Exhibit 10

                   FAMILY DOLLAR STORES, INC.

                1999 DIRECTOR COMPENSATION PLAN


ARTICLE I.  PURPOSES:

     The Family Dollar Stores, Inc., 1999 Director Compensation
Plan (the "Plan") is intended to encourage stock ownership by all
members of the Board of Directors of Family Dollar Stores, Inc.
(the "Corporation") who are not employees of the Corporation
(individually, a "Director") in order to increase each Director's
proprietary interest in the Corporation's success and to
encourage individuals to remain a Director of the Corporation.


ARTICLE II.  ADMINISTRATION:

     The Plan shall be operated by the Board of Directors of the
Corporation.  Subject to the provisions of the Plan, the Board of
Directors may, from time to time, prescribe rules and regulations
for the administration of the Plan and the payment of any
administrative fees associated with the Plan.  The Board of
Directors may decide questions which arise with respect to the
interpretation or application of said Plan, and such decisions
shall not be subject to review.


ARTICLE III.  RIGHT TO RECEIVE STOCK:

     Each Director shall be granted the right to receive his or
her Director's compensation, consisting of all regular meeting
and committee meeting fees in shares of common stock of the
Corporation (the "Stock"), or to receive the compensation in
cash.  All regular meeting and committee meeting fees are
referred to collectively as the "Compensation".  The right to
receive the Compensation in Stock instead of cash is referred
to as an "Election", and shall be made pursuant to Article IV
hereof.  The number of shares which an electing Director
receives for the Compensation shall be calculated as provided
in Article IV hereof.


ARTICLE IV.  TERMS AND CONDITIONS:

     (a)  ELECTION FORM:  An Election shall be evidenced by a
form provided to each Director, which form shall (i) incorporate,
by reference, the terms and provisions of this Plan; and (ii) be
executed by each electing Director.

<PAGE>


     (b)  CONVERTING COMPENSATION TO STOCK:  All Compensation for
a Director making an Election shall be converted to a number of
whole and fractional shares of Stock based upon the fair market
value of the Stock on the appropriate Grant Date as described in
subsection (c) of this Article IV.  The number of whole and
fractional shares of Stock calculated under this section and an
amount equivalent to all cash dividends payable on such Stock
shall be distributed pursuant to subsection (f) of this
Article IV.

     (c)  GRANT DATES:  A Grant Date hereunder is any date at
which the fair market value of the Stock is determined for
purposes of calculating the number of shares of Stock a Director
will receive for his or her Compensation.  The initial Grant Date
shall be the date of the first regular meeting of the Board of
Directors that is not earlier than six months and one day
following the Director's Election.  On the initial Grant Date all
Compensation which has been earned by a Director following a
Director's Election shall be converted to the appropriate number
of whole and fractional shares of Stock based upon the fair
market value of the Stock on the initial Grant Date.  Following
the initial Grant Date, all subsequent Compensation earned by an
electing Director shall be converted to shares of Stock based
upon the fair market value of the Stock on the date of the
regular meeting or committee meeting for which the Compensation
is earned.  Fair market value per share of the Stock is the
average of the highest price and the lowest price at which the
Common Stock is sold regular way on the New York Stock Exchange
on the date for which the calculation is made.

     (d)  ELECTIONS BY DIRECTORS ON THE EFFECTIVE DATE:
Individuals who are Directors on the Effective Date may make an
Election on the Effective Date for the Compensation for meetings
after the Effective Date.  After making an Election, all
Compensation during such Director's term will be converted to a
number of whole and fractional shares of Stock as provided in
subsections (b), (c) and (d) of this Article IV unless the
Election is revoked pursuant to subsection (g) of this
Article IV.

     (e)  ELECTIONS BY DIRECTORS AFTER THE EFFECTIVE DATE:
Individuals who become a Director after the Effective Date and
Directors who did not make an Election for the fiscal year ending
August 28, 1999, may make an Election prior to the beginning of a
fiscal year for Compensation earned during any subsequent fiscal
year.  After making an Election for any fiscal year, all
Compensation paid or made available to a Director during such
Director's term will be converted to a number of whole and
fractional shares of Stock as provided in subsection (b), (c) and
(d) of this Article IV unless the Election is revoked pursuant to
subsection (g) of this Article IV.

<PAGE>


     (f)  DISTRIBUTION OF STOCK:  The Corporation will issue all
Stock to which a Director who has made an Election is entitled
for a fiscal year in one certificate issued within seventy-five
(75) days of the last day of the Corporation's fiscal year for
which the Election is effective.  In issuing the Stock, the
Corporation may round up any fractional shares of Stock to which
a Director is entitled during a fiscal year to the next whole
share of Stock.  An amount equivalent to the cash dividends which
would have been payable on such Stock if the Director would have
been a shareholder of record for the Stock on the date of the
meeting shall be distributed in cash along with the certificate.

     (g)  DURATION OF THE ELECTION:  Following an Election, all
Compensation will be paid in Stock for the remainder of the
Director's term as a Director unless the Director revokes the
Election in writing.  The revocation of an Election shall only be
effective for any Compensation for meetings six months and one
day after the revocation is filed with the Committee, and all
Compensation to a revoking Director for meetings before the
revocation is effective shall be calculated and distributed
pursuant to subsections (b) through (f) hereof.

     (h)  ASSIGNABILITY:  The right to receive Stock hereunder
shall not be assignable or transferable except by will or by the
laws of descent and distribution.

     (i)  RIGHTS AS A SHAREHOLDER:  No Director shall have any
rights as a shareholder with respect to Stock transferred
pursuant to this Plan until a certificate for such Stock has been
actually issued to said Director.  No adjustment will be made for
dividends or other rights for which the record date is prior to
the date of such issuance.

     (j)  RESTRICTIONS ON SALE OF STOCK:  The Stock has not been
registered and is subject to the resale restrictions of Rule 144
under the Securities Act of 1933.  No Stock received by a
Director under this Plan may be sold by the Director for a period
of one (1) year after the Stock is issued to the Director.

     (k)  IRREVOCABLE ELECTION:  Notwithstanding subsection (g)
of this Article IV, a Director's Election to receive Compensation
in Stock for any fiscal year may not be revoked during that
fiscal year.


ARTICLE V.  TERM OF PLAN:

     The term of this Plan shall be for a period commencing on
the Effective Date and ending on the date the Plan is terminated
by the Board of Directors.

<PAGE>


ARTICLE VI.  AMENDMENTS:

     The Board of Directors may, from time to time, alter,
amend, suspend or terminate the Plan at any time without notice,
provided that no Director's existing rights are adversely
affected thereby and provided further that no amendment or
modification may become effective without approval by the
shareholders of the Corporation if shareholder approval is
required to enable the Plan to satisfy any state or federal
statutory or regulatory requirements.


ARTICLE VII.  NOTICES:

     Any notice which the Corporation or any Director may be
required or permitted to give to each other shall be in writing
and shall be deemed given when delivered personally or deposited
in the U.S. Mail, first class postage prepaid, addressed to
Corporate Secretary, Family Dollar Stores, Inc., P.O. Box 1017,
Charlotte, NC  28201, or to such other group or individual that
the Corporation, by notice to the Director, may designate in
writing from time to time; and to the Director, at the address
shown on the records of the Corporation, or at such other address
as the Director, by notice to the Corporation, may designate in
writing from time to time.


ARTICLE VIII.  THE RIGHT OF THE CORPORATION TO
               TERMINATE DIRECTOR'S RELATIONSHIP:

     Nothing contained in the Plan shall confer upon any Director
any right to continue as a Director of the Corporation unless
such Director is duly re-elected by the Corporation's
shareholders.


ARTICLE IX.  GOVERNING LAW:

     The Plan will be governed and construed pursuant to the laws
of the United States of America and the State of North Carolina.


ARTICLE X.  EFFECTIVE DATE OF THE PLAN:

     The Plan shall be become effective on the date the Plan is
adopted by the Board of Directors.