Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On December 16, 2008, Fred's entered into an Amendment to Employment Agreement with Michael J. Hayes amending his Employment Agreement dated April 30, 2003. On December 22, 2008, Fred's entered into an Amendment to Employment Agreement with Bruce A. Efird amending his Employment Agreement dated September 22, 2007. The purpose of these amendments was to make certain modifications in order to make the agreements comply with Section 409A of the Internal Revenue Code of 1986. Copies of the amendments to employment agreement for Messrs. Hayes and Efird are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits Exhibit Number Description 10.1 Amendment to Employment Agreement, dated as of December 16, 2008, by and between Fred's and Michael J. Hayes. 10.2 Amendment to Employment Agreement, dated as of December 22, 2008, by and between Fred's and Bruce A. Efird.

---