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|      (a)   | Nature of Performance Goals.  For the Fiscal 2010 Performance Period, the Performance Goals shall be based solely or in part on (a) 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”), (b) divisional operating profits before taxes and store occupancy expenses and excluding extraordinary and non-recurring items, including, without limitation, severance payments, store closing costs, business transformation costs and related expense (“Divisional Operating Profits”) as set forth in each divisions’ 2009 Annual Plan, (c) other division performance goals and (e) individual performance goals, all as more fully set forth in Schedules I and II hereto.  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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| 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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| Ø   | The Divisional Operating Profits Performance Goals for Fiscal 2010 for the divisions (the “Divisions”) including without limitation, Lane Bryant, Fashion Bug and Catherines and the respective Minimum, Target and Maximum levels of  Divisional Operating Profits are set forth in Schedule I hereto. |
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|   | (b) | Designation of Participants and Award Opportunity Terms.  Participants in the Program for the Fiscal 2010 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, for the Fiscal 2010 Performance Period, the Participant’s target Annual Incentive Award Opportunity, designated levels of achievement of the Company and Divisional Performance 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 and Schedule II hereto. |
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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 the Program). |
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