Document:

exh10-1april22009.htm

    
      
         

      

      
         

        
          

        

      

      
         

        
          

          

          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 of President, 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:

     

    
      
        	
                · 

              	
                Annual Base 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 20 PTO 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

            

    

    

    
      
         

      

      
        6exh10-2april22009.htm

    
      
         

      

      
         

        
          

        

      

      
         

        
          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.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

     

    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:

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      	
               
      (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.

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      	
               
      (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.

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      	
               
      (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 Reason within 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.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

     

    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.

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

     

    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.”

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    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.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

     

    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.

     

    

     

    

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    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.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

     

    (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.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    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.

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    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

            	 
      

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
         

      

      
        16

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