-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S8ImyO/x1UkxZFLGFfqdqQbc2WOYT0Xzd1gesVsW39KTvRNgQG7Atq0Vf+LXVI3y ckuOAdKhmHlxDHyPGKKDNA== 0000039273-02-000016.txt : 20020628 0000039273-02-000016.hdr.sgml : 20020628 20020628162722 ACCESSION NUMBER: 0000039273-02-000016 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FROZEN FOOD EXPRESS INDUSTRIES INC CENTRAL INDEX KEY: 0000039273 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 751301831 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-10006 FILM NUMBER: 02691737 BUSINESS ADDRESS: STREET 1: 1145 EMPIRE CENTRAL PLACE CITY: DALLAS STATE: TX ZIP: 75247 BUSINESS PHONE: 2146308090 10-K/A 1 a10k02.txt 10K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K/A Amendment No. 1 [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2001. [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ____________________ to ____________________ Commission File Number 1-10006 FROZEN FOOD EXPRESS INDUSTRIES, INC. Texas 75-1301831 (State of Incorporation) (I.R.S. Employer Identification No.) 1145 Empire Central Place Dallas, Texas 75247-4309 (2l4) 630-8090 ______________________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [ ] Yes [ X ] No At June 26, 2002, the latest practicable date, there were 16,698,327 outstanding shares of Common Stock, $1.50 par value. Item 14 of the Form 10-K is amended by adding as Exhibit 99.2 the information, financial statements and exhibits required to be filed on Form 11-K for the fiscal year ended December 31, 2001, with respect to the Frozen Food Express Industries, Inc. 401(k) Savings Plan (the "Savings Plan") pursuant to Securities and Exchange Commission Rule 15d-21 promulgated under the Securities Exchange Act of 1934, as amended. Because the plan reported on herein are subject to the reporting requirement of the Employee Retirement Income Security Act of 1974 ("ERISA"), the financial statements and schedules included herein have been prepared in accordance with the requirements of ERISA. Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. (a) 1. & 2. FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES: The financial statements listed in the index to financial statements and financial statement schedules in Item 8 hereof were filed as part of the Registrant's Annual Report on Form 10-K on April 9, 2002. 3. EXHIBITS: 3.l Articles of Incorporation of the Registrant and all amendments to date (filed as Exhibit 3.1 to Registrant's annual report on Form 10-K for the fiscal year ended December, 31, 1993; SEC File Number 1-10006 and incorporated herein by reference). 3.2 Bylaws of the Registrant (filed as Exhibit 3.2 to Registrant's Annual Report on Form 10-K for the fiscal year ended December, 31, 1998; SEC File Number 1-10006 and incorporated herein by reference). 3.3 Amendment to Bylaws of the Registrant, dated June 14,2000 (filed as Exhibit 3.1 to Registrant's Report on Form 8-K filed with the Commission on June 28, 2000 and incorporated herein by reference). 3.4 Amendment to Bylaws of the Registrant, dated April 3, 2002, (filed as Exhibit 3.4 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001; SEC File Number 1-10006 and incorporated herein by reference). 4.1 Rights Agreement dated as of June 14, 2000, between the Registrant and Fleet National Bank, which includes as exhibits, the form of the Rights Certificate and the Summary of Rights (filed as Exhibit 4.1 to Registrant's Form 8-A Registration Statement filed on June 19, 2000 and incorporated herein by reference). 10.1 Frozen Food Express Industries, Inc., 1995 Non-Employee Director Stock Plan (filed as Exhibit 4.3 to Registrant's Registration Statement #033-59645 as filed with the Commission and incorporated herein by reference). 10.2 Second Amended and Restated Credit Agreement among Wells Fargo Bank (Texas) National Association as agent for itself and other banks and FFE Transportation Services, Inc. as Borrower and certain of its affiliates (filed as Exhibit 10.2 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1999; SEC File Number 1-10006 and incorporated herein by reference). 10.3 First Amendment to Second Amended and Restated Credit Agreement (filed as Exhibit 10.1 to Registrant's report on Form 8-K filed with the Commission on June 9, 2000 and incorporated herein by reference). 10.4 Second Amendment to Second Amended and Restated Credit Agreement (Filed as Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001; SEC File Number 1-10006 and incorporated herein by reference). 10.5 Third Amendment to Second Amended and Restated Credit Agreement(filed as Exhibit 10.5 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001; SEC File Number 1-10006 and incorporated herein by reference). 10.6 Fourth Amendment to Second Amended and Restated Credit Agreement and Waiver (filed as Exhibit 10.6 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001; SEC File Number 1-10006 and incorporated herein by reference). 10.7 Frozen Food Express Industries, Inc., 1992 Incentive and Nonstatutory Stock Option Plan (filed as Exhibits 4.3 to Registrant's Registration Statement #33-48494 as filed with the Commission, and incorporated herein by reference). 10.8 Amendment No. 1 to Frozen Food Express Industries, Inc. 1992 Incentive and Nonstatutory Stock Option Plan (filed as Exhibit 4.4 to Registrant's Registration Statement #333-38133 and incorporated herein by reference). 10.9 Amendment No. 2 to Frozen Food Express Industries, Inc. 1992 Incentive Stock Option Plan (filed as Exhibit 4.5 to Registrant's Registration #333-38133 and incorporated herein by reference). 10.10 Amendment No. 3 to Frozen Food Express Industries, Inc. 1992 Incentive Stock Option Plan (filed as Exhibit 4.6 to Registrant's Registration Statement #333-87913 and incorporated herein by reference). 10.11 FFE Transportation Services, Inc. 1994 Incentive Bonus Plan, as amended (filed as Exhibit 10.6 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1994; SEC File Number 1-10006 and incorporated herein by reference). 10.12 FFE Transportation Services, Inc., 1999 Executive Bonus and Phantom Stock Plan (filed as Exhibit 10.8 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1999; SEC File Number 1-10006 and incorporated herein by reference). 10.13 Frozen Food Express Industries, Inc. 401(k) Savings Plan(filed as Exhibit 10.13 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001; SEC File Number 1-10006 and incorporated herein by reference). 10.14 First Amendment to the Frozen Food Express Industries, Inc. 401(k) Savings Plan (filed as Exhibit 10.14 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001; SEC File Number 1-10006 and incorporated herein by reference). 10.15 Frozen Food Express Industries, Inc. Employee Stock Option Plan (filed as Exhibit 4.1 to Registrant's Registration #333-21831 as filed with the Commission, and incorporated herein by reference). 10.16 Amendment to the Frozen Food Express Industries, Inc. Employee Stock Option Plan (filed as Exhibit 4.4 to Registrant's Registration Statement #333-52701 and incorporated herein by reference). 10.17 FFE Transportation Services, Inc. 401(k) Wrap Plan (filed as Exhibit 4.4 to Registrant's Registration Statement #333-56248 and incorporated herein by reference). 10.18 Form of Change in Control Agreement (filed as Exhibit 10.1 to Registrant's report on Form 8-K filed with the Commission on June 28, 2000 and incorporated herein by reference). 10.19 Asset Purchase Agreement between W&B Refrigeration Service Company and W&B Newco, LP (filed as Exhibit 10.19 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001; SEC File Number 1-10006 and incorporated herein by reference). 11.1 Computation of basic and diluted net income per share of common stock (incorporated by reference to Footnote 9 to the financial statements appearing in the Annual Report to Shareholders of the Registrant for the year ending December 31, 2001). 13.1 Annual Report to Shareholders of the Registrant for the year ended December 31, 2001. Except for those portions of such Annual Report to Shareholders expressly incorporated by reference into this Report, such Annual Report to Shareholders is furnished solely for the information of the Securities and Exchange Commission and shall not be deemed a "Filed" Document. 21.1 Subsidiaries of Frozen Food Express Industries, Inc. (filed as Exhibit 21.1 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001; SEC File Number 1-10006 and incorporated herein by reference). 23.1 Consent of Independent Public Accountants. 25.1 A Power of Attorney is found on page 13 of this Report(filed as Exhibit 25.1 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001; SEC File Number 1-10006 and incorporated herein by reference). 99.1 Confirmation of receipt of assurance from Arthur Andersen, LLP(filed as Exhibit 99.1 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001; SEC File Number 1-10006 and incorporated herein by reference). 99.2 Frozen Food Express Industries, Inc. 401(k) Savings Plan Statements of Net Assets Available for Plan Benefits as of December 31, 2001 and 2000 and Statements of Changes in Net Assets Available for Plan Benefits for each of the three years in the period ended December 31, 2001 with notes thereto and Report of Independent Public Accountants thereon. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: June 21, 2002 By: /s/ Stoney M. Stubbs, Jr. ----------------------------------- Stoney M. Stubbs, Jr., Chairman of the Board of Directors and President (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: June 21, 2002 By: /s/ Stoney M. Stubbs, Jr. ----------------------------------- Stoney M. Stubbs, Jr., Chairman of the Board of Directors and President (Principal Executive Officer) June 21, 2002 By: /s/ Charles G. Robertson * ----------------------------------- Charles G. Robertson, Executive Vice President and Director June 21, 2002 By: /s/ F. Dixon McElwee* ---------------------------------- F. Dixon McElwee, Senior Vice President and Chief Financial Officer June 21, 2002 By: /s/ Edgar O. Weller * ---------------------------------- Edgar O. Weller, Vice Chairman of the Board of Directors June 21, 2002 By: /s/ W. Mike Baggett* ---------------------------------- W. Mike Baggett, Director June 21, 2002 By: /s/ Brian R. Blackmarr * ---------------------------------- Brian R. Blackmarr, Director June 21, 2002 By: /s/ Leroy Hallman * ---------------------------------- Leroy Hallman, Director June 21, 2002 By: /s/ T. Michael O'Connor * ---------------------------------- T. Michael O'Connor, Director * By: /s/ Stoney M. Stubbs, Jr. -------------------------- Stoney M. Stubbs, Jr. Attorney-in-Fact EXHIBIT INDEX Sequentially Exhibit Description Numbered Page - ------- ------------- ------------- 23.1 Consent of Independent Public Accountants 8 99.2 Frozen Food Express Industries, Inc. 401(k) 9 Savings Plan Statements of Net Assets Available for Plan Benefits as of December 31, 2001 and 2000 and Statements of Changes in Net Assets Available for Plan Benefits for each of the three years in the period ended December 31, 2001 with notes thereto and Report of Independent Public Accountants thereon. EX-23 3 ex231.txt CONSENT Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-56204) pertaining to the Savings Plan for Employees of Frozen Food Express Industries, Inc., and in the related Prospectus of our reports dated June 21, 2002, with respect to the financial statements of FFE Transportation Services, Inc., Savings Plan for Employees of Frozen Food Express Industries, Inc., which are included in this Amendment No. 1 to the Annual Report (Form 10-K) of Frozen Food Express Industries for the year ended December 31, 2001. /s/ Waters, Wright & Associates LLP - ----------------------------------- Waters, Wright & Associates, LLP Mansfield, Texas June 21, 2002 EX-99 4 ex992.txt SAVINGS PLAN BENEFITS EXHIBIT 99.2 FROZEN FOOD EXPRESS INDUSTRIES, INC. 401(k) SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS December 31, 2001 and 2000 2001 2000 ---- ---- Investments $16,295,625 $14,968,072 Participant notes receivable 1,215,761 1,096,355 Employer contributions receivable 43,239 94,173 Employee contributions receivable 143,697 121,333 ---------- ---------- Total investments 17,698,322 16,279,933 Less: Benefits payable 1,893,432 2,302,598 ---------- ---------- Net assets available for plan benefits $15,804,890 $13,977,335 ========== ========== See accompanying notes and report of independent public accountants. FROZEN FOOD EXPRESS INDUSTRIES, INC. 401(k) SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS Years Ended December 31, 2001, 2000 and 1999 2001 2000 1999 ---- ---- ---- Investment income: Dividend income $ 94,463 $ 200,154 $ 231,742 Interest income 219,148 198,558 161,774 ---------- ---------- --------- 313,611 398,712 393,516 ---------- ---------- --------- Administration expense (158,408) (196,995) (137,977) Realized (loss) gain (1,450,177) (1,329,717) 175,135 Net unrealized appreciation (depreciation)in market value of investments 1,519,821 (3,898,991) (8,236,868) Employee contributions 2,159,034 2,371,661 2,154,142 Employer contributions 991,054 1,309,519 1,361,160 ---------- ---------- ---------- 3,061,324 (1,744,523) (4,684,408) Decrease in fair Market value of plan benefits Payable to participants (1,547,380) (3,248,303) (1,591,272) ---------- ---------- ---------- Net increase (decrease) 1,827,555 (4,594,114) (5,882,164) Assets transferred from: FFE Transportation Services, Inc. Employee Stock Ownership Plan -- 5,063,801 -- Conwell Corporation Employee Stock Ownership Plan (Note 4) -- 541,720 -- Net assets available for plan Benefits at beginning of year 13,977,335 12,965,928 18,848,092 ---------- ---------- ---------- Net assets available for plan Benefits at end of year $15,804,890 $13,977,335 $12,965,928 ========== ========== ========== See accompanying notes and report of independent public accountants. FROZEN FOOD EXPRESS INDUSTRIES, INC. 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS December 31, 2001 1. Description of the Savings Plan ------------------------ The Frozen Food Express Industries, Inc. 401(k) Savings Plan (the "Savings Plan") is a defined contribution plan covering substantially all employees of Frozen Food Express Industries, Inc. ("FFEX") and its wholly-owned subsidiaries (the "Employer"). The Savings Plan is designed to comply with the Employee Retirement Income Security Act of 1974 ("ERISA") and to allow employees the option of investing in common stock of the Employer or in other investment funds designated by the Savings Plan committee. Participants should refer to the Savings Plan agreement for a more complete description of the Savings Plan's provisions. Contributions - Participants may elect to contribute to the Savings Plan through periodic payroll deductions, subject to limits defined by the Savings Plan. Employee contributions, excluding rollovers, amounted to $2,126,687, $2,072,414, and $1,848,504, in 2001, 2000, and 1999, respectively. In addition, Employer cash contributions to the Savings Plan amounted to $928,615, $1,309,519 and $1,361,160 in 2001, 2000 and 1999, respectively. During 2001, 29,059 shares of FFEX treasury stock, valued at $62,439 were contributed to the Savings Plan. Eligibility - An Employee who completes 90 days of employment with an Employer will enter the Savings Plan on the first business day of the month thereafter. Participants' accounts - Each participant account is credited with the participant's contributions and an allocation of (a) the Employer's contributions, (b) plan earnings, and (c) forfeitures of terminated participants' non-vested accounts. Allocations of plan earnings are based on participants' account balances, allocation of Employer's contributions are based on participants' quarterly contributions, and allocations of forfeitures are based on the participants' annual compensation. Participant Notes Receivable - Participants may borrow from their fund accounts an amount not to exceed the lesser of $50,000 or 50% of the participant's vested account balance. Loan transactions are treated as a transfer to (from) the investment fund and from (to) Participant Notes Receivable. Loan terms range from one to five years or up to ten years for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at a reasonable rate as determined by the Savings Committee. The interest rates charged for loans made in 2001 and 2000 ranged from 5.75% to 10.50%, respectively. Principal and interest payments are due in substantially level amortized payments payable not less than quarterly through payroll deductions. Vesting - Upon termination of employment, participants are entitled to receive 100% of their contributions and any earnings thereon. Participants' benefits from Employer contributions begin to vest subsequent to completion of three years of credited service and vest 100% at completion of seven years of credited service as defined by the Savings Plan. Investment options - During each of the three years ending December 31, 2001, participants could direct employee contributions in any of ten investment options. Stable Value Fund - The fund invests in assets whose principal value remains stable regardless of stock and bond market fluctuations. The Savings Plan committee has selected the Schwab Institutional Advantage Money Fund as the investment vehicle for this fund. Intermediate Bond Fund - The fund invests in fixed-income securities including corporate bonds, U.S. government securities, mortgage- related securities, and money-market instruments. The Savings Plan committee has selected the PIMCO Total Return Institutional Fund as the investment vehicle for this fund. Mixed Investment Fund - The fund may invest a large portion of its assets in common stock and convertible securities. Prospective dividends and earnings are major considerations in these purchases. The Savings Plan committee has selected the Janus Balanced Fund as the investment vehicle for this fund. Stock Index Fund - The fund attempts to replicate the aggregate return and risk of the Standard & Poor's 500 index. The fund will purchase all, or a representative sample of all the stocks held in the S&P 500 index. The Savings Plan committee has selected the Schwab S&P 500 Index Fund as the investment vehicle for this fund. Basic Stock Fund - The fund seeks capital appreciation by investing primarily in securities that are expected to grow at an above- average rate. The Savings Plan committee has selected the MFS Massachusetts Investment Trust Fund-Class A and the Dreyfus Appreciation fund as the investment vehicles for this fund. Growth Stock Fund - The fund invests primarily in common stocks and favors securities of companies expected to benefit from special favors or trends. The Savings Plan committee has selected the Managers Special Equity Fund as the investment vehicle for this fund. Small Cap Stock Fund - The fund seeks capital growth by investing in small-sized companies that are currently considered undervalued or demonstrate growth in earnings and revenue. The Savings Plan committee has selected the Baron Asset Fund as the investment vehicle for this fund. International Stock Fund - The fund invests primarily in stocks and debt securities of companies and governments outside the United States. The Savings Plan committee has selected the Deutsche International Equity Investment Fund as the investment vehicle for this fund. Technology Sector Fund - This fund invests primarily in stocks of companies engaged in technology-related fields, such as computers, communications, video and electronics. The Savings Plan committee has selected Investco Technology II Fund as the investment vehicle for this fund. Frozen Food Express Industries, Inc. Common Stock - Funds that are invested in the common stock of FFEX. Administration - The Savings Plan is administered by a committee appointed by the Board of Directors of FFEX. Administrative expenses not paid by FFEX are paid by the Savings Plan. Termination of the Plan - While no Employer has not expressed any intent to discontinue its contributions, Employers are free to discontinue contributions and FFEX may terminate the Savings Plan at any time. If terminated, net assets of the Savings Plan would be distributed to participants and beneficiaries as prescribed by the terms of the Savings Plan, in accordance with ERISA. Upon termination of the Savings Plan, participants' accounts become 100% vested. Tax status - The United States Treasury Department has advised that the Savings Plan constitutes a qualified trust under Section 401(a) of the Internal Revenue Code (the "Code") and is therefore exempt from federal income tax under provisions of Section 501(a) of the Code. Participant contributions, Employer contributions, and earnings from the Savings Plan are not includable in the participant's taxable income until such amounts are distributed to the participant or to the participant's beneficiary. Forfeited accounts - At December 31, 2001, forfeited nonvested accounts totaled $90,635. These accounts will be used to reduce Employer expenses. Also, in 2001, Employer contributions were reduced by $229,482 from forfeited nonvested accounts. 2. Summary of significant accounting policies ------------------------------------------- Basis of accounting - The financial statements of the Savings Plan are under the accrual method of accounting. Accounting estimates - The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires the Savings Plan Committee to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual outcomes may vary from these estimates. Valuation of investments - Investments are valued based on the quoted market price on the last day of the year. The change in the difference between current market value and cost of the investment is reflected in the statement of changes in net assets available for plan benefits by investment fund as net unrealized appreciation or depreciation in market value of investments. 3. The following presents net assets of investments at December 31, 2001 and 2000: 2001 2000 ----- ----- Frozen Food Express Industries, Inc. Common Stock 4,358,964 and 4,538,307 shares, respectively $8,025,443* $ 7,542,338* Deutsche International Equity Fund, 13,775 and 7,440 shares, respectively 241,725 171,932 Baron Asset Fund, 9,752 and 5,803 shares, respectively 405,329 299,835 Dreyfus Appreciation Fund, 16,895 and 12,248 shares, respectively 591,261 472,039 Schwab S&P 500 Index Fund, 35,961 and 26,760 shares, respectively 603,865 507,497 MFS Massachusetts Investment Trust Fund - Class A, 64,590 and 57,940 shares, respectively 979,689 1,072,259 Janus Balanced Fund, 71,456 and 54,302 shares, respectively 1,333,973 1,048,161 PIMCO Total Return Institutional Fund, 91,637 and 61,388 shares, respectively 899,202 596,504 Invesco Technology II, 1,788 and 289 shares, respectively 58,182 17,243 Managers Special Equity Fund, 1,765 and 99 shares, respectively 123,609 7,623 Schwab Institutional Advantage Money Fund, 1,387,412 and 1,226,442 shares, respectively 1,326,851 1,145,549 --------- ---------- $ 14,589,129 $12,880,980 ========== ========== * Nonparticipant-directed shares at December 31, 2001 and 2000 respectively were 2,542,634, and 3,211,860 with net asset value of $5,441,236, and $6,323,511. During 2001, the Plan's investments (including gains and losses on investments bought and sold, as well held during the year) appreciated in value by $1,708,149 as follows: Mutual Funds $ 1,225,044 Common Stock 483,105 --------- $ 1,708,149 ========= 4. Merger ----------- On January 1, 2000, the Conwell Corporation and FFE Transportation Services, Inc. Employee Stock Ownership Plans (the "ESOP'S") were merged into the Savings Plan. The transfer of net assets was credited to separate participant accounts of the Savings Plan as of January 1, 2000, in amounts equal to their balances as previously carried in the separate accounts of the ESOP'S. 5. Income Tax Status ------------------ The Savings Plan obtained its latest determination letter on August 29, 1996, in which the Internal Revenue Service stated that the plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Savings Plan has been amended since receiving the determination letter. However, the Savings Plan administrator and the tax counsel believe that the Savings Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Savings Plan's financial statements. 6. Divesture ---------- In December 2001, most of the operating assets of one of our subsidiaries were sold. In connection with the sale, the buyer of the assets hired several employees who had been participants in the Savings Plan. These employees became ineligible to participate in the Savings Plan. As of December 31, 2001, net Plan assets which were available to these employees totaled $1,369,502. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ----------------------------------------- The Administrative Committee of the Savings Plan for Employees of Frozen Food Express Industries, Inc.: We have audited the accompanying statements of net assets available for plan benefits of the Savings Plan for Exmployees of Frozen Food Express Industries,Inc. (the "Plan") as of December 31, 2001 and 2000, and the related statements of changes in net assets available for plan benefits for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Savings Plan for Employees of Frozen Food Express Industries, Inc. as of December 31,2001 and 2000, and the changes in net assets available for plan benefits in each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules on pages 19, 20, and 21 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules on pages 19, 20 and 21 have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the foregoing basic financial statements taken as a whole. /s/ Waters, Wright & Associates, LLP ------------------------------------- Mansfield, Texas June 21, 2002 ADDITIONAL INFORMATION FROZEN FOOD EXPRESS INDUSTRIES, INC. 401(k) SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES December 31, 2001 (a) (b) (c) (d) (e) Identity of Issue Description of Investment Cost Current Value - -------------------- ------------------------ ----- ------------ Cash United States Dollars $ 1,009 $ 1,009 * Frozen Food Express Industries, Inc. Common Stock 4,358,964 shares 16,943,891 9,328,183 Deutsche International Equity Fund 13,375 shares 322,161 252,386 Baron Asset Fund 9,752 shares 509,582 433,557 Dreyfus Appreciation Fund 16,895 shares 719,693 642,345 Schwab S&P 500 Index Fund 35,961 shares 726,277 635,797 MFS Massachusetts Investment Trust Fund - Class A 64,590 shares 1,276,483 1,070,895 Janus Balanced Fund 71,456 shares 1,528,634 1,402,691 PIMCO Total Return Institutional Fund 91,637 shares 946,307 958,527 Invesco Technology II 1,788 shares 70,300 58,241 Managers Special Equity Fund 1,765 shares 130,147 124,582 Schwab Institutional Advantage Money Fund 1,387,412 shares 1,387,412 1,387,412 --------- ---------- $24,561,896 $16,295,625 ========== ========== Participants' notes Interest bearing notes at receivable 5.75%-10.50% N/A $ 1,215,761 * Party-in-interest to the plan. FROZEN FOOD EXPRESS INDUSTRIES, INC. 401(k) SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS ACQUIRED AND SOLD December 31, 2001 (a) (b) (c) (d) Identity of Issue Description of Investment Cost Proceeds - ----------------- ------------------------- ---------- --------- Frozen Food Express Industries, Inc. Common Stock 691,399 shares FFEX Common Stock* $2,660,850 $1,380,723 * These are total shares sold within the plan year, not necessarily just those shares acquired and disposed within the plan year. All other investment assets that were both acquired and disposed of during the plan year were interests issued by a company registered under the Investment Company Act of 1940. Therefore, these transactions are excluded from this schedule in accordance with the Specific Instructions for Form 5500. FROZEN FOOD EXPRESS INDUSTRIES, INC. 401(k) SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS Years Ended December 31, 2001 Purchases -------------------------- Identity Of Shares/ Market Party Involved Description Units Cost Value ------------- ---------- ------ ----- -------- 2001 ---- Frozen Food Express Industries, Inc. * Common Stock 571,272 $1,289,635 $1,222,522 MFS Trust Large-cap Stock 23,801 418,989 394,621 Schwab Stable Value 605,809 605,809 605,809 PIMCO Intermediate Bond 49,277 523,035 515,437 Baron Mid-cap Stock 5,927 283,909 263,514 Deutsche International Stock 9,790 211,662 184,737 Dreyfus Large-cap Stock 9,079 359,620 345,184 Janus Balanced Investment 39,823 802,428 781,725 Schwab Stock Index 19,155 354,502 338,660 Invesco Technology 2,639 109,447 85,952 Managers Small-cap Stock 1,766 129,612 124,680 * Party in interest to the Plan -----END PRIVACY-ENHANCED MESSAGE-----