**Exhibit 10.32**

 

**EMPLOYMENTAGREEMENT**

 

THIS AGREEMENT, made and entered intoeffective the 4th day of November, 2005, by andbetween FAMILY DOLLAR STORES, INC., a Delaware corporation (hereinafterreferred to as the “Company”); and Charles S. Gibson, Jr. (hereinafter referredto as the “Employee”);

 

WITNESSETH:

 

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

 

NOW, THEREFORE, in consideration of themutual covenants herein contained, the Company and the Employee agree asfollows:

 

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

 

1.01.                        “Affiliate” – Any corporation,or other entity, directly or indirectly controlling, controlled by or under thecommon control of or with the Company.

 

1.02.                        “Cause” –

 

(1)  conviction of a felony, any actinvolving moral turpitude, or a misdemeanor where imprisonment is imposed, (2) commission of any act of theft, fraud, dishonesty, or falsification of anyemployment or Company records, (3)  improper disclosure of the Company’sconfidential or proprietary information, (4)  the Employee’s failure tocomply with reasonable written directives of the Chairman of the Board, theChief Executive Officer or the Board of Directors of the Company, (5)  acourse of conduct amounting to gross incompetence, (6) chronic andunexcused absenteeism, or (7) misconduct in connection with theperformance of any of Employee’s duties, including, without limitation,misappropriation of funds or property of the Company, securing or attempting tosecure personally any profit in connection with any transaction entered into onbehalf of the Company, misrepresentation to the Company, or any violation oflaw or regulations on Company premises or to which the Company is subject.

 

1.03.                        “Competitive Company” – Acorporation, partnership, proprietorship or any other legal entity operatingdiscount retail stores in the Territory, the majority of which stores each have25,000 square feet or less of total space, including non-selling areas, andthat sell or offer for sale merchandise similar or identical to the merchandisesold by the Group.

 

1.04.                        “Confidential Information” –Any information (including, without limitation, any method of operation, sourceof supply, organizational details, personnel information, information regardingreal estate activities, including landlords, prospective landlords and leasedata, business secret, or any formula, pattern, patent, device, plan, processor compilation of information) which (a) is, or is designed to be, used inthe business of any member of the Group, (b) is private or confidential inthat it is not

 

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generally known or available to the public, and (c) gives anymember of the Group an opportunity to obtain a significant advantage overcompetitors who do not know or use it.

 

1.05.                        “Group” – The Company and allAffiliates.

 

1.06.                        “Territory” – All counties,towns and cities in States in which the Company does business at any time whilethe Employee is employed by the Company.

 

1.07.                        “Medical Disability” – Anillness or medical condition preventing the Employee from being able toactively and regularly perform his duties and responsibilities under thisAgreement for period of ninety (90) work days or longer during any fiscal yearof the Company.

 

2.                                       Term.  The Employee shall be employed by the Companyand any Affiliate in the capacity provided for in Paragraph 3 for the periodcommencing upon the effective date of this Agreement, and unless earlierterminated as provided herein in paragraph 6, the Employee’s employmenthereunder shall be for a rolling term of one year (the “Term”) commencing onthe date hereof.  This agreement shall bedeemed to extend each month for an additional month automatically without anyaction on behalf of either party hereto; provided, however, thateither party may, by written notice to the other, cause this Agreement to ceaseto extend automatically and upon such notice, the “Term” of this Agreementshall be the one year following the date of such notice, and this Agreementshall terminate upon the expiration of such Term, or upon the termination ofthis Agreement as provided in Paragraph 6.

 

3.                                       Duties andResponsibilities.  The Employee shallbe employed as Executive Vice President - Supply Chain of the Company and shallperform such reasonable duties and responsibilities as the Chairman of theCompany or Board of Directors of the Company or the Chief Executive Officer ofthe Company may, from time to time, assign to the Employee.  The Employee agrees to accept this employmentand to devote his full time and attention and his best efforts, ability andfidelity to the performance of the duties attaching to such employment.  In addition, the Employee shall serve as adirector and officer of the Company and any corporation in the Group, ifappropriately elected.  During the periodof his employment, the Employee shall not, for remuneration or profit, directlyor indirectly, render any service to, or undertake any employment for, anyother person, firm or corporation, whether in an advisory or consultingcapacity or otherwise, without first obtaining the written consent of theCompany.

 

4.                                       Covenant Notto Compete, Solicit, or Disclose Confidential Information.

 

4.01.                        The Employee will not, directlyor indirectly, for a period of one (1) year from the date of thetermination of his employment with the Company, whether such termination isvoluntary or involuntary or due to the expiration of the term of thisAgreement, (a) engage in competition with the Company, any Affiliates, ortheir successors or assigns, for or on behalf of any Competitive Company, or (b) provide

 

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information to, or travel, canvass, advertise, solicit or sell for, oracquire an interest in, become employed by, act as agent for, or in any mannerassist, any Competitive Company; provided that the Employee may become employedby or act as agent or consultant for, in any capacity, a Competitive Companywhen his duties and responsibilities with the Competitive Company do not,directly or indirectly, involve any business activity in the Territory; or (c) directlyor indirectly approach, solicit, offer employment to or in any manner induce orseek to induce any employee of the Group to become employed by a CompetitiveCompany or to otherwise interfere with the Company’s relationship with anyemployee in the Group.

 

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

 

4.02.                        The Employee acknowledges thatthe signing of this Agreement is a condition of employment and understands thatin the performance of his services hereunder, he may have access to and obtainknowledge of Confidential Information (as hereinbefore defined) relating to thebusiness 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, divulge, communicate,use to the detriment of the Group, or for the benefit of any other person, ormisuse in any way, any Confidential Information, or authorize anyone else to dosuch things, at any time subsequent hereto. Any Confidential Information acquired by the Employee shall be deemed avaluable, special and unique asset of the Group received by the Employee inconfidence and as a fiduciary, and the Employee shall remain a fiduciary to theGroup with respect to all of such information.

 

5.                                       Compensation.

 

5.01.                        In consideration of theservices to be rendered by the Employee pursuant to this Agreement, the Companyshall pay, or cause to be paid, to the Employee a weekly base salary asestablished by the Board of Directors of the Company.  The base salary shall be reviewed annually bythe Board in connection with its annual review of executive compensation,unless Employee’s employment shall have been terminated earlier pursuant tothis Agreement, to determine if such base salary should be increased for thefollowing year in recognition of services to the Company and shall initially beset at a rate not less than the Employee’s current annual salary. The salaryshall be payable at such intervals in conformity with the Company’s prevailingpractice as such practice shall be established or modified from time to time.

 

5.02.                        In addition, the Employee shallbe entitled to:

 

(a) Participate in the Company’s TargetBonus Plan, as it may be amended or modified in any respect, includingachievement of established goals.  The

 

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Target Bonus Plan generally will give the Employee the opportunity toearn a bonus equal to a percentage of the Employee’s base salary actuallyreceived in a given year, the precise percentage to be set by the Board ofDirectors of the Company, subject to the Company’s achievement of certainfinancial goals to be established, the Employee’s performance, and all termsand conditions of the Target Bonus Plan as in effect for any such fiscalyear.  The Employee acknowledges that hehas received a copy of the form of the Target Bonus Plan and related guidelinesfor the operation of such Plan and is familiar with the terms and conditionsthereof.  Nothing contained herein shalllimit the Company’s right to alter, amend or terminate the Target Bonus Plan atany time for any reason.  The Employeefurther acknowledges that, except as provided in Section 6.03, pursuant tothe terms of the Target Bonus Plan, in the event the Employee is not employedby the Company, for whatever reason, at the time the bonus for the fiscal yearis actually paid to participants in the Target Bonus Plan following the end ofthe fiscal year, the Employee will not be entitled to receive the bonus.

 

(b)  Additional benefits and/orcompensation in such form and in such manner and at such times as the Board ofDirectors of the Company, in the exercise of its absolute discretion, shalldetermine, and/or as otherwise provided by the Company, consistent withbenefits and/or compensation currently provided to Company employees in similarpositions.

 

6.                                       Termination.  Employee’s employment under this Agreementmay be terminated as follows:

 

6.01.                        (a)                                  Death.  In the event of Employee’s death, Employee’semployment shall be deemed to have terminated effective as of the date ofEmployee’s death.  Upon the death of theEmployee, the Company shall pay to his widow if he is married or his estate ifhe is not married or his wife predeceases him only such amount as was due andpayable to the Employee at the time of his death.

 

(b)                                 Disability.  The Company may also terminate this Agreementshould the Employee experience a Medical Disability, which termination shall beeffective upon the Company’s giving written notice to the Employee followingthe expiration of the Medical Disability period.

 

(c)                                  By Company forCause.  The Company may terminate thisAgreement at any time, without notice, for Cause.

 

(d)                                 For Other Reasons.  It is agreed that the Company, or Employee,may terminate this Agreement for any reason at any time upon written notice tothe other party.  Except as provided inParagraph 4, this Agreement shall no longer be of any force and effect as ofthe date of such notice or such other date as may be agreed by the Company andthe Employee (herein called the “Termination Date”).  If either party terminates this Agreement,the Company may relieve the Employee of all duties and responsibilitieseffective on the date of notice.  Upontermination of this Agreement by the Company, except for the provisions ofParagraph 4, the Employee’s employment

 

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under the terms of this Agreement and all other agreements andcontracts between the Employee, the Company and the Company’s Affiliate andsubsidiary corporations, shall be terminated effective on the Termination Date.

 

6.02.                        Should the Company terminatethis Agreement for reasons other than for Cause or Medical Disability, it shallpay to the Employee, one year of the base salary set forth in Paragraph 5.01above in effect on the date of the notice (which shall constitute payment infull of the compensation due to the Employee hereunder).  Any such payments shall be made in twelve (12)equal monthly installments with the first such installment due and payable notlater than thirty (30) days after the Termination Date.  Such payments made by the Company to theEmployee are herein called “Termination Compensation.”  In the event the Employee accepts or beginsother employment as an employee, consultant or in any other capacity prior tothe date on which the twelfth monthly installment of Termination Compensationis due and payable, the monthly payments of any unpaid balance of theTermination Compensation as of the date of such new employment shall be (i) eliminatedif the monthly base salary and all other monthly remuneration and compensationfrom the new employment exceeds the monthly base salary of the Employee ineffect on the date of the notice, or (ii) reduced to the amount by whichthe monthly base salary of the Employee in effect on the date of the noticeexceeds the monthly base salary and all other monthly remuneration andcompensation from the new employment. The Employee agrees to pursue reasonable, good faith efforts to obtainother employment in a position suitable to his background and experience.  Moreover, the Employee agrees to notify theCompany within three business days of obtaining other employment during thetime period in which he is receiving Termination Compensation.

 

6.03.                        Notwithstanding any otherprovision of this Agreement, if the Company terminates this Agreement forreasons other than for Cause, or if the Agreement is terminated as a result ofthe Employee’s Death or Medical Disability, the Employee shall be entitled toreceive as additional Termination Compensation an amount equal to the pro ratashare of the bonus, or the full bonus, as the case may be, if any, under andsubject to the terms and conditions of the Target Bonus Plan referred to in Section 5.02(a).  This payment is equal to the amount, if any,the Employee would have received following the end of the fiscal year if theTarget Bonus Plan did not have a requirement that the Employee be employed bythe Company at the time the bonus is customarily paid.  Such payment shall be made to the Employee atthe same time the Company makes payments to other participants in the TargetBonus Plan.

 

6.04.                        On the Termination Date or atthe end of the term of this Agreement, the Employee agrees that he will resignas an officer and director of the Company, its Affiliate and subsidiarycorporations (if and when elected), and from any other positions, whichresignations shall become effective on the Termination Date.

 

6.05.                        After the Termination Date or theend of the term of this Agreement, the Employee covenants to render furtheradvice and assistance to the Company as may be required from time to time, andto provide all information available

 

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to him on matters handled by and through him while employed by theCompany or of which he has personal knowledge, and by making available to theCompany at reasonable times and circumstances, upon request by the Company,information pertinent to its operations in his possession; and, to the extentthat it is necessary, to cooperate with and assist the Company to conclude anymatters that are pending and which may require his assistance; provided, thathe shall be paid reasonable compensation by the Company in the event he isrequired to expend time in the performance of such services; and providedfurther, that the Employee may perform such services in a manner that does notunreasonably interfere with other employment obtained by the Employee.  The Employee shall be reimbursed for anyexpenses incurred by him in the performance of the covenants herein set forthin this Section 6.05.

 

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

 

6.06.                        After the Termination Date orthe end of the term of this Agreement, the Employee agrees not to make anystatements to the Company’s employees, customers or suppliers or to any publicor media source, whether written or oral, regarding the Employee’s employmentor termination from the Company’s employment, except as may be approved inwriting by an executive officer of the Company in advance.  The Employee further agrees not to make anystatement (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 Group or any of their employees,officers, directors, or customers, or place the Group or such individuals inany negative light.

 

7.                                       SpecialProvisions.  This Agreementshall inure to the benefit of any successor to or assignee of the Company, andthe Employee specifically agrees on demand to execute any and all necessarydocuments in connection with the performance of this Agreement.  No waiver by either party of any breach bythe other of any provision hereof shall be deemed to be a waiver of any lateror other breach thereof or as a waiver of any such or other provision of thisAgreement.  If any provision of thisAgreement shall be declared invalid or unenforceable as a matter of law, suchinvalidity or unenforceability shall not affect the validity or enforceabilityof any other provision of this Agreement or of the remainder of this Agreementas a whole.

 

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This Agreement sets forth all of the terms ofthe understanding between the parties with reference to the subject matter setforth herein and may not be waived, changed, discharged or terminated orally orby any course of dealing between the parties, but only by an instrument inwriting signed by the party against whom any waiver, change, discharge ortermination is sought.

 

8.                                       Enforcement.  Because the Employee’s services are uniqueand because the Employee has access to Confidential Information, the partiesagree that money damages would be an inadequate remedy for any breach by theEmployee of any of the provisions of paragraph 4 of this Agreement.  In the event of a breach or threatened breachof any of the provisions of paragraph 4 of this Agreement, the Company or itssuccessors or assigns may, in addition to any other rights and remediesexisting in their favor, apply to any court of competent jurisdiction forspecific performance and/or injunctive relief or other equitable relief inorder to enforce or prevent any violations of any such provision (withoutposting a bond or other security).  Inaddition to the foregoing and not in any way in limitation thereof, or inlimitation of any right or remedy otherwise available to the Company, if the Employeeviolates any provision of paragraph 4 of this Agreement, any compensation,benefits and/or Termination Compensation then or thereafter due from theCompany to the Employee shall be terminated forthwith and the Company’sobligation to pay or provide and the Employee’s right to receive suchcompensation, benefits and/or Termination Compensation shall terminate and beof no further force or effect, in each case without limiting or affecting theEmployee’s obligations under such paragraphs 4 or the Company’s other rightsand remedies available at law or in equity.

 

9.                                       Governing Lawand Forum Selection.  The Employeeagrees that any claim against the Company or any of its Affiliates or theiremployees arising out of or relating in any way to this Agreement or to theEmployee’s employment with the Company, shall be brought exclusively in theSuperior Court of Mecklenburg County, North Carolina or the United StatesDistrict Court for the Western District of North Carolina, and in no otherforum.  Employee hereby irrevocablyconsents to the personal and subject matter jurisdiction of these courts forthe purpose of adjudicating any claims subject to this forum selectionclause.  Employee also agrees that anydispute of any kind arising out of or relating to this Agreement or to theEmployee’s employment shall at the Company’s sole election or demand besubmitted to final, conclusive and binding arbitration before a singlearbitrator and according to the rules then prevailing of the AmericanArbitration Association in Mecklenburg County, North Carolina, which electionor demand may be made by the Company at any time prior to the last day toanswer and/or respond to a summons and/or complaint or counterclaim made by theEmployee.  The results of any sucharbitration proceeding shall be final and binding both upon the Company andupon the Employee, and shall be subject to judicial confirmation as provided bythe Federal Arbitration Act or the North Carolina Arbitration Act, includingspecifically the terms of N.C. Gen. Stat. § 1-567.2, which areincorporated herein by reference.  ThisAgreement shall be construed according to the substantive laws of the State ofNorth Carolina, without regard to conflict of laws principles.

 

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10.                                 Notices.    Any notice or other communicationsto be given hereunder shall be deemed to have been given or delivered whendelivered by hand to the individuals named below or when deposited in UnitedStates mail, registered or certified, with proper postage and registration orcertification fees prepaid, addressed to the parties as follows (or to suchother 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        |
|                            |   |                            |
|                            |   |                            | Family Dollar Stores, Inc. |
| Charles S. Gibson, Jr.          |   | Post Office Box 1017            |
|                            |   | Charlotte, NC 28201-1017        |
|                                 |        |                                 |  |

 

11.                                 Novation of PriorAgreement. This Agreement revokes and supercedes all prior orcontemporaneous agreements, representations, promises and understandings,whether written or oral, between the parties.

 

12.                                 Compliancewith Code Section 409A.  ThisAgreement is intended to comply with Code Section 409A.  Notwithstanding any provision herein to thecontrary, this Agreement shall be interpreted, operated and administeredconsistent with this intent.  In thatregard, the payment of any amounts under this Agreement that are subject toCode Section 409A in connection with the Executive’s termination ofemployment shall not be made earlier than six (6) months after theExecutive’s date of termination to the extent required by Code Section 409A(a)(2)(B)(i).

 

 

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

 
|                 | FAMILY DOLLAR STORES, INC. |
|----------------------|----------------------------|
|                 |                       |   |
|                 | By:                        | /s/ R. James Kelly |   |
|                 | Title:                     | Vice Chairman And CFO |   |
| Attest:              |                       |   |
| /s/ Janice B. Burris |                       |   |   |
| Asst. Secretary      |                       |   |
|                      |                            |  |  |  |  |

 
|                    | EMPLOYEE                   |
|-------------------------|----------------------------|
|                    | /s/ Charles S. Gibson, Jr. |   |
|                    | Charles S. Gibson, Jr.     |   |
| Witness:                |                       |   |
| /s/ Michael P. Mullican |                       |   |   |
|                         |                            |  |  |  |

 

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