8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 10, 2010

Stanley Furniture Company, Inc.
(Exact name of registrant as specified in its charter)

Delaware	0-14938	54-1272589
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1641 Fairystone Park Highway Stanleytown, Virginia	24168
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (276) 627-2000

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Amendment to Glenn Prillaman’s Change in Control Protection Agreement

On September 10, 2010, Stanley Furniture Company, Inc. (the “Company”) and its President and Chief Executive Officer, Glenn Prillaman, agreed to amend the Change in Control Protection Agreement by and between the Company and Mr. Prillaman dated December 11, 2009 (the “Change of Control Agreement”), in connection with the Company’s previously announced subscription rights offering (the “2010 Rights Offering”). The amendment expressly provides that the acquisition of Beneficial Ownership of additional Stock or Voting Power by any Group through the 2010 Rights Offering will not result in a Change of Control for the purposes of the Change of Control Agreement. If any Group obtains 35 percent or more of the Stock or Voting Power pursuant to the 2010 Rights Offering, any acquisition of additional Stock or Voting Power by that Group that results in an increase in the percentage of the total Stock or Voting Power held by that Group will result in a Change of Control for the purposes of the Change of Control Agreement. Defined terms used in the description of this amendment have the meanings set forth in the Change of Control Agreement.

The foregoing description of this amendment is qualified in its entirety by reference to the Amendment to the Change in Control Protection Agreement, a copy of which is attached as Exhibit 10.1 and incorporated herein by reference.

Amendment to Douglas I. Payne’s Employment Agreement

On September 10, 2010, the Company and its Executive Vice President – Finance and Administration and Secretary, Douglas I. Payne, agreed to amend the Employment Agreement by and between the Company and Mr. Payne dated December 31, 2008 (the “Employment Agreement”), in connection with the Company’s 2010 Rights Offering. The amendment expressly provides that the acquisition of beneficial ownership of any additional Company stock by a shareholder through the 2010 Rights Offering will not result in a Change of Control for the purposes of the Employment Agreement.

The foregoing description of this amendment is qualified in its entirety by reference to the Amendment to Employment Agreement, a copy of which is attached as Exhibit 10.2 and is incorporated herein by reference.

Item 8.01 Other Events

On September 10, 2010, the Company announced that it had filed a registration statement on Form S-3 with the Securities and Exchange Commission (the “SEC”) for a rights offering in which stockholders will receive transferable rights to purchase additional shares of the Company’s common stock. A copy of the news release is attached as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

10.1	Amendment to the Change in Control Protection Agreement, dated September 10, 2010, by and between Stanley Furniture Company, Inc. and Glenn Prillaman.
10.2	Amendment to Employment Agreement, dated September 10, 2010, by and between Stanley Furniture Company, Inc. and Douglas I. Payne.
99.1	Press Release of the Company dated September 10, 2010, announcing the Company’s plan for a rights offering to stockholders.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

STANLEY FURNITURE COMPANY, INC.

Date: September 16, 2010

By: /s/Douglas I. Payne               
Douglas I. Payne
Executive Vice President – Finance and
Administration

EX-10.1

Exhibit 10.1

AMENDMENT TO CHANGE IN CONTROL PROTECTION AGREEMENT

THIS AMENDMENT, to the Change in Control Protection Agreement (the “Agreement”) dated as of December 11, 2009 by and between Glenn Prillaman (the “Executive”) and Stanley Furniture Company, Inc. (the “Company” and, together with the Executive, the “Parties”), is effective this 10^th day of September, 2010.

WHEREAS, the Parties have entered into the Agreement, have the power to amend the Agreement and now wish to do so;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby amend the Agreement as follows:

1.      A new subsection (v) is hereby added to the end of the definition of “Change in Control” in Section 1 of the Agreement as follows:

(v) Notwithstanding anything in subsection (i) above to the contrary, (a) no acquisition of Beneficial Ownership of any additional Stock or Voting Power by any Group through the rights offering of the Company contemplated by the Company’s Registration Statement (No. 333-169310) on Form S-3, as amended from time to time (the “2010 Rights Offering”), shall be deemed to result in a Change in Control for purposes of this Agreement; and (b) if an acquisition pursuant to the 2010 Rights Offering results in any Group having Beneficial Ownership of Stock or Voting Power possessing 35 percent or more of the Stock or Voting Power, any acquisition of Beneficial Ownership of any additional Stock or Voting Power by that Group (that occurs while the Group has Beneficial Ownership of Stock or Voting Power possessing 35 percent or more of the total Stock or Voting Power) that results in an increase in the percentage of the total Stock or Voting Power held by that Group shall result in a Change in Control for purposes of this Agreement.

2.      In all other respects, the Agreement is hereby ratified and confirmed.

IN WITNESS WHEREOF, the Parties have affixed their signatures hereto as of the date first written above.

EXECUTIVE:	COMPANY:
	STANLEY FURNITURE COMPANY, INC.
/s/ Glenn Prillaman	By:      /s/ Micah S. Goldstein
Glenn Prillaman	Name: Micah S. Goldstein
	Its:      Chief Operating Officer

EX-10.2

Exhibit 10.2

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT, to the Employment Agreement (the “Agreement”) restated as of December 31, 2008 by and between Douglas I. Payne (the “Executive”) and Stanley Furniture Company, Inc. (the “Company” and, together with thes Executive, the “Parties”), is effective this 10^th day of September, 2010.

WHEREAS, the Parties have entered into the Agreement, have the power to amend the Agreement and now wish to do so;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby amend the Agreement as follows:

1.      Section 7(d) of the Agreement is hereby amended by adding a new sentence to the end thereof as follows:

For avoidance of doubt, no acquisition of beneficial ownership of any additional Company stock by any shareholder of the Company (or more than one shareholder acting as a group) through the rights offering of the Company contemplated by the Company’s Registration Statement (No. 333-169310) on Form S-3, as amended from time to time (the “2010 Rights Offering”), shall be deemed to result in a Change in Control for purposes of Sections 7(d)(i) or 7(d)(ii)(1) of this Agreement.

2.      In all other respects, the Agreement is hereby ratified and confirmed.

IN WITNESS WHEREOF, the Parties have affixed their signatures hereto as of the date first written above.

EXECUTIVE:	COMPANY:
	STANLEY FURNITURE COMPANY, INC.
/s/ Douglas I. Payne	By:      /s/ Micah S. Goldstein
Douglas I. Payne	Name: Micah S. Goldstein
	Its:      Chief Operating Officer

EX-99.1

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE:
September 10, 2010  Stanley Furniture Company, Inc.
Investor Contact: Douglas I. Payne
(276) 627-2157

STANLEY FURNITURE ANNOUNCES
PLANS FOR RIGHTS OFFERING TO STOCKHOLDERS

STANLEYTOWN, Virginia, September 10, 2010/BUSINESS WIRE/ – Stanley Furniture Company, Inc. (Nasdaq-NGS:STLY) announced today that it filed a registration statement on Form S-3 with the Securities and Exchange Commission (the “SEC”) for a rights offering in which stockholders will receive transferable rights to purchase additional shares of Stanley Furniture common stock, par value $0.02 per share. The rights will be issued to all stockholders as of a record date, which has yet to be determined. The subscription price has also yet to be determined. Stanley Furniture will provide notice of the record date and subscription price in the future at such time as they are determined. Assuming the rights offering is fully subscribed, Stanley Furniture currently expects the gross proceeds of the offering to be approximately $10 million.

The proposed rights offering will also include an over-subscription privilege, which will entitle a stockholder who exercises all of its basic subscription privilege in full the right to purchase additional shares of common stock that remain unsubscribed at the expiration of the rights offering, subject to the availability and pro rata allocation of shares among persons exercising this over-subscription right. In the event the rights offering is over-subscribed, Stanley Furniture may, in its sole discretion, elect to offer a number of additional shares to fulfill over-subscription requests such that the maximum gross proceeds in the offering would be approximately $12 million.

The number of shares that each stockholder will be able to purchase will depend on the market price of Stanley Furniture’s stock when the subscription price is determined. The offering is expected to commence in September depending on the time required to have the registration statement for the shares and rights declared effective by the SEC.

The shares issued in connection with the rights offering will be listed on the Nasdaq Global Select Market, and the rights are expected to trade on the Nasdaq Global Select Market until the day before the expiration of the offering period. The offering period is expected to be approximately 25 days.

The net proceeds of the offering will be used to provide additional liquidity for working capital and general corporate purposes, including to provide additional cash resources that may be needed during 2011 in connection with Stanley Furniture’s restructuring plan announced in May 2010.

Stanley Furniture reserves the right to modify, postpone or cancel the rights offering at any time prior to the closing of the sale of the shares in the offering.

A registration statement relating to these securities has been filed with the SEC but has not yet become effective. The securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This announcement shall not constitute an offer to sell, or the solicitation of an offer to buy the rights or the underlying shares, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.

About Stanley Furniture Company, Inc.

Established in 1924, Stanley Furniture Company, Inc. is a leading designer and manufacturer of wood furniture targeted at the premium price range of the residential market. Its common stock is traded on the Nasdaq stock market under the symbol STLY.

Forward Looking Statements

Certain statements made in this press 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 our success in transitioning certain Young America products to our domestic manufacturing facilities, our success in transitioning our adult product line to offshore vendors, costs relating to the transitioning of the Stanleytown facility to a warehouse and distribution center, the cyclical nature of the furniture industry, lower sales due to worsening of current economic conditions, business failures or loss of large customers, competition in the furniture industry including competition from lower-cost foreign manufacturers, disruptions in offshore 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, prepayment of our long-term debt in the event we are not able to renegotiate financial covenants that become effective in the third quarter of 2011, the inability to obtain sufficient quantities of quality raw materials in a timely manner, the inability to raise prices in response to inflation and increasing costs, failure to anticipate or respond to changes in consumer tastes and fashions in a timely manner, environmental, health, safety compliance costs, extended business interruption at manufacturing facilities and changes in credit market conditions. Any forward-looking statement speaks only as of the date of this press 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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