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|      (a)   | Nature of Performance Goals.  For the Fiscal 2010 Performance Period, the Performance Goals for James Fogarty (President and Chief Executive Officer – Impact Level 1) shall be based solely on corporate consolidated results (specifically, consolidated operating earnings before income taxes, and non-cash interest expense determined pursuant to FSP APB 14-1 “Accounting for Convertible Debt Instruments that may be settled in cash upon Conversion (Including Partial Cash Settlements)”  and excluding extraordinary and non-recurring items including, without limitation, severance payments, store closing costs, business transformation costs, and related expenses (“Consolidated Operating Earnings”), as defined in the “Charming Shoppes, Inc. 2009 Budget Presentation”).  The specific Performance Goals for James Fogarty are set forth below and in Schedule I hereto: |
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| Ø   | The Consolidated Operating Earnings Performance Goal for fiscal 2010 shall be a Minimum of $0 ( “Minimum”), a Target of $18,000,000, and a Maximum of $63,000,000. |
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|   | (b) | Designation of Participants and Award Opportunity Terms.  For the Fiscal 2010 Performance Period, James Fogarty’s target Annual Incentive Award Opportunity, designated levels of achievement of the Company Goals, the weights accorded to Performance Goals, range of potential Annual Incentive Awards relating to the level of achievement of  Performance Goals, and other Award Opportunity terms are set forth on Schedule I hereto. |
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|   | (c) | Specification of the Plan Under Which Award Opportunities Designated.  The Award Opportunity designated for James Fogarty in Impact Level 1 is designated under the 2004 Plan. |
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|   | (d) | 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 2004 Plan and the Program). |
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