As filed with the Securities and Exchange Commission on June 17, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
The Dixie Group, Inc.
(Exact name of Registrant as specified in its charter)
TENNESSEE 62-0183370
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1100 South Watkins Street
Chattanooga, Tennessee 37404
(423) 698-2501
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
The Dixie Group, Inc.
Core Leadership Team Stock Ownership Plan
(Full title of the Plan)
Glenn A. Berry
Chief Financial Officer
The Dixie Group, Inc.
1100 South Watkins Street
Chattanooga, Tennessee 37404
(423) 698-2501
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With Copy to:
Steven R. Barrett, Esq.
Witt, Gaither & Whitaker, P.C.
1100 SunTrust Bank Building
Chattanooga, Tennessee 37402
(423) 265-8881
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================
Proposed Proposed
Title of each class of Amount to maximum maximum Amount of
securities to be registered be registered(1) offering price aggregate registration fee
per unit(2) offering price
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $3.00 par value 200,000 shs. $8.375 $1,675,000 $465.65
===========================================================================================================
</TABLE>
(1) This figure represents the aggregate number of shares of Common Stock being
registered hereby for issuance pursuant to the Core Leadership Team Stock
Ownership Plan (the "Plan") of The Dixie Group, Inc. There are also
registered an undetermined number of additional shares of Common Stock that
may become available for issuance in accordance with the provisions of the
Plan in the event of certain changes in the outstanding shares of Common
Stock or in the capital structure of the Company, including a stock
dividend or stock split.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Securities Act Rule 457(c) and based on the average of the
high and low prices reported for the Common Stock on June 15, 1999 on the
National Market System of the Nasdaq Stock Market.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8 will
be sent or given to participating officers and employees as specified by Rule
428(b)(1) of the Securities Act of 1933. The documents and the documents
incorporated by reference in this Registration Statement pursuant to Item 3 of
Part II below, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
There are hereby incorporated by reference in this Registration Statement,
and specifically made a part hereof, the following documents heretofore filed by
The Dixie Group, Inc. (Commission File No. 0-2585) with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934:
(1) Dixie's Annual Report on Form 10-K for the fiscal year ended December 26,
1998;
(2) Dixie's Quarterly Report on Form 10-Q for the fiscal quarter ended March
27, 1999; and
(3) The description of the Company's common stock set forth in the Company's
registration statement filed pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and any amendment or
report filed for the purpose of updating any such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the effective date of this Registration
Statement and prior to the filing of a post-effective amendment indicating that
all the securities offered hereby have been sold, or deregistering all such
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
II-1
<PAGE>
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters in connection with the shares of Common Stock being
registered hereby have been passed upon for the Company by Witt, Gaither and
Whitaker, P.C., 1100 SunTrust Bank Building, 736 Market Street, Chattanooga,
Tennessee, 37402. Certain attorneys who are shareholders and/or employees of
Witt, Gaither and Whitaker, P.C. may be deemed to beneficially own (directly or
indirectly) an aggregate of $24,000 of the Company's Convertible Subordinated
Debentures (convertible into Common Stock at an effective conversion price of
$32.20 per share, subject to adjustment under certain circumstances) and 17,165
shares of the Company's Common Stock. Such number of shares includes beneficial
ownership reported by John W. Murrey, III, a senior member of Witt, Gaither and
Whitaker, P.C. and a director of the Company, as follows: 5,665 shares of Common
Stock (including a total of 3,465 Performance Units awarded under Dixie's
Directors Stock Plan (each representing one share of Common Stock payable upon
retirement from the Board), plus presently exercisable options to acquire an
additional 7,500 shares of Common Stock. Additionally, Raymond B. Witt, Jr., who
is currently Of Counsel to Witt, Gaither and Whitaker, P.C. and is not involved
in the firm's representation of the Company, has reported direct or indirect
beneficial ownership of an aggregate of 50,000 shares of the Company's Common
Stock.
Item 6. Indemnification of Directors and Officers.
The Tennessee Business Corporation Act (the "TBCA") governs permissive
and mandatory indemnification of officers and directors of Tennessee
corporations who are made parties to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal (collectively, a "Proceeding") by
reason of their service to the corporation in such capacity. In general, a
Tennessee corporation may indemnify a director of the corporation against
liability if the director's conduct was in good faith and the director
reasonably believed that his conduct was in the best interest of the corporation
with respect to his conduct in his official capacity with the corporation, and
was at least not opposed to the corporation's best interest in all other cases.
In the case of any criminal Proceeding, a corporation may indemnify a director
against liability if the director had no reasonable cause to believe his conduct
was unlawful. The TBCA specifically provides that a director's conduct with
respect to an employee benefit plan for a purpose the director reasonably
believed to be in the interests of the participants in and beneficiaries of the
plan is conduct which satisfies the requirement that the director's conduct was
at least not opposed to the corporation's best interest. The termination of a
Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent is not, of itself, determinative that the director
did not meet the standard of conduct described in this paragraph.
II-2
<PAGE>
A Tennessee corporation may not indemnify a director in connection with a
Proceeding by or in the right of the corporation in which the director was
judged liable or in connection with a Proceeding charging improper personal
benefit, whether or not in the director's official capacity, in which the
director was found to have, in fact, benefited improperly.
Unless limited by its Charter, a Tennessee corporation must indemnify a
director who was wholly successful, on the merits or otherwise, in the defense
of any Proceeding to which the director was a party because the director is or
was a director of the corporation against reasonable expenses incurred by the
director in connection with the Proceeding.
The TBCA allows a Tennessee corporation to pay for or reimburse the
reasonable expenses incurred by a director who is a party to a Proceeding in
advance of final disposition of the Proceeding if: (i) the director furnishes
the corporation with a written affirmation of the director's good faith belief
that he has met the standards of conduct discussed above; (ii) the director
furnishes the corporation with a written undertaking, executed personally or on
his behalf, to repay the advance if it is ultimately determined that that
director did not meet the appropriate standard of conduct; and (iii) a
determination is made that the facts then known to those making the
determination would not preclude indemnification under the TBCA. The undertaking
which the director furnishes the corporation must be an unlimited general
obligation of the director, but it need not be secured and may be accepted
without reference to financial ability to make repayment.
Unless a corporation's Charter provides otherwise, the TBCA allows a
director who is a party to a Proceeding to apply for indemnification to the
court conducting the Proceeding or to another court of competent jurisdiction.
On receipt of an application, the court, after giving any notice the court
considers necessary, may order indemnification if it determines that the
director is entitled to mandatory indemnification under the TBCA (in which case
the court shall also order the corporation to pay the director's reasonable
expenses to obtain court-ordered indemnification), or if it determines that the
director is fairly and reasonably entitled to indemnification in view of all the
relevant circumstances, whether or not the director has met the standard of
conduct for permissive indemnification. If, however, the court determines that a
director who was adjudged liable to the corporation in a Proceeding by or in the
right of the corporation, or where the director received an improper personal
benefit, is nonetheless "entitled to indemnification in view of all the relevant
circumstances," such indemnification is limited to the director's reasonable
expenses incurred in connection with the Proceeding.
A Tennessee corporation may not indemnify a director (or advance expenses)
under the TBCA unless authorized in the specific case following a determination
that the indemnification is permissible. The determination must be made (i) by
vote of a majority of a quorum of the board of directors not parties to the
Proceeding; (ii) if such a quorum cannot be obtained, by a majority vote of a
special committee designated by the board consisting solely of two or more
members of the board who are not parties to the Proceeding; (iii) by independent
legal counsel selected either by the majority of the nonparty quorum, by a
majority of the designated committee, or, if neither of the foregoing are
possible, by a majority of the full board; or (iv) by the shareholders, without
the vote of shares held by or under the control of directors who are
II-3
<PAGE>
parties to the Proceeding. Authorization of indemnification and the
determination of reasonableness of expenses shall be determined in the same
manner as the permissibility of indemnification; provided, that if
permissibility of indemnification is determined by special legal counsel, the
authorization of indemnification and determination of reasonableness regarding
expenses shall be made by the body which selected the special legal counsel.
An officer of a corporation, regardless of whether he is a director, is
entitled to indemnification and to the advance of expenses to the same extent as
a director. The corporation may voluntarily indemnify and advance expenses under
the TBCA to an officer, employee, or agent of the corporation to the extent,
consistent with public policy, that may be provided by its Charter, bylaws,
general or specific action of its Board of Directors, or by contract. The TBCA
also provides, however, that no such indemnification may be provided to any
director of the corporation if a judgment or other final adjudication
establishes such director's liability for: (i) breach of his duty of loyalty to
the corporation or its shareholders; (ii) acts or omissions not done in good
faith or which involve intentional misconduct or a knowing violation of law; or
(iii) participation in an unlawful distribution to one or more shareholders in
violation of the TBCA. The foregoing restrictions do not apply, however, to any
contractual or other indemnification provided (to the extent consistent with the
charter) to officers, employees or agents who are not directors of the
corporation.
The TBCA provides that a corporation may purchase and maintain insurance on
behalf of an individual who is or was a director, officer, employee, or agent of
the corporation or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise, against liability asserted against or incurred by the individual in
that capacity or arising from the individual's status as a director, officer,
employee, or agent, whether or not the corporation would otherwise have the
power to indemnify the individual against the same liability under the TBCA.
Dixie and its directors and officers are insured under a Directors' and
Officers' Liability Insurance Policy. One or more of the directors or officers
of Dixie may be beneficiaries of insurance policies or agreements which provide
for indemnification of liabilities arising from their services as directors or
officers of Dixie and which are not provided by Dixie.
Paragraph 8 of Part I of Dixie's Restated Charter (the "Dixie Charter")
allows indemnification to the fullest extent authorized by the TBCA, as the same
exists as of the date of adoption of the Dixie Charter or as later amended, of
Dixie's directors for liability to the corporation or its shareholders for money
damages for breach of fiduciary duty as a director; provided that, unless and to
the extent so provided by Tennessee law, the foregoing shall not eliminate
liability for any breach of the director's duty of loyalty to the corporation or
its shareholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, or for unlawful
distributions.
II-4
<PAGE>
Article X of the Amended and Restated By-Laws of Dixie (the "Dixie
By-Laws") provides that Dixie shall indemnify its officers and directors to the
fullest extent now or hereafter permitted by Tennessee law against losses
incurred by any such person who is made or threatened to be made a party to any
proceeding by reason of fact that the person was or is a director or officer of
Dixie or any of its subsidiaries or is or was serving at the direction of Dixie
as an officer or director of any other entity. Article X of the Dixie By-Laws
also provides that the foregoing shall not preclude any other or additional
indemnification whether provided by law, insurance or contract. In addition,
Dixie shall provide, to the fullest extent allowed by Tennessee law, for the
advancement of expenses incurred by officers or directors.
Item 7. Exemption From Registration Claimed.
Not Applicable.
Item 8. Exhibits.
Exhibit
Number Description of Exhibit
- ------ ----------------------
4.1 The Dixie Group, Inc. Core Leadership Team Stock Subscription Plan.
5.1 Opinion of Witt, Gaither & Whitaker, P.C., counsel to the Registrant.
23.1 Consent of Witt, Gaither & Whitaker, P.C.(included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP
24 Powers of Attorney (included in Signatures page of this Registration
Statement).
Item 9. Undertakings.
I. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
II-5
<PAGE>
provided, however, that the Registrant need not file a post-effective amendment
to include the information required to be included by subsection (i) or (ii)
above if such information is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, which are incorporated by reference in the Registration Statement;
and
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
III. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chattanooga, State of Tennessee on June 17, 1999.
THE DIXIE GROUP, INC.
By: /s/ Daniel K. Frierson
------------------------------------
Daniel K. Frierson
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby authorizes Daniel K. Frierson, William N. Fry, IV, and Glenn A. Berry,
and each of them, as attorneys-in-fact, to sign in his name and behalf
individually and in each capacity designated below, and to file any amendments,
including post-effective amendments, to this Registration Statement.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Daniel K. Frierson Chairman, Director and June 17, 1999
- -------------------------------
Daniel K. Frierson Chief Executive Officer
/s/ William N. Fry, IV Director, President and June 17, 1999
- ------------------------------- Chief Operating Officer
William N. Fry, IV
/s/ Glenn A. Berry Executive Vice President and June 17, 1999
- ------------------------------- Chief Financial Officer
Glenn A. Berry
/s/ Paul K. Frierson Director, Corporate Vice President,
- ------------------------------- and President of Candlewick Yarns June 17, 1999
Paul K. Frierson
/s/ D. Eugene Lasater Controller June 17, 1999
- -------------------------------
D. Eugene Lasater
Director June __, 1999
- -------------------------------
J. Don Brock
/s/ Paul K. Brock Director June 17, 1999
- -------------------------------
Paul K. Brock
/s/ Lovic A. Brooks, Jr. Director June 17, 1999
- -------------------------------
Lovic A. Brooks, Jr.
/s/ John W. Murrey, III Director June 17, 1999
- -------------------------------
John W. Murrey, III
/s/ Peter L. Smith Director June 17, 1999
- -------------------------------
Peter L. Smith
/s/ Robert J. Sudderth, Jr. Director June 17, 1999
- -------------------------------
Robert J. Sudderth, Jr.
</TABLE>
II-7
THE DIXIE GROUP, INC.
CORE LEADERSHIP TEAM
STOCK SUBSCRIPTION 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
members of the core leadership team of the Company. It is believed that a
substantial investment in the Company by such associates 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 member of the core leadership team is encouraged to have a
substantial interest in the Company through ownership of Common Stock. Every
member selected by the Compensation Committee to participate in the Plan (a
"Participant") will be offered a subscription (the "Offer Date") for that number
of shares of Common Stock of the Company that represents in fair market value on
the Offer Date one-third (1/3) of such Participant's base salary. 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 last
trading date prior to the Offer Date (the "NASD Price").
Participants: This Plan shall apply to the members of the core leadership team
selected to participate from time to time by the Compensation Committee.
Purchase From Company: In order to facilitate the acquisition of Common Stock of
the Company by the Participants, the Company will, following the selection of an
associate to participate in the Plan, provide the Participant with a written
subscription for that number of shares of Common Stock requested by the
Participant, but not to exceed that number of shares having a fair market value
based upon the NASD Price equal to one-third (1/3) of the Participant's base
salary.
Each subscription shall be automatically called for payment three (3) years
following the Offer Date with respect to the Participant.
Payment of Purchase Price: The subscription price may be paid by cash or shares
of common stock of the Company. At the Participant's request, the Company will
determine the net result of the payment of the subscription price with shares of
common stock of the Company and will settle the transaction through the issuance
or receipt, as applicable, of the net shares resulting from the exchange.
1
<PAGE>
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, the subscription shall become due and payable in
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, the subscription shall become due and
payable, if not earlier pursuant to its terms, ten (10) days from the
Participant's termination date.
Acquisition: 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.
Registered Stock: The Company's offering of shares of Common Stock to
Participants under the Plan shall be registered with the SEC on Form S-8.
Accordingly, upon payment of their subscriptions, Participants will receive
registered shares of Common Stock they may resell at any time without
restriction (except for Participants, if any, who have become "affiliates" of
the Company under applicable federal and state securities laws by virtue of
being named directors or executive officers).
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 Board of Directors 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.
2
June 17, 1999
Board of Directors
The Dixie Group, Inc.
1100 South Watkins Street
Chattanooga, TN 37404
Gentlemen:
You have requested our opinion concerning certain matters in connection with the
Registration Statement on Form S-8 (the "Registration Statement") to be filed by
The Dixie Group, Inc. (the "Company") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
relating to the offer and sale by the Company of up to 200,000 shares of the
Company's Common Stock, $3.00 par value per share ("Common Stock") to certain
employees under the Company's Core Leadership Team Stock Subscription Plan (the
"Plan").
In connection with the following opinions, we have examined and have relied upon
such documents, records, certificates, statements and instruments as we have
deemed necessary and appropriate to render the opinions herein set forth. In
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies.
Based upon and subject to the foregoing, it is our opinion that:
1. The Company is duly incorporated and validly existing under the laws of the
State of Tennessee.
2. The adoption of the Plan, the reservation of up to 200,000 shares of the
Company's Common Stock for issuance in accordance with the Plan, and the
issuance of such shares of Common Stock to employees who are selected as
participants in the Plan in accordance with its terms, have been duly
authorized and approved by the Company's
<PAGE>
Board of Directors
The Dixie Group, Inc.
June 17, 1999
Page 2
Board of Directors, approval by the Company's shareholders not being
required under the rules of either the Securities and Exchange Commission
or the Nasdaq National Market (on which the Company's Common Stock and
Convertible Subordinated Debentures are listed).
3. The issuance of up to 200,000 shares of Common Stock which are the subject
of the Registration Statement to employees who are selected as participants
in the Plan, in accordance with the terms of the Plan, will result in such
shares being duly authorized, legally and validly issued, fully paid and
non-assessable shares of the Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Opinions" in the Prospectus to be delivered to Plan participants pursuant
to the Registration Statement.
WITT, GAITHER & WHITAKER, P.C.
/s/ Steven R. Barrett
--------------------------------
By: Steven R. Barrett
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to The Dixie Group, Inc. Core Leadership Team Stock Ownership
Plan of our report dated February 17, 1999, with respect to the consolidated
financial statements and schedule of The Dixie Group, Inc. included in its
Annual Report (Form 10-K) for the year ended December 26, 1998, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Chattanooga, Tennessee
June 16, 1999
