CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (this “ Agreement ”) is made as of  February 25, 2009  by and between Frozen Food Express Industries, Inc., a Texas corporation (the “Company”)  and Ronald J. Knutson (the “ Executive ”).

A.           The Board of Directors of Company (the “ Board ”) has determined that the interests of the Company will be advanced by providing the key executives of the Company with certain benefits in the event of the termination of employment of any such executive in connection with or following a Change in Control (as hereinafter defined).

B.           The Board believes that such benefits will enable the Company to continue to attract and retain competent and qualified executives, will assure continuity and cooperation of management and will encourage such executives to diligently perform their duties without personal financial concerns, thereby enhancing shareholder value and ensuring a smooth transition.

C.           The Executive is a key executive of the Company.

NOW, THEREFORE, for good and valuable consideration, including the mutual covenants set forth herein, the parties hereto agree as follows:

1.           Definitions.  The following terms shall have the following meanings for purposes of this Agreement.

“Affiliate” means any entity controlled by, controlling or under common control with, the Company.

“Annual Pay” means the sum of (a) an amount equal to the sum of the current annual base salary, the current annual car allowance and Christmas bonus payable to the Executive by the Company or any Related Corporation at the time of the termination of his employment, provided such base salary shall not be less than the base salary of the Executive at the time of Change in Control, plus (b) an amount equal to the Bonus for the Executive for the fiscal year in which his termination of employment occurs.

“Bonus” means the sum of (a) an amount equal to ninety percent  (90%) of the Executive’s base pay for the year of termination of his employment plus (b) an amount equal to the Incentive Bonus Plan’s total incentive bonus payable to the Executive under the plan for the year of termination of his employment.

“Cause” means the Executive’s (a) willful and intentional material breach of this Agreement, (b) willful and intentional misconduct or gross negligence in the performance of or willful neglect of, the Executive’s duties, which has caused material injury (monetary or otherwise) to the Company or any Related Corporation, or (c) conviction of, or plea of nolo contendere to, a felony; provided, however, that no act or omission shall constitute “Cause” for purposes of this Agreement unless the Board or the Chief Executive Officer of the Company provides to the Executive (i) written notice clearly and fully describing the particular acts or omissions which the Board or the Chief Executive Officer of the Company reasonably believes in good faith constitutes “Cause” and (ii) an opportunity, within thirty (30) days following his receipt of such notice, to meet in person with the Board or the Chief Executive Officer of the Company to explain or defend the alleged acts or omissions relied upon by the Board or the Chief Executive Officer of the Company and, to the extent practicable to cure such acts or omissions.  Further, no act or omission shall be considered as “willful” or “intentional” if the Executive reasonably believed such acts or omissions were in the best interests of the Company.

“Change in Control” means (a) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) that does not currently own a five percent (5%) or greater equity interest in the Company or any Related Corporation who becomes the “beneficial owner” (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company or any Related Corporation representing fifteen percent (15%) or more of the combined voting power of the Company’s or Related Corporation’s, as the case may be, then outstanding voting securities; or (b) a change in the composition of the Board occurring within a two (2) year period, as a result of which fewer than a majority of the directors are Incumbent Directors; or (c) the Company or any Related Corporation shall merge with or consolidate into any other corporation, other than a merger or consolidation which would result in the holders of the voting securities of the Company or any Related Corporation, as the case may be, outstanding immediately prior thereto holding immediately thereafter securities representing more than sixty percent (60%) of the combined voting power of the voting securities of the Company or any Related Corporation, as the case may be, or such surviving entity (or its ultimate parent, if applicable) outstanding immediately after such merger or consolidation; or (d) the equity holders of the Company or any Related Corporation approve a plan of complete liquidation of the Company or any Related Corporation or the consummation of an agreement for the sale or disposition by the Company or any Related Corporation of all or substantially all of the Company’s or Related Corporation’s assets and such plan or agreement becomes effective, other than liquidation or sale which would result in the Company directly or indirectly owning such interest or assets.

“Code” means the Internal Revenue Code of 1986, as amended.

“Confidential Information” means all information, whether oral or written, previously or hereafter developed, acquired or used by the Company or any Affiliate and relating to the business of the Company or any Affiliate that is not generally known to others in the Company’s area of business, including without limitation trade secrets, methods or practices developed by the Company or any Affiliate, financial results or plans, customer or client lists, personnel information, information relating to negotiations with clients or prospective clients, proprietary software, databases, programming or data transmission methods, or copyrighted materials (including without limitation, brochures, layouts, letters, art work, copy, photographs or illustrations).  It is expressly understood that the foregoing list shall be illustrative only and is not intended to be an exclusive or exhaustive list of “Confidential Information.”

“First Window Period” shall mean the ten (10) day period immediately following a Change in Control.

“Good Reason” means any of the following events occurring, without the Executive’s prior written consent specifically referring to this Agreement, within the Transition Period following a Change in Control:

(a)           (i) any reduction in the amount of the Executive’s Annual Pay, (ii) any reduction in the amount of Executive’s other long-term aggregate incentive compensation opportunities, or (iii) any significant reduction in the aggregate value of the Executive’s benefits as in effect from time to time (unless in the case of either (ii) or (iii), such reduction is pursuant to a general change in compensation or benefits applicable to all similarly situated employees of the Company and its Affiliates);

 (b)           (i) the removal of the Executive from the position held by him immediately prior to the Change in Control, or (ii) any other significant reduction in the nature or status of the Executive’s duties or responsibilities from those in effect immediately prior to the Change in Control;

(c)           the failure by the Company or Related Corporation to pay Executive any portion of Executive’s current compensation, or to pay Executive any portion of an installment of deferred compensation under any compensation program of the Company or Related Corporation within seven (7) days of the date such compensation is due;

(d)           the failure by the Company or Related Corporation to provide Executive with the number of paid vacation days to which Executive is entitled on the basis of years of service with the Company or Related Corporation in accordance with the Company’s or Related Corporation’s normal vacation policy in effect at the time of the Change in Control;

(e)           transfer of the Executive’s principal place of employment to a metropolitan area other than that of the Executive’s place of employment immediately prior to the Change in Control without the Executive’s consent; or

(f)           failure by the Company or Related Corporation to obtain the assumption agreement referred to in Section 11 of this Agreement prior to the effectiveness of any succession referred to therein, unless the purchaser, successor or assignee referred to therein is bound to perform this Agreement by operation of law.

“Incumbent Directors” means directors who either (a) are directors of the Company as of the date hereof or (b) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors of the Company).

“Related Corporation” shall mean FFE, Inc., a Delaware corporation and wholly owned subsidiary of the Company, and FFE Transportation Services, Inc., a Delaware corporation and wholly owned subsidiary of FFE, Inc.

“Second Window Period” shall mean the thirty (30) day period immediately following the Transition Period.

“Termination Pay” means a payment made by the Company to the Executive pursuant to Sections 2(a)(ii) and (iii).

“Transition Period” shall mean the six (6) month period immediately following a Change  in Control.

“Without Cause” means a termination of the Executive’s employment by the Company or Related Corporation other than due to disability or for Cause.

2.           Termination Payment and Benefits.

(a)            Termination Following Change in Control .  In the event that the Executive’s employment with the Company or Related Corporation is terminated during the Transition Period by the Company or Related Corporation Without Cause, or by the Executive for Good Reason during the Transition Period or in the event the Executive terminates his employment for any reason during the First Window Period or the Second Window Period, the Executive shall be entitled to the following payments and other benefits:

(i)           A cash payment in an amount equal to the sum of (a) the Executive’s accrued and unpaid base salary, car allowance and Christmas bonus as the date of termination plus (b) his accrued and unpaid bonus, if any, for the prior fiscal year plus (c) a percentage of the year worked times the Bonus for the current year. This amount shall be paid on the date of the Executive’s termination of employment.

(ii)           A cash payment in an amount equal to two and nine-tenths  (2.9) times the Executive’s Annual Pay.  This amount shall be paid in accordance with Section 2(c) hereof.

(iii)           A cash payment in an amount equal to the Executive’s unvested account balance under the Company’s or Related Corporation’s 401(k) Savings Plan and 401(k) Wrap Plan.  This amount shall be paid in accordance with Section 2(c) hereof.

(iv)           Executive and his eligible dependents shall be entitled for a period of two (2) years following his date of termination of employment to continued coverage, at the same premium rate charged when actively employed, under the Company’s or any Related Corporation’s group health, dental, long-term disability, Exec-U-Care Medical Reimbursement Insurance Plan and life insurance as in effect from time to time (but not any other welfare benefit plans or any retirement plans); provided that coverage under any particular benefit plan shall expire with respect to the period after the Executive becomes covered under another employer’s plan providing for a similar type of benefit.  In the event the Company or Related Corporation is unable to provide such coverage on account of any limitations under the terms of any applicable contract with an insurance carrier or third party administrator, the Company or Related Corporation shall pay the Executive an amount equal to the cost of such coverage.

                (v)           All of the Executive’s unvested options, restricted stock, stock units, performance share or other awards, if any, based on or related to equity securities of the Company or its Affiliates under any plan in which the Executive participates and which was identified as an executive compensation plan in the exhibits to the Company’s most recent filing with the SEC that shall automatically vest on a Change in Control (as defined in the applicable plan).  The Company shall promptly cause any related award agreements to be amended as necessary to provide for such accelerated vesting.  In the event of any conflict between this provision and the provisions of any stock option, restricted or similar award agreements entered into before or after the effective date of this Agreement, the foregoing provision shall control.

(b)            No Duplication; Other Severance Pay .  There shall be no duplication of severance pay in any manner.  In this regard, the Executive shall not be entitled to termination payment