EXHIBIT 10.1

SEVERANCE AGREEMENT

This Severance Agreement is effective this 5th day of April, 2012 by and between
Mary Winston (“Employee”) and Family Dollar Stores, Inc., and its subsidiaries
and affiliated companies (collectively, the “Company”).

1.             Recitals.  Employee and the Company recite the following:  

    A.       Employee is employed by the Company in a position of senior
leadership.

    B.       The Company desires to obtain the agreement of Employee to certain
restrictive covenants and other provisions as set forth herein in exchange for
Employee’s receipt of good and valuable consideration to which Employee was not
previously entitled, including without limitation: (i) the Company’s agreement
to provide certain severance payments as described herein, (ii) the Company’s
employment of Employee, (iii) a base salary, (iv) an award opportunity under the
Company’s 2006 Incentive Plan Guidelines for Annual Cash Bonus Awards for the
fiscal year beginning August 28, 2011, (v) an award of Performance Share Rights
under the 2006 Incentive Plan, and (vi) an award of stock options under the 2006
Incentive Plan with a grant date of June 2012.  

    C.       Notwithstanding any provision of this Severance Agreement, the
Company and Employee agree that Employee’s employment with the Company is “at
will” and may be terminated at any time with or without “Cause” without any
liability or obligation of the Company except as expressly set forth herein.  

2.            Definitions.  When used in this Severance Agreement the following
terms and provisions shall have the meanings set forth herein:

   A.       “Cause” –  (i) At any time after a Change in Control, Cause means
any of the following acts by Employee, as determined by the Compensation
Committee of the Board of Directors of the Company:  (a) gross neglect of duty,
(b) prolonged absence from duty without the consent of the Company,
(c) intentionally engaging in any activity that is in conflict with or adverse
to the business, reputation or other interests of the Company, or (d) willful
misconduct, misfeasance or malfeasance of duty which is reasonably determined to
be detrimental to the Company. The determination of the Compensation Committee
as to the existence of “Cause” shall be conclusive on Employee and the
Company.   

    (ii) At any time prior to a Change in Control, Cause means any of the
following: (a) conviction of a felony, any act involving moral turpitude, or a
misdemeanor where imprisonment is imposed, (b) commission of any act of theft,
fraud, dishonesty, or falsification of any employment or Company records, (c)
improper disclosure of the Company's confidential or proprietary information,
(d) Employee's failure to comply with reasonable written directives of the
Chairman of the Board or the Board of Directors of the Company, (e) a course of
conduct amounting to gross incompetence, (f) chronic and unexcused absenteeism,
or (g) misconduct in connection with the performance of any of Employee's
duties, including, without limitation, misappropriation of funds or property of
the Company, securing or attempting to secure personally any profit in
connection with any transaction entered into on behalf of the Company,
misrepresentation to the Company, or any violation of law or regulations on
Company premises or to which the Company is subject.

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B.       “Change in Control” – Change in Control shall have the meaning set
forth in Section 2.1(f) of the 2006 Incentive Plan; provided, however, that to
the extent applicable under Section 409A of the Code, for purposes of paying
certain severance payments within 24 months after a Change in Control under
Paragraph 4 below, Change in Control shall have the same meaning as set forth in
any regulations, revenue procedure, revenue rulings or other pronouncements
issued by the Secretary of the United States Treasury pursuant to Section 409A
of the Code.

C.       “Code” – Code means the Internal Revenue Code of 1986, as amended from
time to time, and includes a reference to the underlying final regulations.

D.       “Company’s Business” – The Company’s Business means the operation of
multi-merchandise retail stores, the majority of which stores each have 25,000
square feet or less of total selling space, and that sell, or offer for sale,
low-cost, basic merchandise for family and home needs, including perishable and
non-perishable goods.  

E.       “Competitive Position” – Competitive Position means any employment with
or activity or service performed for a Competitor (whether as owner, member,
manager, lender, partner, shareholder, member, consultant, agent, employee,
co-venturer or otherwise) in which (i) Employee will use or could reasonably be
expected to use any Confidential Company Information or Trade Secrets of the
Company for the benefit of a Competitor in competition with the Company; or (ii)
Employee will hold a position, have duties, or perform services for such
Competitor that is or are the same as or substantially similar to Employee’s
position with, duties for, or services actually performed for the Company during
Employee’s employment with the Company.

F.       “Competitor” – Competitor means (i) any person or entity whose business
is the same as or substantially similar to the Company’s Business; (ii) any
person or entity who owns or operates multi-merchandise retail stores that each
have 25,000 square feet, or less, of total selling space, and that sell, or
offer for sale, merchandise that is the same as or substantially similar to
merchandise sold or offered for sale by the Company; or (iii) any person or
entity who plans to own or operate multi-merchandise retail stores that have
25,000 square feet, or less, of total selling space, and that will sell, or
offer for sale, merchandise that is the same as or substantially similar to
merchandise sold or offered for sale by the Company.

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G.       “Confidential Company Information” – Confidential Company Information
means, unless otherwise available to the public, (i) any and all information
relating to the Company’s methods of operation, source of merchandise supply,
organizational details, personnel information, marketing plans, business plans,
strategic plans, forecasts, or financial information or data; (ii) any and all
information relating to the Company’s real estate activities including, but not
limited to, landlords, prospective landlords, and lease data; (iii) the specific
terms of the Company’s agreements or arrangements with any officers, directors,
employees, vendors, suppliers, or any other entity with which the Company may be
affiliated from time to time, including, but not limited to, the value of any
consideration provided or received by the Company or the expiration date of any
such agreement or arrangement; and (iv) any and all information of a technical
or proprietary nature developed by or acquired by the Company or made available
to the Company and its employees by vendors, suppliers, contractors, or other
employees of the Company, on a confidential basis, including, but not limited
to, ideas, concepts, designs, specifications, prototypes, techniques, technical
data or know-how, formulae, methods, research and development, and inventions,
as such Confidential Company Information may exist from time to time and whether
in electronic, print or other form and all copies, notes, or other reproductions
thereof.  

H.       “Disability” – Disability shall have the meaning set forth in Section
2.1(m) of the 2006 Incentive Plan.

I.        “Employee’s Termination Date” – Employee’s Termination Date means the
date of Employee’s termination of employment with the Company, regardless
of:  (i) the date, cause, or manner of such termination of employment; (ii)
whether such termination is with or without Cause or is a result of Employee’s
resignation; or (iii) whether the Company provides severance benefits to
Employee under this Agreement.  

J.        "Good Reason" shall mean any of the following conditions (each a
“Condition”) that arises without the consent of the Employee, and the Employee’s
Termination Date occurs no later than a period of time not exceeding two years
immediately following the initial existence of the Condition:

i.         A material diminution in the Employee’s base compensation.

ii.        A material diminution in the Employee’s authority, duties, or
responsibilities.

iii.       A material diminution in the budget over which the Employee’s retains
authority.

iv.       A material change in the geographic location at which the Employee
must perform the services required pursuant to this Agreement.

v.        Any other action or inaction that constitutes a material breach by the
Company of this Agreement.

Within thirty (30) days of the initial existence of the Condition, the Employee
must provide notice to the Company of the existence of the Condition, and the
Condition must not be remedied within forty-five (45) days after such
notice.  If the Condition is cured within forty-five (45) days of such notice,
the Employee is not entitled to any payment as the result of a termination of
employment based on that occurrence of the circumstances constituting Good
Reason.

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K.       “Incentive Bonus Plan” – The annual cash incentive bonus plan
established pursuant to the Guidelines for Annual Cash Bonus adopted under the
2006 Incentive Plan.

L.       “Restricted Territory” – Restricted Territory means:

(i) each state of the United States of America in which the Company is
conducting the Company’s Business on Employee’s Termination Date,

(ii) each state of the United States of America in which, as of the Employee’s
Termination Date, the Company is planning to conduct the Company’s Business if
Employee had knowledge, or should have had knowledge, of such Company plans on
or before Employee’s Termination Date,

(iii) each state of Mexico in which the Company is conducting the Company’s
Business on Employee’s Termination Date, and

(iv) each state of Mexico in which, as of the Employee’s Termination Date, the
Company is planning to conduct the Company’s Business if Employee had knowledge,
or should have had knowledge, of such Company plans on or before Employee’s
Termination Date.

For purposes of the foregoing definition, the District of Columbia and each of
any commonwealths, territories, or possessions shall be regarded as a “state of
the United States of America.”

M.       “Target Bonus” – Target Bonus means Employee’s “target bonus” for the
applicable fiscal year within the meaning of Section 4 of the Incentive Bonus
Plan.  

N.       “Trade Secret” – Trade Secret of the Company means any item of
Confidential Company Information that constitutes a trade secret under the
common law or statutory law of the State of North Carolina, namely N.C. Gen.
Stat. §§ 66-152 et seq., but such definition of “Trade Secret” shall not alter
either the Company’s rights or Employee’s obligations under any state or federal
statutory or common law regarding trade secrets and unfair trade practices.

O.       “2006 Incentive Plan” – The Family Dollar Stores, Inc. 2006 Incentive
Plan, as in effect from time to time.

3.         Severance Upon Termination without Cause Prior to a Change in Control
– Subject to the provisions of Paragraphs 5, 8 and 14 hereunder, in the event of
Employee’s termination by the Company without Cause or due to Employee’s
Disability or death, in each case prior to a Change in Control, the Company
shall provide Employee with the following severance benefits:

  A.        The Company shall continue the payment of Employee’s base salary in
effect on the Employee’s Termination Date for a period of twenty-four (24)
months.  Such salary continuation payments shall be paid in a series of
substantially equal installments in accordance with the regular payroll
practices of the Company as in effect as of the Employee’s Termination Date over
said period, commencing as soon as administratively practicable, but in no event
more than sixty (60) days, following the Employee’s Termination Date (except as
otherwise required by Paragraph 14).  In the event that the amount calculated
pursuant to the first sentence of this Section 3.A becomes payable because of
the Employee’s termination of employment by the Company without Cause or on
account of Employee’s Disability, such amount shall be divided into two amounts,
as follows:

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i.        An amount (the “Permitted Amount”) equal to the lesser of (x) twice
the limitation applicable to qualified retirement plans pursuant to Section
401(a)(17) of the Code during the calendar year in which the Employee’s
Termination Date occurs, or (y) one-fourth of the amount calculated pursuant to
the first sentence of this Section 3.A, which shall be paid in installments over
a period of (6) consecutive months beginning with the first day of the month
next following Employee’s Termination Date, in a series of substantially equal
installments, without interest, in accordance with the regular payroll practices
of the Company as in effect as of the Employee’s Termination Date over said
period, commencing on first regular payroll date following the beginning of the
6 month period.

ii.       An amount (the “Remaining Amount”) equal to (x) the amount calculated
pursuant to the first sentence of this Section 3.A minus (y) the Permitted
Amount.  The Remaining Amount shall be paid in installments over a period of
(18) consecutive months beginning with the first day of the month next following
sixth months plus one day after the Employee’s Termination Date, in a series of
substantially equal installments, without interest, in accordance with the
regular payroll practices of the Company as in effect as of the Employee’s
Termination Date over said period, commencing on first regular payroll date
following the beginning of the 18 month period.

Such salary continuation payments shall not be considered eligible compensation
under any of the Company’s employee benefit plans.

B.        If Employee’s Termination Date is after the end of the Company’s
fiscal year but prior to the payment date of any bonus under the Incentive Bonus
Plan for such fiscal year, the Company shall pay Employee the portion of the
Target Bonus earned by Employee for such fiscal year according to the terms of
the Incentive Bonus Plan (i.e., based on the Company’s applicable performance
level and, to the extent applicable, Employee’s performance rating for the
fiscal year), without regard to any requirement in the Incentive Bonus Plan
otherwise requiring Employee to remain employed through the bonus payment
date.  In addition, Employee shall be eligible to receive a pro rated bonus
under the Incentive Bonus Plan for the fiscal year of the Company in which such
termination of employment occurs, without regard to any requirement in the
Incentive Bonus Plan otherwise requiring Employee to remain employed through the
bonus payment date, based on the number of completed weeks during the applicable
fiscal year through the Employee’s Termination Date and further based on the
Company’s applicable performance level for the fiscal year and, if available and
to the extent applicable, Employee’s performance rating for the fiscal year (or
if no such performance rating is available, assuming a performance rating of
“satisfactory” or its equivalent).  Any such payment shall be made to Employee
at the same time the Company makes payments to other participants in the
Incentive Bonus Plan.  Notwithstanding the preceding or any provision of the
Incentive Bonus Plan to the contrary, any bonus payment pursuant to the
Incentive Bonus Plan payable to Employee under the terms of that Plan and/or
this Agreement shall be paid as soon as administratively practicable following
the end of the relevant performance period but in no event later than two and
one half (2½) months following the end of the Company’s fiscal year in which the
relevant performance period ends.

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C.        If Employee elects continuing group health coverage under a group
health plan sponsored by the Company pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), then for the number of months
set forth in clause A above after Employee’s Termination Date, but not to exceed
18 months, the Company shall pay for the same proportion of the monthly cost of
such COBRA continuation coverage as the Company paid for the monthly cost of
group health coverage under such plan during the last calendar month prior to
the Employee’s Termination Date for Employee and Employee’s dependents who elect
COBRA continuation coverage, subject to applicable laws and the provisions of
the group health plan, as amended from time to time by the Company at its sole
discretion.

Such payments and benefits provided by the Company to Employee as set forth in
Paragraphs 3 A, B and C are herein called “Termination Compensation.”  Such
Termination Compensation shall be reduced, in whole or in part, by: (x) all
other salary, bonus, consulting fees or other compensation received by or
payable to Employee for services rendered in any capacity to any third party
during the period that such Termination Compensation is paid, with the exception
of any compensation received for service on a board of directors or other
similar arrangement; (y) all disability or life insurance payments made pursuant
to disability or life insurance policies provided by and paid for by the Company
to Employee and which payments are received during the period that such
Termination Compensation is paid; and (z) comparable health insurance coverage
actually received by Employee for services rendered in any capacity to any third
party during the period that such Termination Compensation is paid.  The
Employee agrees to pursue reasonable, good faith efforts to obtain other
employment in a position suitable to Employee’s background and experience.
Moreover, Employee agrees to notify the Company within three business days of
obtaining other employment during the time period in which Employee is receiving
Termination Compensation.  Notwithstanding any of the foregoing, Employee’s
Termination Compensation shall be subject to forfeiture as set forth below in
Paragraph Five.  

4.        Severance Payable in connection with a Change in Control – Subject to
the provisions of Paragraph 14 hereunder, in the event of a Change in Control
and a termination of Employee’s employment within 24 months after such Change in
Control either by the Company without Cause or by Employee for Good Reason, the
Company shall provide Employee with the following severance benefits:   

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A.        The Company shall pay to Employee in a lump sum in cash within 30 days
after the date of such termination of employment an amount equal to the product
of (x) two (2) and (y) the sum of (A) Employee’s base salary at the highest
annual rate in effect during the period beginning immediately prior to the
Change in Control through the Employee’s Termination Date and (B) the average of
the bonuses, if any, paid or payable to Employee under the Incentive Bonus Plan
for each of the three (3) fiscal years preceding the fiscal year in which
Employee’s Termination Date occurs (or such fewer number of fiscal years for
which Employee was eligible to receive a bonus under the Incentive Bonus Plan).

B.        If Employee elects continuing group health coverage under a group
health plan sponsored by the Company pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), then for the number of years
represented by the multiple set forth in clause A (x) above after Employee’s
Termination Date, but not to exceed 18 months, the Company shall pay for the
same proportion of the monthly cost of such COBRA continuation coverage as the
Company paid for the monthly cost of group health coverage under such plan
during the last calendar month prior to the Employee’s Termination Date for
Employee and Employee’s dependents who elect COBRA continuation coverage,
subject to applicable laws and the provisions of the group health plan as
amended from time to time by the Company at its sole discretion.  Such health
insurance coverage shall be subject to offset as provided in Paragraph 3 above
for comparable coverage received by Employee from a third party during the
continuation period.

The Employee’s right in connection with or following a Change in Control to
receive a pro rata bonus under the Incentive Bonus Plan or any other incentive
compensation program under the 2006 Incentive Plan shall be determined in
accordance with the provisions of Section 15.7 of the 2006 Incentive Plan.
Notwithstanding the preceding or any provision of the Incentive Bonus Plan to
the contrary, any bonus payment pursuant to the Incentive Bonus Plan payable to
Employee under the terms of that Plan and/or this Agreement shall be paid as
soon as administratively practicable following the end of the relevant
performance period but in no event later than two and one half (2½) months
following the end of the Company’s fiscal year in which the relevant performance
period ends.      

5.                 Restrictive Covenants; Non-Disclosure Obligations; Forfeiture
of Termination Compensation. Employee and the Company understand and agree that
the purpose of the provisions of this Paragraph 5 is to protect the legitimate
business interests of the Company, especially within the multi-merchandise
retail industry, in light of Employee’s leadership position with the Company and
exposure and access to Confidential Company Information and Trade
Secrets.  Employee and the Company further agree and understand that the
multi-merchandise retail industry and the Company’s Business are national in
scope and that the Company has plans to expand the Company’s Business
internationally.  Employee acknowledges that the employment and post-employment
restrictions set forth in this Paragraph 5 are therefore reasonable in that
these restrictions are limited to the multi-merchandise retail industry and to
the legitimate protection of the Company’s Business, and that they do not, and
will not, unduly impair Employee’s ability to earn a living during or after
Employee’s employment with the Company.  As a result of Employee’s educational
background, prior work experience, and Employee’s employment and position with
the Company, Employee possesses general skills and knowledge enabling Employee,
if need be, to pursue profitable work in businesses not competitive with the
Company’s Business.

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          Therefore, in consideration of good and valuable consideration to
which Employee was not previously entitled, including, without limitation, as is
set forth in Paragraph 1.B above, Employee agrees as follows:

A.             Covenant Not to Compete.  

                              (i)       Employee agrees that during Employee’s
employment with the Company and for the period of twelve (12) months immediately
following Employee’s Termination Date (such period not to include any period(s)
of violation or period(s) of time required for litigation to enforce the
provisions of this Paragraph 5.A(i)) (the “Restricted Period”), Employee shall
not, without the prior written consent of the Company, directly or indirectly,
accept, obtain, or hold a Competitive Position within the Restricted Territory
with a Competitor.  Notwithstanding the foregoing, the provisions of this
Paragraph 5.A(i) shall not apply from and after a Change in Control.

                              (ii)      Employee agrees that in the event
Employee, without the Company’s prior written consent, directly or indirectly
accepts, obtains, or holds a Competitive Position within the Restricted
Territory with a Competitor during the period between the expiration date of the
Restricted Period and the date of the Company’s final payment to Employee of any
Termination Compensation under this Agreement (the “Concluding Compensation
Period”), the Company shall be entitled to terminate any compensation, benefits,
and/or remaining payments of the Termination Compensation otherwise payable to
Employee under this Agreement and Employee forfeits such Termination
Compensation.  Notwithstanding the foregoing, the provisions of this Paragraph
5.A (ii) shall not apply from and after a Change in Control.

                              (iii)     Notwithstanding the foregoing, Employee
may, as a passive investor, own capital stock of a publicly held corporation,
which is actively traded in the over-the-counter market or is listed and traded
on a national securities exchange, which constitutes or is affiliated with a
Competitor, so long as Employee’s ownership is not in excess of five percent
(5%) of the total outstanding capital stock of the Competitor.

B.             Non-Solicitation of Company Employees.  

                              (i)       Employee understands and agrees that the
relationship between the Company and each of its employees constitutes a
valuable asset of the Company and may not be converted to Employee’s own use or
benefit, or for the use or benefit of any other third party.  Accordingly,
Employee hereby agrees that during Employee’s employment and during the
Restricted Period, Employee shall not, without the Company’s prior written
consent, directly or indirectly, (A) solicit or recruit for employment; hire;
attempt to solicit or recruit for employment; attempt to hire; or accept as an
employee, consultant, contractor, or otherwise, any Company employee, or (B)
urge; encourage; induce; or attempt to urge, encourage, or induce, any Company
employee to terminate his or her employment with Company; or (C) otherwise
interfere with the Company’s relationship with any Company
employee.  Notwithstanding the foregoing, the provisions of this Paragraph
5.B(i) shall not apply from and after a Change in Control.

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                              (ii)      Employee agrees that in the event
Employee, without the Company’s prior written consent, directly or indirectly,
(A) solicits or recruits for employment; hires; attempts to solicit or recruit
for employment; attempts to hire; or accepts as an employee, consultant,
contractor, or otherwise, any Company employee, or (B) urges; encourages;
induces; or attempts to urge, encourage, or induce, any Company employee to
terminate his or her employment with Company; or (C) otherwise interferes with
the Company’s relationship with any Company employee during the Concluding
Compensation Period, the Company shall be entitled to terminate any
compensation, benefits, and/or remaining payments of the Termination
Compensation otherwise payable to Employee under this Agreement and Employee
forfeits such Termination Compensation.  Notwithstanding the foregoing, the
provisions of this Paragraph 5.B(ii) shall not apply from and after a Change in
Control.

C.       Non-Disclosure of Confidential Company Information; Trade Secret
Protections.  Employee recognizes and acknowledges that during the course of
Employee’s employment, the Company has provided and will continue to provide
Employee with exposure and access to Confidential Company Information and Trade
Secrets of the Company, or confidential information belonging to other third
parties who may have furnished such information to the Company under obligations
of confidentiality.  Employee, therefore, agrees that during Employee’s
employment with the Company and at all times after Employee’s Termination Date,
Employee shall not disclose any such Confidential Company Information or Trade
Secrets, or other information subject to an obligation of the Company to keep
confidential, to any third party not employed by or otherwise expressly
affiliated with the Company for any reason or purpose whatsoever, and shall not
use such Confidential Company Information or Trade Secrets except on behalf of
the Company.

D.       Employee Acknowledgement.  Employee acknowledges and agrees that (i)
the restrictive covenants in this Paragraph 5 are reasonable in time, territory
and scope, and in all other respects; (ii) should any part or provision of any
covenant be held invalid, void or unenforceable in any court of competent
jurisdiction, such invalidity, voidness, or unenforceability shall not render
invalid, void or unenforceable any other part or provision of this Agreement;
and (iii) if any portion of the foregoing provisions is found to be invalid or
unenforceable by a court of competent jurisdiction because its duration,
territory, definition of activities or definition of information covered is
considered to be invalid or unreasonable in scope, the invalid or unreasonable
terms shall be redefined, or a new enforceable term provided, such that the
intent of the Company and Employee in agreeing to the provisions of this
Agreement will not be impaired and the provision in question shall be
enforceable to the fullest extent of the applicable laws.  The restrictive
covenants contained herein shall be construed as agreements independent of any
other provision in this Agreement and the existence of any claim or cause of
action of Employee against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
this restrictive covenant.  Any decision in one state or jurisdiction
invalidating or holding unenforceable any provision of this Paragraph 5 shall
not be binding in any other state or jurisdiction.

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         6.        Other Post-Termination Covenants.

                   A.         Employee agrees that Employee shall resign and
does resign from all positions as an officer and director of the Company and
from any other positions, with such resignations to be effective upon Employee’s
Termination Date.

       B.          Upon Employee’s Termination Date, Employee agrees not to make
any statements to the Company’s employees, customers, vendors, or suppliers or
to any public or media source, whether written or oral, regarding Employee’s
employment or termination from the Company’s employment, except as may be
approved in writing by an executive officer of the Company in advance.  The
Employee further agrees not to make any statement (including to any media
source, or to the Company’s suppliers, customers or employees) or take any
action that would disrupt, impair, embarrass, harm or affect adversely the
Company or any of the employees, officers, directors, or customers of the
Company or place the Company or such individuals in any negative light.

                    C.         Following Employee’s Termination Date, Employee
covenants to render further advice and assistance to the Company as may be
required from time to time, and to provide all information available to Employee
on matters handled by and through Employee while employed by the Company or of
which Employee has personal knowledge, and by making available to the Company at
reasonable times and circumstances, upon request by the Company, information
pertinent to its operations in Employee’s possession; and, to the extent that it
is necessary, to cooperate with and assist the Company to conclude any matters
that are pending and which may require Employee’s assistance; provided, that he
shall be paid reasonable compensation (according to the Company’s regular
payroll practices for Executive Vice Presidents) by the Company in the event
Employee is required to expend time in the performance of such services; and
provided further, that Employee may perform such services in a manner that does
not unreasonably interfere with other employment obtained by Employee.  The
Employee shall be reimbursed for any expenses incurred by Employee in the
performance of the covenants herein set forth in this Paragraph 6.C, provided,
however, that the Company shall not have any duty to reimburse any expenses
unless such expenses are documented (in a manner required of Executive Vice
Presidents making claims for reimbursement of business-related expenses) within
90 days of being incurred.  Expenses payable pursuant to the immediately
preceding sentence shall be paid on the 30th day following Company’s receipt of
the required documentation.

          In addition, Employee agrees to cooperate with and provide assistance
to the Company and its legal counsel in connection with any litigation
(including arbitration or administrative hearings) or investigation affecting
the Company, in which, in the reasonable judgment of the Company’s counsel,
Employee’s assistance or cooperation is needed.  The Employee shall, when
requested by the Company, provide testimony or other assistance and shall travel
at the Company’s request in order to fulfill this obligation.  In connection
with such litigation or investigation, the Company shall attempt to accommodate
Employee’s schedule, shall reimburse Employee (unless prohibited by law) for any
actual loss of wages in connection therewith, shall provide Employee with
reasonable notice in advance of the times in which Employee’s cooperation or
assistance is needed, and shall reimburse Employee for any reasonable expenses
incurred in connection with such matters, provided, however, that the Company
shall not have any duty to reimburse any loss of wages and/or expenses unless
such wages and/or expenses are documented (in a manner required of Executive
Vice Presidents making claims for reimbursement of business-related expenses)
within 90 days of being incurred.  Lost wages and/or expenses payable pursuant
to the immediately preceding sentence shall be paid on the 30th day following
Company’s receipt of the required documentation.

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7.                 Delivery of Property upon Termination.  Upon Employee’s
Termination Date, Employee shall, as soon as possible but no later than two (2)
days from Employee’s Termination Date, surrender to the Company all Confidential
Company Information and Trade Secrets in Employee’s possession and return to the
Company all Company property in Employee’s possession or control, including but
not limited to, all paper records and documents, computer disks and access cards
and keys to any Company facilities.

8.                 Enforcement of Restrictions in Paragraphs 5 and 6.  Because
Employee’s services to the Company are special and unique and because Employee
has been exposed to and has had access to Confidential Company Information and
Trade Secrets, Employee and the Company agree that any breach or threatened
breach of the provisions of Paragraphs 5.A(i), 5.B(i), 5.C, and 6 would cause
irreparable injury to the Company and that money damages would not provide an
adequate remedy to the Company.  In the event of a breach or threatened breach
of Paragraphs 5.A(i), 5.B(i), 5.C, or 6 of this Agreement, the Company or its
successors or assigns may, in addition to any other rights and remedies existing
in their favor, apply to any court of competent jurisdiction for specific
performance; temporary, preliminary, and permanent injunctive relief; expedited
discovery; or other equitable relief in order to enforce or prevent any
violations of any such provisions (without posting a bond or other
security).  The Company shall be specifically entitled to an injunction
restraining Employee from disclosing any Confidential Company Information or
Trade Secrets, and, further, from accepting or continuing any employment with or
rendering any services, or continuing to render services, to any such
third-party to whom any Confidential Company Information or Trade Secret has
been disclosed or is threatened to be disclosed by Employee.  

          In addition to the foregoing and not in any way in limitation thereof,
or in limitation of any right or remedy otherwise available to the Company, if
Employee violates any provision of Paragraphs 5.A(i), 5.B(i), 5.C, and 6 of this
Agreement: (i) any compensation, benefits and/or Termination Compensation then
or thereafter due from the Company to Employee shall be terminated forthwith;
(ii) the Company’s obligation to pay or provide and Employee’s right to receive
such compensation, benefits and/or Termination Compensation shall terminate and
be of no further force or effect; and (iii) upon demand by the Company, Employee
shall repay to the Company any such compensation, benefits and/or Termination
Compensation previously paid by the Company because of not being informed or
aware of Employee’s violation of a provision of Paragraphs 5.A(i), 5.B(i), 5.C,
or 6 of this Agreement; in each case without limiting or affecting Employee’s
obligations under such Paragraphs 5.A(i), 5.B(i), 5.C, or 6 or the Company’s
other rights and remedies available at law or in equity, and provided that at
least $20,000 of such compensation, benefits and/or Termination Compensation
shall be retained by Employee representing the consideration Employee received
in exchange for Employee’s release and waiver of rights or claims under
Paragraph 9 of this Agreement.

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9.                 Waiver and Release.  In consideration for the payments and
benefits provided and to be provided hereunder, Employee agrees that Employee
will, upon termination of employment and as a condition to the Company’s
obligation to pay any severance benefits under this Agreement, deliver to the
Company a fully executed release agreement substantially in a form then used by
and agreeable to the Company and which shall fully and irrevocably release and
discharge the Company, its directors, officers, and employees from any and all
claims, charges, complaints, liabilities of any kind, known or unknown, owed to
Employee.

10.              Special Provisions. This Agreement shall be binding on and
inure to the benefit of any successor to or assignee of the Company, and
Employee specifically agrees on demand to execute any and all necessary
documents in connection with the performance of this Agreement.  No waiver by
either party of any breach by the other of any provision hereof shall be deemed
to be a waiver of any later or other breach thereof or as a waiver of any such
or other provision of this Agreement.  If any provision of this Agreement shall
be declared invalid or unenforceable as a matter of law, such invalidity or
unenforceability shall not affect the validity or enforceability of any other
provision of this Agreement or of the remainder of this Agreement as a whole.

11.             Complete Agreement.  This Agreement sets forth all of the terms
of the understanding between the parties with reference to the subject matter
set forth herein and may not be waived, changed, discharged or terminated orally
or by any course of dealing between the parties, but only by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought. This Agreement revokes and supersedes all prior or
contemporaneous agreements, representations, promises and understandings,
whether written or oral, between the parties.

12.             Choice of Law; Consent to Jurisdiction.  This Agreement shall be
governed by and construed under the laws of the State of North Carolina without
regard to its choice of law or conflict of law principles.  Employee hereby
expressly and irrevocably consents to the venue and jurisdiction of the United
States District Court for the Western District of North Carolina, or any state
court in Mecklenburg County, North Carolina.

13.              Notices.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered, if mailed by registered, certified or
express mail, postage prepaid, or if delivered to a recognized courier service,
addressed to Employee at the address shown on the Company’s records for tax
reporting purposes or to the Company as follows (or in either case to such other
address as one party shall give the other in the manner provided herein):

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Family Dollar Stores, Inc.

Chairman of the Board

Post Office Box 1017

Charlotte, NC  28201-1017

 

With copy to:

General Counsel

Family Dollar Stores, Inc.

Post Office Box 1017

Charlotte, NC  28201-1017

 

14.       Compliance with Code Section 409A.  This Agreement is intended to
comply with Code Section 409A, to the extent applicable.  Notwithstanding any
provision herein to the contrary, this Agreement shall be interpreted, operated
and administered consistent with this intent.  Each separate installment under
this Agreement shall be treated as a separate payment for purposes of
determining whether such payment is subject to or exempt from compliance with
the requirements of Code Section 409A.  In addition, in the event that Employee
is a “specified employee” within the meaning of Section 409A of the Code (as
determined in accordance with the methodology established by the Company as in
effect on the date of termination of Employee’s employment), any payment or
benefits hereunder that are nonqualified deferred compensation subject to the
requirements of Section 409A of the Code shall be provided to Employee no
earlier than six (6) months after the date of Employee’s “separation from
service” within the meaning of Section 409A of the Code.

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

   

FAMILY DOLLAR STORES, INC.

 

By:  /s/ Howard R. Levine

 

Title: Chairman and Chief Executive Officer

Attest:

/s/ Beth R. MacDonald Assistant Secretary         

   

EMPLOYEE

 

/s/ Mary Winston

Mary Winston