EXHIBIT 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into this 20th
day of November, 2002, by and between THE DIXIE GROUP, INC., a Corporation
having its principal place of business at 185 South Industrial Boulevard, S.W.,
Calhoun, Georgia 30703-7010 (hereinafter referred to as the "Employer") and
DAVID POLLEY, an individual residing at West Brow Road, Lookout Mountain,
Tennessee (hereinafter referred to as the "Employee").

W I T N E S S E T H

:

WHEREAS, Employer is engaged in the carpet and rug business and is a supplier to
higher-end residential and commercial customers serviced by Masland Carpets and
Fabrica International, to consumers through major retailers under the Bretlin,
Globaltex and Alliance Mills brands and to the factory-built housing and
recreational vehicle markets through Carriage Carpets.

WHEREAS, the Employee is experienced in floor covering and carpet sales;

WHEREAS, the Employer desires to employ the Employee and the Employee desires to
be employed by the Employer; and

WHEREAS, the Employee and the Employer desire to have their respective
employment rights, obligations and duties agreed upon and specified in writing
herein.

NOW, THEREFORE, in consideration of the mutual promises, covenants herein
contained, and other good and valuable considerations, the receipt, sufficiency
and adequacy of which are hereby expressly acknowledged, the parties hereto,
intending to be legally bound, do hereby mutually agree as follows:

1. Employment. The Employer hereby employees the Employee and the Employee
agrees to be employed in accordance with the terms and conditions set forth
herein. The Employee's employment with Employer shall commence on November 20,
2002, and continue thereafter until terminated pursuant to Section 8 hereof.

2. Term. The term of this Agreement shall commence on November 20, 2002, and end
on November 19, 2005 (the "Term").

3. Duties and Responsibilities of Employee.

(a) Professional Responsibilities. The Employee agrees that during the term of
his employment, he shall conscientiously devote his full and exclusive business
time, energies and best efforts to the rendition of services on behalf of the
Employer and in furtherance of the best interests of the Employer as determined
by its Board of Directors. The Employee agrees that he shall, in the rendition
of such services in all aspects of his employment, comply with the policies,
standards and regulations of the Employer as may be from time to time
established.

(b) Duties. The Employee's primary duty is to serve as the Corporate Vice
President of Marketing. Other specific duties and responsibilities of the
Employee shall be determined by and subject at all times to the supervision and
control of the Chairman of the Board of Directors of the Employer.

4. Compensation.

(a) Base Salary. The Employer agrees to pay the Employee an annual base salary
of Two Hundred Fifteen Thousand Dollars ($215,000.00) per year (the "Base
Salary"). The Base Salary shall be paid on the first (1st) and fifteenth (15th)
day of each month. Base Salary payments shall be subject to withholding for all
appropriate items including but not limited to federal and state income taxes,
FICA (Social Security) and contributory benefits plan costs.

(b) Annual Incentive Bonus. The Employee shall be eligible to participate in The
Dixie Group Management Incentive Plan and Employee will have a bonus potential,
which equals up to 75% of Employee's Base Salary. The successful accomplishment
of the business unit, company, and individual goals will determine the actual
bonus paid to Employee. The Dixie Group will guarantee 50% of the 3-year bonus
opportunity by the following means: The Employer will grant the Employee 20,000
shares of restricted stock in The Dixie Group, Inc. This grant vests at the end
of the term of this Agreement and is subject to the requirements found in the
Stock Rights and Restrictions Agreement for Restricted Stock Award under the
2000 Incentive Stock Plan. If the value of the stock grant plus cash paid as
incentive compensation exceeds one-half of the bonus opportunity, no additional
money will be owed. Likewise, if the value of the stock grant plus cash paid as
incentive compensation is less than one-half of the bonus opportunity, the
difference will be paid in cash. If the company is sold, the above shares will
vest at the time of the sale.

(c) Stock Options. The Employee will be awarded 30,000 incentive stock shares of
The Dixie Group, Inc., which will fully vest at the end of the term of this
Agreement and is subject to the terms of the 2000 Incentive Stock Plan. If the
company is sold, the above shares will vest at the time of the sale.

5. Group Health and Medical Insurance. Participation in group health and medical
insurance coverage shall be provided for the Employee and his dependents by the
Employer. Such insurance shall provide the same coverage at the same cost as
provided other employees of the Employer at similar salary levels.

6. Vacation and Other Benefits. The Employee shall be entitled, commencing
January 2, 2002, to three (3) weeks of vacation per year of employment to be
taken in accordance with the policies of the Employer. The Employee shall be
entitled to all employee benefits as are provided the employees of the Employer
at similar salary levels of that of the Employee.

7. Business Expenses. Employer shall reimburse Employee for the reasonable,
ordinary and necessary business expense related to the business of the Employer
upon presentation by the Employee to the Employer of an itemized account of such
expenses in such form as is required by the Employer.

8. Attorneys Fees. The Employee shall be reimbursed up to Two Thousand Five
Hundred Dollars ($2,500.00) for fees and/or costs associated with obtaining and
consulting with an attorney in reviewing this Agreement.

9. Change in Control.

In the event a party other than the Frierson family acquires more than 50% of
the voting stock thereby resulting in a Change in Control, and Employee's
employment is terminated within one year of this Change in Control, Employee
shall be entitled to his base pay for the balance of the contract or to a
minimum of one (1) year's base salary , whichever is greater.

10. Termination of Employment.

(a) By the Employer. The Employer shall have the right to terminate the
Employee's employment hereunder at any time "for cause." A termination of
employment hereunder shall be deemed to have occurred "for cause" if, within a
reasonable period after such termination, a good-faith finding shall be made by
a majority of the Board that such termination occurred as a result of any of the
following: (i) any act committed by Employee which shall represent a breach in
any material respect of any of the terms of the Employee's employment; (ii)
improper conduct, consisting of any willful act or omission with the intent of
obtaining, to the material detriment of the Employer, any benefit to which
Employee would not otherwise be entitled; (iii) improper conduct consisting of
sexual harassment or act of morale turpitude; (iv) gross negligence, consisting
of wanton and reckless acts or omissions in the performance of Employee's duties
to the material detriment of Employer; (v) bad faith in the performance of
Employee's duties, consisting of willful acts or omissions, to the material
detriment of the Employer, including excessive unexcused absence from work; (vi)
use of illegal drugs or unauthorized use of alcohol in the workplace or being
under the influence of illegal drugs or alcohol at work; or (vii) any conviction
of, or plea of nolo contendere to, a crime (other than a traffic violation) that
constitutes a felony under the laws of the United States or any political
subdivision thereof.

(b) This Agreement shall also terminate upon the death or total disability
(within the meaning of the Employer's long-term disability coverage) of the
Employee.

(c) By the Employee. The Employee may terminate his employment pursuant to
Employee's wish to retire from Dixie, upon sixty (60) days prior written notice
to the Employer. Upon the termination of the employment of Employee by Employee,
this Agreement shall continue in full force and effect, however, if termination
of employment occurs prior to the end of this Agreement, all payments, bonus
guarantees, and benefit accruals hereunder will cease.

11. Confidentiality.

(a) Receipt of Confidential Information. Employee acknowledges that he will be
exposed to certain confidential or proprietary information about Employer,
including the suppliers, vendors, customers, potential customers and competition
of Employer, and information about Employer's operations. Additionally, in the
course and scope of his employment, he will be gaining significant experience
and expertise related to Dixie Products, such experience and expertise being of
potentially great value to competitors of Employer. All advertising, sales,
manufacturers' and other materials, articles or information relating to Employer
or Employer's operations, drawings, records, data bases, computer programs, data
processing reports, customer sales analyses, invoices, price lists or
information, samples, supplier and vendor identities and terms, the identities
and terms of prior contacted prospects, and any other materials or data of any
kind furnished to Employee by Employer or developed by Employee on behalf of
Employer or at Employer's direction or for Employer's use or otherwise in
connection with Employee's performance of services for Employer, are and shall
remain the sole and exclusive confidential property of Employer.

(b) Non-Disclosure. Employee shall not use for his personal benefit, or
disclose, communicate or divulge to, or use for the direct or indirect benefit
of any person, firm, association or entity other than Employer, (i) any material
or information referred to in section 1(a) above, (ii) any material or
information regarding the business methods, business policies, procedures,
techniques, research or development projects or results, trade secrets or other
knowledge or processes of or developed by Employer, (iii) any names or addresses
of customers, suppliers, vendors, prior contacted prospects, or clients or any
data on or relating to past, present or prospective customers or clients, or
(iv) any other confidential information relating to or dealing with the business
operations or activities of Employer, made known to Employee or learned or
acquired by Employee during Employee's employment by Employer. Upon request of
Employer, Employee shall immediately deliver to Employer all documents
containing such material or information, and Employee shall not retain any
copies, summaries, analyses, extracts or other reproductions thereof in whole or
in part. The term "documents" as used in this Agreement means all writings,
drawings, graphs, charts, photographs, video tapes, disks, computer memory and
data in any form recorded or stored from which information can be obtained, and
all reproductions thereof.

12. Restrictions on Employment, Non-Inducement, Non-Competition, Trade Secrets,
Etc.

(a) Covenants. Due to the extremely sensitive nature of the confidential
information and knowledge described in Section 11(a) above, and as a material
inducement to Employer entering into this Agreement with Employee, Employee
covenants and agrees that during the two (2) year period following his cessation
of employment with Employer (regardless of the reason thereof):

Employee shall neither accept employment as an employee, agent, advisor, or
independent contractor, nor shall he directly or indirectly render any services
to any competitor of Employer in the floor covering business, such competitors
to specifically include, but not be limited to: Shaw Industries, Inc., Mohawk
Industries, Inc., Beaulieu of America Group, Interface, Inc., Collins & Aikman
Corp., and their affiliated companies. The restrictions in paragraph (i) shall
be removed if the cessation of employment occurs after the end of the Term of
this Agreement.

Employee shall not directly or indirectly induce or attempt to influence any
employee or representative of Employer to terminate his employment or
relationship with Employer.

13. Remedies. Employee acknowledges that the restrictions contained in Sections
11 and 12 above, in view of the nature of the business in which Employer is
engaged, are reasonable and necessary in order to protect the legitimate
interests of Employer, and that any violations thereof would result in immediate
and irreparable injuries to Employer. Employee acknowledges that the covenants
herein and the restrictions applicable to him are special, unique and
extraordinary, and are of peculiar value, the loss or breach of which cannot be
fully compensated by damages in an action at law. Employee therefore
acknowledges that, in the event of his violation of any of these restrictions or
covenants, Employer shall be entitled to obtain preliminary and permanent
injunctive relief, as well as damages, and an equitable accounting of all
earnings, profits and other benefits arising from such violation, which rights
shall be cumulative and in addition to any other rights or remedies to which
Employer may be entitled.

14. Entire Agreement. This Agreement contains the entire agreement of the
parties, and this Agreement supersedes any prior agreements between the parties
relating to the subject matter hereof, excepting the terms and conditions set
out in the Stock Rights and Restrictions Agreement for Restricted Stock Award
Under the 2000 Incentive Stock Plan, which is incorporated herein. This
Agreement may not be modified or amended except by written Agreement executed by
both parties and may not be amended orally.

15. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors, heirs and legal
representatives.

16. Assignment. Neither this Agreement nor any of the rights hereunder shall be
assignable by the Employee.

17. Law Governing. This Agreement shall be governed by the laws of the State of
Georgia and shall be construed in accordance therewith.

18. Severability. If any provision of this Agreement or the application of such
provision to any person or circumstance shall be held invalid, the remaining
provisions of this Agreement, and the application of such provisions to persons
or circumstances other than those to which it is held invalid, shall not be
affected.

19. Notice. Any notice required by this Agreement or desired to be given shall
be in writing and shall be deemed given, either by personal delivery with
written receipt of the party to whom it is addressed, or upon its deposit in the
United States Mail, Registered Mail, Return Receipt Requested, postage prepaid
and addressed with the last known address of the party to whom notice is sought
to be given.

20. Waiver. The failure of either party hereto to exercise any right or
privilege hereunder or to insist upon strict compliance with a new term,
condition or covenant herein contained, shall not constitute a waiver of such
parties right to exercise the same or to demand strict compliance with any such
term, condition or covenant herein contained.

IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed by its
duly constituted officers and the Employer has hereunto set his hand and affixed
his seal the day and year first above written.

     

Accepted and Agreed:
The Dixie Group, Inc.

   /S/ DAVID POLLEY              

By: David Polley    

   /S/ DANIEL K. FRIERSON           

By: Daniel K. Frierson

Dated: November 20, 2002

   

Dated: November 20, 2002