Exhibit 10 (ii)

STATE OF NORTH CAROLINA                         AMENDMENT TO
                                                EMPLOYMENT AGREEMENT
COUNTY OF MECKLENBURG




THIS AMENDMENT, made and entered into effective the 21st day
of June 1999, by and between FAMILY DOLLAR STORES, INC., a Delaware
corporation (hereinafter referred to as the "Company"); and
R. James Kelly (hereinafter referred to as the "Employee");


                       W I T N E S S E T H:


WHEREAS, the Company and the Employee entered into an
Employment Agreement effective December 17, 1996 (hereinafter
referred to as the "Agreement"); and

WHEREAS, the Company and the Employee desire to amend the
Agreement;

NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the Company and the Employee agree as follows:

1.	In the first line of Section 1.01 of the Agreement after
	the word "corporation" add "or other entity".

2.	In the eighth line of Section 1.04 of the Agreement after
	the words "New Mexico" add ", Arizona".

3.	In the second line of Section 1.07(a) of the Agreement
	after the words "Chairman of the Board" add "or President".

4.	In the fifth line of Section 2 of the Agreement delete
	the date "January 31, 2000" and substitute in lieu thereof
	the date "September 1, 2001".

5.	In the fourth line of Section 3 of the Agreement after
	the words "Chairman of the Board of the Company" add "or
	President of the Company".

6.	In the fourth line of Section 5.01 of the Agreement
	delete the date "August 31, 1998" and substitute in lieu
	thereof the date "August 26, 2000".

7.	In the twenty-second line of Section 5.02 delete the
	words "customarily paid in December" and substitute in
	lieu thereof "actually paid to participants in the Target
	Bonus Plan".

8.	Section 5.02(c) of the Agreement is deleted and the
	following is substituted in lieu thereof:



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	"(c) Take twenty days (exclusive of Saturdays, Sundays and
paid Company holidays) of vacation during each of the periods between
the Commencement Date and January 31, 1998; between February 1, 1998
and January 31, 1999; between February 1, 1999 and January 31, 2000;
between February 1, 2000 and January 31, 2001; and take twelve days
(exclusive of Saturdays, Sundays and paid Company holidays) of
vacation during the period February 1, 2001 and September 1, 2001.
Vacation time will accrue ratably during the course of said periods
and cannot be accumulated from year to year."

9.	Section 6.02 of the Agreement is deleted and the
	following is substituted in lieu thereof:

	"6.02.  Upon termination of this Agreement by the Company,
other than for Cause, except for the provisions of Paragraph 4, the
Employee's employment under the terms of this Agreement and all other
agreements and contracts between the Employee, the Company and the
Company's Affiliate and subsidiary corporations, shall be terminated
effective on the Termination Date.  In the event the Company
terminates this Agreement prior to September 1, 2001, for reasons
other than for Cause or Medical Disability, the Company shall pay to
the Employee one hundred eighty (180) days of the base salary set
forth in, or established by the Compensation Committee in accordance
with, Paragraph 5.01 above (which shall constitute payment in full of
the compensation due to the Employee hereunder).  Any such payments
shall be made in six (6) equal monthly installments with the first
installment due and payable not later than thirty (30) days after the
Termination Date.  Payments made by the Company to the Employee under
this Paragraph 6.02 are herein called "Termination Compensation."  In
the event the Employee accepts or begins other employment as an
employee, consultant or in any other capacity prior to the date on
which the last monthly installment of Termination Compensation is due
and payable, the monthly payments of any unpaid balance of the
Termination Compensation as of the date of such new employment shall
be (i) eliminated if the monthly base salary and all other monthly
remuneration and compensation from the new employment exceeds the
monthly base salary of the Employee in effect on the date of the
notice, or (ii) reduced to the amount by which the monthly base
salary of the Employee in effect on the date of the notice exceeds
the monthly base salary and all other monthly remuneration and
compensation from the new employment.  The Employee agrees to pursue
reasonable, good faith efforts to obtain other employment in a
position suitable to his background and experience.

	In the event this Agreement is not terminated by the Company
or the Employee for any reason prior to September 1, 2001, and the
Company and the Employee do not agree in writing before September 1,
2001, to extend the term of this Agreement beyond September 1, 2001,
or to enter into a new agreement to extend the employment
relationship beyond September 1, 2001, this Agreement shall terminate
automatically on September 1, 2001, which shall be the Termination
Date, and the Company shall pay to the Employee sixty (60) days of
the base salary established by the Compensation Committee of the



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Board of Directors and in effect on September 1, 2001 (which shall
constitute payment in full of the compensation due to the Employee
hereunder).  Any such payments shall be made in two (2) equal monthly
installments with the first installment due and payable not later
than thirty (30) days after the Termination Date".

10.	The first sentence of Section 7 of the Agreement is
	deleted and the following is substituted in lieu thereof:

      "7.	Exercise of Stock Options. Notwithstanding any
other provision of this Agreement and the 1989 Non-Qualified Stock
Option Plan and the New Plan and form of Option Agreement, if the
Company terminates this Agreement prior to February 28, 2001, for
reasons other than for Cause or Medical Disability, the Employee
shall be considered an employee of the Company through February 28,
2001, for the sole and limited purpose of permitting the Employee to
exercise said option for one hundred fifty thousand (150,000) shares
as described in Paragraph 5.02(b) above and to exercise any portion
of the options for one hundred thousand (100,000) shares and fifty
thousand (50,000) shares exercisable by the Employee in accordance
with the terms of the 1989 Non-Qualified Stock Option Plan and the
New Plan if said options have been granted to the Employee as
referred to in Paragraph 5.02(b) above."

      11.	In Section 8 of the Agreement in the fourth line, delete
		the date "January 31, 2000" and substitute in lieu thereof
		the date "September 1, 2001"; in the twelfth line, delete
		the words "in December"; and in the sixteenth line, delete
		the date "December 15" and substitute in lieu thereof the
		date "on or about November 15".

      12.	All other terms and provisions of the Agreement shall
		remain in full force and effect.



<PAGE>

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

                               FAMILY DOLLAR STORES, INC.

Attest:
                                By HOWARD R. LEVINE
                                   President and
                                   Chief Executive Officer

GEORGE R. MAHONEY, JR.
Secretary

(Corporate Seal)
                                   R. JAMES KELLY (SEAL)

Witness:
ALICE R. BARRIER