Exhibit 10(ii)

STATE OF NORTH CAROLINA
                                                EMPLOYMENT AGREEMENT
COUNTY OF MECKLENBURG


     THIS AGREEMENT, made and entered into effective the 25th day
of August 2000, by and between FAMILY DOLLAR STORES, INC., a
Delaware corporation (hereinafter referred to as the "Company"); and
R. David Alexander, Jr. (hereinafter referred to as the "Employee");

                       W I T N E S S E T H:

     WHEREAS, the Company desires to employ the Employee and the
Employee desires to be employed by the Company;

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

     1.     Definitions.  When used in this Agreement, these words
shall be defined as follows:

            1.01  "Affiliate" - Any corporation or other entity
directly or indirectly controlling, controlled by or under the
common control of or with the Company.

            1.02.  "Group" - The Company and all Affiliates.

            1.03.  "Confidential Information" - Any information
(including, without limitation, any method of operation, source of
supply, organizational details, personnel information, information
regarding real estate activities, including landlords, prospective
landlords and lease data, business secret, or any formula, pattern,
patent, device, plan, process or compilation of information) which
(a) is, or is designed to be, used in the business of any member
of the Group, (b) is private or confidential in that it is not
generally known or available to the public, and (c) gives any member
of the Group an opportunity to obtain an advantage over competitors
who do not know or use it.

            1.04.  "Present Territory" - All counties, towns and
cities in North Carolina, Virginia, Georgia, South Carolina, West
Virginia, Maryland, Pennsylvania, Kentucky, Tennessee, Mississippi,
Alabama, Florida, Louisiana, Arkansas, Ohio, Texas, Delaware,
Indiana, New Jersey, Missouri, Oklahoma, Illinois, Michigan, Kansas,
Iowa, New York, Wisconsin, Massachusetts, Connecticut, Rhode Island,
Vermont, New Hampshire, Minnesota, Nebraska, South Dakota, Colorado,
New Mexico, Maine and Arizona.

            1.05.  "Future Territory" - All counties, towns and
cities in States other than those listed in the definition of


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Present Territory in which the Company does business while the
Employee is employed by the Company.

            1.06.  "Competitive Company" - A corporation,
partnership, proprietorship or any other legal entity operating
discount retail stores in the Present Territory or the Future
Territory, the majority of which stores each have 50,000 square feet
or less of total space, including non-selling areas, and that sell
or offer for sale merchandise similar or identical to the
merchandise sold by the Group.

            1.07.  "Cause" -

                   (a)  Willful failure of the Employee to comply
with reasonable written directives of the Chairman of the Board or
President or Executive Committee or Board of Directors of the
Company.

                   (b)  Chronic absenteeism not resulting from
Medical Disability.

                   (c)  Willful misconduct or gross negligence.

                   (d)  Willful violation of substantive Company
policies, practices or procedures.

                   (e)  Indictment of or conviction of the
Employee of a crime involving an act of moral turpitude.

                   (f)  Should the Employee become an alcoholic or
become addicted to habit-forming drugs.

            1.08.  "Medical Disability" - An illness or medical
condition preventing the Employee from being able to actively and
regularly perform his duties and responsibilities under this
Agreement for period of ninety (90) work days or longer during any
fiscal year of the Company.

          2.  Employment.  The Employee shall be employed by the
Company and any Affiliate in the capacity provided for in Paragraph
3 for the period commencing August 27, 2000, (the "Commencement
Date"), and ending on September 1, 2001, or upon the termination of
this Agreement as provided in Paragraph 6.

          3.  Duties and Responsibilities.  The Employee shall be
employed as Executive Vice President and Chief Operating Officer
of the Company and shall perform such reasonable duties and
responsibilities as the Chairman of the Board of the Company or


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President of the Company or Board of Directors of the Company or the
Executive Committee of the Board of Directors of the Company may,
from time to time, assign to the Employee.  The Employee agrees to
accept this employment and to devote his full time and attention and
his best efforts, ability and fidelity to the performance of the
duties attaching to such employment.  In addition, the Employee
shall serve as a director and officer of the Company and any
corporation in the Group, if appropriately elected.  During the
period of his employment, the Employee shall not, for remuneration
or profit, directly or indirectly, render any service to, or
undertake any employment for, any other person, firm or corporation,
whether in an advisory or consulting capacity or otherwise, without
first obtaining the written consent of the Company.

         4. Covenant Not to Compete and Disclose Confidential
Information.

            4.01.  The Employee will not, directly or indirectly,
for a period of one (1) year from the date of the termination of his
employment with the Company, whether such termination is voluntary
or involuntary or due to the expiration of the term of this
Agreement, (a) engage in competition with the Company, any
Affiliates, or their successors or assigns, for or on behalf of any
Competitive Company, or (b) provide information to, or travel,
canvass, advertise, solicit or sell for, or acquire an interest in,
become employed by, act as agent for, or in any manner assist, any
Competitive Company; provided that the Employee may become employed
by or act as agent or consultant for, in any capacity, a Competitive
Company when his duties and responsibilities with the Competitive
Company do not, directly or indirectly, involve any business
activity in the Present Territory or the Future Territory; or (c)
directly or indirectly approach, solicit, offer employment to or in
any manner induce or seek to induce any employee of the Group to
become employed by a Competitive Company or to otherwise interfere
with the Company's relationship with any employee in the Group.

                     The foregoing provisions, however, shall not
prohibit the Employee from making investments in any securities
listed on the New York or American Stock Exchanges or actively
traded in the over-the-counter market in amounts not exceeding 1% of
any single class of such securities outstanding, nor prohibit the
Employee from making investments of any nature in any securities of
the Company.

            4.02. The Employee acknowledges that the signing of
this Agreement is a condition of his promotion and employment and
understands that in the performance of his services hereunder, he
may have access to and obtain knowledge of Confidential Information

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(as hereinbefore defined) relating to the business and activities of
the Group.  The Employee shall not, without the written consent of
the Company, either during the period of his employment or
thereafter (a) use or disclose any Confidential Information outside
the Group, (b) publish any article with respect thereto, or (c)
except in the performance of his services hereunder, remove or aid
in the removal from the premises of the members of the Group any
such Confidential Information or any property or material which
relates thereto.

         5. Compensation.

            5.01.   In consideration of the services to be rendered
by the Employee pursuant to this Agreement, the Company shall pay,
or cause to be paid, to the Employee a weekly base salary from the
Commencement Date to September 1, 2001 of $5,576.93 ($290,000 per
annum).

                    The salary shall be payable at such intervals
in conformity with the Company's prevailing practice as such
practice shall be established or modified from time to time.

            5.02.   In addition, the Employee shall be entitled to:

                    (a)  Participate in the Company's Target Bonus
Plan, as it may be amended or modified in any respect, including
achievement of established goals, for the fiscal year commencing
August 27, 2000.  The Target Bonus Plan generally will give the
Employee the opportunity to earn a bonus of up to fifty (50%)
percent of the Employee's base salary actually received for services
on and after August 27, 2000, through September 1, 2001, for the
fiscal year ending September 1, 2001, subject to the Company's
achievement of certain financial goals to be established, the
Employee's performance, and all terms and conditions of the Target
Bonus Plan as in effect for each such  fiscal year; provided that
the amount of bonus paid may not be increased by the annual
individual performance rating of the Employee by the Chairman of the
Board or President.  The Employee acknowledges that he has received
a copy of the form of the Target Bonus Plan and Bonus Conditions for
the fiscal year ending August 26, 2000, and is familiar with the
terms and conditions thereof.  Nothing contained herein shall limit
the Company's right to alter, amend or terminate the Target Bonus
Plan at any time for any reason.  The Employee further acknowledges
that, as provided in the Target Bonus Plan, in the event the
Employee is not employed by the Company, for whatever reason, at the
time the bonus for the fiscal year is actually paid to participants
in the Target Bonus Plan following the end of the fiscal year, the
Employee will not be entitled to receive the bonus.

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                    (b)  Take twenty days (exclusive of Saturdays,
Sundays and paid Company holidays) of vacation during the
twelve-month period commencing August 27, 2000.  Vacation time will
accrue ratably during the course of said periods and cannot be
accumulated from year to year, except that up to five days of
vacation not taken in said twelve-month period may be carried over
to the next period.

                    (c)  Additional benefits and/or compensation in
such form and in such manner and at such times as the Compensation
Committee or Stock Option Committee of the Board of Directors of the
Company, or the Board of Directors of the Company, in the exercise
of its absolute discretion, shall determine.  It is understood and
agreed that any additional salary, benefits and compensation shall
only be paid by the Company upon the approval of the Compensation
Committee or Stock Option Committee or the Board of Directors and
not by any officer or any other person acting on behalf of the
Company.

                    (d)  All insurance and other fringe benefits
afforded to the Company employees pursuant to any plan adopted by
the Company in accordance with the terms of the plan and his
position in the Company.

         6. Termination.

            6.01.  It is agreed that either party may terminate
this Agreement for any reason at any time upon three (3) days' prior
written notice to the other party, whereupon (except as provided in
Paragraphs 4 and 6), this Agreement shall no longer be of any force
and effect (the expiration date of this notice period is herein
called the "Termination Date").  If either party terminates this
Agreement, the Company may relieve the Employee of all duties and
responsibilities effective on the date of the notice.  The Company
may also terminate this Agreement should the Employee experience a
Medical Disability, which termination shall be effective upon the
Company's giving written notice to the Employee following the
occurrence of the Medical Disability.  Upon the death of the
Employee, the Company shall pay to his widow if he is married or his
estate if he is not married or his widow predeceases him only such
amount as was due and payable to the Employee at the time of his
death.  The Company may terminate this Agreement at any time,
without notice, for Cause.

            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


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Employee, the Company and the Company's Affiliate and subsidiary
corporations, shall be terminated effective on the Termination Date.
Should the Company terminate this Agreement prior to the end of the
term of this Agreement, for reasons other than for Cause or Medical
Disability, it shall pay to the Employee, one hundred eighty (180)
days of the base salary set forth in Paragraph 5.01 above in effect
on the date of the notice (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
such installment due and payable 1not later than thirty (30) days
after the Termination Date.  Such payments made by the Company to
the Employee 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 sixth 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 set forth in 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 two (2)
equal monthly installments with the first installment due and
payable not later than thirty (30) days after the Termination Date.

            6.03.  On the Termination Date and at the end of the
term of this Agreement, the Employee agrees that the Company, its
Affiliates, and their officers, directors, members of the Executive
Committee, and employees, and their successors, heirs and assigns,
shall be fully released and discharged from any and all expenses,
claims, considerations, liabilities, obligations and causes of

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action of every kind and nature arising out of or in any manner
related to this Agreement, and any and all previous agreements,
contracts and other rights, claims and obligations between the
parties, to the Employee's employment with the Company, its
Affiliate and subsidiary corporations, and to the Employee's
association or relationship with the Company and its Affiliates,
including but not limited to, all compensations, salaries, bonuses
(including Target Bonus Plan bonuses and guarantees of bonuses
thereunder), director's pay, vacation pay, stock options,
stockholder's claims or suits, loans and other similar liabilities
or related claims; provided, that nothing herein contained shall
qualify or in any manner restrict the right of the Employee to
realize his Termination Compensation, if any, and his interests in
any of the fringe benefits (such as insurance, 401(k) plan and stock
options) of the Company to which he has become legally entitled.

            6.04.  On the Termination Date or at the end of
the term of this Agreement, the Employee agrees that he will
resign as an officer, director and member of the Executive Committee
of the Company, its Affiliate and subsidiary corporations (if and
when elected), and from any other positions, which resignations
shall become effective on the Termination Date.

            6.05.  After the Termination Date or the end of the
term of this Agreement, the 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 him on matters
handled by and through him while employed by the Company or of which
he 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 his 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 his assistance; provided, that he shall be paid reasonable
compensation by the Company in the event he is required to expend
time in the performance of such services; and provided further, that
the Employee may perform such services in a manner that does not
unreasonably interfere with other employment obtained by the
Employee.  The Employee shall be reimbursed for any expenses
incurred by him in the performance of the covenants herein set forth
in this Section 6.05.

            6.06.  After the Termination Date or the end of the
term of this Agreement, the Employee agrees that he will not discuss
his employment and resignation or termination or Termination
Compensation, if any, with any representatives of the media, either
directly or indirectly, without the written consent and approval of
the Company.

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         7.     Special Provisions.  This Agreement shall inure to the
benefit of any successor to or assignee of the Company, and the
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.

              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
parties, but only by an instrument in writing signed by the party
against whom any waiver, change, discharge or termination is sought.

        8.  North Carolina Law Applies.  This Agreement shall be
governed by and construed in accordance with the laws of the State
of North Carolina.

        9.  Notices.  Any notice or other communications to be
given hereunder shall be deemed to have been given or delivered when
delivered by hand to the individuals named below or when deposited
in United States mail, registered or certified, with proper postage
and registration or certification fees prepaid, addressed to the
parties as follows (or to such other address as one party shall give
the other in the manner provided herein):

        Family Dollar Stores, Inc.     Post Office Box 1017
                                       Charlotte, NC  28201-1017
                                       Attention:  Mr. Howard Levine

        With copy to:                  George R. Mahoney, Jr.
                                       Family Dollar Stores, Inc.
                                       Post Office Box 1017
                                       Charlotte, NC  28201-1017

        R. David Alexander, Jr.:       Family Dollar Stores, Inc.
                                       Post Office Box 1017
                                       Charlotte, NC  28201-1017


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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.


                             By HOWARD R. LEVINE
                                HOWARD R. LEVINE
                                President
Attest:

GEORGE R. MAHONEY, JR.
GEORGE R. MAHONEY, JR.
Secretary

(Corporate Seal)

                             R. DAVID ALEXANDER, JR.
                             R. DAVID ALEXANDER, JR. (SEAL)

Witness:
JANICE B. BURRIS
JANICE B. BURRIS