table

Our NEO’s are eligible to participate in the FFE Transportation Services Restated Wrap Plan (Wrap Plan), a deferred compensation plan, and one of the investment elections is Company Common Stock. Stoney M. Stubbs, Jr. also participates in two dormant phantom stock deferred compensation plans, the 1999 executive Bonus and Phantom Stock Plan and the 1993 Supplemental Executive Retirement Plan. For further discussion see “Compensation Discussion and Analysis - Perquisites and Other Benefits” on page 26 of this proxy statement.

The following table provides additional information about deferred compensation held in phantom or Common Stock of the Company under the 1999 Executive Bonus and Phantom Stock Plan, 1993 Supplemental Executive Retirement Plan and the Wrap Plan:

Name	Executive Contributions in Last FY		Aggregate Earnings in Last FY(1)		Aggregate Withdrawals/ Distributions (2)			Aggregate Balance at Last FYE(3)
Stoney M. Stubbs, Jr.	$	16,905	$	145,953	$	(9,323	)	$	585,108
S. Russell Stubbs		12,015		8,485		(8,330	)		36,872
John T. Hickerson		17,228		6,714		(8,330	)		31,218
John R. McManama		-		501		-			1,991

(1)	Represents the change in the market value of shares of phantom or Common Stock of the Company held at the beginning of the year and the number held at year end plus executive contributions less aggregate withdrawals/distributions.
(2)	Represents amount of Common Stock of the Company transferred to the 401(k) Plan.
(3)	Represents the number of shares of phantom/Common Stock held in the deferred compensation plans at December 31, 2010 time $4.41 (the Company Stock Price at December 31, 2010).

Potential Payments Upon Termination

Pursuant to the Change in Control Agreements previously mentioned in this report, our NEOs may be entitled to receive certain payments should a change in control occur. For further explanation of these Changes in Control Agreements, see "Compensation Discussion and Analysis – Change in Control Agreements."

The following table sets forth the maximum payments that would have been made to each of our NEOs had a Change in Control occurred on December 31, 2010:

Named Executive Officer	Salary-Severance		Bonus-Severance		Pro Rata Bonus		Gross-up of Taxes		Acceleration of Restricted Stock Awards		Benefit Continuation		Grand Total
Stoney M. Stubbs Jr.	$	1,214,221	$	1,092,798	$	376,827	$	955,199	$	110,250	$	17,027	$	3,766,322
S. Russell Stubbs		871,081		783,973		270,336		802,344		359,856		31,907		3,119,497
John T. Hickerson		832,685		749,416		258,419		760,797		374,189		36,224		3,011,730
John R. McManama		625,810		563,229		194,217		582,604		103,635		1,370		2,070,865
	$	3,543,797	$	3,189,416	$	1,099,799	$	3,100,944	$	947,930	$	86,528	$	11,968,414

2010 Director Compensation Table

Our Directors receive a fee of $1,000, which was reduced from $2,000, effective July 1, 2010, for each Board meeting personally attended, $1,000 for each committee meeting personally attended and $750 for each telephonic meeting in which they participate. Our Directors annual retainers were changed July 1, 2010 and prorated at 50% of the new rate less 50% of the old rate for the remaining six months of the fiscal year ending December 31, 2010. Our Audit Committee Chairman, Audit Committee Financial Expert, Compensation Committee (“CC”) Chairman and Nominating and Corporate Governance Committee (“NCGC”) Chairman each receive an annual retainer of $5,000, $2,500, $4,750 and $3,600, respectively, effective July 1, 2010. Previously, the CC Chairman and NCGC Chairman each received an annual retainer of $2,500. The annual retainer for our Audit Committee Chairman and Audit Committee Financial Expert did not change.

The Amended and Restated 2005 Non-Employee Director Restricted Stock Plan (the "2005 Director Plan") was approved by the Company's shareholders on May 14, 2008. The 2005 Director Plan has a term of ten years, unless terminated sooner by the Board and a total of 100,000 shares of Common Stock have been reserved for issuance. Eligibility under the 2005 Director Plan is limited to Non-Employee Directors of the Company. There are currently six Directors who are eligible to participate. Upon initial election or appointment to the Board, and thereafter annually upon the date of the annual shareholders' meeting, each Non-Employee Director is awarded shares of restricted stock which will vest over a period of three years, one-third on each anniversary of the Date of Grant, provided that the Non-Employee Director continues to serve on each vesting date. The Board will determine in its discretion the number of shares of Restricted Stock to be awarded under the 2005 Director Plan. All shares of Restricted Stock will vest in full if the Director should die while serving as such.

Name	Fees Paid in Cash		Stock Awards (1)		Total
Jerry T. Armstrong	$	40,750	$	17,034	$	57,784
W. Mike Baggett		36,300		17,034		53,334
Brian R. Blackmarr		34,875		17,034		51,909
Barrett D. Clark		34,250		17,034		51,284
Kevin K. Kilpatrick		29,500		17,034		46,534
T. Michael O'Connor		31,000		17,034		48,034
	$	206,675	$	102,203	$	308,878

(1)

With the exception of ignoring the impact of the forfeiture rate relating to service based vesting conditions; these amounts represent the aggregate grant date fair value of restricted stock granted in 2010. These amounts do not represent the actual amounts paid to or realized by the non-employee Director for these awards. The value as of the grant date for restricted stock is recognized over the number of days of service required for the grant to become vested. The following table represents the grant date fair value for each share award made to each non-executive director during 2010.

Name	Date of Grant 5/19/10		Date of Grant 8/18/10		Total Grant Date Fair Value
Jerry T. Armstrong	$	10,897	$	6,137	$	17,034
W. Mike Baggett		10,897		6,137		17,034
Brian R. Blackmarr		10,897		6,137		17,034
Barrett D. Clark		10,897		6,137		17,034
Kevin K. Kilpatrick		10,897		6,137		17,034
T. Michael O'Connor		10,897		6,137		17,034
	$	65,382	$	36,822	$	102,204

TRANSACTIONS WITH MANAGEMENT AND DIRECTORS

There have been no related party transactions in fiscal year 2010 required to be disclosed pursuant to SEC rules.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Audit Committee (the "Committee") of the Board of Directors of Frozen Food Express Industries, Inc. (the "Company") operates pursuant to a written charter, which has been approved and adopted by the Board of Directors of the Company and is reviewed and reassessed annually by this Committee. Our Committee’s charter is available under "Documents & Charters" under subsection "Corporate Governance" within our "Investors" section of our internet website at www.ffex.net. For the year ended December 31, 2010 and as of the date of the adoption of this report, the Committee was comprised of four Directors who met the independence and experience requirements of NASDAQ. Mr. Armstrong is an "audit committee financial expert", as defined by the applicable rules of the Securities and Exchange Commission.

This Committee oversees the Company's system of internal controls over financial reporting and the financial reporting process on behalf of the Board of Directors and oversees the entire audit function, including the selection of our Independent Registered Public Accounting Firm. Management has the primary responsibility for the financial statements and the financial reporting process, including the systems of internal controls and legal and regulatory compliance. In fulfilling its oversight responsibilities, we reviewed and discussed with management the audited financial statements for the year ended December 31, 2010, including a discussion of the acceptability and quality of the accounting principles, the reasonableness of significant accounting judgments and critical accounting policies and estimates, and the clarity of disclosures in the financial statements. We also discussed with the Chief Executive Officer and Chief Financial Officer their respective certifications with respect to the Company's Annual Report on Form 10-K for the year ended December 31, 2010.

We reviewed with representatives of Grant Thornton LLP, which is responsible for expressing an opinion on the Company's audited financial statements in conformity with U.S. Generally Accepted Accounting Principles, their judgments as to the acceptability and quality of the Company's accounting principles and such other matters as are required to be discussed with this Committee under U.S. Generally Accepted Auditing Standards, including those matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended. In addition, we have received the written disclosures and the letter from the independent auditors required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Committee concerning independence, and have discussed those disclosures and other matters relating to independence with Grant Thornton LLP.

We discussed with the Company's internal auditors and representatives of Grant Thornton LLP the overall scope and plans for their respective audits. This Committee meets with the internal auditor and representatives of Grant Thornton LLP, with and without management present, to discuss the results of their examinations of the Company's internal controls, and the overall quality of financial reporting.

Members of the Committee rely without independent verification on the information provided to them and on the representations made by management and the independent auditors. In reliance on the reviews and discussions with management and with representatives of Grant Thornton LLP referred to above, and the receipt of:

	(i)	an unqualified opinion from Grant Thornton LLP dated March 30, 2011 regarding the audited financial statements of the Company for the year ended December 31, 2010.

This Committee recommended to the Board of Directors (and the Board of Directors approved) that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2010 for filing with the Securities and Exchange Commission.

AUDIT COMMITTEE MEMBERS

/s/Jerry T. Armstrong (Chairman)

/s/W. Mike Baggett

/s/Barrett D. Clark

/s/T. Michael O’Connor

The Audit Committee Report, and references to the independence of Directors, are not deemed to be "soliciting material" or "filed" with the SEC, are not subject to the liabilities of Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any of the filings previously made or in the future by our Company under the Exchange Act or the Securities Act of 1933 (except to the extent we specifically incorporate any such information into a document that is filed).

PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

Our independent registered public accounting firm for the year ended December 31, 2010 was Grant Thornton LLP. Our Audit Committee has approved the engagement of Grant Thornton LLP to be our independent registered public accounting firm for the year ending December 31, 2011. This proposal asks you to consider and vote on the ratification of the engagement of Grant Thornton LLP as out independent registered public accounting firm for the year ending December 31, 2011. A representative of Grant Thornton LLP is expected to attend the annual meeting to respond to appropriate questions and to make a statement if he or she so desires.

Stockholder ratification of the selection of Grant Thornton LLP is not required by our Bylaws or otherwise. However, the Board of Directors is submitting the selection of the independent registered public accounting firm to the stockholders for ratification as a matter of good corporate practice. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such change is in the best interest of the Company and its stockholders.

AUDIT AND NON-AUDIT FEES

The following table presents fees for the professional audit services rendered and billed by Grant Thornton LLP, our independent registered public accounting firm for the audit of our annual financial statements for the year ended December 31, 2010 and for the audit of our systems of internal controls and annual financial statements for the year ended December 31, 2009. There were not any other services rendered by Grant Thornton LLP during those periods.

	2010		2009
Audit fees (1)	$	358,000	$	405,000
Tax fees		-		-
Audit-related fees		-		-
All other fees		-		-
	$	358,000	$	405,000

(1)

Audit fees consist of the aggregate fees billed for professional services rendered for the audit of our systems of internal controls and reviews of the financial statements for the year ended December 31, 2009 and audit and reviews of the financial statements for the year ended December 31, 2010, included in our Quarterly Reports on Form 10-Q and Annual Report on Form 10-K and services that are normally provided by our Independent Registered Public Accounting Firm in connection with statutory and regulatory filings or engagements.

Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services

For 2010 and 2009, our Audit Committee's policy with respect to the pre-approval of audit and non-audit services was to specifically pre-approve the terms and fees of each engagement for services to be performed by the independent registered public accounting firm. Our Audit Committee did not delegate its responsibility to a member of the Audit Committee or to management.

In order to ratify the selection of Grant Thornton LLP as the independent registered public accounting firm for the year ending December 31, 2011, the proposal must receive a majority of the votes represented at the annual meeting, without regard to broker non-votes, in favor of such ratification.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU

VOTE FOR THE RATIFICATION

OF THE APPOINTMENT OF GRANT THORNTON LLP AS OUR

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

PROPOSAL 2 ON PROXY CARD.

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PROPOSAL 3—ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Board is providing shareholders the opportunity to cast an advisory vote on the compensation of our Named Executive Officers. This proposal, commonly known as a “Say on Pay” proposal, gives our shareholders the opportunity to endorse or not endorse our executive compensation programs and policies and the compensation paid to our named executive officers and is being submitted to shareholders as required by Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”).

The Board values the opinions of the Company’s shareholders as expressed through their votes and other communications. This Say on Pay vote is advisory, meaning that it is not binding on the Compensation Committee or Board. This vote will not affect any compensation already paid or awarded to any named executive officer, nor will it overrule any decisions the Board has made. Nonetheless, the Compensation Committee and the Board will review and carefully consider the outcome of the advisory vote on executive compensation when making future decisions regarding our executive compensation programs and policies.

The board of directors believes that the Company’s compensation policies and procedures are centered on a pay-for-performance culture and are strongly aligned with the long-term interests of shareholders. You are urged to read the “Executive Compensation” section of this proxy statement for additional details on the Company’s executive compensation, including the Company’s philosophy and objectives and the 2010 compensation of the named executive officers.

This proposal gives you as a shareholder the opportunity to endorse or not endorse our executive pay program through the following resolution:

“Resolved, that the Company’s shareholders approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in the section of this proxy statement entitled ‘Executive Compensation’.”

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU

VOTE FOR THE APPROVALOF THE COMPENSATION OF THE COMPANY’S

NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT UNDER

“EXECUTIVE COMPENSATION”

PROPOSAL 3 ON PROXY CARD.

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PROPOSAL 4—ADVISORY VOTE ON FREQUENCY OF CONDUCTING THE ADVISORY VOTE ON EXECUTIVE COMPENSATION

We are providing this vote as required pursuant to Section 14A of the Exchange Act. Section 14A of the Securities Exchange Act requires that at least once every six years the company submit for an advisory shareholder vote a proposal on the frequency of the shareholder vote on executive compensation. Accordingly, this proposal provides shareholders with the opportunity to advise the Board how often we should conduct the advisory Say on Pay vote and is being submitted to shareholders as required by Section 14A of the Exchange Act. Accordingly, we are requesting your advisory vote to determine whether a Say on Pay vote will occur every three, two or one year.

The advisory vote to determine whether the advisory shareholder vote on executive compensation should occur every one, two or three years is a plurality vote. The company will consider shareholders to have expressed a non-binding preference for the frequency option that receives the most favorable votes. Because this shareholder vote is advisory, it will not be binding upon the board of directors. However, the board of directors values the opinions expressed by our shareholders and will take into account the outcome of the vote when determining how often the shareholder advisory vote on executive compensation will occur.

After careful consideration of the various arguments supporting each frequency level, the Board currently believes that submitting the advisory vote on executive compensation to shareholders on a triennial basis is appropriate for the Company and its shareholders. Considering the transportation industry is subject to government regulations that are constantly changing and impacting business decisions, an economy that has not stabilized, and the long term structure of our executive compensation plan, we believe a review every three years is appropriate to give proper feedback on the effectiveness of our executive compensation plan.

The proxy card provides shareholders with four choices: every three, two or one year, or you may abstain from voting. Shareholders are not voting to approve or disapprove the Board’s recommendation.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE ON

EXECUTIVE COMPENSATION TO OCCUR TRIENNIALLY.

PROPOSAL 4 ON PROXY CARD.

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SECTION 16(a)

BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our officers, directors and persons who own more than ten percent of our common stock to file reports of ownership and changes in ownership with the Securities SEC. Such stockholders are required by the SEC's regulations to furnish us with copies of all Section 16(a) reports they file. Based solely on our review of the copies of such forms received by us, we believe that all filing requirements applicable to such stockholders for the year ended December 31, 2010, were compliant.

SHAREHOLDER PROPOSALS FOR THE 2012 ANNUAL MEETING

Shareholders intending to present proposals at the 2012 annual meeting of shareholders and desiring to have those proposals included in our proxy statement and form of proxy relating to that meeting must submit such proposals, in compliance with Rule 14a-8 of the Exchange Act, to our Corporate Secretary on or before December 21, 2011. For proposals that shareholders intend to present at the 2012 annual meeting of shareholders outside the processes of Rule 14a-8 of the Exchange Act, unless the shareholder notifies our Corporate Secretary of such intent by March 6, 2012, any proxy solicited by us for such annual meeting of shareholders will confer on the holder of the proxy discretionary authority to vote on the proposal so long as such proposal is properly presented at the annual meeting of shareholders.

	By Order of the Board of Directors

	/s/ Leonard W. Bartholomew
Dallas, TX	LEONARD W. BARTHOLOMEW
April 19, 2011	Corporate Secretary

A copy of our annual report on Form 10-K for the year ended December 31, 2010 may be obtained without charge upon written request to Leonard W. Bartholomew, our Corporate Secretary, 1145 Empire Central Place, Dallas, Texas 75247 or by accessing our Internet website at www.ffex.net and clicking on "SEC Filings."

2011 Annual Meeting of Shareholders of Frozen Food Express Industries, Inc.


		Las Colinas Country Club 4400 North O’Connor Boulevard Irving, TX 75062-2796 DIRECTIONS From Dallas/Fort Worth International Airport DFW Airport North Exit Merge onto TX-114 E (toward Irving/Downtown Dallas) Exit N. O’Connor Rd., turn right on N. O’Connor Rd. Make a left turn at Las Colinas Country Club Dr. From Love Field Airport Airport Exit Right on Mockingbird Right on TX-183 W (signs for Irving/DFW Airport/TX-183/TX-114) Slight right at TX-114 W Exit and turn left on N. O’Connor Rd. Make a left turn at Las Colinas Country Club Dr.

Frozen Food Express Industries (FFEX) Inactive DEF 14ADefinitive proxy