# **Exhibit10(vi)**

#  

# Amended as ofAugust 17, 2004

 

FAMILY DOLLAR STORES, INC.

 

1989 NON-QUALIFIED STOCK OPTION PLAN

 

1.  Purpose.  The purpose of the 1989 Non-Qualified StockOption Plan (the “Plan”) of Family Dollar Stores, Inc. is to encourageownership of a stock interest in Family Dollar Stores, Inc. by certain officersand other key employees of the Company (as such term is defined below) as anadded incentive to remain in the employ of the Company and to increase theirefforts on its behalf, and in order for the Company to retain and attractpersons of competence, and to gain for the organization the advantages inherentin key employees having a sense of proprietorship.

 

Theterm “subsidiary” as used herein, shall mean any business entity in whichFamily Dollar Stores, Inc. owns or controls, directly or indirectly (throughone or more business entities), 50 percent or more of the voting, equity orother ownership interest.  The term “Company”,as used herein, shall include Family Dollar Stores, Inc. and any present orfuture subsidiary thereof.

 

2.  The Stock.  The shares of stock which may be issued andsold under the Plan shall not, except as such number may be adjusted pursuantto Article 10 hereof, exceed 20,100,000 shares of Common Stock of FamilyDollar Stores, Inc. which may be either authorized and unissued shares orissued shares reacquired by Family Dollar Stores, Inc.  Any shares subjected to an option under thePlan which terminates, is cancelled or expires for any reason unexercised as tosuch shares may again be subjected to an option under the Plan notwithstandingthe above limitation.

 

3.  Eligibility.  Options shall be granted only to officers andother key employees (including those who are also directors) who, at the timeof the grant of the option, (a) are employees of the Company and (b) areprimarily responsible for the management and growth of the Company or whootherwise materially contribute to the conduct and direction of its businessand affairs.  A person eligible toreceive an option under the Plan is hereinafter sometimes referred to as an “employee”and a person to who an option is granted hereunder is hereinafter sometimesreferred to as an “optionee.”

 

4.  Grant of Options.  The Compensation Committee (the “Committee”)of the Board of Directors of Family Dollar Stores, Inc. (the “Board”) shalldetermine the employees who are to be granted options under the Plan, thenumber of shares subject to each option and the consideration to the Companyfor the granting of options under the Plan, as well as the conditions, if any,which it may deem appropriate to insure that such consideration will bereceived by, or will accrue to, the Company. In the discretion of the Committee, such consideration need not be thesame but may vary for options granted under the Plan at the same time or fromtime to time.

 

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TheCommittee may grant more than one option to an employee during the life of theplan and such option may be in addition to, or in substitution for, an optionor options, previously granted.  Themaximum aggregate number of shares of Common Stock of Family Dollar Stores,Inc. subject to options which may be granted under the Plan to any optioneeduring any twelve-month period is 450,000. No options shall be granted under the Plan after November 30, 2008.

 

Eachoption granted pursuant to the Plan shall be evidenced by a written optionagreement between Family Dollar Stores, Inc. and the optionee which shallcontain such provisions, terms and conditions (which need not be the same forall options) as the Committee shall in its discretion determine to beappropriate and within the contemplation of the Plan.  Each option agreement shall provide that theoption granted thereby will not be treated as an “incentive stock option”within the meaning of Section 422 of the Internal Revenue Code of 1986, asamended.

 

5.  Option Price.  (a) The price or prices per share for sharesof Common Stock of Family Dollar Stores, Inc. to be sold pursuant to an optionshall be such as shall be fixed by the Committee, but not less in any case than100 percent of the fair market value per share for such stock on the date ofthe granting of the option, subject to adjustment as provided in Article 10hereof.

 

Forthe purpose hereof, the term “fair market value” per share shall mean the meanbetween the average high bid and low asked prices quoted by the NationalQuotations Bureau Inc. for the over-the-counter market on the date of the grantof such option or, if no bid and asked prices are quoted on such day, then on thenext preceding day on which there were such quotations, or if such stock islisted on a national securities exchange, then the average of the highest priceand the lowest price at which the Common Stock shall have been sold regular wayon the national securities exchange on the date of the grant of such option or,if no sales occur on such day, then on the next preceding day on which therewere such sales of Common Stock or, if any time the Common Stock shall not bequoted by the National Quotations Bureau Inc. for the over-the-counter marketand the Common Stock shall not be listed on any national securities exchange,the Committee shall determine the fair value on the basis of available pricesfor such stock or in such manner as the Board may deem reasonable.

 

(b)  For the purposes of Articles 5 and 6 hereof,the date of the granting of an option under the Plan shall be the date fixed bythe Committee as the date for such option for the employee who is to be therecipient thereof.

 

6.  Period ofOption and Certain Limitations on Right to Exercise.

 

Optionswill be exercisable over the Option Period, which, in the case of each option,shall be a period of not more than five years from the date of the grant ofsuch option, as follows:

 

(i)  at any time during the third year of theOption Period the optionee may purchase up to 40 percent of the total number ofshares to which his option relates (adjusted, if a fraction of a share wouldotherwise result thereby, to the nearest full number of shares);

 

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(ii)  at any time during the Option Period afterthe end of the third year the optionee may purchase on a cumulative basis up to70 percent of the total number of shares to which his option relates (adjusted,if a fraction of a share would otherwise result thereby, to the nearest fullnumber of shares); and

 

(iii)  at any time during the Option Period afterthe end of the fourth year the optionee may purchase on a cumulative basis upto 100 percent of the total number of shares to which his option relates;provided, however, that except as provided in Articles 8 and 9 hereof, nooption may be exercised unless the optionee is then in the employ of theCompany and shall have been continuously so employed since the date of thegrant of his option.  Absence on leaveapproved by the Committee shall not be considered an interruption of employmentfor any purpose of the Plan.  FamilyDollar Stores, Inc. may, if it or its counsel shall deem it necessary ordesirable for any reason, require the optionee (or the purchaser acting under Article 9hereof) to represent in writing to Family Dollar Stores, Inc. at the time ofthe exercise of such option that it is his then intention to acquire the sharesof Common Stock as to which his option is then being exercised for investmentand not with a view to the distribution thereof.

 

7.  Non-Transferability of Option.  No option granted under the Plan to anemployee shall be transferable by him otherwise than by will or by the laws ofdescent and distribution, and such option shall be exercisable, during hislifetime, only by him or by his guardian or legal representative.

 

8.  Termination of Employment.  If an optionee shall cease to be employed bythe Company for any reason (other than death or discharge for cause), he may,but only within three months after the date he ceases to be an employee of theCompany (and in no event after the expiration of the Option Period), exercisehis option to the extent that he was entitled to exercise it at the date ofsuch cessation.  The Plan shall notconfer upon any optionee any right with respect to continuation of employmentby the Company, nor shall it interfere in any way with his right or the Company’sright to terminate his employment at any time. Notwithstanding any of the provisions hereinabove set forth, in theevent that any optionee shall be discharged for cause, he shall forthwithforfeit all rights under any options granted to him under the Plan.  “Cause” shall be deemed to include, but notbe limited to, dishonesty, the proved commission of crime, disclosure of theCompany’s affairs to competitors or other unfaithfulness to the interests ofthe Company, continued absence except on account of the illness or disability,or gross insubordination.

 

9.  Death of Optionee.  If an optionee dies while in the employ ofthe Company, or within three months after the date he ceases to be an employeeof the Company (other than by reason of discharge for cause), the optiontheretofore granted to him shall be exercisable by the estate of the optionee,or by a person who acquired the right to exercise such option by bequest orinheritance or by reason of the death of the optionee, but only within a periodof fifteen calendar months next succeeding such death (and in no event afterexpiration of the Option Period), and then only if and to the extent that hewas entitled to exercise it at the date of his death, except as the number ofshares may be adjusted in accordance with the provisions of Article 10 hereof.

 

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10.             StockAdjustments.

 

(a)  In theevent of a recapitalization, stock split, reverse stock split, stock dividend,reclassification, or merger, consolidation, or reorganization in which theCompany is the surviving corporation, or any other change in the corporatestructure or Common Stock of the Company, the Committee shall make suchadjustments, if any, proportionate to such change, as it may deem appropriatein the number of shares authorized by the Plan, in the number of shares coveredby the options granted, and in the option price.

 

(b)  In the event of dissolution or liquidation ofthe Company, or a reorganization, merger or consolidation of the Company withone or more corporations in which the Company is not the surviving corporation,or a sale of substantially all the property or more than eighty percent (80%)of the then outstanding stock of the Company to another corporation, the Planshall terminate and any option heretofore granted pursuant to the Plan shallterminate unless provision be made in writing in connection with suchtransaction for the continuance of the Plan and/or for the assumption ofoptions theretofore granted, or the substitution for such options of newoptions covering the stock of a successor employer corporation, or a parent orsubsidiary thereof, with appropriate adjustments as to the number and kind ofshares and prices, in which event the Plan and options theretofore grantedshall continue in the manner and under the terms so provided.

 

(c)  Adjustments under Article 10 hereofshall be made by the Committee whose determination as to what adjustments shallbe made, and the extent thereof, shall be final, binding and conclusive.  No fractional shares of Common Stock shall beissued pursuant to any such adjustment, and any fraction resulting from anysuch adjustment shall be eliminated in each case by rounding downward to thenearest whole share or unit.

 

11.  Administrationof the Plan.  The Plan shall beadministered by the Committee.  TheCommittee shall consist of two or more members of the Board who are appointedto the Committee by the Board, and each of whom is an “outside director” assuch term is defined in Section 162(m) of the Internal Revenue Code andany regulations thereunder.  If anymember of the Committee does not meet the qualifications for an “outsidedirector,” then that member shall be replaced with another director meetingsuch qualifications such that the Committee shall always be comprised of atleast two persons meeting such qualifications. The Committee is authorized to establish such rules and regulations forthe proper administration of the Plan as it may deem advisable and notinconsistent with the provisions of the Plan. All questions arising under the Plan or under any rule or regulationwith respect to the Plan adopted by the Committee, whether such questionsinvolve an interpretation of the Plan or otherwise, shall be decided by theCommittee.

 

12.  Paymentfor Shares.  Payment for shares purchasedshall be made in full at the time of the exercise of the option.  No loan or advance shall be made by theCompany for the purpose of financing, in whole or in part, the purchase ofoptioned shares.  An optionee or hislegal representatives shall have none of the rights of a stockholder withrespect to shares subject to option until such shares shall be issued uponexercise of the option.

 

13.  Amendmentand Termination of Plan.

 

(a)  The Boardmay at any time suspend or terminate the Plan. The Board may also at any time amend or revise the terms of the Plan orany option to be granted thereunder, provided that no such amendment orrevision shall affect the determination of officers and directors toparticipate in

 

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the Plan or of thetiming, pricing and amount of a grant, all of which determinations andamendments and revisions thereof shall be made by the Committee, and providedfurther that, without stockholder approval, no such amendment or revisionshall:

 

(i)                                     materiallyincrease the benefits accruing to employees under the Plan; or

 

(ii)                                  increasethe number of shares subject to the Plan (except as permitted under theprovisions of Article 10 hereof); or

 

(iii)                               materially modify therequirements as to eligibility for participation in the Plan.

 

(b)  No amendment, suspension or termination ofthe Plan shall, without the consent of the optionee, alter or impair any rightsor obligations under any option theretofore granted under the Plan.

 

14.  Compliance with Law and Other Conditions.  No shares shall be issued pursuant to theexercise of any option granted under the Plan prior to compliance by FamilyDollar Stores, Inc. to the satisfaction of its counsel with any applicablelaws.

 

15.  Withholding of Taxes.  Each optionee who exercises an option shallagree that no later than the date of such exercise or receipt of sharespursuant thereto he will pay to the Company, or make arrangements satisfactoryto the Committee regarding payment of, any federal, state or local taxes of anykind required by law to be withheld with respect to the transfer to him of suchshares of Common Stock.

 

16.  Approval by Stockholders.  The Plan shall become effective December 1,1988, subject to approval thereof by vote (in person or by proxy) of theholders of a majority of all outstanding shares of Common Stock of FamilyDollar Stores, Inc. entitled to vote at the annual meeting of stockholders on January 19,1989, called to take action thereon.

 

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