Exhibit 10.01





                               THIRD AMENDMENT TO
                    ALBERT L. PRILLAMAN EMPLOYMENT AGREEMENT

         THIS THIRD AMENDMENT, dated as of the 26th day of April, 2005 (the
"Third Amendment") to the Employment Agreement, dated as of January 1, 1991, as
amended October 1, 1996 and March 1, 2003 (the "Employment Agreement") between
ALBERT L. PRILLAMAN ("Employee") and STANLEY FURNITURE COMPANY, INC., a Delaware
corporation (the "Company").
         The Parties desire to amend the Employment Agreement as set forth
herein to provide for the Employee's retirement from employment with the Company
effective as of April 30, 2005.
         NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Parties hereto, intending to be
legally bound, agree as follows:

     1.   Section 2 of the Employment  Agreement is amended to add the following
          at the end thereof:

          Notwithstanding  anything in this Agreement to the contrary,  the term
          of employment under this Agreement shall end on April 30, 2005, and at
          the end of such term, all provisions of the Employment Agreement shall
          terminate and be of no force or effect other than the  obligations set
          forth in  Section  6(b) and 6(c) of the  Employment  Agreement  and in
          Section 2 of the Third Amendment.

     2.   As soon as practicable, the Company shall transfer to the Employee, at
          no cost to the Employee,  title to the  automobile  owned or leased by
          the Company and currently used by the Employee. The Company also shall
          pay the  Employee an  additional  amount  reasonably  estimated by the
          Company  to be  equal  to any  federal,  state  and  local  income  or
          employment  taxes imposed on the Employee from (a) the transfer of the
          automobile and (b) the Company's payment under this sentence.

     3.   This Amendment  shall be governed by and construed in accordance  with
          the laws of the Commonwealth of Virginia without regard to conflict of
          laws.

     4.   This Amendment may be executed in counterparts, each of which shall be
          deemed an original, but all of which together shall constitute one and
          the same agreement.

     5.   The Employment Agreement as amended hereby and this Amendment shall be
          read together to constitute  one  agreement.  The parties hereto agree
          that the  Employment  Agreement,  as amended  hereby,  remains in full
          force and effect until its termination as provided herein.

         IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
duly executed on the day and year first above written.

                                             STANLEY FURNITURE COMPANY, INC.

                                             By:/s/Jeffrey R. Scheffer
                                                ----------------------
                                                Jeffrey R. Scheffer
                                                Chairman, President and Chief
                                                Executive Officer

                                                /s/Albert L. Prillaman
                                                -----------------------
                                                Albert L. Prillaman