Schedule 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AouO3R+cUYyTN2lSYddURSmZG0uUidCGMQDoR7MsNu7ky9euSp3sm7g7TBdzztUw V1pe6BLXbMli5iTmcPxKsw== 0000029332-05-000054.txt : 20051222 0000029332-05-000054.hdr.sgml : 20051222 20051222165825 ACCESSION NUMBER: 0000029332-05-000054 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20051222 DATE AS OF CHANGE: 20051222 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DIXIE GROUP INC CENTRAL INDEX KEY: 0000029332 STANDARD INDUSTRIAL CLASSIFICATION: CARPETS AND RUGS [2273] IRS NUMBER: 620183370 STATE OF INCORPORATION: TN FISCAL YEAR END: 1225 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-13451 FILM NUMBER: 051282753 BUSINESS ADDRESS: STREET 1: 2208 S. HAMILTON STREET CITY: DALTON STATE: GA ZIP: 307214974 BUSINESS PHONE: 7068765851 MAIL ADDRESS: STREET 1: 2208 S. HAMILTON STREET CITY: DALTON STATE: GA ZIP: 307214974 FORMER COMPANY: FORMER CONFORMED NAME: DIXIE YARNS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DIXIE MERCERIZING CO DATE OF NAME CHANGE: 19670524 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FRIERSON DANIEL K CENTRAL INDEX KEY: 0000949130 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1100 S WATKINS STREET CITY: CHATTANOOGA STATE: TN ZIP: 37404 BUSINESS PHONE: 6156982501 MAIL ADDRESS: STREET 1: WITT GAITHER & WHITAKER, PC STREET 2: 1100 AMERICAN NATIONAL BANK BLDG CITY: CHATTANOOGA STATE: TN ZIP: 37404 SC 13D 1 fsc13d_dkfam7122205.htm SCHEDULE 13D Schedule 13D UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 7)*

THE DIXIE GROUP, INC.

(Name of Issuer)

Common Stock, Par Value $3.00 Per Share

(Title of Class of Securities)

255579-10-4

(CUSIP Number)

John F. Henry, Jr.

Shumacker Witt Gaither & Whitaker, P.C.

1100 SunTrust Bank Building, 736 Market Street

Chattanooga, TN 37402

423-425-7000

(Name, Address and Telephone Number of Person Authorized

to Receive Notices and Communications)

December 19, 2005**

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Section 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ].

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

**See Explanatory Note that precedes Item 1.

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SCHEDULE 13D

CUSIP NO. 255579-10-4

PAGE 2 OF 7 PAGES

NAMES OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

Daniel K. Frierson

CHECK THE APPROPRIATE BOX IF A MEMBER OF

A GROUP (A) [ ]

(B) [X ]

SEC USE ONLY

SOURCE OF FUNDS (See Instructions)

[PF, OO]

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS

IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

CITIZENSHIP OR PLACE OF ORGANIZATION

United States of America

NUMBER OF

SOLE VOTING POWER

589,927

BENEFICIALLY

OWNED BY

SHARED VOTING POWER

325,648

EACH

REPORTING

SOLE DISPOSITIVE POWER

589,927

PERSON

WITH

10.

SHARED DISPOSITIVE POWER

325,648

11.

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH

REPORTING PERSON

915,575

12.

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW

(11) EXCLUDES CERTAIN SHARES (See Instructions) [ ]

13.

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

7.18%

14.

TYPE OF REPORTING PERSON

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EXPLANATORY NOTE:

This Amendment No. 7 to the Schedule 13D filed by Daniel K. Frierson with respect to holdings and transactions in the Common Stock, par value $3.00 per share (the "Common Stock") and the Class B Common Stock, par value $3.00 per share (the "Class B Common Stock"), of The Dixie Group, Inc., a Tennessee corporation (the "Issuer"), amends and supplements Amendment No. 6 to such Schedule 13D, filed by Daniel K. Frierson with the Securities and Exchange Commission on April 16, 2004, and is being filed to report the execution of a Shareholder Voting Agreement entered into by Mr. Frierson and certain members of his family as of December 19, 2005, as well to reflect the results of Mr. Frierson's transactions in the Common Stock and Class B Common Stock that have occurred since the filing of Amendment No. 6.

Item 1. Security and Issuer.

No Change.

Item 2. Identity and Background.

No Change.

Item 3. Source and Amount of Funds or Other Consideration.

Not applicable for purposes of this Amendment No. 7.

Item 4. Purpose of Transaction.

No Change.

Item 5. Interest in Securities of the Issuer.

The information set forth under Item 5(a) is hereby amended and restated in its entirety as follows:

As of the date hereof, Mr. Frierson is deemed to be the beneficial owner (pursuant to Rule 13d-3) of an aggregate of 915,575 shares of Common Stock¹ constituting approximately 7.18% of the 12,760,096 shares of Common Stock that were deemed to be outstanding as of October 21, 2005.²

The information set forth under Item 5(b) is hereby amended and restated in its entirety as follows:

Mr. Frierson has the sole power to vote and dispose of 589,927 of the shares of Common Stock for which beneficial ownership is reported.³

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******************

(1) Such 915,575 shares of Common Stock consist of 325,480 shares of Common Stock and the deemed conversion to Common Stock of 590,095 shares of Class B Common Stock. The 325,480 shares of Common Stock consist of: (i) 266,734 shares of Common Stock as to which Mr. Frierson has sole voting and investment power, consisting of (A) 29,747 shares of Common Stock owned directly by Mr. Frierson, (B) options, which are exercisable within 60 days of the date hereof, to purchase 227,934 shares of Common Stock, (C) 3,567 shares of Common Stock allocated to Mr. Frierson's account in The Dixie Group, Inc. 401(k) Retirement Savings Plan (the "401(k) Plan") (Trustee votes shares pursuant to direction from 401(k) Plan participants), and (D) 5,486 shares of Common Stock held by Mr. Frierson as trustee of the Rowena K. Frierson Charitable Remainder Unitrust for the lifetime benefit of Daniel K. Frierson; and (ii) 58,746 shares of Common Stock owned by the children of Mr. Frierson an d as to which he shares voting and investment power. The 590,095 shares of Class B Common Stock, which are convertible on a share-for-share basis into shares of Common Stock, consist of: (i) 323,193 shares of Class B Common Stock owned directly by Mr. Frierson; (ii) 86,719 shares of Class B Common Stock owned by the children of Mr. Frierson, as to which he shares voting and investment power, (iii) 94,879 shares of Class B Common Stock owned by the wife of Mr. Frierson, as to which he shares voting and investment power, and (iv) 85,304 shares of Class B Common Stock owned by five family trusts as described in Item 5(b), as to which Mr. Frierson shares voting and investment power as a co-trustee.

(2) 818,029 shares of Common Stock are added to the 11,942,067 shares of Common Stock reported as outstanding as of October 21, 2005 according to the Issuer's third quarter Form 10-Q, to reflect (i) the assumed conversion of the 590,095 shares of Class B Common Stock, which are held as described in Footnote 1 hereto, and (ii) the assumed exercise of options, which are exercisable within 60 days of the date hereof, to purchase 227,934 shares of Common Stock.

(3) Consists of (i) 29,747 shares of Common Stock owned directly by Mr. Frierson, (ii) options, which are exercisable within 60 days of the date hereof, to purchase 227,934 shares of Common Stock, (iii) 3,567 shares of Common Stock allocated to Mr. Frierson's account under the Issuer's 401(k) Plan (Trustee votes shares pursuant to direction from 401(k) Plan participants), (iv) 5,486 shares of Common Stock held by Mr. Frierson as trustee of the Rowena K. Frierson Charitable Remainder Unitrust for the lifetime benefit of Daniel K. Frierson; and (v) 323,193 shares of Class B Common Stock, which are convertible on a share-for-share basis into shares of Common Stock, held directly by Mr. Frierson.

********************

Mr. Frierson shares the power to vote and dispose of 325,648 of the shares of Common Stock for which beneficial ownership is reported, including (i) 58,746 shares of Common Stock and (ii) the deemed conversion of 266,902 shares of Class B Common Stock, which are convertible on a share-for-share basis into shares of Common Stock.

The 58,746 shares of Common Stock as to which Mr. Frierson shares voting and investment power are held by his children (Elizabeth Haley Frierson; D. Kennedy Frierson, Jr.; Rowena F. Barker; James B. Frierson; and Emily F. Brown). Their address for purposes of this filing is 345-B Nowlin Lane, Chattanooga, Tennessee 37421.

The 266,902 shares of Class B Common Stock (convertible on a share-for-share basis into Common Stock, and deemed to be so converted solely for purposes of reporting beneficial ownership herein) as to which Mr. Frierson shares voting and investment power consist of (i) an aggregate of 181,598 shares of Class B Common Stock owned by Mr. Frierson's children (Elizabeth Haley Frierson; D. Kennedy Frierson, Jr.; Rowena F. Barker; James B. Frierson; and Emily F. Brown) and his wife (Joan H. Frierson), whose address for purposes of this filing is 345-B Nowlin Lane, Chattanooga, Tennessee 37421, and (ii) an

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aggregate of 85,304 shares of Class B Common Stock held by Mr. Frierson as co-trustee of each of five family trusts, as follows:

17,061 shares of Class B Common Stock held by Mr. Frierson, Paul K. Frierson, and T. Cartter Frierson, as co-trustees, under Agreement with Rowena K. Frierson for the benefit of the J. Burton Frierson, III family. Paul K. Frierson's address is 141 Brow Lake Road, Lookout Mountain, Georgia 30750. He is a director of the Issuer. T. Cartter Frierson's address is 4939 Scenic Highway, Rising Fawn, Georgia 30738. He is President of TCF Consulting Group, LLC, a management consulting firm.

17,061 shares of Class B Common Stock held by Mr. Frierson, Paul K. Frierson, and T. Cartter Frierson, as co-trustees, under Agreement with Rowena K. Frierson for the benefit of the Paul K. Frierson family.

17,060 shares of Class B Common Stock held by Mr. Frierson, Paul K. Frierson, and T. Cartter Frierson, as co-trustees, under Agreement with Rowena K. Frierson for the benefit of the Daniel K. Frierson family.

17,061 shares of Class B Common Stock held by Mr. Frierson, Paul K. Frierson, and T. Cartter Frierson, as co-trustees, under Agreement with Rowena K. Frierson for the benefit of the T. Cartter Frierson family.

17,061 shares of Class B Common Stock held by Mr. Frierson, Paul K. Frierson, and T. Cartter Frierson, as co-trustees, under Agreement with Rowena K. Frierson for the benefit of the James W. Frierson family.

Based upon the terms of these trusts, Mr. Frierson disclaims beneficial ownership of the 68,244 shares of Common Stock issuable upon the deemed conversion of the shares of Class B Common Stock held by the four trusts for the benefit of the families of his brothers (J. Burton Frierson, III, Paul K. Frierson, T. Cartter Frierson and James W. Frierson) for which he serves as one of the three co-trustees.

None of the aforementioned individuals have, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws. All of the aforementioned individuals are citizens of the United States of America.

The information set forth under Item 5(c) is hereby amended to include the following:

Effective December 19, 2005, Mr. Frierson entered into the Shareholder Voting Agreement described below in Item 6 with his wife (Joan H. Frierson) and his five children (Elizabeth Haley Frierson; D. Kennedy Frierson, Jr.; Rowena F. Barker; James B. Frierson;

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and Emily F. Brown). Effective December 20, 2005, the Compensation Committee of the Issuer's Board of Directors granted immediately vested, non-qualified stock options with an exercise price of $13.51 per share to a number of participants under the Issuer's Stock Incentive Plan, including an option covering 60,000 shares of Common Stock granted to Mr. Frierson. Apart from the execution of the Shareholder Voting Agreement and the Issuer's December 20 option grants, Mr. Frierson has not effected any transactions in the Issuer's Common Stock or Class B Common Stock during the past sixty (60) days.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The information set forth under this item is hereby amended as follows:

The Shareholder Agreement referenced in Amendment 6 to this Schedule 13D expired, in accordance with its terms, in October 2005.

Effective December 19, 2005, Mr. Frierson entered into a Shareholder Voting Agreement (the "Voting Agreement"), the participants in which are Mr. Frierson, his wife (Joan H. Frierson) and his children (D. Kennedy Frierson, Jr.; James B. Frierson; Elizabeth Haley Frierson; Rowena F. Barker; and Emily F. Brown). The new Voting Agreement covers 504,791 of the shares of Class B Common Stock as to which Mr. Frierson has reported beneficial ownership herein, consisting of (i) 323,193 shares of Class B Common Stock owned directly by Mr. Frierson and (ii) an aggregate of 181,598 shares of Class B Common Stock owned by Mr. Frierson's wife and children.

Pursuant to the terms of the Voting Agreement, Mr. Frierson has been granted an irrevocable proxy to vote all such shares during the term of the Voting Agreement, which expires October 11, 2015. The Voting Agreement may not be amended or terminated except by means of a written agreement signed by all of the participants. Mr. Frierson's wife and children (and any of their designated successors under the Voting Agreement) may transfer their shares of Class B Common Stock covered thereby, subject to a requirement that they first offer to exchange such shares for a like number of shares of Common Stock held by Mr. Frierson. Each of the parties to the Voting Agreement has the right (but not the obligation) to make a written designation of a successor who shall be entitled to all of his or her respective rights under the Voting Agreement in the event of his or her death or incapacity. Unless subsequently revoked in writing pursuant to the terms of the Voting Agreement, Mr. Frierson's des ignated successor pursuant to this provision is his son, D. Kennedy Frierson, Jr.

Item 7. Material to Be Filed as Exhibits.

The information set forth under Item 7 is hereby amended by adding thereto the following:

99.2 Shareholder Voting Agreement, dated December 19, 2005.

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Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: December 22, 2005

/s/ Daniel K. Frierson

Daniel K. Frierson

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EX-99.2 2 ex99_2sc13dkfd.htm EXHIBIT 99.2 Exhibit 99.2 EXHIBIT 99.2

SHAREHOLDER VOTING AGREEMENT

AGREEMENT dated December 19, 2005, by and between certain owners of shares of Class B Common Stock issued by The Dixie Group, Inc., set forth on Annex A, attached hereto (Each such person sometimes referred to herein as the "Shareholder" and collectively as the "Shareholders"), and Daniel K. Frierson, individually, and in his capacity as a Shareholder.

The Shareholders believe it to be in the best interests of themselves and The Dixie Group, Inc. ("Dixie") that their shares of Class B Common Stock of Dixie be voted by Daniel K. Frierson for a period of ten (10) years from the date hereof, and that Daniel K. Frierson shall, for such term, be their agent and attorney-in-fact, possessing the irrevocable powers set forth herein.

It is understood, however, that the Shareholders shall be entitled to receive payments of all dividends, if any, declared by Dixie with respect to the shares of Class B Common Stock subject to this Agreement.

During the term of this Agreement, Daniel K. Frierson, or his successor (as provided herein) shall be entitled at all times to vote all of the shares of Class B Common Stock of The Dixie Group, Inc. (the "Corporation") which the shareholders now or hereafter hold at all annual, special or other meetings of the Corporation's shareholders (or for purposes of any action by written consent in lieu of such meeting) and at any other time or times that such shares are required to be or may be voted. Upon the execution of this Agreement, the shareholders shall execute and deliver an irrevocable proxy in the form attached hereto as Exhibit A. From time to time, and as requested by Daniel K. Frierson, or his successor, the Shareholders agree to take such further action as is reasonably necessary to cause all shares of Class B Common Stock held by them to be subject to the provisions of this Agreement.

In the event of the death or incapacity of any Shareholder, their permitted transferees, personal representatives, successors, assigns, heirs, and grantees (and any subsequent transferees of those persons) shall become parties to this Agreement and shall execute and deliver irrevocable proxies in the form of proxy attached hereto as Exhibit A. Any shareholder may, but shall not be obligated to, designate, in writing, a successor who shall be entitled to all of their respective rights under this Agreement, in which case such designated successor shall represent any or all of their respective permitted transferees, personal representatives, successors, assigns, heirs, and grantees (and subsequent transferees of such persons) with respect to any and all shares of Class B Common Stock held by such persons or entities subject to this Agreement. Upon such event, all references in this Agreement to "Daniel K. Frierson" or "Shareholder" as the case may be shall be substituted with and shall mean Daniel K. Frierson's or such Shareholder's permitted transferees, personal representatives, successors, assigns, heirs and grantees (and any subsequent transferees of those persons). Unless revoked in writing, Daniel K. Frierson's designated successor shall be his son, Daniel K. Frierson, Jr. (Kennedy Frierson).

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The Shareholders may, at their discretion, transfer from time to time any or all of their shares subject to this Agreement provided that they: (1) give Daniel K. Frierson advance written notice of such proposed transfer; and (2) offer to exchange such shares of Class B Common Stock for shares of common stock held by Daniel K. Frierson. In the event that Daniel K. Frierson does not exchange shares of common stock for such shares of Class B Common Stock, then the transferring party may complete such transfer. If such transfer is not otherwise permitted by Article Four of the Corporation's Charter, then such shares of Class B Common Stock shall be converted to shares of common stock prior to such transfer. Any transfer otherwise permitted by Article Four of the Corporation's Charter to a permitted transferee of such party may be made without converting such shares to common stock provided that such transferred shares shall remain subject to this Agreement for the term hereof.

This Agreement shall continue in effect until October 11, 2015; provided, however, that this Agreement may be terminated sooner by a written agreement signed by all Shareholders. In the event of the death or incapacity of a Shareholder, this Agreement shall not terminate but shall continue in full force and effect.

This Agreement may not be modified or amended except by a written agreement signed by each Shareholder.

Each Shareholder agrees to perform any acts and to execute and deliver any documents or instruments which may be reasonably necessary to carry out the provisions of this Agreement.

This Agreement supersedes, terminates and cancels all other oral or written agreements entered into prior to the date of this Agreement between any of the parties with respect to the matters covered herein.

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. If any provision of this Agreement is determined by a court of competent jurisdiction to be in conflict with applicable law, then such provision will not be wholly invalid but will be enforced to the maximum extent permitted by law.

The omission by any party to insist upon strict performance of any provision of this Agreement shall not be construed as a waiver of such provision, and the waiver by any party of a breach of any provision of this Agreement shall not be construed as a waiver of subsequent breach of such provision.

This Agreement shall be binding upon and enforceable by the permitted transferees, personal representatives, successors assigns, heirs, grantees and pledges of the parties and of any subsequent transferees of those persons.

This Agreement has been entered into and shall be governed, construed and interpreted pursuant to and in accordance with the laws of the State of Tennessee.

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement effective the day and year first above written.

SHAREHOLDERS

/s/ Daniel K. Frierson

Daniel K. Frierson

/s/ D. Kennedy Frierson, Jr.

D. Kennedy Frierson, Jr.

/s/ James B. Frierson

James B. Frierson

/s/ Elizabeth Haley Frierson

Elizabeth Haley Frierson

/s/ Rowena F. Barker

Rowena F. Barker

/s/ Emily F. Brown

Emily F. Brown

/s/ Joan H. Frierson

Joan H. Frierson

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EXHIBIT A

FORM OF IRREVOCABLE PROXY

IRREVOCABLE PROXY

In consideration of the receipt of One Dollar ($1.00), cash in hand paid, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned stockholders nominate and appoint DANIEL K. FRIERSON as their true and lawful attorney, with full power of substitution for and in their name, to vote all of the shares of Class B Common Stock of The Dixie Group, Inc., a Tennessee corporation of which the undersigned shareholders are or hereafter may be the owner, at any and all annual, special or other meetings of the stockholders of The Dixie Group, Inc. and for any and all purposes, so long as this irrevocable proxy remains in full force and effect; the attorney is to have all of the powers which the undersigned parties would possess if present personally at any meetings.

This irrevocable proxy has been executed in furtherance of a Shareholder Voting Agreement to which the undersigned are parties, and it shall continue in effect until such date as the Shareholder Voting Agreement shall terminate.

Dated this ______ day of ________________, 2005.

SHAREHOLDERS



Daniel K. Frierson



D. Kennedy Frierson, Jr.



James B. Frierson



Elizabeth Haley Frierson

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Rowena F. Barker



Emily F. Brown



Joan H. Frierson

ACCEPTED:

Daniel K. Frierson

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ANNEX A

SHAREHOLDERS AND SHAREHOLDINGS

SHAREHOLDERS	SHAREHOLDINGS
Daniel K. Frierson
D. Kennedy Frierson, Jr.
James B. Frierson
Elizabeth Haley Frierson
Rowena F. Barker
Emily F. Brown
Joan H. Frierson

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