sc13da107087cha_01142008.htm

0000921895-08-000160.txt : 20080115 0000921895-08-000160.hdr.sgml : 20080115 20080115172811 ACCESSION NUMBER: 0000921895-08-000160 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20080115 DATE AS OF CHANGE: 20080115 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CHARMING SHOPPES INC CENTRAL INDEX KEY: 0000019353 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-WOMEN'S CLOTHING STORES [5621] IRS NUMBER: 231721355 STATE OF INCORPORATION: PA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-33215 FILM NUMBER: 08531949 BUSINESS ADDRESS: STREET 1: 450 WINKS LANE CITY: BENSALEM STATE: PA ZIP: 19020 BUSINESS PHONE: 2152459100 MAIL ADDRESS: STREET 1: 450 WINKS LANE CITY: BENSALEM STATE: PA ZIP: 19020 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CRESCENDO PARTNERS II LP CENTRAL INDEX KEY: 0001219602 IRS NUMBER: 134132983 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SC 13D/A 1 sc13da107087cha_01142008.htm sc13da107087cha_01142008.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 1)1

Charming Shoppes, Inc.

(Name of Issuer)

Common Stock, $0.10 par value

(Title of Class of Securities)

161133103

(CUSIP Number)

STEVEN WOLOSKY, ESQ.

OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

January 11, 2008

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

_______________

1 The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP NO. 161133103

1	NAME OF REPORTING PERSON CRESCENDO PARTNERS II, L.P., SERIES Q
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 7,354,125
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 7,354,125
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,354,125
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.3%
14	TYPE OF REPORTING PERSON PN

CUSIP NO. 161133103

1	NAME OF REPORTING PERSON CRESCENDO INVESTMENTS II, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 7,354,125
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 7,354,125
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,354,125
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.3%
14	TYPE OF REPORTING PERSON OO

CUSIP NO. 161133103

1	NAME OF REPORTING PERSON CRESCENDO PARTNERS III, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 378,275
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 378,275
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 378,275
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) LESS THAN 1%
14	TYPE OF REPORTING PERSON PN

CUSIP NO. 161133103

1	NAME OF REPORTING PERSON CRESCENDO INVESTMENTS III, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 378,275
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 378,275
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 378,275
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) LESS THAN 1%
14	TYPE OF REPORTING PERSON OO

CUSIP NO. 161133103

1	NAME OF REPORTING PERSON ERIC ROSENFELD
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 7,732,400
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 7,732,400
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,732,400
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.6%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 161133103

1	NAME OF REPORTING PERSON MYCA PARTNERS, INC.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 1,523,405 (1)
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 1,523,405 (1)
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,523,405 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.3%
14	TYPE OF REPORTING PERSON CO

(1) Includes 209,100 Shares underlying short put options.

CUSIP NO. 161133103

1	NAME OF REPORTING PERSON MYCA MASTER FUND, LTD.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 1,523,405 (1)
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 1,523,405 (1)
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,523,405 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.3%
14	TYPE OF REPORTING PERSON CO

(1) Includes 209,100 Shares underlying short put options.

CUSIP NO. 161133103

1	NAME OF REPORTING PERSON ARNAUD AJDLER
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Belgium
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 15,000
	8	SHARED VOTING POWER - 0 - **
	9	SOLE DISPOSITIVE POWER 15,000
	10	SHARED DISPOSITIVE POWER - 0 - **
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 15,000 **
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) LESS THAN 1% **
14	TYPE OF REPORTING PERSON IN

** See Item 5.

CUSIP NO. 161133103

1	NAME OF REPORTING PERSON MICHAEL APPEL
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 6,000
	8	SHARED VOTING POWER - 0 - **
	9	SOLE DISPOSITIVE POWER 6,000
	10	SHARED DISPOSITIVE POWER - 0 - **
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,000 **
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) LESS THAN 1% **
14	TYPE OF REPORTING PERSON IN

** See Item 5.

CUSIP NO. 161133103

1	NAME OF REPORTING PERSON ROBERT FRANKFURT
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 1,523,405 (1)
	8	SHARED VOTING POWER - 0 - **
	9	SOLE DISPOSITIVE POWER 1,523,405 (1)
	10	SHARED DISPOSITIVE POWER - 0 - **
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,523,405 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.3% **
14	TYPE OF REPORTING PERSON IN

(1) Includes 209,100 Shares underlying short put options.

** See Item 5.

CUSIP NO. 161133103

1	NAME OF REPORTING PERSON THE CHARMING SHOPPES FULL VALUE COMMITTEE
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION N/A
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 9,276,805
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 9,276,805
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,276,805
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.9%
14	TYPE OF REPORTING PERSON OO

CUSIP NO. 161133103

The following constitutes Amendment No. 1 (“Amendment No. 1”) to the Schedule 13D filed by the undersigned (the “Schedule 13D”). This Amendment No. 1 amends the Schedule 13D as specifically set forth. Myca Partners Inc., Myca Master Fund, Ltd., Arnaud Ajdler, Michael Appel, Robert Frankfurt and the Charming Shoppes Full Value Committee (the “Committee”) are hereby added as Reporting Persons to the Schedule 13D.

Item 2 is hereby amended to add the following:

Myca Master Fund, Ltd., (“Myca Master Fund”) is a Cayman Islands company. The principal business of Myca Master Fund is investment advisory services. The principal business address of Myca Master Fund is 135 West 20^th Street, 5^th Floor, New York, New York 10011. The officers and directors of Myca Master Fund and their respective principal occupations and business addresses are set forth on Schedule B and are incorporated by reference in this Item 2.

Myca Partners Inc. (“Myca Partners”) is a Delaware corporation. The principal business of Myca Partners is investment advisory services and serving as the investment manager of Myca Master Fund. The principal business address of Myca Partners is 135 West 20^th Street, 5^th Floor, New York, New York 10011. The officers and directors of Myca Partners and their respective principal occupations and business addresses are set forth on Schedule B and are incorporated by reference in this Item 2.

Arnaud Ajdler (“Mr. Ajdler”) is a nominee for the Board of Directors of the Issuer and his principal occupation is serving as Managing Director of Crescendo Partners II, L.P. The principal business address of Mr. Ajdler is c/o Crescendo Partners, L.P., 825 Third Avenue, 40^th Floor, New York, New York 10022. Mr. Ajdler is a citizen of Belgium.

Michael Appel (“Mr. Appel”) is a nominee for the Board of Directors of the Issuer and his principal occupation is serving as Managing Director of Quest Turnaround Advisors. The principal business address of Mr. Appel is c/o Quest Turnaround Advisors, 287 Bowman Avenue, Purchase, New York 10577. Mr. Appel is a citizen of the United States of America.

Robert Frankfurt (“Mr. Frankfurt”) is a nominee for the Board of Directors of the Issuer and his principal occupation is serving as President of Myca Partners. The principal business address of Mr. Frankfurt is c/o Myca Partners Inc., 135 West 20^th Street, 5^th Floor, New York, New York 10011. Mr. Frankfurt is a citizen of the United States of America.

The Committee is composed of Crescendo Partners II, Crescendo Investments II, Crescendo Partners III, Crescendo Investments III, Myca Partners, Myca Master Fund, Mr. Rosenfeld, Mr. Ajdler, Mr. Appel and Mr. Frankfurt. The Committee is not a business entity and has no place of organization.

No Reporting Person, nor any person listed on Schedule B annexed hereto, has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). No Reporting Person, nor any person listed on Schedule B annexed hereto, has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

CUSIP NO. 161133103

Item 3 is hereby amended and restated to read as follows:

The aggregate purchase price of the 7,732,400 Shares owned in the aggregate by Crescendo Partners II and Crescendo Partners III is approximately $40,613,879, including brokerage commissions. The Shares owned by Crescendo Partners II and Crescendo Partners III were acquired with partnership funds.

The aggregate purchase price of the 1,314,305 Shares (excluding 209,100 Shares underlying short put options) owned by Myca Master Fund is approximately $10,668,333, including brokerage commissions. The Shares owned by Myca Master Fund were acquired with its working capital.

The aggregate purchase price of the 15,000 Shares owned directly by Mr. Ajdler is approximately $63,518, including brokerage commissions. The Shares owned directly by Mr. Ajdler were acquired with personal funds. The aggregate purchase price of the 6,000 Shares beneficially owned by Mr. Appel is approximately $25,435, including brokerage commissions. The Shares owned directly by Mr. Appel were acquired with personal funds.

Item 4 is hereby amended to add the following:

The Committee is seeking representation on the Issuer’s Board of Directors (the “Board”). Crescendo Partners II delivered a letter dated January 11, 2008 to the Corporate Secretary of the Issuer (the "Nomination Letter") on January 14, 2008, nominating Messrs. Ajdler, Appel and Frankfurt, as set forth therein, for election to the Board at the Issuer's 2008 annual meeting of shareholders (the "2008 Annual Meeting").

On January 15, 2008, the Committee delivered a letter (the “January 15 Letter”) to the members of the Issuer’s Board highlighting its significant concerns with the Issuer’s current business strategy, its capital allocation process and its poorly performing stock price. In the January 15 Letter, the Committee outlined various measures to re-focus the Issuer’s business operations and unlock the true intrinsic value of the Issuer. A copy of the press release announcing the delivery of the Nomination Letter and the January 15 Letter, that includes the text of the January 15 Letter, is attached hereto as Exhibit 99.2 and incorporated herein by reference.

Item 5(a) is hereby amended and restated to read as follows:

(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 116,694,356 Shares outstanding, which is the total number of Shares reported to be outstanding as of December 4, 2007 in the Issuer’s Quarterly Report on Form 10-Q, as filed with the Securities and Exchange Commission on December 7, 2007.

As of the date hereof, Crescendo Partners II beneficially owns 7,354,125 Shares, constituting approximately 6.3% of the Shares outstanding. As the general partner of Crescendo Partners II, Crescendo Investments II may be deemed to beneficially own the 7,354,125 Shares owned by Crescendo Partners II, constituting approximately 6.3% of the Shares outstanding. As the managing member of Crescendo Investments II, which in turn is the general partner of Crescendo Partners II, Mr. Rosenfeld may be deemed to beneficially own the 7,354,125 Shares owned by Crescendo Partners II, constituting approximately 6.3% of the Shares outstanding. Mr. Rosenfeld has sole voting and dispositive power with respect to the 7,354,125 Shares owned by Crescendo Partners II by virtue of his authority to vote and dispose of such Shares. Crescendo Investments II and Mr. Rosenfeld disclaim beneficial ownership of the Shares held by Crescendo Partners II, except to the extent of their pecuniary interest therein.

CUSIP NO. 161133103

As of the date hereof, Crescendo Partners III beneficially owns 378,275 Shares, constituting less than one percent of the Shares outstanding. As the general partner of Crescendo Partners III, Crescendo Investments III may be deemed to beneficially own the 378,275 Shares owned by Crescendo Partners II, constituting less than one percent of the Shares outstanding. As the managing member of Crescendo Investments III, the general partner of Crescendo Partners III, Mr. Rosenfeld may be deemed to beneficially own the 378,275 Shares owned by Crescendo Partners III, constituting less than one percent of the Shares outstanding. Mr. Rosenfeld has sole voting and dispositive power with respect to the 378,275 Shares owned by Crescendo Partners III by virtue of his authority to vote and dispose of such Shares. Crescendo Investments III and Mr. Rosenfeld disclaim beneficial ownership of the Shares held by Crescendo Partners III, except to the extent of their pecuniary interest therein.

Each of Crescendo Partners II, Crescendo Investments II, Crescendo Partners III, Crescendo Investments III and Mr. Rosenfeld, as members of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, may be deemed to beneficially own the 1,523,405 Shares beneficially owned by Myca Master Fund. Each of Crescendo Partners II, Crescendo Investments II, Crescendo Partners III, Crescendo Investments III and Mr. Rosenfeld disclaim beneficial ownership of the Shares beneficially owned by Myca Master Fund.

As of the date hereof, Myca Master Fund beneficially owns 1,523,405 Shares, constituting 1.3% of the Shares outstanding. Myca Partners, as the investment manager of Myca Master Fund, may be deemed to beneficially own the 1,523,405 Shares owned by Myca Master Fund, constituting 1.3% of the Shares outstanding. Myca Master Fund and Myca Partners, as members of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, may be deemed to beneficially own the 7,354,125 Shares owned by Crescendo Partners II and the 378,275 Shares owned by Crescendo Partners III. Myca Master Fund and Myca Partners disclaim beneficial ownership of the Shares owned by Crescendo Partners II and Crescendo Partners III.

As of the date hereof, Mr. Frankfurt, as the President of Myca Partners, the investment manager of Myca Master Fund, may be deemed to beneficially own the 1,523,405 Shares beneficially owned by Myca Master Fund, constituting 1.3% of the Shares outstanding. Mr. Frankfurt, as a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, may be deemed to beneficially own the 7,354,125 Shares owned by Crescendo Partners II and the 378,275 Shares owned by Crescendo Partners III. Mr. Frankfurt disclaims beneficial ownership of the Shares owned by Crescendo Partners II and Crescendo Partners III.

As of the date hereof, Mr. Ajdler directly owns 15,000 Shares, constituting less than one percent of the Shares outstanding. Mr. Ajdler, as a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, may be deemed to beneficially own the 7,354,125 Shares owned by Crescendo Partners II, the 378,275 Shares owned by Crescendo Partners III and the 1,523,405 Shares beneficially owned by Myca Master Fund. Mr. Ajdler disclaims beneficial ownership of the Shares owned by Crescendo Partners II, Crescendo Partners III and Myca Master Fund.

CUSIP NO. 161133103

As of the date hereof, Mr. Appel beneficially owns 6,000 Shares through his Michael Appel Rollover IRA account, constituting less than one percent of the Shares outstanding. Mr. Appel, as a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, may be deemed to beneficially own the 7,354,125 Shares owned by Crescendo Partners II, the 378,275 Shares owned by Crescendo Partners III and the 1,523,405 Shares beneficially owned by Myca Master Fund. Mr. Appel disclaims beneficial ownership of the Shares owned by Crescendo Partners II, Crescendo Partners III and Myca Master Fund.

Item 5(c) is hereby amended to add the following:

(c) Schedule A annexed hereto lists all transactions in the Shares by the Reporting Persons since the filing of the Schedule 13D. All of such transactions were effected in the open market.

Item 6 is hereby amended to add the following:

On January 11, 2008, the Reporting Persons entered into a Joint Filing and Solicitation Agreement relating to the sharing of expenses and certain other activities in connection with the proxy solicitation (the “Joint Filing & Solicitation Agreement”). Specifically, the parties to the Joint Filing & Solicitation Agreement agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the shares of Common Stock of the Issuer to the extent required under applicable securities laws. Pursuant to the Joint Filing & Solicitation Agreement, Crescendo Partners II and Myca Partners have agreed to pay directly all expenses incurred in connection with the proxy solicitation on a pro rata basis between Crescendo Partners II and Myca Partners based on the number of shares of Common Stock in the aggregate held by each of Crescendo Partners II and Myca Partners as of January 11, 2008. A copy of the Joint Filing & Solicitation Agreement is attached as Exhibit 99.1 hereto and incorporated herein by reference.

On January 11, 2008, Myca Partners entered into a fee arrangement with RCG Starboard Advisors, LLC (“Starboard”) relating to certain fees payable to Myca Partners by Starboard for previously identifying the Issuer as a potential investment opportunity (the “Fee Arrangement”). Pursuant to the terms of the Fee Arrangement, Starboard agreed to pay Myca Partners an upfront fee and a fee based on the Net Profits (as defined in the Fee Arrangement) on the investment by certain of Starboard’s affiliates in the Issuer. The Fee Arrangement confirms that Myca Partners and Starboard will make their own independent investment, voting and disposition decisions with respect to the Issuer. A copy of the Fee Arrangement is attached as Exhibit 99.3 hereto and incorporated herein by reference.

As of the date hereof, Myca Master Fund had entered into transactions with respect to the securities of the Issuer with unrelated third parties under the terms set forth in the following table:

Class of Security	Number of Shares Underlying	Expiration Date	Strike Price ($)
Short Put Option	(209,100)	01/18/08	9.5100

Item 7 is hereby amended to include the following exhibits:

Exhibit 99.1. Joint Filing and Solicitation Agreement, dated as of January 11, 2008, by and among Crescendo Partners II, L.P., Series Q, Crescendo Investments II, LLC, Crescendo Partners III, L.P., Crescendo Investments III, LLC, Eric Rosenfeld, Myca Partners Inc., Myca Master Fund, Ltd., Mr. Ajdler, Mr. Appel and Mr. Frankfurt.

Exhibit 99.2. Press Release, dated January 15, 2008, announcing the delivery by the Committee of the January 11 Letter and Nomination Letter to the Issuer.

Exhibit 99.3. Fee Arrangement, dated January 11, 2007 by and between Myca Partners, Inc. and RCG Starboard Advisors, LLC.

CUSIP NO. 161133103

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: January 15, 2008	CRESCENDO PARTNERS II, L.P., SERIES Q
	By:	Crescendo Investments II, LLC
		General Partner

	By:	/s/ Eric Rosenfeld
		Name:	Eric Rosenfeld
		Title:	Managing Member

CRESCENDO INVESTMENTS II, LLC

By:	/s/ Eric Rosenfeld
	Name:	Eric Rosenfeld
	Title:	Managing Member

CRESCENDO PARTNERS III, L.P.

By:	Crescendo Investments III, LLC
	General Partner

By:	/s/ Eric Rosenfeld
	Name:	Eric Rosenfeld
	Title:	Managing Member

CRESCENDO INVESTMENTS III, LLC

By:	/s/ Eric Rosenfeld
	Name:	Eric Rosenfeld
	Title:	Managing Member

	/s/ Eric Rosenfeld
	ERIC ROSENFELD

CUSIP NO. 161133103

	MYCA MASTER FUND, LTD.

	By:	Myca Partners, Inc. its Investment Manager

	By:	/s/ Robert Frankfurt
		Robert Frankfurt President

	MYCA PARTNERS, INC.

	By:	/s/ Robert Frankfurt
		Robert Frankfurt President

	/s/ Robert Frankfurt
	ROBERT FRANFURT

	/s/ Arnaud Ajdler
	ARNAUD AJDLER

	/s/ Michael Appel
	MICHAEL APPEL

CUSIP NO. 161133103

SCHEDULE A

Transactions in the Shares Since Filing the Schedule 13D

Shares of Common Stock

Purchased

Price Per

Share($U.S.)

Date of

Purchase

CRESCENDO PARTNERS II, L.P., SERIES Q

50,000	4.2000	01/09/08
65,000	4.5327	01/10/08

CRESCENDO INVESTMENTS II, LLC

None

CRESCENDO PARTNERS III, L.P.

None

CRESCENDO INVESTMENTS III, LLC

None

ERIC ROSENFELD

None

MYCA MASTER FUND, LTD.

93,405		4.4500	01/08/08
363^*		0.4900	01/10/08

MYCA PARTNERS INC.

None

ROBERT FRANKFURT

None

ARNAUD AJDLER

15,000

4.2329

01/11/08

MICHAEL APPEL

6,000^**

4.1879

01/11/08

^* Exercised Put Option ($9.51 Strike Price). Each option represents 100 shares of the underlying Common Stock.

^** Mr. Appel’s Shares were purchased through his Michael Appel Rollover IRA account.

CUSIP NO. 161133103

SCHEDULE B

Directors and Officers of Myca Partners Inc.

Name and Position	Principal Occupation	Principal Business Address

Robert Frankfurt	President of Myca Partners Inc.	135 West 20^th Street, 5^th Floor, New York, New York 10011

Directors and Officers of Myca Master Fund, Ltd.

Name and Position	Principal Occupation	Principal Business Address

Robert Frankfurt	President of Myca Master Fund, Ltd.	135 West 20^th Street, 5^th Floor, New York, New York 10011

EX-99.1 2 ex991sc13da107087cha_011408.htm ex991sc13da107087cha_011408.htm

Exhibit 99.1

JOINT FILING AND SOLICITATION AGREEMENT

WHEREAS, certain of the undersigned are stockholders, direct or beneficial, of Charming Shoppes, Inc., a Pennsylvania corporation (the “Company”);

WHEREAS, Crescendo Partners II, L.P., Series Q, a Delaware limited partnership (“Crescendo Partners”), Crescendo Investments II, LLC, a Delaware limited liability company, Crescendo Partners III, L.P., a Delaware limited partnership, Crescendo Investments III, LLC, a Delaware limited liability company, Eric Rosenfeld, Myca Partners Inc., a Delaware Corporation (“Myca Partners”), [Myca Master Fund, Ltd., a Cayman Islands company], Robert Frankfurt, Arnaud Ajdler and Michael Appel wish to form a group for the purpose of seeking representation on the Board of Directors of the Company at the 2008 annual meeting of stockholders of the Company, or any other meeting of stockholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof (the “2008 Annual Meeting”) and for the purpose of taking all other action necessary to achieve the foregoing.

NOW, IT IS AGREED, this 11^th day of January 2008 by the parties hereto:

1. In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), each of the undersigned (collectively, the “Group”) agrees to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Company to the extent required under applicable securities laws. Each of the undersigned agrees to the joint filing of any necessary amendments to the Schedule 13D. Each member of the Group shall be responsible for the accuracy and completeness of his/its own disclosure therein, and is not responsible for the accuracy and completeness of the information concerning the other members, unless such member knows or has reason to know that such information is inaccurate.

2. Each member of the Group, including its respective affiliates, agrees not to directly or indirectly, sell, transfer, make any short sale of, loan, grant any option for the purchase of or otherwise dispose of any securities of the Company except to other members of the Group who agree in writing to this Agreement.

3. Each of the undersigned agrees to form the Group for the purpose of soliciting proxies or written consents for the election of the persons nominated by the Group to the Board of Directors of the Company at the 2008 Annual Meeting and for the purpose of taking all other action necessary to achieve the foregoing.

4. Crescendo Partners and Myca Partners shall have the right to pre-approve all expenses in excess of $1,000.00 incurred in connection with the Group’s activities and agree to pay directly all such expenses on a pro rata basis between Crescendo Partners and Myca Partners based on the number of Shares in the aggregate held by each of Crescendo Partners and Myca Partners on the date hereof. In addition to the other expenses to be shared by Crescendo Partners and Myca Partners pursuant to this Section 4, the reasonable legal fees and expenses of each member of the Group shall be considered a Group expense.

5. Each of the undersigned agrees that any SEC filing, press release or stockholder communication proposed to be made or issued by the Committee in connection with the Group’s activities set forth in Section 3 shall be first approved by Crescendo Partners and Myca Partners, or their respective representatives, which approval shall not be unreasonably withheld.

6. Should any disagreement arise between Crescendo Partners and Myca Partners concerning decisions to be made or actions to be taken in connection with the Group’s activities set forth in Section 3, including, but not limited to the activities identified in Section 5, Crescendo Partners shall have the sole authority to resolve any such disagreements and take any such actions as it sees fit.

7. The relationship of the parties hereto shall be limited to carrying on the business of the Group in accordance with the terms of this Agreement. Such relationship shall be construed and deemed to be for the sole and limited purpose of carrying on such business as described herein. Nothing herein shall be construed to authorize any party to act as an agent for any other party, or to create a joint venture or partnership, or to constitute an indemnification. Nothing herein shall restrict any party’s right to purchase securities of the Company, as he/it deems appropriate, in his/its sole discretion.

8. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute but one and the same instrument, which may be sufficiently evidenced by one counterpart.

9. In the event of any dispute arising out of the provisions of this Agreement or their investment in the Company, the parties hereto consent and submit to the exclusive jurisdiction of the Federal and State Courts in the State of New York.

10. Any party hereto may terminate his/its obligations under this Agreement only after the later of (a) the first business day following the conclusion of the 2008 Annual Meeting, or (b) on 24 hours’ written notice to all other parties, with a copy by fax to Steve Wolosky at Olshan Grundman Frome Rosenzweig & Wolosky LLP (“Olshan”), Fax No. (212) 451-2222.

11. Each party acknowledges that Olshan shall act as counsel for both the Group and Crescendo Partners and its affiliates relating to their investment in the Company.

12. Each of the undersigned parties hereby agrees that this Agreement shall be filed as an exhibit to the Schedule 13D pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.

	CRESCENDO PARTNERS II, L.P., SERIES Q

	By:	Crescendo Investments II, LLC General Partner

	By:	/s/ Eric Rosenfeld
		Eric Rosenfeld Managing Member

	CRESCENDO INVESTMENTS II, LLC

	By:	/s/ Eric Rosenfeld
		Eric Rosenfeld Managing Member

	CRESCENDO PARTNERS III, L.P.

	By:	Crescendo Investments III, LLC General Partner

	By:	/s/ Eric Rosenfeld
		Eric Rosenfeld Managing Member

	CRESCENDO INVESTMENTS III, LLC

	By:	/s/ Eric Rosenfeld
		Eric Rosenfeld Managing Member

	/s/ Eric Rosenfeld
	ERIC ROSENFELD

	MYCA MASTER FUND, LTD.

	By:	Myca Partners, Inc. its Investment Manager

	By:	/s/ Robert Frankfurt
		Robert Frankfurt President

	MYCA PARTNERS, INC.

	By:	/s/ Robert Frankfurt
		Robert Frankfurt President

	/s/ Robert Frankfurt
	ROBERT FRANKFURT

	/s/ Arnaud Ajdler
	ARNAUD AJDLER

	/s/ Michael Appel
	MICHAEL APPEL

EX-99.2 3 ex992sc13da107087cha_011408.htm ex992sc13da107087cha_011408.htm

Exhibit 99.2

THE CHARMING SHOPPES FULL VALUE COMMITTEE DISCLOSES NOMINATION OF THREE HIGHLY QUALIFIED DIRECTOR CANDIDATES FOR ELECTION TO THE CHARMING SHOPPES, INC. BOARD AT THE 2008 ANNUAL MEETING

Committee Delivers Letter to the Company Highlighting Concerns about the Company’s Performance

NEW YORK, NY - JANUARY 15, 2008 - The Charming Shoppes Full Value Committee (the “Committee”) announced today that it has nominated a slate of three director nominees for election to the Board of Directors of Charming Shoppes, Inc. (“Charming Shoppes” or the “Company”) (NASDAQ:CHRS) at the Company’s 2008 Annual Meeting of Shareholders. The members of the Committee beneficially own an aggregate of 9,276,805 shares, or approximately 7.9% of the outstanding shares, of common stock of the Company. Crescendo Partners II, L.P., Series Q delivered the written notice to the Corporate Secretary of Charming Shoppes on January 14, 2008, in accordance with the Company’s Bylaws. The Committee has nominated the following three highly qualified independent director nominees: Michael Appel, a Managing Director of Quest Turnaround Advisors, with significant retail experience, Arnaud Ajdler, a Managing Director of Crescendo Partners II, L.P. and Robert Frankfurt, the President of Myca Partners. The full bios of the Committee’s director nominees are below.

The Committee also sent a letter to the Company on January 15, 2008, highlighting its significant concerns with the Company’s current business strategy, its capital allocation process and its poorly performing stock price. In the letter the Committee outlined various measures to re-focus the Company’s business operations and unlock the true intrinsic value of the Company.

The full text of the letter sent to the Charming Shoppes Board follows:

January 15, 2008

Board of Directors

Charming Shoppes, Inc.

450 Winks Lane

Bensalem, PA 19020

Attn: Board of Directors

Dear Members of the Board of Directors:

The members of the Charming Shoppes Full Value Committee (the “Committee”) currently own approximately 7.9% of the outstanding shares of Common Stock of Charming Shoppes, Inc. (“Charming Shoppes” or “the Company”). The Committee is deeply concerned with Charming Shoppes’ current business strategy, its capital allocation process and its poorly performing stock price.

The Committee has nominated three highly qualified directors for the 2008 annual meeting. Our nominees are committed to a comprehensive review of Charming Shoppes’ far-flung business operations with the goal of formulating and implementing a company-wide restructuring plan. We believe the Company needs to regain its focus on providing high-quality, fashionable and differentiated merchandise at value prices to its mostly moderate to middle-income plus-size female consumer.

The Committee’s goal is to unlock intrinsic value and restore investor faith in Charming Shoppes by:

Exploring the sale of non-core assets (i.e., real estate, credit card operations, catalog business) in order to simplify the business and focus management on improving its underperforming retail operations;

Slowing store expansion to focus management on fixing the current mix of businesses and increasing free cash flow by reducing capital expenditures;

Focusing on merchandise improvements to appeal to the Company’s core customer base;

Streamlining operations and reducing overhead expenses; and

Buying back a significant amount of shares with cash flow from operations and cash raised through asset sales.

The Committee believes that a combination of (1) a focus on operational excellence and merchandising improvements, (2) simplification of the business through asset sales, (3) a reduction of high corporate overhead and (4) a significant share buyback at depressed valuations should improve operating performance and unlock the Company’s intrinsic value.

We believe the current Board of Directors (the “Board”) and senior management are responsible and must be held accountable for a flawed business strategy and poor execution. The Company’s current stock price is 6% lower than where the stock price was more than 12 years ago when Ms. Dorrit Bern became Chief Executive Officer compared to a 154% increase in the S&P 500 Index during the same period.

Examples of the Company’s flawed business strategies include:

Poor Capital Allocation Decisions

Over the last eleven quarters since the fiscal year ended January 29, 2005, the Board has approved $346 million of capital expenditures and the $262 million acquisition of Crosstown Traders in June 2005 for a total of $608 million. To give a sense of perspective, Charming Shoppes’ current market capitalization is $508 million. The return on this incremental capital is well below the Company’s cost of capital leading to a significant loss of shareholder value evidenced by a 46% decline in the Company’s stock price during that period of time compared to a 21% gain in the S&P 500 Index.

Since acquiring Crosstown Traders in preparation for taking the Lane Bryant catalog in-house, the direct-to-consumer division has experienced a steady deterioration in revenues and profits. Alternatively, the Company could have focused on improving its retail and internet presence at its core brands and could have generated significant free cash flow by licensing out the Lane Bryant Catalog brand to an entrenched catalog company.

§	Charming Shoppes has spent considerable capital to own and build non-core assets rather than embrace outsourcing and the sale of non-core assets.

§	The Company has acquired credit card portfolios whereas most retailers have sold similar portfolios realizing that they could not compete with large financial institutions and they would be better off focusing on their core retail operations.

Subpar Operating Performance

§	Stagnant same-store sales over the last six years despite a solid retail environment and an overall increase in the number of plus-size women in the United States.

§	Fiscal year 2007 EBITDA margins more than 450 basis points lower than that of its most applicable peer group.

§	Declining revenues and operating losses at Crosstown Traders following a poorly conceived and executed integration plan and management turnover.

§	Twelve presidents for four operating divisions over the last sixteen quarters highlights the instability of the division leadership.

§	Twenty-two operating facilities in the US and Hong Kong limit operating efficiency and synergies between brands.

Lack of Focus on Core Brands

§	Senior leadership consistently chases new growth initiatives, such as the Crosstown Traders acquisition, Lane Bryant catalog, Lane Bryant Outlet, Petite Sophisticate, Petite Sophisticate Outlet, and Figure Magazine, instead of optimizing its core brands.

Poor merchandising and store-level marketing that is confusing the Company’s target audience and is resulting in heavy dependence on couponing and discounting, which lower merchandising margins. A companywide brand and product strategy is needed to effectively target the diverse segments of plus-size women across varied ages, races, fashion tastes, and economic strata.

Management Incentives not Properly Aligned with Shareholder Interests

§	Incentives tied to pretax profit rather than free cash flow or stock price motivate management to focus on growth and ownership of additional assets vs. maximizing free cash flow and return on capital.

§	Compensation of top five listed senior executives totals $45.1 million over the last three fiscal years despite lower free cash flow and a 46% decline in share price.

Despite this negative share performance, Ms. Bern received $8.3 million of total compensation in fiscal year 2007 and was recently rewarded with a new three-year employment agreement which includes a 24% increase in salary and target bonus and a substantial increase in the number of shares and options received annually.

Attempts by Myca Partners, one of the members of the Committee, to initiate a meaningful dialog with senior management and the Board have largely been ignored. Ms. Katherine Hudson, the Lead Independent Director, has refused our numerous attempts to meet with her. Accordingly, the Committee believes the best way to address these issues is an immediate change at the Board to include individuals committed to enhancing stockholder value.

The Committee believes that the Board has not properly challenged Ms. Bern’s business strategy and execution and as such, we have nominated three highly qualified individuals who possess a combination of retail, apparel, turnaround management, finance and accounting, and capital allocation experience necessary to help the Company better chart its course for the future.

The Committee’s director nominees are:

Michael Appel has significant retail executive experience. He currently serves as Managing Director of Quest Turnaround Advisors (“Quest”), a firm that provides turnaround and crisis management services to boards of directors, management, creditors and shareholders of companies experiencing financial and operational difficulties. Mr. Appel has served as an interim CEO, interim COO and turnaround advisor for several well-known retailers and specialty consumer products companies. The companies for which Mr. Appel has served as CEO include Caswell-Massey Co. Ltd, Ciro, Inc., Laura Ashley, N.A. and MacKenzie-Childs. Mr. Appel served as financial advisor to the Creditors Committee in the bankruptcy proceeding of Kasper ASL, a leading manufacturer of women’s apparel under the Kasper and Ann Klein brands that filed for Chapter 11 in February 2002. Mr. Appel assisted in developing and implementing a successful turnaround plan for Kasper ASL and was awarded the 2004 Turnaround of the Year Award by the Turnaround Management Association for his work with Kasper ASL. Mr. Appel served as Chief Restructuring Officer of HCI Direct, the leading U.S. direct marketer of women’s hosiery, Mr. Appel worked with HCI’s management and Board in implementing a successful pre-package Chapter 11 filing. Upon departure of the company’s CEO, Mr. Appel was appointed interim CEO, where he managed the business, launched a successful new product line and recruited a new CEO. Mr. Appel began his career in 1973 at Bloomingdale’s where he spent ten years in merchandising. Mr. Appel graduated Phi Beta Kappa from Brandeis University and received an M.B.A., with Distinction, from the Harvard Business School.

Arnaud Ajdler has been a Managing Director of Crescendo Partners II, L.P., since December 2005. Since its inception in June 2006, Mr. Ajdler has served as a member of the Board of Directors and the Secretary of Rhapsody Acquisition Corp., an OTC Bulletin Board-listed blank check company formed to effect a business combination with an operating business. From June 2004 until June 2006 Mr. Ajdler also served as the Chief Financial Officer, a director and the Secretary of Arpeggio Acquisition Corporation. Arpeggio completed its business combination with Hill International, Inc. in June 2006 and since such time Mr. Ajdler has served as a Director of the surviving company, a NASDAQ listed company. From August 2006 until the Company was acquired in October 2007, Mr. Ajdler served as a director of The Topps Company, Inc., a NASDAQ listed company. Mr. Ajdler is also an adjunct professor at Columbia University Business School where he teaches a course in value investing. Mr. Ajdler received a B.S. in engineering from the Free University of Brussels, Belgium, an S.M. in Aeronautics from the Massachusetts Institute of Technology and an M.B.A. from the Harvard Business School.

Robert Frankfurt has served as President of Myca Partners, an investment advisory services firm, since September 2006. From January 2005 to October 2005, Mr. Frankfurt served as a Vice President of Sandell Asset Management Corp., a privately owned hedge fund. From April 2001 to September 2002, Mr. Frankfurt served as President of Myer Capital, an investment advisory services firm. From 1995 to 2000, Mr. Frankfurt was a Partner at Steel Partners. His responsibilities at Steel Partners were extensive and varied, ranging from sourcing public and private investment opportunities to hands-on turnaround management of portfolio companies. During his tenure at Steel Partners, Mr. Frankfurt served on the Board of Directors of Puroflow, Inc. Mr. Frankfurt graduated from the Wharton School of Business at the University of Pennsylvania with a B.S. in Economics and received an M.B.A. from the Anderson Graduate School of Management at UCLA.

CERTAIN INFORMATION CONCERNING THE PARTICIPANTS

The Charming Shoppes Full Value Committee (the “Committee”), together with the other participants named herein, intends to make a preliminary filing with the Securities and Exchange Commission (“SEC”) of a proxy statement and an accompanying WHITE proxy card to be used to solicit votes for the election of its slate of nominees at the 2008 annual meeting of shareholders of Charming Shoppes, Inc., a Pennsylvania corporation (the “Company”).

THE COMMITTEE ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST.

The participants in the proxy solicitation are Crescendo Partners II, L.P., Series Q, a Delaware limited partnership (“Crescendo Partners II”), Crescendo Investments II, LLC, a Delaware limited liability company ("Crescendo Investments II"), Crescendo Partners III, L.P., a Delaware limited partnership (“Crescendo Partners III”), Crescendo Investments III, LLC, a Delaware limited liability company (“Crescendo Investments III”), Myca Master Fund, Ltd, a Cayman Islands company (“Myca Master Fund”), Myca Partners Inc., a Delaware corporation (“Myca Partners”), Eric Rosenfeld, Arnaud Ajdler, Michael Appel and Robert Frankfurt.

Crescendo Partners II beneficially owns 7,354,125 shares of Common Stock of the Company. As the general partner of Crescendo Partners, Crescendo Investments II may be deemed to beneficially own the 7,354,125 shares of the Company beneficially owned by Crescendo Partners II.

Crescendo Partners III beneficially owns 378,275 shares of Common Stock of the Company. As the general partner of Crescendo Partners III, Crescendo Investments III may be deemed to beneficially own the 378,275 shares of the Company beneficially owned by Crescendo Partners III.

Eric Rosenfeld, as the managing member of Crescendo Investments II, which in turn is the general partner of Crescendo Partners II, may be deemed to beneficially own the 7,354,125 shares of the Company owned by Crescendo Partners II. Additionally, Eric Rosenfeld, as the managing member of Crescendo Investments III, the general partner of Crescendo Partners III, may be deemed to beneficially own the 378,275 shares of the Company owned by Crescendo Partners III.

Myca Master Fund beneficially owns 1,523,405 shares of Common Stock of the Company. As the investment manager of Myca Master Fund, Myca Partners may be deemed to beneficially own the 1,523,405 shares of the Company beneficially owned by Myca Master Fund.

Robert Frankfurt, as the President of Myca Partners, the investment manager of Myca Master Fund, may be deemed to beneficially own the 1,523,405 shares of the Company beneficially owned by Myca Master Fund. Additionally, Robert Frankfurt, as a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, may be deemed to beneficially own the 7,354,125 shares owned by Crescendo Partners II and the 378,275 shares owned by Crescendo Partners III. Mr. Frankfurt disclaims beneficial ownership of the shares owned by Crescendo Partners II and Crescendo Partners III.

Arnaud Ajdler owns 15,000 shares of Common Stock of the Company. As a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, is deemed to beneficially own the 7,354,125 shares owned by Crescendo Partners II, the 378,275 shares owned by Crescendo Partners III and the 1,523,405 shares owned by Myca Master Fund. Mr. Ajdler disclaims beneficial ownership of the shares owned by Crescendo Partners II, Crescendo Partners III and Myca Master Fund.

Michael Appel, through the Michael Appel Rollover IRA account, owns 6,000 shares of Common Stock of the Company. As a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, is deemed to beneficially own the 7,354,125 shares owned by Crescendo Partners II, the 378,275 shares owned by Crescendo Partners III and the 1,523,405 shares owned by Myca Master Fund. Mr. Appel disclaims beneficial ownership of the shares owned by Crescendo Partners II, Crescendo Partners III and Myca Master Fund.

For Additional Information Please Contact:

Crescendo Partners II, L.P.

Eric Rosenfeld or Arnaud Ajdler, (212) 319-7676.

Myca Partners, Inc.

Robert Frankfurt, (212) 587-7611

EX-99.3 4 ex993sc13da107087cha_011408.htm ex993sc13da107087cha_011408.htm

Exhibit 99.3

Execution Version

Agreement effective as of January 11, 2008, by and between Myca Partners, Inc. (“Myca”), on the one hand, and RCG Starboard Advisors, LLC ( “Starboard”), on the other.

RECITALS

A. The parties have had discussions prior to the date hereof in connection with the identification by Myca to Starboard of a potential investment opportunity relating to Charming Shoppes Inc. (the “Target”) and Myca and Starboard initially decided to work together as a group regarding an investment in Target.

B. Starboard has since decided that it will not work with Myca regarding Target and each party will make its own independent investments, voting and disposition decisions.

C. The parties wish to set forth their understanding regarding fees payable to Myca by Starboard for identifying Target as a potential investment opportunity.

NOW THEREFORE, the parties hereto agree as follows:

1. Fee Based on Net Profits.

(a) Starboard hereby agrees to pay Myca $50,000 (the “Upfront Fee”) on the date hereof and an 8% fee based on the Net Profits (as defined below) on the investment by each of Starboard Value and Opportunity Master Fund Ltd., Parche, LLC and RCG Latitude Master Fund, Ltd. (and any other affiliated entity that purchases securities on behalf of the portfolios currently managed by Jeffrey C. Smith, Mark R. Mitchell or Robert Ryon) (collectively, the “Starboard Entities”) in the Target (the “Fee”). The determination of the aggregate amount invested by the Starboard Entities and the Starboard Entities’ Net Profits shall be made by Starboard in good faith in accordance with its regular accounting procedure assessing only broker fees and direct transaction expenses with no cost allocations and taking account of any reimbursement of expenses. Net Profits will be calculated (the “Calculation Period”) for the twelve-month period ending on December 31 of each year except that (i) the first Calculation Period will be from the date of the first investment in Target to

December 31, 2008 and (ii) the last Calculation Period will end on the date that the Starboard Entities no longer have an investment in the Target. Starboard will use its best efforts to calculate and pay to Myca the Fee within 90 days of the end of the Calculation Period. “Net Profits” means, after recoupment of any carryover losses (which will equal any negative value determined when calculating Net Profits in the immediately preceding Calculation Period), (x) all realized gains during a Calculation Period, including dividends and other distributions of value but only to the extent of amounts actually received by the Starboard Entities, less (y) all realized losses during such Calculation Period (and out of pocket fees and expenses incurred relating to the Starboard Entities’ investment in the Target) and (z) the Upfront Fee until the Upfront Fee has been recovered by Starboard. Absent manifest error, Starboard’s calculation of the Fee shall be final and binding; provided, however, that all purchases, sales, broker fees and transaction expenses are reasonably documented and supported.

2. Relationship of Parties. All shares (or other securities) of Target, held by the Starboard Entities whether acquired before, on or after the date hereof, will be subject to the fee arrangements under this Agreement; provided, however, that once the Starboard Entities no longer have an investment in Target (the “Final Sale Date”), no further fees shall be payable to Myca with respect to shares (or other securities) in Target that are subsequently purchased by the Starboard Entities so long as such purchases occur at least six (6) months after the

Final Sale Date. Starboard and its affiliates retain sole authority to vote investments and dispose of the shares in Target held by the Starboard Entities. The parties acknowledge that no agreement exists between Myca and Starboard or any of their respective affiliates to act together for the purpose of acquiring, holding, voting or disposing of equity securities of Target.

3. Limited Liability. Each of Starboard and Myca agrees that none of Starboard, the Starboard Entities or Myca, nor the respective members, officers, employees or affiliates of any of them, shall be liable for any loss arising out of any act or omission hereunder unless arising out of their gross negligence, willful misconduct, malfeasance or bad faith. Notwithstanding any of the foregoing to the contrary, the federal securities laws of the United States impose liability under certain circumstances even on persons who act in good faith, and nothing in this Section 3 constitutes a waiver or limitation of any rights that Starboard may have under such laws.

4. Representations, Warranties and Covenants. Each of the Parties hereby represents and warrants to, and covenants with, the other Parties that:

(a) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has full power and authority to enter into and perform its obligations under this Agreement, that it is qualified to conduct its business and is in good standing in every jurisdiction in which the nature or conduct of its business requires such qualification and failure to so qualify would have a material adverse effect on its ability to comply with or perform its obligations under this Agreement (it being understood that any decision as to the jurisdiction or jurisdictions in which it shall conduct its business is withinits sole discretion), and that this Agreement has been duly and validly authorized, executed and delivered by it and is its valid and binding agreement enforceable in accordance with its terms;

(b) it shall obtain and maintain as current any necessary approvals, consents, licenses and registrations from any governmental entity or any other person or entity necessary to perform its obligations hereunder, and shall use its commercially reasonable best efforts to prevent such approvals, consents and registrations from lapsing or being revoked, suspended, terminated, or not renewed, or being limited or qualified in any respect; and

(c) it shall have complied and will continue to comply with all laws and regulations applicable to it or to its respective businesses, properties or assets, the violation of which would materially adversely affect its ability to comply with and perform its obligations under this Agreement, and, to its knowledge, there are no actions, suits, proceedings, or notices of investigations pending or threatened against it by any governmental entity or before any court, arbitrator or regulatory authority (at law or in equity) regarding its non-compliance with any law or regulation that is reasonably likely to materially and adversely affect its ability to comply with and to perform its obligations under this Agreement, and it shall promptly notify the other parties hereto of the commencement of any such suit, action or proceeding or its receipt of notice of commencement thereof.

5. Miscellaneous.

(a) No party hereto shall by any act (except as provided herein), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder. No failure to exercise, nor any delay in exercising, on the part of any party hereto, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any party hereto of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which any party hereto would otherwise have on any future occasion.

(b) Except as otherwise set forth in this Agreement, this Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted successors and assigns, and nothing herein, express or implied, is intended to or shall confer upon any other person or entity, any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. No party hereto may assign any of its rights or obligations under this Agreement to any person without the prior written consent of the other parties hereto.

(c) This Agreement shall be interpreted in accordance with and governed by the laws of the State of New York. If any provision hereof would be invalid under applicable law, then such provision shall be deemed modified to the extent necessary to render it valid while most nearly preserving its original intent. No provision hereof shall be affected as a result of another provision being held invalid.

(d) Any action or proceeding against the parties hereto relating in any way to this Agreement or the transactions contemplated hereby shall be brought and enforced exclusively in the courts of the State of New York or (to the extent subject matter jurisdiction exists therefor) of the United States in the Southern District of New York, and any courts appealable therefrom, and the parties irrevocably submit to the jurisdiction of all such courts in respect of any such action or proceeding. Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that they may now or hereafter have to the laying of venue of any such action or proceeding in the courts of the State of New York or the United States District Court for the Southern District of New York, and any courts appealable therefrom, and any claim that any such action or proceeding brought in any such court has been brought in any inconvenient forum.

(e) This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and undertakings, both written and oral, between the parties hereto with respect to the subject matter hereof.

(f) This Agreement may be executed by the parties hereto by manual or facsimile signature, and in any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

[signature page follows]

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date and year first above written.

MYCA PARTNERS, INC.


By	/s/ Robert Frankfurt
	Name:	Robert Frankfurt
	Title:	President

RCG STARBOARD ADVISORS, LLC


By	/s/ Owen Littman
	Name:	Owen Littman
	Title:	Authorized Signatory