<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
FROZEN FOODS EXPRESS INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
FROZEN FOOD EXPRESS INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1996
TO THE SHAREHOLDERS OF
FROZEN FOOD EXPRESS INDUSTRIES, INC.:
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Frozen Food Express Industries, Inc. (the "Company"), a Texas
corporation, will be held on Thursday, April 25, 1996, at 3:30 p.m., Dallas,
Texas time, in the Sheraton Park Central Hotel, 12720 Merit Drive, Dallas,
Texas 75251 for the following purposes:
1. Electing eight (8) directors to serve until the next Annual Meeting of
Shareholders and until their respective successors are elected and
qualified; and
2. Transacting such other business as may properly be brought before the
Annual Meeting or any adjournment thereof.
You are encouraged to attend the Annual Meeting in person. Whether or not
you plan to attend the Annual Meeting, please complete, date, sign and return
the accompanying proxy at your earliest convenience. A reply envelope is
provided for this purpose, which needs no postage if mailed in the United
States. Your immediate attention is requested in order to save your Company
additional solicitation expense.
Information regarding the matters to be acted upon at the Annual Meeting is
contained in the Proxy Statement attached to this Notice.
Only shareholders of record at the close of business on March 8, 1996, are
entitled to notice of and to vote at such meeting or any adjournment thereof.
By Order of the Board of Directors
Dallas, Texas LEONARD W. BARTHOLOMEW
March 29, 1996 Secretary
<PAGE>
FROZEN FOOD EXPRESS INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1996
FROZEN FOOD EXPRESS INDUSTRIES, INC.
1145 EMPIRE CENTRAL PLACE
P. O. BOX 655888
DALLAS, TEXAS 75265-5888
TELEPHONE: (214) 630-8090
PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD APRIL 25, 1996
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the management of Frozen Food Express
Industries, Inc., (the "Company") for use at the Annual Meeting of
Shareholders to be held at Dallas, Texas, on the 25th day of April, 1996 (the
"Annual Meeting"), and at any adjournment thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Shareholders. This Proxy
Statement and accompanying proxy are being mailed or delivered to shareholders
on or about March 29, 1996. Solicitations of proxies may be made by personal
interview, mail, telephone or telegram by directors, officers and regular
employees of the Company. The Company may also request banking institutions,
brokerage firms, custodians, trustees, nominees and fiduciaries to forward
solicitation material to the beneficial owners of the Company's $1.50 par
value Common Stock (the "Common Stock") held of record by such persons and may
reimburse such forwarding expenses. All costs of preparing, printing,
assembling and mailing the form of proxy and the material used in the
solicitation thereof and all clerical and other expenses of solicitation will
be borne by the Company.
ANNUAL REPORT
The Company's Annual Report to Shareholders, covering the fiscal year ended
December 31, 1995, including audited financial statements, is also being
mailed to the shareholders entitled to notice of and vote at the Annual
Meeting in the envelope containing this Proxy Statement. The Annual Report
does not form any part of the material for solicitation of proxies.
SIGNATURES OF PROXIES IN CERTAIN CASES
If a shareholder is a corporation, the accompanying proxy should be signed
in its full corporate name by the President or another authorized officer who
should indicate his 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 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 signature.
REVOCATION OF PROXY
All shares represented by a valid proxy will be voted. A proxy may be
revoked at any time before it is voted by the giving of written notice to that
effect to the Secretary of the Company, by executing and delivering a later-
dated proxy or by attending the Annual Meeting and voting in person.
<PAGE>
OUTSTANDING CAPITAL STOCK; PRINCIPAL SHAREHOLDERS
At the close of business on the 8th day of March, 1996, the record date for
determination of shareholders entitled to notice of, and to vote at, the
Annual Meeting, there were outstanding and entitled to be voted 16,394,484
shares of Common Stock. The following table sets forth certain information, as
of March 8, 1996, with respect to each person known to the management of the
Company to be a beneficial owner of more than five percent of the outstanding
Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP(/1/) OF CLASS
------------------------------------------------------------------
<S> <C> <C>
FEE Transportation Services, Inc. 2,759,183 16.83%
Employee Stock Ownership Trust(/2/)
Texas Commerce Bank,
National Association, Trustee
1700 Pacific Avenue
Dallas, Texas 75201
Edgar O. Weller 1,930,050(/3/) 11.77%
16120 Chalfont Circle
Dallas, Texas 75248
Savings Plan For Employees of 1,745,634 10.65%
Frozen Food Express Industries, Inc.
Texas Commerce Bank,
National Association, Trustee
1700 Pacific Avenue
Dallas, Texas 75201
Stoney M. Stubbs, Jr.(4) 1,399,200(/5/) 8.46%
158 Jellico Circle
Southlake, Texas 76092
Quest Advisory Corp. and Quest 1,151,630(/6/) 7.02%
Management Company
1414 Avenue of the Americas
New York, New York 10019
</TABLE>
- --------
(1) Except as otherwise noted, each beneficial owner has sole voting and
investment power with respect to all shares owned by him, and all shares
are directly held by the person named.
(2) FFE Transportation Services, Inc. ("FFE") is the principal operating
subsidiary of the Company.
(3) Includes 1,333,332 shares held by a family partnership which is controlled
by Mr. Weller.
(4) Mr. Stubbs holds, and has held for the past sixteen years, the offices of
Chairman of the Board, President and Chief Executive Officer of the
Company and FFE. Mr. Stubbs is the nephew of Edgar O. Weller, a director
of the Company.
(5) Includes 153,055 shares Mr. Stubbs has the right to acquire pursuant to
presently exercisable options, 144,080 shares allocated to his account in
the FFE Transportation Services, Inc., Employee Stock Ownership Plan,
41,211 shares allocated to his account in the Savings Plan for Employees
of Frozen Food Express Industries, Inc., 880 shares held by an estate of
which Mr. Stubbs is executor, and 788,222 shares held in family
partnerships controlled by Mr. Stubbs.
(6) Information concerning the number of shares beneficially owned by Quest
Advisory Corp. ("Quest") and Quest Management Company ("QMC") is as of
December 31, 1995, and was obtained from a Schedule 13G, dated February
15, 1996, jointly filed by Quest, QMC and Charles M. Royce with the
Securities and Exchange Commission (the "SEC"). The Schedule 13G confirms
that Quest and QMC are both investment advisers and members of a "group".
Quest has sole voting and dispositive power over 1,055,092 shares and QMC
has sole voting and dispositive power over 96,538 shares. Mr. Royce may be
deemed to be a controlling person of Quest and QMC and as such may be
deemed to beneficially own the shares beneficially owned by Quest and QMC.
Mr. Royce does not own any shares outside of Quest and QMC and disclaims
beneficial ownership of the shares held by Quest and QMC.
2
<PAGE>
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote is necessary to constitute
a quorum at the Annual Meeting. Abstentions and broker non-votes will be
counted in determining the presence of a quorum. A "broker non-vote" occurs
when a nominee holding shares for a beneficial owner has voted on certain
matters at the Annual Meeting pursuant to discretionary authority or
instructions from the beneficial owner but may not have received instructions
or exercised discretionary voting power with respect to other matters.
Each holder of Common Stock will be entitled to one vote, in person or by
proxy, for each share of such stock owned of record at the close of business on
March 8, 1996. As to the election of directors, a shareholder may, by checking
the appropriate box on the proxy: (i) vote for all director nominees as a
group; (ii) withhold authority to vote for all director nominees as a group; or
(iii) vote for all director nominees as a group except those nominees
identified by the shareholder in the appropriate area. Cumulative voting for
directors is not permitted.
ACTION TO BE TAKEN UNDER THE PROXY
The accompanying proxy, if properly executed and returned, will be voted (i)
unless otherwise specified thereon, FOR the election of the eight nominees,
named in the next succeeding table, as directors of the Company and (ii) in the
transaction of such other business as may properly come before the Annual
Meeting or any adjournment thereof. As to any other matter or business which
may be brought before the Annual Meeting, a vote may be cast pursuant to the
accompanying proxy in accordance with the judgment of the person or persons
voting the same. The management of the Company does not know of any such other
matter or business. Should any nominee named herein for the office of director
become unable or be unwilling to accept nomination for or election to such
position, the persons acting under the proxy will vote for the election, in his
stead, of such other person as the management of the Company may recommend. The
management of the Company has no reason to believe that any of the nominees
will be unable or unwilling to serve if elected to office. To be elected, each
director must receive the affirmative vote of the holders of a plurality of the
issued and outstanding shares of Common Stock represented in person or by proxy
at the Annual Meeting. Abstentions and broker non-voter will have no effect in
the election of directors.
3
<PAGE>
NOMINEES FOR DIRECTORS
The Company's Bylaws provide that the Board of Directors shall consist of a
minimum of seven and a maximum of fifteen directors. Eight directors will be
elected at the Annual Meeting. Each director elected will serve until the next
Annual Meeting of Shareholders and until his successor has been elected and
qualified.
The persons named below are the Board of Directors' nominees for election as
directors. Each nominee has served continuously as a director since the date
of his first election to the Board. Further items of information with respect
to the nominees and all directors and officers of the Company as a group,
including the beneficial ownership of Common Stock as of March 8, 1996, by
such persons and group, are set forth below:
<TABLE>
<CAPTION>
AMOUNT AND
PRINCIPAL OCCUPATION FIRST NATURE OF PERCENT
DURING PAST FIVE YEARS BECAME A BENEFICIAL OF
NAME AGE AND DIRECTORSHIPS DIRECTOR OWNERSHIP(/1/) CLASS
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stoney M. (Mit) 59 Chairman of the Board, 1977 1,399,200(/2/) 8.46%
Stubbs, Jr. President and Chief Executive
Officer of the Company
Edgar O. Weller 78 Vice Chairman of the Board 1969 1,930,050(/3/) 11.77%
of the Company
W. Grogan Lord 81 Senior Chairman of the Board, 1975 1,875(/4/) *
TeleCom Corporation
Leroy Hallman(/5/) 80 Of counsel to the law firm of 1975 16,775 *
Storey Armstrong Steger &
Martin, P.C.
Brian R. Blackmarr 54 President, 1990 21,071(/6/) *
B.R. Blackmarr &
Associates, Inc.
T. Michael O'Connor 41 Chief Executive Officer, 1992 20,803(/7/) *
Ecosource, Inc., Managing
Partner, T.J. O'Connor
Cattle Co. and Member of
Texas A & M University
Board of Regents
Charles G. 54 Executive Vice President 1982 486,546(/9/) 2.95%
Robertson(/8/)
of the Company since
November 1987 and prior
thereto Senior Vice
President of FFE
Burl G. Cott(/8/) 55 Senior Vice President 1990 104,332(/1//0/) *
of the Company and FFE
since November 1989
All above directors and 3,980,652(/1//1/) 23.83%
executive officers, as a
group
All above directors, 5,249,341(/1//2/) 30.89%
executive officers and
18 officers not listed
above, as a group
</TABLE>
- --------
* less than 1%
(1) Except as otherwise noted, all shares are held directly, and the owner
has sole voting and investment power.
(2) Includes 153,055 shares Mr. Stubbs has the right to acquire pursuant to
presently exercisable options, 144,080 shares allocated to his account in
the FFE Transportation Services, Inc., Employee Stock
4
<PAGE>
Ownership Plan, 41,211 shares allocated to his account in the Savings Plan
for Employees of Frozen Food Express Industries, Inc., 880 shares held by an
estate of which Mr. Stubbs is executor, and 788,222 shares held in family
partnerships controlled by Mr. Stubbs.
(3) Includes 1,333,332 shares held by a family partnership which is controlled
by Mr. Weller.
(4) Represents 1,875 shares which Mr. Lord has the right to acquire pursuant
to presently exercisable options.
(5) Mr. Hallman, and firms of which he is or has been a member, serve, and for
more than 30 years have served, as the Company's principal attorneys in
interstate and intrastate trucking matters.
(6) Includes 1,071 shares which Mr. Blackmarr has the right to acquire
pursuant to presently exercisable options.
(7) Represents 20,803 shares which Mr. O'Connor has the right to acquire
pursuant to presently exercisable options.
(8) Mr. Robertson is also Executive Vice President and a director of FFE. Mr.
Cott is also Senior Vice President and a director of FFE.
(9) Includes 96,047 shares Mr. Robertson has the right to acquire pursuant to
presently exercisable options, 81,415 shares allocated to his account in
the FFE Transportation Services, Inc., Employee Stock Ownership Plan,
34,776 shares allocated to his account in the Savings Plan for Employees
of Frozen Food Express Industries, Inc., and 192,236 shares held by a
family partnership which is controlled by Mr. Robertson.
(10) Includes 36,672 shares Mr. Cott has the right to acquire pursuant to
presently exercisable options, 21,205 shares allocated to his account in
the FFE Transportation Services, Inc., Employee Stock Ownership Plan and
10,992 shares allocated to his account in the Savings Plan for Employees
of Frozen Food Express Industries, Inc.
(11) Includes 309,523 shares which executive officers and directors have the
right to acquire pursuant to presently exercisable options, 246,700 shares
allocated to the accounts of executive officers pursuant to the FFE
Transportation Services, Inc., Employee Stock Ownership Plan, 86,979
shares allocated to the accounts of executive officers pursuant to the
Savings Plan for Employees of Frozen Food Express Industries, Inc., 880
shares held by an estate, and 2,313,790 shares held by family partnerships
controlled by directors and executive officers.
(12) Includes 598,716 shares which officers and directors have the right to
acquire pursuant to presently exercisable options, 575,278 shares
allocated to the accounts of officers pursuant to the FFE Transportation
Services, Inc., Employees Stock Ownership Plan, 251,885 shares allocated
to the accounts of officers pursuant to the Savings Plan for Employees of
Frozen Food Express Industries, Inc., 880 shares held by an estate, and
2,313,790 shares held by family partnerships controlled by directors and
officers.
The Company's Board of Directors held five meetings during 1995. Each
incumbent director attended during 1995 at least 75% of the aggregate of (i)
the total number of meetings of the Board of Directors held during the period
that he was director and (ii) the total number of meetings held by all
committees of the Board on which he served (during the periods that he served).
The Company's Board of Directors has standing compensation, audit and
information services committees, but does not have a standing nominating
committee. The Compensation Committee consists of Messrs. Blackmarr, Chairman,
and Lord. The Committee is charged with recommending compensation arrangements
for the directors and executive officers of the Company and recommending
compensation programs for FFE. The Committee held two meetings during 1995.
The Audit Committee of the Board of Directors consists of Messrs. Hallman,
Chairman, Weller and O'Connor. During 1995, the Committee held one meeting at
which it reviewed with representatives of Arthur Andersen LLP the results of
its 1994 annual audit, plans for the 1995 annual audit and reviewed other
services provided by the Company's accountants.
The Information Services Committee of the Board of Directors consists of
Messrs. Stubbs, Chairman, Blackmarr, Cott and Robertson. The Committee is
charged with reviewing the Company's information systems and making
recommendations to the Board of Directors regarding possible improvements to
such systems. The Committee held 11 meetings during 1995.
5
<PAGE>
DIRECTOR COMPENSATION
As consideration for services as a director, each director who is not an
executive officer of the Company receives fees of $1,000 for each meeting
attended and $500 for each telephonic meeting in which he participates.
Members of the Audit, Compensation and Information Services Committees who are
not executive officers of the Company receive fees of $500 for each committee
meeting attended which does not occur on the same day as a Board meeting.
On April 27, 1995, the shareholders adopted the Frozen Food Express
Industries, Inc., 1995 Non-Employee Director Stock Option Plan (the "1995
Director Plan"). The purpose of the 1995 Director Plan is to advance the
interest of the Company and its shareholders by strengthening the Company's
ability to attract and retain experienced and able individuals to serve as
independent directors of the Company and to furnish additional incentive to
such individuals to expend their best efforts on behalf of the Company.
On the day of a non-employee director's initial appointment or election
(whichever comes first) to the Board, such individual will be granted, without
any further action on the part of the Board or such individual, an option to
purchase 9,375 shares of Common Stock (subject to adjustment to reflect
certain changes in capitalization). Upon the reelection of any non-employee
director to the Board (including the non-employee director's first election by
shareholders if such director was initially appointed to the Board) such
individual will be granted, without any further action on the part of the
Board or such individual, an option to purchase 1,875 shares of Common Stock
(subject to adjustment to reflect certain changes in capitalization). No
option shall be granted pursuant to the 1995 Director Plan after March 3,
2005.
To the extent that a non-employee director has served as a director for one
or more years prior to the grant of an option, the option is immediately
exercisable for the number of shares equal to the product of one-seventh (1/7)
of the number of shares subject to the option multiplied by the number of full
years such non-employee director has served as a director. Thereafter, one-
seventh of the number of shares subject to the option become exercisable on
each anniversary of the date of grant until the option becomes fully
exercisable. No option granted under the 1995 Director Plan may be exercised
after the tenth anniversary of its grant. In the event that an optionee dies
while serving on the Board of Directors, all options granted to such optionee
under the 1995 Director Plan become fully exercisable as of the date of his or
her death, by the beneficiary under the optionee's will or the executor of
such optionee's estate at any time prior to the second anniversary of his or
her death, and his or her unexercised options expire at the end of such
period. No shares underlying the options, however, may be sold until the
expiration of six months after the date of grant.
The exercise price under each option is fifty percent (50%) of the fair
market value of the Common Stock at the close of business on the last business
day prior to the date the option is granted. Options may be exercised by
tendering to the Company the purchase price in cash, check, or shares of
Common Stock already owned by the non-employee director having a fair market
value equal to the purchase price.
In accordance with the Director Plan, each of the Company's non-employee
Directors was granted an option to purchase 1,875 shares of Common Stock for
$5.8125 per share on April 27, 1995.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Blackmarr and Lord. The
Committee is charged with recommending compensation arrangements for the
directors and executive officers of the Company and recommending compensation
programs for FFE. No payments other than director fees were made to
Compensation Committee members during 1995.
6
<PAGE>
FIVE-YEAR SHAREHOLDER RETURN COMPARISON
The graph below compares the cumulative total shareholder return on the
Common Stock of the Company for the last five fiscal years with the cumulative
total return on the S&P 500 Index and the Media General Industry Group Index
#221--Trucking Companies, consisting of the Company and 52 other trucking
companies (assuming the investment of $100 in the Company's Common Stock, the
S&P 500 Index and the Media General Index on January 1, 1991, and reinvestment
of all dividends).
COMPARISON OF FIVE-YEAR TOTAL RETURN AMONG FROZEN FOOD EXPRESS, MEDIA GENERAL
INDUSTRY GROUP #221--TRUCKING COMPANIES AND S&P 500 INDEX
COMPARISON OF 5-YEAR TOTAL RETURN
AMONG FROZEN FOOD EXPRESS, MEDIA GENERAL INDUSTRY GROUP
#221-TRUCKING COMPANIES AND S&P 500 INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
FROZEN FOOD MG S&P
Measurement Period EXPRESS INDUSTRY 500
(Fiscal Year Covered) INDUSTRIES, INC. GROUP INDEX INDEX
- --------------------- --------------- ----------- ----------
<S> <C> <C> <C>
$100.00 $100.00 $100.00
FYE 12/31/1991 $220.22 $158.76 $130.48
FYE 12/31/1992 $553.35 $185.68 $140.46
FYE 12/31/1993 $811.16 $199.23 $154.62
FYE 12/31/1994 $694.03 $183.74 $156.66
FYE 12/31/1995 $495.08 $158.33 $215.54
</TABLE>
[GRAPH]
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the compensation
paid by the Company for services rendered during the fiscal years ended
December 31, 1995, 1994 and 1993, to each executive officer (collectively, the
"Executive Officers") of the Company:
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------------------------------------
AWARDS PAYOUTS
----------------------------
SECURITIES
RESTRICTED UNDERLYING ALL OTHER
STOCK AWARDS OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS TOTAL (1) $(2) #(3) (4)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stoney M. (Mit) Stubbs, Jr. 1995 $258,099 $224,281 $482,380 $ 84,652 81,250 $ 41,152
Chairman of the Board, 1994 $258,099 $474,373 $732,472 $138,950 62,500 $ 23,530
President and Chief 1993 $237,112 $521,734 $758,846 $400,257 88,333 $ 28,286
Executive Officer of the Company and FFE
Charles G. Robertson 1995 $194,364 $132,145 $326,509 $ 52,314 58,000 $ 23,371
Executive Vice President 1994 $194,364 $283,726 $478,090 $ 84,494 38,125 $ 20,293
of the Company and FFE 1993 $172,169 $306,761 $478,930 $223,535 51,666 $ 25,341
Burl G. Cott 1995 $120,490 $ 72,328 $192,818 $ 23,820 21,000 $ 13,668
Senior Vice President 1994 $120,490 $156,705 $277,195 $ 39,930 8,750 $ 14,574
of the Company and FFE 1993 $112,745 $179,767 $292,512 $ 94,479 19,999 $ 20,565
</TABLE>
- --------
(1) Personal benefits provided to each of the named individuals under various
Company programs do not exceed the disclosure thresholds established under
SEC rules and are not included in this total.
(2) The awards reported in this column are restricted phantom stock units
relating to the Common Stock that were awarded for achievement of
performance goals under the FFE Transportation Services, Inc. Executive
Bonus and Phantom Stock Plan (the "Executive Plan") or in accordance with
the Company's Supplemental Executive Retirement Plan (the "SERP"). The
amounts reported represent the product of the aggregate number of phantom
stock units awarded and the market price of a share of Common Stock on the
date of the award. The number of phantom stock units allocated to an
officer generally will be adjusted to prevent dilution in the event of
certain cash and non-cash dividends, recapitalizations and similar
transactions effecting the Common Stock. An officer may generally elect to
"cash out" any number or all of the phantom stock units allocated to such
officer between December 1 and December 15 of any calendar year, in which
event an amount equal to the fair market value of a share of Common Stock
on the last business day of the year in which such election is made
multiplied by the number of phantom stock units that the officer elected
to "cash out" shall be paid to the officer. Additionally, in the event of
certain mergers, the sale of all or substantially all of the Company's
assets and certain similar transactions (a "Reorganization") within six
months after the date an officer has been paid for phantom stock units and
as a result of such Reorganization and the holders of Common Stock receive
cash for each share so held in an amount in excess of the amount paid to
such officer for such phantom stock units, then such excess shall be paid
to the officer. As of the date hereof, none of the Executive Officers have
elected to "cash out" any of the phantom stock units. The total number of
phantom stock units awarded to Messrs. Stubbs, Robertson, and Cott in
1993, 1994, and 1995 under the Executive Plan, the SERP and their
predecessors was 27,415, 15,311, and 6,471; 11,206, 6,814, and 3,220; and
9,675, 5,979, and 2,722, respectively. As of December 31, 1995, the total
number of phantom stock units allocated to the accounts of Messrs. Stubbs,
Robertson, and Cott and the value of such units (calculated by multiplying
the number of phantom stock units allocated to such officer by the market
price of a share of Common Stock on December 29, 1995) was 60,436, 35,813
and 18,270 and $528,817, $313,364 and $159,865, respectively.
(3) Options to acquire shares of the Company's Common Stock.
8
<PAGE>
(4) Company contributions to the FFE Employee Stock Ownership Plan (the
"ESOP"), the Savings Plan for Employees of Frozen Food Express Industries,
Inc., (the "Savings Plan") and the value of benefits, as determined under
a methodology required by the SEC for valuing such benefits, ascribed to
life insurance policies whose premiums are paid by the Company for the
benefit of the persons indicated below. Set forth below is a summary of
such compensation:
<TABLE>
<CAPTION>
SAVINGS SPLIT DOLLAR
NAME YEAR ESOP PLAN LIFE INSURANCE
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Stoney M. Stubbs, Jr. 1995 $ 7,668 $6,000 $27,484
1994 $ 9,119 $6,000 $ 8,411
1993 $18,194 $2,371 $ 7,721
Charles G. Robertson 1995 $ 7,668 $6,000 $ 9,703
1994 $ 9,119 $6,000 $ 5,174
1993 $18,194 $2,371 $ 4,776
Burl G. Cott 1995 $ 7,668 $6,000 --
1994 $ 9,119 $5,455 --
1993 $18,194 $2,371 --
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the grant of stock
options to the Executive Officers in the last fiscal year under the Company's
1992 Incentive and Nonstatutory Stock Option Plan:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (1)
------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS/SARS ASSUMED ANNUAL RATES
SECURITIES GRANTED TO OF STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE OR FOR OPTION TERM (1)
NAME OPTIONS/SARS IN FISCAL BASE PRICE EXPIRATION --------------------------------
GRANTED (2) YEAR ($/SH) DATE 5% 10%
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stoney M. (Mit) Stubbs,
Jr. 31,250 7.0% $12.000 01/06/05 $ 235,835 $ 597,653
50,000 11.3% $ 8.875 11/27/05 $ 279,072 $ 707,223
Charles G. Robertson 25,000 5.6% $12.000 01/06/05 $ 188,668 $ 478,123
33,000 7.4% $ 8.875 11/27/05 $ 184,188 $ 466,767
Burl G. Cott 7,500 1.7% $12.000 01/06/05 $ 56,601 $ 143,437
13,500 3.0% $ 8.875 11/27/05 $ 75,349 $ 190,950
All Holders of Common
Stock (/3/) N/A N/A $ 8.875 N/A $91,504,826 $231,891,194
</TABLE>
- --------
(1) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises and Common Stock holdings are
dependent on the future performance of the Common Stock and overall stock
market conditions. There can be no assurance that the amounts reflected in
this table will be achieved.
(2) All options granted to Executive Officers were granted on January 6, 1995,
or November 27, 1995, under the 1992 Incentive and Nonstatutory Stock
Option Plan, first become exercisable on January 6, 1996, or November 27,
1996, respectively, and are exercisable for a period of ten years from the
date of grant. All options were granted with an exercise price equal to
100% of the market price of the Common Stock on the date of grant of such
stock option.
(3) Assumes a total of 16,394,484 shares of Common Stock outstanding with a
value of $8.875 (the closing sales price of the Common Stock on November
27, 1995) per share held from November 27, 1995, until November 27, 2005.
9
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION/SAR
VALUES
The following table provides information, with respect to each Executive
Officer, concerning the exercise of options during the last fiscal year and
unexercised options held as of the end of the fiscal year ending December 31,
1995:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END AT FY-END
(#) ($)(2)
-------------- -------------
# OF SHARES VALUE
ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (1) UNEXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stoney M. (Mit) Stubbs, Jr. 54,500 $222,589 121,805/81,250 $79,777/ $--
Charles G. Robertson 30,480 $114,886 71,047/58,000 $40,024/ $--
Burl G. Cott 12,298 $ 57,441 29,172/21,000 $17,283/ $--
</TABLE>
- --------
(1) Value is calculated on the basis of the difference between the closing
price for the Company's Common Stock on the date of exercise and the option
exercise price multiplied by the number of shares of Common Stock
underlying the option exercised.
(2) The closing price for the Company's Common Stock as reported by the Nasdaq
Stock Market on December 31, 1995, was $8.75. Value is calculated on the
basis of the difference between $8.75 and the option exercise price of an
"in-the-money" option multiplied by the number of shares of Common Stock
underlying the option.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
composed of Messrs. Brian R. Blackmarr, Chairman, and W. Grogan Lord. The
Committee determines on an annual basis the compensation to be paid to the
Chief Executive Officer and each of the other executive officers of the
Company. Under the supervision of the Committee, the Company has developed and
implemented compensation policies, plans and programs which seek to enhance the
profitability of the Company, and thus shareholder value, by aligning closely
the financial interests of the Company's executives with those of its
shareholders. The specific objectives of the Company's executive compensation
program are to:
.Support the achievement of Company strategic operating objectives.
. Provide compensation that will attract and retain superior talent and reward
the executives based upon Company and individual performance.
. Align the Executive Officers' financial interests with the success of the
Company by placing a substantial portion of pay at risk (i.e., payout that
is dependent upon Company performance).
. Encourage a balanced perspective between the short-term and long-term
decision making responsibilities of the Executive Officers by providing an
effective balance between rewards offered through the Company's incentive
plans.
The Company's Executive Officer compensation program is comprised of base
salary, annual cash incentive compensation, long-term incentive compensation in
the form of stock options and phantom equity units, supplemental retirement
benefits and various benefits, including medical and retirement plans generally
available to employees of the Company. During 1995, the Company engaged a
compensation consultant to update the 1993 competitive market analysis of the
executive positions in a competitive peer group of companies. The scope of this
analysis included comparisons of base salaries, annual cash bonuses, long-term
incentives and retirement benefits for executive officer positions comparable
to those at the Company. The competitive peer group utilized for purposes of
this analysis consisted of 12 publicly-traded trucking companies with
operations and revenue
10
<PAGE>
size similar to the Company's. The Committee believes that the peer group used
for the compensation study provided a more meaningful comparison than would
have the broader industry index the Company has selected for use in the five-
year shareholder return comparison. For 1995, the broader industry index
included 43 other companies, many of which are significantly different from
the Company in size and nature of the services provided. This study was
completed in February, 1996. It is the intention of the Committee to update
the study on a regular basis in an effort to maintain current data on
competitive pay practices among its peer group of companies. References made
below comparing the compensation of the Company's Executive Officers to the
competitive market are based upon the results of the updated study.
Base salary levels for the Company's Executive Officers are set relative to
comparable positions at companies in the transportation services industry. It
is the objective of the Company to maintain base salaries that are somewhat
below the median of amounts paid to senior executives with comparable
qualifications, experience and responsibilities at other companies engaged in
the same or similar business as the Company. Based upon an analysis of the
Company's peer group, the base salaries for Executive Officers in the current
fiscal year remain below the average for comparable positions.
Annual incentive compensation may be paid under the Company's 1994 Incentive
Bonus Plan (the "Incentive Plan") and the Company's Executive Bonus and
Phantom Stock Plan (the "Executive Plan"). The main purpose of the plans, both
of which were approved by the Company's shareholders at the 1994 annual
meeting, is to provide direct financial incentives in the form of annual cash
bonuses and phantom shares upon the achievement of predetermined performance
goals. The Incentive Plan covers all full-time employees of FFE, including
Executive Officers. The Incentive Plan provides for incentive compensation
based upon a formula giving effect to efficiencies of operation as evidenced
by the Company's operating ratio. Under the Executive Plan, participants can
earn a bonus calculated as a percentage of their annual base salary if the
operating ratio meets prescribed targets. The Committee believes that through
the Incentive and Executive Plans, when the Company performs in an outstanding
manner in relation to its peer group, amounts should be made available to
Executive Officers at levels above the median for that peer group with respect
to total cash compensation. For the current fiscal year, cash bonuses awarded
under the Incentive and Executive Plans averaged approximately 27% percent of
the Executive Officers' annual salaries as compared to 64% during 1994 and 62%
during 1993 when operating ratios were better than that achieved during the
current year.
The Board of Directors, at the recommendation of the Committee, awarded
discretionary bonuses to the Executive Officers during the 1995 fiscal year,
citing their exemplary performance for the first half of fiscal 1995 in
directing the Company's profitability to another record in its 49-year
history. Company profits during the twelve months ended June 30, 1995,
increased approximately 12 percent over the same period in 1994, which was
better than most other refrigerated carriers in their peer group.
The stock option and phantom equity programs form the bases for the
Company's long-term incentive plan for officers and key managers. The specific
objectives of the programs are (i) to align executive and shareholder long-
term interests by creating a strong link between executive pay and shareholder
return, and (ii) to provide a balance between the short-term and long-term
decision making responsibilities of each executive. It is the intention of the
Company that executives develop and maintain a significant, long-term stock
ownership position in the Company's Common Stock.
The 1992 Incentive and Nonstatutory Stock Option Plan as amended (the "1992
Plan") was approved by the shareholders at the 1994 Annual Meeting, and serves
to replace the expired 1982 Incentive Stock Option. The 1992 Plan permits the
granting of both incentive stock options and nonstatutory options. The
exercise price for incentive stock options granted under the plan will not be
less than 100% of the fair market value of a share of the Company's Common
Stock at the time of the grant. The exercise price for nonstatutory stock
options granted under the plan will be determined by the Committee or the
Board of Directors at the time of the grant; provided, however, that the
exercise price will not be less than 50% of the fair market value of a share
of the Company's Common Stock at the time of the grant. The term of the
options granted under the 1992 Plan will be determined by the Committee or the
Board of Directors; provided that the term of stock options will not exceed
ten years. The number of options awarded to individual Executive Officers
during the 1995 fiscal year were
11
<PAGE>
determined by reference to grants made to comparable executive positions at the
Company's peer group of companies. The Committee believes the current year
awards are competitive in value with the awards made to comparable executive
officer positions in the Company's peer group.
During 1993, the Company's Board of Directors adopted and implemented the FFE
Transportation Services, Inc., Supplemental Executive Retirement Plan. The
purpose of the plan is to allow executives whose retirement benefits are
restricted by Internal Revenue Code Sections 401(a)(17) and 415 to receive
supplemental benefits in the form of phantom shares in the Company. The amounts
awarded under this plan for fiscal 1995 are disclosed in the Summary
Compensation Table.
Mr. Stoney M. (Mit) Stubbs, Jr., has served as Chairman of the Board,
President and Chief Executive Officer of the Company since his appointment in
1982. His base salary paid in fiscal year 1995 was $258,099, the same as the
previous year. Mr. Stubbs' salary is reviewed annually by the Committee.
Adjustments, if any, are made based upon the competitive market analysis of the
chief executive officer position at the Company's competitive peer group of
companies. In addition, the performance of the Company and the Committee's
subjective analysis of Mr. Stubbs' individual performance are also taken into
consideration.
Mr. Stubbs' bonus for fiscal 1995 awarded under the Incentive Bonus Plan and
the Executive Plan totaled $69,281. The award levels were determined solely by
reference to the pre-established performance goals under each plan with respect
to the Company's operating ratio for the current year. In addition, the Board
of Directors, at the recommendation of the Committee approved in 1995 the
payment of a discretionary bonus to Mr. Stubbs in the amount of $155,000,
citing his exemplary performance in directing the Company's profitability
during the first half of 1995 to another record best in its 49-year history.
Company profits during the 12 months ended June 30, 1995, increased by
$1,265,000 or 12% over twelve months ended June 30, 1994.
During the current fiscal year, the Committee, with the approval of the Board
of Directors, awarded Mr. Stubbs 81,250 options to purchase Company Common
Stock under the terms of the 1992 Plan. The exercise price of the options was
equal to the fair market value of the Company's Common Stock on the date of
grant. In determining the number of options awarded to Mr. Stubbs, the
Committee considered the value of long-term incentive plan awards made to the
chief executive officers of the Company's peer group of companies. Additional
considerations included the recent performance of the Company and the
Committee's subjective assessment of the individual performance of Mr. Stubbs.
Changes made to the Internal Revenue Code in 1993 could potentially limit the
ability of the Company to deduct, for federal income tax purposes, certain
compensation in excess of $1 million per year paid to individuals named in the
Summary Compensation Table. This limitation became effective in 1994. The
Company has taken steps to mitigate the impact of this limitation and believes
all compensation paid in 1995 to be fully tax deductible. The Company will
continue to seek ways to preserve the tax deductibility of compensation
payments without compromising the Company's or the Committee's flexibility in
designing effective compensation plans that can meet the Company's changing
objectives. Although the Committee will from time to time review the
advisability of making changes in compensation plans to reflect future
government-mandated policies, it will not do so unless it feels that such
changes are in the best interest of the Company and its shareholders.
Brian R. Blackmarr, Chairman
W. Grogan Lord
Members of the Compensation Committee
12
<PAGE>
TRANSACTIONS WITH MANAGEMENT
During 1993, 1994 and 1995 a subsidiary of the Company entered into lease
agreements whereby Stoney M. Stubbs, Jr., Chairman of the Board, President and
Chief Executive Officer of the Company, Charles G. Robertson, the Executive
Vice President and a director of the Company, and a family partnership
controlled by Mr. Stubbs leased an aggregate of 54 tractors to the subsidiary.
Lease payments were determined by reference to amounts the subsidiary was
paying to unaffiliated lessors for similar equipment leased under similar
terms. Each tractor is leased under a non-cancelable operating lease for a
period of thirty-six months. As of December 31, 1995, the subsidiary was also
renting an aggregate of 46 trailers from these officers. Trailer leases in
effect on such date were cancelable without notice by either party and are
continuing on a month-to-month basis.
Total tractor and trailer rentals paid during 1995 by the subsidiary pursuant
to the lease agreements were as follows: Mr. Stubbs and the family
partnership--$819,915 and Mr. Robertson--$427,310. The leases are triple-net
leases which require the lessee to pay directly to third parties all taxes,
insurance and maintenance expenses. The leases grant the subsidiary an option
to purchase the leased equipment at the end of the lease term for its fair
market value. Fair market value is determined by reference to prices at which
the subsidiary is able to buy and sell similar equipment of similar age and
condition. During 1995, the Company purchased tractors and trailers valued at
$284,765 from Mr. Stubbs and the family partnership and $155,900 from Mr.
Robertson. The aggregate future minimum lease payments to Mr. Stubbs and the
family partnership and Mr. Robertson under the tractor leases are $537,000 and
$275,000, respectively, in 1996, $360,000 and $205,000, respectively, in 1997
and $120,000 and $60,000, respectively, in 1998.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP served as the Company's independent
accountant for fiscal year 1995. It is expected that representatives of Arthur
Andersen LLP will be present at the Annual Meeting, with the opportunity to
make a statement if they so desire, and will be available to respond to
appropriate questions. The Company intends to select its independent accountant
to review and report on the financial statements of the Company for the 1996
fiscal year after receiving the recommendation of the Audit Committee of the
Board of Directors at the Audit Committee's May 1996 meeting.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) promulgated under the Securities Exchange Act of 1934, as
amended, requires the Company's officers and directors and persons who own more
than ten percent of a registered class of the Company's equity securities to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission ("SEC") and Nasdaq. Officers and directors and greater than
ten-percent shareholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on its review of such forms received by it, or written
representations from certain reporting persons that no Form 5 filings were
required for those persons, the Company believes that, during the year ended
December 31, 1995, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were
complied with.
13
<PAGE>
SHAREHOLDER PROPOSALS AT 1997 ANNUAL MEETING
Shareholders intending to present proposals at the 1997 Annual Meeting of
Shareholders and desiring to have those proposals included in the Company's
proxy statement and form of proxy relating to that meeting must deliver such
proposals to the Secretary of the Company on or before November 30, 1996.
By Order of the Board of Directors
Dallas, TX LEONARD W. BARTHOLOMEW
March 29, 1996 Secretary
THE COMPANY WILL PROVIDE, UPON WRITTEN REQUEST AND WITHOUT CHARGE, A COPY OF
ITS ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995, WHICH IT
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, TO ANY RECORD OR
BENEFICIAL OWNER OF THE COMPANY'S COMMON STOCK AT THE CLOSE OF BUSINESS ON
MARCH 8, 1996. REQUESTS SHOULD BE DIRECTED TO LEONARD W. BARTHOLOMEW,
SECRETARY OF THE COMPANY, P. O. BOX 655888, DALLAS, TEXAS 75265-5888.
14
<PAGE>
FROZEN FOOD EXPRESS INDUSTRIES, INC.
ANNUAL MEETING OF SHAREHOLDERS - APRIL 25, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (1) acknowledges receipt of the notice, dated March
29, 1996, of the Annual Meeting of Shareholders of Frozen Food Express
Industries, Inc. (herein called the "Company") to be held on Thursday, April 25,
1996, at 3:30 p.m., Dallas, Texas time, in the Sheraton Park Central Hotel,
12720 Merit Drive, Dallas, Texas 75251, and the Proxy Statement, also dated
March 29, 1996, in connection therewith (herein called the "Proxy Statement"),
and (2) constitutes and appoints Stoney M. Stubbs, Jr., and Burl G. Cott, and
each of them, (if only one be present, then by that one alone), his attorneys
and proxies, with full power of substitution and revocation to each, for and in
the name, place and stead of the undersigned, to vote, and act with respect to,
all of the shares of capital stock of the Company standing in the name of the
undersigned or with respect to which the undersigned is entitled to vote and
act, at said meeting and at any adjournment thereof. The Board of Directors
recommends a vote FOR each of the Company's proposals set forth on the reverse.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR all nominees listed in Proposal 1.
-----------
SEE REVERSE
SIDE
-----------
(Continued and to be signed on reverse side.)
<PAGE>
Please mark
/x/ votes as in
this example.
Please mark boxes in blue or black ink.
1. ELECTION OF OFFICERS
Nominees: Stoney M. (Mit) Stubbs, Jr., Edgar O. Weller, W. Grogan Lord, Leroy
Hallman, Brian R. Blackmarr, Charles G. Robertson, Burl G. Cott and T. Michael
O'Connor.
FOR WITHHELD
/ / / /
/ / __________________________________
For all nominees except as noted above
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE
FOR ADDRESS / /
CHANGE AND
NOTE AT LEFT
Please promptly complete, date, sign and return this proxy using the enclosed
envelope.
When shares are held by joint tenants, both should sign. When signing as an
agent, attorney, administrator, executor, guardian or trustee, please give full
title as such. If a corporation, please sign in full corporate name by President
or other authorized officer who should indicate his title. If a partnership,
please sign in partnership name by authorized person. Please date, sign and
mail this proxy card in the enclosed envelope. No postage is required if mailed
in the United States.
Signature: __________________________ Date: __________________________
Signature: __________________________ Date: __________________________
