Exhibit
10.4


 


FORM OF SEVERANCE AGREEMENT FOR
SENIOR VICE PRESIDENTS


 


This
Severance Agreement is effective this
                
day of October, 2008, by and between
                        ,
(“Employee”) and Family Dollar Stores, Inc., and its successors,
subsidiaries and affiliated companies (collectively, the “Company”).


 


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


 


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


 


B.            The Company desires to
obtain the agreement of Employee to certain restrictive covenants and other
provisions as set forth herein in exchange for Employee’s receipt of good and
valuable consideration to which Employee was not previously entitled, including
without limitation: (i) the Company’s agreement to provide certain
severance payments as described herein, (ii) an increase in Employee’s
rate of base salary effective as of September 7, 2008, (iii) an award
opportunity under the Company’s Incentive Bonus Plan for the fiscal year
beginning August 31, 2008, (iv) an award of Performance Share Rights
under the 2006 Incentive Plan for the 3-year performance period commencing August 31,
2008, and (v) an award of stock options under the 2006 Incentive Plan with
a grant date of October 7, 2008.


 


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


 


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


 


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


 


(ii) At
any time prior to a Change in Control, Cause means any of the following: (a) conviction
of a felony, any act involving moral turpitude, or a misdemeanor where imprisonment
is imposed, (b) commission of any act of theft, fraud, dishonesty, or
falsification of any employment or Company records, (c) improper
disclosure of the Company’s confidential or proprietary information, (d) Employee’s
failure to comply with reasonable written directives of the Chairman of the
Board or the Board of Directors of the Company, (e) a course of conduct
amounting to gross incompetence, (f) chronic and unexcused absenteeism, or
(g) misconduct in 


 


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connection
with the performance of any of Employee’s duties, including, without
limitation, misappropriation of funds or property of the Company, securing or
attempting to secure personally any profit in connection with any transaction
entered into on behalf of the Company, misrepresentation to the Company, or any
violation of law or regulations on Company premises or to which the Company is
subject.


 


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


 


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


 


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


 


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


 


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


 


G.            “Confidential Company
Information” – Confidential Company Information means, unless otherwise
available to the public, (i) any and all
information relating to the Company’s methods of operation, source of
merchandise supply, organizational details, personnel information, marketing
plans, business plans, strategic plans, forecasts, or financial information or
data; (ii) any and all information relating to the Company’s real estate
activities  


 


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including,
but not limited to, landlords, prospective landlords, and lease data; (iii) the specific terms of the Company’s agreements or
arrangements with any officers, directors, employees, vendors, suppliers, or
any other entity with which the Company may be affiliated from time to time, including, but not limited to, the value of any
consideration provided or received by the Company or the expiration date of any
such agreement or arrangement; and (iv) any and all information of a
technical or proprietary nature developed by or acquired by the Company or made
available to the Company and its employees by vendors, suppliers, contractors,
or other employees of the Company, on a confidential basis, including, but not
limited to, ideas, concepts, designs, specifications, prototypes, techniques,
technical data or know-how, formulae, methods, research and development, and
inventions, as such Confidential Company Information may exist from time to
time and whether in electronic, print or other form and all copies, notes, or
other reproductions thereof.


 


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


 


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


 


J.             “Good Reason” shall mean any of the following
acts by the Company, without the consent of the Employee (in each case, other
than an isolated, insubstantial and inadvertent action not taken in bad faith
and which is remedied by the Company promptly after receipt of notice thereof
given by the Employee): (i) a reduction by the Company in the Employee’s
base salary; (ii) a direct or indirect material reduction by the Company
in the Employee’s aggregate annual and long-term incentive compensation
opportunities, such as through a reduction in target or maximum award
opportunities, a change in the performance goals or formulas for earning awards
resulting in a material increase in the degree of difficulty of achieving
target performance, or similar changes; (iii) a material reduction in the
Employee’s position, duties and responsibilities, assignment to duties inconsistent
with such position or material adverse change in reporting relationships, (iv) with
respect to an Employee who is stationed at the Company’s headquarters in
Charlotte, North Carolina, or in Matthews, North Carolina, the Company
requiring the Employee, without his or her consent, to be based at any office
or location more than 35 miles from the location at which the Employee was
stationed immediately prior to a Change in Control, or (v) the continuing
material breach by the Company of any employment agreement between the Employee
and the Company after the expiration of any applicable period for cure.


 


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


 


L.             “Restricted Territory” –
Restricted Territory means any state in the United States of America, or any
state in Mexico, in which (i) the Company is conducting the 


 


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Company’s
Business on Employee’s Termination Date, or (ii) the Company is planning
to conduct the Company’s Business on Employee’s Termination Date and Employee
has knowledge, or should have knowledge, of such Company plans.


 


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


 


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


 


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


 


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


 


A.            The Company
shall continue the payment of Employee’s base salary in effect on the date of
such termination of employment for a period of twelve (12) months.  Such salary continuation payments shall be
paid in a series of substantially equal installments in accordance with the
regular payroll practices of the Company as in effect as of the date of
termination over said period, commencing as soon as administratively
practicable, but in no event more than sixty (60) days, following the
Participant’s date of termination of employment (except as otherwise required
by Paragraph 14).  Such salary
continuation payments shall not be considered eligible compensation under any
of the Company’s employee benefit plans.


 


B.            If Employee’s
date of termination of employment is after the end of the Company’s fiscal year
but prior to the payment date of any bonus under the Incentive Bonus Plan for
such fiscal year, the Company shall pay Employee the portion of the Target
Bonus earned by Employee for such fiscal year according to the terms of the
Incentive Bonus Plan (i.e., based on the Company’s applicable performance level
and, to the extent applicable, Employee’s performance rating for the fiscal
year), without regard to any requirement in the Incentive Bonus Plan otherwise
requiring Employee to remain employed through the bonus payment date.  In addition, Employee shall be eligible to
receive a pro rated bonus under the Incentive Bonus Plan for the fiscal year of
the Company in which such termination of employment occurs, without regard to
any requirement in the Incentive Bonus Plan otherwise requiring Employee to
remain employed through the bonus payment date, based on the number of
completed weeks during the applicable fiscal year through the date of
termination of employment and 


 


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further
based on the Company’s applicable performance level for the fiscal year and, if
available and to the extent applicable, Employee’s performance rating for the
fiscal year (or if no such performance rating is available, assuming a
performance rating of “satisfactory” or its equivalent).  Any such payment shall be made to Employee at
the same time the Company makes payments to other participants in the Incentive
Bonus Plan.


 


C.            For the number
of months set forth in clause A above after Employee’s date of termination of
employment, but not to exceed 18 months, the Company shall continue to provide
health insurance coverage and benefits to Employee and Employee’s dependents as
if Employee’s employment had not been terminated, including but not limited to
the provision of the Company’s Medical Expense Reimbursement Plan (the “MERP”).
Any period during which health benefits are continued pursuant to this
Paragraph shall be considered to be in satisfaction of the Company’s obligation
to provide “continuation coverage” pursuant to Section 4980B of the Code,
and the period of coverage required under said Section 4980B shall be
reduced by the period during which health benefits were provided pursuant to
this Paragraph.


 


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


 


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


 


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


 


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employment
occurs (or such fewer number of fiscal years for which Employee was eligible to
receive a bonus under the Incentive Bonus Plan).


 


B.            For the number
of months represented by the multiple set forth in clause A (x) above
after Employee’s date of termination of employment, but not to exceed 18
months, the Company shall continue to provide health insurance coverage and
benefits to Employee and Employee’s dependents as if Employee’s employment had
not been terminated, including but not limited to the provision of the Company’s
Medical Expense Reimbursement Plan (the “MERP”). Any period during which health
benefits are continued pursuant to this Paragraph shall be considered to be in
satisfaction of the Company’s obligation to provide “continuation coverage”
pursuant to Section 4980B of the Code, and the period of coverage required
under said Section 4980B shall be reduced by the period during which health
benefits were provided pursuant to this Paragraph.  Such health insurance coverage shall be
subject to offset as provided in Paragraph 3 above for comparable coverage
received by Employee from a third party during the continuation period.


 


The
Employee’s right in connection with or following a Change in Control to receive
a pro rata bonus under the Incentive Bonus Plan or any other incentive
compensation program under the 2006 Incentive Plan shall be determined in
accordance with the provisions of Section 15.7 of the 2006 Incentive Plan.


 


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


 


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


 


A.            Covenant Not to Compete.


 


(i)            Employee agrees that during Employee’s employment
with the Company and for the period of twelve (12) months immediately following
Employee’s


 


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


 


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


 


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


 


B.            Non-Solicitation
of Company Employees.


 


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


 


(ii)           Employee agrees that in the event Employee, without the
Company’s prior written consent, directly or indirectly, (A) solicits or
recruits for employment; hires; attempts to solicit or recruit for employment;
attempts to hire; or accepts as an employee, consultant, contractor, or
otherwise, any Company employee, or (B) urges; encourages; induces; or
attempts to urge, encourage, or induce, any Company employee to terminate his
or her employment with Company; or (C) otherwise interferes with the
Company’s relationship with any Company employee during the Concluding
Compensation Period, the Company shall be 


 


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entitled to terminate any
compensation, benefits, and/or remaining payments of the Termination
Compensation otherwise payable to Employee under this Agreement and Employee
forfeits such Termination Compensation.  Notwithstanding the foregoing, the
provisions of this Paragraph 5.B(ii) shall not apply from and after
a Change in Control.


 


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


 


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


 


6.             Other  Post-Termination Covenants.


 


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


 


B.            Upon Employee’s Termination Date, Employee agrees not to
make any statements to the Company’s employees, customers, vendors, or
suppliers or to any public or media source, whether written or oral, regarding
Employee’s employment or termination from the Company’s employment, except as
may be approved in writing by an executive officer of the 


 


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Company in advance.  The Employee further agrees not to make any
statement (including to any media source, or to the Company’s suppliers,
customers or employees) or take any action that would disrupt, impair,
embarrass, harm or affect adversely the Company or any of the employees,
officers, directors, or customers of the Company or place the Company or such
individuals in any negative light.


 


C.            Following Employee’s Termination
Date, Employee covenants to render further advice and assistance to the Company
as may be required from time to time, and to provide all information available
to Employee on matters handled by and through Employee while employed by the
Company or of which Employee has personal knowledge, and by making available to
the Company at reasonable times and circumstances, upon request by the Company,
information pertinent to its operations in Employee’s possession; and, to the
extent that it is necessary, to cooperate with and assist the Company to
conclude any matters that are pending and which may require Employee’s
assistance; provided, that he shall be paid reasonable compensation by the
Company in the event Employee is required to expend time in the performance of
such services; and provided further, that Employee may perform such services in
a manner that does not unreasonably interfere with other employment obtained by
Employee.  The Employee shall be reimbursed
for any expenses incurred by Employee in the performance of the covenants
herein set forth in this Paragraph 6.C.


 


In addition, Employee agrees
to cooperate with and provide assistance to the Company and its legal counsel
in connection with any litigation (including arbitration or administrative
hearings) or investigation affecting the Company, in which, in the reasonable
judgment of the Company’s counsel, Employee’s assistance or cooperation is
needed.  The Employee shall, when
requested by the Company, provide testimony or other assistance and shall
travel at the Company’s request in order to fulfill this obligation.  In connection with such litigation or
investigation, the Company shall attempt to accommodate Employee’s schedule,
shall reimburse Employee (unless prohibited by law) for any actual loss of
wages in connection therewith, shall provide Employee with reasonable notice in
advance of the times in which Employee’s cooperation or assistance is needed,
and shall reimburse Employee for any reasonable expenses incurred in connection
with such matters.


 


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


 


8.             Enforcement
of Restrictions in Paragraphs 5 and 6.  Because Employee’s services to the Company
are special and unique and because Employee has been exposed to and has had
access to Confidential Company Information and Trade Secrets, Employee and the
Company agree that any breach or threatened
breach of the provisions of Paragraphs 5.A(i), 5.B(i), 5.C, and 6 would cause
irreparable injury to the Company and that money damages would not provide an
adequate remedy to the Company. 
In the event of a breach or threatened breach of Paragraphs 5.A(i), 5.B(i), 5.C, or 6 of this
Agreement, the Company or its successors or 


 


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assigns may, in addition to
any other rights and remedies existing in their favor, apply to any court of
competent jurisdiction for specific performance; temporary, preliminary, and
permanent injunctive relief; expedited discovery; or other equitable relief in
order to enforce or prevent any violations of any such provisions (without
posting a bond or other security).  The Company shall be specifically entitled to an
injunction restraining Employee from disclosing any Confidential Company
Information or Trade Secrets, and, further, from accepting or continuing any
employment with or rendering any services, or continuing to render services, to
any such third-party to whom any Confidential Company Information or Trade
Secret has been disclosed or is threatened to be disclosed by Employee.


 


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


 


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


 


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


 


11.           Complete
Agreement.  This
Agreement sets forth all of the terms of the understanding between the parties
with reference to the subject matter set forth herein and may not be waived,
changed, discharged or terminated orally or by any course of dealing between
the 


 


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parties, but only by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination
is sought. This Agreement revokes and supersedes all prior or contemporaneous
agreements, representations, promises and understandings, whether written or
oral, between the parties.


 


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


 


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


 


	
  Family Dollar
  Stores, Inc.

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  	
  Post Office Box 1017

  
	
   

  	
   

  	
   

  	
  Charlotte, NC 28201-1017

  
	
   

  	
   

  	
   

  	
   

  
	
  With
  copy to:

  	
   

  	
  General
  Counsel

  
	
   

  	
   

  	
   

  	
  Family Dollar
  Stores, Inc.

  
	
   

  	
   

  	
   

  	
  Post Office Box 1017

  
	
   

  	
   

  	
   

  	
  Charlotte, NC 28201-1017

  



 


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


 


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


 


	
   

  	
   

  	
  FAMILY
  DOLLAR STORES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					



 


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