UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

SCHEDULE 14A INFORMATION
(Rule 14a-101)

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oSoliciting Material Pursuant to Section 240.14a-12
dglogoa06.jpg
The Dixie Group, Inc.

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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THE DIXIE GROUP, INC.
475 Reed Road
Dalton, Georgia 30720
(706) 876-5800
 




NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
 
To the Shareholders of The Dixie Group, Inc.:
The Annual Meeting of Shareholders of The Dixie Group, Inc. will be held at the Corporate Office, 475 Reed Road, Dalton, Georgia, on May 1, 20194, 2022 at 8:00 a.m., Eastern Daylight Time, for the following purposes:

1.To elect seven individuals to the Board of Directors for a term of one year each;
1.To elect seven individuals to the Board of Directors for a term of one year each;

2.To cast an advisory vote on the Company’s Executive Compensation for its named executive officers (“Say-on-Pay”);
2.To approve the Company's Omnibus Equity Incentive Plan;

3.To cast an advisory vote on the frequency of future say-on-pay votes;
3.    To cast an advisory vote on the Company’s Executive Compensation for its named executive officers (“Say-on-Pay”);

4.To ratify appointment of Dixon Hughes Goodman LLP to serve as independent registered public accountants of the Company for 2019; and
4.    To ratify appointment of Dixon Hughes Goodman LLP to serve as independent registered public accountants of
the Company for 2022; and

5.Such other business as may properly come before the Annual Meeting of Shareholders or any adjournment thereof.
5.    Such other business as may properly come before the Annual Meeting of Shareholders or any adjournment     
thereof.

Only shareholders of record of the Common Stock and Class B Common Stock at the close of business on February 22, 2019,25, 2022, are entitled to notice of, and to vote at, the Annual Meeting or any adjournment thereof.

Your attention is directed to the Proxy Statement accompanying this Notice for more complete information regarding the matters to be acted upon at the Annual Meeting.


 
The Dixie Group, Inc.
dana02.jpg
Daniel K. Frierson
Chairman of the Board

Dalton, Georgia
Dated: March 22, 201930, 2022
 





PLEASE READ THE ATTACHED MATERIAL CAREFULLY AND COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY TO THE COMPANY IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO THAT YOUR SHARES OF COMMON STOCK AND CLASS B COMMON STOCK WILL BE REPRESENTED AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON, SHOULD YOU SO DESIRE.


Important Notice
 
Regarding Internet
 
Availability of Proxy Materials
 
for the
 
Annual Meeting of Shareholders
 
to be held on
 
May 1, 20194, 2022

 
The proxy statement and annual report to shareholders are available under "Annual Report and Proxy Materials" at www.dixiegroup.com/Investor.







THE DIXIE GROUP, INC.
475 Reed Road
Dalton, Georgia 30720
Phone (706) 876-5800

 
ANNUAL MEETING OF SHAREHOLDERS
May 1, 20194, 2022

     
PROXY STATEMENT


     
INTRODUCTION


The enclosed Proxy is solicited on behalf of the Board of Directors of the Company for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. This Proxy Statement and the enclosed Proxy will be mailed on or about March 22, 2019,30, 2022, to shareholders of record of the Company’s Common Stock and Class B Common Stock as of the close of business on February 22, 2019.25, 2022.

At the Annual Meeting, holders of the Company’s Common Stock, $3.00 par value per share (“Common Stock”), and Class B Common Stock, $3.00 par value per share (“Class B Common Stock”), will be asked to: (i) elect seven (7) individuals to the Board of Directors for a term of one year each, (ii) approve the adoption of the Company's Omnibus Equity Incentive Plan; (iii) cast an advisory vote on the Company’s executive compensation for its named executive officers; (iii) cast an advisory vote on the frequency of the shareholder advisory vote on executive compensation; (iv) ratify the appointment of Dixon Hughes Goodman LLP to serve as independent registered public accountants of the Company for 2019,2022, and (v) transact any other business that may properly come before the meeting.

The Board of Directors recommends that the Company’s shareholders vote (i) FOR electing the seven (7) nominees for director; (ii) FOR approval of the Company's Omnibus Equity Incentive Plan; (iii) FORapproving the Company’s executive compensation of its named executive officers; (iii) FOR setting the frequency of the shareholder advisory vote on executive compensation at an annual vote;and (iv) FOR ratifying the appointment of Dixon Hughes Goodman LLP to serve as independent registered public accountants of the Company for 2019.2022.


RECORD DATE, VOTE REQUIRED AND RELATED MATTERS

The Board has fixed the close of business on February 22, 2019,25, 2022, as the Record Date for the determination of shareholders entitled to notice of, and to vote at, the Annual Meeting. In accordance with the Company’s Charter, each outstanding share of Common Stock is entitled to one vote, and each outstanding share of Class B Common Stock is entitled to 20 votes, exercisable in person or by properly executed Proxy, on each matter brought before the Annual Meeting. Cumulative voting is not permitted. As of February 22, 2019, 15,522,58825, 2022, 14,792,647 shares of Common Stock, representing 15,522,58814,792,647 votes, were held of record by approximately 2,8004,445 shareholders (including an estimated 2,400 shareholders3,700 shareholders whose shares are held in nominee names) and 839,3041,004,975 shares of Class B Common Stock, representing 16,786,08020,099,500 votes, were held by 10 individual shareholders, together representing an aggregate of 32,308,66834,892,147 votes.

Shares represented at the Annual Meeting by properly executed Proxy will be voted in accordance with the instructions indicated therein unless such Proxy has previously been revoked. If no instructions are indicated, such shares will be voted (i) FOR electing the seven (7) nominees for director; (ii) FOR approval of adoption of the Company's Omnibus Equity Incentive Plan; (iii) FORapproving the Company’s executive compensation of its named executive officers; (iii) FOR setting the frequency of the shareholder advisory vote on executive compensation at an annual vote;and (iv) FOR ratifying the appointment of Dixon Hughes Goodman LLP to serve as independent registered public accountants of the Company for 2019.2022.

Any Proxy given pursuant to this solicitation may be revoked at any time by the shareholder giving it by (i) delivering to the Corporate Secretary of the Company a written notice of revocation bearing a later date than the Proxy, (ii) submitting a later-dated, properly executed Proxy, or (iii) revoking the Proxy and voting in person at the Annual Meeting. Attendance at the Annual Meeting will not, in and of itself, constitute a revocation of a Proxy. Any written notice revoking a Proxy should be sent to The Dixie Group, Inc., P.O. Box 2007, Dalton, Georgia 30722-2007, Attention: Derek Davis.

The persons designated as proxies were selected by the Board of Directors and are Daniel K. Frierson, Lowry F. Kline and Michael L. Owens. The cost of solicitation of Proxies will be borne by the Company.

1

The presence, in person or by Proxy, of the holders of a majority of the aggregate outstanding vote of Common Stock and Class B Common Stock entitled to vote is necessary to constitute a quorum at the Annual Meeting. In accordance with Tennessee law, Directors are elected by the affirmative vote of a plurality of the votes cast in person or by Proxy at the Annual Meeting.



Approval of the Company’s Omnibus Equity Incentive Plan will be deemed to have been obtained if the affirmative vote of a majority of the total number of votes represented in person or by proxy and entitled to vote at the annual meeting is received in favor of adoption of the plan. See, Proposal Two: Adoption of the Omnibus Equity Incentive Plan.
    
Approval of the Company’s executive compensation for its named executive officers will be deemed to have been obtained if the number of votes properly cast in favor of such compensation exceeds the number of votes cast against such compensation.
    
With respect to the advisory vote on the frequency of say-on-pay advisory votes, the option that receives the highest number of votes will be deemed to have been selected by shareholders.

Ratification of the appointment of Dixon Hughes Goodman LLP to serve as independent registered public accountants of the Company for 20192022 will be approved if the number of votes properly cast favoring ratification exceedexceeds the number of votes cast opposing ratification.

Shares covered by abstentions and broker non-votes, while counted for purposes of determining the presence of a quorum at the Annual Meeting, are not considered to be affirmative or negative votes.votes for purposes of Proposal One. Abstentions and broker non-votes will have no effect upon the election of a nominee for director, so long as such nominee receives any affirmative votes.

A copy of the Company’s Annual Report for the year-ended December 29, 2018,25, 2021, is enclosed herewith.

The Board is not aware of any other matter to be brought before the Annual Meeting for a vote of shareholders. If, however, other matters are properly presented, Proxies representing shares of Common Stock and Class B Common Stock will be voted in accordance with the best judgment of the proxy holders.






2

PRINCIPAL SHAREHOLDERS
 
Shareholders of record at the close of business on February 22, 2019,25, 2022, the Record Date, will be entitled to notice of and to vote at the Annual Meeting.
The following is information regarding beneficial owners of more than 5% of the Company's Common Stock or Class B Common Stock. Beneficial ownership information is also presented for (i) the executive officers named in the Summary Compensation Table;Table (the "Named Executive Officers"); (ii) all directors and nominees; and (iii) all directors and executive officers, as a group, as of February 22, 201925, 2022 (except as otherwise noted).
Name and Address of Beneficial OwnerTitle of ClassNumber of Shares Beneficially Owned(1)(2)% of Class
Daniel K. Frierson
111 East and West RoadCommon Stock1,141,909 (3)7.2 %
Lookout Mountain, TN 37350Class B Common Stock1,004,975 (4)100%
Jeffrey L. Gendell
1 Sound Shore Drive, Suite 304Common Stock1,446,782 (5)9.8 %
Greenwich, CT 06830-7251
Hodges Capital Holdings, Inc.
2905 Maple AvenueCommon Stock1,385,900 (6)9.4 %
Dallas, TX 75201
Robert E. Shaw
115 West King StreetCommon Stock1,125,000 (7)7.6 %
Dalton, GA 30722-1005
Royce & Associates
745 Fifth AvenueCommon Stock886,131 (8 )6.0 %
New York, NY 10151

3

Name and Address of Beneficial OwnerTitle of ClassNumber of Shares Beneficially Owned(1)(2) % of Class 
Daniel K. Frierson     
111 East and West RoadCommon Stock975,695
 (3)5.9
 %
Lookout Mountain, TN 37350Class B Common Stock839,304
 (4)100.0
 %
        
Dimensional Fund Advisors, L.P.      
Palisades West, Building One,       
6300 Bee Cave RoadCommon Stock1,004,199
 (5)6.5
 %
Austin, TX 78746       
        
Hodges Capital Holdings, Inc.       
2905 Maple AvenueCommon Stock1,606,954
 (6)10.4
 %
Dallas, TX 75201       
        
Royce & Associates, LLC      
745 Fifth AvenueCommon Stock1,229,101
 (7)7.9
 %
New York, NY 10151       
        
Robert E. Shaw      
115 West King StreetCommon Stock1,125,000
 (8)7.2
 %
Dalton, GA 30722-1005       
        
Terry Ledbetter, Jr.      
400 West Louisiana StreetCommon Stock1,047,155
 (9)6.7
 %
McKinney, TX 75009       
        
Wells Fargo & Company      
420 Montgomery StreetCommon Stock1,331,764
 (10)8.6
 %
San Francisco, CA 94163       



Additional Directors and Executive OfficersTitle of ClassNumber of Shares Beneficially Owned (1) % of Class Additional Directors and Executive OfficersTitle of ClassNumber of Shares Beneficially Owned (1)% of Class
     
William F. Blue, Jr.Common Stock26,371
 (11)  *William F. Blue, Jr.Common Stock41,571 (9)*
     
Charles E. BrockCommon Stock18,141
 (12)  *Charles E. BrockCommon Stock33,341 (10)*
     
W. Derek DavisCommon Stock102,155
 (13)   *
     
Jon A. FaulknerCommon Stock183,536
 (14) 1.1
 %
     
D. Kennedy Frierson, Jr.Common Stock274,894
 (15) 1.7
 %D. Kennedy Frierson, Jr.Common Stock329,144 (11)2 %
Class B Common Stock233,019
 (4)27.8
 %Class B Common Stock309,620 (4)30.8 %
     
E. David HobbsCommon Stock30,034
 (16)  *
     
Walter W. Hubbard***Common Stock29,001
 (17)  *
     
Lowry F. KlineCommon Stock61,499
 (18)  *Lowry F. KlineCommon Stock76,699 (12)*
     
Hilda S. MurrayCommon Stock18,141
 (19)  *Hilda S. MurrayCommon Stock33,341 (13)*
     
T.M. Nuckols, Jr.Common Stock52,493
 (20)  *T.M. Nuckols, Jr.Common Stock90,838 (14)*
     
Michael L. OwensCommon Stock13,975
 (21)  *Michael L. OwensCommon Stock29,175 (15)*
     
All Directors, Named Executive Officers andCommon Stock1,535,342
 (22) 9.3
 %All Directors, Named Executive Officers andCommon Stock1,596,429 (16)10.8 %
Executive Officers as Group (12 Persons) **Class B Common Stock839,304
 (23) 100.0
 %
Executive Officers as Group (10 Persons) **Executive Officers as Group (10 Persons) **Class B Common Stock1,004,975 (17)100%
 
 
* Percentage of shares beneficially owned does not exceed 1% of the Class.
** The total vote of Common Stock and Class B Common Stock represented by the shares held by all directors and executive officers as a group is 21,776,29217,482,118 votes or 54.1%62.4% of the total vote.

*** Mr. Hubbard's term(1)    Under the rules of the Securities and Exchange Commission and for the purposes of these disclosures, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose or to direct the disposition of such security. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities. The Class B Common Stock is convertible on a share-for-share basis into shares of Common Stock, and accordingly, outstanding shares of such stock are treated as Director willhaving been converted to shares of Common Stock for purposes of determining both the number and percentage of class of Common Stock for persons set forth in the table who hold such shares.

(2)    Does not extend pastinclude 136,170 shares of Common Stock owned by The Dixie Group, Inc. 401(k) Retirement Savings Plan (the “401(k) Plan”) for which Daniel K. Frierson is a fiduciary and for which Bank of America, N.A. serves as Trustee. Participants in the Annual Meeting.401(k) Plan may direct the voting of all shares of Common Stock held in their accounts, and the Trustee must vote all shares of Common Stock held in the 401(k) Plan in the ratio reflected by such direction. Participants may also direct the disposition of such shares. Accordingly, for purposes of these disclosures, shares held for participants in the 401(k) Plan are reported as beneficially owned by the participants.

(1)Under the rules of the Securities and Exchange Commission and for the purposes of these disclosures, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose or to direct the disposition of such security. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities. The Class B Common Stock is convertible on a share-for-share basis into shares of Common Stock, and accordingly, outstanding shares of such stock are treated as having been converted to shares of Common Stock for purposes of determining both the number and percentage of class of Common Stock for persons set forth in the table who hold such shares.

(2)Does not include 227,219 shares of Common Stock owned by The Dixie Group, Inc. 401(k) Retirement Savings Plan (the “401(k) Plan”) for which Daniel K. Frierson is a fiduciary and for which Bank of America, N.A. serves as Trustee. Participants in the 401(k) Plan may direct the voting of all shares of Common Stock held in their accounts, and the Trustee must vote all shares of Common Stock held in the 401(k) Plan in the ratio reflected by such direction. Participants may also direct the disposition of such shares. Accordingly, for purposes of these disclosures, shares held for participants in the 401(k) Plan are reported as beneficially owned by the participants.



(3)Mr. Daniel K. Frierson's beneficial ownership of Common Stock and Class B Common Stock may be summarized as follows:
4

 Number of Shares Common Stock Number of Shares Class B Common Stock 
Shares held outright13,263
  394,350
 (a)
Shares held in his Individual Retirement Account3,567
 (a)17,061
 (a)
Shares held in 401(k) Plan796
 (a)—
  
Shares held by his wife—
  94,879
 (c)
Shares held by his children, their spouses and grandchildren32,477
 (b)291,241
 (c)
Unvested restricted stock36,288
 (a)36,287
 (a)
Shares held by family Unitrust—
  5,486
 (a)
Exercisable Stock Option50,000
 (a)—
  
Deemed conversion of his Class B Common Stock839,304
  —
  
Total975,695
  839,304
  

(3)Mr. Daniel K. Frierson's beneficial ownership of Common Stock and Class B Common Stock may be summarized as follows:
Number of Shares Common StockNumber of Shares Class B Common Stock
Shares held outright35,219 441,951 (a)
Shares held in his Individual Retirement Account3,567 (a)17,061 (a)
Shares held in 401(k) Plan796 (a)— 
Shares held by his wife— 94,879 (c)
Shares held by his children, their spouses and grandchildren60,389 (b)367,842 (c)
Unvested restricted stock36,963 (a)77,756 (a)
Shares held by family Unitrust— 5,486 (a)
Deemed conversion of his Class B Common Stock1,004,975 — 
Total1,141,909 1,004,975 

Total does not include 40,000 shares of Non Exercisable Stock Options.

(a) Sole voting and investment power
(b) Shared voting and investment power
(c) Sole voting and shared investment power

(4)    The 1,004,975 includes 468,207shares of Class B Common Stock held subject to a Shareholder's Agreement among Daniel K. Frierson, his wife, two of their five children (including D. Kennedy Frierson, Jr., his son) and certain family trusts which hold Class B Common Stock, pursuant to which Daniel K. Frierson has been granted a proxy to vote such shares. The Shareholder's Agreement relates only to shares of Class B Common Stock held by each of the parties to the agreement. Pursuant to the agreement Daniel K. Frierson is granted a proxy to vote such shares of Class B Common Stock so long as they remain subject to the agreement. The Class B Common Stock is convertible on a share for share basis into shares of Common Stock; however, upon conversion such shares are no longer subject to the agreement. Nevertheless, the parties to the agreement may be deemed to be members of a "group" for purposes of Section 13(d) of the act and for purposes of reporting beneficial ownership of the Common Stock of The Dixie Group, Inc., and accordingly Daniel K. Frierson, and the other parties to the agreement have jointly filed a report on Schedule 13(d) reporting beneficial ownership of the Common Stock which they own.

(5)    Jeffrey L. Gendell. has reported the beneficial ownership of an aggregate of 1,446,782 shares of Common Stock for which he has 1,399,547shared voting power and 1,399,547 shared dispositive power and 47,235 sole voting and sole dispositive power (with Tontine Asset Associates, LLC). The reported information is based upon the Schedule 13G filed by Tontine Asset Associates, LLC and Mr. Gendell, managing member of Tontine Asset Associates, LLC, with the Securities and Exchange Commission on Feburary 11, 2022.

(6)    Hodges Capital Holdings, Inc., Craig Hodges, Hodges Capital Management, Inc., Hodges Fund, Hodges Small Intrinsic Value Fund, and First Dallas Securities, Inc. has reported beneficial ownership of an aggregate of 1,385,900 shares of Common Stock. Hodges Capital Holdings, Inc. reports having shared voting power of 1,127,845 and 1,385,900 shared dispositive power. The reported information is based upon the Schedule 13G filed by Hodges Capital Holdings, Inc. with the Securities and Exchange Commission on February 2, 2021.

(7)    Robert E. Shaw has reported the beneficial ownership of an aggregate of 1,125,000 shares of Common Stock for which he has 1,125,000 shared voting power and 1,125,000 shared dispositive power. The reported information is based upon the Schedule 13G filed by Mr. Shaw with the Securities and Exchange Commission on February 7, 2022.

(8)     Royce & Associates LLC has reported beneficial ownership of 886,131 shares of Common Stock for which it has sole dispositive power and sole voting power. The reported information is based upon the Schedule 13G filed by Royce & Associates LP with the Securities and Exchange Commission on January 14, 2022.


5

(9)Mr. William F. Blue's beneficial ownership may be summarized as follows:
(4)
The 839,304 includes 391,606shares of Class B Common Stock held subject to a Shareholder's Agreement among Daniel K. Frierson, his wife, two of their five children (including D. Kennedy Frierson, Jr., his son) and certain family trusts which hold Class B Common Stock, pursuant to which Daniel K. Frierson has been granted a proxy to vote such shares. The Shareholder's Agreement relates only to shares of Class B Common Stock held by each of the parties to the agreement. Pursuant to the agreement Daniel K. Frierson is granted a proxy to vote such shares of Class B Common Stock so long as they remain subject to the agreement. The Class B Common Stock is convertible on a share for share basis in to shares of Common Stock; however, upon conversion such shares are no longer subject to the agreement. Nevertheless, the parties to the agreement may be deemed to be members of a "group" for purposes of Section 13(d) of the act and for purposes of reporting beneficial ownership of the Common Stock of The Dixie Group, Inc., and accordingly Daniel K. Frierson, and the other parties to the agreement have jointly filed a report on Schedule 13(d) reporting beneficial ownership of the Common Stock which they own.

(5)Dimensional Fund Advisors, L.P. has reported beneficial ownership of an aggregate of 1,004,199 shares of Common Stock, as follows: 981,068 shares of Common Stock, for which it has sole voting power, and 1,004,199 shares of Common Stock for which it has sole dispositive power. The reported information is based upon the Schedule 13G filed by Dimensional Fund Advisors, L.P. with the Securities and Exchange Commission on February 8, 2019.

(6)Hodges Capital Holdings, Inc. Craig Hodges, First Dallas Securities, Inc., Hodges Capital Management, Inc., Hodges Fund, and Hodges Pure Contrarian Fund has reported beneficial ownership of an aggregate of 1,606,954 shares of Common Stock. Hodges Capital Holdings, Inc. reports having shared voting power of 1,382,929 and 1,606,954 shared dispositive power. The reported information is based upon the Schedule 13G filed by Hodges Capital Holdings, Inc. with the Securities and Exchange Commission on February 11, 2019.

(7)Royce & Associates LLC has reported beneficial ownership of 1,229,101 shares of Common Stock for which it has sole dispositive power and sole voting power. The reported information is based upon the Schedule 13G filed by Royce & Associates LP with the Securities and Exchange Commission on January 14, 2019.

(8)Robert E. Shaw has reported the beneficial ownership of an aggregate of 1,125,000 shares of Common Stock for which he has 1,125,000 shared voting power and 1,125,000 shared dispositive power. The reported information is based upon the Schedule 13G filed by Mr. Shaw with the Securities and Exchange Commission on January 30, 2019.

(9)Terry Ledbetter, Jr. has reported the beneficial ownership of an aggregate of 1,047,155 shares of Common Stock for which he has 664,266 shared voting power and 1,047,155 shared dispositive power. The reported information is based upon the Schedule 13G filed by Kopion Asset Management, LLC and Mr. Ledbetter, founder and manager of Kopion Asset Management, LLC, with the Securities and Exchange Commission on February 12, 2019.
(10)Wells Fargo & Company has reported the beneficial ownership of an aggregate of 1,331,764 shares of Common Stock, on behalf the following subsidiaries: Wells Capital Management Incorporated, Wells Fargo Funds Management, LLC, Wells Fargo Bank, National Association and Wells Fargo Clearing Services, LLC. It has reported 1,090,760 shares of Common Stock for which it has shared voting power. The reported information is based on a Form 13G filed on January 22, 2019.


(11)Mr. William F. Blue's beneficial ownership may be summarized as follows:
Number of Shares Common Stock
Director's Restricted Stock Award8,000 
Shares held outright12,609
Performance Units, convertible into shares of Common Stock on retirement as a director13,76220,962 
Total26,37141,571 


(10)Mr. Charles E. Brock's beneficial ownership may be summarized as follows:
(12)Mr. Charles E. Brock's beneficial ownership may be summarized as follows:
Number of Shares Common Stock
Director's Restricted Stock Award8,000 
Shares held outright—
Performance Units, convertible into shares of Common Stock on retirement as a director18,14125,341 
Total18,14133,341 


(13)Mr. W. Derek Davis's beneficial ownership may be summarized as follows:
Number of Shares Common Stock
Shares held outright66,512
Shares held by his wife4,500
Unvested Restricted Stock24,386
Held in 401(k) Plan4,257
Exercisable Stock Options2,500
Total102,155


Total does not include 15,000 shares of Non Exercisable Stock Options.

(11)Mr. D. Kennedy Frierson Jr.'s beneficial ownership may be summarized as follows:

(14)Mr. Jon A. Faulkner's beneficial ownership may be summarized as follows:
Number of Shares Common StockNumber of Shares Class B Common Stock
Shares held outright5,155 109,835 (a)
Shares held by his wife100 — 
Shares held in trust(s) for children2,585 15,540 (a)
Shares held in 401(k)2,301 — 
Unvested Restricted Stock9,383 184,245 (a)
Exercisable Stock Options— — 
Deemed conversion of Class B Stock309,620 — (a)
Total329,144 309,620 
Number of Shares Common Stock
Shares held outright65,693
Unvested Restricted Stock106,843
Exercisable Stock Options11,000
Total183,536

Total does not include 15,000 shares of Non Exercisable Stock Options.



(15)Mr. D. Kennedy Frierson Jr.'s beneficial ownership may be summarized as follows:
 Number of Shares Common Stock Number of Shares Class B Common Stock 
Shares held outright10,000
 89,038
(a)
Shares held by his wife100
 —
 
Shares held in trust(s) for children2,585
 15,540
(a)
Shares held in 401(k)2,301
 —
 
Unvested Restricted Stock4,889
 128,441
(a)
Exercisable Stock Options22,000
 —
 
Deemed conversion of Class B Stock233,019
 —
(a)
Total274,894
 233,019
 

Total does not include 25,000 shares of Non Exercisable Stock Options.

(a)Subject to Shareholder's Agreement described in Note (4), above. Mr. Kennedy Frierson has sole investment power, and no voting power with respect to such shares.

(16)(a)     Subject to Shareholder's Agreement described in Note (4), above. Mr. E. David Hobbs'Kennedy Frierson has sole investment power, and no voting power with respect to such shares.

(12)Mr. Lowry F. Kline's beneficial ownership may be summarized as follows:
Number of Shares Common Stock
Shares held outright5,472
UnvestedDirector's Restricted Stock Award24,5628,000 
Total30,034

Total does not include 15,000 shares of Non Exercisable Stock Options.

(17)Mr. Walter W. Hubbard's beneficial ownership may be summarized as follows:
Number of Shares Common Stock
Shares held outright—31,198 
Performance Units, convertible into shares of Common Stock on retirement as a director29,00137,501 
Total29,00176,699 





6





(13)Ms. Hilda S. Murray's beneficial ownership may be summarized as follows:
(18)Mr. Lowry F. Kline's beneficial ownership may be summarized as follows:
Number of Shares Common Stock
Director's Restricted Stock Award8,000 
Shares held outright31,198— 
Performance Units, convertible into shares of Common Stock on retirement as a director30,30125,341 
Total61,49933,341 


(14)Mr. T.M. Nuckols, Jr.'s beneficial ownership may be summarized as follows:
(19)Ms. Hilda S. Murray's beneficial ownership may be summarized as follows:
Number of Shares Common Stock
Shares held outright—27,182 
Unvested Restricted Stock63,656 
Total90,838 

Total does not include 15,000 shares of Non Exercisable Stock Options.


(15)Mr. Michael L. Owens' beneficial ownership may be summarized as follows:
Number of Shares Common Stock
Director's Restricted Stock Award8,000 
Shares held outright— 
Performance Units, convertible into shares of Common Stock on retirement as a director18,14121,175 
Total18,14129,175 








(20)Mr. T.M. Nuckols, Jr.'s beneficial ownership may be summarized as follows:
Number of Shares Common Stock
Shares held outright—
Unvested Restricted Stock52,493
Total52,493

Total does not include 15,000(16)Includes: (i) 193,778 shares of Non ExercisableCommon Stock Options.owned directly by individuals in this group; (ii) 7,909 shares of Common Stock allocated to accounts in the 401(k) Plan of members of this group; (iii) 130,320 shares of Common Stock held pursuant to performance units issued as payment of one-half of the annual retainer for the Company's non-employee directors; (iv) 40,000 shares of Common Stock held by the Company's non-employee directors as an award of Restricted Stock; (v) 22,188 shares of Common Stock owned by immediate family members of certain members of this group; (v) 3,567 shares held in individual retirement accounts; (vi) 186,855 unvested restricted shares of Common Stock held by individuals in this group, which shares may be voted by such individuals; and (vii) 1,004,975 shares of Class B Common Stock held by individuals in this group, that could be converted on a share for share basis into shares of Common Stock. This total excludes options which are not yet vested of 99,000 shares of Common Stock. The options excluded will vest once the average of the high and low share price of the Company’s Common Stock shall be at least $7.00 per share for a period of 5 consecutive days, prior to the option expiration date of May 30, 2022.


(17)Includes: (i) 1,004,975 shares of Class B Common Stock held subject to the Shareholder Agreement described in Note (4) above.
(21)Mr. Michael L. Owens' beneficial ownership may be summarized as follows:
Number of Shares Common Stock
Shares held outright—
Performance Units, convertible into shares of Common Stock on retirement as a director13,975
Total13,975

(22)Includes: (i) 204,747 shares of Common Stock owned directly by individuals in this group; (ii) 7,354 shares of Common Stock allocated to accounts in the 401(k) Plan of members of this group; (iii) options, which are either immediately exercisable, or exercisable within 60 days of the Record Date to purchase 85,500 shares of Common Stock; (iv) 123,321 shares of Common Stock held pursuant to performance units issued as payment of one-half of the annual retainer for the Company's non-employee directors; (v) 22,088 shares of Common Stock owned by immediate family members of certain members of this group; (vi) 3,567 shares held in individual retirement accounts; (vii) 249,461 unvested restricted shares of Common Stock held by individuals in this group, which shares may be voted by such individuals; and (viii) 839,304 shares of Class B Common Stock held by individuals in this group, that could be converted on a share for share basis into shares of Common Stock. (This total excludes options which are not yet vested of 125,000 shares of Common Stock.)
(23)Includes: (i) 839,304 shares of Class B Common Stock held subject to the Shareholder Agreement described in Note (4) above.
 


7

PROPOSAL ONE
ELECTION OF DIRECTORS

 
Information About Nominees for Director
Pursuant to the Company’s Bylaws, all Directors are elected to serve a one year term, or until their successors are elected and qualified. The Board of Directors is permitted to appoint directorsDirectors to fill the unexpired terms of directorsDirectors who resign.

The names of the nominees for election to the Board, their ages, their principal occupation or employment (which has continued for at least the past five years unless otherwise noted), directorships held by them in other publicly-held corporations or investment companies, the dates they first became directorsDirectors of the Company, and certain other relevant information with respect to such nominees are as follows:

William F. Blue, Jr., age 60,63, is Chairman of the Board of The Hopeway Foundation in Charlotte, North Carolina. From 2008 until his retirement in 2014, he served as Vice Chairman of Investment Banking and Capital Markets, part of Wells Fargo Securities, LLC, in Charlotte. Throughout his 29-year investment banking career, he represented foreign and domestic corporations in financing and advisory assignments, including acquisitions, divestitures, recapitalizations, fairness opinions, and public and private equity and debt offerings. From 1998 until 2008, Mr. Blue served as group head of the Wachovia Consumer and Retail Investment Banking group. Before joining Wachovia, he was a managing director in the Mergers and Acquisitions group of NationsBanc Montgomery Securities, the predecessor firm to Banc of America Securities. Mr. Blue is Chairman of the Company's Compensation/Nominations and Corporate Governance Committee, a member of the Company's Audit Committee, Executive Committee and Compensationa member of the Company's Executive Committee. He has been a directorDirector of the Company since October 2014.

Charles E. Brock, age 54,57, is the owner of Brock Partnerships, an entrepreneurial advisory and investment firm. From 2013-2018, Mr. Brock served as President and Chief Executive Officer of Launch Tennessee, a public-private partnership, focused on the development of high-growth companies in Tennessee. Previously, he served as the Executive Entrepreneur of The Company Lab, a Chattanooga organization that serves as “the Front Door for Entrepreneurs” in Southeast Tennessee and one of Launch Tennessee's regional accelerators. Mr. Brock was a founding partner of the Chattanooga Renaissance Fund, a locally based angel investment group. Mr. Brock also serves as a director of Four Bridges Capital Advisors, a Chattanooga based boutique investment bank as well as director of Pinnacle Financial Partners. Mr. Brock is a member of the Company’s Audit Committee and a member of the Company's Compensation/Nominations and Corporate Governance Committee.Committee. He has been a directorDirector of the Company since 2012.

Daniel K. Frierson, age 77,80, is Chairman of the Board of the Company, a position he has held since 1987. He also has been Chief Executive Officer of the Company since 1980 and a directorDirector of the Company since 1973. Mr. Frierson serves as a director of Astec Industries, Inc., a manufacturer of specialized equipment for building and restoring the world’s infrastructure headquartered in Chattanooga, Tennessee, andDirector Printpack, Inc., a world leading Flexible Packaging Company, headquartered in Atlanta, Georgia.Georgia and serves as Chairman of the Compensation Committee. Mr. Frierson is Chairman of the Company's Executive Committee.

D. Kennedy Frierson, Jr., age 52,55, is Chief Operating Officer of the Company, a position he has held since 2009. He has been President of Masland Residential, General Manager of Dixie Home, President of Bretlin as well as various other positions in operations, sales and senior management of the Company since 1998. He has been a directorDirector of the Company since 2012.

Lowry F. Kline, age 78,81, served as a director of Coca-Cola Enterprises, Inc. from April 2000 until April 2008, serving as Chairman from April 2002 until April 2008, and as Vice Chairman from April 2000 to April 2003. Mr. Kline served as Chief Executive Officer of Coca-Cola Enterprises, Inc. from April 2001 until January 2004 and from December 2005 to April 2006. Prior to becoming Chief Executive Officer for Coca-Cola Enterprises, Inc., he held a number of positions with said company, including Chief Administrative Officer, Executive Vice President and General Counsel. Mr. Kline is a former director of Jackson Furniture Industries, Inc., headquarteredheadquarter in Cleveland, Tennessee and McKee Foods Corporation, headquartered in Collegedale, Tennessee. Mr. Kline is Chairmana member of the Company’s CompensationCompensation/Nominations and Corporate Governance Committee, a member of the Company’s Audit Committee, and is a member of the Company’s Executive Committee. He has been a directorDirector of the Company since 2004.

Hilda S. Murray, age 64,67, is the Corporate Secretary and Executive Vice President of TPC Printing & Packaging, a specialty packaging and printing company in Chattanooga, TN. She is also founder and President of Greener Planet, LLC, an environmental compliance consultant to the packaging and printing industry. Ms. Murray has been a Director of the Company since 2012, and is a member of the Company’s Audit Committee, and is Chairman of the Company’s NominatingCompensation/Nominations and Corporate Governance Committee.

Michael L. Owens, age 62,65, is Assistant Dean of Graduate Programs and Lecturer in the College of Business at the University of Tennessee at Chattanooga, Chattanooga, Tennessee. Prior to joining the University of Tennessee at Chattanooga, Mr. Owens was President of Coverdell & Company, Atlanta, Georgia. Prior to joining Coverdell, he was Senior Vice President
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and Chief Operating Officer of Monumental Life Insurance Company. He has been a directorDirector of the Company since 2014 and is a memberChairman of the Company's Audit Committee.


D. Kennedy Frierson, Jr., the Company’s Vice President and Chief Operating Officer, is the son of Daniel K. Frierson. No other director, nominee, or executive officer of the Company has any family relationship, not more remote than first cousin, to any other director, nominee, or executive officer.

Considerations with Respect to Nominees

In selecting the slate of nominees for 2019,2022, the independent directorsDirectors of the Board considered the familiarity of the Company’s incumbent Directors with the business and prospects of the Company, developed as a result of their service on the Company’s Board. The Board believes that such familiarity will be helpful in their service on the Company’s Board. With respect to all nominees, the independent directorsDirectors of the Board noted the particular qualifications, experience, attributes and skills possessed by each nominee. These qualifications are reflected in the business experience listed under each nominee’s name above. In order of the list of nominees, such information may be summarized as follows: Mr. Blue is an experienced investment banker having been Vice Chairman of Wells Fargo Securities and involved with capital formation, mergers, acquisitions and financing of various types of ventures.venture; he chairs the Company's Compensation Committee. Mr. Brock is experienced in establishing new businesses having been involved in the establishment of both Foxmark Media and CapitalMark Bank and Trust. Mr. Daniel K. Frierson has served with the Company in several management and executive capacities his entire adult life, and has been Chief Executive Officer since 1980 and a Board member since 1973. In such capacity, he has been instrumental in planning and implementing the transition of the Company to its current position as a manufacturer of residential and commercial floorcovering products. Additionally, Mr. Frierson has experience as a board member of other public companies as well as significant trade group experience relevant to the Company’s business. He is well known and respected throughout the industry. Mr. D. Kennedy Frierson, Jr. has served with the Company in various capacities since 1992. He is currently Chief Operating Officer and has most recently led the Company’s Masland ResidentialAtlasMasland Commercial business. Ms. Murray has a long history of executive management experience at TPC Printing and Packaging, a provider to the specialty packaging business as well as experience with environmental controls and footprint through Greener Planet. Mr. Kline has a long history of management and board level experience with the world’s largest bottler and distributor of Coca Cola Products. Additionally, he has an extensive background in business, corporate and securities law. Mr. Kline has served as a Director of the Company for several years, as reflected above, and chairs the Company’s Compensation Committee.above. Mr. Owens has extensive business and management experience, having served as President of Coverdell & Company prior to joining the University of Tennessee at Chattanooga. In addition, he has auditing experience having been employed as a certified public accountant and is Chairman of the Company's Audit Committee.

John W. Murrey did not stand for reelection in 2018 to the board upon reaching age 75, in accordance with the Company’s age-eligibility requirements. Likewise, Mr. Hubbard, age 75, will not stand for reelection in 2019. The requirement has been waived for Lowry Kline, who chairs the independent directors’ executive sessions, and for Daniel K. Frierson, the Company’s Chief Executive Officer.
The Board of Directors recommends that the Company’s shareholders vote FOR electing the seven (7) nominees for director.


9


MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

Meetings of the Board of Directors

The Board of Directors of the Company met five (5)seven (7) times in 2018.2021.

Committees, Attendance, and Directors' Fees

     The Company has a standing Executive Committee, Audit Committee Compensation Committee, and a Compensation/Nominations and Corporate Governance Committee. Copies of the Charters of the Company’s Audit Committee Compensation Committee and Compensation/Nominations and Corporate Governance CommitteesCommittee charters, and the Company’s resolution establishing the Executive Committee’s authority may be found on the Company’s website at www.dixiegroup.com/Investor.investor.

Members of the Executive Committee are Daniel K. Frierson, Chairman, William F. Blue, Jr. and Lowry F. Kline. Except as otherwise limited by law or by resolution of the Board of Directors, the Executive Committee has and may exercise all of the powers and authority of the Board of Directors for the management of the business and affairs of the Company, which power the Executive Committee exercises between the meetings of the full Board of Directors. The Executive Committee met one (1) timetwo (2) times in 2018.2021.

Members of the Audit Committee are Michael L. Owens, Chairman, William F. Blue, Jr., Charles E. Brock, Walter W. Hubbard, Lowry F. Kline, and Hilda S. Murray. All of the members of the Audit Committee are “independent directors” as that term is defined by applicable regulations and rules of the National Association of Securities Dealers, Inc. (“NASD”). The Audit Committee evaluates audit performance, handles relations with the Company’s independent auditors, and evaluates policies and procedures relating to internal accounting functions and controls. The Audit Committee has the authority to engage the independent accountants for the Company. The Audit Committee operates pursuant to an Audit Committee Charter adopted by the Board of Directors. The Audit Committee has implemented pre-approval policies and procedures related to the provision of audit and non-audit services performed by the independent auditors. Under these procedures, the Audit Committee approves the type of services to be provided and the estimated fees related to those services.

The Audit Committee met four (4) times in 2018.2021.

Following last year's annual meeting of shareholders, the Compensation Committee and the Nominations and Corporate Governance Committee were merged. All independent directors of the Board, with the exception of Michael L. Owens, serve on the Committee as merged.

Members of the CompensationCompensation/Nominations and Corporate Governance Committee are Lowry F. Kline, Chairman, William F. Blue, Jr., Chairman, Charles E. Brock, Lowry F. Kline and Walter W. Hubbard. TheHilda S. Murray. In its role as a Compensation Committee it administers the Company’s compensation plans, reviews and may establish the compensation of the Company’s officers, and makes recommendations to the Board of Directors concerning such compensation and related matters. The Compensation Committee acts pursuant to a written Charter adopted by the Board of Directors.

The Compensation Committee may request recommendations from the Company’s management concerning the types and levels of compensation to be paid to the Company’s executive officers. Additionally, the Compensation Committee is authorized to engage compensation consultants and may review and consider information and recommendations of compensation consultants otherwise engaged by the Company or the Board of Directors in connection with the assessment, review and structuring of compensation plans and compensation levels. For a description of the Compensation Committee actions with respect to Compensation of Executive Officers in 2018,2021, see Compensation Discussion and Analysis - Compensation for 2018.2021.

Annually, the Compensation Committee reviews the performance of the Chief Executive Officer against goals and objectives established by the Committee as part of the process of determining his compensation. The Compensation Committee reports to the Board on its performance review.

The Compensation Committee met one (1) time in 2018.

The members of the Compensation/Nominations and Corporate Governance Committee met three (3) times in 2018 were Hilda S. Murray, Chairman, Charles E. Brock,2021, in its role as a Compensation Committee and Michael L. Owens. Theonce in its role as a Nominations and Corporate Governance Committee. In its role as a Nominations and Corporate Governance Committee, the Committee develops and recommends for board approval corporate governance guidelines.guidelines.


The Compensation/Nominations and Corporate Governance Committee’s Charter includes the duties a corporate governance committee and of a nominating committee. Nominees approved by a majority of the Committee are recommended to the full Board. In selecting and approving director nominees, the Committee considers, among other factors, the existing composition of the Board and the mix of Board members appropriate for the perceived needs of the Company. The Committee believes continuity in leadership and board tenure increase the Board’s ability to exercise meaningful board oversight. Because qualified incumbent directors provide stockholders the benefit of continuity of leadership and seasoned judgment gained through experience as a director of the Company, the Committee will generally give priority as potential candidates to those incumbent
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directors interested in standing for re-election who have satisfied director performance expectations, including regular attendance at, preparation for and meaningful participation in Board and committee meetings.




The Nominations and Corporate Governance Committee also considers the following in selecting the proposed nominee slate:

•at all times at least a majority of directors must be “independent” in the opinion of the Board as determined in accordance with relevant regulatory and NASD standards;

•at all times at least three members of the Board must satisfy heightened standards of independence for Audit Committee members; and

•at all times the Board should have at least one member who satisfies the criteria to be designated by the Board as an “audit committee financial expert”.

In selecting the current slate of director nominees, the Committee considered overall qualifications and the requirements of the makeup of the Board of Directors rather than addressing separate topics such as diversity in its selection.Directors. The Board considered the value of the incumbents’ familiarity with the Company and its business as well as the considerations outlined above under the heading Considerations with Respect to Nominees.

The Nominations and Corporate Governance Committee met one (1) time in 2018.

Board Leadership Structure

Mr. Daniel K. Frierson currently serves as the Chairman of the Board and the Chief Executive Officer of the Company. The positions of Chief Executive Officer and Chairman of the Board are combined. Executive sessionsSessions of the Board are chaired by the chairman of the Compensation Committee, LowryDirector William F. Kline, who, as noted above, has extensive management and Board experience independent of his experience with the Company.Blue. Mr. KlineBlue and the independent directors set their own agenda for meetings in executive sessionExecutive Session and may consider any topic relevant to the Company and its business. The Company believes that regular, periodic, meetings held in executive session,Executive Session, in the absence of management members or management directors, provide the Board an adequate opportunity to review and address issues affecting management or the Company that require an independent perspective. Additionally, the Company’s Audit Committee holds separate executive sessionsExecutive Sessions with the Company’s independent registered public accounts, internal auditor and management. The Audit Committee also sets its own agenda and may consider any relevant topic in its executive sessions.

Director Attendance

During 2018,2021, no director attended fewer than 75% of the total number of meetings of the Board of Directors and any Committee of the Board of Directors on which he served. All directors are invited and encouraged to attend the annual meeting of shareholders. In general, all directors attend the annual meeting of shareholders unless they are unable to do so due to unavoidable commitments or intervening events.

Director Compensation

Directors who are employees of the Company do not receive any additional compensation for their services as members of the Board of Directors. Non-employee directors receive an annual retainer of $36,000,$40,000, payable one-half in cash and one-half in valuequarterly installments of Performance Units (subject to a $5.00 per share minimum value for determination of the number of performance units to be issued). Performance Units are redeemable upon a director’s retirement for an equivalent number of shares of the Company’s Common Stock. In addition to the annual retainer, directors who are not employees of the Company receive $1,500 for each Board meeting attended and $1,000 for each committee meeting attended. Chairmen of the Audit and Compensation committees$10,000 each. Committee Chairs receive an additional annual paymentretainer of $8,000 and$10,000, also payable in quarterly installments. There are no additional individual Board or Committee meeting fees. Each non-employee director also receives an equity award of $40,000 in value of restricted stock with such value determined by reference to the Chairmenpublic share price (the closing price) as of the Nominations and Corporate Governance Committee receives an additionaldate of the annual paymentmeeting at which the individual is elected, or, if the individual is appointed to the Board, then with reference to the stock price as of $4,000. For an additional discussionthe date of Director Compensation, seeappointment (subject to a deemed minimum stock price of $5 per share). The restricted stock award will vest five business days after the tabular information below under the heading, succeeding annual meeting.
“Director Compensation.”

Independent Directors

The Board has determined that William F. Blue, Jr., Charles E. Brock, Walter W. Hubbard, Lowry F. Kline, Hilda S. Murray, and Michael L. Owens are independent within the meaning of the standards for independence set forth in the Company’s corporate governance guidelines, which are consistent with the applicable Securities and Exchange Commission (“SEC”) rules and NASDAQ standards.




11

Executive Sessions of the Independent Directors

The Company’s independent directors meet in executive session at each regularly scheduled quarterly meeting of the Board, with the chair of the Compensation CommitteeDirector William F. Blue serving as chair of such executive sessions.




Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, and regulations of the SEC thereunder, require the Company’s executive officers and directors and persons who beneficially own more than 10% of the Company’s Common Stock, as well as certain affiliates of such persons, to file initial reports of such ownership and monthly transaction reports covering any changes in such ownership with the SEC and the National Association of Securities Dealers. Executive officers, directors and persons owning more than 10% of the Company’s Common Stock are required by SEC regulations to furnish the Company with all such reports they file. Based on its review of the copies of such reports received by it, the Company believes that, during fiscal year 2018,2021, all filing requirements applicable to its executive officers, directors, and owners of more than 10% of the Company's Common Stock have been met.

Management Succession

Periodically, the Board reviews a succession plan, developed by management, addressing the policies and principles for selecting successors to the Company’s executive officers, including the Company’s CEO. The succession plan includes an assessment of the experience, performance and skills believed to be desirable for possible successors to the Company’s executive officers.

Certain Transactions between the Company and Directors and Officers

The Company’s Compensation/Nominations and Corporate Governance Committee has adopted written policies and procedures concerning the review, approval or ratification of all transactions required to be disclosed under the SEC’s Regulation S-K, Rule 404. These policies and procedures cover all related party transactions required to be disclosed under the SEC’s rules as well as all material conflict of interest transactions as defined by relevant state law and the rules and regulations of NASDAQ that are applicable to the Company, and require that all such transactions be identified by management and disclosed to the committee for review. If required and appropriate under the circumstances, the committee will consider such transactions for approval or ratification. Full disclosure of the material terms of any such transaction must be made to the committee, including:

•the parties to the transaction and their relationship to the Company, its directors and officers;

•the terms of the transaction, including all proposed periodic payments; and

•the direct or indirect interest of any related parties or any director, officer or associate in the transaction.

To be approved or ratified, the committee must find any such transaction to be fair to the Company. Prior approval of such transactions must be obtained generally, if they are material to the Company. If such transactions are immaterial, such transactions may be ratified and prior approval is not required. Ordinary employment transactions may be ratified.

Certain Related Party Transactions

During its fiscal year ended December 29, 2018,25, 2021, the Company purchased a portion of its product needs in the form of fiber, yarn, and carpet from Engineered Floors, an entity substantially controlled by Robert E. Shaw, a shareholder of the Company. Mr. Shaw has reported holding approximately 7.2%7.6% of the Company’s Common Stock, which, as of year-end, represented approximately 3.5% of the total vote of all classes of the Company’s Common Stock. Engineered Floors is one of several suppliers of such products to the Company. Total purchases from Engineered Floors for 20182021 were approximately $8.2$3.9 million; or approximately 2.6%1.4% of the Company’s cost of goods sold in 2018.2021. In accordance with the terms of its charter, the CompensationNominations and Corporate Governance Committee reviewed the Company’s supply relationship with Engineered Floors. The dollar value of Mr. Shaw’s interest in the transactions with Engineered Floors is not known to the Company.

12

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Audit Committee of the Board of Directors is composed of sevenfive members, each of whom is an independent, non-employee director. The Audit Committee operates under a written Audit Committee Charter adopted and approved by the Board of Directors. The Charter is reviewed at least annually by the Committee. While the Committee has the responsibilities and powers set forth in its written charter, it is not the duty of the Committee to plan or conduct audits. This function is conducted by the Company’s management and its independent registered public accountants.
The Committee has reviewed and discussed with management the audited financial statements of the Company for the year ended December 29, 201825, 2021 (the “Audited Financial Statements”). In addition, the Committee has discussed with Dixon Hughes Goodman LLP all matters required by applicable auditing standards.
The Committee also has received the written report, disclosure and the letter from Dixon Hughes Goodman required by PCAOB Rule 3526, “Communication with Audit Committees Concerning Independence”, and the Committee has reviewed, evaluated, and discussed with that firm the written report and its independence from the Company. The Committee also has discussed with management of the Company and Dixon Hughes Goodman LLP such other matters and received such assurances from them as the Committee deemed appropriate.
Based on the foregoing review and discussions and relying thereon, the Committee has recommended to the Company’s Board of Directors the inclusion of the Company’s Audited Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 29, 2018,25, 2021, to be filed with the Securities and Exchange Commission.
THE AUDIT COMMITTEE
Michael L. Owens, Chairman
William F. Blue, Jr.
Charles E. Brock
Walter W. Hubbard
Lowry F. Kline
Hilda S. Murray

AUDIT COMMITTEE FINANCIAL EXPERT
The Board has determined that Michael L. Owens, Chairman of the Audit Committee, is an audit committee financial expert as defined by Item 407(d)(5) of Regulation S-K of the Securities Exchange Act of 1934, as amended, and is independent within the meaning of Rule 10A-3(b)(l) of the Securities Exchange Act of 1934 of the Securities Exchange Act of 1934. For a brief list of Mr. Owens’ relevant experience, please refer to Mr. Owens’ biographical information as set forth in the Election of Directors section of this proxy statement. Additionally, the Board believes the remaining members of the Audit Committee would qualify as audit committee financial experts, within the meaning of applicable rules, based on each individual's qualification and expertise.








13

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation/Nominations and Corporate Governance Committee, acting in its capacity as a Compensation Committee, reviews and sets compensation for the Company’s executive officers, and its decisions are reported to and reviewed by the Board of Directors.officers. The Compensation Committee currently consists of threefour independent directors (currently all independent directors with the exception of Michael L. Owens, Chairman of the Company’s Audit Committee) chosen annually by the Board.

Compensation of the Company’s executive officers is intended to be competitive with compensation offered by other companies generally similar to the Company in size and lines of business. In determining what types and levels of compensation to offer, the Committee may review relevant, publicly available data and, from time to time, it may receive advice and information from professional compensation consultants.

The Elements of Executive Officer Compensation
Compensation for each of the Company’s executive officersExecutive Officers consists generally of base salary, retirement plan benefits and other customary employment benefits, as well as potential cash incentive awards and stock plan awards pursuant to an annual incentive planplans reviewed and adopted by the Committee at the beginning of each year. The annual incentive plan is customarily structured so that a significant portion of each executive’s potential annual compensation may consist of equity awards, the award value of which is tied to accomplishing both financial and non-financial goals and objectives.

Compensation for 20182021. .

Effective February 19, 2018,2021, the Compensation Committee selected performance goals and objectives and a range of possible incentives for the Company’s 2018annual 2021 Incentive Compensation Plan (the “2018“2021 Plan”). Pursuant to the 20182021 Plan, each executive officer had the opportunity to earnbe granted a Cash Incentive Award,cash incentive award, a Primary Long-Term Incentive Award of restricted stock, and an award of restricted stock denominated as “Career Shares.”

In addition to required levels of achievement of certain financial goals related to the Company as a whole and the Company’s business units, the 2021 plan established certain individual goals and objectives for each officer participating in the plan. The potential rangeCommittee retained significant discretion in evaluating achievement of the financial and individual goals and, among other matters, considered the successful disposal of the Company’s commercial business together with the unanticipated effects of the ransomware attack and certain supply and fiber cost issues confronted by the Company and its management in its determinations.

Considering the foregoing factors, the following awards were paid or granted under the plan: Cash Incentive Awards were paid to the Company’s Named Executive Officers: Daniel K. Frierson- $520,042; D. Kennedy Frierson- $266,261; and T.M. Nuckols-$141,013. The following Career Share awards were granted to the Named Executive Officers: Daniel K. Frierson - 25,000; D. Kennedy Frierson - 22,400 and T.M. Nuckols - 11,000 The following Long Term Incentive Plan Shares were granted to the Named Executive Officers: Daniel K. Frierson - 65,954; D. Kennedy Frierson - 26,264; and T.M. Nuckols - 18,637 Awards under the plan are reported as income for 2022 because employment at the time of payment, in the case of cash incentivesawards, and conditions to vestinggrant in the case of the restricted stock awards, are described below.

No incentive awards were awarded tois required under the Company's executive officers for 2018. Incentive awards earned with respect to results for 2017 were, however, paid in the first quarter of 2018, in accordance with past practice.

For 2018, each executive officer also received customary retirement plan benefits and other customary employment benefits, as in prior years.

plan.
Salary for 2018. The base salaries for the executive officers were not adjusted during 2018. See the 2018 Summary Compensation Table for a tabular presentation of the amount of salary and other compensation elements paid in proportion to total compensation for each named executive officer.
Potential Incentive Awards for 20182021. The CEO and the Chief Operating Officer had the opportunity to earn a cash payment ranging from 45% to not more than 105% of such executive’s base salary. The Chief Financial Officer and all executiveother officers whose responsibilities primarily relate to corporate level administration had the opportunity to earn a cash payment ranging from 15% to no more than 105%75% of such executive’sofficer’s base salary (from 45% to 105% for the Chief Executive Officer and Chief Operating Officer, and from 30% to 90% for the Chief Financial Officer and from 15% to 75% for all other officers). Fiftysalary. Sixty percent of the amount of the potential awardamount was based on achievement of specified levels of operating income from continuing operations forof the Company, as adjusted for unusual items, 30% of the amount was based on achievement of specified levels of operating income of the Company’s residential business operations, as adjusted for unusual items, and 20%10 % of the amount was to have been based on achievement of specified levels of the Company’s commercial business operating income,operations, as adjusted for unusual items. Disposal of the Company’s commercial business and the several other matters described above were taken into consideration in evaluating achievement of the specified levels of operating income as well as individual goals and objectives.

Executive officers whose responsibilities primarily relate to one of the Company’s business units, had the opportunity to earn a cash payment ranging from 15% to no more than 75% of such participant’s base salary. Fifty fiveFifty-five percent of the amount was based on achievement of specified levels of their annual business unit operating income, as adjusted for unusual items, 30% was based on the achievement of specified levels of the Company’s consolidated operating income, as adjusted for unusual items, and 15% was based on the achievement of specified levels of the annual operating income of the Company’s other business units, as adjusted for unusual items.
Primary Long-Term Incentive Share Awards and Career Shares Awards for 2018. The incentive plan provided for two possible awards As noted above, adjustments were made to reflect a number of restricted stock: Primary Long-Term Incentive Share Awards and Career Share Awards. Receiptunusual items affecting 2021 results in determining achievement of the Primary Long-Term Incentive Share Awards was contingent on the Company’s achievement of minimum levels of adjusted operating income and, in the case of Career Share Awards was contingent on the Company's having a profitable operating income, as adjusted.specified criteria.

The Primary Long-Term Incentive Share Award was designed as a possible award of restricted shares, in value equal to no more than 35% 35% of the executive’s base salary as of the beginning of 20182021 (45% in the case of the Chief Executive Officer) plus any cash incentive award paid for such year. Any Primary Long-Term Incentive Share Awards, if earned, vest ratably over three years.

Career Shares were designed as a possible award of restricted stock valued at 20% of each executive officer’s base salary as of the beginning of the year, excluding the Company’s Chief Operating Officer and Chief Financial Officer. The level of career share awards was set at 35% and 30%, respectively, of the Chief Operating Officer’s and Chief Financial Officer’s base salary for 2018.2021.



In accordance with past practice, any such award, if earned, would be granted in 2019.2022. For participants age 61 or older, the Career Share Awards vest ratably over two years from the date of the grant. For the participants age 60 or younger, shares vest ratably over five years from the date of grant after the participant reaches age 61.
14


Additionally, all Share Awards are subject to vesting or forfeiture under certain conditions as follows: death, disability or a change in control will result in immediate vesting of all Share Awards; termination without cause will also result in immediate vesting of all Career Share Awards and in immediate vesting of that portion of Long-Term Incentive Share Awards that have been expensed; voluntary termination of employment prior to retirement, or termination for cause will result in forfeiture of all unvested awards; to the extent that the Company has recognized compensation expense related to the shares subject to the awards, such amounts vest at retirement age and are paid out by March 15th of the subsequent year.

All awards of restricted stock are subject to a $5.00 minimum price per share when determining the number of shares awarded. The Compensation Committee retained the discretion to reduce or increase any award by up to 30% of the amount otherwise earned based on the participant’s failure to achieveachievement of individual performance goals set by the committee.Committee.
No 2018 Incentive Awards. No awards were granted under the 2018 Incentive Compensation Plan.
Incentive Compensation Applicable to 2019.2022. Following year-end, the Committee adopted an incentive plan for 20192022 providing for possible cash incentive awards and restricted stock awards in the form of Long-Term Incentive Share Awards and Career Share awards, as in prior years, and similar in structure to the annual plan adopted for 2018.2021. The Committee reserved to itself the discretion to increase as well as reduce awards based on its evaluation of various factors applicable to the plan and each participant. The Committee was authorized to modify the plan and the assessment of individual performance based on unusual or extraordinary items. Any such awards, if earned, will be paid, in the case of the cash award, or granted, in the case of the restricted stock awards, in March 2020.2023.

Retirement Plans and Other Benefits. The Company’s compensation for its executive officers also includes the opportunity to participate in two retirement plans, one qualified and one non-qualified for federal tax purposes, and certain health insurance, life insurance, relocation allowances, and other benefits. Such benefits are designed to be similar to the benefits available to other exempt, salaried associates of the Company, and to be comparable to and competitive with benefits offered by businesses with which the Company competes for executive talent.

Executive officers may elect to contribute a limited amount of their compensation to the qualified plan and make deferrals into the non-qualified plan (up to 90% of total compensation). Although the plans permit the Company to make discretionary contributions in an aggregate amount equal to up to 3% of the executive officer’s cash compensation, for 20182021 the Company made a contribution of 1% to the qualified plan, while no Company contributions were made to the non-qualified plan.
In 2015, the Company's Chief Executive Officer, Daniel K. Frierson, was awarded a 100,000 share retention grant with both a continued service condition and a performance condition. The performance condition was not met at the year end of 2018, and in accordance with the terms of the award, it was forfeited.
Compensation Considerations for 20182021 and 20192022.The tax effect of possible forms of compensation on the Company and on the executive officers is a factor considered in determining types of compensation to be awarded. Similarly, the accounting treatment accorded various types of compensation may be an important factor used to determine the form of compensation. The deductibility, for tax purposes, of compensation paid to named executive officers is subject to limits imposed by Section 162 of the Internal Revenue Code. Annual compensation exceeding $1 million is non-deductible. Accordingly, all compensation in excess of $1 million paid to any of the Company's named executive officersNamed Executive Officers (and the Chief Financial Officer) in any given year will be non-deductible.

The Company held a “Say on Pay” vote at its annual meeting in 2018.2021. At that meeting, in excess of 98% ofof the votes were cast “For” approval of our executive compensation as described in the Proxy Statement for that meeting. The Committee intends to consider these results as part of its ongoing review of executive compensation.


Termination Benefits. Upon a Participant's reaching retirement age (as defined in the plan), all Long-Term Incentive Plan and Career Share restricted stock awards vest to the extent such awards have been expensed in the Company’s financial statements. As of year-end, Daniel K. Frierson and Mr. E. David Hobbs wereis the only Named Executive OfficersOfficer eligible for retirement in accordance with the terms of the restricted stock awards. If Mr. Frierson had retired at year end, the number of shares subject to such awards that would have vested and the value of such shares would have been 22,359 41,477 shares and $15,652. If Mr. Hobbs had retired at year end, the number of shares subject to such awards that would have vested and the value of such shares would have been 7,664 shares and $5,365. $141.021. For purposes of valuing the foregoing awards, the Company used the year-end market value of the Company’s Common Stock, which was $0.70/$3.40/share.






Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis, set forth above, withmanagement.

Based on our review and the discussions we held with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Proxy Materials.

Respectfully submitted,
Lowry F. Kline, Chairman
William F. Blue, Jr., Chairman
Walter W. HubbardCharles E. Brock

Lowry F. Kline

Hilda S. Murray

15


EXECUTIVE COMPENSATION INFORMATION

The following table sets forth information as to all compensation earned during the fiscal years ended December 31, 2016, December 30, 201726, 2020 and December 29, 201825, 2021 for (i) the Company's Chief Executive Officer; and (ii) the Company's Chief Financial Officer, (iii) the threetwo other most highly compensated executive officers who served as such during the fiscal year ended December 29, 201825, 2021 (the “Named Executive Officers”). For a more complete discussion of the elements of executive compensation, this information should be read in conjunction with the other tabular information presented in the balance of this section.

Summary Compensation Table
Name and Principal PositionYearSalary ($)(1)Bonus ($)(4)Stock Awards ($)(2)(4)Option Awards ($)Nonqualified Compensation Earnings ($)(3)All Other Compensation ($)(5)Total ($)
Daniel K Frierson
Chief Executive Officer		2021625,000478,125362,877——4,9641,470,966
2020574,219—70,000——5,895650,114
D. Kennedy Frierson, Jr. Chief Operating Officer2021320,000244,800219,873——5,636790,309
2020302,667—62,720——5,593370,980
T.M. Nuckols, Vice President, President Residential2021275,000162,938147,879——5,463591,280
2020260,104—30,800——5,219296,123
Name and Principal Position (a)Year (b)Salary ($)(c)(1)Bonus ($)(d)(2)Stock Awards ($)(e)(3)Option Awards ($)(f)Nonqualified Compensation Earnings ($)(h)(4)All Other Compensation ($)(i)(5)Total ($) (j)
         
Daniel K Frierson
Chief Executive Officer
2018625,000
257,656
203,210
 —
5,529
1,091,395
2017625,000
—
—
55,748
—
5,087
685,835
2016625,000
—
109,000
—
—
5,479
739,479
         
D. Kennedy Frierson, Jr. Chief Operating Officer2018320,000
125,975
130,026
—
—
5,307
581,308
2017320,000
—
—
34,842
—
4,874
359,716
2016320,000
—
97,664
—
—
5,479
423,143
         
Jon A. Faulkner, Chief Financial Officer2018270,000
84,351
98,840
—
—
5,163
458,354
2017270,000
—
—
23,366
—
4,602
297,968
2016270,000
—
70,632
—
—
5,389
346,021
         
T.M. Nuckols, Vice President, President, Dixie Residential2018275,000
123,750
90,980
—
—
4,647
494,377
2017248,958
—
70,000
23,366
—
2,172
344,496
2016—
—
—
—
—
—
—
         
E. David Hobbs, Vice President, President,
Dixie Commercial
2018250,000
55,000
68,774
—
—
2,960
376,734
2017247,500
—
—
23,366
—
3,879
274,745
2016203,437
—
16,786
—
—
3,705
223,928


(1)Includes all amounts deferred at the election of the Named Executive Officer.
(2)Cash bonuses are shown in the year granted, not earned, because employment through year-end is a condition of earning the award. Therefore, the bonus shown in the column for 2018 relates to performance achieved in 2017.

(3)Amounts reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for the year presented of stock awards to the Named Executive Officers. Continued employment is a condition of the Plan so the grant date is in the year after the year for which the performance was earned.
(4)The Dixie Group does not provide above-market or preferential earnings on deferred compensation. The Named Executive Officers did not participate in any defined benefit or actuarial pension plans for the periods presented.

(5)The following table is a summary and quantification of all amounts included in column (i).

(1)Includes all amounts deferred at the election of the Named Executive Officer.


(2)Amounts reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for the year presented of stock awards to the Named Executive Officers. Continued employment is a condition of the Plan so the grant date is in the year after the year for which the performance was earned.

(3)The Dixie Group does not provide above-market or preferential earnings on deferred compensation. The Named Executive Officers did not participate in any defined benefit or actuarial pension plans for the periods presented.

(4)     Continued employment at the time of grant and payment is required under the 2021 Incentive Plan; accordingly, bonuses and stock awards earned under the plan will be reported as compensation for 2022.

(5)The following table is a summary and quantification of all amounts included in All Other Compensation.


 All Other Compensation
NameYearRegistrant Contributions to Defined Contributions Plans ($)Insurance Premiums ($)Other ($)(1)Total Perquisites and Other Benefits($)
Daniel K. Frierson20212,8502,114—4,964
20202,8003,095—5,895
D. Kennedy Frierson, Jr.20212,8502,786—5,636
20202,8002,793—5,593
T.M. Nuckols20212,8502,613—5,463
2020—2,618—2,618
Name (a)Year (b)Registrant Contributions to Defined Contributions Plans ($)(c)Insurance Premiums ($)(d)Other ($)(f) (1&2)Total Perquisites and Other Benefits($)(g)
      
Daniel K. Frierson20182,650
2,879
 5,529
20172,208
2,879
 5,087
20162,600
2,879
 5,479
      
D. Kennedy Frierson, Jr.20182,650
2,657
 5,307
20172,208
2,666
 4,874
20162,600
2,879
 5,479
      
Jon A. Faulkner20182,650
2,513
 5,163
20172,208
2,394
 4,602
20162,600
2,789
 5,389
      
T.M. Nuckols20182,475
2,172
 4,647
2017 2,172
 2,172
2016   —
      
E. David Hobbs20181,115
1,845
 2,960
20172,034
1,845
 3,879
20161,925
1,780
 3,705


(1)(1)No named Executive Officer received any tax reimbursement, discounted securities purchases, or payment or accrual on termination plans for the period presented.



Grants of Plan-Based Awards
 Estimated Future Payouts Under Equity Incentive Plan Awards (1)
 Name (a)Grant Date (b)  Shares of Stock or Units (#) (i)Grant Date Fair Value of Stock and Option Awards ($)
 Securities Underlying Options (#) (j)Base Price of Option ($/#) (k)
 
 
       
 Daniel K. Frierson3/12/2018  25,000$70,000
  3/12/2018  47,575$133,210
       
 D. Kennedy Frierson, Jr.3/12/2018  22,400$62,720
  3/12/2018  24,038$67,306
       
 Jon A. Faulkner3/12/2018  16,200$45,360
  3/12/2018  19,100$53,480
       
 T.M. Nuckols3/12/2018  11,000$30,800
  3/12/2018  21,493$60,180
       
 E. David Hobbs3/12/2018  9,200$25,760
  3/12/2018  15,362$43,014

(1)The amount set forth in the table reflects the grant date fair value of the award determined in accordance with FASB ASC Topic 718.


No awards of restricted stock made to the Named Executive Officers under the 2018 Incentive Compensation Plan were granted
in 2019, in accordance with the terms of the plan.






Option Exercises and Stock Vested
 Option AwardsStock Awards
Name (a)Number of Shares Acquired on Exercise (#)(b)Value Realized on Exercise ($)(c) (1)Number of Shares Acquired on Vesting (#)(d)Value Realized on Vesting ($)(e)(2)
Daniel K. Frierson—
—
12,500
35,500
     
D. Kennedy Frierson, Jr.—
—
—
—
     
Jon A. Faulkner—
—
—
—
     
T.M. Nuckols—
—
—
—
     
E. David Hobbs—
—
1,925
5,467

(1)The value realized is calculated as average of the high and low price on the relevant exercise date minus the option price times the number of acquired shares.
(2) The value realized is calculated as the average of the high and low price on the relevant vesting date times the number of vested shares.

The following table sets forth information concerning the Company’s Non-Qualified Defined Contribution Plan for each of the Named Executive Officers for the fiscal year ended December 29, 2018. The Company does not maintain any other non-tax qualified deferred compensation plans. There were two withdrawals or distributions by the Named Executive Officers in the fiscal year ended 2018.period presented.
Nonqualified Deferred Compensation


16
Name (a)Executive Contribution in Last FY ($)(b)(1)(2)Registrant Contribution in Last FY ($)(c)(1)(2)Aggregate Earnings in Last FY ($) (d)(1)(2)(3)Aggregate Withdrawals/ Distributions ($)(e)Aggregate Balance at Last FYE ($)(f)
Daniel K. Frierson82,781
—
(215,307)(1,619,451)966,666
      
D. Kennedy Frierson, Jr.50,694
—
(43,732)—
631,973
      
Jon A. Faulkner67,481
—
(151,447)(98,810)1,306,327
      
T.M. Nuckols—
—
—
—
—
      
E. David Hobbs41,600
—
(10,534)—
125,548

(1)For each of the named executive officers, the entire amount reported in this column (b) is included within the amount report in column (c) of the 2018 Summary Compensation Table.

(2)None of the amounts reported in this column (d) are reported in column (h) of the 2018 Summary Compensation Table because the Company does not pay guaranteed, above-market or preferential earnings on deferred compensation.

(3)Amounts reported in this column (f) for each named executive officer include amounts previously reported in the Company's Summary Compensation Table last year when earned if that officer's compensation was required to be disclosed in the previous year. This total reflects the cumulative value of each named executive officer's deferrals and investment experience.





The following table sets forth information concerning outstanding equity awards for each of the Named Executive Officers at fiscal year-end.
 Outstanding Equity Awards at Fiscal Year-End
Option AwardsStock Awards
Name Exercisable (#)Unexercisable (#)Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Option (#)Option Exercise Price ($)Option Expiration DateEquity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(a)
Daniel K. Frierson—40,000—4.595/30/2022114,719645,868
D. Kennedy Frierson, Jr.—25,000—4.595/30/2022193,6281,090,126
T.M. Nuckols—15,000—4.175/30/202263,656358,383

a.The market value of the restricted stock set forth in the table has been calculated by multiplying the closing price of the Company’s Common Stock at year-end ($5.63/share) by the number of shares of unvested restricted stock subject to the award.




17
Option AwardsStock Awards
Name (a) Exercisable(#)(b)Unexercisable (#)(c)Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Option (#)(d)Option Exercise Price ($)(e)Option Expiration Date (f)Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(i)Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(j)
        
Daniel K. Frierson50,000
—
—
5.00
11/4/201972,575
50,803
 40,000
 4.59
5/30/2022  
        
D. Kennedy Frierson, Jr.22,000
—
—
5.00
11/4/2019133,330
93,331
 25,000
 4.59
5/30/2022  
        
Jon A. Faulkner11,000
—
—
5.00
11/4/2019106,843
74,790
 15,000
 4.17
5/30/2022  
        
T.M. Nuckols—
15,000
—
4.17
5/30/202252,493
36,745
       
        
E. David Hobbs—
15,000
—
4.175/30/202224,562
17,193
       


(1)The market value of the restricted stock set forth in the table has been calculated by multiplying the closing price of the Company’s Common Stock at year-end ($0.70/share) by the number of shares of unvested restricted stock subject to the award.





DIRECTOR COMPENSATION
NameFees earned or paid in cash ($)(1)Director's Restricted Stock Awards ($)(2)Option Awards ($)All Other Compensation ($)Total ($)
William F. Blue, Jr.50,00027,680——77,680
 Charles E. Brock39,50027,680——67,180
 Lowry F. Kline40,50027,680——68,180
 Hilda S. Murray40,50027,680——68,180
Michael L. Owens49,00027,680——76,680
 Name (a)Fees earned or paid in cash ($) (b)(1)Stock Awards ($) (c)(2)Option Awards ($) (d)(3)All Other Compensation ($) (e)(4)Total ($)
 
 
 
 William F. Blue, Jr.29,00011,520——40,520
       
  Charles E. Brock30,50011,520——42,020
       
  Walter W. Hubbard30,50011,520——42,020
       
  Lowry F. Kline39,50011,520——51,020
       
  Hilda S. Murray32,00011,520——43,520
       
 Michael L. Owens37,50011,520——49,020


(1)Directors who are employees of the Company do not receive any additional compensation for their services as members of the Board of Directors. Non-employee directors receive an annual retainer of $36,000, payable $18,000 in cash and the remainder in Performance Units (subject, for payments made in 2016, 2017 and 2018, to a $5.00 minimum value per unit). For 2018 the value awarded was $11,520 in Performance Units determined as of the date of grant. In addition to the annual retainer, directors who are not employees of the Company received $1,500 for each Board meeting attended and $1,000 for each committee meeting attended. Chairmen of the Audit and Compensation committees receive an additional annual payment of $8,000 and the Chairmen of the Nominations and Corporate Governance Committee receives an additional annual payment of $4,000. Also, directors receive reimbursement of the expenses they incur in attending all board and committee meetings.
(2)The value presented is the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The value of the Performance Units awarded to each non-employee director under the Company's 2018 Incentive Compensation Plan was $11,520.

At fiscal year-end, each(1)Non-employee directors receive an annual retainer of $40,000, payable in quarterly installments of $10,000 each. Committee Chairs receive an additional annual retainer of $10,000, also payable in quarterly installments. There are no additional individual Board or Committee meeting fees. Each non-employee director was issuedalso receives an equity award of $40,000 in value of restricted stock with such value determined by reference to the following outstanding equity awards,public share price (the closing price) as of the date of the annual meeting at which the individual is elected, or, if the individual is appointed to the Board, then with respectreference to service for 2018:the stock price as of the date of appointment (subject to a deemed minimum stock price of $5 per share. The restricted stock award will vest five business days after the succeeding annual meeting.

(2)The value presented is the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, using the annual meeting date as the grant date.


18
Name (a)Performance Units (#)(b)(1)
William F. Blue, Jr.3,600
Charles E. Brock3,600
Walter W. Hubbard3,600
Lowry F. Kline3,600
Hilda S. Murray3,600
Michael L. Owens3,600


(1)The performance units represent an equal number of shares of the Company's Common Stock. At year-end, the aggregate value of such stock was $15,120, determined by multiplying the number of performance units issued by the year-end per share market value of the Company's Common Stock ($0.70/share).


PROPOSAL TWO

ADVISORY VOTE ON EXECUTIVE COMPENSATIONADOPTION OF THE OMNIBUS EQUITY INCENTIVE PLAN

As required
On March 12, 2022, the Compensation/Nominations and Corporate Governance Committee ("Compensation Committee") recommended and the Board of Directors unanimously approved adoption of the Omnibus Equity Incentive Plan (the “2022 Plan” or the “Omnibus Equity Incentive Plan”). The Company’s 2016 Incentive Plan will remain in effect. All remaining shares available for issuance under recent amendmentsthe 2016 Incentive Plan have been granted, subject to possible forfeiture or cancellation of unvested awards outstanding under that plan.

The 2022 Plan authorizes similar forms of awards as the Securities Exchange Act of 1934, our stockholders may cast an advisory vote2016 Incentive Plan and contains certain annual and other limits on the compensation of our Named Executive Officers,awards, as described herein, but eliminates those references to and the specific limitations on “qualifying performance awards” included in this proxy statement.
Our executive compensation programs arethe 2016 Incentive Plan that were designed to attract, motivate,meet former requirements under Code Section 162 (m) of the Internal Revenue Code of 1986, as amended (the “Code”).

The 2022 Plan, if adopted by the Company’s shareholders, will authorize the issuance of up to 1,300,000 shares of the Company’s Common or Class B Common Stock to designated officers, directors and retain our Named Executive Officers, whoemployees (as such terms are criticaldefined in the 2022 Plan) as equity awards, subject to our success. Please read the Compensation Discussion and Analysis for additional details about our executive compensation programs, including information about the fiscal 2018 compensation of our Named Executive Officers.
We are asking our Shareholders to indicate their approval of our Named Executive Officer compensationcertain limits as described in this proxy statement. This proposal, commonly known as a hereinafter.
“say-on-pay” proposal, gives our stockholders the opportunity to express their views on our Named Executive Officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and practices described in this proxy statement.
We recommend that stockholders vote, on an advisory basis, “FOR” the following resolution:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as discussed and disclosed in the Compensation Discussion and Analysis, the executive compensation tables and related narrative executive compensation disclosure in this proxy statement.”
The above resolution will be deemed to be approved if it receives the affirmative vote of a majority of the total votes castrepresented in person or by proxy and entitled to vote on Proposal Twothis item will be required for approval of the plan. Abstentions will be counted as represented and entitled to vote and will therefore have the effect of a negative vote. Broker non-votes will not be considered entitled to vote on this item and will therefore not be counted in determining the number of votes necessary for approval.

The 2022 Plan includes the following features that are designed to protect the interests of our shareholders:

Administration by a Compensation Committee composed entirely of independent directors.

The number of shares available for grant will not automatically increase because of an “evergreen feature.”

Exercise prices of awards (if applicable) must be at least 100% of fair market value on the date of the award.

Option Awards may not be re-priced, including, specifically, by any action that has the effect of reducing the exercise price of such option.

There are annual meeting. Abstentions and broker non-votes arefixed limits on the number of equity Awards:

The maximum number of options that may be granted to any one participant during any fiscal year is 150,000; the maximum number of shares of restricted stock that may be granted to any participant during any fiscal year is 330,000; the maximum number of shares of restricted stock that may be granted to any non-employee director in any one fiscal year is 20,000.

No material amendments may be made without the approval of shareholders.

Summary Description of the Omnibus Equity Incentive Plan.

Following is a brief description of certain key features of the Omnibus Equity Incentive Plan, the full text of which is attached as APPENDIX A. This Summary does not consideredpurport to be votes castcomplete and accordingly, will have no effectis qualified in its entirety by reference to APPENDIX A. If the Omnibus Equity Incentive Plan is approved by the Company’s shareholders, we intend to promptly file a registration statement on Form S-8 under the outcomeSecurities Act of 1933, as amended, registering the shares available for issuance under the 2022 Plan.

General. The Omnibus Equity Incentive Plan provides for various types of awards denominated in shares of the vote. AsCompany’s common stock (for these purposes, Common Stock and or Class B Common Stock) to employees, officers, directors and agents of the company and its participating subsidiaries. The primary purposes of the Omnibus Equity Incentive Plan are to attract and retain such persons by providing competitive compensation opportunities, to provide incentives for those who contribute to the long-term performance of the Company, and to align employee and director interests with those of our shareholders.

Administration. The Omnibus Equity Incentive Plan is administered by the Compensation Committee of the Board. All members of the Committee must satisfy the requirements for independence of the Securities Exchange Act rule 16b-3.

The Compensation Committee has the authority to administer and interpret the Omnibus Equity Incentive Plan, to determine the employees to whom awards will be granted under the plan and, subject to the terms and limitations of the plan, the type and size of each award, the terms and conditions for vesting, cancellation and forfeiture of awards and the other features applicable to each award or type of award. Included within this voteauthority is an advisory vote, the outcome is not binding on usbroad discretionary authority to administer and interpret each annual incentive plan adopted by the Company pursuant to the Omnibus Equity Incentive Plan.
19


The Committee may:

•accelerate or defer the vesting or payment of awards;

•cancel or modify outstanding awards;

•waive any conditions or restrictions imposed with respect to future executive compensation decisions, including those relatingawards or the stock issued pursuant to our named executive officers. Our Board of Directors awards;

•and our Compensation Committee, however, value the opinions of our stockholders,make any and all other determinations that it deems appropriate, subject to the extent thereexpress limitations imposed by the Omnibus Equity Incentive Plan, including minimum vesting requirements, prohibitions against re-pricing, and provisions designed to maintain compliance with the requirements of Sections 422 (for incentive stock options) and 409 A of the Internal Revenue Code, as well as other applicable laws and stock exchange rules.

The Committee may delegate some or all of its authority over administration of the Omnibus Equity Incentive Plan to one or more officers and directors except as otherwise prohibited by applicable rule or regulation.

Eligibility. All “employees” of the Company-within the SEC’s broad definition set forth in the instructions to the Form S-8 registration statement, which includes employees, officers, directors and (subject to certain restrictions) consultants and advisors to the Company- are eligible to receive awards under the Omnibus Equity Incentive Plan. Participation is discretionary- awards are subject to approval of the Compensation Committee.

Shares Subject to the Plan. The maximum number of shares of Common Stock and Class B Common Stock that may be issued as awards pursuant to the Omnibus Equity Incentive Plan is 1,300,000.

The maximum number of shares of that may be issued will not be affected by the payment in cash of dividends or dividend equivalents in connection with outstanding awards, the granting or payment of stock-denominated awards that by their terms may be settled only in cash, or awards that are granted through the assumption of, or in substitution for outstanding awards previously granted to individuals who have become employees as a result of a merger, consolidation, or acquisition or other corporate transaction involving the Company or a subsidiary. Additionally, shares used by a participant to exercise an option and shares withheld by the Company to cover the withholding tax liability associated with the exercise or vesting of an award are not counted toward the maximum number of shares that may be issued and will not reduce the number of shares that will be available for future awards.

Shares of Common Stock and Class B Common Stock issued in connection with awards under the Omnibus Equity Incentive Plan may be shares that are authorized but unissued, or previously issued shares that have been reacquired, or both. If an award is forfeited, canceled, terminated or expires prior to the issuance of shares, the shares subject to the award will be available for future grants. Shares subject to outstanding awards granted under other plans shall not be subject to future issuance under the Omnibus Equity Incentive Plan, if such awards are forfeited, cancelled, terminated or expire prior to the issuance of such shares.

Limit on Awards. The aggregate number of shares of Common Stock and or Class B Common Stock subject to awards of restricted stock that may be granted to any significant vote againstone participant during any fiscal year of the Named Executive Officer compensation as disclosedCompany may not exceed 330,000, and the maximum number of shares subject to awards of stock options that may be granted to any one participant during any fiscal year may not exceed 150,000. The maximum number of shares of restricted stock that may be granted to any one non-employee director in this proxy statement,any fiscal year may not exceed 20,000.

Proportional exercise For Common Stock and Class B Common Stock. All awards granted under the Omnibus Equity Incentive Plan shall be denominated and documented with reference to the number of shares of Common Stock subject to such award; provided, however, that any participant who owns shares of the Company’s Class B Common Stock shall be entitled to elect, on the election date applicable to the award to receive a portion of such award in shares of Class B Common Stock in an amount no greater than the proportion of Class B Common Stock then held by such participant.

Types of Awards. The following types of awards may be granted under the Omnibus Equity Incentive Plan. All of the awards described below are subject to the conditions, limitations, restrictions, vesting and forfeiture provisions determined by the Compensation Committee, in its sole discretion, subject to such limitations as are provided in the Omnibus Equity Incentive Plan. The number of shares subject to any award is also determined by the Compensation Committee in its discretion. At the discretion of the Compensation Committee, awards may be made subject to or may vest on an accelerated basis upon the achievement of performance criteria, which may be established on a Company-wide basis or with respect to one or more business units or divisions or subsidiaries and may be based upon the attainment of criteria as may be determined by the Committee.

Restricted Stock. A restricted stock award is an award of outstanding shares of Common Stock or Class B Common Stock that does not vest until after a specified period of time, or upon the satisfaction of other vesting conditions as determined by the compensation Committee and which may be forfeited if conditions to vesting are not met. Participants generally are entitled to receive dividends (if any) during the vesting period and are also generally entitled to vote the shares underlying the award.

Non-Qualified Stock Options. An award of a non-qualified stock option under the Omnibus Equity Incentive Plan grants a participant the right to purchase a certain number of shares of Common Stock and or Class B Common stock during a
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specified term in the future, after a vesting period, at an exercise price equal to at least 100% of the fair market value of the Common Stock on the grant date. The exercise price may be paid by any of the means described below under “Payment of Exercise Price.” A non-qualified stock option is one that does not qualify under Section 422 of the Code.

Incentive Stock Options. An incentive stock option is a stock option that meets the requirements of Section 422 of the Code, which include an exercise price of no less than 100% of fair market value on the date of grant, a term of no more than 10 years, and that the option be granted from a plan that has been approved by shareholders. Additional requirements apply to an incentive stock option granted to a participant who beneficially owns stock representing more than 10% of the total voting power of all outstanding stock of the Company on the date of grant. If certain holding period requirements are met and there is no disqualifying disposition of the shares, the participant will consider our stockholdersbe entitled to receive capital gain rather than ordinary income treatment under the Code with respect to any gain related to the exercise of the option.

Payment of the Exercise Price’. Payment of the exercise price of any option (or other award, if such award requires payment of an exercise price) granted under the Omnibus Equity Incentive Plan may be made in cash or, if permitted by the Compensation Committee, by tendering shares of Common Stock and or Class B Common Stock owned by the participant and acquired at least six (six) months prior to exercise, having a fair market value equal to the exercise price, by a combination of cash and shares or by authorizing the sale of shares otherwise issuable upon exercise, with the sale proceeds applied towards the exercise price. Additionally, the Committee may provide that stock options can be net exercised- that is by issuing shares having a value approximately equal to the difference between the aggregate value of the shares as to which the awards being exercised and the aggregate exercise price for such number of shares.

Stock Unit. concernsA stock unit is an award denominated in shares of Common Stock or Class B Common Stock that may be settled ether in shares and or cash subject to terms and conditions determined by the Compensation Committee.

Stock Payment. Subject to limits on individual and aggregate awards as described above, the Compensation Committee may issue unrestricted shares of Common Stock and or Class B Common Stock under the Omnibus Equity Incentive Plan, alone or in tandem with other awards, in such amounts and subject to such terms and conditions as the Compensation Committee may determine. A stock payment may be granted as, or in payment of a bonus or to provide incentives or recognize special achievements or contributions.

Prohibition Against Re-Pricing. The Omnibus Equity Incentive Plan prohibits any adjustment to an award of options that would constitute a re-pricing (within the meaning of U.S. generally accepted accounting principles or any applicable stock exchange rule) of awards, and defined, for these purposes, as any action that would have the effect of reducing the exercise price of an option.

Additional Forfeiture Provisions. Awards granted under the Omnibus Equity Incentive Plan may be made subject to forfeiture if, after a termination of employment, the Participant engages in certain activities that breach an obligation or duty of the Participant to the Company, or that are materially injurious to or in competition with the Company.

Deferrals. The Compensation Committee may postpone the exercise of awards, or the issuance or delivery of shares or cash pursuant to any award for such periods and upon such terms and conditions as the Compensation Committee determines, but not in contravention of Section 409A of the Code.

Annual Incentive Plans. In accordance with past practice, and subject to the express terms and conditions of the Omnibus Equity Incentive Plan, the Company may continue to establish annual incentive plans that provide for cash and equity awards to eligible employees selected by the Committee. Awards under such annual plans may be based on achievement of performance criteria and formulas set by the Committee and evaluated in light of individual goals and achievements. The Committee retains broad discretion to interpret the goals and attainment of the performance metrics expressed by such goals, including the discretion to increase or decrease awards. A description of the annual plan adopted for 2022 is set forth under “Incentive Compensation Applicable to 2022.”

Individual Awards. Subject to relevant plan limitations, awards may be made outside of the terms of any annual incentive plan to participants selected by the Compensation Committee from among the Company’s eligible participants.

New Plan Benefits Under the Omnibus Equity Incentive Plan. Future benefits under the Omnibus Equity Incentive Plan are not currently determinable. The amounts and terms of any future awards, as well as the participants to which such awards may be made, depend on discretionary decisions of the Compensation Committee. While the Committee expects that shares which ultimately may become issuable for 2022 (under the annual incentive plan described herein at “Incentive Compensation Applicable to 2022”) will evaluatebe granted as restricted stock awards, whether such awards will be granted, and the number of shares to be issued pursuant to such awards that are granted cannot be known until the Committee evaluates whether and to what extent any actions are necessaryrelated performance criteria and goals have been met.

Additionally, the Committee anticipates reviewing awards issued under the annual plan for 2021 to address those concerns.determine whether and to what extent additional awards should be granted to participants under that plan in acknowledgement of the participants’ and the Company’s performance responding to the challenges of 2021. Additional awards in the aggregate amounting to 78,957 restricted shares may be considered based upon share availability under the Company's 2016 Incentive Compensation Plan as a result of forfeited awards.

The Boardfollowing table provides information as of Directors recommends thatMarch 12, 2022, with respect to compensation plans (including individual compensation arrangements) under which equity securities of the Company’s shareholders vote FORregistrant are authorized for issuance
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.
2016 Incentive Compensation Plan(a) Number of
securities to be issued upon
exercise of any
outstanding
options, warrants
and rights
(b) Weighted-
average exercise
price of
outstanding
options, warrants
and rights
(c) Number of
securities
remaining
available for
future issuance
under equity
compensation
plans (excluding securities reflected in column)

Equity Compensation Plan Approved by Security Holders		281,320 [1]4.35[2]1,008

[1] Includes the approvaloptions to purchase 151,000 shares of Proposal Two.Common Stock under our 2016 Incentive Compensation Plan and 130,320 Performance Units issued under the 2016 Incentive Compensation Plan, each unit being equivalent to one share of Common Stock. Does not includes shares of Common Stock issued but not vested pursuant to outstanding restricted stock awards.
[2] Includes the aggregate weighted-average of (i) the exercise price per share for outstanding options to purchase 151,000 shares of Common Stock under our 2016 Incentive Compensation Plan and (ii) the price per share of the Common Stock on the grant date for each of 130,320 Performance Units issued under the 2016 Incentive Compensation Plan (each unit equivalent to one share of Common Stock).    
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PROPOSAL THREE

ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY SAY-ON-PAY VOTESEXECUTIVE COMPENSATION
Our
As required under recent amendments to the Securities Exchange Act of 1934, our stockholders also have the opportunity to indicate how frequently we should seekmay cast an advisory vote on the compensation of our Named Executive Officers, as described in this proxy statement.
Our executive compensation programs are designed to attract, motivate and retain our Named Executive Officers, who are critical to our success. Please read the Compensation Discussion and Analysis for additional details about our executive compensation programs, including information about the fiscal 2021 compensation of our Named Executive Officers.
We are asking our Shareholders to indicate their approval of our Named Executive Officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our Named Executive Officers’ compensation.
We recommend that stockholders vote, on an advisory basis, “FOR” the following resolution:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers. By votingofficers, as discussed and disclosed in the Compensation Discussion and Analysis, the executive compensation tables and related narrative executive compensation disclosure in this proxy statement.”
The above resolution will be deemed to be approved if it receives the affirmative vote of a majority of the total votes cast on Proposal Three stockholders may indicate whether they would prefer an advisory vote on named executive officer compensation once every one, two, or three years. You will haveat the opportunity to vote on this issue at least once every six years.
Our Board of Directors has determined that an advisory vote on executive compensation that occurs every year is the most appropriate alternative for our company. Accordingly, our Board of Directors recommends that you vote for a one-year interval for the advisory vote on executive compensation.
You may cast your vote on your preferred voting frequency by choosing the option of one year, two years, or three years. You may also abstain from voting. The option that receives the highest number of advisory votes by shareholders will be the frequency for the advisory vote on executive compensation deemed to have been selected by stockholders.annual meeting. Abstentions and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote.
As thethis vote is an advisory andvote, the outcome is not binding theon us with respect to future executive compensation decisions, including those relating to our Named Executive Officers. Our Board of Directors may decide that it is in the best interests of the Company and its shareholders to hold an advisory vote on executive compensation more or less frequently than the option selected by our shareholders (but not less often than once every three years). However, weCompensation Committee, however, value the opinions of our shareholdersstockholders, and to the extent there is any significant vote against the Named Executive Officer compensation as disclosed in this proxy statement, the Compensation Committee will consider our stockholders’ concerns and will consider the outcome of the advisory vote in deciding how oftenevaluate whether any actions are necessary to hold the advisory vote on executive compensation in future years.address those concerns.
The Board of Directors recommends athat the Company’s shareholders vote FOR the frequencyapproval of the say-on-pay advisory vote to be "one year".Proposal Three.








PROPOSAL FOUR

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR 20192021
The firm of Dixon Hughes Goodman LLP served as independent registered public accountants for the Company for fiscal year 2018. Subject to ratification of its decision by the Company’s shareholders, the Company has selected the firm of Dixon Hughes Goodman LLP to serve as its independent registered public accountants for its 20192022 fiscal year. A representative of Dixon Hughes Goodman LLP is expected to be present at the Annual Meeting and will have the opportunity to make a statement if he so desires and to respond to appropriate questions from shareholders.
The Board of Directors recommends that that the Company’s shareholders vote FOR Proposal Four.
In the event that the Company’s shareholders do not ratify the selection of Dixon Hughes Goodman LLP as independent registered public accountants for fiscal 2019,2022, the Board of Directors will consider other alternatives, including appointment of another firm to serve as independent registered public accountants for fiscal 2019.2022.


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AUDIT FEES DISCUSSION

The following table sets forth the fees paid to Dixon Hughes Goodman LLP for services provided during fiscal year 20172020 and 2018:2021:
 20182017
Audit fees paid to Dixon Hughes Goodman LLP (1)$610,026
$652,536
Audit related fees (2)$3,354
$23,612
Tax fees (3)$45,495
$174,975
All other fees (4)$5,716
$—
Total Audit Fees$664,591
$851,123
20212020
Audit fees paid to Dixon Hughes Goodman LLP (1)$849,364 $603,642 
Tax fees (2)$7,800 $1,450 
All other fees (3)$10,000 
Total Audit Fees$857,164 $615,092 
 
(1)Represents fees for professional services paid to Dixon Hughes Goodman LLP provided in connection with the audit of the Company’s annual financial statements, review of the Company’s quarterly financial statements, review of other SEC filings and technical accounting issues during 2017 and 2018.
(2)Represents fees for discussions of recent accounting pronouncements and review of SEC comment letter.
(3)Represents fees for tax compliance and tax planning services.
(4)Represents fees related to a sale leaseback transaction.
1.    Represents fees for professional services paid to Dixon Hughes Goodman LLP provided in connection with the audit of the Company’s annual financial statements, review of the Company’s quarterly financial statements, review of other SEC filings and technical accounting issues during 2020 and 2021.
2.    Represents fees for tax compliance and tax planning services.
3.    Represents fees related to the S-8 Registration Statement filing.

It is the policy of the Audit Committee to pre-approve all services provided by its independent registered public accountants. In addition, the Audit Committee has granted the Chairman of the Audit Committee the power to pre-approve any services that the Committee, as a whole, could approve. None of the fees were approved by the Audit Committee pursuant to the de minimis exception of Reg. S-X T Rule 2-01(c)(7)(i)(C).

SHAREHOLDER PROPOSALS
FOR INCLUSION IN NEXT YEAR'S PROXY STATEMENT

In the event any shareholder wishes to present a proposal at the 20202023 Annual Meeting of Shareholders, such proposal must be received by the Company on or before November 1512, 2019,2022, to be considered for inclusion in the Company's proxy materials. All shareholder proposals should be addressed to the Company at its principal executive offices, P.O. Box 2007, Dalton, Georgia 30722-2007, Attention: Corporate Secretary, and must comply with the rules and regulations of the Securities and Exchange Commission.

COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Shareholders who wish to communicate with members of the Board, including the independent directors individually or as a group, may send correspondence to them in care of the Corporate Secretary at the Company’s corporate headquarters, P.O. Box 2007, Dalton, Georgia 30722-2007.
ADDITIONAL INFORMATION
The entire cost of soliciting proxies will be borne by the Company. In addition to solicitation of proxies by mail, proxies may be solicited by the Company’s directors, officers, and other employees by personal interview, telephone, and telegram. The persons making such solicitations will receive no additional compensation for such services. The Company also requests that brokerage houses and other custodians, nominees and fiduciaries forward solicitation materials to the beneficial owners of the shares of Common Stock held of record by such persons and will pay such brokers and other fiduciaries all of their reasonable out-of-pocket expenses incurred in connection therewith.

OTHER MATTERS

As of the date of this Proxy Material, the Board does not intend to present, and has not been informed that any other person intends to present, any matter for action at the Annual Meeting other than those specifically referred to herein. If other matters should properly come before the Annual Meeting, it is intended that the holders of the proxies will vote in accordance with their best judgment.


The Dixie Group, Inc.

dana02.jpg
Daniel K. Frierson
Chairman of the Board
Dated: March 22, 2019

30, 2022
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proxycardpage01.jpgANNEX A


DIXIE GROUP, INC.
proxycardpage2a03.jpg
OMNIBUS EQUITY INCENTIVE PLAN


DIXIE GROUP, INC.

Omnibus Equity Incentive Plan

1.Purpose. The primary purposes of the Omnibus Equity Incentive Plan are to attract, retain and motivate employees, officers, agents or other eligible plan participants, including non-employee directors of the Company, and to compensate them for their contributions to the growth and profits of the Company.

2.Definitions. Except as otherwise provided in an applicable Award Document, the following capitalized terms shall have the meanings indicated below for purposes of the Plan and any Award:

“Administrator” means the Compensation/Nominations and Corporate Governance Committee or any subcommittee or individual appointed by the Committee to administer the Plan.

“Award” means any Award of Restricted Stock, Stock Units, Performance Units, Options, Cash or Other Awards (or any combination thereof) made under and pursuant to the terms of the Plan.

“Award Date” means the date specified in a Participant’s Award Document as the grant date of the Award.

“Award Document” means a written document (including in electronic form) that sets forth the terms and conditions of an Award. Award Documents shall be authorized in accordance with Section 11(c).

“Board” means the Board of Directors of The Dixie Group, Inc.

“Code” means the Internal Revenue Code of 1986, as amended, and the applicable rulings, regulations and guidance thereunder.

“Committee” means the Compensation/Nominations and Corporate Governance Committee of the Board, any successor committee thereto or any other committee of the Board appointed by the Board to administer the Plan or to have authority with respect to the Plan, or any subcommittee appointed by such Committee.

“Company” means The Dixie Group, Inc. and all of its Subsidiaries.

“Eligible Individuals” means the individuals described in Section 6 who are eligible for Awards.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the applicable rulings and regulations thereunder.

“Fair Market Value” means, with respect to a Share, the fair market value thereof as of the relevant date of determination, as determined in accordance with a valuation methodology approved by the Committee.

“Incentive Stock Option” or “ISO” means an Option that is intended to qualify for special federal income tax treatment pursuant to Sections 421 and 422 of the Code, as now constituted or subsequently amended, or pursuant to a successor provision of the Code, and which is so designated in the applicable Award Document.

“Option” or “Stock Option” means a right, granted to a Participant pursuant to Section 9, to purchase Shares of The Dixie Group, Inc. common stock (Common Stock and Class B Common Stock).

“Other Award” means any other form of Award authorized under Section 12.

“Participant” means an individual to whom an Award has been made.

“Plan” means the Dixie Group, Inc. Omnibus Equity Incentive Plan, as amended from time to time in accordance with Section 14(e).

“Restricted Stock” means Shares granted or sold to a participant pursuant to Section 7.

“Section 409A” means Section 409A of the Code.

“Shares” means shares of Stock.

“Stock” means the Common Stock, Par Value $3.00 per share, of The Dixie Group, Inc., and, where permitted under the Plan, the Class B Common Stock, $3.00 Par Value per share of The Dixie Group, Inc.
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“Stock Unit” means a right, granted to a Participant pursuant to Section 8, redeemable in shares or cash, as authorized by the Committee.

“Subsidiary” means (i) a corporation or other entity with respect to which the Dixie Group, Inc. directly or indirectly, has the power, whether through the ownership of securities, by contract or otherwise, to elect at least a majority of the members of such corporation’s board of directors or analogous governing body, or any other corporation or other entity in which the Dixie Group, Inc. directly or indirectly, has an equity or similar interest and which the Committee designates as a Subsidiary for purposes of the Plan.

3.    Effective Date.

(a)    Effective Date. The Plan shall become effective upon its adoption by the Board, subject to its approval by The Dixie Group Inc.’s stockholders. Prior to such stockholder approval and subject to applicable regulatory limitations, the Committee may grant Awards conditioned on stockholder approval, but no shares may be issued or delivered pursuant to any such Award until The Dixie Group, Inc.’s stockholders have approved the Plan. If such stockholder approval is not obtained the Plan and any awards made thereunder shall terminate ab initio and be of no further force and effect.

(b)    Term of Plan. No awards may be made after May 4, 2032.

4.    Stock Subject to Plan.

(a)     Overall Plan Limit. The total number of Shares that may be delivered pursuant to Awards shall be 1,300,000 as calculated pursuant to Section 4(c). the number of Shares available for delivery under the Plan shall be adjusted as provided in Section 4(b). Shares delivered under the Plan may be authorized but unissued shares or treasury shares that the Company acquires in the open market, in private transactions or otherwise.

(b)    Adjustments for Certain Transactions. In the event of a stock split, reverse stock split, stock dividend, recapitalization, reorganization, merger, consolidation, extraordinary dividend or distribution, split-up, spin-off, combination, reclassification or exchange of shares, warrants or rights or other change in corporate structure or any other event that affects the Company’s capitalization, the Committee shall have the authority to equitably adjust (i) the number and kind of Shares authorized for delivery under the Plan, including the maximum number of shares available for Awards and Options as provided in Section 4(d), the maximum number of Incentive Options as provided in Section 4(e) and (ii) the number and kind of shares subject to any outstanding Award and the purchase price per share, if any, under any outstanding Award. The Committee shall make all such adjustments, and its determination as to what adjustments shall be made, and the extent thereof, shall be final. Unless the Committee determines otherwise, such adjusted Awards shall be subject to the same vesting schedule and restrictions to which the underlying Award is subject.

(c)    Calculation of Shares Available for Delivery. In calculating the number of Shares that remain available for delivery pursuant to Awards at any time, the following rules shall apply (subject to the limitation in Section 4(e)):

(1) the number of Shares available for delivery shall be reduced by the number of shares subject to an Award and, in the case of an Award that is not denominated in Shares, the number of Shares actually delivered upon payment or settlement of the Award.

(2) the number of Shares tendered (by actual delivery or attestation) or withheld from an Award to pay the exercise price of the Award or to satisfy any tax withholding obligation or liability of a Participant shall be added back to the number of Shares available for delivery pursuant to Awards.

(3) the number of Shares in respect of any portion of an Award that is canceled or that expires without having been paid or settled by the Company shall be added back to the number of Shares available for delivery pursuant to clause (1).
(4) If an Award is settled or paid by the Company in whole or in part through the delivery of consideration other than Shares, or by delivery of fewer that the full number of Shares that was counted against the Shares available for delivery pursuant to clause (1), there shall be added back to the number of shares available for delivery pursuant to Awards the excess of the number of Shares that had been so counted over the number of shares (if any) actually delivered upon payment or settlement of the Award.

(d)    Individual Limit on Options. The maximum number of Shares that may be subject to Options granted to a Participant in any fiscal year shall be 150,000 Shares.

(e)     ISO Limit. In calculating the number of Shares that remain available for Awards of Incentive Stock Options, the rules set out in Section 4(c) shall not apply to the extent not permitted by Section 422 of the Code.

5.    Administration.

(a)    Committee Authority Generally. The Committee shall administer the Plan and shall have full power and authority to make all determinations under the Plan, subject to the express provisions hereof, including, without limitation: (i) to select participants from among the Eligible Individuals; (ii) to make Awards; (iii) to determine the number of Shares subject to each Award or the cash amount payable in connection with an Award; to establish the terms and conditions of each
26

Award, including, without limitation, those related to vesting, cancellation, payment, exercisability, and the effect, if any, of certain events on a Participant’s Awards, such as the Participant’s termination of employment with the Company; (v) to specify and approve the provisions of the Award Documents; (vi) to construe and interpret any Award Document; (vii) to prescribe, amend and rescind rules and procedures relating to the Plan; (viii) to make all determinations necessary or advisable in administering the Plan and Awards, including, without limitation, determinations as to whether (and if so as of what date) a Participant has commenced, or has experienced a termination of, employment; provided, however, that to the extent full or partial payment of any Award that constitutes a deferral of compensation subject to Section 409A is made upon or as a result of a participant’s termination of employment, the Participant will be considered to have a termination of employment if, and only if, the participant has experienced a separation of service for purposes of Section 409A; (ix) to vary the terms of Awards to take account of securities law and other legal or regulatory requirements of jurisdictions in which Participants work or reside or to procure favorable tax treatment for participants; and (x) to formulate procedures necessary or advisable for the administration of the Plan.

(b)    Authority to Construe and Interpret. The Committee shall have full power and authority, subject to the express provisions hereof, to construe and interpret the Plan.

(c)    Committee Discretion. All of the Committee’s determinations in carrying out, administering, construing, and interpreting the Plan shall be made or taken in its sole discretion and shall be final, binding and conclusive for all purposes and upon all persons. The Committee’s determinations need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan (whether or not such persons are similarly situated). Without limiting the generality of the foregoing, the Committee shall be entitled, among other things, to make non-uniform and selective determinations and to enter into non-uniform and selective Award Documents, as to persons receiving Awards under the Plan, and the terms and provisions of Awards under the Plan


(d)    No Liability. Subject to applicable law: (i) no member of the Committee or any Administrator shall be liable for anything whatsoever in connection with the exercise of authority under the Plan or the administration of the Plan except such person’s own willful misconduct; (ii) under no circumstances shall any member of the Committee or any Administrator be liable for any act or omission of any other member of the Committee or an Administrator; and (iii) in the performance of its functions with respect to the Plan, the Committee and any Administrator shall be entitled to rely upon information and advice furnished by the Company’s officers, the Company’s accountants, the Company’s counsel and any other party the Committee deems necessary, and no member of the Committee shall be liable for any action taken or not taken in good faith reliance upon any such advice.

6.    Eligibility. All “employees” of the Company- within the SEC’s broad definition set forth in the instructions to the Form S-8 registration statement, which includes, employees, officers, directors and (subject to certain restrictions) consultants and advisors to the Company- are eligible to receive Awards under the Plan. Participation is discretionary- Awards are subject to approval by the Committee.

7.    Restricted Stock. An Award of Restricted Stock shall be subject to the terms and conditions established by the Committee in connection with the Award and specified in the applicable Award Document. Restricted Stock may, among other things, be subject to restrictions on transfer, vesting requirements or cancellation under certain circumstances.

8.    Stock Units. A stock Unit is an Award denominated in Shares that may be settled either in Shares and or in cash, or partly in cash and partly in Shares subject to terms and conditions determined by the Compensation Committee.

9.    Options.

(a)    Options Generally. An Award of Options shall be subject to the terms and conditions established by the Committee in connection with the Award and specified in the applicable Award Document. The Committee shall establish (or shall authorize the method for establishing) the exercise price of all Options awarded under the Plan, except that the exercise price of an option shall not be less than 100% of the Fair market Value of one share on the Award Date (110% in the case of a 10% Shareholder). Upon satisfaction of the conditions to exercisability of the Award, a Participant shall be entitled to exercise the Options included in the Award and to have delivered, upon the Company’s receipt of payment of the exercise price and completion of any other conditions or procedures specified by the Company, the number of shares in respect of which the Options shall have been exercised. Options may be either nonqualified stock options or Incentive Stock Options. Options and the Shares acquired upon exercise may, among other things, be subject to restrictions on transfer, vesting requirements or cancellation under specified circumstances.

(b)    Prohibition on Repricing. Anything in the Plan to the contrary notwithstanding, the committee may not reprice any Option. “Reprice” means any action that would have the effect of reducing the exercise price of such Option.

(c)    Payment of Exercise Price. Subject to the provisions of the Applicable Award Document and to the extent authorized by the Company from time to time, the exercise price of an Option may be paid in cash, by actual delivery of Shares already owned by the person exercising the Option, or by such other means as the Company may authorize.

(d)     Maximum Term on Options. No Incentive Stock Option shall have an expiration date that is later than the tenth anniversary of the Award Date thereof.

10.    Certain Restrictions.
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(a)    Stockholder Rights. Except as otherwise provided in Section 4(b) or 12(b), no adjustments shall be made for dividends or distributions on, or other events relating to, Shares subject to an Award for which the record date is prior to the date such Shares are delivered. Except for the risk of cancellation and the restrictions on transfer that may apply to certain Shares (including restrictions relating to any dividends or other rights) or as otherwise set forth in the applicable Award Document, the Participant shall be the beneficial owner of any Shares delivered to the Participant in connection with an Award and, upon such delivery shall be entitled to all rights of ownership, including, without limitation, the right to vote the Shares and to receive cash dividends or other dividends (whether in Shares, other securities or other property) thereon.

(b)    Transferability. No Award granted under the Plan shall be transferable, whether voluntarily or involuntarily, other than by will or by the laws of descent and distribution; provided that, except with respect to Incentive Stock Options, the Committee may permit transfers on such terms and conditions as it shall determine. During the lifetime of a Participant to whom Incentive Stock Options were awarded, such Incentive Stock Options shall be exercisable only by the Participant.

11.    General Terms and Provisions.

(a)    Awards in General. Awards may be granted as an award of cash, as Shares, as Restricted Stock, as a Performance Award, as Options or as Stock Units. Awards may be granted independent of other Awards. The grant, vesting or payment of an Award may, among other things, be conditioned on the attainment of performance objectives as established by the Committee.

(b)    Dividends and Distributions. If the Company pays any dividend or makes any distribution to holders of Stock the Committee may in its discretion authorize payments) which may be in cash, Stock (including Restricted Stock) or Stock Units or a combination thereof) with respect to the Shares corresponding to an Award, or may authorize appropriate adjustments to outstanding Awards, to reflect such dividend or distribution. The Committee may make any such payments subject to vesting, deferral, restrictions on transfer or other conditions. Any determination by the Committee will be part of the terms and conditions of the Award.

(c)    Award Documentation and Award Terms. The terms and conditions of an Award shall be set forth in an Award Document authorized by the Committee. The Award Document shall include any vesting, exercisability, payment, and other restrictions applicable to an Award (which may include, without limitation, the effects of termination of employment, cancellation of the Award under certain circumstances, restrictions on transfer or provision for mandatory resale to the Company).

(d)    Proportional Exercise for Common Stock and Class B Common Stock. All awards granted under the Plan shall be documented with reference to the number of shares of Common Stock subject to such Award; provided, however, that any participant who already owns shares of Class B Common Stock shall be entitled to elect to receive shares of both Common Stock and Class B Common stock with respect to such Award, with the maximum number of shares of Class B Common Stock that the Participant may elect to receive being limited to a number that will not increase the ratio of the number of shares of Class B common Stock held by the Participant to the total number of shares of Common Stock and Class B Common Stock held by such participant on the Election Date. For any Award which is an ISO or non-qualified Stock Option (or portion thereof, in the case of Options which vest over time), the Election Date shall be the date on which such Award (or any applicable portion of such Award) is exercised, unless the Participant chooses to express such election on the date of grant. For any Award of Restricted Stock, the Election Date shall be the date on which the Award is granted. Any Participant who holds shares of Class B Common stock and fails to make the applicable election will only receive shares of Common Stock with respect to such Award. References to Common Stock shall where applicable be deemed to include Class B Common Stock, unless otherwise indicated.

(e)    Voting. Participants shall have the right to vote shares of Common Stock and Class B Common stock allocated to an Award of Restricted Stock.

12.    Representation; Compliance with Law. The Committee may condition the grant, exercise, settlement or retention of any Award on the Participant making any representations required in the applicable Award Document. Each Award shall also be conditioned upon the making of any filings and the receipt of any consents or authorizations required to comply with, or required to be obtained under, applicable law.

13.    Miscellaneous Provisions.

(a)    Satisfaction of Obligations. As a condition to the making or retention of any Award, the vesting, exercise or payment of any Award or the lapse of any restrictions pertaining thereto, The Dixie Group, Inc. may require a Participant to pay such sum to the Company as may be necessary to discharge the Company’s obligations with respect to any taxes, assessments or other governmental charges (including FICA and other social security or similar tax) imposed on property or income received by a Participant pursuant to the Award or to satisfy any obligation that the Participant owes to the Company. In accordance with rules and procedures authorized by The Dixie Group, Inc., (i) such payment may be in the form of cash or other property, including the tender of previously owned Shares, and (ii) in satisfaction of such taxes, assessments or other governmental charges or, exclusively in the case of an Award that does not constitute a deferral of compensation subject to Section 409A, of other obligations that a Participant owes to the Company, The Dixie Group, Inc. may make available for delivery a lesser number of Shares in payment or settlement of an Award, may withhold from any payment or distribution of an Award or may enter into any other suitable arrangements to satisfy such withholding or other obligation. To the extent an Award constitutes a deferral of compensation subject to Section 409A, the Company may not offset from the
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payment of such Award amounts that a Participant owes to the Company with respect to any such other obligation except to the extent such offset is not prohibited by Section 409A and would not cause a Participant to recognize income for United States federal income tax purposes prior to the time of payment of the Award or to incur interest or additional tax under Section 409A

(b)    No Right to Continued Employment. Neither the Plan nor any Award shall give rise to any right on the part of any Participant to continue in the employ of the Company.

(c)    Headings. The headings of sections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of the Plan.

(d)    Governing Law. The Plan and all rights hereunder shall be construed in accordance with and governed by the laws of the State of Tennessee, without regard to any conflicts or choice of law, rule or principle that might otherwise refer the interpretation of the award to the substantive law of another jurisdiction.

(e)    Amendments and Termination. The Board or Committee may modify, amend, suspend or terminate the Plan in whole or in part at any time and may modify or amend the terms and conditions of any outstanding Award (including by amending or supplementing the relevant Award Document at any time); provided, however, that no such modification, amendment, suspension or termination shall, without a Participant’s consent, materially adversely affect that Participant’s rights with respect to any Award previously made; and provided, further, that the Committee shall have the right at any time, without a Participant’s consent and whether or not the Participant’s rights are materially adversely affected thereby, to amend or modify the Plan or any Award under the Plan in any manner that the Committee considers necessary or advisable to comply with any law, regulation, ruling, judicial decision, accounting standards, regulatory guidance or other legal requirement. Notwithstanding the preceding sentence, neither the Board nor the Committee may accelerate the payment or settlement of any Award, including, without limitation, any Award subject to a prior deferral election, that constitutes a deferral of compensation for purposes of Section 409A except to the extent such acceleration would not result in the Participant incurring interest or additional tax under Section 409A.
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