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              AMENDMENT NO. 1 TO MANAGEMENT AGREEMENT


     AMENDMENT NO. 1 (the Amendment) to the MANAGEMENT
AGREEMENT, dated as of September 29, 1988 (the Agreement), made
by and among the Thomas H. Lee Company, a Massachusetts sole
proprietorship owned by Thomas H. Lee with its principal place of
business at One Boston Place, Boston, Massachusetts (the
Consultant), and Stanley Holding Corporation, a Delaware
corporation (Holding), Stanley Acquisition Corporation, a
Delaware corporation (Acquisition) and Interiors Acquisition
Corporation, a Delaware corporation (Interiors) is entered into
as of November 1, 1996 between the Consultant and Stanley
Furniture Company, Inc., a Delaware corporation and successor to
Holding, Acquisition and Interiors (the Company).

     The Fund and certain other stockholders of the Company (the
Selling Stockholders) desire to sell shares of common stock,
$.02 par value, of the Company (the Shares) in a registered
public offering pursuant to an Underwriting Agreement (the
Underwriting Agreement) to be executed among the Company, the
Selling Stockholders and Dillon Read & Co. Inc., Raymond James &
Associates, Inc. and Wheat First Butcher Singer (the Managing
Underwriters) as representatives of the several Underwriters
named therein.  The Consultant and the Company desire to
terminate the Agreement upon sale of the Shares pursuant to the
Underwriting Agreement.

     The parties hereby agree to amend the Agreement as follows:

1.   Section 2 of the Agreement shall be amended by inserting the
following sentence to the end thereof:

          This Agreement shall terminate upon the
          completion of the sale of the Shares pursuant
          to the Underwriting Agreement; provided,
          however, (i) the Company shall reimburse
          Consultant for any expenses incurred pursuant
          to Section 5(c) of this Agreement before
          termination of this Agreement and not
          previously reimbursed and (ii) Consultant
          shall pay to the Company an amount equal to
          the Management Fee for the month of
          termination pro rated for the number of days
          in such month following termination.  

2.   Except as expressly set forth in this Amendment, all other
terms and conditions of the Agreement shall remain in full force
and effect. Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to such terms in the
Agreement.

3.   This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original but all
of which together shall constitute one instrument.


     IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers
as of the day and year first above written.

                               THOMAS H. LEE COMPANY



                               By:  /s/C. Hunter Boll        
                                    C. Hunter Boll
                                    Managing Director


                               STANLEY FURNITURE COMPANY, INC.



                               By:  /s/Albert L. Prillaman   
                                    Albert L. Prillaman
                                    President