-----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, C6vYsEriDxZJK+2MH/2M82UJO3Pg5OcL8bMcI2GwuCwveQmGkXfA9qFX96Z8kyF2 pl152GzhBPYJm5UaRkE/Qw== 0000913943-95-000013.txt : 19951012 0000913943-95-000013.hdr.sgml : 19951012 ACCESSION NUMBER: 0000913943-95-000013 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19951011 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DIXIE YARNS INC CENTRAL INDEX KEY: 0000029332 STANDARD INDUSTRIAL CLASSIFICATION: TEXTILE MILL PRODUCTS [2200] IRS NUMBER: 620183370 STATE OF INCORPORATION: TN FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-10155 FILM NUMBER: 95579942 BUSINESS ADDRESS: STREET 1: 1100 S WATKINS ST CITY: CHATTANOOGA STATE: TN ZIP: 37404 BUSINESS PHONE: 6156982501 MAIL ADDRESS: STREET 1: P O BOX 751 CITY: CHATTANOOGA STATE: TN ZIP: 37401 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/A 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/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 2)* DIXIE YARNS, 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. Witt, Gaither & Whitaker, P.C. 1100 American National Bank Building Chattanooga, TN 37402 615-265-8881 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 5, 1995 (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 Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) 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). SCHEDULE 13D CUSIP NO. 255579-10-4 PAGE 2 OF 7 PAGES 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON DANIEL K. FRIERSON 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ] (B) [X ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* OO 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES OF AMERICA NUMBER OF 7. SOLE VOTING POWER SHARES 247,738 BENEFICIALLY 8. SHARED VOTING POWER OWNED BY 749,249 EACH 9. SOLE DISPOSITIVE POWER REPORTING 247,738 PERSON 10. SHARED DISPOSITIVE POWER WITH 749,249 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 997,167 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.96% 14. TYPE OF REPORTING PERSON IN * SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION ITEM 1. SECURITY AND ISSUER. This Statement on Schedule 13D (the "STATEMENT") relates to the Common Stock, par value $3.00 per share (the "COMMON STOCK"), of Dixie Yarns, Inc., a Tennessee corporation (the "ISSUER"), the principal executive offices of which are located at 1100 South Watkins Street, Chattanooga, Tennessee 37404. ITEM 2. IDENTITY AND BACKGROUND. (a) Daniel K. Frierson. (b) 1100 South Watkins Street, Chattanooga, Tennessee 37404. (c) Chairman of the Board and Chief Executive Officer of Dixie Yarns, Inc., a manufacturer and marketer of textiles and floorcovering products headquartered at 1100 South Watkins Street, Chattanooga, Tennessee 37404. (d) Mr. Frierson has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) Mr. Frierson has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding 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. (f) Mr. Frierson is a citizen of the United States of America. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Mr. Frierson (i) exchanged 50,000 shares of the Issuer's Common Stock with his brother, James W. Frierson, for 50,000 shares of Class B Common Stock $3.00 par value per share (the "CLASS B COMMON STOCK") of the Issuer, effective February 7, 1995 and (ii) exchanged 15,678 shares of the Issuer's Common Stock with his brother, J. Burton Frierson, III, for 15,678 shares of Class B Common Stock effective May 5, 1995. Additionally, on July 10, 1995, another shareholder of the Issuer exercised a put option to sell 1,029,446 shares of Common Stock to the Issuer. The repurchase of said shares by the Issuer had the effect of increasing the percentage of Common Stock beneficially owned by Mr. Frierson. ITEM 4. PURPOSE OF TRANSACTION. Mr. Frierson does not have any present plans or proposals that relate to or would result in the following: the acquisition of additional securities of the Issuer or the disposition of 3 securities of the Issuer; an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the Issuer or any of its subsidiaries; a change in the present Board or management of the Issuer; any other material change in the Issuer's business or corporate structure or its present capitalization or dividend policy; changes in the Issuer's charter or by-laws or other actions that might impede the the acquisition of control of the Issuer of cause it to be delisted from a national securities exchange or cease to be authorized to be quoted in an inter- dealer quotation system of a registered national securities association; or causing securities of the Issuer to be eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act or any other similar action. Notwithstanding the foregoing, any of the preceding actions may be, from time to time, proposed to and acted upon by the board of directors of the Issuer, of which Mr. Frierson is a member, in the normal course of the Issuer's business. Thus, in the normal course of discharging his duties as a director or as Chief Executive Officer of the Issuer, and in his capacity as such, Mr. Frierson may be required to consider or review any such plans or proposals. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) As of the date hereof, Mr. Frierson is deemed to be the beneficial owner (pursuant to Rule 13d-3) of an aggregate of 997,167 shares of Common Stock constituting approximately 8.96% of the 11,125,559 shares of Common Stock that were outstanding as ____________________ Such 997,167 shares of Common Stock consist of: (i) 11,560 shares of Common Stock as to which Mr. Frierson has sole investment and sole voting power; (ii) 27,433 shares of Common Stock owned directly by Rowena K. Frierson but subject to a general power of attorney granted to Mr. Frierson and T. Cartter Frierson; (iii) 174,588 shares of Common Stock owned by the "Dixie Yarns, Inc. Defined Contribution Plan" for which Mr. Frierson is one of three fiduciaries and for which American National Bank & Trust Company of Chattanooga serves as trustee; (iv) 122,146 shares of Common Stock owned by the wife and children of Mr. Frierson and as to which he shares voting and investment power; and (v) the deemed conversion of (A) 105,072 shares of Class B Common Stock, which are convertible on a share-for-share basis into shares of Common Stock, owned by the wife and children of Mr. Frierson and as to which he shares investment and voting power and (B) 556,368 shares of Class B Common Stock (including 236,178 such shares owned directly by Mr. Frierson) which Mr. Frierson votes pursuant to the terms of the Shareholder Agreement. 661,440 shares of Common Stock are added to the 10,464,119 shares of Common Stock reported by the Issuer to Mr. Frierson as outstanding as of July 21, 1995 in order to reflect the assumed conversion of the 661,440 shares of Class B Common Stock, which are held as described in Footnote 1. As stated in Item 5(a), Mr. Frierson expressly 4 of July 21, 1995, as reported by the Issuer to Mr. Frierson. Mr. Frierson expressly disclaims beneficial ownership of the 556,368 such shares which may be deemed to result from the conversion of shares of Class B Common Stock held subject to the Shareholder Agreement discussed in Item 6 hereof, because restrictions on transferability and withdrawal imposed by the agreement effectively prohibit such conversion for the duration of the agreement, absent the consent of the parties. (b) Mr. Frierson has the sole power to vote and dispose of 247,738 of the shares of Common Stock for which beneficial ownership is reported. Mr. Frierson shares the power to vote and dispose of 749,429 of the shares of Common Stock for which beneficial ownership is reported. Mr. Frierson shares the power to vote and dispose of the 27,433 shares of Common Stock and the 125,139 shares of Class B Common Stock owned directly by Rowena K. Frierson, who has given a general power of attorney to Mr. Frierson and T. Cartter Frierson. Rowena K. Frierson is retired and her address, for purposes of this filing, is 1100 South Watkins Street, Chattanooga, TN 37404. T. Cartter Frierson's address is 633 Chestnut Street, Suite 850, Chattanooga, Tennessee 37450. He is president of T. Cartter Frierson & Company. Mr. Frierson shares the power to vote and dispose of the 122,146 shares of Common Stock and the 105,072 shares of Class B Common Stock owned by his wife (Joan H. Frierson) and children (E. Haley Frierson; D. Kennedy Frierson, Jr.; Rowena F. Barker; James B. Frierson; and Emily M. Frierson). Their address is 1100 South Watkins Street, Chattanooga, Tennessee 37404. Mr. Frierson also shares the power to vote and dispose of the 40,000 shares of Class B Common Stock held by Paul K. Frierson, T. Cartter Frierson and Mr. Frierson as co- trustees of the Frierson Family Trusts and the 45,304 shares of Class B Common Stock held by Paul K. Frierson, T. Cartter Frierson and Mr. Frierson as co-trustees of the Special Purpose Trust of J. Burton Frierson. Paul K. Frierson's address is 1100 South Watkins Street, Chattanooga, Tennessee 37404. He is vice president of the Issuer and president of the Issuer's Candlewick group. ______________________________________________________________ disclaims beneficial ownership of the 556,368 shares of Common Stock which would result from the conversion of shares of Class B Common Stock which are subject to the Shareholder Agreement. Consists of (i) 11,560 shares of Common Stock held directly by Mr. Frierson and (ii) 236,178 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. As stated in Item 5(a), Mr. Frierson expressly disclaims beneficial ownership of the 236,178 shares of Common Stock which would result from the conversion of these shares of Class B Common Stock which are subject to the Shareholder Agreement. 5 Mr. Frierson shares the power to vote and dispose of the 174,588 shares of Common Stock of the Dixie Yarns, Inc. Defined Contribution Plan, of which Mr. Frierson and Robert J. Sudderth, Jr. are fiduciaries. Robert J. Sudderth, Jr. is Chairman and Chief Executive Officer of American National Bank & Trust Company in Chattanooga, Tennessee. His address is 1700 American National Bank Building, Chattanooga, Tennessee 37402. Additionally, pursuant to the Shareholder Agreement, Mr. Frierson also shares the power to vote and dispose of (i) 15,678 shares of Class B Common Stock owned directly by T. Cartter Frierson and (ii) 94,069 shares of Class B Common Stock owned directly by Paul K. Frierson. Mr. Frierson may therefore be deemed to share beneficial ownership with respect to the shares of Common Stock into which such shares of Class B Common Stock are convertible. As stated in Item 5(a), however, Mr. Frierson disclaims such beneficial ownership and, additionally, if it were currently possible for such shares to be withdrawn from the Shareholder Agreement and converted into shares of Common Stock, Mr. Frierson would no longer have or share either voting or investment power with respect to such shares of Common Stock. 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. (c) As stated in Item 3, Mr. Frierson (i) exchanged 50,000 shares of the Issuer's Common Stock with his brother, James W. Frierson, for 50,000 shares of Class B Common Stock of the Issuer, effective February 7, 1995 and (ii) exchanged 15,678 shares of the Issuer's Common Stock with his brother, J. Burton Frierson, III, for 15,678 shares of Class B Common Stock effective May 5, 1995. (d) See Item 5(b). (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Of the 661,440 shares of Class B Common Stock beneficially owned by Mr. Frierson, 556,368 are subject to a shareholder agreement (the "SHAREHOLDER AGREEMENT"). Pursuant to the terms of the Shareholder Agreement, Mr. Frierson has been granted a proxy, which expires October 2005, to vote all such shares. The proxy is terminable under certain limited circumstances prescribed in the Shareholder Agreement. 6 The Shareholder Agreement also places certain restrictions on the transfer or withdrawal of shares of Class B Common Stock held by the parties thereto, effectively preventing the conversion of shares held pursuant to the Shareholder Agreement into shares of Common Stock for the duration of the agreement, absent the consent of the parties. Accordingly, Mr. Frierson has expressly disclaimed beneficial ownership of any shares of Common Stock which would result from the conversion of shares of Class B Common Stock which are currently held subject to the Shareholder Agreement. The participating parties to the Shareholder Agreement are the trusts created under the Estate of J. Burton Frierson, the wife of J. Burton Frierson (Rowena K. Frierson) and three of the sons of J. Burton and Rowena K. Frierson (Daniel K. Frierson; Paul K. Frierson; and T. Cartter Frierson). ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 99.1 Dixie Yarns, Inc. Class B Common Stock Shareholders Agreement, as amended to date. SIGNATURE After reasonable inquiry and to the best of the knowledge and belief of the undersigned, the undersigned hereby certifies that the information set forth in this Schedule 13D is true, complete and correct. /s/ Daniel K. Frierson _________________________________________ Daniel K. Frierson Date: October 10, 1995 7 EX-99.1 2 EXHIBIT 99.1 RENEWAL OF DIXIE YARNS, INC. CLASS B COMMON STOCK STOCKHOLDERS AGREEMENT WHEREAS, the Undersigned entered into the Dixie Yarns, Inc. Class B Common Stock Shareholders Agreement (the "Shareholders Agreement") on October 10, 1985; and WHEREAS, the Shareholders Agreement was effective October 11, 1985; and WHEREAS, pursuant to Article - III(1) the Shareholders Agreement has a duration of ten (10) years; and WHEREAS, the Undersigned are of the opinion that it is in their mutual best interest to extend the duration of the Shareholders Agreement; and WHEREAS, Article - III(2) provides that the Shareholders Agreement may be extended by written consent of the parties; NOW, THEREFORE, in consideration of the premises and the authority of TCA 48-17-302, the Undersigned, intending to be legally bound, hereby extend the Shareholders Agreement for a period of ten (10) years from October 11, 1995 unless said Shareholders Agreement is otherwise terminated pursuant to its terms. With the exception of extending the duration of the Shareholders Agreement, the Undersigned hereby restate and affirm the Shareholders Agreement in its entirety. EFFECTIVE this 19th day of June, 1990. /s/ Rowena K. Frierson __________________________________ Rowena K. Frierson /s/ J. Burton Frierson, III __________________________________ J. Burton Frierson, III /s/ James W. Frierson __________________________________ James W. Frierson /s/ Paul K. Frierson __________________________________ Paul K. Frierson, Individually and as co-executor of the Estate of J. Burton Frierson, Jr. /s/ T. Cartter Frierson __________________________________ T. Cartter Frierson, Individually and as co-executor of the Estate of J. Burton Frierson, Jr. /s/ Daniel K. Frierson __________________________________ Daniel K. Frierson, Individually and as co-executor of the Estate of J. Burton Frierson, Jr. DIXIE YARNS, INC CLASS B COMMON STOCK SHAREHOLDERS AGREEMENT (10-11-85) I. PURPOSE. The economic climate today, particularly in the depressed textile industry, is dominated by corporate takeover potential playing a major role in the corporate environment. Uncertainty as to the future stability of an enterprise is prevalent resulting in a negative impact upon the operations and performance of many publicly held companies. Participants and Proxies believe that well established relationships among Dixie Yarns, Inc., (Dixie) its key management group, employees, customers, suppliers and financial lenders are founded upon a sense of future continuity and past proven performance. These relationships are unique and valuable especially when the textile industry is threatened by foreign competition and takeover rumors. An ongoing atmosphere of uncertainty would be detrimental to the economic well-being of Dixie and would impair its ability to continue to make progress for the benefit of its shareholders and employees. To provide continuity in management requires unity of purpose among controlling shareholders. A unified voice growing out of common purposes, will enable management to avoid a defensive posture and to concentrate its efforts on competitive conditions. Plans for long term growth and development of Dixie, including possible diversification, can be given full attention. This Agreement is designed to accomplish these purposes. Therefore, the Participants, in consideration of their mutual promises and other valuable consideration, do agree to and with each other as follows: II. PROCEDURE. J. Burton Frierson, Rowena K. Frierson and their sons, Burton, Paul, Cartter, Dan and James are the only holders of Class B Common Stock (Class B Stock) initially eligible to participate. Those who agree to participate in the Shareholders' Agreement ("Agreement") ("Participants") shall deposit all of their Class B Common Stock with the Initial Proxies, as hereinafter defined. All Participants will execute a proxy to the Initial Proxies (as hereinafter defined) in the form attached to this Agreement as Exhibit A. Certificates representing shares of all Class B Stock to be subject to this Agreement shall be deposited with the Initial Proxies for safe keeping and in order to insure that such shares remain subject to the Agreement. The Initial Proxies will issue written receipts to the Participants for certificates received. Dividends declared and paid on the Class B Stock held subject to this Agreement (other than stock dividends, stock splits, and newly issued shares of Class B Stock) shall be paid directly to the Participants by Dixie. Proxy forms received by Participants from Dixie shall be signed in blank and forwarded to the Initial Proxies then exercising the voting rights of the Class B Stock under this Agreement. Each Participant shall forward to Dixie a letter advising Dixie of the execution of this Agreement, such letter to be in the form attached hereto as Exhibit B. Participants agree to take any and all necessary steps to allow the Initial Proxies to perform their other duties under this Agreement. The Proxies will be irrevocable for a period of ten years from the date hereof except as provided otherwise herein. The rights of the Initial Proxies shall be limited specifically as are forth in the Agreement (Article IV). III. DURATION OF THE AGREEMENT. (1) This Agreement shall continue for a period of ten (10) years, at which time it and the proxies issued in accordance herewith shall automatically terminate. This Agreement may be terminated, altered or amended at any time by the written consent of three-fourths (3/4) of the original Participants then participating and the legal representative or designee of any deceased Participant with such voting being pursuant to Article X. Any proxies issued pursuant to this Agreement will automatically terminate and become null and void upon the termination of this Agreement. (2) By written consent, all or any of the Participants and the legal representative or designee of a deceased participant may periodically elect to extend the Agreement with respect to their shares of Class B Stock for such period of time and for such purposes as they deem advisable subject to any legal limitation as to duration. Any such extension shall have no effect upon any Participant who has not elected to extend the trust with respect to their shares. -2- IV. INITIAL PROXIES - RIGHTS AND DUTIES (1) The initial Proxies shall be J. Burton Frierson and Daniel K. Frierson (Initial Proxies). They shall have the exclusive right to exercise jointly, either in person or by proxy, all voting rights and powers in respect to all Class B Stock held hereunder and to take part in any corporate or stockholders' action of any kind whatsoever until they shall cease serving as Initial Proxies or upon termination of this Agreement, whichever shall first occur. All decisions of the Initial Proxies as to how to vote the Class B Stock held subject to this Agreement must be by unanimous vote. Any disagreement will be resolved by a vote of all the Participants pursuant to Article X. (2) Upon the death, disability or removal of the Initial Proxies, Burton Frierson, his wife, Rowena K. Frierson, and all of their surviving children shall serve together as alternate Proxies (Alternate Proxies). The Alternate Proxies shall then have the exclusive right to vote jointly all Class B Stock held under this Agreement until its termination. All such decisions of the Alternate Proxies shall be made in the manner set forth in Article X hereof. In the event of the death of a Participant, the legal representative or sole designee of such decedent shall represent the decedent as an Alternate Proxy who shall participate in any voting required of Alternate Proxies in accordance with the provisions of Article X hereof. V. SPECIAL CIRCUMSTANCES. (1) Upon the death, incompetence, resignation or removal of either of the Initial Proxies, Burton and Daniel, the other shall continue to serve as Initial Proxy alone. (2) Daniel K. Frierson shall serve as Initial Proxy only so long as he shall continue as Chief Executive Officer, or Chairman of the Board of Dixie, or an officer or Director of any parent or successor of Dixie, unless the Participants voting in the manner described in Article X agree to his continuation as Initial Proxy. (3) Upon the unanimous vote of all original Participants and representatives of deceased original Participants, an Initial Proxy shall be removed. The Initial Proxy being voted upon shall not participate in this decision. The Proxy so -3- involved shall cease to serve as Initial Proxy. Such removal shall not affect either Initial Proxy's right to serve thereafter as Alternate Proxy hereunder. (4) It shall be the objective of the Initial Proxies to keep all Participants informed of major events of consequence with respect to Dixie that would materially affect their interests. Their ideas and suggestions may be sought and will be given due consideration in making decisions affecting Dixie. However, the final decision with respect to the vote of the Class B Stock under the Agreement shall reside entirely with the unanimous decision of the Initial Proxies so long as they or either of them continue to serve as such. VI. TRANSFERABILITY. The Class B Stock held under this Agreement may not be sold, conveyed or transferred except as herein specifically provided for until termination of this Agreement or upon early withdrawal of the Class B Stock as authorized herein. The Class B Stock shall also remain subject to the transferability restrictions set forth in Article Fourth of the Amendment to the Charter of Dixie approved by the Shareholders at its Annual Meeting in April of 1985. Any Class B Stock transferred shall be subject to the transferee executing a document acknowledging and agreeing that the Class B Stock being received shall continue to be held by and be subject to the Agreement. No such transferee or his or her representatives, successors or assigns, other than a fiduciary or sole designee of a deceased Participant, shall be entitled to serve as an Alternate Proxy under this Agreement as a result of the transfer and none of such persons will be entitled to participate in any manner in the decisions respecting the vote of the Class B Stock being held under this Agreement as a result of the transfer unless such designee is then a Participant herein. When and if Class B Stock held subject to this Agreement is sold or transferred to another Participant such stock shall continue to be held subject to the terms hereof. However, should such stock be transferred to a person not then a Participant in this agreement receipt of such Stock shall not have the effect of making such person a Participant to this Agreement. Such stock when so acquired shall upon transfer automatically remain subject to the terms of this Agreement. When and if stock not subject to this Agreement is purchased or otherwise acquired by any Participant such stock shall upon effective transfer become subject to the terms of this Agreement. -4- When and if upon the death of a Participant Class B Stock is transferred to an executor, trustee or beneficiary of the estate of such Participant, such stock shall continue to be held by the transferee subject to the terms hereof. A Participant's interest in the Class B Stock may be pledged as collateral for a loan; however, the pledge of such shares shall be subject to this Agreement, and such right is conditioned upon the lender executing a document acknowledging and agreeing that the stock so pledged shall continue to be held by and be subject to the terms of this Agreement. VII. EARLY WITHDRAWAL. A Participant may be allowed to withdraw some or all of his Class B Stock held pursuant to the Agreement in the event of personal need or unusual circumstances upon the approval of two-thirds (2/3) in interest of the other Participants. Any withdrawal of Stock held may be conditioned upon the withdrawing Participant agreeing to abide by such terms and conditions as shall be established by the other Participants. The Participants so deciding as provided in Article X may also refuse to allow any withdrawal of Stock, with or without cause. VIII. EARLY TERMINATION. Upon the death, inability to perform the duties of Initial Proxy, or resignation of both Burton and Daniel this Agreement shall terminate automatically two (2) years thereafter unless it terminates by its terms at an earlier date or sooner termination is approved by a unanimous vote of the Alternate Proxies. IX. RESIGNATION. Either Initial Proxy may resign at any time upon delivery of a letter of resignation to all the Participants. X. VOTING BY ALTERNATE PROXIES OR PARTICIPANTS ACTING AS SUCH. All decisions required herein shall be by the majority of the total number of Class B common shares subject to this agreement voting on such decision with each Participant voting the number of shares subject to this Agreement owned by the Participant. Should a gift occur of such shares to a child of a Participant such shares shall continue to be voted by such donor. All voting shall follow the procedure described here in except when specifically provided to the contrary. XI CAPTIONS. The captions and headings of the paragraphs of this Option Agreement are inserted for convenience only and shall not be considered in construing the provisions of this instrument. -5- XII. SPECIFIC PERFORMANCE. The parties agree that there is no adequate remedy at law for breach of this contract and acknowledge that each party is entitled to sue for specific performance. However, this shall not be the exclusive remedy of either party, and the remedies to which the parties are entitled shall be deemed cumulative. XIII. SEVERABILITY. If any term of this Agreement shall be held invalid, illegal or unenforceable in whole or in part, neither the validity of the remaining part of such term nor the validity of any other term of this Agreement shall in any way be affected. XIII. GOVERNING LAW. This Agreement shall be governed and construed in accordance with the laws of the State of Tennessee, AGREED TO this 10th day of October, 1985. /s/ J. Burton Frierson, Jr. ______________________________ J. Burton Frierson, Jr. /s/ Rowena K. Frierson ______________________________ Rowena K. Frierson /s/ J. Burton Frierson, III ______________________________ J. Burton Frierson, III /s/ Paul K. Frierson ______________________________ Paul K. Frierson /s/ T. Cartter Frierson ______________________________ T. Cartter Frierson /s/ Daniel K. Frierson ______________________________ Daniel K. Frierson /s/ James Frierson ______________________________ James Frierson -6- LIST OF OMITTED EXHIBITS AND SCHEDULES The Reporting Person hereby undertakes to file supplementally, upon the request of the Commission's Staff, any of the exhibits or schedules to this document listed below which have been omitted from this filing. EXHIBIT A IRREVOCABLE PROXY EXHIBIT B NOTICE TRANSMITTING IRREVOCABLE PROXY SCHEDULE OF CLASS B COMMON STOCK SHARES HELD IN VOTING TRUST -----END PRIVACY-ENHANCED MESSAGE-----