**Exhibit 10.50**

**Compensation Arrangement with Named ExecutiveOfficers**

At its meetingheld on October 3, 2006, the Compensation Committee approved annualcompensation packages for the Company’s executive officers who are expected tobe included in the summary compensation table in the Company’s proxy statementfor the Annual Meeting, and for those officers who were named executiveofficers as of the filing of the Company’s last proxy statement (the “namedexecutive officers”), as follows:
| ** **             | ** ** | ** **           | ** ** | **Target Bonus ** | ** ** | ** **             | ** ** | **Target Performance Share Grants** | ** ** |
|------------------------|------------|----------------------|------------|-----------------------------|------------|------------------------|------------|----------------------------------------------------|------------|
| ** **             | ** ** | **Base Salary** | ** ** | **Percentage**              | ** ** | **Stock Options** | ** ** | **1-year**                                         | ** ** | **3-year** | ** ** |
| Howard R. Levine       |       | $                    | 800,000    |                        | 100        | %                      | 150,000    |                                               | 12,500     |   | 37,500 |   |
| R. James Kelly         |       | $                    | 600,000    |                        | 75         | %                      | 110,000    |                                               | 9,167      |   | 27,500 |   |
| Robert George          |       | $                    | 375,000    |                        | 50         | %                      | 21,845     |                                               | 2,229      |   | 6,687 |   |
| Charles S. Gibson, Jr. |       | $                    | 340,000    |                        | 50         | %                      | 21,340     |                                               | 2,178      |   | 6,532 |   |
| Dorlisa K. Flur        |       | $                    | 325,000    |                        | 40         | %                      | 14,528     |                                               | 1,483      |   | 4,447 |   |
| Janet G. Kelley        |       | $                    | 300,000    |                        | 40         | %                      | 11,746     |                                               | 1,199      |   | 3,595 |   |

 

The foregoing doesnot constitute a complete summary of the compensation terms of the above namedexecutive officers and reference is made to the following Company plans withrespect to various aspects of the compensation packages awarded to each namedexecutive officer:  (i) Family Dollar Stores, Inc. 2006 Incentive Plan, (ii)Family Dollar Stores, Inc. 2006 Incentive Plan*  Guidelines for Long-Term IncentivePerformance Share Rights Awards* , (iii) Family Dollar Stores, Inc.2006 Incentive Plan*2006 Non-Qualified StockOption Grant Program*  (filedas Exhibits 10.1, 10.2, and 10.3, respectively, to the Company’s Form 8-K filedwith the SEC on January 25, 2006) and (iv) the Cash Bonus Award Guidelinesattached hereto as Exhibit 10.

Reference is alsomade to (i) the employment agreements between the Company and Messrs. Levine andKelly, which have been filed previously as Exhibits 10.2 and 10.3,respectively, to the Company’s report on Form 8-K filed with the SEC on August24, 2005 (along with amendments to such agreements, filed as Exhibits 10.2 and10.3 to the Company’s report on Form 8-K filed with the SEC on August 21,2006), (ii) the Employment Agreement between the Company and Mr. George, filedas Exhibit 10 to the Company’s report on Form 8-K filed with the SEC onNovember 25, 2005, and (iii) the Employment Agreement between the Company andMr. Gibson, filed as Exhibit 10.32 to the Company’s Form 10-K filed with theSEC on November 7, 2005.

 

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