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Exhibit 10 (ii)

STATE OF NORTH CAROLINA   AMENDMENT TO
EMPLOYMENT AGREEMENT COUNTY OF MECKLENBURG    

        THIS AMENDMENT, made and entered into effective the 31st day of
August 2003, by and between FAMILY DOLLAR STORES, INC., a Delaware corporation
(hereinafter referred to as the "Company"); and R. James Kelly (hereinafter
referred to as the "Employee");

W I T N E S S E T H:

        WHEREAS, the Company and the Employee entered into an Employment
Agreement effective December 17, 1996, as amended by Amendments to Employment
Agreement effective June 21, 1999, September 2, 2001, and September 1, 2002
(hereinafter referred to as the "Agreement"); and

        WHEREAS, the Company and the Employee desire to amend the Agreement;

        NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and the Employee agree as follows:

1.Section 1.04 of the Agreement is amended by adding "Nevada", "North Dakota"
and "Wyoming" to the list of states constituting the "Present Territory."

2.Section 2 of the Agreement is deleted and the following is substituted in lieu
thereof:

        "2.    Employment. The Employee shall be employed by the Company and any
Affiliate in the capacity provided for in Paragraph 3 for the peiod commencing
August 31, 2003, (the "Commencement Date"), and ending on August 28, 2004, or
upon the termination of this Agreement as provided in Paragraph 6."

3.The first sentence of Section 5.01 of the Agreement is deleted and the
following sentence is substituted in lieu thereof.

        "5.01    In consideration of the services to be rendered by the Employee
pursuant to this Agreement, the Company shall pay, or cause to be paid, to the
Employee a weekly base salary from August 31, 2003, to August 28, 2004, of
$8,846.16 ($460,000.00 per annum)."

4.Subparagraph (a) of Section 5.02 of the Agreement is deleted and the following
subparagraphs are substituted in lieu thereof:

        "5.02.    In addition, the Employee shall be entitled to:

        (a)    Participate in the Company's Target Bonus Plan, as it may be
amended or modified in any respect, including achievement of established goals,
as Vice Chairman for the fiscal year commencing August 31, 2003. The Target
Bonus Plan generally will give the Employee the opportunity to earn a bonus of
up to sixty (60%) percent of the Employee's base salary actually received for
services on and after August 31, 2003, through August 28, 2004, for the fiscal
year ending August 28, 2004, subject to the Company's achievement of certain
financial goals to be established, the Employee's performance, and all terms and
conditions of the Target Bonus Plan as in effect for such fiscal year; provided
that the amount of bonus paid may not be increased by the annual individual
performance rating of the employee by the Chairman of the Board. The Employee
acknowledges that he has received a copy of the form of the Target Bonus Plan
and Bonus Conditions and is familiar with the terms and conditions thereof.
Nothing contained herein shall limit the Company's right to alter, amend or
terminate the Target Bonus Plan at any time for any reason. The Employee further
acknowledges that, as provided in the Target Bonus Plan, in the event the
Employee is not employed by the Company, for whatever reason, at the time the
bonus for the fiscal year is actually paid to participants in the Target Bonus
Plan following the end of the fiscal year, the Employee will not be entitled to
receive the bonus.

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5.Section 5.02 (c) of the Agreement is deleted and the following is substituted
in lieu thereof:

        "(c) Take twenty days (exclusive of Saturdays, Sundays and paid Company
holidays) of vacation during the twelve month period commencing August 31, 2003.
Vacation time will accrue ratably during the course of said period and cannot be
accumulated from year to year except that up to five days of vacation not taken
in said twelve month period may be carried over to the next twelve month
period."

6.Section 6.02 of the Agreement is deleted and the following is substituted in
lieu thereof:

        "6.02.    Upon termination of this Agreement by the Company, other than
for Cause, except for the provisions of Paragraph 4, the Employee's employment
under the terms of this Agreement and all other agreements and contracts between
the Employee, the Company and the Company's Affiliate and subsidiary
corporations, shall be terminated effective on the Termination Date. In the
event the Company terminates this Agreement prior to August 28, 2004, for
reasons other than for Cause or Medical Disability, the Company shall pay to the
Employee one hundred eighty (180) days of the base salary set forth in
Paragraph 5.01 above (which shall constitute payment in full of the compensation
due to the Employee hereunder). Any such payments shall be made in six (6) equal
monthly installments with the first installment due and payable not later than
thirty (30) days after the Termination Date. Payments made by the Company to the
Employee under this Paragraph 6.02 are herein called "Termination Compensation."
In the event the Employee accepts or begins other employment as an employee,
consultant or in any other capacity prior to the date on which the last monthly
installment of Termination Compensation is due and payable, the monthly payments
of any unpaid balance of the Termination Compensation as of the date of such new
employment shall be (i) eliminated if the monthly base salary and all other
monthly remuneration and compensation from the new employment exceeds the
monthly base salary of the Employee in effect on the date of the notice, or
(ii) reduced to the amount by which the monthly base salary of the Employee in
effect on the date of the notice exceeds the monthly base salary and all other
monthly remuneration and compensation from the new employment. The Employee
agrees to pursue reasonable, good faith efforts to obtain other employment in a
position suitable to his background and experience.

        In the event this Agreement is not terminated by the Company or the
Employee for any reason prior to August 28, 2004, and the Company and the
Employee do not agree in writing before August 28, 2004, to extend the term of
this Agreement beyond August 28, 2004, or to enter into a new agreement to
extend the employment relationship beyond August 28, 2004, this Agreement shall
terminate automatically on August 28, 2004, which shall be the Termination Date,
and the Company shall pay to the Employee sixty (60) days of the base salary set
forth in Paragraph 5.01 (which shall constitute payment in full of the
compensation due to the Employee hereunder). Any such payments shall be made in
two (2) equal monthly installments with the first installment due and payable
not later than thirty (30) days after the Termination Date."

7.In Section 8 of the Agreement in the fourth line, delete the date "August 30,
2003" and substitute in lieu thereof the date "August 28, 2004" and in the
eighth line delete "fifty (50%)" and substitute in lieu thereof "sixty (60%)".

8.All other terms and provisions of the Agreement shall remain in full force and
effect.

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        IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
triplicate, all as of the day and year first above written.

    FAMILY DOLLAR STORES, INC.
Attest
 
By
 
/s/  HOWARD R. LEVINE      

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Chairman of the Board /s/  GEORGE R. MAHONEY, JR.      

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Secretary         (Corporate Seal)                 /s/  R. JAMES KELLY      

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R. James Kelly Witness:        
/s/  ALICE R. BARRIER      

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Exhibit 10 (ii)