**EXHIBIT      10.2.1**

**CHARMING      SHOPPES, INC.**

**1988      KEY EMPLOYEE STOCK OPTION PLAN**

**AMOUNT      AND SOURCE OF STOCK**

**ADMINISTRATION      OF THE PLAN**

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**EFFECTIVE      DATE AND TERM OF PLAN**

**ELIGIBLE      PARTICIPANTS**

**TERMS      OF OPTIONS**

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|   | (i) | Any                  Affected Option that is otherwise exercisable in 2005 may be exercised                  in                  2005, which shall be deemed a termination of the Affected Option                  in                  accordance with Q/A 20 of IRS Notice 2005-1. |
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|   | (ii) | Employees                  who hold an Affected Option shall be permitted to choose one of                  the                  following two exercise elections during 2005 (subject to such deadline                  as                  the Company may specify), and thereafter the Affected Option shall                  be                  exercisable only as permitted under that exercise election (including                  any                  related post-termination exercise provisions): |
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| ·   | Exercise              Election A: The employee may elect to have each part of the Affected              Option (a “tranche”) vesting at a date between 2005 and 2009 be              exercisable from that vesting date until March 15th              of              the following year, in compliance with the “short-term deferral”              provisions of Proposed Treasury Regulation § 1.409A-1(b)(iv) and Q/A 4(c)              of IRS Notice 2005-1. |
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| ·   | Exercise              Election B: The employee may elect a particular calendar year in which              the              Affected Option tranche will become exercisable. Under this Exercise              Election, the Affected Option will become exercisable on January 1              of the              year selected and will remain exercisable until December 31 of that              year.              The exercise year selected must be after the year in which the Affected              Option tranche vests, and if the employee selects the year in which              the              option expires the exercise period will extend only from January 1              of that              year until the expiration date. This alternative is in compliance with              Proposed Treasury Regulation § 1.409A-3(a)(4) and §              1.409A-3(g)(1). |
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|   | (iii) | The                  periods following termination of employment, death or disability                  during                  which an Affected Option may be exercised will be as                  follows: |
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| ·   | If              Exercise Election A has been selected: If the employee’s employment with              the Company or its subsidiaries terminates, the Affected Option will              be              exercisable, if and to the extent vested, for the lesser of the period              provided in the applicable Stock Option Agreement or the period permitted              under Proposed Treasury Regulation § 1.409A-1(b)(4) (in some cases not              extending beyond March 15 of the year following the year of termination). |
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| ·   | If              Exercise Election B has been selected: If the employee’s employment with              the Company or its subsidiaries terminates before the Affected Option              has              become exercisable under Exercise Election B, the Affected Option will              be              exercisable, if and to the extent vested, for the period provided under              the Stock Option Agreement (A), for a termination before October 1              of a              given calendar year, for the period specified in the Stock Option              Agreement but in no event beyond December 31 of that calendar year,              and              (B), for a termination on or after October 1 of a given calendar year,              beginning on January 1 of the calendar year after termination for the              period specified in the Stock Option Agreement, but in no event will              the              Option remain outstanding past its stated expiration date. If the              employee’s employment with the Company or its subsidiaries terminates              during the year the employee selected for exercise, the affected Option              will remain outstanding for the period provided in the Stock Option              Agreement but not beyond December 31 of that year and not beyond the              Option’s expiration date. |
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|   | (iv) | In                  the case of an employee’s termination due to death or disability or in                  case of the employee’s death during a permitted exercise period following                  termination, the exercise period of an Affected Option will be                  the lesser                  of the period provided under the employee’s Stock Option Agreement or, if                  Exercise Election A applies, the maximum period permitted under                  Proposed                  Treasury Regulation § 1.409A-1(b)(4) or, if Exercise Election B applies,                  the remainder of the exercise period under Exercise Election B                  (applying                  the termination of employment rules if death or disability resulted                  in                  termination); provided, however, that if the Affected Option has                  not been                  exercised before its termination date, the Company shall cause                  it to be                  exercised on the Option termination date (if it is in-the-money),                  applying                  Option shares to the payment of the exercise price and any applicable                  tax                  withholding, and turn over the Shares that constitute the net proceeds                  of                  exercise to the employee or his or her legatee or legatees. |
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|  | (i) | Each                separate vesting tranche of a 409A Option shall be exercisable commencing                upon the scheduled date of lapse of the risk of forfeiture due to                a                voluntary termination (i.e., the scheduled vesting date) of that                tranche                (if not previously vested or forfeited) and continuing only until                the end                of that same calendar year, except that this exercise period shall                extend                past the end of the calendar year to the extent necessary so that                the                exercise period is not less than 74 days;                and |
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|   | (ii) | Any                tranche or other part of a 409A Option that vests and becomes exercisable                upon termination of employment or upon a change in control shall                be                exercisable for the period provided in the option agreement, except                that                an option will not be exercisable for a period that extends beyond                March                15 of the year following the year in which such tranche or other                portion                vests and becomes exercisable. This rule also applies in the case                of death                or disability of the optionee, including death during a permitted                exercise                period following termination, provided, however, that if the 409A                Option                has not been exercised before its termination date, the Company shall                cause it to be exercised on the Option termination date (if it is                in-the-money), applying Option shares to the payment of the exercise                price                and any applicable tax withholding, and turn over the Shares that                constitute the net proceeds of exercise to the employee or his or                her                legatee or legatees. |
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**MANNER      OF EXERCISE OF OPTIONS**

|   | (i) | Cash; |
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|  | (ii) | Certified                  or bank cashier's check payable to the order of the                  Company; |
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|  | (iii) | Common                  Stock of the Company owned by the optionee, including Common Stock                  then                  being acquired upon exercise of the Option, which has an aggregate                  fair                  market value, determined on the date of exercise of the Option                  by the                  optionee based upon the reported trading price of the Company's                  Common                  Stock, equal to the aggregate exercise price of such Option (or                  portion                  thereof then being exercised); or |
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|  | (iv) | Such                  other method or arrangement as the Committee shall                  determine. |
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**TERMINATION      OF EMPLOYMENT OR CHANGE IN JOB CLASSIFICATION**

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**DEATH      OR DISABILITY OF AN OPTIONEE**

**ADJUSTMENT      OF NUMBER AND PRICE OF SHARES SUBJECT TO OPTIONS**

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**AMENDMENT      AND TERMINATION**

**GOVERNING      LAW**

**COMPLIANCE      WITH RULE 16b-3**

| *Adopted                  by Board of directors:* | *September                  8, 1988* |
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| *Amended                  and Restated:*          | *December                  6, 1990*  |
|                                              | *June                  18, 1992*     |
|                                              | *August                  21, 1996*   |
|                                              | *January                  25, 2006*  |

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