8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 2, 2009

CHARMING SHOPPES, INC.

(Exact name of registrant as specified in its charter)

PENNSYLVANIA	000-07258	23-1721355
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

3750 STATE ROAD, BENSALEM, PA  19020

(Address of principal executive offices) (Zip Code)

(215) 245-9100

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Compensatory Arrangements of Certain Officers.

On April 2, 2009, Charming Shoppes, Inc. (the “Company”) appointed James P. Fogarty as President, Chief Executive Officer, and Director of the Company.  Mr. Fogarty was not immediately appointed to any committee of the Board of Directors, but is expected to be appointed to various committees in the future.

Mr. Fogarty, 40, most recently was a Managing Director with Alvarez & Marsal (“A&M”), a premier independent global professional services firm providing leadership, problem-solving, and value-creation services across the industry spectrum.  He had also been a member of the A&M’s Executive Committee for North America Restructuring.  In his almost 15 years with A&M, he provided performance improvement, crisis management, and restructuring advisory services to numerous companies in various sectors.

During his tenure at A&M, Mr. Fogarty most recently served as President and Chief Operating Officer of Lehman Brothers Holdings from September 2008 to the present time.  From September 2005 through February 2008, he was President and Chief Executive Officer of American Italian Pasta Company, the largest producer of dry pasta in North America.  He served as the Chief Financial Officer at Levi Strauss & Co. from 2003 to 2005.  From December 2001 through September 2003, he served as Senior Vice President and Chief Financial Officer of The Warnaco Group, a then $1.5 billion global apparel maker, which emerged from bankruptcy in early 2003 after completing a successful turnaround during his tenure.

In connection with his appointment as President and Chief Executive Officer, the Company and Mr. Fogarty signed an offer letter (the “Letter”) on April 2, 2009 setting out his compensation arrangement.  Mr. Fogarty will receive an annual base salary of $1,000,000 and is eligible to receive an annual bonus of up to 200% of base salary (150% is the target level for such bonus) based on the achievement of certain performance goals of the Company.  The Company agreed to pay, in April 2010, a guaranteed bonus of up to $1,500,000 for his first year of employment to the extent Mr. Fogarty fails to achieve a bonus at target.  Mr. Fogarty is also eligible to participate in the Company’s Long Term Incentive Program beginning in Spring 2011.  The Letter also provides for Mr. Fogarty’s participation in the Company’s retirement and other employee benefit programs.  In addition, Mr. Fogarty will be provided with an annual automobile allowance of $15,000, an annual flexible perquisite allowance of $20,000, temporary living and commuting expenses for the first 12 months of his employment, relocation assistance, and a household move reimbursement.

Inducement Grants

As an inducement for Mr. Fogarty to enter into employment with the Company, the Company granted him 2,000,000 stock appreciation rights (“SARs”).   Each SAR represents the right to receive, at exercise, a number of shares of the Company’s common stock with a fair market value at the date of exercise equal to the appreciation in value of the Company’s common stock over the base amount.  The base amount is $1.82 per share, which was the fair market value of the Company’s common stock on April 2, 2009 (the grant date).

An amount equal to 900,000 SARs is subject to time-based vesting.  These SARs will vest in four equal installments on the first, second, third and fourth anniversaries of the grant date, subject only to Mr. Fogarty’s continued employment with the Company.  These SARs were granted under the terms of the Company’s 2004 Stock Award and Incentive Plan.

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Another 1,100,000 of the SARs is subject to performance-based vesting.  These SARs will vest in four equal installments on the last trading day of each of the Company’s next four fiscal years, subject to Mr. Fogarty’s continued employment with the Company and the closing price of the Company’s common stock equaling or exceeding 120% of the base amount for five consecutive days during the respective fiscal year.  Vesting of the performance-based SARs will be accelerated on the day on which the Company’s common stock equals or exceeds a certain target stock price ($2.40 in fiscal 2010, $3.50 in fiscal 2011, $5.00 in fiscal 2012, and $7.50 in fiscal 2013).  However, vesting in any fiscal year cannot exceed 275,000 SARs plus the number of SARs (if any) that did not vest in a previous fiscal year.  In addition, the number of shares of the Company’s common stock with respect to which the SARs become exercisable will be decreased as necessary so that the aggregate spread (fair market value of the Company’s common stock on the vesting date over the base amount) in a particular fiscal year does not exceed certain specified amounts ($159,500 in fiscal 2010, $1,000,000 in fiscal 2011, $1,750,00 in fiscal 2012, $10,340,500 in fiscal 2013, $3,666,667 in fiscal 2014, and $3,500,000 in fiscal 2015 through 2017).  The performance-based SARs were granted under NASDAQ Marketplace Rule 4350(i)(1)(A)(iv).

Both the time-vest and performance-based SARs may be accelerated upon termination of Mr. Fogarty’s employment other than for cause or good reason or within 24 months of a change of control if the successor does not convert the SARs to stock appreciation rights with equivalent terms.  The SARs will terminate on the seventh anniversary of the grant date, or earlier, for certain terminations of employment.

Severance Agreement

In addition to the Letter, the Company also entered into a Severance Agreement (the “Agreement”) with Mr. Fogarty dated as of April 2, 2009.  Under the Agreement, Mr. Fogarty would receive severance benefits upon a termination of employment by the Company other than for “cause”, or upon a termination by the executive for “good reason” (each as defined in the Agreement) (each a “Qualifying Termination”).  In the event of a Qualifying Termination, Mr. Fogarty would receive severance equal to twice his annual base salary, payable over 24 months, monthly reimbursements of COBRA health care premiums during the 24-month severance period (or until he obtains similar coverage from a subsequent employer, if earlier), his prorated annual bonus for the year of termination, based on Company performance, and a lump sum payment equal to his unpaid base salary and accrued and earned vacation pay.  The Company would also provide certain outplacement services.

If there was a Qualifying Termination during the 24-months after a “change of control” (as defined in the Agreement), instead of the severance benefits described above, Mr. Fogarty would receive a lump sum severance amount equal to twice the sum of his annual base salary and cash bonus (averaged over the past three years), a lump sum payment equal to the cost of COBRA health care premiums and life insurance and disability coverage for the 24-months after termination, a prorated annual bonus at target for the year of termination, a lump sum payment equal to his unpaid base salary, and accrued and earned vacation pay.  The Company would also provide certain outplacement services.

Any severance payment due to Mr. Fogarty may be postponed for six months in order to comply with section 409A of the Internal Revenue Code (the “Code”).  At Mr. Fogarty’s option, if an excise tax under section 4999 of the Code is imposed on any payments, the amount of such payments may be reduced to the section 280G threshold amount if such reduction provides Mr. Fogarty with a greater net after-tax amount than would be the case if no reduction was made.

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Mr. Fogarty is not entitled to severance payments due to termination for disability or upon retirement or death.  Additionally, if Mr. Fogarty is terminated for cause or other than for good reason or retires, he will only receive accrued base salary and vacation pay through the date of termination.

The Agreement has a three-year term which, at the end of the first year of the three-year term and at the end of each year thereafter, automatically extends for one additional year unless notice of non-renewal is delivered.

During the term of the Agreement and for 24 months following any termination, Mr. Fogarty is subject to non-competition and non-solicitation provisions.  He is also subject to confidentiality and non-disparagement provisions.  We may seek injunctive relief against Mr. Fogarty for breach of these provisions.  In addition, Mr. Fogarty would forfeit payments under the Agreement for a breach of any of these provisions.

Resignation of Interim Chief Executive Officer

In connection with Mr. Fogarty’s appointment, Alan Rosskamm resigned as the Company’s Interim Chief Executive Officer on April 2, 2009.  Mr. Rosskamm will continue as the Company’s Chairman of the Board.  The Company thanks Mr. Rosskamm for his significant contribution and service as Interim Chief Executive Officer.

Upon Mr. Rosskamm’s appointment as Interim Chief Executive Officer, the Company granted him 41,152 SARs.  As a result of Mr. Fogarty’s appointment as President, Chief Executive Officer and Director of the Company, Mr. Rosskamm’s SARs vested.

The foregoing descriptions of the Letter, the Agreement and the SARs are qualified in their entirety by reference to the agreements, which are attached as Exhibits 10.1, 10.2, 10.3 and 10.4 respectively, to this current report and incorporated herein by reference.

The Company issued a press release on April 3, 2009 with respect to the foregoing, a copy which is attached as Exhibit 99.1 to this current report.

Item 9.01  Financial Statements and Exhibits.

Exhibit No.	Description
10.1	Offer Letter dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty.
10.2	Severance Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty.
10.3	Stock Appreciation Rights Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James B. Fogarty (Inducement Grant).
10.4	Stock Appreciation Rights Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James B. Fogarty (Time-Based Grant).
99.1	Press Release dated April 3, 2009.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CHARMINGSHOPPES, INC.
	(Registrant)
Date:  April 6, 2009	/S/ ERIC M. SPECTER
	Eric M. Specter
	Executive Vice President
	Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Offer Letter dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty.
10.2	Severance Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty.
10.3	Stock Appreciation Rights Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James B. Fogarty (Inducement Grant).
10.4	Stock Appreciation Rights Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James B. Fogarty (Time-Based Grant).
99.1	Press Release dated April 3, 2009.

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EX-10.1

EXHIBIT 10.1

April 2, 2009

James Fogarty

14 Old Roaming Brook Road

Mt. Kisco, NY 10544

Dear Jim:

On behalf of the Board of Directors of Charming Shoppes, Inc., I am pleased to extend to you this offer of employment to serve in the position ofPresident, Chief Executive Officer (CEO) and Director of Charming Shoppes, Inc., located in Bensalem, Pennsylvania. Your starting date will be a date mutually agreed upon. We have enjoyed getting acquainted with you and are enthusiastic about the skills, ideas and potential that you bring to our organization.  Likewise, we are confident that you will find Charming Shoppes, Inc., an environment in which excellence is recognized and rewarded.

Listed below is a summary of the key terms of your annual compensation package.  Additional details follow this summary:

· AnnualBase Salary: $1,000,000

· “Welcome” Equity Grant: 2,000,000 Stock Appreciation Rights (“SAR’s”)

· Target Bonus:  150% of base which would equate to a target bonus opportunity of $1,500,000

o	The Company will pay you a guaranteed bonus of $1,500,000
	(150% of base salary) for your first year of employment, in April 2010

· Annual Auto Allowance: $15,000

· Annual Flexible Perquisite Allowance: $20,000

Additional Details

Welcome Equity Grant:  Charming Shoppes, Inc. hopes that you will accept our offer of employment set forth in this letter.  As an inducement to accept this offer, you will be granted 2,000,000 units of SAR’s in the aggregate to be effective on your first day of employment.  900,000 SAR’s and 1,100,000 SAR’s, respectively, will be granted pursuant to our 2004 Stock Award and Incentive Plan (the “2004 Plan”) and our 2003 Incentive Compensation Plan (the “2003 Plan”), respectively.  The SAR’s granted under the 2004 Plan will vest in equal amounts over the first four years from the date of grant, all as more fully set forth in the Stock Appreciation Rights Agreement (2004 Plan) attached hereto.  The SAR’s granted under the 2003 Plan will vest in 25% increments at the earlier of (a) achieving a target stock price within a designated fiscal year, or (b) the last trading day of each of the first four fiscal years, all as more fully set forth in the Stock Appreciation Rights Agreement (2003 Plan) attached hereto.   The SAR’s will be settled by delivery of shares at the time of vesting.  Actual value at the time of vesting will be determined by the market performance of the stock and are not guaranteed by the Company.

The approved grant under the 2003 Plan will be made in reliance on NASDAQ Marketplace Rule 4350(i) (1) (A) (iv), and on terms substantially the same as set forth in the Stock Appreciation Rights Agreement (2003 Plan).  That rule requires that we issue a press release announcing this grant shortly after it is effective.  Under NASDAQ rules, we will be required to identify you by name in the press release and provide details regarding the grant.

Bonus Program:  For fiscal year 2010, which began February 3, 2009, you will be eligible to participate in an Executive Incentive Plan under the 2004 Stock Award and Incentive Plan with a targeted bonus opportunity of one hundred and fifty percent (150%) of your base salary.  Plan design is subject to review and approval each year by the Company’s Board of Directors.  Under the current plan design, the Executive Incentive Plan is built upon the Company achieving a financial target established for that fiscal year, in combination with the achievement of any target performance goals.  The Company does not guarantee bonus payments, except for the guaranteed bonus of $1,500,000 payable to you for your first year of employment in April 2010.  Should you be entitled to a bonus payment in excess of target for fiscal year 2010, such excess will be paid to you in addition to the guaranteed bonus payment of $1,500,000.  The plan typically has provided for a reduced bonus payout should the Company results reach a minimum level as determined by the Board of Directors.  The payment level increases as the Company approaches the Targeted level and should the Company surpass the Targeted level, your bonus payout may increase up to two hundred percent (200%) of your base salary based upon the business performance and you personally achieving any target performance goals set for you.  Shortly after you start with the Company you will receive additional information about this program.

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Auto Allowance: As it is presently designed, you will receive one thousand two hundred fifty dollars ($1,250) per month allowance.  The Company requires all executives covered under this program to maintain a record of business usage and to provide that information to the Company’s finance department prior to each year-end.  Auto Allowance awards are paid on a monthly basis and will appear on your paycheck at the beginning of the month.

Flexible Perquisite Allowance:  You will have a flexible perquisite allowance of $20,000 per year to spend on specified items such as financial counseling and wellness expenses. The details of this specific program will be more fully described upon commencement of your employment.

BENEFITS:  The Company will also contribute toward a robust selection of benefits that are part of your Total Rewards package, and which are outlined in the Benefits Enrollment Guidebook 2009 which is included with this letter.  Please understand that eligibility for benefits may be triggered by your starting date of employment and any adjustments to the effective dates of coverage will be made and confirmed with you, once we have established your actual employment date.  Listed below are additional details.

Medical Benefits: You will be eligible to participate in your choice of the Company's medical options, prescription, vision and dental programs as of the first of the month following 30 days of employment.  The Company has established a Premium Conversion (S125) Plan so that you are able to pay your portion of the coverage with pre-tax dollars.  You will receive an enrollment guidebook detailing the plan provisions and related costs approximately two weeks prior to your eligibility date for coverage.  Should you decide to forego participation in the Company health related coverage plans during your enrollment time, you may re-consider your option to do so during the open enrollment period which has typically been held in November of each year with coverage effective at the beginning of January. Short-term disability, life insurance and other optional benefit offerings will go into effect after the required waiting periods.

Executive Life Insurance:  Effective with the commencement of your employment, you will be provided with enrollment information for an additional life insurance benefit that will provide a death benefit equal to one time your salary ($1,000,000).

Paid-Time-Off:  In calendar year 2009, you will be eligible to participate in the Company Paid Time Off Plan (PTO) with 20PTO days available.  Under the Company’s PTO Plan you may use a PTO day to cover vacation time, sick days, personal days, etc.  In calendar year 2010 you will be eligible for 26 PTO days. The number of days you receive under the Company PTO plan does not include Paid Holidays.  The Company recognizes six (6) paid holidays (Memorial Day, Independence Day, Labor Day, Thanksgiving, Christmas, and New Years Day).

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Annual Review: Your performance review would be completed by the Board of Directors and you will have the opportunity to complete a self-appraisal of your performance to review prior to completion of the final appraisal rating.

Long Term Incentive Program: In addition to the “Welcome” Grant of SAR’s, you will be eligible to participate in the Long Term Incentive Program (LTIP), under which the Company will provide you with an equity based award beginning in Spring 2011 and in subsequent years as determined by the plan approved by the Company’s Compensation Committee of the Board of Directors.  While subject to review each year by the Company’s Board of Directors, the annual LTIP program for individuals at your position level with the Company, currently has both performance based, as well as a time based equity components of the award.  Each year, plan details are outlined to you in a communication packet prepared specifically for you.  In addition you will be able to access information about your LTIP balances through our Fidelity Investment partner who handle the administration and account management of the stock awards; Employee Stock Purchase Plan, the 401(k), and the Non Qualified (NQ) Variable Deferred Compensation Plan accounts.

401(k): After the required waiting periods, you will be eligible for the Company’s 401(k) Retirement Program which is administered by Fidelity Investment.  Based upon your position and compensation level, when you have reached the eligibility date to place “new” money into the Company’s 401(k) plan, you will be restricted to a contribution level of no more than three percent (3%) of your salary.  You will be eligible to roll-over any money from a qualified plan into the Company’s 401(k) plan upon your hire date.  The Benefit Service Center staff will be available to answer any questions you may have with respect to these benefits.  Please note that the Company has suspended matching contributions at least through December 31, 2009.

Variable Deferred Compensation Plan: After the commencement of your employment with the Company, you will be eligible to participate in the Company’s Variable Deferred Compensation Plan for Executives.  The details of this plan will be explained to you following your start date. Please note that the Company has suspended matching contributions at least through December 31, 2009.

Relocation:  The Company recognizes that relocation to a new community often takes time and careful consideration of the options regarding where to settle in the greater Bensalem, Pennsylvania area.  Prior to initiating your relocation in the Bensalem area, all temporary living and commutation expenses for the first twelve months of your employment will be paid for by the Company.

Under our relocation policy, you will have twelve (12) months from your date of hire to complete the relocation process.  The Company currently partners with Primacy Relocation LLC to handle this important process for you and your family.  It is our goal to make your relocation process efficient in the form of services offered and to reduce the cost impact that may be incurred during the relocation process.  It is imperative that if you accept our offer of employment, you speak with Primacy prior to initiating contact with any other outside party regarding your relocation (including but not limited to Real Estate Agents, Temporary Living Providers and/or Household Good Providers).  Failure to work within the established relocation guidelines, administered by Primacy, may result in a loss of this relocation benefit.

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As the Chief Executive Officer, you will be receiving the highest level of relocation support offered under our program which includes a period of temporary housing including storage of your household goods until your new location is confirmed, a miscellaneous expense allowance to help with the cost of items not covered under the relocation policy, such as carpet cleaning, car registration/license fees, utility hookups, etc., and the eligibility to participate in our Buyer Value Option (BVO).  This BVO feature assists you with the sale of your existing home when compared to a direct reimbursement program through the following:

·   Having the customer closing costs paid through Primacy therefore not requiring tax assistance

·   Your eligibility to receive an equity advancement (once an offer has been received on the home you are selling) which will allow you to move more quickly on the purchase of a new home

·   Primacy will handle the closing on the home you are selling, which would eliminate the need for you to return home for a closing process.

Taxable relocation payments will appear on your individual W-2 and the Company will provide tax assistance (gross-up) on many of the taxable payments to offset your individual tax burden.  We encourage you to seek advice from a tax expert to determine your individual tax impact regarding relocation expenses.  As a condition to reimbursement, you will be responsible for keeping accurate expense records, completing relocation expense reports and providing clear, readable receipts.

A summary of the relocation process is included with this offer letter so that you may better understand how our process works.  Once you have accepted our offer we will work with Primacy to set up your relocation account and any additional questions can be reviewed with your individual relocation coordinator.

Executive Severance Agreement:  As of the first day of your employment with the Company, the Executive Severance Agreement, which includes a Change in Control provision, will become effective.  You in turn will commit to a non-compete, non-solicitation, non-hire and non-disclosure undertaking, as more fully set forth in the Executive Severance Agreement. The details around this protection are provided to you as an enclosure to this letter.

As you may know, your employment with the Company is an at will relationship.  This letter is not a formal contract of employment with the Company or a contract for any particular length of employment, but rather a summary of the initial terms of your employment.  In addition we have included a copy of the CSI Standards of Business Conduct which will be applicable to you during your employment with the Company.

If you are in full agreement with this offer and accept its terms, please sign the offer letter, the Executive Severance Agreement, and the Business Conduct Policy.  Please return the originals in the enclosed envelope, and we will return fully executed copies for your records.

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Jim, on behalf of all of us here at Charming Shoppes, Inc., I am pleased to extend this offer of employment to you and I look forward to welcoming you to the Company.  I believe you have the unique blend of talents to lead us in transforming Charming Shoppes, Inc.  Your background is well suited to the task.  The Board is confident that you can create substantial shareholder value.

Please contact Gale Varma, Executive Vice President – Human Resources at 215-633-4929 if there is anything we can do to assist you in a smooth transition to the Company.  On behalf of all your new colleagues, I look forward to hearing from you.

Sincerely,

Alan Rosskamm

Interim CEO and Chairman of the Board

I have read and agree to accept the terms offered to me:

___________________________________________

James Fogarty

___________________________________________

Date:

Attachments:

Executive Severance Agreement

SAR’s Agreement (2003 Plan)

SAR’s Agreement (2004 Plan)

Relocation Policy

SAR’s Hand-out

Benefits Enrollment Guidebook

cc:	Michael Goldstein – Charming Shoppes Board of Directors
	Gale Varma - Executive Vice President – Human Resources

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EX-10.2

EXHIBIT 10.2

Severance Agreement for

JAMES P. FOGARTY

Charming Shoppes, Inc.

APRIL 2, 2009

Contents

Article 1. Establishment, Term, and Purpose	1
Article 2. Definitions	1
Article 3. Severance Benefits	5
Article 4. Tax Compliance	9
Article 5. Application of 280G	10
Article 6. The Company’s Payment Obligation	11
Article 7. Legal Remedies	11
Article 8. Outplacement Assistance	11
Article 9. Successors and Assignment	12
Article 10. Covenants	12
Article 11. Miscellaneous	14

Charming Shoppes, Inc.

Severance Agreement

THIS AGREEMENT is made and entered into as of April 2, 2009 (the “Effective Date”), by and between Charming Shoppes, Inc. (hereinafter referred to as the “Company”) and James P. Fogarty (hereinafter referred to as the “Executive”).

WHEREAS, the Compensation Committee of the Company (the “Committee”) has determined that it is appropriate to provide severance compensation to recruit and retain key executives and to provide incentives to key executives to promote the interests of the Company;

WHEREAS, the Committee has approved the Company entering into severance agreements with certain key executives of the Company; and

WHEREAS, the Executive is a key executive of the Company.

NOW THEREFORE, to assure the Company that it will have the continued dedication of the Executive, and to induce the Executive to remain in the employ of the Company, and for other good and valuable consideration, the Company and the Executive agree as follows:

Article 1. Establishment, Term, and Purpose

This Agreement shall commence on the Effective Date and shall continue in effect for three (3) full years (i.e., until the day before the third anniversary of the Effective Date).  However, at the end of the first year of such three (3) year period and at the end of each additional year thereafter, the term of this Agreement shall be extended automatically for one (1) additional year, unless the Committee delivers written notice six (6) months prior to the end of the first year of such term, or extended term, to the Executive, that the Agreement will not be extended.  In such case, the Agreement will terminate at the end of the term, or extended term, then in progress.  However, in the event a Change in Control occurs during the original or any extended term, this Agreement will remain in effect for not less than the longer of: (i) twenty-four (24) months beyond the month in which such Change in Control occurs; or (ii) until all obligations of the Company hereunder have been fulfilled, and until all benefits required hereunder have been paid to the Executive.

Article 2. Definitions

Whenever used in this Agreement, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized.

2.1 “Base Salary” means the salary of record paid to the Executive as annual salary, excluding amounts received under incentive or other bonus plans, whether or not any such salary or other amounts are deferred.

2.2 “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act and shall include related terms such as “Beneficial Ownership.”

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2.3 “Benefit Period” means the period as provided in Section 3.3 herein with respect to which the Executive receives severance compensation.

2.4 “Beneficiary” means the persons or entities designated or deemed designated by the Executive pursuant to Section 9.2 herein.

2.5 “Board” means the Board of Directors of the Company.

2.6 “Cause” means: (a) the Executive’s willful and continued failure to substantially perform his or her duties with the Company (other than any such failure resulting from Disability or occurring after issuance by the Executive of a Notice of Termination for Good Reason), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has willfully failed to substantially perform his or her duties, and after the Executive has failed to resume substantial performance of his or her duties on a continuous basis within thirty (30) calendar days of receiving such demand; (b) the Executive’s willfully engaging in conduct (other than conduct covered under (a) above) which is demonstrably and materially injurious to the Company, monetarily or otherwise; or (c) the Executive’s having been convicted of a felony.  For purposes of this subparagraph, no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the action or omission was in the best interests of the Company.

2.7 “Change in Control” of the Company shall be deemed to have occurred as of the first day after the Effective Date that any one or more of the following conditions is satisfied:

(a) Any Person, other than the Company or a Related Party, acquires directly or indirectly the Beneficial Ownership of any Voting Security and immediately after such acquisition such Person has directly or indirectly, the Beneficial Ownership of Voting Securities representing fifty percent (50%) or more of the total voting power of all the then-outstanding Voting Securities; or

(b) Those individuals who as of the date of this Agreement constitute the Board or who thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors as of the date of this Agreement or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(c) There is consummated a merger, consolidation, recapitalization, or reor­gani­zation of the Company, a reverse stock split of outstanding Voting Securities, or an acquisition of securities or assets by the Company (a "Transaction"), other than a Transaction which would result in the holders of Voting Securities having at least eighty percent (80%) of the total voting power represented by the Voting Securities outstanding immediately prior thereto continuing to hold Voting Securities or voting securities of the surviving entity having at least sixty (60%) percent of the total voting power represented by the Voting Securities or the voting securities of such surviving entity outstanding immediately after such Transaction and in or as a result of which the voting rights of each Voting Security relative to the voting rights of all other Voting Securities are not altered; or

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(d) There is implemented or consummated a plan of complete liquidation of the Company or sale or disposition by the Company of all or substantially all of the Company’s assets other than any such transaction which would result in Related Parties owning or acquiring more than fifty percent (50%) of the assets owned by the Company immediately prior to the transaction.

However, in no event shall a Change in Control be deemed to have occurred, with respect to the Executive, if the Executive is part of a purchasing group which consummates the Change in Control transaction. The Executive shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Executive is an equity participant in the purchasing company or group (except for: (i) passive ownership of less than three percent (3%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change in Control by a majority of the nonemployee continuing Directors).

2.8 “COBRA Benefits” shall refer to continued group health insurance benefits under Sections 601-607 of the federal Employee Retirement Income Security Act of 1974, as amended.

2.9 “Code” means the United States Internal Revenue Code of 1986, as amended.

2.10 “Committee” means the Compensation Committee of the Board or any other committee appointed by the Board to perform the functions of the Compensation Committee.

2.11 “Company” means Charming Shoppes, Inc., a Pennsylvania corporation, or any successor thereto as provided in Article 9 herein.  If the Executive is an officer of Charming Shoppes of Delaware, Inc. and/or any other subsidiary, direct or indirect, of Charming Shoppes, Inc. only, or an officer of any or all of  Charming Shoppes of Delaware, Inc., Charming Shoppes, Inc., and/or any other subsidiary, direct or indirect, of Charming Shoppes, Inc., the word "Company" shall be deemed to include not only Charming Shoppes, Inc. but also Charming Shoppes of Delaware, Inc., and/or such other subsidiary, direct or indirect, of Charming Shoppes, Inc., as applicable, with respect to employment matters, including termination of employment, where appropriate.  References to the "Company" with respect to a Change in Control and matters incidental to the determination of a Change in Control relate only to Charming Shoppes, Inc.

2.12 “Disability” means complete and permanent inability by reason of illness or accident to perform the duties of the occupation at which the Executive was employed when such disability commenced.

2.13 “Effective Date” means the date of this Agreement set forth above.

2.14 “Effective Date of Termination” means the date of termination of active employment with the Company.

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2.15 “Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

2.16 “Good Reason” shall mean, without the Executive’s express written consent, the occurrence of any one or more of the following:

(a) A material diminution of the Executive’s authorities, duties or responsibilities as an employee of the Company including the Executive ceasing to have the title of President and Chief Executive Officer of the Company.

(b) A material change in the geographic location at which the Executive must perform services; for purposes of this Agreement, a material change means the Company requires the Executive to be based at a location which is at least fifty (50) miles farther from the Executive’s then current primary residence than is the Executive’s then current office location;

(c) A material diminution by the Company in the Executive's Base Salary as in effect on the Effective Date or as the same shall be increased from time to time; or

(d) A material breach by the Company of this Agreement.

Notwithstanding the foregoing, the Executive shall not have Good Reason for termination if, within sixty (60) days after the date on which the Executive gives a Notice of Termination, as provided in Section 3.8, the Company corrects the action or failure to act that constitutes the grounds for termination for Good Reason as set forth in the Executive’s Notice of Termination.  If the Company does not correct the action or failure to act, the Executive must terminate his or her employment within thirty (30) days after the end of the cure period, in order for the termination to be considered a Good Reason termination.  The existence of Good Reason shall not be affected by the Executive’s temporary incapacity due to physical or mental illness not constituting a Disability.

2.17 “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

2.18 “Qualifying Termination” means any of the events described in Section 3.2 herein, the occurrence of which triggers the payment of Severance Benefits hereunder.

2.19 “Related Party” means (a) a majority-owned subsidiary of the Company; or (b) a trustee or other fiduciary holding securities under an employment plan of the Company or any majority-owned subsidiary; or (c) a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities.

2.20 “Retirement” means the Executive’s voluntary termination of employment in a manner which qualifies the Executive to receive immediately payable retirement benefits under the Company’s tax-qualified retirement plan or under the successor or replacement of such retirement plan if it is then no longer in effect.  The term “Retirement” shall not mean a termination of the Executive’s employment under circumstances that constitute Good Reason or that constitute an involuntary termination of the Executive’s employment by the Company.

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2.21 “Separation Pay Limitation” means the lesser of (i) two (2) times the Executive's then annual compensation or (ii) two (2) times the limit on compensation then set forth in Section 401(a)(17) of the Code, as determined for purposes of the “separation pay” exception under Section 409A of the Code.

2.22 “Severance Benefits” means the payment of severance compensation as provided in Section 3.4 herein.

2.23 “Three-Year Average Bonus” means the Bonus Percentage (defined below) multiplied by the Executive’s target annual cash bonus in effect for the fiscal year in which the Effective Date of Termination occurs.  The Bonus Percentage is calculated as the average of the following percentages for each of the three (3) fiscal years preceding the Effective Date of Termination:  (i) the annual cash bonus paid to the Executive for the fiscal year, divided by (ii) the Executive’s target annual cash bonus for the fiscal year.  If the Executive has been employed for less than three (3) fiscal years at the Date of Termination, the average bonus will be based on the completed fiscal years from the date the Executive commenced employment with the Company to the Executive’s Date of Termination.

2.24 “Voting Securities” means any securities of the Company which carry the right to vote generally in the election of directors.

Article 3. Severance Benefits

3.1 Right to Severance Benefits.  The Executive shall be entitled to receive from the Company Severance Benefits, as described in Section 3.4 herein, if there has been a Qualifying Termination and a Notice of Termination for a Qualifying Termination has been delivered, provided the Executive executes and does not revoke a written release and waiver of claims, in form and substance acceptable to the Company (the “Release”), of any and all claims against the Company and all related parties with respect to all matters arising out of the Executive’s employment by the Company, or the termination thereof (other than claims based upon any severance entitlements under the terms of this Agreement or entitlements under any plans or programs of the Company under which Executive has accrued a benefit).

The Executive shall not be entitled to receive Severance Benefits if the Executive’s employment is terminated for Cause, or if his or her employment with the Company ends due to death, Disability, or Retirement or due to a voluntary termination of employment by the Executive without Good Reason.

3.2 Qualifying Termination.  The occurrence of any one or more of the following events (as evidenced by a Notice of Termination) shall be considered a Qualifying Termination under this Agreement:

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  (a) A termination of the Executive’s employment by the Company for reasons other than Cause, as evidenced by a Notice of Termination delivered by the Company to the Executive; or

  (b) A termination by the Executive for Good Reason, as evidenced by a Notice of Termination delivered by the Executive to the Company.

3.3 Benefit Period.  In the event of a Qualifying Termination, the Executive will receive Severance Benefits with respect to the Benefit Period.  The Benefit Period shall in all events be twenty-four (24) months.

3.4 Severance Benefits.  In the event the Executive becomes entitled to receive Severance Benefits as provided in Sections 3.1 and 3.2 herein, the Executive shall receive the following Severance Benefits:

  (a) In the event of a Qualifying Termination before a Change in Control, or in the event of a Qualifying Termination after twenty-four (24) months following a Change in Control, the Company shall pay to the Executive the following:

  (i) An amount equal to two (2) times the Executive’s annual Base Salary. This severance amount shall be payable in regular payroll installments over the Benefit Period, beginning within thirty (30) days after the Effective Date of Termination, subject to the six-month delay of Section 409A of the Code, if applicable, as described in subsection (f) below.

  (ii) Reimbursement of the Executive’s monthly cost of COBRA Benefits under the Company’s health plan for the Benefit Period, provided, however, that payment of the COBRA Benefits shall be discontinued prior to the end of the Benefit Period if the Executive ceases to receive COBRA coverage under the Company’s health plan or if the Executive has available substantially similar benefits at a comparable cost to the Executive from a subsequent employer, as determined by the Committee.  The COBRA reimbursement payments shall be paid monthly on the first payroll date of each month, beginning within thirty (30) days after the Effective Date of Termination.

  (iii) A lump sum amount equal to the Executive’s unpaid annual cash bonus, calculated based on Company performance, for the year in which the Executive’s Effective Date of Termination occurs, multiplied by a fraction, the numerator of which is the number of completed days in the then existing fiscal year through the Effective Date of Termination, and the denominator of which is three hundred and sixty-five (365). This payment will be paid when the annual cash bonuses for the year are paid to other executives of the Company (but no later than the end of the “short term deferral” exception period under Section 409A of the Code).

  (iv) Outplacement services, as described in Article 8.

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  (v) A lump sum amount equal to the Executive’s unpaid Base Salary, accrued vacation pay, and earned but not taken vacation pay through the Effective Date of Termination.  This payment shall be made within thirty (30) days after the Effective Date of Termination.

  (b) In the event of a Qualifying Termination upon or within twenty-four (24) months after a Change in Control, the Company shall pay to the Executive the following amounts, all of which shall be paid within thirty (30) days after the Effective Date of Termination (except as provided in subsection (b)(iv) or (f) below):

  (i) A lump sum amount equal to two (2) times the sum of (A) the Executive’s annual Base Salary, plus (B) the Executive’s Three-Year Average Bonus.

  (ii) A lump sum amount equal to the monthly cost of COBRA Benefits under the Company’s health plan and the Company’s monthly cost of life insurance and disability coverage in effect for the Executive at the Effective Date of Termination, multiplied by the number of full months in the Benefit Period.

  (iii) A lump sum amount equal to the Executive’s unpaid target annual cash bonus established for the year in which the Executive’s Effective Date of Termination occurs, multiplied by a fraction, the numerator of which is the number of completed days in the then existing fiscal year through the Effective Date of Termination, and the denominator of which is three hundred and sixty-five (365).  This lump sum amount shall be payable regardless of whether the Company meets its performance objectives for the year in which the Executive’s Effective Date of Termination occurs.

  (iv) Outplacement services, as described in Article 8.

  (v) A lump sum amount equal to the Executive’s unpaid Base Salary, accrued vacation pay, and earned but not taken vacation pay through the Effective Date of Termination.

  (c) Except as specifically provided above, incentive awards granted under the incentive arrangements adopted by the Company shall be paid pursuant to the terms of the applicable plan.  Equity awards shall be paid pursuant to the terms of the applicable plan.

  (d) The aggregate benefits accrued by the Executive as of the Effective Date of Termination under the savings and retirement plans sponsored by the Company shall be distributed pursuant to the terms of the applicable plan.

  (e) Compensation which has been deferred under the Charming Shoppes Variable Deferred Compensation Plan or other plans sponsored by the Company, as applicable, together with all interest or earnings credited with respect to any such deferred compensation balances, shall be distributed pursuant to the terms of the applicable plan.

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  (f) To the maximum extent permitted under Section 409A of the Code, the severance benefits payable under this Agreement are intended to comply with the “short-term deferral exception” under Section 409A and the “separation pay exception” under Section 409A. Any amount payable to the Executive during the six (6) month period following the Effective Date of Termination that does not qualify for either of the foregoing exceptions and that constitutes deferred compensation subject to the requirements of Section 409A of the Code is referred to as the “Excess Amount.”  If at the time of the Executive’s separation from service, the Executive is a “specified employee” (as defined in Section 409A of the Code and determined in accordance with the Company’s “specified employee” determination policy), the Company shall postpone payment of the Excess Amount for six (6) months following the Effective Date of Termination as described in Section 4.1 below.

  (g) Notwithstanding Section 3.4(b), the cash severance payments described in Section 3.4(b)(i) and (ii) shall be paid in a lump sum payment only if the Change in Control constitutes a change in control event under Section 409A (a “409A Change in Control”), if required by Section 409A.  If the Change in Control does not constitute a 409A Change in Control, the cash severance payments described in Section 3.4(b)(i) and (ii) shall be paid in installments as described in Section 3.4(a)(i) and (ii), if required by Section 409A. 

3.5 Termination for Disability.  If the Executive’s employment is terminated by reason of his or her Disability, the Executive shall receive his or her Base Salary and accrued vacation through the Effective Date of Termination, at which point in time the Executive’s benefits shall be determined in accordance with the Company’s disability, retirement, insurance, and other applicable plans and programs then in effect.  In the event the Executive’s employment is terminated due to Disability, the Executive shall not be entitled to the Severance Benefits described in Section 3.4.

3.6 Termination for Retirement or Death.  If the Executive’s employment is terminated by reason of Retirement or death, the Executive’s benefits shall be determined in accordance with the Company’s retirement, survivor’s benefits, insurance, and other applicable programs of the Company then in effect.  In the event the Executive’s employment is terminated by reason of his or her Retirement or death, the Executive shall not be entitled to the Severance Benefits described in Section 3.4.

3.7 Termination for Cause, or Other Than for Good Reason or Retirement. If the Executive’s employment is terminated either: (a) by the Company for Cause; or (b) by the  Executive (other than for Retirement or Good Reason), the Company shall pay the Executive his or her full Base Salary and accrued vacation through the Effective Date of Termination, at the rate then in effect, plus all other amounts to which the Executive is entitled under any compensation plans of the Company, at the time such payments are due, and the Company shall have no further obligations to the Executive under this Agreement.

3.8 Notice of Termination.  The Company may terminate the Executive’s employment by providing not less than sixty (60) days prior written notice.  The Executive shall provide notice of a termination of employment by the Executive for Good Reasonwithin thirty (30) days after the event giving rise to Good Reason occurs.  Any termination of employment by the Executive or by the Company for any reason shall be communicated by a Notice of Termination.

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Article 4. Tax Compliance

4.1Section 409A.  

  (a) Notwithstanding the foregoing, if required by Section 409A of the Code, if any amounts payable upon separation from service are considered “deferred compensation” under Section 409A, payment of such amounts will be postponed as required by Section 409A, and the postponed amounts will be paid, with accrued interest as described below, on the first monthly payroll date occurring after six (6) months following the Effective Date of Termination.  If the Executive dies during the postponement period, any amounts postponed on account of Section 409A of the Code, with accrued interest as described below, shall be paid to the personal representative of the Executive's estate within sixty (60) days after the date of the Executive's death.  If payment of any amounts under this Agreement is required to be delayed pursuant to Section 409A, the Company shall pay interest on the postponed payments from the date on which the amounts otherwise would have been paid to the date on which such amounts are paid at a market rate of interest, as determined by the Committee.

  (b) This Agreement is intended to comply with the requirements of Section 409A of the Code, and, specifically, the separation pay exceptin and short term deferral exception of Section 409A, and shall in all respects be administered and interpreted in accordance with Section 409A.  If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions on the Executive under Section 409A of the Code, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed.  Notwithstanding anything in the Agreement to the contrary, distributions may only be made under the Agreement upon an event and in a manner permitted by Section 409A of the Code or an applicable exception.  All payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under Section 409A.  For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments, and each payment under this Agreement shall be treated as a separate payment.  In no event may the Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement.

  (c) All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement shall be for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

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4.2 Withholding of Taxes.  The Company shall be entitled to withhold from any amounts payable under this Agreement all taxes as legally shall be required to be withheld (including, without limitation, any United States federal taxes and any other state, city, or local taxes).

Article 5. Application of 280G

5.1 Effect of Section 280G on Payments.  In the event a Change in Control occurs and the Executive becomes entitled to any benefits or payments in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) under this Agreement, or any other plan, arrangement, or agreement with the Company (the “Payments”), and such benefits or payments will be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), the aggregate present value of the Payments under this Agreement shall be reduced (but not below zero) to the Reduced Amount (as defined below), if reducing the Payments under this Agreement will provide the Executive with a greater net after-tax amount than would be the case if no reduction was made.  The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of Payments without causing any Payment under this Agreement to be subject to the Excise Tax, determined in accordance with Section 280G(d)(4) of the Code.  The Company shall reduce the Payments under this Agreement by first reducing Payments that are not payable in cash and then by reducing cash Payments.  Only amounts payable under this Agreement shall be reduced pursuant to this Section 5.1.

5.2 Computation.   In determining the potential impact of the Excise Tax, the Company may rely on any advice it deems appropriate, including, but not limited to, the counsel of its independent accounting firm.  For purposes of determining whether any of the Payments will be subject to the Excise Tax and the amount of such Excise Tax, the Company may take into account any relevant guidance under the Code and the regulations promugalted thereunder, including, but not limited to, the following:

(a) The amount of the Payments which shall be treated as subject to the Excise Tax shall be equal to the amount of excess parachute payments within the meaning of Section 280G(b)(1) of the Code, as determined by the Company’s independent accounting firm;

(b) The value of any non-cash benefits or any deferred or accumulated payment or benefit shall be determined by the Company's independent accounting firm in accordance with the principles of Sections 280G(d)(3) and (4) of the Code; and

(c) The value of the non-competition covenants contained in this Agreement shall be taken into account to reduce “parachute payments” to the maximum extent allowable under Section 280G of the Code.

For purposes of the determinations under this Article 5, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the applicable payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.”

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Article 6. The Company’s Payment Obligation

The Company’s obligation to make the payments and the arrangements provided for herein shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which the Company may have against the Executive or anyone else.  All amounts payable by the Company hereunder shall be paid without notice or demand.  Each and every payment made hereunder by the Company shall be final, and the Company shall not seek to recover all or any part of such payment from the Executive or from whomsoever may be entitled thereto, for any reasons whatsoever.

The Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of this Agreement, and the obtaining of any such other employment shall in no event effect any reduction of the Company’s obligations to make the payments and arrangements required to be made under this Agreement.

Article 7. Legal Remedies

7.1 Payment of Legal Fees. To the extent permitted by law, the Company shall pay all legal fees, costs of litigation, prejudgment interest, and other expenses incurred in good faith by the Executive as a result of the Company’s refusal to provide the Severance Benefits to which the Executive becomes entitled under this Agreement, or as a result of the Company’s contesting the validity, enforceability, or interpretation of this Agreement, or as a result of any conflict (including conflicts related to the calculation of parachute payments) between the parties pertaining to this Agreement, subject to an overall limit on the payment of legal fees of thirty-five thousand dollars ($35,000).  The Company will provide such payment or reimbursement, as applicable, in accordance with Section 4.1(c) herein.

7.2 Arbitration.  Any dispute or controversy arising under or in connection with this Agreement (other than as described in Section 10.4 below) shall be settled by arbitration, conducted before a panel of three (3) arbitrators sitting in a location selected by the Executive within fifty (50) miles from the location of his or her employment with the Company, in accordance with the rules of the American Arbitration Association then in effect.

Judgment may be entered on the award of the arbitrator in any court having proper jurisdiction.  Subject to the limitations set forth in Section 7.1 above relating to legal fees incurred by the Executive, all expenses of such arbitration, including the fees and expenses of the counsel for the Executive, shall be borne by the Company.

Article 8. Outplacement Assistance

Following a Qualifying Termination (as described in Section 3.2 herein), the Executive shall be reimbursed by the Company for the costs of all outplacement services obtained by the Executive within the two (2) year period after the Effective Date of Termination, provided, however, that the total reimbursement shall be limited to an amount equal to thirty thousand dollars ($30,000).  The Company will provide reimbursement for the costs of outplacement services, provided that such reimbursements are available only for expenses incurred by the Executive, and the reimbursements shall be made by the end of the third taxable year following the Effective Date of Termination, in accordance with Section 409A of the Code.

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Article 9. Successors and Assignment

9.1 Successors to the Company.  The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) of all or substantially all of the business and/or assets of the Company or of any division or subsidiary thereof to expressly assume and agree to perform the Company’s obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform them if no such succession had taken place.

9.2 Assignment by the Executive.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.  If the Executive dies while any amount would still be payable to the Executive hereunder had he or she continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s Beneficiary.  If the Executive has not named a Beneficiary, then such amounts shall be paid to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.

Article 10.   Covenants

10.1 Disclosure of Information.  The Executive recognizes that he or she has access to and knowledge of certain confidential and proprietary information of the Company which is essential to the performance of his or her duties under this Agreement.  The Executive will not, during or after the term of his or her employment by the Company, in whole or in part, disclose such information to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever, nor shall he or she make use of any such information for his or her own purposes, so long as such information has not otherwise been disclosed to the public or is not otherwise in the public domain except as required by law or pursuant to legal process.

10.2 Covenants Regarding Other Employees.

  (a) During the term of this Agreement and after the Executive’s termination of employment for any reason for the period of time equal to the Benefit Period that would be applicable if there was a Qualifying Termination (regardless of whether the Executive receives Severance Benefits), the Executive will not attempt to induce any employee of the Company to terminate his or her employment with the Company.

(b) After the Executive’s termination of employment for any reason for the period of time equal to the Benefit Period that would be applicable if there was a Qualifying Termination (regardless of whether the Executive receives Severance Benefits), the Executive will not employ or hire, directly or indirectly, any employee of the Company and/or its subsidiaries.

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10.3 Non-Competition Covenants.  

(a) During the term of this Agreement and after the Executive’s termination of employment for any reason for the period of time equal to the Benefit Period that would be applicable if there was a Qualifying Termination (regardless of whether the Executive receives Severance Benefits), the Executive shall not, within the United States:  (1) directly or indirectly own any equity or proprietary interest (except for ownership of shares in a publicly traded company not exceeding three percent (3%) of any class of outstanding securities) in, or be an employee, agent, director, advisor, consultant, or independent contractor of, any Competitor of the Company, whether on the Executive’s own behalf or on behalf of any person, or (2) undertake any action to induce or cause any supplier or vendor to discontinue all or any part of its business with the Company.

(b) For purposes of this Agreement, “Competitor” shall mean a chain of retail stores with fifty (50) or more store locations that sells or distributes primarily women’s apparel; provided, however, that the average square footage of the chain’s stores is less than ten thousand (10,000) square feet.

10.4 Non-Disparagement.  During or after the term of his or her employment by the Company, (a) the Executive will not make any negative or disparaging statements about the professional or personal reputation of the Company, its officers, directors, or employees, except if testifying truthfully under oath pursuant to subpoena or other legal process, and (b) the Company will not make any negative or disparaging statements about the professional or personal reputation of the Executive except if testifying truthfully under oath pursuant to subpoena or other legal process.

10.5 Enforcement.  

(a) The Executive acknowledges and agrees that the restrictions contained in this Article 10 are reasonable and necessary to protect and preserve the legitimate interests, properties, goodwill and business of the Company, that the Company would not have entered into this Agreement in the absence of such restrictions and that irreparable injury will be suffered by the Company should the Executive breach any of the provisions of those Sections.  The Executive represents and acknowledges that (i) the Executive has been advised by the Company to consult the Executive’s own legal counsel in respect of this Agreement, and (ii) the Executive has had full opportunity, prior to execution of this Agreement, to review thoroughly this Agreement with the Executive’s counsel.

(b) The Executive further acknowledges and agrees that a breach of any of the restrictions in this Article 10 cannot be adequately compensated by monetary damages.  The Executive agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of Section 10.1, 10.2, 10.3 or 10.4 hereof, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled.  In the event that any of the provisions of Section 10.1, 10.2, 10.3 or 10.4 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, it is the intention of the parties that the provision shall be amended to the extent of the maximum time, geographic, service, or other limitations permitted by applicable law, that such amendment shall apply only within the jurisdiction of the court that made such adjudication and that the provision otherwise be enforced to the maximum extent permitted by law.

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(c) Notwithstanding anything in this Agreement to the contrary, if the Executive breaches any of the Executive’s obligations under Section 10.1, 10.2, 10.3 or 10.4 hereof, the Company shall thereafter be obligated only for the compensation and other benefits provided in any Company benefit plans, policies or practices then applicable to the Executive in accordance with the terms thereof, and all payments under this Agreement shall cease.

(d) The covenants described in this Article shall continue to apply during the period specified herein after the Executive’s termination of employment for any reason, without regard to whether the Executive executes a Release or receives any Severance Benefits as a result of such termination.  If the Executive breaches any of the covenants described in Sections 10.1, 10.2, 10.3 and 10.4, the applicable period during which the covenant applies shall be tolled during the period of the breach.  Without limiting the foregoing, the Severance Benefits provided under this Agreement are specifically designated as additional consideration for the covenants described in Sections 10.1, 10.2, 10.3 and 10.4.

(e) All references to the Company in this Article 10 shall include Charming Shoppes, Inc. and its subsidiaries, direct or indirect, and each of their successors.

Article 11.  Miscellaneous

11.1 Notices.  All notices and other communications required or permitted under this Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand delivered or mailed by registered or certified mail, as follows (provided that notice of change of address shall be deemed given only when received):

If to the Company, to:
	Charming Shoppes, Inc.
	3750 State Road
	Bensalem, PA  19020
	Attention:  General Counsel
If to the Executive, to:
	James P. Fogarty
	14 Old Roaming Brook Road
	Mt. Kisco, NY 10544

or to such other names or addresses as the Company or the Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section.

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11.2 Employment Status.  Except as may be provided under any other agreement between the Executive and the Company, the employment of the Executive by the Company is “at will,” and may be terminated by either the Executive or the Company at any time, subject to applicable law.

11.3 Beneficiaries.  The Executive may designate one or more persons or entities as the primary and/or contingent Beneficiaries of any Severance Benefits owing to the Executive under this Agreement.  Such designation must be in the form of a signed writing acceptable to the Committee.  The Executive may make or change such designations at any time.

11.4 Severability.  In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.  Further, the captions of this Agreement are not part of the provisions hereof and shall have no force and effect.

11.5 Modification.  No provision of this Agreement may be modified, waived, or discharged unless such modification, waiver, or discharge is approved by the Committee and agreed to in writing and signed by the Executive and by an authorized officer of the Company, or by the respective parties’ legal representatives and successors.

11.6 Other Severance Plans and Agreements.  The benefits under this Agreement will be provided in lieu of benefits under any other severance plan or agreement of the Company, except as otherwise provided herein.  Except as otherwise provided herein, this Agreement replaces any other severance agreements between the Executive and the Company or a subsidiary and any non-competition or non-solicitation agreements between the Executive and the Company or a subsidiary.

11.7 Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original hereof, and it shall not be necessary in making proof of this Agreement to produce or account for more than one counterpart hereof.

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11.8. Applicable Law.  To the extent not preempted by the laws of the United States, the laws of the state of Pennsylvania shall be the controlling law in all matters relating to this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on this ___ day of April, 2009.

CHARMING SHOPPES, INC.	EXECUTIVE
_______________________________	___________________________________
Alan Rosskamm
Its:  Chairman of the Board and
Interim Chief Executive Officer
ATTEST:________________________
Colin D. Stern
Secretary

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EX-10.3

EXHIBIT 10.3

CHARMING SHOPPES, INC.

INDUCEMENT GRANT

STOCK APPRECIATION RIGHTS AGREEMENT

Agreement dated as of April 2, 2009 (the “Grant Date”) between CHARMING SHOPPES, INC. (the “Company”) and James P. Fogarty (the “Employee”).

WHEREAS, the Employee has commenced employment with the Company in the capacity of President and Chief Executive Officer, and as a member of the Board of Directors of the Company, with effect from the Grant Date;

WHEREAS, the Company determined to grant the stock appreciation rights more fully described in this Agreement to the Employee as an inducement to the Employee to become employed by the Company and its subsidiaries; and

WHEREAS, the Company and the Employee are parties to a Severance Agreement dated as of April 2, 2009, (the “Severance Agreement”).

1. Grant of SAR; Consideration; Employee Acknowledgments.

The Company hereby confirms the grant to the Employee on the Grant Date of a stock appreciation right (the “SAR”) with respect to 1,100,000 shares of the Company’s common stock, par value $.10 per share (the “Shares”).  The SAR represents the right to receive, at exercise, a number of Shares with a then Fair Market Value equal to the appreciation in value of the Shares over the base amount.  The base amount is $1.82 per share, which is the Fair Market Value of a Share on the Grant Date (the “Base Amount”).  This grant is an “inducement grant” within the meaning of Nasdaq Marketplace Rule 4350(i) and Nasdaq interpretations thereunder and is made pursuant to the 2003 Incentive Compensation Plan (the “2003 Plan”) which was re-approved by the Company’s Shareholders on June 26, 2008.

The Employee shall be required to pay no consideration for the grant of the SAR except for his agreement to become employed by the Company and to provide services to the Company prior to exercise and his agreement to the terms of this Stock Appreciation Rights Agreement (the “Agreement”), and any interpretations and decisions of the Committee relating hereto.  Although this SAR is not granted under the 2004 Stock Award and Incentive Plan (the “Plan”), the terms of the Plan governing the rights and obligations of an employee granted stock appreciation rights under the Plan shall apply with equal force to this SAR, including any rules and regulations under the Plan.  The Employee acknowledges and agrees that (i) the SAR is nontransferable, except as provided in Section 9 hereof and under applicable terms of the Plan, (ii) the SAR is subject to forfeiture in the event of the Employee’s termination of employment in certain circumstances, as specified in Section 7 hereof, and (iii) sales of Shares will be subject to the Federal securities laws as well as the Company’s policies regulating trading by employees, including any applicable “blackout” or other designated periods in which sales of Shares are not permitted.

2. Incorporation of Plan by Reference.

As stated in Section 1 above, all of the terms, conditions and other provisions of the Plan governing the rights and obligations of an employee granted stock appreciation rights under the Plan are hereby incorporated by reference into this Agreement.  Capitalized terms used in this Agreement but not defined herein shall have the same meanings as in the Plan.  If there is any conflict between the provisions of this Agreement and the provisions of the Plan applicable by virtue of the preceding sentence, the provisions of the Plan shall govern, except to the extent otherwise provided herein.  Employee hereby accepts the grant of the SAR, acknowledges receipt of the Plan, and agrees to be bound by all the terms and applicable provisions hereof and thereof (as presently in effect or hereafter amended), and by all decisions and determinations of the Board or Committee relating to the SAR and this Agreement.

3. Date When Exercisable.

(a)This SAR may be exercised only if and to the extent that it has become exercisable as specified in this Agreement.  Subject to Sections 6 and 7 below, and all other terms and conditions of this Agreement, this SAR shall become exercisable as follows:

(i)  Subject to the limit set forth in Section 3(c), this SAR shall become exercisable during the period beginning on the Grant Date and ending January 29, 2010 with respect to 25% of the Shares available under this SAR, on the later of:

(A) the last day of any period of five consecutive trading days after the Grant Date on which the Fair Market Value of a Share is equal to or greater than 120% of the Base Amount, and

(B) the earlier of January 29, 2010, and the first trading day during the period beginning on the Grant Date and ending January 29, 2010 on which the Fair Market Value of a Share is equal to or greater than $2.40;

(ii)  Subject to the limit set forth in Section 3(c), this SAR shall become exercisable during the period beginning February 1, 2010 and ending January 28, 2011 as follows:

(A) with respect to any of the Shares subject to Section 3(a)(i) that have not yet vested as of January 29, 2010 in accordance with Section 3(a)(i), on the last day of any period of five consecutive trading days after the Grant Date on which the Fair Market Value of a Share is equal to or greater than 120% of the Base Amount, but not earlier than February 1, 2010, and

(B) with respect to an additional 25% of the Shares available under this SAR, on the later of:

(I)  the last day of any period of five consecutive trading days after the Grant Date on which the Fair Market Value of a Share is equal to or greater than 120% of the Base Amount, and

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(II) the earlier of (aa) January 28, 2011, and (bb) the first trading day during the period beginning February 1, 2010 and ending January 28, 2011 on which the Fair Market Value of a Share is equal to or greater than $3.50;

(iii)  Subject to the limit set forth in Section 3(c), this SAR shall become exercisable during the period beginning January 31, 2011 and ending January 27, 2012 as follows:

(A) with respect to any of the Shares subject to Section 3(a)(i) or (ii) that have not yet vested as of January 28, 2011 in accordance with Section 3(a)(i) or (ii), on the last day of any period of five consecutive trading days after the Grant Date on which the Fair Market Value of a Share is equal to or greater than 120% of the Base Amount, but not earlier than January 31, 2011, and

(B)  with respect to an additional 25% of the Shares available under this SAR, on the later of:

 (I) the last day of any period of five consecutive trading days after the Grant Date on which the Fair Market Value of a Share is equal to or greater than 120% of the Base Amount, and

(II) the earlier of (aa) January 27, 2012, and (bb) the first trading day during the period beginning January 31, 2011 and ending January 27, 2012 on which the Fair Market Value of a Share is equal to or greater than $5.00;

(iv)  Subject to the limit set forth in Section 3(c), this SAR shall become exercisable during the period beginning January 30, 2012 and ending February 1, 2013 as follows:

(A)  with respect to any of the Shares subject to Section 3(a)(i), (ii) or (iii) that have not yet vested as of January 27, 2012 in accordance with Section 3(a)(i), (ii) or (iii), on the last day of any period of five consecutive trading days after the Grant Date on which the Fair Market Value of a Share is equal to or greater than 120% of the Base Amount, but not earlier than January 30, 2012, and

(B)  with respect to an additional 25% of the Shares available under this SAR, on the later of:

 (I) the last day of any period of five consecutive trading days after the Grant Date on which the Fair Market Value of a Share is equal to or greater than 120% of the Base Amount, and

(II) the earlier of (aa) February 1, 2013, and (bb) the first trading day during the period beginning January 30, 2012 and ending February 1, 2013 on which the Fair Market Value of a Share is equal to or greater than $7.50;  and

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(v)  Subject to the limit set forth in Section 3(c), this SAR shall become exercisable with respect to any of the Shares that have not yet vested as of February 1, 2013 in accordance with Section 3(a)(i), (ii), (iii) or (iv), on the later of:

(A) the last day of any period of five consecutive trading days after the Grant Date on which the Fair Market Value of a Share is equal to or greater than 120% of the Base Amount (but not earlier than February 4, 2013), provided such goal is attained on or before the scheduled expiration time of the SAR, as set forth in Section 3(b), and

(B) the first trading day of any Fiscal Year of the Company beginning on or after February 3, 2013 and before the scheduled expiration time of the SAR, as set forth in Section 3(b).

(b)The number of Shares with respect to which the SAR may be exercised shall be cumulative, but shall not exceed 100% of the Shares subject to the SAR.  If the foregoing schedule would produce fractional Shares, the number of Shares for which the SAR becomes exercisable shall be rounded down to the nearest whole Share.  The SAR shall expire at 5:00 p.m. on the day before the seventh anniversary of the Grant Date, unless the SAR terminates on an earlier date as provided herein.  The following shall be subject to adjustment as provided in Section 10(c) of the Plan:  the number of Shares subject to this SAR and becoming exercisable under Section 3(a), the Base Amount, and the target stock price under Section 3(a) at which vesting is accelerated.

(c)  The number of Shares with respect to which the SAR becomes exercisable pursuant to paragraphs (i), (ii), (iii), (iv) and (v) of Section 3(a) shall be decreased to the extent necessary (if any) so that the aggregate “Spread” with respect to the number of Shares for which the SAR becomes exercisable in any Fiscal Year of the Company does not exceed the amount set forth in the table below.  For purposes of this Section 3(c), “Spread” shall mean the excess of the Fair Market Value of a Share on the date the SAR becomes exercisable with respect to the Share, over the Base Amount.

Fiscal Year in which Vesting Occurs:	Limit on Spread
Fiscal Year Ending January 30, 2010	$159,500
January 31, 2010 – January 29, 2011	$1,000,000
January 30, 2011 – January 28, 2012	$1,750,000
January 29, 2012 – February 2, 2013	$10,340,500
February 3, 2013 – February 1, 2014	$3,666,667
Any Fiscal Year beginning on or after February 2, 2014	$3,500,000

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4. Method of Exercise.

(a) The SAR may be exercised, to the extent the SAR is then vested and exercisable, by delivery to and receipt by the Secretary of the Company at 3750 State Road, Bensalem, Pennsylvania 19020, of a written notice, signed by the Employee, specifying the portion of the vested SAR that the Employee wishes to exercise.  Simultaneous with or as soon as practicable after the receipt of such notice, the Company shall deliver to the Employee a number of whole Shares that will be determined by dividing the Stock Appreciation by the Fair Market Value of a Share on the date of exercise, less applicable tax withholding.  ”Stock Appreciation” shall mean the amount that results from multiplying (i) the number of Shares as to which the SAR is exercised by (ii) the amount by which the Fair Market Value of a Share on the date of exercise exceeds the Base Amount.  Only whole Shares will be delivered pursuant to the exercise of the SAR.

(b)Upon exercise of the SAR, the Company will deliver a stock certificate for the Shares to be delivered, with any requisite legend affixed.  Such exercise may include instructions to the Company to deliver Shares due upon exercise of the SAR to any registered broker or dealer designated by the Committee in lieu of delivery to the Employee.  Such instructions must designate the account into which the Shares are to be deposited.  The method of exercise and related matters governed by this Section 4 shall be subject to Rules and Regulations (under the Plan or otherwise) adopted by the Committee and in effect at the time the Employee’s notice of exercise is received by the Company; such Rules and Regulations may vary from or limit the procedures specified in this Section 4, and may specify other methods of exercise.  Upon exercise of any portion of the SAR, the exercised portion of the SAR shall terminate and cease to be outstanding.

(c) If, on the date on which the vested SAR will terminate according to its terms, the Employee has not given the Company written notice of exercise, and if the Stock Appreciation amount is a positive number, then the outstanding vested portion of the SAR shall be automatically exercised and taxes shall be withheld as described in Section 5 below.

5. Tax Withholding.

The Company will withhold from the Shares to be delivered upon the exercise of the SAR a sufficient number of such Shares to satisfy the minimum federal, state and local tax withholding obligations relating to the SAR exercise.  The Shares withheld will be valued at the Fair Market Value, determined in such manner as may be specified and applicable under the Plan.

6. Acceleration of Exercisability; Change of Control Provisions; Definitions.

(a) The following provisions shall apply in the event of a Change of Control:

(i)In the event of a Change of Control at a time when the Employee is employed by the Company or any of its subsidiaries, if the acquiring company does not convert the Employee’s outstanding SAR to a stock appreciation right with respect to the stock of the acquiring company (or the parent of the acquiring company, if the acquiror is a subsidiary) that has the same economic value, vesting provisions and other terms as the Employee’s outstanding SAR, this SAR shall become fully vested and exercisable immediately prior to the occurrence of such Change of Control.

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(ii) If the Employee’s employment is terminated as a result of a Qualifying Termination which occurs upon or within 24 months following a Change of Control, the SAR shall become fully vested and exercisable on the date of the Qualifying Termination (to the extent that it is not already vested).

(b) Exercise after a Change of Control.  In the event of the Employee’s termination of employment after a Change of Control, the vested SAR, to the extent then outstanding, shall be exercisable for the applicable time period described in Section 7(a)(iii), (iv), (v) or (vi) (determined without regard to any requirement that the termination occur at least one year after the Grant Date).

(c)Other Actions.  In the event of a Change of Control, the Committee may make such adjustments and take such other actions with respect to outstanding SARs as the Committee deems appropriate pursuant to Section 10(c) of the Plan.

 (d)   Involuntary Termination:  Without Cause; Good Reason. If the Employee’s employment is terminated by the Company without Cause or if he terminates his employment for Good Reason, this SAR shall become vested and exercisable on the date of such termination of employment to the extent set forth below (which shall include (and shall not be in addition to) that portion of this SAR which has already become vested and exercisable pursuant to Section 3 hereof); provided, however, that such accelerated vesting shall not occur unless the Fair Market Value of a Share is equal to or greater than 120% of the Base Amount on any five consecutive trading days during the period beginning on the Grant Date and ending on the date of such termination of employment; and further provided that vesting in the Fiscal Year in which such termination occurs shall be limited to the extent necessary (if any) so that such vesting, after taking into account any previous vesting under Section 3(a) for such Fiscal Year, does not exceed the limit set forth in Section 3(c) for such Fiscal Year.  To the extent vesting under this Section 6(d) is limited by Section 3(c) with respect to the Fiscal Year in which such termination occurs, such vesting shall occur on the first trading day of the next Fiscal Year subject to the Section 3(c) limit for such Fiscal Year, and the first trading day of each subsequent Fiscal Year (subject to the Section 3(c) limit for each such Fiscal Year), until the SAR has become vested and exercisable to the extent set forth below:

	Exercisable Portion of SAR
Date of Employment Termination	(Subject to Section 6(d) Limit)
April 2, 2009 to April 1, 2010	50%
April 2, 2010 to April 1, 2011	75%
April 2, 2011 and thereafter	100%

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(e)Definitions of Certain Terms.  For purposes of this Agreement, the following definitions shall have the meanings ascribed to them in the Severance Agreement:

”Beneficial Owner”; “Cause”;  “Change of Control” (except that “20%” in Section 2.7(a) of the Severance Agreement shall be changed to “50%” for purposes of this Agreement); “Disability”; “Good Reason”;  “Notice of Termination”;  “Qualifying Termination”; “Person”;  “Related Party”;  and “Voting Securities”.

7. Termination of Employment.

(a) This SAR shall terminate and no longer be exercisable at the earlier of (i) the scheduled expiration time of the SAR, as set forth in Section 3(b) above, or (ii) the earliest time specified below at or following a termination of employment of the Employee.  In the event of termination of employment before a Change of Control, the SAR shall be exercisable as follows:

(i) The SAR shall terminate at the time of voluntary termination of the Employee’s employment with the Company and its subsidiaries at any time prior to the expiration of one year after the Grant Date of this SAR, other than by reason of the Employee’s death, or Disability, in which event the SAR shall no longer be exercisable.

(ii) The SAR shall terminate at the time of the involuntary termination for Cause of the Employee’s employment with the Company and its subsidiaries in which event the SAR shall no longer be exercisable.

(iii) The SAR shall continue in effect until the expiration of 90 days after the voluntary termination of the Employee’s employment with the Company and its subsidiaries, at any time after the expiration of one year after the Grant Date of this SAR.  During such 90 day period, this SAR shall be exercisable only to the extent that it was exercisable at the date of the Employee’s termination of employment.

(iv) The SAR shall continue in effect until the expiration of 90 days after the date the Employee terminates his employment for Good Reason or the involuntary termination of the Employee’s employment, other than for reasons of Cause or Disability, with the Company and its subsidiaries at any time.  During such 90 day period, this SAR shall be exercisable to the extent that it was exercisable at the date of the Employee’s termination of employment, plus the number of additional Shares (if any) as to which the SAR becomes exercisable pursuant to Section 6(d).

(v) The SAR shall continue in effect until the expiration of one year after the Employee’s death if the Employee dies while employed by the Company or any of its subsidiaries.  During such one year period, this SAR shall be exercisable to the extent that it was exercisable at the date of the Employee’s death, plus the number of additional shares (if any) as to which the SAR would have become exercisable within 180 days from the date of the Employee’s death pursuant to Section 3(a) but for the death of the Employee (but disregarding any Change of Control occurring after the Employee’s death).

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(vi) The SAR shall continue in effect until the expiration of one year after the termination of the Employee’s employment with the Company and its subsidiaries by reason of the Employee’s Disability.  During such one year period, this SAR shall be exercisable to the extent that it was exercisable at the date of the Employee’s Disability, plus the number of additional shares (if any) as to which the SAR would have become exercisable within 180 days from the date of the Employee’s Disability pursuant to Section 3(a) but for the Disability of the Employee (but disregarding any Change of Control occurring after the Employee’s Disability).

(b) Any portion of the SAR that is not exercisable at the date of termination of employment and that does not become exercisable pursuant to Section 7(a) shall terminate as of the Employee’s termination date.  Notwithstanding anything in this Section 7 to the contrary, in no event may the SAR be exercised after the expiration date of the SAR as set forth in Section 3(b).

(c) Except as provided in Section 8, an Employee shall not be deemed to have terminated employment for purposes of this Section 7 if his employment terminates with the Company but thereafter continues with one of the Company’s subsidiaries or terminates with a subsidiary but thereafter continues with the Company or another subsidiary.

8. Change in Job Status.

Should the Employee cease to have the titles of President and Chief Executive Officer of the Company (other than in connection with the termination of the Employee’s employment with the Company) then the Employee’s employment with the Company and its subsidiaries shall be deemed to have been terminated involuntarily (but not for Cause) in respect of all or a portion of this SAR.

9. Limits on Transfer of SARs; Beneficiaries.

No right or interest of a participant in this SAR shall be pledged, encumbered or hypothecated to or in favor of any third party or shall be subject to any lien, obligation or liability of the Employee to any third party.  This SAR shall not be transferable to any third party by the Employee otherwise than by will or the laws of descent and distribution, and this SAR shall be exercisable, during the lifetime of the Employee, only by the Employee; provided, however, that the Employee will be entitled to designate a beneficiary or beneficiaries to exercise his or her rights under this SAR upon the death of the Employee, in the manner and to the extent permitted by the Committee under Rules and Regulations adopted by the Committee under the Plan, and the Committee may permit transfers otherwise to the extent permitted under the Plan.

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10. Investment Representation.

Unless, at the time of any exercise of this SAR, the issuance and delivery of Shares hereunder to the Employee is registered under a then-effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), and complies with all applicable registration requirements under state securities laws, the Employee shall provide to the Company, as a condition to the valid exercise of this SAR and the delivery of any certificates representing Shares, appropriate evidence, satisfactory in form and substance to the Company, that he or she is acquiring the Shares for investment and not with a view to the distribution of the Shares or any interest in the Shares, and a representation to the effect that the Employee shall make no sale or other disposition of the Shares unless (i) the Company shall have received an opinion of counsel satisfactory to it in form and substance that such sale or other disposition may be made without registration under the then-applicable provisions of the Securities Act, the related rules and regulations of the Securities and Exchange Commission, and applicable state securities laws and regulations, or (ii) the sale or other disposition of the Shares shall be registered under a currently effective registration statement under the Securities Act and complies with all applicable registration requirements under state securities laws.  The certificates representing the Shares may bear an appropriate legend giving notice of the foregoing restriction on transfer of the Shares, and any other restrictive legend deemed necessary or appropriate by the Committee.

11. Miscellaneous.

This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties.  This Agreement constitutes the entire agreement between the parties with respect to the SAR, and supersedes any prior agreements or documents with respect to the SAR.  No amendment, alteration, suspension, discontinuation or termination of this Agreement which may impose any additional obligation upon the Company or impair the rights of the Employee with respect to the SAR shall be valid unless in each instance such amendment, alteration, suspension, discontinuation or termination is expressed in a written instrument duly executed in the name and on behalf of the Company and by the Employee.

CHARMING SHOPPES, INC.

By:  _______________________________

(Authorized Officer)

EMPLOYEE:

___________________________________

James P. Fogarty

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EX-10.4

EXHIBIT 10.4

CHARMING SHOPPES, INC.

2004 STOCK AWARD AND INCENTIVE PLAN

STOCK APPRECIATION RIGHTS AGREEMENT

Agreement dated as of April 2, 2009 (the “Grant Date”) between CHARMING SHOPPES, INC. (the “Company”) and James P. Fogarty (the “Employee”).

WHEREAS, the Employee has commenced employment with the Company in the capacity of President and Chief Executive Officer, and as a member of the Board of Directors of the Company, with effect from the Grant Date;

WHEREAS, the Company determined to grant the stock appreciation rights more fully described in this Agreement to the Employee; and

WHEREAS, the Company and the Employee are parties to a Severance Agreement dated as of April 2, 2009, (the “Severance Agreement”). 

1.           Grant of SAR; Consideration; Employee Acknowledgments.

The Company hereby confirms the grant, under the Company’s 2004 Stock Award and Incentive Plan (the “Plan”), to the Employee on the Grant Date of a stock appreciation right (the “SAR”) with respect to 900,000 shares of the Company’s common stock, par value $.10 per share (the “Shares”).  The SAR represents the right to receive, at exercise, a number of Shares with a then Fair Market Value equal to the appreciation in value of the Shares over the base amount.  The base amount is $1.82 per share, which is the Fair Market Value of a Share on the Grant Date (the “Base Amount”).

The Employee shall be required to pay no consideration for the grant of the SAR except for his agreement to become employed by the Company and to provide services to the Company prior to exercise and his agreement to abide by the terms set forth in the Plan, this Stock Appreciation Rights Agreement (the “Agreement”), and any Rules and Regulations under the Plan.  The Employee acknowledges and agrees that (i) the SAR is nontransferable, except as provided in Section 9 hereof and in the Plan, (ii) the SAR is subject to forfeiture in the event of Employee’s termination of employment in certain circumstances, as specified in Section 7 hereof, and (iii) sales of Shares will be subject to the Federal securities laws as well as the Company’s policies regulating trading by employees, including any applicable “blackout” or other designated periods in which sales of Shares are not permitted.

2.           Incorporation of Plan by Reference.

           The SAR has been granted to the Employee under the Plan.  All of the terms, conditions and other provisions of the Plan are hereby incorporated by reference into this Agreement.  Capitalized terms used in this Agreement but not defined herein shall have the same meanings as in the Plan.  If there is any conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan shall govern.  The Employee hereby accepts the grant of the SAR, acknowledges receipt of the Plan, and agrees to be bound by all the terms and provisions hereof and thereof (as presently in effect or hereafter amended), and by all decisions and determinations of the Board or Committee under the Plan.

3.           Date When Exercisable.

(a) This SAR may be exercised only if and to the extent that it has become exercisable as specified in this Agreement.  Subject to acceleration as provided in Section 6 below, and limitations on exercisability imposed in Sections 6 and 7 below, and all other terms and conditions of this Agreement, this SAR shall become exercisable as follows:

Vesting Date	Exercisable Portion of SAR
April 2, 2010	25%
April 2, 2011	25%
April 2, 2012	25%
April 2, 2013	25%

(b) The number of Shares with respect to which the SAR may be exercised shall be cumulative, but shall not exceed 100% of the Shares subject to the SAR.  If the foregoing schedule would produce fractional Shares, the number of Shares for which the SAR becomes exercisable shall be rounded to the nearest whole Share.  The SAR shall expire at 5:00 p.m. on the day before the seventh anniversary of the Grant Date, unless the SAR terminates on an earlier date as provided herein.

4.           Method of Exercise.

(a) The SAR may be exercised, to the extent the SAR is then vested and exercisable, by delivery to and receipt by the Secretary of the Company at 3750 State Road, Bensalem, Pennsylvania 19020, of a written notice, signed by the Employee, specifying the portion of the vested SAR that the Employee wishes to exercise.  Simultaneous with or as soon as practicable after the receipt of such notice, the Company shall deliver to the Employee a number of whole Shares that will be determined by dividing the Stock Appreciation by the Fair Market Value of a Share on the date of exercise, less applicable tax withholding.  ”Stock Appreciation” shall mean the amount that results from multiplying (i) the number of Shares as to which the SAR is exercised by (ii) the amount by which the Fair Market Value of a Share on the date of exercise exceeds the Base Amount.  Only whole Shares will be delivered pursuant to the exercise of the SAR.

(b) Upon exercise of the SAR, the Company will deliver a stock certificate for the Shares to be delivered, with any requisite legend affixed.  Such exercise may include instructions to the Company to deliver Shares due upon exercise of the SAR to any registered broker or dealer designated by the Committee in lieu of delivery to the Employee.  Such instructions must designate the account into which the Shares are to be deposited.  The method of exercise and related matters governed by this Section 4 shall be subject to Rules and Regulations adopted by the Committee and in effect at the time the Employee’s notice of exercise is received by the Company; such Rules and Regulations may vary from or limit the procedures specified in this Section 4, and may specify other methods of exercise.  Upon exercise of any portion of the SAR, the exercised portion of the SAR shall terminate and cease to be outstanding.

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(c) If, on the date on which the vested SAR will terminate according to its terms, the Employee has not given the Company written notice of exercise, and if the Stock Appreciation amount is a positive number, then the outstanding vested portion of the SAR shall be automatically exercised and taxes shall be withheld as described in Section 5 below.

5.           Tax Withholding.

The Company will withhold from the Shares to be delivered upon the exercise of the SAR a sufficient number of such Shares to satisfy the minimum federal, state and local tax withholding obligations relating to the SAR exercise.  The Shares withheld will be valued at the Fair Market Value on the date of exercise, determined in such manner as may be specified under the Plan.

6.           Acceleration of Exercisability; Change of Control Provisions; Definitions.

(a) The following provisions shall apply in the event of a Change of Control:

(i) In the event of a Change of Control at a time when the Employee is employed by the Company or any of its subsidiaries, if the acquiring company does not convert the Employee’s outstanding SAR to a stock appreciation right with respect to the stock of the acquiring company (or the parent of the acquiring company, if the acquiror is a subsidiary) that has the same economic value, vesting provisions and other terms as the Employee’s outstanding SAR, this SAR shall become fully vested and exercisable immediately prior to the occurrence of such Change of Control.

(ii) If the Employee’s employment is terminated as a result of a Qualifying Termination which occurs upon or within 24 months following a Change of Control, the SAR shall become fully vested and exercisable on the date of the Qualifying Termination (to the extent that it is not already vested).

(b) Exercise after a Change of Control.  In the event of the Employee’s termination of employment after a Change of Control, the vested SAR, to the extent then outstanding, shall be exercisable for the applicable time period described in Section 7(a)(iii), (iv), (v), (vi) or (vii) (determined without regard to any requirement that the termination occur at least one year after the Grant Date).

(c)  Other Actions.  In the event of a Change of Control, the Committee may make such adjustments and take such other actions with respect to outstanding SARs as the Committee deems appropriate pursuant to Section 10(c) of the Plan.

(d)   Involuntary Termination:  Without Cause; Good Reason. If the Employee’s employment is terminated by the Company without Cause or if he terminates his employment for Good Reason, this SAR shall become vested and exercisable on the date of such termination of employment to the extent set forth below (which shall include (and shall not be in addition to) that portion of this SAR which has already become vested and exercisable pursuant to Section 3 hereof):

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Date of Employment Termination	Exercisable Portion of SAR
April 2, 2009 to April 1, 2010	50%
April 2, 2010 to April 1, 2011	75%
April 2, 2011 and thereafter	100%

(e)   Definitions of Certain Terms.  For purposes of this Agreement, the following definitions shall have the meanings ascribed to them in the Severance Agreement:

“Beneficial Owner”; “Cause”; “Change of Control” (except that “20%” in Section 2.7(a) of the Severance Agreement shall be changed to “50%” for purposes of this Agreement); “Good Reason”; “Notice of Termination”; “Qualifying Termination”; “Disability”; “Person”; “Related Party”;  “Retirement”; and “Voting Securities”

7.           Termination of Employment.

(a) This SAR shall terminate and no longer be exercisable at the earlier of (i) the scheduled expiration time of the SAR, as set forth in Section 3(b) above, or (ii) the earliest time specified below at or following a termination of employment of the Employee.  In the event of termination of employment before a Change of Control, the SAR shall be exercisable as follows:

(i) The SAR shall terminate at the time of voluntary termination of the Employee’s employment with the Company and its subsidiaries at any time prior to the expiration of one year after the Grant Date of this SAR, other than by reason of the Employee’s death, Disability or Retirement, in which event the SAR shall no longer be exercisable.

(ii) The SAR shall terminate at the time of the involuntary termination for Cause of the Employee’s employment with the Company and its subsidiaries in which event the SAR shall no longer be exercisable.

(iii) The SAR shall continue in effect until the expiration of 90 days after the voluntary termination of the Employee’s employment with the Company and its subsidiaries, other than on account of Retirement, at any time after the expiration of one year after the Grant Date of this SAR.  During such 90 day period, this SAR shall be exercisable only to the extent that it was exercisable at the date of the Employee’s termination of employment.

(iv) The SAR shall continue in effect until the expiration of 90 days after the date the Employee terminates his employment for Good Reason or the involuntary termination of the Employee’s employment, other than for reasons of Cause or Disability, with the Company and its subsidiaries at any time.  During such 90 day period, this SAR shall be exercisable to the extent that it was exercisable at the date of the Employee’s termination of employment pursuant to Section 6(d).

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(v)The SAR shall continue in effect until the expiration of one year after the Employee’s termination of employment upon Retirement.  During such one year period, this SAR shall be exercisable to purchase the number of Shares as to which the SAR was exercisable at the date of Retirement, plus the number of additional Shares (if any) equal to the product of (i) the number of Shares as to which the SAR would have become exercisable on the next vesting date pursuant to Section 3(a) after the date of Retirement in the absence of a termination (but disregarding any other event occurring prior to that date), and (ii) a fraction, the numerator of which shall be the number of full and partial months that the Employee has been employed by the Company or any of its subsidiaries between the Grant Date and the date of Retirement and the denominator of which shall be the number of full or partial months between the Grant Date and the next vesting date pursuant to Section 3(a) after the date of Retirement.

(vi) The SAR shall continue in effect until the expiration of one year after the Employee’s death if the Employee dies while employed by the Company or any of its subsidiaries.  During such one year period, this SAR shall be exercisable to the extent that it was exercisable at the date of the Employee’s death, plus the number of additional shares (if any) as to which the SAR would have become exercisable within 180 days from the date of the Employee’s death pursuant to Section 3(a) but for the death of the Employee (but disregarding any other event occurring prior to that date).

(vii) The SAR shall continue in effect until the expiration of one year after the termination of the Employee’s employment with the Company and its subsidiaries by reason of the Employee’s Disability.  During such one year period, this SAR shall be exercisable to the extent that it was exercisable at the date of the Employee’s Disability, plus the number of additional shares (if any) as to which the SAR would have become exercisable within 180 days from the date of the Employee’s Disability pursuant to Section 3(a) but for the Disability of the Employee (but disregarding any other event occurring prior to that date).

(b) Any portion of the SAR that is not exercisable at the date of termination of employment and that does not become exercisable pursuant to Section 7(a) shall terminate as of the Employee’s termination date.  Notwithstanding anything in this Section 7 to the contrary, in no event may the SAR be exercised after the expiration date of the SAR as set forth in Section 3(b).

(c) Except as provided in Section 8, an Employee shall not be deemed to have terminated employment for purposes of this Section 7 if his employment terminates with the Company but thereafter continues with one of the Company’s subsidiaries or terminates with a subsidiary but thereafter continues with the Company or another subsidiary.

8.           Change in Job Status.

Should the Employee cease to have the titles of President and Chief Executive Officer of the Company (other than in connection with the termination of the Employee’s employment with the Company) then the Employee’s employment with the Company and its subsidiaries shall be deemed to have been terminated involuntarily (but not for Cause) in respect of all or a portion of this SAR.

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9.           Limits on Transfer of SARs; Beneficiaries.

No right or interest of a participant in this SAR shall be pledged, encumbered or hypothecated to or in favor of any third party or shall be subject to any lien, obligation or liability of the Employee to any third party.  This SAR shall not be transferable to any third party by the Employee otherwise than by will or the laws of descent and distribution, and this SAR shall be exercisable, during the lifetime of the Employee, only by the Employee; provided, however, that the Employee will be entitled to designate a beneficiary or beneficiaries to exercise his or her rights under this SAR upon the death of the Employee, in the manner and to the extent permitted by the Committee under Rules and Regulations adopted by the Committee under the Plan, and the Committee may permit transfers otherwise to the extent permitted under the Plan.

10.           Investment Representation.

   Unless, at the time of any exercise of this SAR, the issuance and delivery of Shares hereunder to the Employee is registered under a then-effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), and complies with all applicable registration requirements under state securities laws, the Employee shall provide to the Company, as a condition to the valid exercise of this SAR and the delivery of any certificates representing Shares, appropriate evidence, satisfactory in form and substance to the Company, that he or she is acquiring the Shares for investment and not with a view to the distribution of the Shares or any interest in the Shares, and a representation to the effect that the Employee shall make no sale or other disposition of the Shares unless (i) the Company shall have received an opinion of counsel satisfactory to it in form and substance that such sale or other disposition may be made without registration under the then-applicable provisions of the Securities Act, the related rules and regulations of the Securities and Exchange Commission, and applicable state securities laws and regulations, or (ii) the sale or other disposition of the Shares shall be registered under a currently effective registration statement under the Securities Act and complies with all applicable registration requirements under state securities laws.  The certificates representing the Shares may bear an appropriate legend giving notice of the foregoing restriction on transfer of the Shares, and any other restrictive legend deemed necessary or appropriate by the Committee.

11.           Miscellaneous. 

This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties.  This Agreement constitutes the entire agreement between the parties with respect to the SAR, and supersedes any prior agreements or documents with respect to the SAR.  No amendment, alteration, suspension, discontinuation or termination of this Agreement which may impose any additional obligation upon the Company or impair the rights of the Employee with respect to the SAR shall be valid unless in each instance such amendment, alteration, suspension, discontinuation or termination is expressed in a written instrument duly executed in the name and on behalf of the Company and by the Employee. 

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CHARMING SHOPPES, INC.

By:  ________________________________

        (Authorized Officer)

EMPLOYEE:

____________________________________

James P. Fogarty

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EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

PRESS RELEASE

CHARMING SHOPPES, INC. APPOINTS JAMES P. FOGARTY

AS PRESIDENT AND CHIEF EXECUTIVE OFFICER

BENSALEM, Pa., April 3, 2009 -- Charming Shoppes, Inc. (Nasdaq: CHRS), a leading multi-brand apparel retailer specializing in women's plus apparel, today announced the appointment of James P. (“Jim”) Fogarty as President and Chief Executive Officer and a member of the Company’s Board of Directors.

Alan Rosskamm, Chairman of the Board of Charming Shoppes, Inc. commented, “We are extremely pleased to be welcoming Jim to Charming Shoppes.  Jim is an exceptional business leader, with a solid track record of driving results and creating value at a number of multi-brand consumer-based companies.  His reputation in building operational excellence and his proven skills in re-energizing strong brands will nicely complement our team of experienced merchant leaders.”

Jim Fogarty most recently was a Managing Director with Alvarez & Marsal (“A&M”), a premier independent global professional services firm providing leadership, problem-solving and value-creation services across the industry spectrum. He was also a member of the firm's Executive Committee for North America Restructuring. In his almost 15 years with A&M, he has provided performance improvement, crisis management and restructuring advisory services to numerous companies in various sectors.

During his tenure at A&M, Fogarty most recently served as President and Chief Operating Officer of Lehman Brothers Holdings from September 2008 to the present. From September 2005 through February 2008, he was President and Chief Executive Officer of American Italian Pasta Company, the largest producer of dry pasta in North America, where market capitalization has grown five fold since his initial involvement with the company.  He served as the Chief Financial Officer at the $4 billion Levi Strauss & Co. from 2003 to 2005, during which time the company’s EBITDA nearly doubled, creating a substantial increase in shareholder value.  From December 2001 through September 2003, he served as Senior Vice President and Chief Financial Officer of The Warnaco Group, a then $1.5 billion global apparel maker, which emerged from bankruptcy in early 2003 after completing a successful turnaround during his tenure.

Prior to joining A&M in 1995, Fogarty spent four years with the Corporate Transactions Group of KPMG Peat Marwick.  He holds a bachelor's degree in economics and computer science from Williams College, a master's degree in accounting from the Leonard Stern School of Business at New York University, and a master's degree in business administration, with concentrations in finance and accounting, from the Leonard Stern School of Business at New York University. He is also a Certified Public Accountant (CPA).

Commenting on his appointment, Fogarty said, “Charming Shoppes is the leader in women’s specialty plus apparel, a market with growing demographics and opportunities.  I am impressed with Charming Shoppes’ renewed focus on their core customer, and their recruitment of empowered and experienced merchant and brand executives.  I look forward to leading the Charming Shoppes team and am especially attracted to the opportunity to grow this business over time, and more fully capitalize on its leading position in its market.”

Michael Goldstein, Chair of the Directors’ CEO Search Committee summarized, “We are excited to have recruited an executive with the credentials and successes that Jim brings, and we extend to him an enthusiastic welcome to Charming Shoppes.  Also, on behalf of the Board and the associates of Charming Shoppes, I would like to extend our thanks to Alan for his significant contribution and service as Interim CEO.  He has been a tireless and fully engaged leader, and has done a tremendous job in refocusing the Company on its core brands.”

At January 31, 2009, Charming Shoppes, Inc. operated 2,301 retail stores in 48 states under the names LANE BRYANT®, FASHION BUG®, FASHION BUG PLUS®, CATHERINES PLUS SIZES®, LANE BRYANT OUTLET®, and PETITE SOPHISTICATE OUTLET®. Please visit www.charmingshoppes.com for additional information about Charming Shoppes, Inc.

Safe Harbor Statement

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning appointments of executives, the Company's operations, performance, and financial condition. Such forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those indicated. Such risks and uncertainties may include, but are not limited to: the failure to consummate our identified strategic solution for our non-core assets, the failure to effectively implement our planned consolidation, cost and capital budget reduction plans and store closing plans, the failure to implement the Company's business plan for increased profitability and growth in the Company's retail stores and direct-to-consumer segments, the failure to effectively implement the Company's plans for a new organizational structure and enhancements in the Company's merchandise and marketing, the failure to effectively implement the Company's plans for the transformation of its brands to a vertical specialty store model, the failure to achieve increased profitability through the adoption by the Company's brands of a vertical specialty store model, the failure to achieve improvement in the Company's competitive position, the failure to continue receiving financing at an affordable cost through the availability of our credit card securitization facilities and through the availability of credit we receive from our suppliers and their agents, the failure to maintain efficient and uninterrupted order-taking and fulfillment in our direct-to-consumer business, changes in or miscalculation of fashion trends, extreme or unseasonable weather conditions, economic downturns, escalation of energy costs, a weakness in overall consumer demand, increases in wage rates, the ability to hire and train associates, trade and security restrictions and political or financial instability in countries where goods are manufactured, the interruption of merchandise flow from the Company's centralized distribution facilities, competitive pressures, and the adverse effects of natural disasters, war, acts of terrorism or threats of either, or other armed conflict, on the United States and international economies. These, and other risks and uncertainties, are detailed in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2009, our Quarterly Reports on Form 10-Q and other Company filings with the Securities and Exchange Commission. Charming Shoppes assumes no duty to update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

CONTACT:	Gayle M. Coolick
	Vice President, Investor Relations
	215-638-6955