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| (a)   | Nature of Performance      Goals.  For the Fiscal 2009 Performance Period, the      Performance Goal shall be based solely or in part on corporate      consolidated results (specifically, consolidated operating earnings before      income taxes  and excluding extraordinary and non-recurring      items including, without limitation, severance payments, store closing      costs and proxy contest and related expenses (“Consolidated Operating      Earnings”), as defined in the “Charming Shoppes, Inc. 2008 Budget      Presentation”), division performance goals and individual performance      goals.  The specific Performance Goals and the Participants      including all Executive Officers and other senior officers to whom they      apply are set forth below and in Schedules I and II hereto.  The      Performance Goals of other Participants shall be determined by the Chief      Executive Officer and the Divisional President (to the extent applicable)      in consultation with the Chief Financial Officer and the Executive Vice      President - Human Resources of the Company (the “Authorized      Officers”).  In furtherance of the  foregoing: |
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|   | -- | The      Consolidated Operating Earnings Performance Goal for fiscal 2009 shall be      a Minimum of $_____________ (the “Minimum Goal”), a Target of $__________,      and a Maximum of $___________. |
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|   | -- | The      minimum, target and maximum levels of operating earnings for Lane Bryant,      Fashion Bug, Catherines and Crosstown are set forth in Schedule I      hereto. |
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|   | -- | An      Annual Incentive Award Opportunity based on the achievement of the      Consolidated Operating Earnings Performance Goal will be earned only if      Consolidated Operating Earnings equal or exceed the specified Minimum      Goal; and An Annual Incentive Award Opportunity based on divisional      operating income and individual performance goals will be earned only if      the divisional operating income equals or exceeds the specified minimum      level for the Performance Period for that division as set forth in      Schedules I and II hereto. |
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| (b)   | Designation of      Participants and Award Opportunity Terms.  Participants      in the Program for the Fiscal 2009 Performance Period shall be executive      officers, senior officers and other employees designated in Impact Levels      1 through 9 at the date hereof as more fully set forth in Schedule I      hereto.  For each Participant in Impact Levels 1 through 9, the      Fiscal 2009 Performance Period, the Participant’s target Annual Incentive      Award Opportunity, designated levels of achievement of the Company      Performance Goals, range of potential Annual Incentive Awards relating to      the level of achievement of the Performance Goal, and other Award      Opportunity terms are set forth on Schedule I and Schedule II      hereto.  Division Performance Goals and related terms shall be      determined by the Authorized Officers, subject to The divisional      performance weights  in accordance with Schedule I and      II. |
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| (c)   | Adjustments to      Performance Goals.  The Committee may determine in its      discretion to adjust the Performance Goals specified in (a) above (except      as limited by the 2003 Plan and theProgram). |
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