Charming Shoppes' Settlement Offer to Crescendo and Myca Rejected; Announces Enhancements to Corporate Governance Practices

May 5, 2008 6:15 PM EDT
Charming Shoppes, Inc. (Nasdaq: CHRS) has made a proposal to settle the proxy contest related to the Company's 2008 Annual Meeting of Shareholders. Crescendo Partners and Myca Partners have rejected this settlement offer, which included an offer of a seat on the Charming Shoppes' Board to Mr. Michael C. Appel, one of the Committee's director nominees.

Additionally, the Company announced that it intends to appoint to the Board, promptly following the May 8, 2008 Annual Meeting of Shareholders, two experienced retail executives with significant industry experience: Mr. Richard W. Bennet, III, former Vice Chairman of The May Department Stores Company, and Mr. Michael Goldstein, former Chairman and Chief Executive Officer of Toys "R" Us, Inc. Neither of these individuals have any prior relationship with the Company, its Board of Directors, or its executives. Both Messrs. Bennet and Goldstein were evaluated by an independent search firm and recommended to the Board of Charming Shoppes. Detailed biographies of Messrs. Bennet and Goldstein follow at the end of this press release.

Dorrit J. Bern, Chief Executive Officer, President and Chairman of Charming Shoppes stated, "We are disappointed that the Committee rejected our settlement offer. After having spoken with many of our largest shareholders, we believe our offer to add Mr. Appel, together with Messrs. Bennet and Goldstein, to the Board is aligned with the majority of our shareholders' wishes and interests. Our settlement offer to the Committee remains in place and we believe it is in the best interests of all Charming Shoppes shareholders to resolve this matter so that we can move ahead with our efforts to improve our operational and financial performance and create shareholder value."

Notwithstanding the Committee's rejection of the Company's settlement offer, the Board has reiterated its offer to appoint Mr. Michael C. Appel, one of the Committee's nominees and the only Committee nominee to have received the support of three independent proxy advisory firms, to the Board.

Charming Shoppes' Board has unanimously voted to recommend that shareholders approve the elimination of the classified board structure. The proposal will be submitted for shareholder approval at the 2009 Annual Meeting of Shareholders.

The Company's Board of Directors has also unanimously voted not to extend the Company's Shareholder Rights Plan, which has been in place since 1999 and is scheduled to expire in April 2009, prior to the Company's next annual meeting.

Additionally, the Company's Board of Directors has voted to separate the duties of Chairman of the Board and Chief Executive Officer. Following the Company's 2008 Annual Meeting of Shareholders, the Board of Directors will appoint an independent non-executive Board member as Chairman of the Board.

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