Form 8-K Material Definitive Agreement

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

                             
FORM 8-K
                             

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934


Date of Report (Date of earliest event reported): December 20, 2005

                                                                      

THE DIXIE GROUP, INC.
(Exact name of Registrant as specified in its charter)
                                                                      

          Tennessee          
(State or other jurisdiction of incorporation)

       0-2585        
(Commission File Number)

        62-0183370      
(I.R.S. Employer Identification No.)

 

345-B Nowlin Lane, Chattanooga, Tennessee
(Address of principal executive offices)

   37421   
(zip code)

 

Registrant's telephone number, including area code (423) 510-7010


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01 Entry Into a Material Definitive Agreement.

Effective December 20, 2005, the Compensation Committee of the Board of Directors of The Dixie Group, Inc. (the "Company") granted non-qualified stock options under The Dixie Group, Inc. Stock Incentive Plan to selected directors, officers and employees of the Company. These options, which are immediately vested in full and expire ten years from the date of grant, cover an aggregate of 343,000 shares of common stock at an exercise price of $13.51 per share and prohibit the sale of any shares acquired upon exercise of the option for a period of three years following the grant date.

Included in these option grants were the following awards to those individuals who are directors of the Company or who qualify as "named executive officers" (pursuant to Item 402(a)(3) of Securities and Exchange Commission Regulation S-K):

Name:

Title:

No. of Shares
Subject to Options Granted:

Daniel K. Frierson

Chairman of the Board and Chief Executive Officer


60,000

Kenneth L. Dempsey

Vice President and
President - Masland Carpets


20,000

Gary A. Harmon

Vice President and
Chief Financial Officer


15,000

David E. Polley

Vice President - Marketing

20,000

J. Don Brock

Director

4,000

Paul K Frierson

Director

4,000

Walter W. Hubbard

Director

8,000

Lowry F. Kline

Director

4,000

John W. Murrey, III

Director

4,000

 

The form of stock option agreement for each of the grants is attached as Exhibit 10.1 hereto.

Item 9.01 Financial Statements and Exhibits.

(d) The following exhibits are filed as a part of this Report:

Exhibit No.

Description

10.1

Form of Stock Option Agreement for Non-Qualified Options Granted December 20, 2005.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:    December 22, 2005

THE DIXIE GROUP, INC.

 

 By: /s/ Gary A. Harmon               
Gary A. Harmon
Chief Financial Officer

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