SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

“Affiliate” means any firm, partnership, or corporation that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Company. “Affiliate” also includes any other organization similarly related to the Company that is designated as such by the Board.

“Annual Bonus” means an amount awarded under the Company’s annual bonus plan and any special recognition bonus the Committee, in its sole discretion, declares to be an Annual Bonus.

“Beneficiary” means the person or persons selected by the Participant, on a form provided by the Committee, to receive benefits provided under the Plan that are payable after the Participant’s death, or in the absence of such selection, the Participant’s estate.

“Benefit Percentage” means the percentage, determined under Section 5.2, of Salary and Annual Bonus added each month to a Participant’s Retirement Benefit Account.

“Board of Directors” or “Board” means the Board of Directors of the Company, and shall also mean any committee of the Board of Directors which has been delegated selected by the Committee), as of the close of the first business day of each calendar quarter for which earnings are determined under Section 5.4.

“Cause” means the occurrence of any one or more of the following:

The Eligible Executive’s plea of nolo contendre to or conviction for committing an act of fraud, embezzlement, theft, or other constituting a felony involving moral turpitude (with all rights of appeal having been exhausted); or

The willful engaging by the Eligible Executive in gross misconduct materially and demonstrably injurious to the Company, monetarily or otherwise. However, no act or failure to act on the Eligible Executive’s part shall be considered “willful” unless done, or omitted to be done, by the Eligible Executive not in good faith and without reasonable belief that his action or omission was in the best interest of the Company.

“Change in Control” means the occurrence of an event described under Section 2.10 (“Change of Control”) of the Amended and Restated Charming Shoppes Variable Deferred Compensation Plan for Executives.

“Committee” means the Compensation Committee of the Board of Directors, or other persons delegated pursuant to Section 7.1 to assist the Committee, that will administer the Plan in accordance with Section 7.1.

“Company” means Charming Shoppes, Inc., a corporation organized and existing under the laws of the Commonwealth of Pennsylvania or its successor or successors.

“Disability” means a mental or physical condition which qualifies a Participant for benefits under the Charming Shoppes Long-Term Disability Plan.

“Effective Date” means the effective date of the Plan as amended and restated, which is January 1, 2005.

“Eligible Executive” means an individual member of a group of select management or highly compensated employees of the Company or an Affiliate.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, or any successor act thereto.

“Grandfathered Accounts” means that portion of a Participant’s Retirement Benefit Account that was earned and vested as of December 31, 2004, and shall include earnings whenever credited to such amount under the terms of the Plan. The Grandfathered Account shall be calculated in accordance with Section 409A of the Code. The Company shall maintain a separate record of Grandfathered Accounts. All Grandfathered Accounts shall be subject to, and governed by, the terms of the Plan as in effect on December 31, 2004, as set forth on Exhibit A.

Interest Rate” means the sum of (a) three percent (3%) and (b) the “10-Year Treasury Note Yield”, published in the Wall Street Journal (or such other business publication selected by the Committee), as of the close of the first business day of each calendar quarter for which earnings are determined under Section 5.4.

“Participant” means an Eligible Executive designated and selected by the Committee for participation in the Plan in accordance with the provisions of Article 3.

“Plan” means the Charming Shoppes Supplemental Executive Retirement Plan, the plan set forth herein, as amended from time to time.

“Plan Service” means the product of one-twelfth (1/12) times the number of complete calendar months of Service a Participant has performed since February 1, 2003.

“Plan Year” means the consecutive twelve (12) month period commencing on January 1 and ending on December 31.

“Retirement Benefit” means the amount determined under Article 6 payable to a Participant or Beneficiary following the Participant’s termination of employment.

“Retirement Benefit Account” means the bookkeeping account established for the Participant as described under Article 5.

“Retirement Credits” means the amounts determined under Section 5.2 that are added to a Participant’s Retirement Benefit Account.

“Salary” means all regular, basic wages before reduction for amounts deferred pursuant to any plan of the Company, payable in cash to a Participant for services to be rendered, exclusive of any Annual Bonus, other special fees, awards or incentive compensation, imputed income, allowances, or amounts designated by the Company as payment toward or reimbursement of expenses.

“Service” means the period of time during which an employment relationship exists between an employee and the Company or an Affiliate, including any period during which the employee is on an approved leave of absence, whether paid or unpaid.

“Vesting Percentage” means the percentage, determined under Article 4, of a Participant’s Retirement Benefit Account that the Participant is entitled to receive following termination of employment with the Company or an Affiliate.

“Year of Service” or “Years of Service” means the “years of service” credited to a Participant under the Charming Shoppes, Inc. Employees’ Retirement Savings Plan.

Eligible Executives who have been selected and approved for participation in the Plan by the Committee shall be notified in writing of their selection at least thirty (30) calendar days prior to the first Plan Year of participation, or as soon as possible thereafter. The Participant shall not have any contractual rights under the Plan until notified. A Participant’s participation in the Plan shall constitute acknowledgment that all decisions, interpretations and determinations by the Committee shall be final and binding on the Company, Affiliates, Participants, Beneficiaries and any other persons having or claiming an interest thereunder. An Eligible Employee who is hired or promoted during a Plan Year and is selected and approved by the Committee for participation in the Plan to commence during the Plan Year shall be notified in writing of his or her selection as soon as practicable thereafter, but in no event later than thirty (30) calendar days after such selection and approval.

In the event that a Participant is deemed by the Committee to be ineligible to continue participation in the Plan for any reason, such Participant shall be notified in writing of such decision and such Par