The
Charming Shoppes Full Value Committee Responds to Company's Announced Corporate
Governance Reforms and Proposed Appointment of Two Additional
Directors
Criticizes
Company for Mischaracterizing Settlement Discussions
Calls
Last-Minute Corporate Governance Reforms a Thinly-Veiled Attempt to Stave Off
Accountability and to Confuse the Real Issue at the Annual Meeting - Charming
Shoppes' Poor Operational and Stock Performance
Urges
Shareholders to vote the WHITE Proxy Card to Elect Directors Who Will Represent
Their Best Interests and Promote an Environment of Accountability in the
Boardroom
NEW YORK,
May 6, 2008 -- The Charming Shoppes Full Value Committee (the "Committee")
responded to yesterday's announcement by Charming Shoppes, Inc. ("Charming
Shoppes" or the "Company") (Nasdaq: CHRS - News) that the
Company intends to appoint two new directors to the Board after the 2008 Annual
Meeting and that it has adopted last-minute corporate governance
reforms.
On the
Company's Self-Serving Mischaracterization of Settlement
Discussions
The
Committee criticized the Company for deliberately mischaracterizing the
settlement discussions that were taking place between the parties. The day
before the Company's announcement, the Committee made a good faith
counter-proposal to settle the proxy contest.
"For
Charming Shoppes to announce that the Committee rejected its settlement offer
one day after receiving the Committee's counter-proposal without responding to
us calls into question whether Charming Shoppes ever had a genuine interest in
settling this matter or was merely using these discussions to further its own
self-serving agenda," stated Eric Rosenfeld, President and CEO of Crescendo
Partners.
"The
Committee has made it clear that we are only willing to agree to a settlement
that involves a shareholder representative from either Crescendo Partners or
Myca Partners being added to the Board in addition to Michael Appel, whom the
Board has already claimed it would support. We believe that our counter-proposal
was fair and reasonable in light of the significant deterioration of shareholder
value under this Board's watch, this Board's waste of corporate assets and
shareholders' money in trying to disenfranchise shareholders and this Board's
lack of accountability."
On the
Company's Eleventh Hour Corporate Governance Reforms
Commenting
on the last-minute corporate governance reforms that were suddenly announced by
the Company, Mr. Rosenfeld stated, "While we welcome the admission by this Board
into the modern world of corporate governance, we believe all of the credit for
these eleventh hour reforms is due to the pressure that the shareholders -- the
true owners of Charming Shoppes -- exerted on the Board through support of our
nominees and platform. While corporate governance is important, operational
performance is paramount. We think all shareholders will see right through these
changes as another last-ditch attempt by the Company to stave off
accountability."
Mr.
Rosenfeld continued, "Shareholders require and deserve representation in the
Charming Shoppes boardroom to ensure that all decisions are made with the
shareholders best interests in mind all of the time, not just in the face of an
election contest."
The
Committee also stated that while such corporate governance reforms represent a
step in the right direction, they do not go far enough. The Committee
highlighted that the proposal to declassify the Board will not be voted on until
next year and requires a supermajority 80% vote of shareholders.
"If the
Board were truly committed to corporate governance reforms, then why would the
Board wait until next year to vote on the proposal, why wouldn't it also propose
to eliminate all of the Company's supermajority provisions in its charter and
why would the members of the Board not publicly state that they intend to vote
their shares in favor of such proposals?" asked Mr. Rosenfeld. "The answer is
because this Board is only willing to do the bare minimum it takes to sway
shareholders' votes at the last minute."
On the
Company's Appointment of 2 Additional Directors After the 2008 Annual
Meeting
The
Committee also questioned the Company's announcement of two directors to the
Board immediately following the Annual Meeting.
"While
the Committee welcomes experienced retail executives to the Board, we question
why the Company did not nominate and recommend these candidates for election at
the Annual Meeting as part of its slate. We view the expansion of the Board
without a shareholder vote in the face of a proxy contest as just another in the
ever-growing laundry list of actions this Board has taken to disenfranchise its
shareholders. We can certainly think of a couple of Board members that these two
candidates could have been appointed to replace, especially when Glass Lewis
gave the entire Compensation Committee an 'F' grade and called for the removal
of all of its members," stated Mr. Rosenfeld.
The
Committee strongly encourages Charming Shoppes shareholders to sign, date, and
return the WHITE proxy card and vote FOR Arnaud Ajdler, Robert Frankfurt and
Michael Appel. Your vote is very important, regardless of how many or how few
shares you own. If you have any questions, or need assistance in voting your
shares, please call our proxy solicitors, D.F. King & Co., Inc. toll-free at
(800) 735-3107.
Contact:
Crescendo
Partners II, L.P.
Eric
Rosenfeld or Arnaud Ajdler, (212) 319-7676
Myca
Partners, Inc.
Robert
Frankfurt, (212)
587-7611