SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) September 9, 1996
DIXIE YARNS, INC.
(Exact Name of Registrant as specified in its Charter)
Tennessee 0-2585 62-0183370
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
1100 SOUTH WATKINS STREET, CHATTANOOGA, TN 37404
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (423) 698-2501
Item 5. Other Events
On August 22, 1996, the Company's Board of Directors adopted a Stock
Ownership Plan (the "Plan") applicable to the Chief Executive Officer,
President, Chief Financial Officer, and all corporate Vice Presidents and
Executive Vice Presidents of the Company. The purpose of the Plan is to
encourage each participant to make a significant investment in the
Company's Common Stock. In order to facilitate the acquisition of such
stock by participants, the Plan provides that each corporate officer
eligible to participate in the Plan will be allowed to subscribe for the
purchase, directly from the Company, of a number of shares of Common Stock
up to, but not exceeding, that number of shares having a fair market value
equal to two times such officer's base salary. For this purpose, the fair
market value of the Common Stock is deemed to be the closing price of such
stock as reported by NASDAQ on either (i) the date of adoption of the Plan
or (ii) the first anniversary of the date of the adoption of the Plan which
occurs after a new participant is selected to participate in the plan
(defined in the Plan as the "NASD Price").
The NASD Price is also intended to be used as the initial subscription
price for any participants who elect to purchase shares under the Plan,
although the Company retains the right to adjust the subscription price and
other terms on which participants will be allowed to subscribe for shares
at any time prior to the actual execution of a subscription agreement with
any participant. In addition to the initial opportunity of the designated
officers to enter into subscription agreements under the Plan, each such
officer will have the opportunity, on the two successive Anniversary Dates
following his Initial Subscription Offering Date (each as defined in the
Plan) to subscribe for additional shares of Common Stock having a fair
market value equal to two times his base salary, less the amount of his
previous subscriptions. The full subscription price for all shares
purchased by a participant under the Plan will be due and payable on the
third Anniversary Date following his Initial Subscription Date under the
Plan. Any termination of a participant's employment with the Company due
to death or disability will cause the subscription price for that
participant's purchases to become due and payable (if not earlier pursuant
to the terms described above) six months from the date of such event; any
other termination of a participant's employment (for any reason) will cause
the participant's full subscription price to be due and payable ten days
from the participant's termination date.
As of September 9, 1996, seven of the Company's senior executive officers
(the President and Chief Executive Officer; the Executive Vice President
and Chief Operating Officer for Candlewick, Carriage and Bretlin; the
Executive Vice President and President of Masland Carpets, Inc.; the
Executive Vice President and President and Chief Operating Officer of the
Textile and Apparel Group; the Vice President and President of Candlewick
Yarns Group; the Vice President and President of Carriage Industries, Inc.;
and the Vice President, Human Resources) have subscribed for an aggregate
of 449,300 shares of the Company's Common Stock at a purchase price of
$4.875 per share pursuant to the initial subscription agreements entered
into under the Plan.
Administration of the Plan is delegated to the Compensation Committee of
the Company's the Board of Directors, and the Company may select additional
senior officers to participate in the Plan on an annual basis. Initially,
the shares for which participants subscribe under the Plan will be
restricted stock subject to all applicable resale restrictions under
Federal and state securities laws. The Company intends to file a
registration statement on Form S-8 with the Securities and Exchange
Commission to permit the unrestricted public resale of shares acquired by
participants in the Plan.
Item 7. Financial Statements and Exhibits
(c) Exhibits
(1) Exhibits Incorporated by Reference:
None.
(2) Exhibits Filed with this Report:
(10) Dixie Yarns, Inc. Stock Ownership Plan for senior
executive officers, approved by the Board of
Directors August 22, 1996, together with Form
of Stock Subscription Agreement under the Plan.
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 thereunto duly authorized.
DIXIE YARNS, INC.
_________________________
(Registrant)
By:/s/D. EUGENE LASATER
______________________
D. Eugene Lasater
Controller
Date: September 17, 1996
____________________
DIXIE YARNS, INC.
CURRENT REPORT ON FORM 8-K
EXHIBIT INDEX
Exhibit No. Description
(10) Dixie Yarns, Inc. Stock Ownership Plan for senior
executive officers, approved by the Board of
Directors August 22, 1996, together with Form
of Stock Subscription Agreement under the Plan.
EXHIBIT 10
DIXIE YARNS, INC.
STOCK OWNERSHIP PLAN
PURPOSE: The Board of Directors believes that it is desirable and in the
best interest of the Company to encourage ownership of Common Stock of the
Company by the principal officers of the Company. It is believed that a
substantial investment in the Company by such officers will encourage and
enhance their incentive to manage the Company for the long term benefit of
its shareholders. Accordingly, the Board of Directors adopts this Plan in
order to carryout such goals.
GOAL: Every participant is encouraged to own that number of shares of
Common Stock of the Company that represents in fair market value two (2)
times such participant's base salary commencing on the first business day
three (3) years following (a) the date of adoption of this Plan, or (b) the
first anniversary date of the adoption of this Plan occurring after a new
participant is selected to participate in the Plan, whichever is
applicable. For the purpose of such determination, fair market value shall
be determined by the closing price of the Company's Common Stock as
reported by NASD on the date of such determination, or if the Common Stock
is not traded on such day, then the earliest day prior thereto when such
stock trades (the "NASD Price".)
PARTICIPANTS: This Plan shall apply to the Chief Executive Officer,
President, Chief Financial Officer, and all Corporate vice-presidents, and,
such other persons as may be identified periodically from time to time
hereafter by the Compensation Committee.
PURCHASE FROM COMPANY: In order to facilitate the acquisition of Common
Stock of the Company, the Company will on the date of adoption of the Plan
by the Board of Directors, or as soon thereafter as may be practical, or on
the next anniversary date of the adoption of the Plan (an "Anniversary
Date") that occurs following the selection of a new corporate officer
eligible to participate in the Plan (the "Initial Subscription Offering
Date") allow each participant to subscribe for shares of Common Stock up to
but not to exceed that number of shares having a fair market value based
upon the NASD Price on the Initial Subscription Offering Date equal to two
(2) times the participant's base salary.
Thereafter on the two (2) successive Anniversary Dates following the
Initial Subscription Offering Date, a participant shall be allowed to
subscribe for the purchase of additional shares of Common Stock having a
fair market value equal to two (2) times the participant's base salary on
such Anniversary Date less the dollar amount of any previous subscriptions.
The purchase price of such shares shall be the NASD Price of the Common
Stock on the applicable Anniversary Date of the offering.
Each subscription shall be automatically called for payment on the third
Anniversary Date following the Initial Subscription Offering Date with
respect to the participant.
DEATH OR DISABILITY: In the event of the death of a participant or the
disability of a participant such that the participant shall no longer
continue to be employed by the Company, all subscriptions outstanding shall
become due and payable, if not earlier pursuant to their terms, six (6)
months from the date of such participant's death or disability, as
applicable.
TERMINATION OF EMPLOYMENT: In the event of the termination of employment
of a participant for any reason other than death or disability, whether for
or without cause, voluntary or involuntary, all subscriptions outstanding
shall become due and payable, if not earlier pursuant to their terms, ten
(10) days from the participant's termination date.
ACQUISTION: In the event that the Company is acquired by another person,
corporation or legal entity, whether by merger, consolidation, sale of
assets, tender offer or other means, the Company shall have the right to
immediately call all outstanding subscriptions for payment, at its sole
option.
RESTRICTED STOCK: All shares of Common Stock purchased by a participant
from the Company shall be restricted stock and shall be subject to the
resale restrictions imposed by all applicable federal and state securities
laws.
RULE 16B-3 REQUIREMENTS: The Board of Directors reserves the right to
modify the Plan retroactively and/or submit the Plan to the Company's
shareholders for approval should it determine that it is desirable to do so
in order to meet the requirements of Rule 16b-3 of the Securities Exchange
Act of 1934.
AUTHORITY TO MODIFY THE PLAN: The Company reserves the right to modify or
terminate the Plan at all times, provided that the Company will not change
the number of shares of Common Stock or the maturity date of any
subscription agreement outstanding without such participant's consent.
COMPENSATION COMMITTEE AUTHORITY: The Board of Directors grants to the
Compensation Committee the authority to administer the Plan and to make any
changes in the Plan necessary or desirable in order to carry out the
purposes of the Plan. Furthermore, the Compensation Committee shall have
exclusive authority to interpret the Plan provisions and to waive or modify
any requirement of the Plan or any terms of a subscription agreement issued
to a participant in the Plan.
FORM OF STOCK SUBSCRIPTION AGREEMENT
DIXIE YARNS, INC.
The undersigned participant in the Stock Ownership Plan (the "Plan")
adopted by the Board of Directors of Dixie Yarns, Inc. ("Dixie") on
August 22, 1996, hereby subscribes for ________ shares of Common Stock
of Dixie, par value of $3 per share, at a price of $4.875 per share (the
"Shares"), a total purchase price of $__________ (the "Purchase Price").
The undersigned participant in the Plan hereby agrees that the Purchase
Price for the Shares shall be due and payable on August 21, 1999, if not
sooner in accordance with the Plan. The undersigned hereby acknowledges
receipt of a copy of the Plan and confirms that the undersigned has read
the Plan.
This subscription is subject to the terms and conditions of the Plan,
including specifically the provisions of the Plan that provide for
automatic call for payment of the Purchase Price and the optional call
for payment of the Purchase Price before August 21, 1999.
All shares of Common Stock issued pursuant to this subscription may be
restricted shares and subject to limitations and conditions of sale,
including the holding of such shares for a minimum period of time.
Executed this ____ day of __________, 199__.
_____________________ _____________________
Participant Witness
This subscription is accepted by Dixie Yarns, Inc. pursuant to the
terms of the Stock Ownership Plan adopted by the Board of Directors
on August 22, 1996.
Dixie Yarns, Inc.
By: _____________________
Chairman and CEO
