Employment Agreement - AnnTaylor Inc. and Dwight F. Meyer


                   EMPLOYMENT AGREEMENT


      THIS EMPLOYMENT AGREEMENT (the 'Agreement') is entered
into  between  AnnTaylor, Inc., a Delaware corporation  (the
'Company'),  and  DWIGHT  F.  MEYER  ('Executive'),  as   of
September 20, 1996.

                    R E C I T A L S:
                    ----------------

     WHEREAS, Executive presently serves as President of CAT
US Inc. ('CAT'), a corporation 40% owned by the Company; and

      WHEREAS,  pursuant  to  a  Stock  and  Asset  Purchase
Agreement  dated  as  of  June  7,  1996  (as  amended,  the
'Purchase  Agreement'),  among Cygne  Designs,  Inc.,  Cygne
Group  (F.E.)  Limited,  the Company  and  AnnTaylor  Stores
Corporation,   a   Delaware  corporation  and   the   parent
corporation of the Company ('ATSC'), the Company intends  to
acquire, among other things, the remaining outstanding stock
of  CAT and, upon consummation of such acquisition, CAT will
become a wholly owned subsidiary of the Company and will  be
known   as  AnnTaylor  Global  Sourcing,  Inc.  (hereinafter
referred to as 'ATGS'); and

      WHEREAS, the services of Executive, his experience and
knowledge  of  the affairs of ATGS and the Company  and  his
reputation  and  contacts  in the  industry  are  considered
valuable  to the Company, and the Company desires to  employ
Executive  and  Executive desires  to  be  employed  by  the
Company upon the terms and conditions hereinafter set forth;

      
      
      NOW,  THEREFORE, the parties hereto,  for  the
consideration herein set forth and the mutual covenants herein 
contained  and intending to be legally bound hereby,  agree  as
follows:
      
      Section 1.  Employment.  Subject to Section 16 hereof,
                  ----------
the  Company hereby agrees to employ Executive as  Executive
Vice  President of Sourcing of the Company and  ATGS  during
the  term set forth in Section 2 below and Executive  hereby
accepts  employment with the Company and ATGS and agrees  to
perform   his  duties  and  responsibilities  hereunder   in
accordance  with  the terms and conditions  hereinafter  set
forth.
      
      Section 2.  Term.  The term of employment of Executive
                  ----
under this Agreement (the 'Term of Employment') shall be for
a  period  commencing  on the date of  the  closing  of  the
transactions  contemplated by the  Purchase  Agreement  (the
'Starting  Date'), and shall continue, unless earlier  
terminated  pursuant to Section 8 hereof, for a period  of  three
years from the Starting Date.
      
      Section  3.  Duties and Responsibilities.  During  the
                   ---------------------------
Term  of  Employment, Executive shall perform and  discharge
such  executive duties and responsibilities as  may  be  
prescribed  from  time to time by the Board of  Directors  (the
'Company  Board'),  the Chairman or  the  President  of  the
Company.   The  principal location at which  Executive  will
perform  his services will be at ATGS's offices in New  York
City (except for required travel on the Company's business).

      Section 4.  Extent of Service.  During the Term of  
                  -----------------
Employment,  Executive shall devote substantially all  of  his
business  time and attention, reasonable vacation  time  and
absences  for  sickness excepted, to  the  business  of  the
Company  and  ATGS.  Executive shall perform the  duties  as
signed to him with fidelity and to the best of his ability.

      Section 5.  Compensation.  For all services to be  
                  ------------
rendered by Executive in any capacity hereunder during the Term
of Employment, the Company shall pay, or shall cause ATGS to
pay,   Executive   the  following  types  and   amounts   of
compensation:

           
           5.1.   Base  Salary.  The Company shall  pay,  or
                  ------------
shall cause ATGS to pay, Executive a base salary of $350,000
per  annum,  such salary to be paid in conformity  with  the
Company's  policies  relating to  salaried  employees.   The
Company  agrees to review annually Executive's base  salary,
and  may  increase  Executive's  base  salary  at  its  sole
discretion.
          
          5.2.  Benefits.  Executive shall, as long as he is
                --------
a  full-time employee of the Company or ATGS, have the right
to  receive vacation, sick pay, life, medical and disability
insurance  benefits  and other fringe benefits  provided  to
executive  employees of the Company generally.  The  Company
shall  waive  or  cause  to be waived the  one-year  waiting
period  after commencement of employment applicable  to  its
life insurance and group accident insurance programs and any
other  program where such waiver will not be a violation  of
any  Federal  or state law or regulation.  The Company  will
reimburse Executive for travel, entertainment and other 
business  expenses reasonably incurred by him in connection with
the business of the Company consistent with Company policy.

           
          5.3.   Annual Bonus.  During the Term  of  Employment,
                 ------------
the Executive shall be eligible to participate in  the
Company's annual bonus plan as in effect from time to  time,
and shall be entitled to receive such amounts (a 'Bonus') as
may be authorized, declared and paid by the Company pursuant
to  the  terms  of  such plan.  ATSC currently  maintains  a
Management  Performance Compensation Plan (the  'Performance
Plan'),  a  copy  of  which is attached to  this  Agreement,
pursuant  to which certain executives and employees  of  the
Company  are  paid  performance bonus compensation.   It  is
agreed  that  Executive shall participate in the Performance
Plan  effective as of the Starting Date.  Executive's 
Performance Percentage (as that term is defined in the Performance
Plan)  shall be established at 40% during the first year  of
participation  under the Performance Plan (20%  per  season)
and   thereafter   the  Performance  Percentage   shall   be
determined   as   provided   in   the   Performance    Plan.
Notwithstanding the foregoing, the minimum bonus to be  paid
to  Executive  under the Performance Plan or  otherwise  for
each  of  the fall season of 1996 and the spring  season  of
1997  shall  be  $35,000,  provided  Executive's  employment
hereunder during such period has not been terminated by  the
Company for Cause or by the Executive without Good Reason.
           
           5.4.  Stock Options.  The Executive will be grant
                 -------------
ed  a  time-vested  Non-Qualified Stock  Option  to  acquire
35,000 shares (the 'Option Shares') of common stock of  ATSC
(the  'Common Stock') under ATSC's Amended and Restated 1992
Stock  Option and Restricted Stock and Unit Award Plan  (the
'Option  Plan')  with an exercise price equal  to  the  fair
market  value (as defined and determined as of the  Starting
Date under the Option Plan) of the Common Stock.  The Option
shall   vest   in  accordance  with  the  vesting   schedule
applicable  to  the  options granted to the  Company's  
associates  in 1996 under the Option Plan.  The Executive  shall
be  eligible to receive additional options under the  Option
Plan  or other and additional option plans as may be adopted
by  ATSC during the Term of Employment, taking into account,
among  other  things, Executive's performance  and  position
with the Company.
          
          5.5  Anniversary Bonus.  Subject to the provisions
               -----------------
of  Section 8 hereof, the Company shall, or shall cause ATGS
to,  pay  to  Executive  a  one-time  anniversary  bonus  of
$400,000 on September 21, 1997.
     
     
     Section 6.  Covenant Not to Compete.
                 -----------------------
           
           6.1.  During the period in which Executive is  
employed  by the Company or ATGS and for a period of one  year
thereafter, Executive shall not:
               
               6.1.1.  Engage or participate in any activity
or  business (other than as an investor owning not more than
1%  of  the  voting securities of any publicly-held  corporation)
which is the same or similar to the business  engaged
in  by  the Company or ATGS, or, with regard to the one-year
period referred to above, engaged in by the Company or  ATGS
at  the  time of termination of Executive's employment  with
the Company or ATGS.
                
                6.1.2.   Serve as, act as or be an employee,
agent,  consultant,  representative,  officer,  director  or
investor (other than as an investor owning not more than  1%
of  the  voting securities of any publicly-held corporation)
with  or  of,  or  receive any payment in the  way  of  
remuneration  from, any entity, or an Affiliate (as  defined  in
Section      6.3)     thereof,     which     engages      or
becomes  engaged in any activity or business  which  is  the
same or similar to the business engaged in by the Company or
ATGS,  or,  with regard to the one-year period  referred  to
above,  engaged  in by the Company or ATGS at  the  time  of
termination.
           
           6.2.  Directly or indirectly, for himself, or  on
behalf  of  or in conjunction with any entity, (a)  solicit,
raid, entice or induce any person who is an employee of  the
Company or any of its Affiliates, or, with regard to the
one-year  period  referred  to above, was  an  employee  of  the
Company or any of its Affiliates at the time Executive's  
employment  was  terminated,  to (i)  refrain  from  rendering
services  to,  or  (ii) become employed  by  or  enter  into
contractual relations with any person or entity  other  than
the  Company or any of its Affiliates or (b) interfere with,
disrupt  or attempt to disrupt the relationship, contractual
or  otherwise, between the Company or any of its Affiliates,
and  any  franchisor, customer, supplier, lessor, lessee  or
employee of the Company or any of its Affiliates.

           6.3.   For  the  purposes of this  Agreement,  an
'Affiliate'  of any entity is any person, firm,  partnership
or corporation which, directly or indirectly, through one or
more intermediaries, owns or controls, or is controlled  by,
or  is under common control with, any such entity.  For  the
purposes of this Agreement, 'control' when used with respect
to  any  specified  entity means the  power  to  direct  the
management and policies of such entity, directly or indirect
ly,  whether through the ownership of voting securities,  by
contract  or  otherwise;  and the  terms  'controlling'  and
'controlled' have meanings relative to the foregoing.

           6.4.  Executive declares that the foregoing  time
limitations  are  reasonable and properly required  for  the
adequate protection of the business of the Company.  In  the
event  that the provisions of this Section 6 should ever  be
deemed   to   exceed  the  time  limitations  permitted   by
applicable  law,  then  such  provisions  shall  be   deemed
reformed  to  the  maximum  time  limitations  permitted  by
applicable law.

           
           6.5.   Executive  specifically  acknowledges  and
agrees  that  the  remedy  at law  for  any  breach  of  the
provisions of this Section 6 will be inadequate (for reasons
which  include,  but  are  not limited  to,  the  fact  that
Executive's  talents, and the services  to  be  provided  by
Executive, are unique) and that the Company, in addition  to
any  other  relief  available to it, shall  be  entitled  to
temporary  and  permanent  injunctive  relief  without   the
necessity  of proving actual damage.  The existence  of  any
claim  or  cause of action by Executive against the  Company
shall  not  constitute a defense to the enforcement  by  the
Company  of  the  foregoing restrictive covenant,  but  such
claim or cause of action shall be litigated separately.

          
          6.6.  Executive (a) acknowledges and agrees that a
substantial   and   legally  sufficient   portion   of   the
consideration  payable  by  the  Company  pursuant  to  this
Agreement  is attributable to the non-competition  and  
non-interference  covenants of this Section  6  and  (b)  hereby
expressly  waives  any  right to assert  inadequacy  of  
consideration  as defense to enforcement of the non-competition
and non-interference covenants in this Section 6 should such
enforcement ever become necessary.

            
            6.7.   Notwithstanding  any  provision  of  this
Section  6  to  the  contrary,  if  the  Company's  business
operations  are terminated and such business operations  are
not  carried on by any successor succeeding to the Company's
obligations under this Agreement, then Executive shall  have
no further obligation of any nature on and after the date of
such termination under the provisions of this Section 6.

     
     Section 7.  Protection of Confidential Information.
                 --------------------------------------
          
          7.1  Executive acknowledges that his employment by
the Company will, throughout the Term of Employment, involve
his   obtaining   knowledge   of  confidential   information
regarding  the business and affairs of the Company  and  its
Affiliates.  In recognition of the foregoing, the  Executive
covenants and agrees that:

                7.1.1   Except in compliance with legal  
process,  he will keep secret all confidential matters  of  the
Company  and its Affiliates which are not otherwise  in  the
public  domain and will not intentionally disclose  them  to
anyone outside of the Company, wherever located (other  than
to  a  person to whom disclosure is reasonably necessary  or
appropriate in connection with the performance by  Executive
of  his  duties  as  an executive officer of  the  Company),
either  during or after the Term of Employment, except  with
the  prior written consent of the Company Board or a  person
authorized thereby; and

                
                7.1.2  He will deliver promptly to the 
Company  on  termination of his employment, or at any other  time
the  Company may so request, all memoranda, notes,  records,
customer lists, reports and other documents (and all  copies
thereof)  relating  to the business of the  Company  or  its
Affiliates which he created, generated or obtained while  
employed by, or otherwise serving or acting on behalf of,  the
Company or ATGS and which he may then possess or have  under
his control.
           
           7.2.   Executive  specifically  acknowledges  and
agrees  that  the  remedy  at law  for  any  breach  of  the
provisions of this Section 7 will be inadequate and that the
Company,  in addition to any other relief available  to  it,
shall  be  entitled  to  temporary and permanent  injunctive
relief without the necessity of proving actual damage.   The
existence  of  any  claim or cause of  action  by  Executive
against  the Company shall not constitute a defense  to  the
enforcement  by  the  Company of the  foregoing  restrictive
covenant,  but  such  claim  or cause  of  action  shall  be
litigated separately.
      
      Section 8.  Termination of Employment.  This Agreement
                  -------------------------
shall  terminate (except for Sections 6, 7 and  8)  and  the
Company  and  ATGS  shall  have  no  further  liability   or
obligation  hereunder, on the earlier of (a) the  expiration
of  the Term of Employment, or (b) the occurrence of any one
of the following events:

          
          8.1.  Disability.  In the event that Executive has
                ----------
a  Total Disability (as hereinafter defined), this Agreement
may  be  terminated by the Company, and in  such  event  the
Company  and  ATGS  shall  have  no  further  liability   or
obligation  to  Executive for compensation hereunder,  other
than  for  (i) amounts accrued as of the date of  the  Total
Disability pursuant to Section 5 of this Agreement, (ii)  if
such  event occurs on or before September 21, 1997, the full
amount of the anniversary bonus referred to in Section  5.5,
and (iii) an amount equal to Executive's then current annual
base  salary,  payable in installments for a  period  of  12
months.  'Total Disability' shall mean a physical or  mental
condition  which  renders Executive unable  to  perform  the
normal duties of his employment with the Company or ATGS and
is  expected  to be of extended duration of at  least  three
months  or  result  in death.  A Total Disability  shall  be
deemed  to  have  occurred as of the  date  of  any  medical
opinion  satisfactory  to the Company  to  that  effect  and
reasonably   satisfactory  to   Executive   or   his   legal
representative.
           
           8.2.   Death.   In the event that Executive  dies
                  -----
during  the Term of Employment, the Company shall, or  shall
cause  ATGS  to,  pay to his executors or administrators  an
amount equal to (i) amounts accrued as of the date of  death
pursuant to Section 5 of this Agreement, (ii) if such  event
occurs  on or before September 21, 1997, the full amount  of
the  anniversary bonus referred to in Section 5.5, and (iii)
amounts payable as a result of Executive's death as provided
for  under  and in accordance with the Company's  insurance,
survivors'  income  and other employee welfare  and  benefit
plans,  if any, covering Executive.  Thereafter, the Company
and  ATGS  shall have no further liability or obligation  to
Executive's  executors  or  administrators,  his  heirs  and
assigns or any other person claiming under or through him.

           
           8.3.   With  Cause.  This Agreement  (except  for
                  -----------
Sections  6,  7 and 8) may be terminated by the Company,  at
any  time, for Cause.  In the event this Agreement is  
terminated  by  the  Company pursuant to this  Section  8.3,  the
Company  shall,  or shall cause ATGS to,  pay  to  Executive
amounts  accrued as of the date of the termination  pursuant
to  Section  5 of this Agreement but shall have  no  further
liability  to  Executive pursuant to this Agreement  or  any
person  claiming under or through him.  Termination  by  the
Company for Cause shall mean Termination because of (i)  the
Executive's conviction for the commission of any act or acts
constituting a felony under the laws of the United States or
any  state thereof, (ii) action by the Executive toward  the
Company  or ATGS involving dishonesty, (iii) the Executive's
refusal  to  abide  by or follow written directions  of  the
Company's Board, Chairman or President, (iv) the Executive's
gross  nonfeasance which does not cease within ten  business
days  after notice regarding nonfeasance has been  given  to
the  Executive by the Company, (v) failure of the  Executive
to  comply with the provisions of Section 6 or Section 7  of
this  Agreement,  or  (vi)  other  willful  conduct  by  the
Executive which is intended to have and does have a material
adverse impact on the Company or ATGS.

           8.4.   By Executive.  This Agreement (except  for
                  ------------
Sections 6, 7 and 8) may be terminated by Executive, in  his
sole discretion, at any time upon thirty days' prior written
notice.   In the event this Agreement is terminated  by  the
Executive  pursuant to this Section 8.4, the Company  shall,
or shall cause ATGS to, pay to Executive all amounts accrued
as  of the date of the termination pursuant to Section 5  of
this Agreement.  Thereafter, the Company and ATGS shall have
no  further  liability or obligation to the  Executive,  the
Executive's  executors  or  administrators,  his  heirs  and
assigns, or any other person claiming under or through him.

           
           8.5.  Without Cause.  This Agreement (except  for
                 -------------
Sections 6, 7 and 8) may be terminated without Cause by  the
Company  at  any  time.   In  the event  this  Agreement  is
terminated by the Company pursuant to this Section 8.5,  the
Company shall, or shall cause ATGS to, pay to Executive  (a)
all  amounts accrued as of the date of the termination 
pursuant  to Section 5 of this Agreement, (b) if such termination
occurs  on or before September 21, 1997, the full amount  of
the  anniversary bonus referred to in Section 5.5,  and  (c)
for  a period of 12 months or, if less, the remainder of the
original  Term  of  Employment,  an  amount  equal  to   the
Executive's  then  current monthly  base  salary;  provided,
                                                   --------
however, that such payments shall cease as of the date  when
- -------
Executive becomes employed on a full-time basis by a person,
firm,  partnership or corporation other than the Company  or
ATGS.

            
            8.6.   By  Executive  for  Good  Reason.    This
                   --------------------------------
Agreement (except for Sections 6, 7 and 8) may be terminated
by  the Executive for Good Reason at any time.  In the event
this  Agreement is terminated by Executive pursuant to  this
Section 8.6, the Company shall, or shall cause ATGS to,  pay
to  Executive (a) all amounts accrued as of the date of  the
termination pursuant to Section 5 of this Agreement, (b)  if
such termination occurs on or before September 21, 1997, the
full  amount of the anniversary bonus referred to in Section
5.5,  and  (c)  for a period of 12 months or, if  less,  the
remainder  of  the  original Term of Employment,  an  amount
equal  to the Executive's then current monthly base  salary;
provided, however, that such payments shall cease as of  the
- --------  -------
date when Executive becomes employed on a full-time basis by
a  person, firm, partnership or corporation other  than  the
Company  or ATGS.  As used herein, 'Good Reason' shall  mean
(i)  failure  to  re-elect Executive as  an  Executive  Vice
President  (provided that such failure is not in  connection
with  a termination of Executive's employment hereunder  for
Cause),  or (ii) a material change in Executive's authority,
functions,  duties or responsibilities as an Executive  Vice
President  which  would  cause his  position  to  become  of
significantly  less dignity, responsibility,  importance  or
scope, or (iii) a failure of the Company to comply with  the
provisions of Section 5, after the Company shall  have  been
given written notice and thirty days to cure.

      
      Section 9.  Arbitration.  Any controversy, dispute  or
                  -----------
claim  arising out of or in connection with this  Agreement,
or  the  breach,  termination or validity hereof,  shall  be
settled by final and binding arbitration to be conducted  by
an arbitrator in New York, New York pursuant to the rules of
the  American  Arbitration Association.  The Office  of  the
American Arbitration Association in New York, New York shall
make  the  necessary appointment of such arbitrator pursuant
to  the  rules  thereof.   The  decision  or  award  of  the
arbitrator  shall be final, and judgment upon such  decision
or   award  may  be  entered  in  any  competent  court   or
application may be made to any competent court for  judicial
acceptance  of  such  decision or  award  and  an  order  of
enforcement.   In  the  event of any procedural  matter  not
covered  by the aforesaid rules, the procedural law  of  The
State of New York shall govern.

      
      Section  10.  Contents of Agreement, Parties in  Interest,
                    -------------------------------------------
Assignment, etc.  This Agreement sets forth the entire
- ----------------
understanding  and  supersedes all  prior  agreements,  both
written   and   oral,  between  the  parties   hereto.    No
representation, promise, inducement or statement  of  intent
has  been  made by any party to this Agreement to any  other
party  to  this  Agreement which is  not  embodied  in  this
Agreement, and no party shall be bound by or liable for  any
alleged representation, promise, inducement or statement  of
intention  not embodied herein with respect to  the  subject
matter  hereof.   All  of the terms and provisions  of  this
Agreement shall be binding upon and inure to the benefit  of
and be enforceable by the respective heirs, representatives,
successors  and  assigns  of the parties  hereto;  provided,
however,  that the duties and responsibilities of  Executive
hereunder and any right to receive payments hereunder  shall
neither  be assigned nor transferred in whole or in part  by
Executive.   The  Company agrees that it  will  require  any
successor   (including,  without  limitation,   by   merger,
operation  of law, consolidation, assignment or purchase  of
all  or  substantially all of the assets of the Company)  to
assume expressly and agree to perform this Agreement.   This
Agreement  shall not be amended except by written instrument
duly executed by the Company and Executive.

       
       Section   11.    Severability.   The  invalidity   or
                        ------------
unenforceability  of  any  particular  provision   of   this
Agreement shall not affect the other provisions hereof,  and
this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.

      
      Section  12.  Governing Law.  This Agreement shall  be
                    -------------
construed and interpreted in accordance with the laws of the
State  of New York relating to contracts to be performed  in
the State of New York.

      
      Section 13.  Notices.  All notices, consents,  waivers
                   -------
or  communications which are required or permitted hereunder
shall  be  sufficient  if  given in  writing  and  delivered
personally  or  by  registered  or  certified  mail,  return
receipt  requested, postage prepaid, as follows (or to  such
other addressee or address as shall be set forth in a notice
given in the same manner):

     
     If to the Company:
          
          AnnTaylor, Inc.
          
          142 West 57th Street
          
          New York, New York  10019
          
          Attn:  General Counsel
     
     If to Executive:
          
          Mr. Dwight F. Meyer
          
          12 Woodside Avenue
          
          Westport, Connecticut  06880

All  such notices shall be deemed to have been given on  the
date delivered or mailed in the manner provided above.

      
      Section  14.  Waiver.  No purported waiver  of  either
                    ------
party  of  any  default by the other party of  any  term  or
provision contained herein shall be deemed to be a waiver of
such  term or provision unless the waiver is in writing  and
signed  by the waiving party.  No such waiver shall  in  any
event be deemed a waiver of any subsequent default under the
same or any other term or provision contained herein.

      
      Section  15.   Counterparts.  This  Agreement  may  be
                     ------------
executed in any number of counterparts, each of which  shall
be  deemed  an  original  but all of  which  shall  together
constitute but one instrument.
       
       Section  16.     Effectiveness.  This  Agreement   is
                        -------------
conditioned  upon and shall be of no force or effect  unless
and  until  the  transactions contemplated by  the  Purchase
Agreement have been consummated.
       
       Section   17.     Termination  of  Prior   Agreement.
                         ----------------------------------
Executive hereby acknowledges that, upon the Starting  Date,
the  Employment Agreement, dated as of May 1, 1992 (the 'CAT
Agreement'),  between Executive and CAT US,  Inc.  shall  be
terminated   and  of  no  further  force  and  effect.    In
consideration  of the sum of $1,600,000 to be  paid  to  the
Executive  on  the Starting Date (less required  withholding
taxes, if any) Executive hereby releases the Company,  ATSC,
CAT  US,  Inc.,  C.A.T. (Far East) Ltd. and  Cygne  Designs,
Inc.,  as of the Starting Date, from any and all liabilities
and  obligations under the CAT Agreement, including, without
limitation, the obligations of Cygne Designs, Inc. under the
Guaranty attached to the CAT Agreement.

      The  parties have set their hands on the day and  year
first above mentioned.

                              
                              ANNTAYLOR, INC.

                              By:_____________________________
                              
                              Chairman and Chief Executive Officer

                              EXECUTIVE

                              ____________________________
                              
                              Dwight F. Meyer