Summary of FAMILY DOLLAR STORES INC

Item 1.01. Entry into a Material Definitive Agreement.

On December 18, 2008, Family Dollar Stores, Inc. (the "Company") and its wholly owned subsidiary, Family Dollar, Inc. ("FDI") entered into a senior unsecured 364-Day Credit Agreement (the "Credit Agreement") with a syndicate of lenders. This Credit Agreement replaced a pre-existing 364-day credit agreement in the same amount on substantially the same terms and conditions other than the pricing terms. Wachovia Bank, National Association serves as Administrative Agent for the Credit Agreement. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to them in the Credit Agreement.

The Credit Agreement provides for a commitment of $250 million. The Company may use borrowings thereunder for any general corporate purpose. The Credit Agreement matures on December 17, 2009, but the parties may mutually agree to extend the Credit Agreement for up to two additional 364-day extensions, provided that in no event may the maturity date be extended beyond December 15, 2011. Subject to certain customary conditions, the Company may elect to have 100% of the principal balance of the loans outstanding under the Credit Agreement on the then current maturity date continue as a non-revolving term loan for a period of one year from the then current maturity date.

Loans under the Credit Agreement shall, at the Company's option, bear interest at a rate per annum equal to (A) the Adjusted CD Rate plus the Applicable Margin or (B) the LIBOR Rate (or, in the case of Swingline Loans, the LIBOR Market Index Rate) plus the Applicable Margin. The Company has also agreed to pay certain customary facility fees and administrative agent fees.

The Credit Agreement contains the same representations and warranties, affirmative, negative and financial covenants and events of default as set forth in the pre-existing 364-day credit agreement entered into by the Company in January 2008 (available as Exhibit 10 to the Company's report on Form 8-K filed with the SEC on February 4, 2008.) These representations and warranties, covenants and events of default are also substantially equivalent to those set forth in (i) the Note Purchase Agreement for the issuance of unsecured Senior Notes due 2015 (available as Exhibit 10.24 to the Company's report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on November 7, 2005) and (ii) the $350 million senior unsecured Credit Agreement between the Company, FDI, Wachovia Bank, National Association and a syndicate of lenders (available as Exhibit 10 to the Company's report on Form 8-K filed with the SEC on August 28, 2006). The Credit Agreement also contains customary indemnity provisions. The obligations of the Company and FDI under the Credit Agreement are guaranteed by Family Dollar Services, Inc., Family Dollar Operations, Inc. and Family Dollar Trucking, Inc., each a wholly owned subsidiary of FDI.

The foregoing does not constitute a complete summary of the terms of the Credit Agreement, and reference is made to the complete text of the Credit Agreement which is attached hereto and incorporated herein by reference as Exhibit 10.