AMENDMENT NUMBER ONE
                                     TO THE
                         STANLEY FURNITURE COMPANY, INC.
                             1994 STOCK OPTION PLAN

         The Stanley Furniture Company, Inc. 1994 Stock Option Plan (the
         "Plan"), effective as of December 2, 1994, is hereby amended effective
         July 1, 2000 as follows:

I.       Section 2(b) of the Plan is amended in its entirety to read as follows:
         "Applicable  Withholding  Taxes" means the aggregate  minimum statutory
         amount of federal,  state and local  income and payroll  taxes that the
         Company is required to withhold in  connection  with any  exercise of a
         Nonstatutory Stock Option.

II.      Section 2(n) of the Plan is amended in its entirety to read as follows:
         (n) "Incentive Award" means the award of an Option under the Plan.

III.     Section 2 of the Plan is amended by deleting and reserving Section 2(u)
         which previously related to Tax Offset Rights.

IV.      Section 3 of the Plan is amended in its entirety to read as follows:
         The following types of Incentive Awards may be granted under the Plan:
         Incentive Stock Options or Nonstatutory Stock Options.

V.       Section 4 of the Plan is amended by deleting the fourth sentence of the
         section which  previously read as follows:  "The Committee is expressly
         authorized to make an Incentive Award to a Participant conditioned upon
         the surrender for  cancellation  of an option granted under an existing
         Incentive Award under this Plan or the 1992 Plan."

VI.      Section 8(a) of the Plan is amended in its entirety to read as follows:
         (a) Options may be exercised by the  Participant  giving written notice
         of the  exercise  to the  Company,  stating  the  number of shares  the
         Participant has elected to purchase under the Option. Such notice shall
         be effective only if accompanied by the exercise price in full in cash;
         provided that, if the terms of an Option so permit, the Participant may
         (i) deliver Mature Shares (as defined  herein) of Company Stock (valued
         at their Fair Market Value on the date of exercise) in  satisfaction of
         all or any part of the exercise price, (ii) deliver a properly executed
         exercise notice together with  irrevocable  instructions to a broker to
         deliver  promptly to the Company,  from the sale or loan  proceeds with
         respect  to the sale of  Company  Stock or a loan  secured  by  Company
         Stock,  the amount necessary to pay the exercise price and, if required
         by the Committee,  Applicable  Withholding  Taxes,  or (iii) deliver an
         interest bearing promissory note, payable to the Company, in payment of
         all or part of the exercise price together with such  collateral as may
         be required by the Committee at the time of exercise. The interest rate
         under any such  promissory  note shall be  established by the Committee
         and shall be at least equal to the minimum  interest  rate  required at
         the time to avoid imputed  interest  under the Code.  Mature Shares are
         shares of Company  Stock for which the holder  thereof  has good title,
         free and clear of all  liens and  encumbrances  and which  such  holder
         either  (i) has held for at least six months or (ii) has  purchased  on
         the open market.

VII.     Section 10 of the Plan, captioned "Tax Offset Rights," is deleted and
         reserved.

VIII.    The following sentence is inserted at the end of Section 12 of the
         Plan:
         Notwithstanding anything in the Plan to the contrary, the Board and the
         Committee are expressly  prohibited from reducing the exercise price of
         an Option  after the Date of Grant  (except as  provided in Section 13)
         and from making a new  Incentive  Award in the form of an Option if the
         exercise price of the new Option is less than the exercise price of the
         Option under an existing Incentive Award surrendered for cancellation.

IX.      Section 14 of the Plan is amended by deleting and reserving clause
         (a)(iii) which previously read as follows:
         "(iii) when, whether and to what extent Tax Offset Rights shall be
         granted and the terms thereof"

X.       In all respects not amended, the Plan is hereby ratified and confirmed.

                                  * * * * * * *

                                             STANLEY FURNITURE COMPANY, INC

                                             BY: _______________________________
                                             TITLE: ____________________________

DATED: August 24, 2000