The Company recognizes compensation expense relating to share-based payments based on the fair value of the equity instrument issued and records such expense in selling and administrative expenses in the Company's Consolidated Statements of Operations. The Company's stock compensation expense was $240 in 2025 and $494 in 2024.

On May 4, 2022, the Company's shareholders' approved and adopted the Company's Omnibus Equity Incentive Plan (the "Omnibus Equity Incentive Plan" or the "2022 Plan") which provides for the issuance of a maximum of 1,300,000 shares of Common Stock and/or Class B Common Stock for the grant of options, and/or other stock-based or stock-denominated awards to employees, officers, directors and agents of the Company and its participating subsidiaries. There are 490,238 shares remaining under the 2022 Plan.

On May 3, 2016, the Company's shareholders' approved and adopted the Company's 2016 Incentive Compensation Plan (the "2016 Incentive Compensation Plan") which provided for the issuance of a maximum of 800,000 shares of Common Stock and/or Class B Common Stock for the grant of options, and/or other stock-based or stock-denominated awards to employees, officers, directors, and agents of the Company and its participating subsidiaries. The 2016 Incentive Compensation Plan and the

allocation of shares thereunder superseded and replaced The Dixie Group, Inc. Stock Awards Plan, as amended (the "2006 Plan") and the allocation of shares thereunder. Awards previously granted under the 2006 Plan continue to be governed by the terms of that plan and are not affected by its termination. On May 6, 2020, the board approved an amendment of the Company's 2016 Incentive Compensation Plan to increase the original number of shares by an additional 500,000. There are 258,517 shares remaining under the 2016 Incentive Plan due to forfeiture or cancellation of unvested awards outstanding under that plan.

Pursuant to the Company's Omnibus Equity Incentive Plan, the Company's practice has been to adopt an annual incentive plan which provides for the grant of restricted stock awards denominated as Long-Term Incentive Stock Awards and Career Share awards. Under the plan adopted for 2023, each executive officer has the opportunity to earn a Primary Long-Term Incentive Award of restricted stock and separately receive an award of restricted stock denominated as “Career Shares.” The number of shares issued, if any, is based on the market price of the Company’s Common Stock at the time of grant of the award, subject to a $5.00 per share minimum value. Primary Long-Term Incentive Awards vest over three years. For participants over age 60, Career Shares awards fully vest when the participant becomes (i) qualified to retire from the Company and (ii) has retained such shares two years following the grant date. For the participants under age 60, Career Shares vest ratably over five years beginning on the participant's 61st birthday.


	Number of Shares	Weighted-Average Grant-Date Fair Value








Outstanding at December 30, 2023	706,275	$	3.07
Granted	443,537	0.60
Vested	(237,557)	2.41
Forfeited	(31,812)	1.92
Outstanding at December 28, 2024	880,443	$	2.05
Granted	32,000	0.69
Vested	(229,550)	1.37
Forfeited	(45,580)	1.78
Outstanding at December 27, 2025	637,313	$	2.25

As of December 27, 2025, unrecognized compensation cost related to unvested restricted stock was $598. That cost is expected to be recognized over a weighted-average period of 6.3 years. The total fair value of shares vested was approximately $107 and $147 during 2025 and 2024, respectively.

Prior to 2021, the Company's non-employee directors received an annual retainer of $18 in cash and $18 in value of Stock Performance Units (subject to a $5.00 minimum per unit). If market value at the date of the grants was above $5.00 per share; there was no reduction in the number of units issued. However, if the market value at the date of the grants was below $5.00, units would be reduced to reflect the $5.00 per share minimum. Upon retirement, the Company will issue the number of shares of Common Stock equivalent to the number of Stock Performance Units held by non-employee directors at that time. As of December 27, 2025, there were 92,819 Stock Performance Units were outstanding under this plan. As of December 27, 2025, there was no unrecognized compensation cost related to Stock Performance Units.

Options granted under the Company's Omnibus Equity Incentive Plan were exercisable for periods determined at the time the awards are granted. Effective 2009, the Company established a $5.00 minimum price for calculating the number of options to be granted.


	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Weighted-Average Fair Value of Options Granted During the Year




Outstanding at December 30, 2023	419,000	$	1.00	4.40	$	—
Granted	—	—		—	—

Expired	(38,000)	1.00		—	—
Outstanding at December 28, 2024	381,000	1.00		3.40	—
Granted	—	—		—	—

Forfeited	(66,000)	1.00		—	—

Outstanding at December 27, 2025	315,000	$	1.00	2.40	$	—


Options exercisable at December 27, 2025	—	$	—	—	$	—

At December 27, 2025, there was no intrinsic value of outstanding stock options and no intrinsic value of exercisable stock options. At December 27, 2025, there was no unrecognized compensation expense related to unvested stock options.