Exhibit 10.1

AGREEMENT

This Agreement (“Agreement”) is made and entered into as of January 7, 2016, by
and among Stanley Furniture Company, Inc., a Delaware corporation (the
“Company”), and the entities and natural persons listed on Exhibit A hereto
(collectively, the “Hale-Talanta Group,” and individually a “member” of the
Hale-Talanta Group).

WHEREAS, the Company and members of the Hale-Talanta Group have engaged in
various discussions and communications concerning the Company’s business,
financial performance and strategic plans;

WHEREAS, the Hale-Talanta Group beneficially owns shares of Common Stock of the
Company (the “Common Stock”) totaling, in the aggregate, 1,330,204 shares, or
approximately 8.9% of the Common Stock issued and outstanding on the date
hereof;

WHEREAS, members of the Hale-Talanta Group have (i) submitted a nomination
letter to the Company dated November 24, 2015 (the “Nomination Letter”)
nominating director candidates to be elected to the Company’s board of directors
(the “Board”) at the 2016 Annual Meeting of Stockholders of the Company (the
“2016 Annual Meeting”);

WHEREAS, the Company and the members of the Hale-Talanta Group entered into an
Agreement, dated February 12, 2015 (the “Prior Agreement”), relating to the
Company’s 2015 Annual Meeting of Stockholders (the “2015 Annual Meeting”),
pursuant to which, among other things, Mr. Jeffrey S. Gilliam (“Gilliam”) was
appointed to the Company’s Board for a term expiring at the 2017 Annual Meeting
of Stockholders; and  

WHEREAS, the Company and the Hale-Talanta Group have determined to come to an
agreement with respect to the election of members of the Board at the 2016
Annual Meeting and certain other matters, as provided in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:

1.

Board Matters; Board Appointment; 2016 Annual Meeting.

(a) Effective on the date hereof, in accordance with the Restated Certificate of
Incorporation of the Company amended as of May 6, 2005 (the “Charter”) and the
Amended By-Laws of the Company dated December 11, 2015 (the “By-Laws”), the
Board will increase the size of the Board from six to seven members.

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(b) On the date hereof, in accordance with the Charter and By-Laws, the Board
shall appoint Justyn R. Putnam (“Putnam”) as a director to fill the vacancy
created by the newly created directorship resulting from the expansion of the
Board contemplated by clause (a), for a term expiring at the 2016 Annual
Meeting.  Putnam or his replacement (see Section 1(f) below) shall have all
benefits, such as compensation, expense reimbursements and indemnity provisions
and agreements as are provided to the other members of the Board.

(c)  The Board will nominate Putnam for election to the Board by the
stockholders of the Company at the 2016 Annual Meeting for a term expiring at
the 2019 Annual Meeting.  Mr. D. Paul Dascoli, who in August 2015 informed the
Board that in connection with accepting a new employment opportunity and at the
request of his new employer he would not stand for re-election as a director at
the 2016 Annual Meeting when his current term expires, will not be re-nominated
by the Board for election to the Board.  The Company will exercise reasonable
and customary efforts in good faith to cause Putnam to be elected to the Board
by the stockholders of the Company at the 2016 Annual Meeting.  The Company will
call and hold the 2016 Annual Meeting in a timeframe and manner consistent with
the 2015 Annual Meeting.  The Board will reduce the size of the Board from seven
to six members no later than immediately following the 2016 Annual Meeting.

(d) Upon execution of this Agreement, the Hale-Talanta Group hereby withdraws
the Nomination Letter and agrees not to (i) nominate any person for election to
the Board at the 2016 Annual Meeting, (ii) submit any proposal for consideration
at, or bring any other business before, the 2016 Annual Meeting, (iii) initiate,
encourage or participate in any “withhold” or similar campaign with respect to
the 2016 Annual Meeting, or (iv)  permit any of its “Affiliates” or “Associates”
(as such terms are defined in Regulation 14A under the Securities and Exchange
Act of 1934, as amended, or the rules or regulations thereunder (the “Exchange
Act”)) to perform any of the items described in this Section 1(d).  The
Hale-Talanta Group shall not publicly or privately encourage or support any
other shareholder to take any of the actions described in this Section 1(d)
during the Standstill Period.

(e) At the 2016 Annual Meeting, the members of the Hale-Talanta Group agree to
appear in person or by proxy and vote all shares of Common Stock beneficially
owned by them in favor of the election of each of the Company’s nominees for
election to the Board.

(f) If Putnam (i) is unable to serve on the Board or (ii) resigns from the Board
other than pursuant to Section 1(g) below, at any time prior to the 2019 Annual
Meeting, Hale-Talanta Group (subject to owning the aggregate number of shares of
Common Stock specified in Section 1(g)) shall be permitted to recommend a
substitute person for expeditious consideration and appointment by the Board as
a replacement for Putnam (the “Putnam Replacement”), including as a member of
the Special Committee contemplated by Section 1(g) below, who will qualify as
“independent” pursuant to the Marketplace Rules of The NASDAQ Stock Market and
applicable rules and regulations

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of the Securities and Exchange Commission (the “SEC”), to fill the resulting
vacancy, subject to the approval of the Corporate Governance and Nominating
Committee after consideration in good faith and exercising its fiduciary duties,
which approval shall not be unreasonably withheld or delayed.  In the event the
Corporate Governance and Nominating Committee does not approve the initial
Putnam Replacement recommended by the Hale-Talanta Group, the Hale-Talanta Group
will have the right to recommend additional substitute person(s), subject to the
terms of Section 1(g), for consideration by the Corporate Governance and
Nominating Committee and ultimate appointment by the Board as the Putnam
Replacement.  

(g) Notwithstanding the foregoing, if at any time after the date hereof, the
Hale-Talanta Group, together with all Hale-Talanta Affiliates (as defined
below), ceases collectively to beneficially own, an aggregate of at least
900,000 shares of Common Stock, the Hale-Talanta Group shall use its reasonable
best efforts to cause Putnam or any Putnam Replacement to promptly tender his
resignation from the Board.  In furtherance of this Section 1(g), Putnam or any
Putnam Replacement shall, prior to his appointment to the Board, execute an
irrevocable resignation as director in the form attached hereto as Exhibit B and
deliver it to the Company.  The Hale-Talanta Group shall keep the company
regularly apprised of the number of shares of Common Stock it beneficially owns
if such position differs from the ownership positions publicly reported on the
Hale-Talanta Group’s Schedule 13D and amendments thereto for more than 10 days.

(h)  Effective on the date hereof, the Board will form a Special Committee (the
“Special Committee”) consisting of John D. Lapey, Michael P. Haley, Justyn
Putnam and Jeffrey S. Gilliam, with Mr. Putnam as chairman, which committee
shall be authorized and directed to consider potential strategic and capital
allocation opportunities that may be available to the Company, including
potential acquisition transactions to enhance product offerings and expand
distribution channels, leveraging on the strength of the Company’s balance sheet
including its net operating loss carry-forwards.  The Special Committee shall
act by a majority of its members, provided that the Special Committee may make
recommendations to the full Board to pursue a specific transaction or
opportunity by action of only two members of the Special Committee.

(i)  In the event that the Company does not achieve Net Sales growth for the
fiscal year ended December 31, 2016 (“FY2016”) of at least 5% from the Net Sales
reported by the Company for the fiscal year ended December 31, 2015 (“FY2015”),
as reported in its Annual Report on Form 10-K for FY2016, then the Board shall
promptly after the filing of such 10-K with the SEC, but not later than March
31, 2017 expand the size of the Board by one member with a term expiring at the
2019 Annual Meeting of Stockholders, and the Hale-Talanta Group shall be
permitted to recommend a person for expeditious consideration and appointment by
the Board as the additional director (the “Additional Director”), who will
qualify as “independent” pursuant to the Marketplace Rules of The NASDAQ Stock
Market and applicable rules and regulations of the SEC, to fill the resulting
vacancy, subject to the approval of the Corporate Governance and Nominating
Committee after consideration in good faith and exercising its fiduciary duties,
which

 

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approval shall not be unreasonably withheld or delayed.  In the event the
Corporate Governance and Nominating Committee does not approve the initial
Additional Director recommended by the Hale-Talanta Group, the Hale-Talanta
Group will have the right to recommend additional substitute person(s), subject
to the terms of Section 1(g), for consideration by the Corporate Governance and
Nominating Committee and ultimate appointment by the Board as the Additional
Director.

2.

Standstill Provisions.

(a) Each member of the Hale-Talanta Group agrees that, from the date of this
Agreement until December 31, 2016 (the “Standstill Period”), he or it will not,
and he or it will cause each of such person’s respective Affiliates or
Associates (collectively and individually, the “Hale-Talanta Affiliates”) not to
(except as expressly set forth in this Agreement), directly or indirectly, in
any manner, alone or in concert with others:

(i) engage in any solicitation of proxies or consents or become a “participant”
in a “solicitation” as such terms are defined in Regulation 14A under the
Exchange Act of proxies or consents (including, without limitation, any
solicitation of consents that seeks to call a special meeting of shareholders),
in each case, with respect to securities of the Company;

(ii) seek or encourage any person to submit nominations in furtherance of a
“contested solicitation” for the election or removal of directors with respect
to the Company or seek, encourage or take any other action with respect to the
election or removal of any directors;

(iii) make any proposal for consideration by shareholders at any annual or
special meeting of shareholders of the Company;

(iv) effect or seek to effect, offer or propose to effect, cause or participate
in, or in any way assist or facilitate any other person to effect or seek, offer
or propose to effect or participate in, any tender or exchange offer, merger,
consolidation, acquisition, scheme, arrangement, business combination,
recapitalization, reorganization, sale or acquisition of material assets,
liquidation, dissolution or other extraordinary transaction involving the
Company or any of its subsidiaries or any of their respective securities (each,
an “Extraordinary Transaction”), or make any public statement with respect to an
Extraordinary Transaction; provided, however, that this clause shall not
preclude (1) the tender by the Hale-Talanta Group or a Hale-Talanta Affiliate of
any securities of the Company into any tender or exchange offer or vote with
respect to any Extraordinary Transaction approved by the Board or (2) any member
of the Hale-Talanta Group, who in compliance with the provisions of this
Agreement receives or has received a communication from a third party indicating
an interest in an Extraordinary Transaction, from relaying such indication of
interest to the Special Committee;

 

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(v) seek, alone or in concert with others, representation on the Board, except
as specifically contemplated in Section 1;

(vi) seek to advise, encourage, support or influence any person with respect to
the voting or disposition of any securities of the Company at any annual or
special meeting of shareholders, except in accordance with Section 1; or

(vii) make any request or submit any proposal to amend the terms of this
Agreement other than through non-public communications with the Company that
would not be reasonably determined to trigger public disclosure obligations for
any Party;

(b) provided, that, notwithstanding the foregoing, it is understood and agreed
that this Agreement shall not be deemed to prohibit (x) Putnam or Gilliam (or
their respective successors) from engaging in any lawful act in their capacities
as directors of the Company or members of the Special Committee that is either
expressly approved by the Board or reasonably believed by either of them to be
consistent with, or required in order to comply with, their fiduciary duties as
directors of the Company and/or members of the Special Committee or any other
committee of the Board, (y) the members of the Hale-Talanta Group from proposing
an Extraordinary Transaction involving members of the Hale-Talanta Group to the
Special Committee or making public statements, engaging in discussions with
other shareholders, soliciting proxies or voting any shares or proxies with
respect to any Extraordinary Transaction that (A) has been approved by the Board
and has been publicly announced by the Company or (B) has been recommended to
the Board by the Special Committee and the Board has decided not to consider; or
(z) the Hale-Talanta Group from submitting written notice to the Company of
intent to nominate one or more persons for election as a director at the
Company’s 2017 Annual Meeting of Stockholders in accordance with the provisions
of the By-Laws.

(c)  Each member of the Hale-Talanta Group agrees that, from the date of this
Agreement until the expiration of the Standstill Period, he or it will, and he
or it will cause each of such person’s respective Affiliates or Associates to
refer all communications from third parties regarding potential strategic
transactions to the Special Committee.

(d)  The Standstill Period shall immediately expire:

(i)  (1) upon the filing with the SEC of the Company’s Quarterly Report on Form
10-Q for the quarterly period ended July 2, 2016 in the event that the Company
does not achieve Net Sales growth for the first six months of FY2016 of at least
3%, as reported in such 10-Q, from the Net Sales reported by the Company for the
first six months of 2015 or (2) the Company shall have failed to file either a
Current Report on Form 8-K reporting Net Sales for the quarterly period ended
July 2 , 2016 or its Quarterly Report on Form 10-Q for the quarterly period
ended July 2 , 2016 prior to the applicable deadline under SEC rules for filing
such 10-Q; or

 

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(ii)  (1) upon the filing with the SEC of the Company’s Quarterly Report on Form
10-Q for the quarterly period ended October 1, 2016 in the event that the
Company does not achieve Net Sales growth for the first nine months of 2016 of
at least 4%, as reported in such 10-Q, from the Net Sales reported by the
Company for the first nine months of 2015 or (2) the Company shall have failed
to file eithera Current Report on Form 8-K reporting Net Sales for the quarterly
period ended October 1 , 2016 or its Quarterly Report on Form 10-Q for the
quarterly period ended October 1, 2016 prior to the applicable deadline under
SEC rules for filing such 10-Q.

3.

Public Announcement .  Promptly after the execution of this Agreement, the
Company will issue the press release in the form attached hereto as Exhibit C.
 Without the prior written consent of the Company and the Hale-Talanta Group,
none of the Company, the members of the Hale-Talanta Group or the other
directors of the Company shall (a) issue a press release in connection with this
Agreement or the actions contemplated hereby or (b) otherwise make any public
statement, disclosure or announcement with respect to this Agreement or the
actions contemplated hereby, except as required by law.

4.

Representations of the Company.  The Company represents and warrants as follows
as of the date hereof:

(a) The Company has the corporate power and authority to execute, deliver and
carry out the terms and provisions of this Agreement and to consummate the
transactions contemplated hereby.

(b) This Agreement has been duly and validly authorized, executed and delivered
by the Company, constitutes a valid and binding obligation and agreement of the
Company and is enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
affecting the rights of creditors and subject to general equity principles.

(c) The execution, delivery and performance of this Agreement by the Company
does not and will not (i) violate or conflict with any law, rule, regulation,
order, judgment or decree, in each case that is applicable to the Company, or
(ii) result in any breach or violation of, or constitute a default (or an event
which with notice or lapse of time or both could become a default) under or
pursuant to, or result in the loss of a material benefit under, or give any
right of termination, amendment, acceleration or cancellation of (A) any
organizational document of the Company or (B) any agreement, contract,
commitment, understanding or arrangement, in each case to which the Company is a
party or by which it is bound and which is material to the Company’s business or
operations.

 

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5.

Representations of the Hale-Talanta Group.  Each member of the Hale-Talanta
Group severally, and not jointly, represents and warrants with respect to
himself or itself as follows as of the date hereof:

(a) Such member has the power and authority to execute, deliver and carry out
the terms and provisions of this Agreement and to consummate the transactions
contemplated hereby. Such member, if an entity, has the corporate, limited
partnership or limited liability company power and authority, as applicable, to
execute, deliver and carry out the terms and provisions of this Agreement and to
consummate the transactions contemplated hereby.

(b) This Agreement has been duly and validly authorized, executed, and delivered
by such member, constitutes a valid and binding obligation and agreement of such
member and is enforceable against such member in accordance with its terms,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
affecting the rights of creditors and subject to general equity principles.

(c) The execution, delivery and performance of this Agreement by such member
does not and will not (i) violate or conflict with any law, rule, regulation,
order, judgment or decree applicable to such member, or (ii) result in any
breach or violation of, or constitute a default (or an event which with notice
or lapse of time or both could become a default) under or pursuant to, or result
in the loss of a material benefit under, or give any right of termination,
amendment, acceleration or cancellation of, (A) any organizational document, if
an entity, or (B) any agreement, contract, commitment, understanding or
arrangement, in each case to which such member is a party or by which such
member is bound.

(d) As of the date hereof, the members of the Hale-Talanta Group, together with
the Hale-Talanta Affiliates, beneficially owns, directly or indirectly, an
aggregate of 1,330,204 shares of Common Stock.

6.

Non-Disparagement.  Each of the Company and the members of the Hale Talanta
Group covenants and agrees that, during the Standstill Period, neither it nor
any of its respective subsidiaries, affiliates, successors, assigns, officers,
key employees or directors shall in any way disparage (or cause to be
disparaged), attempt to discredit, make derogatory statements with respect to,
or otherwise call into disrepute, the other parties to this Agreement or such
other parties’ subsidiaries, affiliates, successors, assigns, officers
(including any current, future or former officer of a party or a parties’
subsidiaries), directors (including any current, future or former director of a
party or a parties’ subsidiaries), employees, stockholders, agents, attorneys or
representatives, or any of their practices, procedures, business operations,
products or services in any manner.

7.

Miscellaneous.  The parties hereto recognize and agree that if for any reason
any of the provisions of this Agreement are not performed in accordance with

 

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their specific terms or are otherwise breached, immediate and irreparable harm
or injury would be caused for which money damages would not be an adequate
remedy.  Accordingly, each party agrees that in addition to other remedies the
other party shall be entitled to at law or equity, the other party shall be
entitled to seek an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
exclusively in the Court of Chancery or other federal or state courts of the
State of Delaware. Furthermore, each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of the Court of Chancery or other
federal or state courts of the State of Delaware in the event any dispute arises
out of this Agreement or the transactions contemplated by this Agreement, (b)
agrees that it shall not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court, (c) agrees that it shall
not bring any action relating to this Agreement or the transactions contemplated
by this Agreement in any court other than the Court of Chancery or other federal
or state courts of the State of Delaware, and each of the parties irrevocably
waives the right to trial by jury and (d) irrevocably consents to service of
process by a reputable overnight mail delivery service, signature requested, to
the address of such party’s principal place of business or as otherwise provided
by applicable law.  THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING
VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE
WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.

8.

No Waiver.  Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.

9.

Entire Agreement.  This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and may be amended only by an
agreement in writing executed by the parties hereto.  The Prior Agreement shall
continue in full force and effect after the date of this Agreement in accordance
with its terms.

10.

Notices.  All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and shall be deemed validly given, made or served, if (a) given by
email, when such email is sent to the email address set forth below and the
appropriate confirmation is received (if sent by 5:00 p.m. Eastern Time on a
business day, or otherwise on the next business day) or (b) if given by any
other means, when actually received during normal business hours at the address
specified in this subsection:

 

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if to the Company:

Stanley Furniture Company, Inc.

200 North Hamilton Street, No. 200

High Point, North Carolina 27260

Attention: Glenn Prillaman

Email: gprillaman@stanleyfurniture.com

With a copy to (which shall not constitute notice):

McGuireWoods LLP

901 East Cary Street

Richmond, VA 23220

Attention: David W. Robertson

Email: drobertson@mcguirewoods.com

if to the Hale Talanta Group:

Hale Partnership Capital Management, LLC

6100 Fairview Road, Suite 1220

Charlotte, NC  28210

Attention:  Steve Hale

Email: steve@halepartnership.com

With a copy to (which shall not constitute notice):

Kilpatrick Townsend & Stockton LLP

1001 West Fourth Street

Winston-Salem, NC 27101-2400

Attention:   Paul Foley, Partner

Email:  pfoley@kilpatricktownsend.com

AND

Talanta Investment Group, LLC

401 N. Tryon Street, 10th Floor

Charlotte, NC  28202

Attention:  Justyn R. Putnam

jputnam@talantainvestments.com

With a copy to (which shall not constitute notice):

Thompson Hine LLP

3900 Key Center

127 Public Square

Cleveland, Ohio 44114

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Attention:  Derek D. Bork

Email:  derek.bork@thompsonhine.com

11.

Severability.  If at any time subsequent to the date hereof, any provision of
this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon the legality or enforceability of any other provision of this Agreement, so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any Party.

12.

Counterparts.  This Agreement may be executed in two or more counterparts which
together shall constitute a single agreement.

13.

Successors and Assigns.  This Agreement shall not be assignable by any of the
parties to this Agreement.  This Agreement, however, shall be binding on
successors of the parties hereto.

14.

No Third Party Beneficiaries.  This Agreement is solely for the benefit of the
parties hereto and is not enforceable by any other persons.

15.

Interpretation and Construction.  Each of the parties hereto acknowledges that
it has been represented by counsel of its choice throughout all negotiations
that have preceded the execution of this Agreement, and that it has executed the
same with the advice of said independent counsel.  Each party and its counsel
cooperated and participated in the drafting and preparation of this Agreement
and this Agreement, as executed, shall be deemed the work product of all of the
parties and may not be construed against any party by reason of its drafting or
preparation.  Accordingly, any rule of law or any legal decision that would
require interpretation of any ambiguities in this Agreement against any party
that drafted or prepared it is of no application and is hereby expressly waived
by each of the parties hereto, and any controversy over interpretations of this
Agreement shall be decided without regards to events of drafting or preparation.
 The section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.  The term “including” shall be deemed to mean “including without
limitation” in all instances.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized signatories of the parties as of the date first written above.

STANLEY FURNITURE COMPANY, INC.

By:  s/ Glenn Prillaman                                

Name: Glenn Prillaman

Title:  President and Chief Executive Officer

HALE PARTNERSHIP CAPITAL

MANAGEMENT, LLC

By:  s/Steven A. Hale II                              

Name: Steven A. Hale II

Title:  Manager

HALE PARTNERSHIP CAPITAL

ADVISORS, LLC

By:  s/Steven A. Hale II                              

Name: Steven A. Hale II

Title:  Manager

HALE PARTNERSHIP FUND, LP

By: Hale Partnership Capital Advisors, LLC, General Partner

By:   s/Steven A. Hale II                              

Name: Steven A. Hale II

Title:  Manager

MGEN II- HALE FUND, LP

By: Hale Partnership Capital Advisors, LLC, General Partner

By:  s/Steven A. Hale II                              

Name: Steven A. Hale II

Title:  Manager

STEVEN A. HALE II

s/Steven A. Hale II                              

Name: Steven A. Hale II

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TALANTA FUND, L.P.

By: Talanta Investment Group LLC, General Partner

By:  s/Justyn Putnam                                                      

Name: Justyn Putnam

Title:  Managing Member

JUSTYN R. PUTNAM

s/Justyn R. Putnam                              

Name: Justyn R. Putnam

JEFFREY S. GILLIAM

By:  s/Jeffrey S. Gilliam                    

Name: Jeffrey S. Gilliam

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EXHIBIT A

Hale Partnership Capital Management, LLC

Hale Partnership Capital Advisors, LLC

Hale Partnership Fund, LP

MGEN II – Hale Fund, LP

Steven A. Hale, II

TALANTA Investment Group, LLC

TALANTA Fund, L.P.

Justyn R. Putnam

Jeffrey S. Gilliam

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EXHIBIT B

IRREVOCABLE RESIGNATION

[Date]

Attention: Board of Directors

Stanley Furniture Company, Inc.

200 North Hamilton Street, No. 200

High Point, North Carolina 27260

Re:           Resignation

Gentlemen:

This irrevocable resignation is delivered pursuant to Section 1(g) of the
Agreement, dated as of January __, 2016 (the “Agreement”), by and among Stanley
Furniture Company, Inc. and the Hale-Talanta Group (as defined therein).
 Capitalized terms used herein but not defined shall have the meaning set forth
in the Agreement.  Effective only upon, and subject to, such time as the
Hale-Talanta Group, together with all of the Hale-Talanta Affiliates, ceases
collectively to “beneficially own” (as defined in Rule 13d-3 under the Exchange
Act) an aggregate of at least 900,000 shares of Common Stock  then outstanding,
I hereby resign from my position as a director of the Company and from any and
all committees of the Board on which I serve.

This resignation may not be withdrawn by me at any time during which it is
effective.

Sincerely,

[Name]

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EXHIBIT C

FORM OF PRESS RELEASE

[STANLEY FURNITURE COMPANY, INC. LOGO]

NEWS RELEASE

FOR IMMEDIATE RELEASE:

Stanley Furniture Company, Inc.

January __, 2016

                      Investor Contact: Anita W. Wimmer

                                                                          
 (336) 884-7698

STANLEY FURNITURE APPOINTS JUSTYN R. PUTNAM

TO BOARD OF DIRECTORS

High Point, North Carolina, January __, 2016/Businesswire/  – Stanley Furniture
Company, Inc. (Nasdaq-NGS:STLY) (the “company”) announced today that  it has
reached an agreement with Hale Partnership Fund, LP and Talanta Fund, L.P.
(collectively and with their affiliates, the “Hale-Talanta Group”) a shareholder
group that collectively owns approximately 8.9% of the company’s outstanding
common stock and who had nominated two candidates for election to the company’s
Board of Directors at the 2016 Annual Stockholders meeting.  Under the
agreement, the company appointed Justyn R. Putnam to the Board effective
immediately and the Hale-Talanta Group withdrew its nominations.  Mr. Putnam, as
well as Glenn Prillaman, the company’s President and Chief Executive Officer,
have been nominated by the Board for election by the shareholders at the 2016
Annual Meeting for a term that will expire at the 2019 Annual Meeting of
Stockholders.

“We are pleased to have reached an agreement with the Hale-Talanta Group and
believe this is in the best interests of the company and its shareholders,” said
Glenn Prillaman, President and Chief Executive Officer. “We welcome Mr. Putnam
to the Board and expect to benefit from his financial expertise and knowledge of
the company as we work together to continue the company’s progress,” concluded
Prillaman.

Mr. Putnam is the Managing Member of the Talanta Investment Group, LLC, an asset
management firm focusing investment on smaller publicly traded companies and
utilizing intense fundamental research and a long-term investment horizon, a
position he has held since 2009.  

About Stanley Furniture Company, Inc.

Established in 1924, Stanley Furniture Company, Inc. is a leading design,
marketing and sourcing resource in the upscale segment of the wood residential
market. The Company offers a diversified product line supported by an overseas
sourcing model.  The Company distributes and markets its Stanley Furniture brand
through a network of carefully chosen retailers and interior designers
worldwide.  The Company’s common stock is traded on the NASDAQ stock market
under the symbol STLY.

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Forward-Looking Statements Certain statements made in this news release are not
based on historical facts, but are forward-looking statements. These statements
can be identified by the use of forward-looking terminology such as “believes,”
“estimates,” “expects,” “may,” “will,” “should,” or “anticipates,” or the
negative thereof or other variations thereon or comparable terminology, or by
discussions of strategy.  These statements reflect our reasonable judgment with
respect to future events and are subject to risks and uncertainties that could
cause actual results to differ materially from those in the forward-looking
statements.  Such risks and uncertainties include disruptions in foreign
sourcing including those arising from supply or distribution disruptions or
those arising from changes in political, economic and social conditions, as well
as laws and regulations, in countries from which we source products,
international trade policies of the United States and countries from which we
source products, the inability to raise prices in response to inflation and
increasing costs, lower sales due to worsening of current economic conditions,
the cyclical nature of the furniture industry,  business failures or loss of
large customers, failure to anticipate or respond to changes in consumer tastes,
fashions and perceived value in a timely manner, competition in the furniture
industry, environmental, health, and safety  compliance costs,  failure or
interruption of our information technology infrastructure. Any forward looking
statement speaks only as of the date of this news release and we undertake no
obligation to update or revise any forward looking statements, whether as a
result of new developments or otherwise.

 

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