Exhibit 10.1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NORTH CAROLINA

CHARLOTTE DIVISION

In re FAMILY DOLLAR, INC.

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Master File No. 3:06-CV-00510(W)

SHAREHOLDER DERIVATIVE LITIGATION

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This Document Relates To:

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STIPULATION AND AGREEMENT OF
COMPROMISE, SETTLEMENT AND
RELEASE

 

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ALL ACTIONS.

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This Stipulation and Agreement of Compromise, Settlement and Release (the
“Stipulation”) dated as of June 22, 2007, and subject to the approval of the
United States District Court for the Western District of North Carolina,
Charlotte Division (the “Court”), is entered into by and among the parties to
the actions captioned In re Family Dollar, Inc. Shareholder Derivative
Litigation, Master File No. 3:06-CV-00510(W) (the “Action”) and In re Family
Dollar Stores, Inc. Derivative Shareholders Litigation, Master File No.
06-CVS-16796 (the “State Action”), pending before the Court, and the General
Court of Justice, Superior Court Division, of the State of North Carolina,
County of Mecklenburg (the “Superior Court”), respectively.

STIPULATED FACTS

WHEREAS:

A.                                   On August 24, 2006, a shareholder
derivative complaint was filed in the Superior Court, captioned Rebecca Mitchell
v. Howard Levine, et al., Case No. 06-CV-516796 (the “Mitchell litigation”), on
behalf of Family Dollar Stores, Inc. (“Family Dollar” or the “Company”), against
its directors and officers: Howard R. Levine, R. James Kelly, R. David
Alexander, Jr., George R. Mahoney, John D. Reier, Albert S. Rorie, Philip W.
Thompson, Mark R. Bernstein, James G. Martin and Sharon Allred Decker.  The
Mitchell litigation alleges, inter alia, that from 1995 to 2001, the Company and
certain of its directors and officers engaged in improper backdating of stock
options and, as a result, disseminated materially false financial statements to
the stockholders of the Company.

B.                                     On October 2, 2006, a second derivative
complaint captioned Jeffrey Alasina v. Howard Levine, et al., was filed in the
Superior Court complaining of the same alleged activities by the same defendants
as the Mitchell litigation.  The Alasina complaint included claims for breach of

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fiduciary duty and unjust enrichment arising from these allegations.  The
Mitchell and Alasina complaints were consolidated by order of the Superior Court
into the State Action.

C.                                     On December 15, 2006, a derivative
complaint was filed in this Court captioned Dorothy M. Lee v. Howard R. Levine,
et al., No. 3:06-CV-510-W.  A virtually identical complaint was filed in this
Court on December 20, 2006, captioned Stanford H. Arden v. Howard R. Levine, et
al., No. 3:06-CV-523-C.  By order entered March 27, 2007, the Court consolidated
the Lee and Arden cases into the Action.  The Action names the following Family
Dollar directors and officers as defendants: Howard R. Levine, Leon Levine, R.
James Kelly, R. David Alexander, Jr., Charles Gibson, Jr., C. Martin Sowers,
George R. Mahoney, Jr., Mark R. Bernstein, Sharon Allred Decker, Edward C.
Dolby, Glenn A. Eisenberg, James G. Martin and Dale C. Pond (collectively, with
the Mitchell Defendants, the “Individual Defendants”).

D.                                    In connection with alleged improper
backdating of stock options at the Company, the Action alleges violations of
§14(a) of the Securities Exchange Act of 1934, breaches of fiduciary duties
and/or aiding and abetting in the breach of fiduciary duties, which are alleged
to include abuse of control, gross mismanagement, constructive fraud, corporate
waste, unjust enrichment and breach of fiduciary duty for insider selling and
misappropriation of information by the “insider selling defendants,” all of
which are alleged to have occurred between 1995 and 2006.

E.                                      On January 4, 2007, a consolidated
derivative complaint was filed in the State Action.  The consolidated derivative
complaint names as defendants, Howard R. Levine, R. James Kelly, R. David
Alexander, Jr., John J. Scanlon, Charles S. Gibson, Jr., C. Martin Sowers,
George R. Mahoney, Jr., Gilbert A. LaFare, Samuel N. McPherson, Mark R.
Bernstein, Sharon Allred Decker and James G. Martin (together with the
defendants named in the Mitchell action, the “Mitchell Defendants”).

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F.                                      On August 31, 2006, after receiving the
Mitchell complaint and pursuant to resolutions adopted at a duly called meeting,
the Board of Directors of the Company (the “Board”), acting in accordance with
Section 141(c) of the General Corporation Law of the State of Delaware and
Article III, Section 11 of the Company’s Bylaws, formed the “Special
Committee.”  Pursuant to such resolutions, the Board appointed Edward C. Dolby,
Glenn A. Eisenberg and Dale C. Pond, each of whom was determined by the Board to
be a disinterested and independent director, to serve on the Special Committee. 
The purpose of the Special Committee, as provided in such resolutions, was to
conduct a full and complete investigation and review of the matters set forth in
the Mitchell litigation and such related matters as the Special Committee deemed
necessary or appropriate.  To that end, the Special Committee was (i) delegated
the authority to consider and determine whether or not prosecution of the claims
and actions set forth in the pending litigation was in the best interests of the
Company and its stockholders, and to advise what action the Company should take
with respect thereto, and (ii) empowered to take any and all such other actions
as it deemed necessary or appropriate to conduct its investigation.

G.                                     Subsequent to the formation of the
Special Committee, the three additional complaints discussed above were filed,
which included similar claims against the Company and its officers and
directors.  In accordance with the Board resolutions referred to above, the
Special Committee determined that it was necessary and appropriate to consider
all related claims against the Company and its officers and directors and to
consider its investigation as encompassing all of the pending actions.

H.                                    On May 18, 2007, counsel for the parties
to the Action and the State Action reached an agreement-in-principle (subject to
the negotiation of a definitive written agreement) concerning the proposed
settlement of the Action and State Action.  The parties’ agreement was reached
after

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repeated meetings, both telephonic and in person, between counsel for the
Plaintiffs and the Special Committee and, in some instances, counsel to the
Company.  Counsel for the parties to the Action and State Action have concluded
that the terms contained in this Stipulation are fair and adequate to both the
Company and its stockholders and that it is fair and reasonable to pursue a
settlement of the Action and dismissal of the State Action based upon the
procedures outlined herein and the substantial benefits and protections offered
herein.  This conclusion by counsel for Plaintiffs was based in part on review
of non-public documents relating to the claims asserted in the Action and State
Action, as well as documents reviewed and created by the Special Committee
during the course of its factual investigation of these claims.

I.                                         The Company, the Individual
Defendants, the Special Committee and all plaintiffs in the Action and State
Action (collectively, the “Plaintiffs”) have independently considered the terms
of this Stipulation and believe that settlement of the Action, subject to the
terms herein (the “Settlement”), is desirable and in the best interests of the
Company and its stockholders.

J.                                        The Company and the Individual
Defendants have denied, and continue to deny, any liability or wrongdoing with
respect to any and all claims alleged in the Action, the State Action or
otherwise.  Without conceding any infirmities in their defenses to the claims
asserted in the Action or State Action, the Company and the Individual
Defendants nevertheless consider the dismissal of the Action and State Action,
subject to the terms and conditions herein, desirable because, among other
things, the Stipulation and Settlement will eliminate the substantial burden,
expense, inconvenience and distraction of litigation and will dispel any
uncertainty that may exist as a result thereof.

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NOW THEREFORE IT IS HEREBY STIPULATED AND AGREED AS FOLLOWS, pursuant to Federal
Rule of Civil Procedure 23.1 (“Rule 23.1”), and subject to the approval of the
Court.

I.                                         SETTLEMENT CONSIDERATION

In consideration for the full settlement and release of all Settled Claims (as
defined below), the Company and Individual Defendants shall implement the
corporate governance provisions detailed in Exhibit A attached hereto.

II.                                     RELEASE OF CLAIMS

1.                                       Upon Final Approval, all of the Settled
Claims (as defined below) are completely, fully, finally and forever
compromised, settled, released, discharged, extinguished and dismissed with
prejudice, upon and subject to the terms and conditions set forth in this
Stipulation.

2.                                       Upon Final Approval, each of the
Released Persons shall be deemed to have and by operation of the Order and Final
Judgment shall have fully, finally and forever released and relinquished and
discharged the Plaintiffs and their counsel from all claims, including unknown
claims, arising out of the institution, prosecution, assertion, settlement or
resolution of the Action or the Settled Claims.

3.                                       For the purposes of this Stipulation:

(a)                                  “Final Approval” shall be considered to
have occurred for purposes of this Stipulation after both of the following have
occurred:

(i)                                     entry of the Order and Final Judgment
approving the Settlement, attached hereto as Exhibit D, and the expiration of
any applicable appeal period for the appeal of the Order and Final Judgment
without an appeal having been filed or, if an appeal is taken, upon entry of an
order affirming the Order and Final Judgment appealed from (or dismissing the
appeal) and the expiration of any applicable period for the reconsideration,
rehearing or appeal of such affirmance

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(or dismissal) without any motion for reconsideration or rehearing or further
appeal having been filed; and

(ii)                                  the dismissal with prejudice of the State
Action and the expiration of any applicable appeal period for the appeal of such
dismissal with prejudice without an appeal having been filed or, if an appeal is
taken, upon entry of an order affirming the dismissal with prejudice of the
State Action (or dismissing the appeal) and the expiration of any applicable
period for the reconsideration, rehearing or appeal of such affirmance (or
dismissal) without any motion for reconsideration or rehearing or further appeal
having been filed.

An appeal only with respect to the award of attorneys’ fees and expenses shall
not affect Final Approval or the finality of the Settlement.

(b)                                 “Released Persons” means (i) the Company and
its parent entities, predecessors, associates, general or limited partnerships,
limited liability companies, affiliates, past and present subsidiaries, and each
and all of their respective past, present or future officers, members,
directors, stockholders, agents, representatives, employees, and also attorneys,
financial or investment advisors, advisors, consultants, auditors, accountants,
investment bankers, commercial bankers, trustees, engineers, agents, insurers,
co-insurers and reinsurers (except to the extent claims against insurance
carriers and subrogation rights are specifically reserved herein); and (ii) all
persons who are or were defendants in the Action or State Action (or any action
encompassed by the Action or State Action), including the Individual Defendants,
and their respective heirs, executors, trustees, general or limited partners or
partnerships, limited liability companies, members, representatives, employees,
attorneys, advisors, consultants, agents, estates, and administrators; in each
instance, whether or not they were named, served with process or appeared in the
Action.

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(c)                                  “Settled Claims” means all claims, demands,
rights, actions or causes of action, liabilities, damages, losses, obligations,
judgments, suits, fees, expenses, costs, matters and issues of any kind or
nature whatsoever, whether known or unknown, contingent or absolute, suspected
or unsuspected, disclosed or undisclosed, matured or unmatured, that have been,
could have been, or in the future can or might be asserted in the Action, the
State Action or in any court, tribunal or proceeding (including, but not limited
to, any claims arising under federal or state statutory or common law relating
to alleged fraud, breach of any duty, negligence, violations of the federal
securities laws or otherwise), by or on behalf of Plaintiffs, derivatively or in
their status as stockholders of the Company, by any past or present stockholder
of the Company (derivatively or in their status as stockholders of the Company),
by the Company, or by their or its predecessors, successors or assigns (or any
person claiming by, through, in the right of, or on behalf of them or the
Company by assignment or otherwise, except to the extent claims against
insurance carriers and subrogation rights are specifically reserved herein),
whether legal, equitable or any other type, which have arisen, arise now or
hereafter arise out of, or relate in any manner to, the allegations, facts,
events, practices, conduct, transactions, matters, acts, occurrences,
statements, representations, misrepresentations or omissions, or any fees,
expenses or costs incurred in prosecuting, defending or settling the Action and
State Action, or any other matter, thing or cause whatsoever, or any series
thereof, embraced, involved or set forth in, or referred to or otherwise
related, directly or indirectly, in any way to, the Action or the State Action
or the subject matter of the Action or State Action, and including, without
limitation, any claims in any way related to (i) the Settlement and this
Stipulation, (ii) the fiduciary obligations of the Individual Defendants or any
other Released Persons relating to or in connection with the allegations made in
the complaints in the Action and State Action or the investigation of such
allegations, (iii) any disclosures or alleged misrepresentations or omissions
that

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were made or allegedly not made by any of the Released Persons regarding the
subject matter of the Action or State Action, (iv) the Stipulation or any other
matters described or alleged in this Stipulation, including, without limitation,
(1) all stock option grants made by the Company, (2) all stock options issued
pursuant to such grants, (3) all shares issued upon the exercise of said stock
options, (4) the stock option granting practices of the Company, (5) the actions
of the Special Committee, and (6) any and all disclosures made in connection
with any of the foregoing.

4.                                       The releases contemplated by this
Stipulation extend to claims that any parties granting a release (the “Releasing
Parties”) do not know or suspect to exist at the time of the release, which if
known might have affected the Releasing Parties’ decision to enter into this
release.  The Releasing Parties will be deemed to relinquish, to the extent
applicable and to the full extent permitted by law, the provisions, rights and
benefits of Section 1542 of the California Civil Code, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

In addition, the Releasing Parties will be deemed to relinquish, to the extent
applicable, and to the fullest extent permitted by law, the provisions, rights
and benefits of any law of any state or territory of the United States, federal
law, or principle of common law, which is similar, comparable or equivalent to
Section 1542 of the California Civil Code.  The Releasing Parties acknowledge
that the Releasing Parties may discover facts in addition to or different from
those now known or believed to be true with respect to the Settled Claims, but
that it is the intention of the Releasing Parties to hereby completely, fully,
finally and forever compromise, settle, release, discharge and extinguish any
and all Settled Claims, known or unknown, suspected or unsuspected, which now
exist, or heretofore existed, or may hereafter exist, and without regard to the
subsequent discovery or

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existence of additional or different facts.  The parties acknowledge that the
inclusion of Unknown Claims in the definition of Released Claims was separately
bargained for and was a key element of the Settlement.  The Releasing Parties
warrant that the Releasing Parties have read and understand Section 1542 of the
California Civil Code and have had the opportunity to consult with and be
advised by counsel regarding its meaning and effect.  The Releasing Parties
hereby voluntarily waive the provisions, rights and benefits of Section 1542 of
the California Civil Code and the provisions, rights and benefits of any law of
any state or territory of the United States, federal law, or principle of common
law, which is similar, comparable or equivalent to Section 1542 of the
California Civil Code.

5.                                       Notwithstanding any other provision of
this Stipulation or anything contained in any Exhibit hereto to the contrary,
nothing in this Stipulation or in any Exhibit hereto shall be construed to (i)
release, discharge, extinguish or otherwise compromise any claims or potential
claims that Family Dollar or any person who is or was a defendant in the Action
or the State Action may have under or relating to any policy of liability or
other insurance, or (ii) release any insurer, co-insurer or reinsurer from any
obligation owed to Family Dollar or any person who is or was a defendant in the
Action or the State Action for indemnity or coverage under or relating to any
policy of liability or other insurance.

6.                                       Notwithstanding any other provision of
this Stipulation or anything contained in any Exhibit hereto to the contrary,
nothing in this Stipulation or in any Exhibit hereto shall be construed to
release, discharge, extinguish or otherwise compromise any claims or potential
claims for subrogation that any insurance carrier may have as to any third
party, including, but not limited to attorneys, financial or investment
advisors, advisors, consultants, auditors, accountants, investment bankers,
commercial bankers, trustees, engineers, agents, insurers, co-insurers and
reinsurers not

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otherwise named in the Action or State Action and not otherwise released herein,
to the extent of any prior or future payments under any policy of insurance
which have arisen, arise now or hereafter arise out of, or relate in any manner
to, the allegations, facts, events, practices, conduct, transactions, matters,
acts, occurrences, statements, representations, misrepresentations or omissions,
or any fees, expenses or costs incurred in prosecuting, defending or settling
the Action and State Action, or any other matter, thing or cause whatsoever, or
any series thereof, embraced, involved or set forth in, or referred to or
otherwise related, directly or indirectly, in any way to, the Action or the
State Action or the subject matter of the Action or State Action, and including,
without limitation, any claims in any way related to (i) the Settlement and this
Stipulation, (ii) the fiduciary obligations of the Individual Defendants or any
other Released Persons relating to or in connection with the allegations made in
the complaints in the Action and State Action or the investigation of such
allegations, (iii) any disclosures or alleged misrepresentations or omissions
that were made or allegedly not made by any of the Released Persons regarding
the subject matter of the Action or State Action, (iv) the Stipulation or any
other matters described or alleged in this Stipulation, including, without
limitation, (1) all stock option grants made by the Company, (2) all stock
options issued pursuant to such grants, (3) all shares issued upon the exercise
of said stock options, (4) the stock option granting practices of the Company,
(5) the actions of the Special Committee, and (6) any and all disclosures made
in connection with any of the foregoing.

III.                                 SUBMISSION AND APPLICATION TO THE COURT

1.                                       As soon as practicable after the
execution of this Stipulation, the parties to the Action shall jointly apply to
the Court for an order in the form attached hereto as Exhibit B (the
“Preliminary Approval and Scheduling Order”), which shall provide:

(a)                                  that a settlement hearing (the “Settlement
Hearing”) be held to determine whether the Court should: (i) approve the
Settlement pursuant to Rule 23.1 as fair, reasonable,

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adequate and in the best interests of the Company and its stockholders; (ii)
enter an Order and Final Judgment dismissing the Action with prejudice, with
each party to bear its, his or her own costs, and release and enjoin prosecution
of any and all Settled Claims; (iii) consider the application of Plaintiffs’
counsel for an award of attorneys’ fees and expenses; and (iv) hear other such
matters as the Court may deem necessary and appropriate;

(b)                                 that a copy of the Notice of Hearing and
Proposed Settlement of Derivative Action (the “Notice”), substantially in the
form attached hereto as Exhibit C, shall be sent to all stockholders of record
of the Company as of the date of the Preliminary Approval and Scheduling Order,
and further provide that the distribution of the Notice substantially in the
manner set forth in the Preliminary Approval and Scheduling Order herein
constitutes the best notice practicable under the circumstances, meets the
requirements of applicable law and due process, is due and sufficient notice of
all matters relating to the Settlement and fully satisfies the requirements of
due process and of Rule 23.1;

(c)                                  a Court finding that the Settlement appears
to be the product of serious, informed, non-collusive negotiations, has no
obvious deficiencies, provides substantial value to the Company and falls within
the range of possible approval and, therefore, merits further consideration; and

(d)                                 a grant of preliminary approval of the
Settlement and a preliminary finding that the Settlement is fair, reasonable,
adequate and in the best interests of the Company and its stockholders.

2.                                       All costs incurred in identifying and
notifying the Company’s stockholders of the Settlement, including the printing
and the copying of the Notice, as set forth in the Preliminary Approval and
Scheduling Order, will be paid by the Company.  Plaintiffs shall undertake the

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administrative responsibility for providing notice to the Company’s stockholders
and are authorized to hire Gilardi & Co. LLC for purposes of effecting such
notice.

3.                                       As soon as practicable after the
execution of this Stipulation, the parties to the State Action shall jointly (i)
notify the Superior Court of this Stipulation and the Settlement, and (ii) apply
to the Superior Court for a stay of all proceedings in the State Action pending
Final Approval.

4.                                       Within five (5) days after entry by the
Court of the Order and Final Judgment approving the Settlement (attached hereto
as Exhibit D), the parties to the State Action shall jointly apply to the
Superior Court for a dismissal with prejudice of the State Action, and shall use
their reasonable best efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, all things, reasonably necessary, proper or advisable
under applicable laws, regulations and agreements, to secure such dismissal with
prejudice.

IV.                                ORDER AND FINAL JUDGMENT

1.                                       If the Settlement (including any
modification thereto made with the consent of Plaintiffs, the Company and the
Individual Defendants as provided for herein) is approved by the Court, the
parties to the Action shall promptly request that the Court enter an Order and
Final Judgment, substantially in the form attached hereto as Exhibit D, which
among other things:

(a)                                  approves the Settlement, adjudges the terms
thereof to be fair, reasonable, adequate and in the best interests of the
Company and its stockholders, and directs consummation of the Settlement in
accordance with the terms and conditions of the Stipulation;

(b)                                 determines that the requirements of Rule
23.1 and due process have been satisfied in connection with the Notice to the
Company’s stockholders;

(c)                                  dismisses the Action with prejudice as to
Plaintiffs, the Company, the Company’s stockholders and all of the Individual
Defendants, extinguishing, discharging and releasing any and all Settled Claims
as against the Company and the Individual Defendants, said

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dismissal subject only to compliance by the Company and the Individual
Defendants with the terms of this Stipulation and any order of the Court
concerning this Stipulation, and permanently enjoining Plaintiffs, the Company’s
past or present stockholders, the Company and anyone claiming through or for the
benefit of any of them, from asserting, commencing, prosecuting, assisting,
instigating or in any way participating in the commencement or prosecution of
any action or other proceeding, in any forum, asserting any Settled Claims;

(d)                                 Contains a release by the Released Persons
of the Plaintiffs and their counsel from all claims, including Unknown Claims,
arising out of the institution, prosecution, assertion, settlement or resolution
of the Action or the Settled Claims; and

(e)                                  Contains a statement that during the course
of the Action, the Parties and their counsel at all times complied with Federal
Rule of Civil Procedure 11 and all similar applicable state laws.

V.                                    RIGHT TO WITHDRAW FROM THE SETTLEMENT

1.                                       Plaintiffs in the Action and the State
Action, the Company and each of the Individual Defendants shall have the
separate option to withdraw from the Settlement in the event that (i) either the
Order and Final Judgment referred to above are not entered substantially in the
forms specified herein, including such modifications thereto as may be ordered
by the Court with the consent of Plaintiffs in the Action, the Company and the
Individual Defendants, or (ii) the Settlement does not receive Final Approval,
or the Court approves the Settlement but such approval is reversed or vacated or
substantially modified on appeal, reconsideration or otherwise.

2.                                       In the event that the Settlement
proposed herein does not receive Final Approval, or the Court approves the
Settlement but such approval is reversed or vacated on appeal, reconsideration
or otherwise, and such order reversing or vacating the Settlement becomes final
by lapse of time or otherwise, or if any of the conditions to such Settlement
are not fulfilled (including

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dismissal of the State Action with prejudice), then the Settlement proposed
herein shall be of no further force or effect, and this Stipulation and all
negotiations, proceedings and statements relating thereto and any amendment
thereof shall be null and void and without prejudice to any party hereto, and
each party shall be restored to his, her or its respective position as it
existed prior to the execution of this Stipulation.

3.                                       In order to exercise any option a party
to the Action or the State Action may have to withdraw from and terminate this
Settlement, such party must provide, within five business days of the event
giving rise to such option, written notice of such withdrawal and the grounds
therefor to all signatories to this Stipulation.

VI.                                STIPULATION NOT AN ADMISSION

1.                                       The provisions contained in this
Stipulation and all negotiations, statements and proceedings leading up to and
in connection therewith are not, shall not be argued to be, and shall not be
deemed, a presumption, concession or admission by the Individual Defendants or
the Company of any fault, liability or wrongdoing as to any fact or claim
alleged or asserted in the Action, the State Action or any other actions or
proceedings and shall not be interpreted, construed, deemed, invoked, offered or
received in evidence or otherwise used by any person in these or any other
actions or proceedings, whether civil, criminal or administrative, except in a
proceeding to enforce the terms or conditions of this Stipulation.

VII.                            DENIAL OF LIABILITY

1.                                       Each Released Person specifically
disclaims any liability whatsoever relating to any of the Settled Claims;
expressly denies having engaged in, or threatened to engage in, any breach of
duty, violations of law or wrongful or illegal activity, or having failed to act
in any matter required by law or rule, or having violated, or threatened to
violate, any law or regulation or duty; expressly denies that any person or
entity has suffered any harm or damages as a result of such Released

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Person’s involvement with the Settled Claims (or the events at issue therein),
and such Released Person is making this Settlement (without conceding any
infirmity in such Released Person’s defenses against the Settled Claims) solely
to avoid the uncertainty, harm, distraction, burden and expense occasioned by
litigation.  Each Released Person believes such Released Person acted, at all
times, in the best interests of the Company and its stockholders.  The Court has
made no finding that any Released Person has engaged in any wrongdoing or
wrongful conduct or otherwise acted improperly or in violation of any law or
regulation or duty in any respect.

VIII.                        GENERAL PROVISIONS

1.                                       Each of the individuals executing this
Stipulation on behalf of one or more of the parties hereto represents and
warrants that he or she has been duly authorized and empowered to execute this
Stipulation on behalf of his or her respective client or clients.

2.                                       The Plaintiffs and their counsel in the
Action and State Action represent and warrant that none of Plaintiffs’ claims or
causes of action referred to in any complaint encompassed by the Action or the
State Action or this Stipulation have been assigned, encumbered or in any manner
transferred in whole or in part.

3.                                       This Stipulation may be executed in any
number of actual or telecopied counterparts and by each of the different parties
thereto on several counterparts, each of which when so executed and delivered
shall be an original.  The executed signature page(s) from each actual or
telecopied counterpart may be joined together and attached to such original and
shall constitute one and the same instrument.

4.                                       The waiver by any party of any breach
of this Stipulation shall not be deemed or construed as a waiver of any other
breach, whether prior, subsequent, or contemporaneous, of this Stipulation.

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5.                                       In addition to the actions specifically
provided for in this Stipulation, the parties will use their reasonable best
efforts from the date hereof to take, or cause to be taken, all actions, and to
do, or cause to be done, all things, reasonably necessary, proper or advisable
under applicable laws, regulations and agreements, to consummate and make
effective this Stipulation.  The parties and their attorneys agree to cooperate
fully with one another in seeking the Court’s approval of this Stipulation and
the Settlement and to use their best efforts to effect the consummation of this
Stipulation and the Settlement.  Without further order of the Court, the parties
may agree to reasonable extensions of time not expressly set by the Court order
to carry out any of the provisions of this Stipulation.

6.                                       Each party represents and warrants that
the party, or a responsible officer or partner or other fiduciary thereof, has
read this Stipulation and understands the contents hereof, and believes it is a
fair resolution of contested claims.

7.                                       Each party represents and warrants that
the party has made such investigation of the facts pertaining to the Settlement
provided for in this Stipulation, and of all of the matters pertaining thereto,
as the party deems necessary and advisable.

8.                                       Each term of this Stipulation is
contractual and not merely a recital.

9.                                       This Stipulation may not be amended,
changed, waived, discharged or terminated (except as explicitly provided
herein), in whole or in part, except by an instrument in writing signed by the
party against whom or which enforcement of such amendment, change, waiver,
discharge or termination is sought.

10.                                 This Stipulation and Settlement will be
governed by, and construed in accordance with, the laws of the State of North
Carolina, without regard to conflict of laws principles.  Any action relating to
this Stipulation or the Settlement will be filed exclusively in the Court.  Each
party

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hereto (i) consents to personal jurisdiction in any such action (but in no other
action) brought in the Court, (ii) consents to service of process by registered
mail upon such party and/or such party’s agent, (iii) waives any objection to
venue in the Court and any claim the Court is in an inconvenient forum, and (iv)
waives any right to a jury trial as to any such action.

11.                                 This Stipulation constitutes the entire
agreement among the parties with respect to the subject matter hereof, and
supersedes all prior or contemporaneous oral or written agreements,
understandings or representations.  All of the Exhibits hereto are incorporated
herein by reference as if set forth herein verbatim, and the terms of all
Exhibits are expressly made part of this Stipulation.

12.                                 This Stipulation is and will be binding
upon, and inure to the benefit of, the parties and their respective affiliates,
agents, executors, heirs, successors and permitted assigns.

13.                                 The terms and provisions of this Stipulation
are intended solely for the benefit of the Released Persons and their respective
successors and permitted assigns, and it is not the intention of the parties to
confer third-party beneficiary rights or remedies upon any other person or
entity, except any attorneys’ fees and expenses to be paid pursuant to the terms
of this Stipulation.

14.                                 This Stipulation will be deemed to have been
mutually prepared by the parties and will not be construed against any of them
by reason of authorship.  Paragraph titles and headings have been inserted for
convenience only and will not be used in determining the terms of this
Stipulation.

15.                                 All agreements made and orders entered
during the course of the Action and the State Action relating to the
confidentiality of information shall survive this Stipulation.

16.                                 The parties and their counsel agree not to
disparage any of the other parties or to state or imply that any of the other
parties are guilty of or have engaged in wrongdoing or misconduct of any sort
whatsoever in any press release or other public statement.

17

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17.                                 If any provision of this Stipulation is held
to be illegal, invalid, or unenforceable (i) such provision will be fully
severable, (ii) this Stipulation will be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part of this
Stipulation, and (iii) the remaining provisions of this Stipulation will remain
in full force and effect and will not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Stipulation.

IX.                                FEES AND EXPENSES

1.                                       Counsel for the Plaintiffs will apply
to the Court for an award of attorneys’ fees and expenses (including costs and
disbursements) in a total amount not to exceed $3,500,000.  Defendants agree not
to oppose any such fee and expense award that does not exceed that amount.  The
Company will pay any award of fees and expenses (including costs and
disbursements), not to exceed $3,500,000.  Within five (5) business days after
Final Approval, the Company will make such payment jointly to Schiffrin Barroway
Topaz & Kessler, LLP and Lerach Coughlin Stoia Geller Rudman & Robbins LLP, as
joint receiving agents for all Plaintiffs’ counsel.  Nothing contained herein
shall be deemed to prejudice the rights of the defendants to seek reimbursement
under any insurance policy of the fees and expenses awarded by the Court.

2.                                       The allowance or disallowance by the
Court of any award of attorneys’ fees and/or expenses will be considered by the
Court following approval of this Stipulation and separately from the Court’s
consideration of the fairness, reasonableness and adequacy of the Settlement. 
Any order or proceeding relating solely to the application by Plaintiffs’
counsel for an award of attorneys’ fees and expenses (including costs and
disbursements), or any appeal from any order relating thereto or reversal or
modification thereof, shall have no effect on the Settlement and shall not
operate to terminate or cancel this Stipulation or to affect or delay the
finality of the Order and Final Judgment approving this Stipulation.

18

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IN WITNESS WHEREOF, the parties have executed this Stipulation effective as of
June 22, 2007.

/s/ L. Bruce McDaniel

 

L. BRUCE McDANIEL (N.C. State Bar #5025)

 

WILLIAM E. ANDERSON (N.C. State Bar #098)

 

McDANIEL & ANDERSON, L.L.P.

 

Lafayette Square

 

4942 Windy Hill Drive

 

P.O. Box 58186

 

Raleigh, NC 27658

 

Telephone: 919/872-3000

 

919/790-9273 (fax)

 

mcdas@mcdas.com

 

 

 

Liaison Counsel

 

 

 

LERACH COUGHLIN STOIA GELLER

 

RUDMAN & ROBBINS LLP

 

TRAVIS E. DOWNS III

 

JEFFREY D. LIGHT

 

BENNY C. GOODMAN III

 

MARY LYNNE CALKINS

 

655 West Broadway, Suite 1900

 

San Diego, CA 92101

 

Telephone: 619/231-1058

 

619/231-7423 (fax)

 

 

 

LERACH COUGHLIN STOIA GELLER

 

RUDMAN & ROBBINS LLP

 

SHAWN A. WILLIAMS

 

MONIQUE C. WINKLER

 

AELISH M. BAIG

 

100 Pine Street, Suite 2600

 

San Francisco, CA 94111

 

Telephone: 415/288-4545

 

415/288-4534 (fax)

 

19

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LERACH COUGHLIN STOIA GELLER

 

RUDMAN & ROBBINS LLP

 

THOMAS G. WILHELM

 

9601 Wilshire Blvd., Suite 510

 

Los Angeles, CA 90210

 

Telephone: 310/859-3100

 

310/278-2148 (fax)

 

 

 

THE WEISER LAW FIRM, P.C.

 

ROBERT B. WEISER

 

BRETT D. STECKER

 

121 N. Wayne Avenue, Suite 100

 

Wayne, PA 19087

 

Telephone: 610/225-2677

 

610/225-2678 (fax)

 

 

 

Co-Lead Counsel for Plaintiffs

 

 

 

SCHIFFRIN BARROWAY TOPAZ &

 

KESSLER, LLP

 

LEE D. RUDY

 

280 King of Prussia Road

 

Radnor, PA 19087

 

Telephone: 610/667-7706

 

610/667-7056 (fax)

 

 

 

Of Counsel

 

 

 

/s/ Gary W. Jackson

 

GARY W. JACKSON (NC STATE BAR #1376)

 

THE JACKSON LAW GROUP, PLLC

 

1321 East Morehead Street

 

Charlotte, NC 28204

 

Telephone: 704/377-6680

 

704/377-6690 (fax)

 

 

 

Attorneys for Plaintiffs in the State Action

 

20

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/s/ T. Thomas Cottingham, III

 

T. THOMAS COTTINGHAM, III

 

(NC STATE BAR #23798)

 

VALERIE B. WRIGHT

 

(NC STATE BAR #32348)

 

HUNTON & WILLIAMS LLP

 

Bank of America Plaza

 

101 South Tryon Street, Suite 3500

 

Charlotte, NC 28280

 

Telephone: 704/378-4700

 

704/378-4890 (fax)

 

 

 

Attorneys for Nominal Defendant Family Dollar

 

Stores, Inc.

 

 

 

HUNTON & WILLIAMS LLP

 

Riverfront Plaza, East Tower

 

951 East Byrd Street

 

Richmond, VA 23219

 

 

 

/s/ Jonathan E. Buchan, Jr.

 

JONATHAN E. BUCHAN, JR.

 

(NC STATE BAR #8205)

 

IRVING M. BRENNER

 

(NC STATE BAR #15483)

 

CATHERINE E. THOMPSON

 

(NC STATE BAR #9495)

 

HELMS, MULLIS & WICKER, PLLC

 

201 North Tryon Street

 

PO Box 31247 (28231)

 

Charlotte, NC 28202

 

Telephone: 704/343-2000

 

704/343-2300 (fax)

 

 

 

Attorneys for Defendants Howard Levine, R.
James Kelly, R. David Alexander, Jr., George
Mahoney, Jr., Gilbert Lafare, John Scanlon, Sam
McPherson, Charles S. Gibson, Mark Bernstein,
Sharon Allred Decker, and James Martin in the
State Action

 

21

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/s/ Mark W. Merritt

 

MARK W. MERRITT
(NC STATE BAR #12198)
RUSSELL M. ROBINSON, II
(NC STATE BAR #3735)
KATHERINE G. MAYNARD
(NC STATE BAR #26837)
ROBINSON, BRADSHAW & HINSON, P.A.
101 North Tryon Street, Suite 1900
Charlotte, NC  28246
Telephone: 704/377-2536
704/378-4000 (fax)

 

 

 

Attorneys for Defendant Leon Levine in the
Action

 

 

 

/s/ Mark R. Kutny

 

MARK R. KUTNY
(NC STATE BAR #29306)
DAVID B. HAMILTON
(NC STATE BAR #7771)
HAMILTON, MOON, STEPHENS,
   STEELE & MARTIN PLLC
2020 Charlotte Plaza
201 S. College Street
Charlotte, NC  28244-2020
Telephone: 704/344-1117
704/344-1483 (fax)

 

 

 

Attorneys for Defendant C. Martin Sowers in the Action

 

 

 

ROGERS & HARDIN LLP
2700 International Tower, Peachtree Center
229 Peachtree Street, N.E.
Atlanta, GA  30303

 

 

 

Of Counsel

 

22

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/s/ James T. Williams, Jr.

 

JAMES T. WILLIAMS, JR.

 

(NC STATE BAR #4758)

 

JENNIFER K. VAN ZANT

 

(NC STATE BAR #21280)

 

BROOKS, PIERCE, MCLENDON,

 

HUMPHREY & LEONARD LLP

 

Post Office Box 26000

 

Greensboro, North Carolina 27420

 

Telephone: 336-373-8850

 

336-378-1001 (fax)

 

 

 

Attorneys for Defendants Edward C. Dolby, Glenn

 

A. Eisenberg and Dale C. Pond in the Action

 

 

 

RICHARDS, LAYTON & FINGER, P.A.

 

GREGORY WILLIAMS

 

HARRY TASHJIAN, IV

 

One Rodney Square

 

P.O. Box 551

 

Wilmington, DE 19899

 

Telephone: 302-658-6541

 

302-658-6548 (fax)

 

 

 

Of Counsel

 

23

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Jonathan E. Buchan, Jr.

 

JONATHAN E. BUCHAN, JR.

 

(NC STATE BAR #8205)

 

IRVING M. BRENNER

 

(NC STATE BAR #15483)

 

CATHERINE E. THOMPSON

 

(NC STATE BAR #9495)

 

HELMS, MULLIS & WICKER, PLLC

 

201 North Tryon Street

 

PO Box 31247 (28231)

 

Charlotte, North Carolina 28202

 

Telephone: 704/343-2000

 

704/343-2300 (fax)

 

 

 

Attorneys for Defendants Howard Levine, R.
James Kelly, R. David Alexander, Jr., George
Mahoney, Jr., Charles S. Gibson, Jr., Mark
Bernstein, Sharon Allred Decker, and James
Martin in the Action

 

24

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EXHIBIT A TO STIPULATION AND AGREEMENT
OF COMPROMISE, SETTLEMENT AND RELEASE

The defendants acknowledge and agree that the pendency and prosecution of the
shareholder derivative litigation was a significant factor underlying the
Company’s decision to agree to the series of changes set forth below with
respect to the Company’s corporate governance practices.  In addition,
subsequent to the filing of the shareholder derivative litigation, the
Plaintiffs and the Special Committee negotiated the cancellation of stock
options detailed in paragraph seven (7) below.

1.             The Company’s Equity Award Processes.

(a)           Annual equity grants of stock options and/or performance share
rights (“PSRs”) will be made by the Compensation Committee of the Board (the
“Compensation Committee”) with a grant date of the Tuesday following the
Company’s annual earnings release.  Grants in connection with the employment,
promotion or retention of an individual employee with the title of Vice
President or above (“Individual Officer Grants”) will be made by the
Compensation Committee with a grant date of the Tuesday following the Company’s
monthly sales release.  Grants may be made at other times only upon an express
determination by the Compensation Committee that such grants are in the best
interests of the Company.

(b)           A list of the proposed grantees and the amount of options and PSRs
will be provided to the Compensation Committee and shall include all Individual
Officer Grants to be made to employees through the latest practicable date prior
to the meeting of the Compensation Committee at which such grants are to be
considered.

(c)           Grants in connection with the employment, promotion or retention
of an individual employee below the level of Vice President (“Individual
Grants”) will be made by the Equity Award Committee of the Board with a grant
date of the Tuesday following the Company’s

--------------------------------------------------------------------------------

monthly sales release and shall include all Individual Grants to be made to
employees through the Friday before such Tuesday grant date.

(d)           All stock option grants will be made at meetings of the Board or a
relevant committee of the Board (other than any committee consisting of one
member) and will not be effected by written consent, except where extenuating
circumstances so require.

(e)           Where circumstances require the use of a written consent to
approve a stock option grant, no such consent shall contain a pre-printed stated
effective date of the consent and each member of the Board or committee must
date any written consent on the date of his or her execution thereof.

2.             The Board shall revise its Corporate Governance Guidelines (the
“Guidelines”) to adopt a majority voting policy for uncontested elections of
directors only.  Under the Company’s organizational documents, directors
currently are elected by a plurality of votes cast at any meeting of
stockholders duly called and held for the purpose of electing directors.  Under
the majority voting policy, each director who receives a greater number of votes
withheld from his or her election than votes cast “for” such election would be
required to tender his or her resignation to the Board promptly following the
certification of the election results.  The Nominating/Corporate Governance
Committee of the Board (the “Nominating Committee”) would consider the tendered
resignation and make a recommendation to the Board with respect thereto.

3.             The Board shall revise the Company’s guidelines regarding cash
bonuses to provide that in the future, in connection with the award of any cash
bonus to an “executive officer” (as defined in the rules promulgated under the
Securities and Exchange Act of 1934, as amended), such awards would be
conditioned upon, in the event of an accounting restatement due to material
noncompliance by the Company as a result of intentional misconduct with any
financial reporting

2

--------------------------------------------------------------------------------

requirements of the federal securities laws with respect to financial statements
filed by the Company within twelve (12) months after the date of such award,
reimbursement by the executive officer to the Company of the difference between
the amount of the original bonus received by the executive officer and the
amount of the bonus such officer would have received had the amount of the bonus
been calculated based on the restated financial statements.

4.             The Board shall revise the Guidelines to provide that, to be
deemed “independent” in any fiscal year, a director must satisfy the following
qualifications:

(a)           The director has not been employed by the Company or its
subsidiaries or affiliates within the last four years;

(b)           The director has not received, during the current year or any of
the three immediately preceding years, remuneration, directly or indirectly,
other than de minimis remuneration (as defined below), as a result of service
(other than as a director of a customer or supplier) as (i) an advisor,
consultant, or legal counsel to the Company or to a member of the Company’s
senior management; or (ii) a significant customer or supplier of the Company;

(c)           The director has no personal services contracts with the Company,
or any member of the Company’s senior management;

(d)           The director is not an officer or employee of a not-for-profit
entity that receives significant contributions from the Company, and does not
serve any such entity in any capacity for which remuneration is received;

(e)           The director does not have any investment in any entity in which
the Company also has an investment, other than equity or debt investments that
are available to the public in public or governmental entities, or investments
in any other entity in which neither the

3

--------------------------------------------------------------------------------

director nor the Company or any of its parents, subsidiaries or affiliates own
an interest of 5% or more or exercises managerial control;

(f)            The director is not employed by a public company at which an
executive officer of the Company serves on the Compensation Committee;

(g)           The director has not had any of the relationships described above
in sub-sections “a” through “f,” with any affiliate of the Company; and

(h)           The director is not a member of the immediate family of any person
who fails to satisfy the qualifications described above.

A director shall be deemed to have received remuneration (other than
remuneration as a director, including remuneration provided to a non-executive
Chairman of the Board, Committee Chairman, or Lead Director), directly or
indirectly, if remuneration, other than de minimis remuneration, was paid by the
Company, its subsidiaries or affiliates, to any entity in which the director has
a beneficial ownership interest of 5% percent of equity or more, or to an entity
by which the director is employed or self-employed other than as a director. 
Remuneration is deemed de minimis remuneration if such remuneration is $60,000
or less in any year,(1) or if such remuneration is paid to an entity, it (i) did
not for the fiscal year exceed the lesser of $1 million, or 5% of the gross
revenues of the entity; and (ii) did not directly result in a material increase
in the compensation received by the director from that entity.

5.             The Company shall continue to identify qualified independent
directors and agrees to cause two additional independent directors to be
nominated for election to the Board by the date of

--------------------------------------------------------------------------------

(1)           The $60,000 remuneration level set forth above applies for three
years from the date of Final Approval. Thereafter, the analogous remuneration
level set forth in the applicable stock exchange rules (currently $100,000 as
set forth in New York Stock Exchange Listed Company Manual, Section
303A.02(b)(ii)) shall apply.

4

--------------------------------------------------------------------------------

the annual meeting of stockholders of the Company in the fiscal year 2009.  One
such director may be added to the Board to fill a vacancy created by resignation
or retirement of a non-independent director.  With respect to the election of
these independent directors, a designee of the Nominating Committee shall work
with a designee of a major stockholder of the Company, other than stockholders
who are affiliates of any member of management, to identify potential director
candidates acceptable to the designee of such major stockholder.  A reputable
director search firm shall be engaged and assist in such search process.  The
candidates so selected shall be submitted to the Nominating Committee.  Absent
unforeseen circumstances, the Nominating Committee and Company shall nominate
persons for election for these two director positions as set forth in this
paragraph five (5).  After election of these two additional independent
directors to the Board, the Company will maintain a board of directors comprised
of at least 75% independent directors; however, the termination of service of
independent directors that results in the Board being comprised of less than 75%
independent directors shall not result in a violation of this provision so long
as the Company nominates for election independent directors to fill vacancies
created by such termination of service as soon as practicable.

6.             For a period of at least three years, the Company shall require
its officers, subject to certain conditions set forth in the Company’s policy
with respect to officer stock ownership, to retain 25% of all equity awards made
to such officers until the following ownership levels of the Company’s stock are
obtained:  Chief Executive Officer - five times salary; President, Chief
Financial Officer, Chief Operating Officer and Executive Vice President - three
times salary; Senior Vice Presidents - two times salary; and Vice Presidents -
one times salary.

7.             Upon Final Approval (as defined in the Stipulation) of the
Settlement, each of defendants Howard R. Levine, the Company’s chief executive
officer, R. James Kelly, the

5

--------------------------------------------------------------------------------

Company’s president and chief operating officer, George R. Mahoney, Jr., the
Company’s former general counsel, and C. Martin Sowers, the Company’s senior
vice president of finance, agree to relinquish their rights to certain
unexercised stock options to purchase shares of common stock of the Company in
the amounts of 75,000, 35,000, 80,000, and 20,000, respectively.  Specifically,
Mr. Levine will relinquish his rights to 57,000 options granted to him by the
Company in 2002 and 18,000 options granted to him in 2003;  Mr. Kelly will
relinquish his rights to 28,000 options granted to him by the Company in 2002
and 7,000 options granted to him in 2003; Mr. Mahoney will relinquish his rights
to 32,000 options granted to him by the Company in 2002 and 48,000 options
granted to him in 2003; and Mr. Sowers will relinquish his rights to 11,500
options granted to him by the Company in 2002 and 8,500 options granted to him
in 2003.  The parties agree that Messrs. Levine, Kelly, Mahoney and Sowers are
legally entitled to the options being relinquished, that there has been no
finding of wrongdoing in connection with the grant of such options and that
their agreement in this regard is not to be deemed an admission of any liability
or wrongdoing on their part.  Messrs. Levine, Kelly, Mahoney and Sowers agree to
relinquish the options recited above as part of the settlement of the
above-styled action and their agreement in this regard is not to be deemed an
admission of any liability or wrongdoing on their part.  The parties agree that
the relinquishment of said options is not disgorgement or restitution and the
value of said options does not represent in any way a measure of disgorgement or
restitution.  The Company shall not replace, reissue, or substitute new or
additional options for the options that are being relinquished pursuant to this
paragraph.

8.             In September 2006, Messrs. Levine, Kelly, Mahoney and Sowers
allowed certain stock options to expire, due in significant part to the pendency
of the shareholder derivative litigation and the Special Committee
investigation.  Mr. Levine allowed 150,000 stock options to expire; Mr.

6

--------------------------------------------------------------------------------

Kelly allowed 85,000 stock options to expire; Mr. Mahoney allowed 21,000 stock
options to expire; and Mr. Sowers allowed 20,000 stock options to expire.  In
connection with the selection of the number and grant date of options to be
relinquished as set forth in paragraph 7 of this Exhibit A, the Special
Committee considered the fact that Messrs. Levine, Kelly, Mahoney and Sowers
allowed the options referred to in this paragraph to expire; however, the
Company will not make any payment to Messrs. Levine, Kelly, Mahoney or Sowers
with respect to the expired options referred to in this paragraph.

7

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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NORTH CAROLINA

CHARLOTTE DIVISION

 

 

In re FAMILY DOLLAR, INC.

)

Master File No. 3:06-CV-00510(W)

SHAREHOLDER DERIVATIVE LITIGATION

)

 

 

)

PRELIMINARY APPROVAL AND
 SCHEDULING ORDER

 

)

This Document Relates To:

)

 

 

)

EXHIBIT B

ALL ACTIONS.

)

 

)

 

 

--------------------------------------------------------------------------------

The parties to the above-captioned consolidated derivative action (the “Action”)
having applied pursuant to Federal Rule of Civil Procedure 23.1 for an Order to
approve the proposed settlement of the Action in accordance with the Stipulation
and Agreement of Compromise, Settlement and Release entered into by the parties,
dated as of June 22, 2007 (the “Stipulation”), and for the dismissal of the
Action with prejudice upon the terms and conditions set forth in the Stipulation
(the “Settlement”), and the Court having read and considered the Stipulation and
accompanying documents, and all parties having consented to the entry of this
Order,

NOW, THEREFORE, this     day of June, 2007, upon application of the parties, IT
IS HEREBY ORDERED as follows:

1.             Except for terms defined herein, the Court adopts and
incorporates the definitions in the Stipulation for purposes of this Order.

2.             The Settlement appears to be the product of serious, informed,
non-collusive negotiations, has no obvious deficiencies, provides substantial
value to the Company and falls within the range of possible approval and,
therefore, merits further consideration.

3.             The Court preliminarily finds that the Settlement is fair,
reasonable, adequate and in the best interests of the Company and its
stockholders.

4.             The Court has scheduled a Settlement Hearing, which will be held
on August    , 2007, at            .m., at 195 Charles R. Jonas Federal Bldg.,
401 West Trade Street, Charlotte, North Carolina 28202, to:

(a)           consider the Settlement pursuant to Federal Rule of Civil
Procedure 23.1 as fair, reasonable, adequate and in the best interests of the
Company and its stockholders;

1

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(b)           consider an Order and Final Judgment dismissing the Action with
prejudice, with each party to bear its, his or her own costs, and release and
enjoin prosecution of any and all Settled Claims;

(c)           consider Plaintiffs’ counsel’s request for an award of attorneys’
fees and expenses; and

(d)           hear other such matters as the Court may deem necessary and
appropriate.

5.             The Court reserves the right to adjourn the Settlement Hearing or
modify any of the dates set forth herein without further notice to the Company’s
stockholders.

6.             The Court reserves the right to approve the Settlement at or
after the Settlement Hearing with such modifications as may be consented to by
the parties to the Action and without further notice to the Company’s
stockholders.

7.             The Court approves, as to form and content, the Notice of Hearing
and Proposed Settlement of Derivative Action (the “Notice”), annexed as Exhibit
C to the Stipulation, and finds that the mailing and distribution of the Notice,
substantially in the manner and form set forth in this Order, meets the
requirements of Federal Rule of Civil Procedure 23.1 and due process under the
United States Constitution and any other applicable laws, is the best notice
practicable under the circumstances, and shall constitute due and sufficient
notice of all matters relating to the Settlement.

8.             All costs incurred in identifying and notifying the Company’s
stockholders of the Settlement, including the printing, copying and mailing of
the Notice, shall be paid by the Company.  Plaintiffs shall undertake the
administrative responsibility for providing notice to the Company’s
stockholders.

2

--------------------------------------------------------------------------------

9.             Gilardi & Co. LLC is appointed to act as “Notice Administrator”
to supervise and administer the notice procedure subject to such supervision and
direction of Plaintiffs’ counsel or the Court as may be necessary or the
circumstances may require as more fully set forth below:

(a)           Not later than          , 2007, the Notice Administrator shall
cause a copy of the Notice, substantially in the form annexed as Exhibit C to
the Stipulation, to be mailed by first class mail to all shareholders of Family
Dollar as of the date the Court signs this Order (“Family Dollar stockholders”
or the “Company’s stockholders”) who can be identified with reasonable effort;
and

(b)           At least seven (7) days prior to the Settlement Hearing,
Plaintiffs’ counsel shall file with the Court and serve on defendants’ counsel
proof, by affidavit or declaration, of such mailing.

10.           Nominees who held the common stock of Family Dollar on behalf of
any Family Dollar stockholder shall send the Notice to such beneficial owners of
Family Dollar common stock within ten (10) days after receipt thereof, or send a
list of the names and addresses of such beneficial owners to the Notice
Administrator within ten (10) days of receipt thereof, in which event the Notice
Administrator shall promptly mail the Notice to such beneficial owners.

11.           All proceedings in the Action, other than such proceedings as may
be necessary to carry out the terms and conditions of the Stipulation and the
Settlement, are hereby stayed and suspended until further Order of this Court. 
Pending final determination of whether the Stipulation should be approved,
Plaintiffs, the Company, Plaintiffs’ counsel and all of the Company’s
stockholders, and any of them, are barred and enjoined from commencing,
prosecuting, instigating or in any way participating in the commencement or
prosecution of any action asserting any Settled Claims (as defined in the
Stipulation) against any Released Person (as defined in the Stipulation).

3

--------------------------------------------------------------------------------

12.           Any Family Dollar stockholder may appear and show cause, if he,
she or it has any reason why the proposed Settlement of the Action should not be
approved as fair, reasonable and adequate, or why a Judgment should not be
entered thereon, or why attorneys’ fees and expenses should not be awarded to
counsel for the Plaintiffs; provided, however, that no Family Dollar stockholder
shall be heard or entitled to contest the approval of the terms and conditions
of the proposed Settlement, or, if approved, the Order and Final Judgment to be
entered thereon approving the same, or the attorneys’ fees and expenses to be
awarded to counsel for the Plaintiffs unless that person files and serves his,
her, or its objection in accordance with the terms and conditions in the Notice.

13.           If the Settlement provided for in the Stipulation shall be
approved by the Court following the Settlement Hearing, a Final Order shall be
entered as described in the Stipulation.

14.           If the Stipulation is not approved by the Court, is terminated or
shall not become effective for any reason, the Action shall proceed, completely
without prejudice to any party as to any matter of law or fact, as if the
Stipulation had not been made and had not been submitted to the Court, and
neither the Stipulation, any provision contained in the Stipulation, any action
undertaken pursuant thereto, nor the negotiation thereof by any party shall be
deemed an admission or offered or received in evidence at any proceeding in the
Action or any other action or proceeding.

IT IS SO ORDERED.

DATED:

 

 

 

 

 

THE HONORABLE FRANK D. WHITNEY

 

UNITED STATES DISTRICT JUDGE

 

4

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Submitted by,

/s/ L. Bruce McDaniel

 

L. BRUCE McDANIEL (N.C. State Bar #5025)
WILLIAM E. ANDERSON (N.C. State Bar #098)
McDANIEL & ANDERSON, L.L.P.
Lafayette Square
4942 Windy Hill Drive
P.O. Box 58186
Raleigh, NC 27658
Telephone: 919/872-3000
919/790-9273 (fax)
mcdas@mcdas.com

 

Liaison Counsel

 

LERACH COUGHLIN STOIA GELLER
RUDMAN & ROBBINS LLP
TRAVIS E. DOWNS III
JEFFREY D. LIGHT
BENNY C. GOODMAN III
MARY LYNNE CALKINS
655 West Broadway, Suite 1900
San Diego, CA 92101
Telephone: 619/231-1058
619/231-7423 (fax)

 

LERACH COUGHLIN STOIA GELLER
RUDMAN & ROBBINS LLP
SHAWN A. WILLIAMS
MONIQUE C. WINKLER
AELISH M. BAIG
100 Pine Street, Suite 2600
San Francisco, CA 94111
Telephone: 415/288-4545
415/288-4534 (fax)

 

LERACH COUGHLIN STOIA GELLER
RUDMAN & ROBBINS LLP
THOMAS G. WILHELM
9601 Wilshire Blvd., Suite 510
Los Angeles, CA 90210
Telephone: 310/859-3100
310/278-2148 (fax)

 

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THE WEISER LAW FIRM, P.C.
ROBERT B. WEISER
BRETT D. STECKER
121 N. Wayne Avenue, Suite 100
Wayne, PA 19087
Telephone: 610/225-2677
610/225-2678 (fax)

 

Co-Lead Counsel for Plaintiffs

 

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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NORTH CAROLINA

CHARLOTTE DIVISION

In re FAMILY DOLLAR, INC.

)

Master File No. 3:06-CV-00510(W)

SHAREHOLDER DERIVATIVE LITIGATION

)

 

 

)

NOTICE OF HEARING AND PROPOSED
SETTLEMENT OF DERIVATIVE ACTION

 

)

This Document Relates To:

)

EXHIBIT C

 

)

ALL ACTIONS.

)

 

 

)

 

 

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TO:                            ALL HOLDERS OF STOCK OF FAMILY DOLLAR STORES,
INC. (“FAMILY DOLLAR” OR THE “COMPANY”) ON JUNE     , 2007 (COLLECTIVELY
“CURRENT FAMILY DOLLAR STOCKHOLDERS”).

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY.  YOUR RIGHTS MAY BE
AFFECTED BY THE LEGAL PROCEEDINGS IN THIS LITIGATION.

THIS NOTICE RELATES TO A SETTLEMENT OF SHAREHOLDERS’ ACTION AND CLAIMS ASSERTED
THEREIN ON BEHALF OF FAMILY DOLLAR.

This Notice is given pursuant to an Order of the United States District Court
for the Western District of North Carolina, Charlotte Division (the “Court”). 
The purpose of the Notice is to advise you that the parties in the
above-entitled action (the “Action”), and in a related consolidated action
pending in the Superior Court of the State of North Carolina, County of
Mecklenburg (the “State Action”), have reached a settlement (the “Settlement”)
as set forth in a Stipulation and Agreement of Compromise, Settlement and
Release dated as of June 22, 2007 (the “Stipulation”), which will fully, finally
and forever resolve the Action and State Action on the terms and conditions set
forth in the Stipulation and summarized in this Notice.

I.                                         SETTLEMENT HEARING

1.             A hearing will be held at 195 Charles R. Jonas Federal Bldg., 401
West Trade Street, Charlotte, North Carolina 28202, on August    , 2007,
at   :      .m. (the “Settlement Hearing”), to determine whether the Court
should: (i) approve the Settlement (as defined above) pursuant to Federal Rule
of Civil Procedure 23.1 (“Rule 23.1”) as fair, reasonable, adequate and in the
best interests of the Company and its stockholders; (ii) enter an Order and
Final Judgment dismissing the Action with prejudice; (iii) consider Plaintiffs’
counsel’s application for an award of attorneys’ fees and expenses; and (iv)
hear other such matters as the Court may deem necessary and appropriate.  The
Settlement Hearing may be continued or adjourned by the Court without further
notice.  Any of the dates set forth herein may also be modified by the Court
without further notice.

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II.                                     BACKGROUND OF THE ACTION

On August 24, 2006, a shareholder derivative complaint was filed in the Superior
Court of North Carolina, Mecklenburg County (the “Superior Court”), captioned
Rebecca Mitchell v. Howard Levine, et al., Case No. 06-CV-516796 (the “Mitchell
litigation”), on behalf of Family Dollar, against its directors and officers:
Howard R. Levine, R. James Kelly, R. David Alexander, Jr., George R. Mahoney,
John D. Reier, Albert S. Rorie, Philip W. Thompson, Mark R. Bernstein, James G.
Martin and Sharon Allred Decker.  The Mitchell litigation alleges, inter alia,
that from 1995 to 2001, the Company and certain of its directors and officers
engaged in improper backdating of stock options and, as a result, disseminated
materially false financial statements to the stockholders of the Company.  On
October 2, 2006, a second derivative complaint captioned Jeffrey Alasina v.
Howard Levine, et al., was filed in the Superior Court complaining of the same
alleged activities.  The Mitchell and Alasina complaints were consolidated by
order of the Superior Court into the State Action and a consolidated complaint
was filed which named as defendants, in addition to the defendants named in the
Mitchell litigation, John J. Scanlon, C. Martin Sowers, Gilbert A. LaFare,
Samuel N. McPherson (collectively, the “Mitchell Defendants”).

On December 15, 2006, a derivative complaint was filed in this Court captioned
Dorothy M. Lee v. Howard R. Levine, et al., No. 3:06-CV-510-W.  A virtually
identical complaint was filed in this Court on December 20, 2006, captioned
Stanford H. Arden v. Howard R. Levine, et al., No. 3:06-CV-523-C.  By order
entered March 27, 2007, the Court consolidated the Lee and Arden cases into the
Action, appointed Lee and Arden as co-lead plaintiffs and appointed co-lead
counsel.  The Action names the following Family Dollar directors and officers as
defendants: Howard R. Levine, Leon Levine, R. James Kelly, R. David Alexander,
Jr., Charles S. Gibson, Jr., C. Martin Sowers, George R. Mahoney, Jr., Mark R.
Bernstein, Sharon Allred Decker, Edward C. Dolby, Glenn A.

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Eisenberg, James G. Martin and Dale C. Pond.  The Mitchell Defendants and the
defendants named in the Action are referred to as the “Individual Defendants.”

The Action, in connection with alleged improper backdating of stock options at
the Company, alleges violations of §14(a) of the Securities Exchange Act of
1934, breaches of fiduciary duties and/or aiding and abetting in the breach of
fiduciary duties, which are alleged to include abuse of control, gross
mismanagement, constructive fraud, corporate waste, unjust enrichment and breach
of fiduciary duty for insider selling and misappropriation of information by the
“insider selling defendants,” all of which are alleged to have occurred between
1995 and 2006.

On August 31, 2006, after receiving the Mitchell complaint and pursuant to
resolutions adopted at a duly called meeting, the Board of Directors of the
Company (the “Board”), acting in accordance with Section 141(c) of the General
Corporation Law of the State of Delaware and Article III, Section 11 of the
Company’s Bylaws, formed the “Special Committee” whose duties, among other
things, are to investigate the pending litigation and advise what action the
Company should take with respect to such litigation.

On May 18, 2007, counsel for the parties to the Action and the State Action
reached an agreement-in-principle (subject to the negotiation of a definitive
written agreement) concerning the proposed Settlement of the Action and State
Action.  The parties’ agreement was reached after repeated meetings, both
telephonic and in person, between counsel for the Plaintiffs and the Special
Committee and, in some instances, counsel to the Company.  Counsel for the
parties to the Action and State Action have independently concluded that the
terms of the Settlement are fair, reasonable and adequate to both the Company
and its stockholders based upon the substantial benefits and protections offered
therein.  This conclusion by counsel for Plaintiffs was based in part on review
of non-public documents relating to the claims asserted in the Action and State
Action, as well as

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documents reviewed and created by the Special Committee during the course of its
factual investigation of these claims.

III.                                 CLAIMS OF THE PLAINTIFFS AND BENEFITS OF
THE SETTLEMENT

Plaintiffs’ counsel believe that the Settlement set forth in the Stipulation
addresses Plaintiffs’ allegations and confers substantial benefits upon, and is
also in the best interests of, Family Dollar and its shareholders.  This
conclusion is based in part on the Plaintiffs’ counsel’s extensive investigation
of the facts and applicable law regarding the alleged claims and the potential
defenses thereto.  This investigation included the review of public and
non-public documents relating to the claims asserted in the Action and State
Action as well as documents reviewed and created by the Special Committee during
the course of its factual investigation of these claims.

While Plaintiffs and their counsel believe that the claims asserted in the
Action and State Action have substantial merit, they recognize and acknowledge
the risk, expense and length of continued proceedings necessary to prosecute the
Action and State Action against the Individual Defendants through trial and
appeal.  Plaintiffs’ counsel also have taken into account the uncertain outcome
and the risk of any litigation, especially in complex actions such as the Action
and State Action, as well as the difficulties and delays inherent in such
litigation.  Plaintiffs’ counsel also are mindful of the inherent problems of
proof of, and possible defenses to, the violations alleged in the Action and
State Action.  As a result, Plaintiffs and their counsel believe the Settlement
is in the best interest of the Company and its shareholders.

IV.                                THE COMPANY AND INDIVIDUAL DEFENDANTS’ DENIAL
OF WRONGDOING AND LIABILITY

The Company and the Individual Defendants have denied, and continue to deny, any
liability or wrongdoing with respect to any and all claims alleged in the
Action, the State Action or otherwise.  Without conceding any infirmities in
their defenses to the claims asserted in the Action

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or State Action, the Company and the Individual Defendants nevertheless consider
the dismissal of the Action and State Action, subject to the terms and
conditions in the Stipulation, desirable because, among other things, the
Stipulation and Settlement will eliminate the substantial burden, expense,
inconvenience and distraction of litigation and will dispel any uncertainty that
may exist as a result thereof.

V.                                    THE TERMS OF THE PROPOSED SETTLEMENT

A settlement has been reached, the terms and conditions of which are set forth
in the Stipulation.  The following description of the proposed Settlement is
only a summary.

The defendants acknowledge and agree that the pendency and prosecution of the
shareholder derivative litigation was a significant factor underlying the
Company’s decision to agree to the series of changes set forth below with
respect to the Company’s corporate governance practices.  In addition,
subsequent to the filing of the shareholder derivative litigation, the
Plaintiffs and the Special Committee negotiated the cancellation of stock
options detailed in paragraph seven (7) below.

1.             The Company’s Equity Award Processes.

(a)           Annual equity grants of stock options and/or performance share
rights (“PSRs”) will be made by the Compensation Committee of the Board (the
“Compensation Committee”) with a grant date of the Tuesday following the
Company’s annual earnings release.  Grants in connection with the employment,
promotion or retention of an individual employee with the title of Vice
President or above (“Individual Officer Grants”) will be made by the
Compensation Committee with a grant date of the Tuesday following the Company’s
monthly sales release.  Grants may be made at other times only upon an express
determination by the Compensation Committee that such grants are in the best
interests of the Company.

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(b)           A list of the proposed grantees and the amount of options and PSRs
will be provided to the Compensation Committee and shall include all Individual
Officer Grants to be made to employees through the latest practicable date prior
to the meeting of the Compensation Committee at which such grants are to be
considered.

(c)           Grants in connection with the employment, promotion or retention
of an individual employee below the level of Vice President (“Individual
Grants”) will be made by the Equity Award Committee of the Board with a grant
date of the Tuesday following the Company’s monthly sales release and shall
include all Individual Grants to be made to employees through the Friday before
such Tuesday grant date.

(d)           All stock option grants will be made at meetings of the Board or a
relevant committee of the Board (other than any committee consisting of one
member) and will not be effected by written consent, except where extenuating
circumstances so require.

(e)           Where circumstances require the use of a written consent to
approve a stock option grant, no such consent shall contain a pre-printed stated
effective date of the consent and each member of the Board or committee must
date any written consent on the date of his or her execution thereof.

2.             The Board shall revise its Corporate Governance Guidelines (the
“Guidelines”) to adopt a majority voting policy for uncontested elections of
directors only.  Under the Company’s organizational documents, directors
currently are elected by a plurality of votes cast at any meeting of
stockholders duly called and held for the purpose of electing directors.  Under
the majority voting policy, each director who receives a greater number of votes
withheld from his or her election than votes cast “for” such election would be
required to tender his or her resignation to the Board promptly following the
certification of the election results.  The Nominating/Corporate Governance

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Committee of the Board (the “Nominating Committee”) would consider the tendered
resignation and make a recommendation to the Board with respect thereto.

3.             The Board shall revise the Company’s guidelines regarding cash
bonuses to provide that in the future, in connection with the award of any cash
bonus to an “executive officer” (as defined in the rules promulgated under the
Securities and Exchange Act of 1934, as amended), such awards would be
conditioned upon, in the event of an accounting restatement due to material
noncompliance by the Company as a result of intentional misconduct with any
financial reporting requirements of the federal securities laws with respect to
financial statements filed by the Company within twelve (12) months after the
date of such award, reimbursement by the executive officer to the Company of the
difference between the amount of the original bonus received by the executive
officer and the amount of the bonus such officer would have received had the
amount of the bonus been calculated based on the restated financial statements.

4.             The Board shall revise the Guidelines to provide that, to be
deemed “independent” in any fiscal year, a director must satisfy the following
qualifications:

(a)           The director has not been employed by the Company or its
subsidiaries or affiliates within the last four years;

(b)           The director has not received, during the current year or any of
the three immediately preceding years, remuneration, directly or indirectly,
other than de minimis remuneration (as defined below), as a result of service
(other than as a director of a customer or supplier) as (i) an advisor,
consultant, or legal counsel to the Company or to a member of the Company’s
senior management; or (ii) a significant customer or supplier of the Company;

(c)           The director has no personal services contracts with the Company,
or any member of the Company’s senior management;

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(d)           The director is not an officer or employee of a not-for-profit
entity that receives significant contributions from the Company, and does not
serve any such entity in any capacity for which remuneration is received;

(e)           The director does not have any investment in any entity in which
the Company also has an investment, other than equity or debt investments that
are available to the public in public or governmental entities, or investments
in any other entity in which neither the director nor the Company or any of its
parents, subsidiaries or affiliates own an interest of 5% or more or exercises
managerial control;

(f)            The director is not employed by a public company at which an
executive officer of the Company serves on the Compensation Committee;

(g)           The director has not had any of the relationships described above
in sub-sections “a” through “f,” with any affiliate of the Company; and

(h)           The director is not a member of the immediate family of any person
who fails to satisfy the qualifications described above.

A director shall be deemed to have received remuneration (other than
remuneration as a director, including remuneration provided to a non-executive
Chairman of the Board, Committee Chairman, or Lead Director), directly or
indirectly, if remuneration, other than de minimis remuneration, was paid by the
Company, its subsidiaries or affiliates, to any entity in which the director has
a beneficial ownership interest of 5% percent of equity or more, or to an entity
by which the director is employed or self-employed other than as a director. 
Remuneration is deemed de minimis remuneration if such remuneration is $60,000
or less in any year,(1) or if such remuneration is

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(1)                                  The $60,000 remuneration level set forth
above applies for three years from the date of Final Approval. Thereafter, the
analogous remuneration level set forth in the applicable stock exchange rules
(currently $100,000 as set forth in New York Stock Exchange Listed Company
Manual, Section 303A.02(b)(ii)) shall apply.

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paid to an entity, it (i) did not for the fiscal year exceed the lesser of $1
million, or 5% of the gross revenues of the entity; and (ii) did not directly
result in a material increase in the compensation received by the director from
that entity.

5.             The Company shall continue to identify qualified independent
directors and agrees to cause two additional independent directors to be
nominated for election to the Board by the date of the annual meeting of
stockholders of the Company in the fiscal year 2009.  One such director may be
added to the Board to fill a vacancy created by resignation or retirement of a
non-independent director.  With respect to the election of these independent
directors, a designee of the Nominating Committee shall work with a designee of
a major stockholder of the Company, other than stockholders who are affiliates
of any member of management, to identify potential director candidates
acceptable to the designee of such major stockholder.  A reputable director
search firm shall be engaged and assist in such search process.  The candidates
so selected shall be submitted to the Nominating Committee.  Absent unforeseen
circumstances, the Nominating Committee and Company shall nominate persons for
election for these two director positions as set forth in this paragraph 5. 
After election of these two additional independent directors to the Board, the
Company will maintain a board of directors comprised of at least 75% independent
directors; however, the termination of service of independent directors that
results in the Board being comprised of less than 75% independent directors
shall not result in a violation of this provision so long as the Company
nominates for election independent directors to fill vacancies created by such
termination of service as soon as practicable.

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6.             For a period of at least three years, the Company shall require
its officers, subject to certain conditions set forth in the Company’s policy
with respect to officer stock ownership, to retain 25% of all equity awards made
to such officers until the following ownership levels of the Company’s stock are
obtained:  Chief Executive Officer - five times salary; President, Chief
Financial Officer, Chief Operating Officer and Executive Vice President - three
times salary; Senior Vice Presidents - two times salary; and Vice Presidents -
one times salary.

7.             Upon Final Approval (as defined below) of the Settlement, each of
defendants Howard R. Levine, the Company’s chief executive officer, R. James
Kelly, the Company’s president and chief operating officer, George R. Mahoney,
Jr., the Company’s former general counsel, and C. Martin Sowers, the Company’s
senior vice president of finance, agree to relinquish their rights to certain
unexercised stock options to purchase shares of common stock of the Company in
the amounts of 75,000, 35,000, 80,000, and 20,000, respectively.  Specifically,
Mr. Levine will relinquish his rights to 57,000 options granted to him by the
Company in 2002 and 18,000 options granted to him in 2003;  Mr. Kelly will
relinquish his rights to 28,000 options granted to him by the Company in 2002
and 7,000 options granted to him in 2003; Mr. Mahoney will relinquish his rights
to 32,000 options granted to him by the Company in 2002 and 48,000 options
granted to him in 2003; and Mr. Sowers will relinquish his rights to 11,500
options granted to him by the Company in 2002 and 8,500 options granted to him
in 2003.  The parties agree that Messrs. Levine, Kelly, Mahoney and Sowers are
legally entitled to the options being relinquished, that there has been no
finding of wrongdoing in connection with the grant of such options and that
their agreement in this regard is not to be deemed an

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admission of any liability or wrongdoing on their part.  Messrs. Levine, Kelly,
Mahoney and Sowers agree to relinquish the options recited above as part of the
settlement of the above-styled action and their agreement in this regard is not
to be deemed an admission of any liability or wrongdoing on their part.  The
parties agree that the relinquishment of said options is not disgorgement or
restitution and the value of said options does not represent in any way a
measure of disgorgement or restitution.  The Company shall not replace, reissue,
or substitute new or additional options for the options that are being
relinquished pursuant to this paragraph.(2)

8.             In September 2006, Messrs. Levine, Kelly, Mahoney and Sowers
allowed certain stock options to expire, due in significant part to the pendency
of the shareholder derivative litigation and the Special Committee
investigation.  Mr. Levine allowed 150,000 stock options to expire; Mr. Kelly
allowed 85,000 stock options to expire; Mr. Mahoney allowed 21,000 stock options
to expire; and Mr. Sowers allowed 20,000 stock options to expire.  In connection
with the selection of the number and grant date of options to be relinquished as
set forth in paragraph 7 of this Notice, the Special Committee considered the
fact that Messrs. Levine, Kelly, Mahoney and Sowers allowed the options referred
to in this paragraph to expire; however, the Company will not make any payment
to Messrs. Levine, Kelly, Mahoney or Sowers with respect to the expired options
referred to in this paragraph.

VI.                                DISMISSAL AND RELEASE

If the Settlement is approved, the Court will enter an Order and Final
Judgment.  The Judgment will fully, finally and forever release the Settled
Claims (defined below) as to the Individual Defendants and the Released Persons
(defined below) and will permanently bar Plaintiffs and the Company’s past and
present stockholders from asserting, commencing, prosecuting,

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(2)           In the event that the options to be relinquished as set forth in
paragraph 7 hereof are relinquished pursuant to the Stipulation and
subsequently, for whatever reason, the Settlement is not consummated, the
Company will make cash payments to Messrs. Levine, Kelly, Mahoney and Sowers
reflecting the value of the relinquished options.  In that event, the Special
Committee will issue its final report and, pursuant thereto, enact remedial
measures.

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assisting, instigating or in any way participating in the commencement or
prosecution of any action or other proceeding, in any forum, asserting any
Settled Claims against any Released Person.

1.             For purposes of the Settlement,

(a)           “Final Approval” shall be considered to have occurred for purposes
of the Stipulation after both of the following have occurred:

(i)            entry of the Order and Final Judgment approving the Settlement,
attached to the Stipulation as Exhibit D, and the expiration of any applicable
appeal period for the appeal of the Order and Final Judgment without an appeal
having been filed or, if an appeal is taken, upon entry of an order affirming
the Order and Final Judgment appealed from (or dismissing the appeal) and the
expiration of any applicable period for the reconsideration, rehearing or appeal
of such affirmance (or dismissal) without any motion for reconsideration or
rehearing or further appeal having been filed; and

(ii)           the dismissal with prejudice of the State Action and the
expiration of any applicable appeal period for the appeal of such dismissal with
prejudice without an appeal having been filed or, if an appeal is taken, upon
entry of an order affirming the dismissal with prejudice of the State Action (or
dismissing the appeal) and the expiration of any applicable period for the
reconsideration, rehearing or appeal of such affirmance (or dismissal) without
any motion for reconsideration or rehearing or further appeal having been filed.

(b)           “Released Persons” means (i) the Company and its parent entities,
predecessors, associates, general or limited partnerships, limited liability
companies, affiliates, past and present subsidiaries, and each and all of their
respective past, present or future officers, members, directors, stockholders,
agents, representatives, employees, and also attorneys, financial or investment
advisors, advisors, consultants, auditors, accountants, investment bankers,
commercial

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bankers, trustees, engineers, agents, insurers, co-insurers and reinsurers
(except to the extent claims against insurance carriers and subrogation rights
are specifically reserved herein); and (ii) all persons who are or were
defendants in the Action or State Action (or any action encompassed by the
Action or State Action), including the Individual Defendants, and their
respective heirs, executors, trustees, general or limited partners or
partnerships, limited liability companies, members, representatives, employees,
attorneys, advisors, consultants, agents, estates, and administrators; in each
instance, whether or not they were named, served with process or appeared in the
Action.

(c)           “Settled Claims” means all claims, demands, rights, actions or
causes of action, liabilities, damages, losses, obligations, judgments, suits,
fees, expenses, costs, matters and issues of any kind or nature whatsoever,
whether known or unknown, contingent or absolute, suspected or unsuspected,
disclosed or undisclosed, matured or unmatured, that have been, could have been,
or in the future can or might be asserted in the Action, the State Action or in
any court, tribunal or proceeding (including, but not limited to, any claims
arising under federal or state statutory or common law relating to alleged
fraud, breach of any duty, negligence, violations of the federal securities laws
or otherwise), by or on behalf of Plaintiffs, derivatively or in their status as
stockholders of the Company, by any past or present stockholder of the Company
(derivatively or in their status as stockholders of the Company), by the
Company, or by their or its predecessors, successors or assigns (or any person
claiming by, through, in the right of, or on behalf of them or the Company by
assignment or otherwise, except to the extent claims against insurance carriers
and subrogation rights are specifically reserved herein), whether legal,
equitable or any other type, which have arisen, arise now or hereafter arise out
of, or relate in any manner to, the allegations, facts, events, practices,
conduct, transactions, matters, acts, occurrences, statements, representations,
misrepresentations or omissions, or any fees, expenses or costs incurred in
prosecuting, defending or

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settling the Action and State Action, or any other matter, thing or cause
whatsoever, or any series thereof, embraced, involved or set forth in, or
referred to or otherwise related, directly or indirectly, in any way to, the
Action or the State Action or the subject matter of the Action or State Action,
and including, without limitation, any claims in any way related to (i) the
Settlement and the Stipulation, (ii) the fiduciary obligations of the Individual
Defendants or any other Released Persons relating to or in connection with the
allegations made in the complaints in the Action and State Action or the
investigation of such allegations, (iii) any disclosures or alleged
misrepresentations or omissions that were made or allegedly not made by any of
the Released Persons regarding the subject matter of the Action or State Action,
(iv) the Stipulation or any other matters described or alleged in the
Stipulation, including, without limitation, (1) all stock option grants made by
the Company, (2) all stock options issued pursuant to such grants, (3) all
shares issued upon the exercise of said stock options, (4) the stock option
granting practices of the Company, (5) the actions of the Special Committee, and
(6) any and all disclosures made in connection with any of the foregoing.

2.             In the event that the Settlement does not receive final approval
from the Court or the Court approves the Settlement but such approval is
reversed or vacated on appeal, reconsideration or otherwise, or the Stipulation
is terminated for any other reason (including dismissal of the State Action with
prejudice), then the Stipulation will become null and void and each party to the
Stipulation shall be restored to his, her or its respective position as it
existed prior to the execution of the Stipulation.

3.             Nothing in the Stipulation or in any Exhibit thereto (i)
releases, discharges, extinguishes or otherwise compromises any claims or
potential claims that Family Dollar or any person who is or was a defendant in
the Action or the State Action may have under or relating to any policy of
liability or other insurance, or (ii) releases any insurer, co-insurer or
reinsurer from any

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obligation owed to Family Dollar or any person who is or was a defendant in the
Action or the State Action for indemnity or coverage under or relating to any
policy of liability or other insurance.

4.             Nothing in the Stipulation or in any Exhibit thereto discharges,
extinguishes or otherwise compromises any claims or potential claims for
subrogation that any insurance carrier may have as to any third party,
including, but not limited to attorneys, financial or investment advisors,
advisors, consultants, auditors, accountants, investment bankers, commercial
bankers, trustees, engineers, agents, insurers, co-insurers and reinsurers not
otherwise named in the Action or State Action and not otherwise released herein,
to the extent of any prior or future payments under any policy of insurance
which have arisen, arise now or hereafter arise out of, or relate in any manner
to, the allegations, facts, events, practices, conduct, transactions, matters,
acts, occurrences, statements, representations, misrepresentations or omissions,
or any fees, expenses or costs incurred in prosecuting, defending or settling
the Action and State Action, or any other matter, thing or cause whatsoever, or
any series thereof, embraced, involved or set forth in, or referred to or
otherwise related, directly or indirectly, in any way to, the Action or the
State Action or the subject matter of the Action or State Action, and including,
without limitation, any claims in any way related to (i) the Settlement and the
Stipulation, (ii) the fiduciary obligations of the Individual Defendants or any
other Released Persons relating to or in connection with the allegations made in
the complaints in the Action and State Action or the investigation of such
allegations, (iii) any disclosures or alleged misrepresentations or omissions
that were made or allegedly not made by any of the Released Persons regarding
the subject matter of the Action or State Action, (iv) the Stipulation or any
other matters described or alleged in the Stipulation, including, without
limitation, (1) all stock option grants made by the Company, (2) all stock
options issued pursuant to such grants, (3) all shares issued upon the exercise
of said stock options, (4) the stock option granting practices of the

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Company, (5) the actions of the Special Committee, and (6) any and all
disclosures made in connection with any of the foregoing.

VII.                            RELEASE OF UNKNOWN CLAIMS

1.             The releases contemplated in the Settlement extend to claims that
the parties granting the release (the “Releasing Parties”) do not know or
suspect to exist at the time of the release, which if known might have affected
the Releasing Parties’ decision to enter into the release; the Releasing Parties
shall be deemed to relinquish, to the extent applicable and to the fullest
extent permitted by law, the provisions, rights and benefits of Section 1542 of
the California Civil Code, and the Releasing Parties shall be deemed to waive
any and all provisions, rights and benefits conferred by any law of any state or
territory of the United States, federal law or principle of common law, which is
similar, comparable or equivalent to California Civil Code Section 1542.

VIII.                        ATTORNEYS’ FEES

1.             Counsel for the Plaintiffs will seek an award of attorneys’ fees
and expenses (including costs and disbursements) in a total amount of
$3,500,000, which if approved by the Court at the Settlement Hearing will be
paid by the Company.

IX.                                YOUR RIGHT TO BE HEARD AT THE SETTLEMENT
HEARING

1.             Any Current Family Dollar stockholder who wishes to object to the
Settlement or any of the terms therein, the dismissal of the Action, the Order
and Final Judgment to be entered approving the Settlement, or the Fee
Application, or who otherwise wishes to be heard, may appear in person or
through counsel at the Settlement Hearing and present evidence or argument that
may be proper and relevant; provided, however, that no person other than counsel
for Plaintiffs and defendants shall be heard, and no papers, briefs, pleadings
or other documents by any such person shall be received and considered by the
Court (unless the Court in its discretion shall thereafter

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otherwise direct, upon application of such person and for good cause shown),
unless not later than          , 2007, such person files with the Court:

(a)           a written notice of intention to appear;

(b)           competent evidence that such person held shares of Family Dollar
common stock as of June    , 2007, and that the person continues to hold shares
of Family Dollar common stock as of the date of the Settlement Hearing; and

(c)           a statement of such person’s objections to any matters before the
Court, the grounds therefor or the reasons for such person’s desiring to appear
and be heard, as well as all documents or writings such person desires the Court
to consider and, on or before the date of such filing, serves the same documents
via first class mail or overnight delivery upon all of the following counsel of
record:

Jeffrey D. Light
Lerach Coughlin Stoia Geller
  Rudman & Robbins LLP
655 West Broadway, Suite 1900
San Diego, CA 92101
Attorney for Plaintiffs in the Action

T. Thomas Cottingham, III
Hunton & Williams LLP
Bank of America Plaza
101 South Tryon Street, Suite 3500
Charlotte, NC 28280
Attorney for Nominal Defendant Family Dollar Stores, Inc.

 

 

Mark W. Merritt
Robinson, Bradshaw & Hinson, P.A.
101 North Tryon Street, Suite 1900
Charlotte, NC 28246
Attorney for Defendant Leon Levine in the Action

Mark R. Kutny
Hamilton, Moon, Stephens, Steele & Martin
PLLC
2020 Charlotte Plaza
201 S. College Street
Charlotte, NC 28244-2020
Attorney for Defendant C. Martin Sowers in the Action

 

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James T. Williams, Jr.
Brooks, Pierce, McLendon, Humphrey &
Leonard LLP
Post Office Box 26000
Greensboro, NC 27420
Attorney for Defendants Edward C. Dolby,
Glenn A. Eisenberg and Dale C. Pond in the Action

Jonathan E. Buchan, Jr.
Helms, Mullis & Wicker, PLLC
201 North Tryon Street
PO Box 31247 (28231)
Charlotte, NC 28202
Attorney for Defendants Howard Levine, R. James Kelly, R. David Alexander, Jr.,
George Mahoney, Jr., Charles S. Gibson, Jr., Mark Bernstein, Sharon Allred
Decker, and James Martin in the Action

 

2.             Such objecting persons must also contemporaneously deliver a copy
of all documents described above to the Clerk of Court, United States District
Court for the Western District of North Carolina, Charlotte Division, 401 West
Trade Street, Charlotte, North Carolina 28202; and even if such persons do not
appear at the Settlement Hearing, the Court will consider their written
submissions.  Unless the Court otherwise directs, no person shall be entitled to
object to the approval of the Settlement, to any Order and Final Judgment
entered thereon, to the Fee Application, or to otherwise be heard, except by
serving and filing a written objection and supporting papers and documents as
prescribed above.  Any persons who fail to object in the manner and within the
time prescribed above shall be deemed to have waived the right to object
(including the right to appeal) and forever shall be barred, in this proceeding
or in any other proceeding, from raising such objection.

X.                                    SCOPE OF THIS NOTICE AND FURTHER
INFORMATION

This Notice contains only a summary of the terms of the Settlement.  For a more
detailed statement of the matters involved in this litigation, you may inspect
the pleadings, the Stipulation, the Orders entered by the Court and other papers
filed in the litigation, unless sealed, at the Office of the Clerk of Court,
United States District Court for the Western District of North Carolina,
Charlotte Division, 401 West Trade Street, Charlotte, North Carolina 28202,
during regular business hours of

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each business day.  Any other inquiries regarding the Action should be addressed
in the first instance as follows:

Rick Nelson
LERACH COUGHLIN STOIA GELLER
  RUDMAN & ROBBINS LLP
655 West Broadway, Suite 1900
San Diego, CA  92101

1-800-449-4900

PLEASE DO NOT CONTACT THE CLERK OF THE COURT OR THE JUDGE REGARDING THIS NOTICE.

XI.                                NOTICE TO BANKS, BROKERS, AND OTHER NOMINEES

Banks, brokerage firms, institutions, and other persons who are nominees who,
on                , 2007, held the common stock of Family Dollar for the
beneficial interest of other persons are requested within ten (10) days of
receipt of this Notice, to: (a) provide the Notice Administrator (at the address
set forth below) with the names and addresses of such beneficial holders, or (b)
forward a copy of this Notice to each such beneficial holder and provide the
Notice Administrator with written confirmation that the Notice has been so
forwarded.  Additional copies of the Notice may be obtained from the Notice
Administrator for forwarding to such beneficial owners. All such correspondence
should be addressed as follows:

Family Dollar Derivative Litigation
Notice Administrator
c/o Gilardi & Co. LLC
P.O. Box 8040
San Rafael, CA  94912-8040

DATED: June   , 2007

BY ORDER OF THE COURT
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION

 

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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NORTH CAROLINA

CHARLOTTE DIVISION

In re FAMILY DOLLAR, INC.

)

Master File No. 3:06-CV-00510(W)

SHAREHOLDER DERIVATIVE LITIGATION

)

 

 

)

ORDER AND FINAL JUDGMENT

 

)

 

This Document Relates To:

)

EXHIBIT D

 

)

 

ALL ACTIONS.

)

 

 

)

 

 

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A hearing having been held before this Court on August    , 2007, pursuant to
the Court’s Order of June    , 2007 (the “Scheduling Order”), upon the
Stipulation and Agreement of Compromise, Settlement and Release entered into by
the parties, dated as of June 22, 2007 (the “Stipulation”), providing for the
settlement of the above-captioned consolidated action (the “Action”), which is
incorporated herein by reference; it appearing that due notice of said hearing
has been given in accordance with the Scheduling Order; the respective parties
having appeared by their attorneys of record; the Court having heard and
considered evidence in support of the proposed settlement and dismissal with
prejudice of the Action upon the terms and conditions set forth in the
Stipulation (the “Settlement”); the attorneys for the respective parties having
been heard; an opportunity to be heard having been given to all other persons
requesting to be heard in accordance with the Scheduling Order; the Court having
determined that notice to the Company’s stockholders was adequate and
sufficient; and the entire matter of the proposed Settlement having been heard
and considered by the Court;

IT IS HEREBY ORDERED, ADJUDGED AND DECREED, this     day of August, 2007, that:

1.             Unless otherwise defined herein, all defined terms shall have the
meaning set forth in the Stipulation.

2.             The Notice of Hearing and Proposed Settlement of Derivative
Action (the “Notice”) has been given to the Company’s stockholders, pursuant to
and in the manner directed by the Scheduling Order, proof of mailing of the
Notice was filed with the Court, and full opportunity to be heard has been
offered to all parties and persons in interest.  The form and manner of the
Notice is hereby determined to have been the best notice practicable under the
circumstances and to have been given in full compliance with each of the
requirements of Federal Rule of Civil Procedure 23.1 and

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due process, and it is further determined that the Company, Plaintiffs and all
of the Company’s stockholders are bound by this Order and Final Judgment.

3.             The Stipulation and the Settlement thereto are found to be fair,
reasonable and in the best interests of the Company and its stockholders and are
hereby approved pursuant to Federal Rule of Civil Procedure 23.1.  The parties
to the Stipulation are hereby authorized and directed to comply with and to
consummate the Settlement in accordance with its terms and provisions, and the
Clerk of Court is directed to enter and docket this Order and Final Judgment.

4.             This Order and Final Judgment shall not constitute any evidence
of or admission by any party herein that any acts of wrongdoing have been
committed by any of the parties to the Action or State Action and shall not be
deemed to create any inference that there is any liability therefor.

5.             Upon Final Approval, the Action is hereby dismissed with
prejudice as to the Individual Defendants and against Plaintiffs, the Company
and all of the Company’s stockholders on the merits and, except as explicitly
provided in the Stipulation, without costs.

6.             Upon Final Approval, all claims, demands, rights, actions or
causes of action, liabilities, damages, losses, obligations, judgments, suits,
fees, expenses, costs, matters and issues of any kind or nature whatsoever,
whether known or unknown, contingent or absolute, suspected or unsuspected,
disclosed or undisclosed, matured or unmatured, that have been, could have been,
or in the future can or might be asserted in the Action, the State Action or in
any court, tribunal or proceeding (including, but not limited to, any claims
arising under federal or state statutory or common law relating to alleged
fraud, breach of any duty, negligence, violations of the federal securities laws
or otherwise), by or on behalf of Plaintiffs, derivatively or in their status as
stockholders of the Company, by any past or present stockholder of the Company
(derivatively or in

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their status as stockholders of the Company), by the Company, or by their or its
predecessors, successors or assigns (or any person claiming by, through, in the
right of, or on behalf of them or the Company by assignment or otherwise, except
to the extent claims against insurance carriers and subrogation rights are
specifically reserved herein), whether legal, equitable or any other type, which
have arisen, arise now or hereafter arise out of, or relate in any manner to,
the allegations, facts, events, practices, conduct, transactions, matters, acts,
occurrences, statements, representations, misrepresentations or omissions, or
any fees, expenses or costs incurred in prosecuting, defending or settling the
Action and State Action, or any other matter, thing or cause whatsoever, or any
series thereof, embraced, involved or set forth in, or referred to or otherwise
related, directly or indirectly, in any way to, the Action or the State Action
or the subject matter of the Action or State Action, and including, without
limitation, any claims in any way related to (i) the Settlement and the
Stipulation, (ii) the fiduciary obligations of the Individual Defendants or any
other Released Persons relating to or in connection with the allegations made in
the complaints in the Action and State Action or the investigation of such
allegations, (iii) any disclosures or alleged misrepresentations or omissions
that were made or allegedly not made by any of the Released Persons regarding
the subject matter of the Action or State Action, (iv) the Stipulation or any
other matters described or alleged in the Stipulation, including, without
limitation, (1) all stock option grants made by the Company, (2) all stock
options issued pursuant to such grants, (3) all shares issued upon the exercise
of said stock options, (4) the stock option granting practices of the Company,
(5) the actions of the Special Committee, and (6) any and all disclosures made
in connection with any of the foregoing (collectively, the “Settled Claims”) are
hereby completely, fully, finally and forever compromised, settled, released,
discharged, extinguished and dismissed with prejudice; provided, however, that
the Settled Claims shall not include the right to enforce the terms of the
Stipulation.

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7.             Upon Final Approval, all claims, demands, rights, actions or
causes of action, liabilities, damages, losses, obligations, judgments, suits,
fees, expenses, costs, matters and issues of any kind or nature whatsoever,
whether known or unknown, contingent or absolute, suspected or unsuspected,
disclosed or undisclosed, matured or unmatured, that have been, could have been,
or in the future can or might be asserted by the Released Persons against the
Plaintiffs in the Action or the State Action and their counsel arising out of
the institution, prosecution, assertion, settlement or resolution of the Action,
the State Action and the Settled Claims are hereby completely, fully, finally
and forever compromised, settled, released, discharged, extinguished and
dismissed with prejudice; provided, however, that the release granted in this
paragraph shall not release the right to enforce the terms of the Stipulation.

8.             The releases set forth herein extend to claims that the Releasing
Parties do not know or suspect to exist at the time of the release, which if
known, might have affected the Releasing Parties’ decision to enter into the
release; the Releasing Parties shall be deemed to relinquish, to the extent
applicable and to the fullest extent permitted by law, the provisions, rights
and benefits of Section 1542 of the California Civil Code; and the Releasing
Parties shall be deemed to waive any and all provisions, rights and benefits
conferred by any law of any state or territory of the United States, federal law
or principle of common law, which is similar, comparable or equivalent to
California Civil Code Section 1542.

9.             Upon Final Approval, Plaintiffs, the Company’s past and present
stockholders, the Company and anyone claiming through or for the benefit of any
of them, are hereby permanently enjoined from asserting, commencing,
prosecuting, assisting, instigating or in any way participating in the
commencement or prosecution of any action or other proceeding, in any forum,
asserting any Settled Claims.

4

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10.           Notwithstanding any other provision of this Order and Final
Judgment to the contrary, nothing in this Order and Final Judgment shall be
construed to (i) release, discharge, extinguish or otherwise compromise any
claims or potential claims that Family Dollar or any person who is or was a
defendant in the Action or the State Action may have under or relating to any
policy of liability or other insurance, or (ii) release any insurer, co-insurer
or reinsurer from any obligation owed to Family Dollar or any person who is or
was a defendant in the Action or the State Action for indemnity or coverage
under or relating to any policy of liability or other insurance.

11.           Notwithstanding any other provision of this Order and Final
Judgment to the contrary, nothing in this Order and Final Judgment shall be
construed to release, discharge, extinguish or otherwise compromise any claims
or potential claims for subrogation that any insurance carrier may have as to
any third party, including, but not limited to attorneys, financial or
investment advisors, advisors, consultants, auditors, accountants, investment
bankers, commercial bankers, trustees, engineers, agents, insurers, co-insurers
and reinsurers not otherwise named in the Action or State Action and not
otherwise released herein, to the extent of any prior or future payments under
any policy of insurance which have arisen, arise now or hereafter arise out of,
or relating in any manner to, the allegations, facts, events, practices,
conduct, transactions, matters, acts, occurrences, statements, representations,
misrepresentations or omissions, or any fees, expenses or costs incurred in
prosecuting, defending or settling the Action and State Action, or any other
matter, thing or cause whatsoever, or any series thereof, embraced, involved or
set forth in, or referred to or otherwise related, directly or indirectly, in
any way to, the Action or the State Action or the subject matter of the Action
or State Action, and including, without limitation, any claims in any way
related to (i) the Settlement and the Stipulation, (ii) the fiduciary
obligations of the Individual Defendants or any other Released Persons relating
to or in connection with the allegations

5

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made in the complaints in the Action and State Action or the investigation of
such allegations, (iii) any disclosures or alleged misrepresentations or
omissions that were made or allegedly not made by any of the Released Persons
regarding the subject matter of the Action or State Action, (iv) the Stipulation
or any other matters described or alleged in the Stipulation, including, without
limitation, (1) all stock option grants made by the Company, (2) all stock
options issued pursuant to such grants, (3) all shares issued upon the exercise
of said stock options, (4) the stock option granting practices of the Company,
(5) the actions of the Special Committee, and (6) any and all disclosures made
in connection with any of the foregoing.

12.           The Court finds that the Action was filed in good faith and that
the parties and their counsel at all times complied with Federal Rule of Civil
Procedure 11 and other similar state laws during the course of the Action.

13.           Counsel for the Plaintiffs are awarded attorneys’ fees and
expenses (including costs and disbursements) in the total amount of
$3,500,000.00, which sum the Court finds to be fair and reasonable, and which
shall be paid by the Company jointly to Schiffrin Barroway Topaz & Kessler, LLP
and Lerach Coughlin Stoia Geller Rudman & Robbins LLP, as joint receiving agents
for all Plaintiffs’ counsel, within five (5) business days after Final Approval.

14.           If Final Approval fails to occur, then this Order and Final
Judgment shall be rendered null and void to the extent provided by and in
accordance with the Stipulation and shall be vacated and, in such event, all
orders entered and releases delivered in connection herewith shall be null and
void to the extent provided by and in accordance with the Stipulation.

15.           The effectiveness of this Order and Final Judgment and the
obligations of Plaintiffs, the Company and the Individual Defendants under the
Stipulation and the Settlement shall not be conditioned upon or subject to the
resolution of any appeal from this Order and Final Judgment that

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relates solely to the issue of Plaintiffs’ counsel’s application for an award of
attorneys’ fees and expenses.

16.           Without affecting the finality of this Order and Final Judgment in
any way, this Court reserves jurisdiction over all matters relating to the
administration and consummation of the Settlement.

IT IS SO ORDERED.

DATED:

 

 

 

 

 

THE HONORABLE FRANK D. WHITNEY

 

UNITED STATES DISTRICT JUDGE

 

Submitted by,

/s/ L. Bruce McDaniel

 

L. BRUCE McDANIEL (N.C. State Bar #5025)
WILLIAM E. ANDERSON (N.C. State Bar #098)
McDANIEL & ANDERSON, L.L.P.
Lafayette Square
4942 Windy Hill Drive
P.O. Box 58186
Raleigh, NC 27658
Telephone: 919/872-3000
919/790-9273 (fax)
mcdas@mcdas.com

 

Liaison Counsel

 

LERACH COUGHLIN STOIA GELLER
  RUDMAN & ROBBINS LLP
TRAVIS E. DOWNS III
JEFFREY D. LIGHT
BENNY C. GOODMAN III
MARY LYNNE CALKINS
655 West Broadway, Suite 1900
San Diego, CA 92101
Telephone: 619/231-1058
619/231-7423 (fax)

 

7

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LERACH COUGHLIN STOIA GELLER
  RUDMAN & ROBBINS LLP
SHAWN A. WILLIAMS
MONIQUE C. WINKLER
AELISH M. BAIG
100 Pine Street, Suite 2600
San Francisco, CA 94111
Telephone: 415/288-4545
415/288-4534 (fax)

 

LERACH COUGHLIN STOIA GELLER
  RUDMAN & ROBBINS LLP
THOMAS G. WILHELM
9601 Wilshire Blvd., Suite 510
Los Angeles, CA 90210
Telephone: 310/859-3100
310/278-2148 (fax)

 

THE WEISER LAW FIRM, P.C.
ROBERT B. WEISER
BRETT D. STECKER
121 N. Wayne Avenue, Suite 100
Wayne, PA 19087
Telephone: 610/225-2677
610/225-2678 (fax)

 

Co-Lead Counsel for Plaintiffs

 

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