EXHIBIT 10.14
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FIRST AMENDMENT TO THE
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(K) SAVINGS PLAN
AS RESTATED EFFECTIVE JANUARY 1, 2001
PREAMBLE
1. Adoption and Effective Date of Amendment. This amendment of the
Frozen Food Express Industries, Inc. 401(k) Savings Plan (the "Plan") is
adopted to reflect certain provisions of the Economic Growth and Tax
Relief Reconciliation Act of 2001 ("EGTRRA"). This amendment is
intended as good faith compliance with the requirements of EGTRRA and
is to be construed in accordance with EGTRRA and guidance issued
thereunder. Except as otherwise provided, this amendment shall be
effective as of the first day of the first Plan Year beginning after
December 31, 2001.
2. Further Amendment. Frozen Food Express Industries, Inc. (the
"Employer") has also determined to make certain other changes to the
Plan that the Employer believes will be desirable in light of certain
EGTRRRA provisions; in particular, the Employer desires to raise the
Plan-imposed limit on elective salary deferrals from 20% to 75% and to
provide a 6-year vesting schedule for discretionary employer
contributions.
3. Supersession of Inconsistent Provisions. This amendment shall supersede
the provisions of the Plan to the extent those provisions are inconsistent
with the provisions of this amendment.
4. Defined Terms. Capitalized terms not defined herein are defined in the
Plan.
SECTION I. LIMITATIONS ON CONTRIBUTIONS
1. Effective Date. This section shall be effective January 1, 2002.
2. Maximum Annual Addition. Except to the extent permitted under Section X
of this amendment and Section 414(v) of the Code, if applicable, the
annual addition that may be contributed or allocated to a Participant's
account under the Plan for any taxable year shall not exceed the lesser
of:
(a) $40,000, as adjusted for increases in the cost-of-living under
Section 415(d) of the Code, or
(b) 100 percent of the Participant's compensation, within the meaning
of Section 415(c)(3) of the Code, for the taxable year.
The compensation limit referred to in (b) shall not apply to any contribution
for medical benefits after separation from service (within the meaning of
Section 401(h) or Section 419(A)(f)(2) of the Code) which is otherwise treated
as an annual addition.
SECTION II. INCREASE IN COMPENSATION LIMIT
The annual compensation of each Participant taken into account in determining
allocations for any taxable year beginning after December 31, 2001, shall not
exceed $200,000, as adjusted for cost-of-living increases in accordance with
Section 401(a)(17)(B) of the Code. Annual compensation means compensation
during the Plan Year or such other consecutive 12-month period over which
compensation is otherwise determined under the Plan (the determination period).
The cost-of-living adjustment in effect for a calendar year applies to annual
compensation for the determination period that begins with or within such
calendar year.
SECTION III. MODIFICATION OF TOP-HEAVY RULES
1. Effective Date. This section shall apply for purposes of determining
whether the Plan is a top-heavy plan under Section 416(g) of the Code
for Plan Years beginning after December 31, 2001, and whether the Plan
satisfies the minimum benefits requirements of Section 416(c) of the
Code for such years. This section amends Article XII of the Plan.
2. Determination of Top-Heavy Status.
2.1 Key Employee. Key employee means any employee or former employee
(including any deceased employee) who at any time during the Plan Year
that includes the determination date was an officer of the employer
having annual compensation greater than $130,000 (as adjusted under
Section 416(i)(1) of the Code for Plan Years beginning after December
31, 2002), a 5-percent owner of the employer, or a 1-percent owner of
the employer having annual compensation of more than $150,000. For this
purpose, annual compensation means compensation within the meaning of
Section 415(c)(3) of the Code. The determination of who is a key
employee will be made in accordance with Section 416(i)(1) of the Code
and the applicable regulations and other guidance of general
applicability issued thereunder.
2.2 Determination of Present Values and Amounts. This section 2.2 shall
apply for purposes of determining the present values of accrued benefits
and the amounts of account balances of employees as of the determination
date.
2.2.1 Distributions During Year Ending on the Determination Date. The
present values of accrued benefits and the amounts of account
balances of an employee as of the determination date shall be
increased by the distributions made with respect to the employee
under the Plan and any Plan aggregated with the Plan under
Section 416(g)(2) of the Code during the 1-year period ending on
the determination date. The preceding sentence shall also apply to
distributions under a terminated plan which, had it not been
terminated, would have been aggregated with the Plan under
Section 416(g)(2)(A)(i) of the Code. In the case of a distribution
made for a reason other than separation from service, death, or
disability, this provision shall be applied by substituting "5-year
period" for "1-year period."
2.2.2 Employees Not Performing Services During Year Ending on the
Determination Date. The accrued benefits and accounts of any
individual who has not performed services for the employer during
the 1-year period ending on the determination date shall not be
taken into account.
3. Minimum Benefits.
3.1 Matching Contributions. Employer matching contributions shall be taken
into account for purposes of satisfying the minimum contribution
requirements of Section 416(c)(2) of the Code and the Plan. The
preceding sentence shall apply with respect to matching contributions
under the Plan or, if the Plan provides that the minimum contribution
requirement shall be met in another plan, such other plan. Employer
matching contributions that are used to satisfy the minimum contribution
requirements shall be treated as matching contributions for purposes of
the actual contribution percentage test and other requirements of
Section 401(m) of the Code.
3.2 Contributions Under Other Plans. The Employer may provide, in an
addendum to this amendment, that the minimum benefit requirement shall
be met in another plan (including another plan that consists solely of
a cash or deferred arrangement which meets the requirements of Section
401(k)(12) of the Code and matching contributions with respect to which
the requirements of Section 401(m)(11) of the Code are met). The
addendum should include the name of the other plan, the minimum benefit
that will be provided under such other plan, and the employees who will
receive the minimum benefit under such other plan.
SECTION IV. VESTING OF EMPLOYER CONTRIBUTIONS
1. Applicability. This section shall apply to Participants with accrued
benefits derived from Matching Employer Contributions and Discretionary
Employer Contributions who complete an Hour of Service under the Plan
after December 31, 2001, with respect to benefits derived from Matching
Employer Contributions and Discretionary Employer Contributions that
accrue after December 31, 2001.
2. Vesting Schedule. If a Participant or Former Participant is Separated
from Service for any reason other than Retirement, Early Retirement,
death, or Disability, such Participant or Former Participant shall be
entitled to the sum of the vested percentage at the date he is Separated
from Service of the total amount credited to the Participant's Matching
Employer Contribution Account, Discretionary Employer Contribution
Account, W & B Plan Rollover Account, and ESOP Transfer Account, if any.
The Vested Percentage shall be determined as follows:
YEARS OF VESTING SERVICE NONFORFEITABLE PERCENTAGE
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2 20%
3 40%
4 60%
5 80%
6 100%
SECTION V. DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS
1. Effective Date. This section shall apply to distributions made after
December 31, 2001.
2. Modification of Definition of Eligible Retirement Plan. For purposes of
the direct rollover provisions in Section 11.5 of the Plan, an eligible
retirement plan shall also mean an annuity contract described in Section
403(b) of the Code and an eligible plan under Section 457(b) of the Code
which is maintained by a state, political subdivision of a state, or any
agency or instrumentality of a state or political subdivision of a state
and which agrees to separately account for amounts transferred into such
plan from this Plan. The definition of eligible retirement plan shall
also apply in the case of a distribution to a surviving spouse, or to a
spouse or former spouse who is the alternate payee under a qualified
domestic relation order, as defined in Section 414(p) of the Code.
3. Modification of Definition of Eligible Rollover Distribution to Exclude
Hardship Distributions. For purposes of the direct rollover provisions
in Section 11.5 of the Plan, any amount that is distributed on account
of hardship shall not be an eligible rollover distribution and the
distributee may not elect to have any portion of such a distribution
paid directly to an eligible retirement plan.
4. Modification of Definition of Eligible Rollover Distribution to Include
After-tax Employee Contributions. For purposes of the direct rollover
provisions in Section 11.5 of the Plan, a portion of a distribution
shall not fail to be an eligible rollover distribution merely because
the portion consists of after-tax employee contributions which are not
includible in gross income. However, such portion may be transferred
only to an individual retirement account or annuity described in Section
408(a) or (b) of the Code, or to a qualified defined contribution plan
described in Section 401(a) or 403(a) of the Code that agrees to
separately account for amounts so transferred, including separately
accounting for the portion of such distribution which is includible in
gross income and the portion of such distribution which is not so
includible.
SECTION VI. ROLLOVERS FROM OTHER PLANS
Effective Date. This section shall be effective January 1, 2002.
DIRECT ROLLOVER:
The Plan will accept a direct rollover of an eligible rollover
distribution from (i) a qualified plan described in Section 401(a) or 403(a)
of the Code, excluding after-tax employee contributions; (ii) an annuity
contract described in Section 403(b) of the Code, excluding after-tax employee
contributions; and (iii) an eligible plan under Section 457(b) of the Code
which is maintained by a state, political subdivision of a state, or any
agency or instrumentality of a state or political subdivision of a state.
PARTICIPANT ROLLOVER CONTRIBUTIONS FROM OTHER PLANS:
The Plan will accept a Participant contribution of an eligible rollover
distribution from (i) a qualified plan described in Section 401(a) or 403(a)
of the Code; (ii) an annuity contract described in Section 403(b) of the Code;
and (iii) an eligible plan under Section 457(b) of the Code which is
maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state.
SECTION VII. ROLLOVERS DISREGARDED IN INVOLUNTARY CASH-OUTS
1. Applicability and Effective Date. This section shall be effective for
distributions after December 31, 2001.
2. Rollovers Disregarded in Determining Value of Account Balance for
Involuntary Distributions. For purposes of Section 11.1(f) of the Plan,
the value of a Participant's nonforfeitable account balance shall be
determined without regard to that portion of the account balance that is
attributable to rollover contributions (and earnings allocable thereto)
within the meaning of Sections 402(c), 403(a)(4), 403(b)(8),
408(d)(3)(A)(ii), and 457(e)(16) of the Code. If the value of the
Participant's nonforfeitable account balance as so determined is $5,000
or less, the Plan shall immediately distribute the Participant's entire
nonforfeitable account balance.
SECTION VIII. REPEAL OF MULTIPLE USE TEST
The multiple use test described in Treasury Regulation Section 1.401(m)-2
and Section 4.2(b)(iii)(A) of the Plan shall not apply for Plan Years
beginning after December 31, 2001.
SECTION IX. ELECTIVE DEFERRAL - CONTRIBUTION LIMITATION
No Participant shall be permitted to have elective deferrals made under
this Plan, or any other qualified plan maintained by the employer during any
taxable year, in excess of the dollar limitation contained in Section 402(g)
of the Code in effect for such taxable year, except to the extent permitted
under Section X of this amendment and Section 414(v) of the Code, if applicable.
SECTION X. CATCH-UP CONTRIBUTIONS
Effective after December 31, 2001, all employees who are eligible to
make elective deferrals under this Plan and who have attained age 50 before
the close of the Plan Year shall be eligible to make catch-up contributions
in accordance with, and subject to the limitations of, Section 414(v) of the
Code. Such catch-up contributions shall not be taken into account for purposes
of the provisions of the Plan implementing the required limitations of Sections
402(g) and 415 of the Code. The Plan shall not be treated as failing to
satisfy the provisions of the Plan implementing the requirements of section
401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable,
by reason of the making of such catch-up contributions. Such catch-up
contributions will not be matched by Matching Employer Contributions.
SECTION XII. DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT
1. Effective Date. This section shall apply for distributions after
December 31, 2001, regardless of when the severance from employment
occurred.
2. New Distributable Event. A Participant's elective deferrals, qualified
nonelective contributions, qualified matching contributions, and
earnings attributable to these contributions shall be distributed on
account of the Participant's severance from employment. However, such a
distribution shall be subject to the other provisions of the Plan
regarding distributions, other than provisions that require a separation
from service before such amounts may be distributed.
SECTION XIII. PLAN LOANS FOR OWNER-EMPLOYEES AND SHAREHOLDER EMPLOYEES
Effective for Plan loans made after December 31, 2001, Plan provisions
prohibiting loans to any owner-employee or shareholder-employee shall cease
to apply.
SECTION XIV. AMENDMENT TO LIMIT ON SAVINGS CONTRIBUTIONS
Effective April 1, 2002, Section 4.1(a) of the Plan shall be amended as
underlined to be and read as follows:
(a) Subject to the provisions of Sections 4.1(d) and (f), each
Participant may elect that an amount, in any whole percentage of
his Compensation, not to exceed seventy-five percent (75%) of his
Compensation, be withheld from his Compensation and contributed by
his Employer to the Trust. The Plan Administrator may permit a
Participant to make an election under this Section through any
written, electronic or telephonic means authorized by
the Committee. Such contributions shall be known as Savings
Contributions.
Executed this 3 day of January, 2002.
FROZEN FOOD EXPRESS INDUSTRIES, INC.
By: /s/ Stoney M. Stubbs, Jr.
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Stoney M. Stubbs, Jr.
Title: Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)