Employment Agreement - AnnTaylor Stores Corp. and Sally Frame Kasaks


                  EMPLOYMENT AGREEMENT


          EMPLOYMENT AGREEMENT (the 'Agreement'), dated
as of February 1, 1994, between ANNTAYLOR STORES 
CORPORATION, a Delaware corporation (the 'Company'), and SALLY
FRAME KASAKS (the 'Executive').

          WHEREAS, the Company and the Executive are
currently parties to an agreement (the 'Prior Agreement')
relating to Executive's employment with the Company; and

          WHEREAS, the Company desires to provide for the
continued service and employment of the Executive with
the Company and the Executive wishes to continue in the
service of the Company, all in accordance with the terms
and conditions provided herein.

          NOW, THEREFORE, in consideration of the 
premises and the respective covenants and agreements of 
the parties herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:

          1.   Employment.  The Company hereby agrees to
continue to employ the Executive, and the Executive
hereby agrees to continue to serve the Company, on the
terms and conditions set forth herein.

          2.   Term.  The initial term of employment of
the Executive by the Company hereunder will commence
effective as of February 1, 1994, and such initial term
will end on January 31, 1997, unless further extended or
sooner terminated as hereinafter provided.  Commencing on
February 1, 1997, and each February 1 thereafter (each
such February 1st, an 'Anniversary Date'), the term of
the Executive's employment shall automatically be 
extended for one additional year unless, not later than 
the July 31 immediately preceding an Anniversary Date, 
either party shall have given notice (a 'Nonrenewal 
Notice') to the other party that it does not wish to 
extend this Agreement.  References hereinafter to the 
'Term' of this Agreement shall refer to both the initial 
term and any extended term of the Agreement hereunder.  
Notwithstanding expiration of the Term or other termination 
of this Agreement, without limiting other provisions that 
survive by their intent, the provisions of Sections 3(b), 
5(c), 10 and 11 hereof shall continue in effect.

          3.   Nature of Performance.

               (a)  Position and Duties.  The Executive
shall continue to serve as Chairman and Chief Executive
Officer of the Company and shall have such 
responsibilities, duties and authority consistent with 
such positions (and not less than her current 
responsibilities, duties and authority) as may from time 
to time be determined by the Board of Directors of the 
Company (the 'Board').  The Executive shall devote 
substantially all of her working time and efforts to the 
business and affairs of the Company; provided that, this 
Agreement shall not be interpreted to prohibit the 
Executive from making passive investments, engaging in 
charitable activities or, subject to prior approval of 
the Board (which approval shall not be unreasonably 
withheld), serving on the board of directors of any 
other corporation.

               (b)  Indemnification.  To the fullest
extent permitted by law and the Company's certificate of
incorporation and by-laws, the Company shall indemnify
the Executive for all amounts (including, without 
limitation, judgments, fines, settlement payments, 
losses, damages, costs and expenses (including 
reasonable attorneys' fees)) incurred or paid by the 
Executive in connection with any action, proceeding, suit 
or investigation arising out of or relating to the 
performance by the Executive of services for, or acting as 
a fiduciary of any employee benefit plans, programs or 
arrangements of the Company or as a director, officer or employee of,
the Company or any subsidiary thereof.  Following the
Term, the Company shall continue to indemnify the Executive with 
respect to such services performed during the Term, to the same 
extent as the Company indemnifies its officers, directors, employees 
and fiduciaries, as applicable.

          4.   Place of Performance.  In connection with
the Executive's employment by the Company, the Executive
shall be based at the principal executive offices of the
Company in the city of New York or at such other principal 
executive office in the New York City Metropolitan
Area as the Company may hereafter maintain, except for 
required travel on the Company's business.

          5.   Compensation and Related Matters.

               (a)  Annual Compensation.

                    (i)  Base Salary.  During the period
     of the Executive's employment hereunder, the Company
     shall pay to the Executive an annual base salary at
     a rate not less than $750,000, such salary to be
     paid in conformity with the Company's policies relating
     to salaried employees.  This salary may be (but
     is not required to be) increased from time to time,
     subject to and in accordance with the annual
     executive performance review procedures of the Company 
     and, if so increased, shall not thereafter be
     decreased during the Term of this Agreement.  Compensation 
     of the Executive by salary payments shall not
     be deemed exclusive and shall not prevent the Executive 
     from participating in any other compensation or
     benefit plan of the Company.  The salary payments
     (including any increased salary payments) hereunder
     shall not in any way limit or reduce any other
     obligation of the Company hereunder, and no other
     compensation, benefit or payment hereunder shall in
     any way limit or reduce the obligation of the Company 
     to pay the Executive's salary hereunder.

                    (ii)  Annual Bonus.  During the
     period of Executive's employment hereunder, 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; provided that, notwithstanding any contrary 
     provisions of such bonus plan, unless the
     Executive's employment is terminated by the Company
     for Cause (as defined in Section 6(c) hereof) or by
     the Executive (other than for Good Reason, as defined 
     in Section 6(d)(1) hereof), the Executive
     shall be entitled to receive any Bonus paid with
     respect to any bonus period completed on or prior
     to the Date of Termination or, in the case a
     Nonrenewal Notice is given by the Company, through
     the scheduled expiration date of the Term (even if
     the Executive terminates her employment prior to
     such scheduled expiration date for Good Reason
     under Section 6(d)(1)(v) hereof).

               (b)  Stock Options.  During the period of
Executive's employment hereunder, the Executive shall be
eligible to be granted options to acquire shares of common 
stock of the Company ('Shares') pursuant to the
Company's stock option plan.  In determining the number
of Shares to be covered by such stock option grants, the
Committee administering the Company's stock option plan
shall take into account, among other things, the position 
of the Executive and the number of Shares covered
by options granted to other executives of the Company.

               (c)  SERP.

                    (i)   Subject to the terms and conditions 
     set forth herein, the Executive shall be
     entitled to payment by the Company of an annual
     supplemental retirement benefit (the 'SERP'), expressed 
     as a life annuity commencing on the Executive's 
     sixty-fifth (65th) birthday, equal to (A) fifty percent 
     (50%) of her 'Final Average Compensation' 
     (as defined in clause (ii) below) minus (B) the sum of 
     (1)  any amounts payable to the Executive under any 
     'defined benefit plan' (as defined in Section 3(35) 
     of the Employee Retirement Income Security Act of 1974), 
     now or hereafter maintained by the Company, including 
     excess benefit or supplemental retirement plans; 
     and (2) any amounts payable to the Executive as annual 
     primary social security retirement benefits.

                    (ii)  As used in this Agreement,
     'Final Average Compensation' shall mean the highest
     average of the Executive's annual salary and Bonus
     payable from the Company for any period of three
     consecutive fiscal years; provided that, the maximum 
     amount of any Bonus to be taken into account
     for any year in determining Final Average Compensation 
     shall be 100% of the Executive's salary for
     the year to which the Bonus relates.

                    (iii) The Executive shall be fully
     vested in the SERP upon the completion of fifteen
     (15) years of service with the Company and attainment 
     of age 55; provided that, the SERP shall be
     fully vested if the Executive's employment is terminated 
     (1) by the Company without Cause (as hereinafter defined), 
     (2) by the Executive for Good Reason (as hereinafter 
     defined), (3) due to the Executive's death, (4) due to 
     the Executive's Disability (as hereinafter defined), 
     or (5) by reason of the expiration of the Term of this 
     Agreement as a result of a Nonrenewal Notice having been 
     provided by the Company.  For purposes hereof, all service 
     by the Executive with the Company or any predecessor, 
     including her prior service from May 1979
     through September 1985, shall be recognized.  In
     the event the Executive's employment is terminated
     under any of the circumstances referred to in the
     foregoing proviso, the amount of the SERP referred
     to in sub-clause (A) of clause (i) above shall be
     determined by multiplying such amount by a fraction
     (not to exceed one (1)) the numerator of which is
     the number of years of service of the Executive as
     of the Date of Termination (taking into account,
     where and to the extent applicable, the additional
     period referred to in Section 7(a)(v) or Section
     7(d)(4) hereof) and the denominator of which is
     fifteen (15).

                    (iv)  The SERP shall be payable on a
     monthly basis in the form of an annuity for the
     Executive's life with fifty percent (50%) of the
     SERP amount being payable after Executive's death
     to her surviving spouse for his life.  The fifty
     percent (50%) survivor benefit referred to in the
     preceding sentence shall also be payable to Executive's 
     surviving spouse in the event of her death
     during employment or her death after cessation of
     employment but prior to commencement of SERP payments.
     SERP payments shall commence on the first
     day of the month following the later of the
     Executive's fifty-fifth (55th) birthday or her Date
     of Termination; provided that, Executive (or, in
     the event of her death, her surviving spouse) may
     elect, at least one year prior to termination of
     employment, to commence receiving SERP payments at
     any later date (but in no event later than the
     later of her sixty-fifth (65th) birthday or her
     Date of Termination).  In the event SERP payments
     commence prior to the Executive's sixty-fifth
     (65th) birthday, the amount of such payments shall
     be actuarially reduced (in accordance with the
     methods and assumptions used under the Company's
     qualified defined benefit pension plan) to reflect
     such early commencement.

                    (v)  Notwithstanding the foregoing
     provisions, if the Executive's employment is terminated 
     by the Company for Cause, all rights of the
     Executive and her spouse to future SERP payments
     shall be forfeited.

               (d)  Other Benefits.  During the period
of Executive's employment hereunder, the Executive shall
continue to be entitled to participate in all other employee 
benefit plans, programs and arrangements of the
Company, as now or hereinafter in effect, which are
applicable to the Company's employees generally or to
its executive officers, as the case may be, subject to
and on a basis consistent with the terms, conditions and
overall administration of such plans, programs and arrangements.  
During the period of Executive's employment
hereunder, the Company shall continue to provide to the
Executive all of the fringe benefits and perquisites
which she is receiving as of the date hereof, at not
less than the levels currently provided, and the Executive 
shall be entitled to participate in and receive any
other fringe benefits or perquisites which may become
available to the Company's executive employees.  Without
limiting the generality of the foregoing, the Company
shall provide the Executive with financial planning and
tax preparation services on a tax-free basis.

               (e)  Vacations and Other Leaves.  The
Executive shall continue to be entitled to the number of
vacation days (and to compensation in respect of earned
but unused vacation days), paid holidays and personal
leave days that she is entitled to as of the date hereof.
               
               (f)  Expenses.  During the period of the
Executive's employment hereunder, the Executive shall be
entitled to receive prompt reimbursement for all reason
able and customary expenses incurred by the Executive in
performing services hereunder, including all expenses of
travel and accommodations while away from home on business 
or at the request of and in the service of the
Company; provided that, such expenses are incurred and
accounted for in accordance with the policies and procedures 
established by the Company.

               (g)  Services Furnished.  The Company
shall continue to furnish the Executive with office
space, stenographic assistance and such other facilities
and services as shall be suitable to the Executive's
position and adequate for the performance of her duties
hereunder.

               (h)  Legal Fees.  The Company shall pay
directly or reimburse the Executive for any legal fees
incurred by the Executive in connection with the negotiation 
and preparation of the Agreement; provided that,
such payment or reimbursement shall not exceed $10,000.

          6.   Termination.  The Executive's employment
hereunder may be terminated without breach of this Agreement 
only under the following circumstances:

               (a)  Death.  The Executive's employment
hereunder shall terminate upon her death.

               (b)  Disability.  If, as a result of the
Executive's incapacity due to physical or mental illness, 
the Executive shall have been absent from her
duties hereunder on a full-time basis for the entire
period of six (6) consecutive months, and within thirty
(30) days after written Notice of Termination (as defined 
in paragraph (e) below) is given (which may occur
before or after the end of such six (6) month period)
shall not have returned to the performance of her duties
hereunder on a full-time basis, the Executive's employment 
hereunder shall terminate for 'Disability.'

               (c)  Cause.  The Company may terminate
the Executive's employment hereunder for 'Cause'.  For
purposes of this Agreement, the Company shall have
'Cause' to terminate the Executive's employment hereunder 
upon (i) the Executive's conviction for the commission 
of an 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 involving
dishonesty (other than good faith expense account disputes), 
(iii) the Executive's refusal to abide by or
follow written directions of the Board, (iv) the
Executive's gross nonfeasance which does not cease with
in ten (10) business days after notice regarding such
nonfeasance has been given to the Executive by the Company 
or (v) failure of the Executive to comply with the
provisions of Section 10 (prior to a Change in Control)
or 11 of this Agreement, or other willful conduct by the
Executive which is intended to have and does have a
material adverse impact on the Company.

               (d)  Termination by the Executive.

                    (1)  The Executive may terminate her
     employment hereunder for 'Good Reason'.  For purposes 
     of this Agreement, the Executive shall have
     'Good Reason' to terminate her employment hereunder
     (i) upon a failure by the Company to comply with
     any material provision of this Agreement which has
     not been cured within ten (10) business days after
     notice of such noncompliance has been given by the
     Executive to the Company, (ii) upon action by the
     Company resulting in a diminution of the
     Executive's title or authority, (iii) upon the
     Company's relocation of the Executive's principal
     place of employment outside of the New York City
     Metropolitan Area, (iv) one year after a 'Change in
     Control of the Company' (as defined in paragraph
     (d)(2) below) or (v) at any time following the
     expiration of ninety (90) days following the
     Company's issuance of a Nonrenewal Notice.  The
     Executive may terminate her employment voluntarily
     without Good Reason upon at least six months' prior
     notice to the Company.

                    (2)   For purposes of this Agreement, 
     a 'Change in Control of the Company' will be
     deemed to have occurred if:

               (A)  any 'person', as such term is used
                    in Sections 13(d) and 14(d) of the
                    Securities Exchange Act of 1934, as
                    amended (the 'Exchange Act'), other
                    than (1) the Company, (2) Merrill
                    Lynch & Co. or any affiliate there
                    of, which for purposes of this
                    Agreement shall include First Capital 
                    Partners Inc. and its affiliates
                    (collectively, 'ML'), (3) any trustee 
                    or other fiduciary holding securities 
                    under an employee benefit
                    plan of the Company, or (4) any 
                    corporation owned, directly or indirectly, 
                    by the stockholders of the Company in 
                    substantially the same proportion as 
                    their ownership of Shares)
                    (a 'Person'), is or becomes the 'beneficial 
                    owner' (as defined in Rule
                    13d-3 under the Exchange Act), directly 
                    or indirectly, of securities
                    of the Company representing 30% or
                    more of the combined voting power of
                    the Company's then outstanding
                    voting securities (not including in
                    the securities beneficially owned by
                    such Person securities acquired
                    directly from ML representing in
                    excess of 15% of the combined voting
                    power of the Company's then
                    outstanding voting securities but
                    including any such securities
                    acquired directly from ML representing 
                    up to 15% of such combined
                    voting power);

               (B)  during any period of not more than
                    two consecutive years, individuals
                    who at the beginning of such period
                    constitute the Board, and any new
                    director (other than a director designated 
                    by a person who has entered
                    into an agreement with the Company
                    to effect a transaction described in
                    clause (A), (C), or (D) of this Section 
                    6(d)(2)) whose election by the
                    Board or nomination for election by
                    the Company's stockholders was approved 
                    by a vote of at least two-thirds (2/3) 
                    of the directors then still in office 
                    who either were directors at the beginning 
                    of the period or whose election or nomination
                    for election was previously so approved, 
                    cease for any reason to constitute at least 
                    a majority thereof;

               (C)  the stockholders of the Company approve 
                    a merger or consolidation of
                    the Company with any other corporation, 
                    other than (1) a merger or consolidation 
                    which would result in the
                    voting securities of the Company
                    outstanding immediately prior there
                    to continuing to represent (either
                    by remaining outstanding or by being
                    converted into voting securities of
                    the surviving or parent entity) 50%
                    or more of the combined voting power
                    of the voting securities of the Company 
                    or such surviving or parent
                    entity outstanding immediately after
                    such merger or consolidation or (2)
                    a merger or consolidation effected
                    to implement a recapitalization of
                    the Company (or similar transaction)
                    in which no Person is or becomes the
                    beneficial owner (as defined in (A)
                    above), directly or indirectly, of
                    securities of the Company represent
                    ing 30% or more of the combined voting 
                    power of the Company's then outstanding 
                    securities (not including
                    in the securities beneficially owned
                    by such Person securities acquired
                    directly from ML representing in excess 
                    of 15% of the combined voting
                    power of the Company's then outstanding 
                    voting securities but including any such 
                    securities acquired directly from ML 
                    representing up to 15% of such combined 
                    voting power); or

               (D)  the stockholders of the Company approve 
                    a plan of complete liquidation
                    of the Company or an agreement for
                    the sale or disposition by the Company 
                    of all or substantially all of
                    the Company's assets (or any transaction 
                    having a similar effect).

               (e)  Notice of Termination.  Any termination 
of the Executive's employment by the Company or by the Executive 
(other than termination under Section 6(a) hereof) shall be 
communicated by written Notice of Termination to the other party hereto 
in accordance with Section 13 hereof.  For purposes of this Agreement, a
'Notice of Termination' shall mean a notice which shall indicate the 
specific termination provision in this Agreement relied upon and shall 
set forth in reasonable detail the facts and circumstances claimed to 
provide a basis for termination of the Executive's employment
under the provision so indicated.

               (f)  Date of Termination.  'Date of Termination' 
shall mean (i) if the Executive's employment is terminated by her 
death, the date of her death, (ii) if the Executive's employment is 
terminated pursuant to subsection (b) above, the date which is the 
later of thirty (30) days after Notice of Termination is given
(provided that the Executive shall not have returned to
the performance of her duties on a full-time basis during such 
thirty (30)-day period) or the end of the six (6) consecutive month 
period referred to in Subsection (b) above, and (iii) if the 
Executive's employment is terminated pursuant to subsection 
(c) or (d) above, the date specified in the Notice of Termination; 
provided that, if within thirty (30) days after any Notice of
Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination 
shall be the date on which the dispute is finally
determined, either by mutual written agreement of the
parties or by a binding and final arbitration award.

          7.   Compensation Upon Termination or During
Disability.

               (a)  Disability.  During any period that
the Executive fails to perform her duties hereunder as a
result of incapacity due to physical or mental illness,
the Executive shall continue to receive her full salary
at the rate then in effect for such period and other
applicable benefits provided to active employees until
her employment is terminated pursuant to Section 6(b)
hereof.  Subject to the provisions of Section 10 hereof,
in the event the Executive's employment is terminated
pursuant to Section 6(b) hereof, then

                    (i)  as soon as practicable thereafter, 
     the Company shall pay the Executive all unpaid
     amounts, if any, to which the Executive is entitled
     as of the Date of Termination under Sections 5(a)
     and (b) hereof and shall pay to the Executive, in
     accordance with the terms of the applicable plan or
     program, all other unpaid amounts to which Executive 
     is then entitled under any compensation or
     benefit plan or program of the Company (collectively, 
     'Accrued Obligations');

                    (ii)  following the Date of Termination 
     and for the longer of eighteen (18) months
     thereafter or the balance of the Term as then in
     effect (the 'Severance Period'), the Company shall
     pay the Executive monthly an amount equal to (x)
     the quotient of (A) the sum of (1) the Executive's
     annual base salary at the rate in effect as of the
     Date of Termination and (2) the average of the
     annual bonuses earned by the Executive in the three
     fiscal years of the Company ended immediately prior
     to the Date of Termination, divided by (B) the
     number twelve (12) (such quotient being referred to
     herein as the 'Severance Payments'), minus (y) any
     amounts payable to the Executive during such month
     as a disability benefit under a Company-paid plan;

                    (iii)  as of the Date of Termination, 
     an additional number of Shares underlying
     outstanding stock options granted to the Executive
     shall become exercisable, such that the total number 
     of Shares underlying each such grant which are
     exercisable (including Shares covered by such grant
     which have already become exercisable, whether or
     not exercised) is equal to the product of (A) the
     total number of Shares covered by such grant (whether 
     or not any portion of such grant has previously
     been exercised) and (B) a fraction the numerator of
     which is the number of full months from the date of
     grant to the end of the Severance Period and the
     denominator of which is the number of full months
     from the date of grant to the date the option would
     otherwise have become fully exercisable.  The Executive 
     shall have the right to exercise any stock
     option, to the extent then exercisable, for a
     period of one (1) year following the Date of
     Termination, but in no event beyond the expiration
     date of the option, and to the extent not exercisable, 
     the option shall immediately terminate;

                    (iv)  as of the Termination Date,
     restrictions with respect to an additional number
     of restricted Shares then held by the Executive
     shall lapse, such that the aggregate number of
     Shares underlying each grant with respect to which
     such restrictions have lapsed (including restricted
     Shares underlying such grant with respect to which
     such restrictions have previously lapsed) shall
     equal the number of Shares with respect to which
     such restrictions would have lapsed had the Executive 
     continued in the employment of the Company
     through the end of the Severance Period, and all
     additional restricted Shares shall be forfeited;

                    (v)  for purposes of computing the
     SERP payable to Executive, Executive shall be treated 
     as if she had continued in employment through
     the end of the Severance Period; and

                    (vi)  all outstanding principal
     amounts (and accrued interest thereon) with respect
     to the loan described in Section 8 hereof shall be
     forgiven.

               (b)  Death.  If the Executive's employment 
     is terminated by her death,

                    (i)  the Company shall pay to the
     person(s) or entity set forth in Section 12(b)
     hereof: (A) the Accrued Obligations, at the time(s)
     set forth in Section 7(a)(i) hereof; and (B) as
     soon as practicable following the end of the fiscal
     year of the Company in which the Executive's death
     occurs, the Bonus which would otherwise have been
     paid to the Executive with respect to such fiscal
     year;

                    (ii)  the additional vesting of
     stock options and restricted Shares, as described
     in Sections 7(a)(iii) and 7(a)(iv), respectively,
     shall apply; and

                    (iii)  all outstanding principal
     amounts (and accrued interest thereon) with respect
     to the loan described in Section 8 hereof shall be
     forgiven.

               (c)  Termination for Cause; Voluntary
Termination Without Good Reason.  If the Executive's employment 
is terminated by the Company for Cause or voluntarily by 
the Executive for other than Good Reason (including by 
reason of the expiration of the Term of this
Agreement as a result of a Nonrenewal Notice having been
given by the Executive), the Company shall pay the Accrued 
Obligations to the Executive at the time(s) set
forth in Section 7(a)(i) hereof and, except with respect
to any obligations to pay the SERP hereunder, the Company 
shall have no further obligations to the Executive
under this Agreement.

               (d)  Termination Without Cause; Termination 
for Good Reason; Nonrenewal.  If (i) the Company
shall terminate the Executive's employment other than
for Disability pursuant to Section 6(b) or for Cause,
(ii) the Executive shall terminate her employment for
Good Reason or (iii) the Term of this Agreement expires
as a result of a Nonrenewal Notice having been provided
by the Company, then, subject to the provisions of Section 
10 hereof: 

               (1)  the Company shall pay the Accrued
                    Obligations to the Executive at the
                    time(s) set forth in Section 7(a)(i)
                    hereof;

               (2)  the Company shall pay to the Executive 
                    the Severance Payments, as defined 
                    and for the period set forth
                    in Section 7(a)(ii) hereof (except
                    that in the case of the expiration
                    of the Term, as described in clause
                    (iii) above, or if the Executive
                    shall terminate her employment based
                    upon the event of Good Reason set
                    forth in Section 6(d)(1)(v) hereof,
                    the Severance Period shall end on
                    the first anniversary of the expiration 
                    of the Term or on the first
                    anniversary of the scheduled expiration 
                    of the Term (after giving effect to the 
                    relevant Nonrenewal Notice), as the 
                    case may be);

               (3)  the additional vesting of stock options 
                    and restricted Shares, as described in 
                    Sections 7(a)(iii) and
                    7(a)(iv), respectively, shall apply
                    (except that in the case of the expiration 
                    of the Term, as described in
                    clause (iii) above, or if the Executive 
                    shall terminate her employment
                    based upon the event of Good Reason
                    set forth in Section 6(d)(1)(v) here
                    of, (1) the number of additional option 
                    Shares becoming exercisable
                    shall be determined by reference to
                    the number of full months from the
                    date of grant to the first anniversary 
                    of the date of expiration of the
                    Term or to the first anniversary of
                    the scheduled expiration of the Term
                    (after giving effect to the relevant
                    Nonrenewal Notice), as the case may
                    be, and (2) the number of additional
                    Shares as to which restrictions
                    shall lapse shall be determined as
                    if Executive had remained employed
                    through the first anniversary of the
                    date of such expiration or scheduled
                    expiration, as the case may be;

               (4)  for purposes of computing the SERP
                    payable to the Executive, the Executive 
                    shall be treated as if she had
                    continued in employment through the
                    end of the Severance Period (or, in
                    the case of the expiration of the
                    Term, as described in clause (iii)
                    above, or if the Executive shall
                    terminate her employment based upon
                    the event of Good Reason set forth
                    in Section 6(d)(1)(v) hereof,
                    through the first anniversary of the
                    date of such expiration or through
                    the first anniversary of the scheduled 
                    expiration of the Term (after 
                    giving effect to the relevant
                    Nonrenewal Notice), as the case may
                    be);

               (5)  the Executive shall continue to be
                    provided with the same medical and
                    life insurance coverage as existed
                    immediately prior to the applicable
                    Notice of Termination or Notice of
                    Nonrenewal, as the case may be, such
                    coverage to continue through the end
                    of the Severance Period (or, in the
                    case of expiration of the Term, as
                    described in clause (iii) above, or
                    if the Executive shall terminate her
                    employment based upon the event of
                    Good Reason set forth in Section
                    6(d)(1)(v) hereof, through the first
                    anniversary of the date of such expiration 
                    or through the first anniversary of 
                    the scheduled expiration of
                    the Term (after giving effect to the
                    relevant Nonrenewal Notice), as the
                    case may be); provided that, such
                    coverage shall cease as of the date
                    the Executive commences new employment;

               (6)  the Executive shall be provided with
                    outplacement services commensurate
                    with her position; and

               (7)  all outstanding principal amounts
                    (and accrued interest thereon) with
                    respect to the loan described in Section 
                    8 hereof shall be forgiven.

          8.   Loan.

               (a)  As soon practicable following the
execution of this Agreement, the Company shall make a
loan to the Executive in the principal amount of
$500,000, which loan shall be evidenced by a promissory
note (the 'Note') substantially in the form of Exhibit A
annexed hereto.

               (b)  In connection with the loan, the
Company agrees to pay to the Executive, on the date(s)
on which interest is payable under the Note, such
amounts as may be necessary to place the Executive in
the same after-tax position as if the Note had been
interest-free.

          9.   Change in Control.

               (a)  Upon the occurrence of a Change in
Control of the Company during the Term, (i) all then
outstanding stock options granted to the Executive shall
become fully exercisable, whether or not otherwise exercisable, 
(ii) the restrictions applicable to any restricted Shares 
granted to the Executive shall lapse,
and such options and restricted Shares shall be fully
vested.

               (b)  In the event that any payment or
benefit received or to be received by the Executive in
connection with a Change in Control of the Company or
the termination of the Executive's employment, whether
such payments or benefits are received pursuant to the
terms of this Agreement or any other plan, arrangement
or agreement with the Company, any person whose actions
result in a Change in Control of the Company or any
person affiliated with the Company or such person (all such
payments and benefits being hereinafter called 'Total
Payments'), would be subject (in whole or part), to the
tax (the 'Excise Tax') imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the 'Code'),
the Company shall pay to the Executive such additional
amounts (the 'Gross-Up Payment') as may be necessary to
place the Executive in the same after-tax position as if
no portion of the Total Payments had been subject to the
Excise Tax.  In the event that the Excise Tax is
subsequently determined to be less than the amount taken
into account hereunder, the Executive shall repay to the
Company, at the time that the amount of such reduction
in Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus
that portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state and local income tax 
imposed on the Gross-Up Payment being repaid by the 
Executive to the extent that such repayment results in a
reduction in Excise Tax and/or a federal, state or local
income tax deduction) plus interest on the amount of
such repayment at the rate provided in Section
1274(b)(2)(B) of the Code.  In the event that the Excise
Tax is determined to exceed the amount taken into
account hereunder (including by reason of any payment
the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such
excess (plus any interest, penalties or additions
payable by the Executive with respect to such excess) at
the time that the amount of such excess is finally 
determined.  The Executive and the Company shall each 
reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with
respect to the Total Payments.

          10.  Nonsolicitation; Noncompete.

               (a)  Subject to (c) below, during the period 
of Executive's employment and during the Severance
Period, the Executive shall not initiate discussions (of
a non-isolated nature) with any person who is then an
executive employee of the Company (i.e., director level
or above) with the intent of soliciting or inducing such
person to leave his or her employment, with a view toward
joining the Executive in the pursuit of any business
activity (whether or not such activity involves engaging
or participating in a Competitive Business, as defined
below).  Notwithstanding any other provision of this
Agreement to the contrary, in the event Executive fails
to comply with the preceding sentence, all rights of the
Executive and her surviving spouse or other beneficiary
hereunder to any future Severance Payments, SERP payments
and continuing life insurance and medical converge shall
be forfeited; provided that, the foregoing shall not
apply if such failure of compliance commences following a
Change in Control of the Company.

               (b)  Subject to (c) below, for as long as
Executive has the right to payment of any future SERP
benefits, Executive shall not, without the prior written
consent of the Company (which consent shall not be unreasonably 
withheld), engage or participate in any business
which is 'in competition' (as defined below) with the
business of the Company or any of its 50% or more owned
affiliates (such business being referred to herein as a
'Competitive Business').  Notwithstanding any other provision 
of this Agreement to the contrary, in the event the
Executive fails to comply with the preceding sentence,
all rights of the Executive and her surviving spouse or
other beneficiary hereunder to any future Severance Payments, 
SERP payments and continuing life insurance and
medical coverage shall be forfeited; provided that, the
foregoing shall not apply if such failure of compliance
commences following a Change in Control of the Company.

               (c)  In the event of a violation of paragraphs 
10(a) or 10(b) hereof, the remedies of the Company
shall be limited to (i) if such violation occurs during
the period of Executive's employment hereunder, termination 
of the Executive for Cause and the associated rights
of the Company specified herein resulting therefrom, (ii)
regardless of when such violation occurs, forfeiture by
the Executive of the payments and benefits set forth in
paragraphs (a) and (b) above if and to the extent provided 
in such paragraphs, and (iii) the right to seek injunctive 
relief in accordance with and to the extent
provided in Section 17 hereof.

               (d)  For purposes hereof, a business will
be 'in competition' with the business of the Company or
its 50% or more owned affiliates if (i) the Company's
business with which the other business competes accounted
for 20% or more of the Company's consolidated revenues as
of the end of its most recently completed fiscal year
prior to the Date of Termination, and (ii) the entity 
(including all 50% or more owned affiliates) through which
the other business is or will be operated maintains a
'women's apparel' business which generated at least $50
million in revenue during the entity's most recently 
completed fiscal year ended prior to the date the Executive
commences (or proposes to commence) to engage or participate 
in the other business.  For purposes hereof,
'women's apparel' shall consist of dresses, jackets,
pants, skirts, blouses, sweaters and T-shirts.

               (e)  Notwithstanding the foregoing, the
Executive's engaging in the following activities shall
not be construed as engaging or participating in a 
Competitive Business: (i) investment banking; (ii) passive
ownership of less than 2% of any class of securities of a
public company; (iii) engaging or participating in 
noncompetitive businesses of an entity which also operates a
business which is 'in competition' with the business of
the Company or its affiliates; (iv) serving as an outside
director of an entity which operates a business which is
'in competition' with the business of the Company or its
affiliates, so long as such business did not account for
10% or more of the consolidated revenues of such entity
as of the end of its most recently completed fiscal year
prior to the date Executive commences (or proposes to 
commence) serving as an outside director; (v) engaging in a
business involving licensing arrangements so long as such
business is not an in-house arrangement for any entity
'in competition' with the business of the Company or its
affiliates; and (vi) affiliation with an advertising agency.

          11.  Protection of Confidential Information.

               (a)  Executive acknowledges that her
employment by the Company will, throughout the Term of
this Agreement, involve her obtaining knowledge of 
confidential information regarding the business and affairs of
the Company.  In recognition of the foregoing, the Executive 
covenants and agrees:

                    (i)  that, except in compliance with
     legal process,  she will keep secret all confidential 
     matters of the Company 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 inconnection with the performance 
     by Executive of her duties as an executive officer 
     of the Company), either during or after the Term, 
     except with the prior written consent of the Board 
     or a person authorized thereby; and

                    (ii)  that she will deliver promptly
     to the Company on termination of her 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 which she obtained 
     while employed by, or otherwise serving or
     acting on behalf of, the Company and which she may
     then possess or have under her control.

               (b)  Notwithstanding the provisions of
Section 17 of this Agreement, if the Executive commits a
breach of the provisions of paragraphs 11(a)(i) or
11(a)(ii), the Company shall have the right and remedy to
have such provisions specifically enforced by any court
having equity jurisdiction, it being acknowledged and
agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money
damages will not provide an adequate remedy to the 
Company.

          12.  Successors; Binding Agreement.

               (a)  Neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to
hypothecation by the Executive (except by will or by
operation of the laws of intestate succession) or by the
Company, except that the Company will require any successor 
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all
of the business and/or assets of the Company, by agreement 
in form and substance reasonably satisfactory to the
Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place.  Failure of the Company to
obtain such assumption and agreement prior to the 
effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation
from the Company in the same amount and on the same terms
as she would be entitled to hereunder if she terminated
her employment for Good Reason, except that for purposes
of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of
Termination.  As used in this Agreement, 'Company' shall
mean the Company as herein before defined and any successor 
to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this
Section 12 or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of
law.

               (b)  This Agreement and all rights of the
Executive hereunder shall inure to the benefit of and be
enforceable by the Executive's personal or legal 
representatives, executors, administrators, successors, 
heirs, distributees, devisees and legatees.  If the Executive
should die while any amounts would still be payable to
her hereunder if she had continued to live, all such
amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to the
Executive's devisee, legatee, or other designee or, if
there be no such designee, to the Executive's estate.

          13.  Notice.  For the purposes of this Agreement, 
notices, demands and all other communications
provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or
(unless otherwise specified) mailed by United States
certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:

If to the Company:

               AnnTaylor Stores Corporation
               142 West 57th Street
               New York, New York  10019
               Attn:  General Counsel

          With a copy to:

               Stuart N. Alperin, Esq.
               Skadden, Arps, Slate, Meagher & Flom
               919 Third Avenue
               New York, New York 10022

If to the Executive:

               Sally Frame Kasaks
               99 Anderson Avenue
               Demarest, New Jersey 07627

          With a copy to:

               Michael S. Sirkin, Esq.
               Proskauer Rose Goetz & Mendelsohn
               1585 Broadway
               New York, New York 10036

or to such other address as any party may have furnished
to the other in writing in accordance herewith, except
that notices of change of address shall be effective only
upon receipt.

          14.  Miscellaneous.  No provisions of this
Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in
writing signed by the Executive and such officer of the
Company as may be specifically designated by the Board.
No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with,
any condition or provision of this Agreement to be 
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.  No agreements
or representations, oral or otherwise, express or 
implied, with respect to the subject matter hereof have
been made by either party which are not set forth 
expressly in this Agreement.  The validity, interpretation,
construction and performance of this Agreement shall be
governed by the laws of the state of New York without
regard to its conflicts of law principles.

          15.  Validity.  The invalidity or
unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall
remain in full force and effect.

          16.  Counterparts.  This Agreement may be executed 
in one or more counterparts, each of which shall be
deemed to be an original but all of which together will
constitute one and the same instrument.

          17.  Arbitration.  Any dispute or controversy
arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a
panel of three arbitrators in New York City in accordance
with the rules of the American Arbitration Association
then in effect.  Judgment may be entered on the
arbitrator's award in any court having jurisdiction;
provided that, the Company shall be entitled to seek a 
restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation
of the provisions of Section 10 of the Agreement during
the period of Executive's employment prior to a Change in
Control or of Section 11 of this Agreement at any time,
and the Executive hereby consents that such restraining
order or injunction may be granted without the necessity
of the Company's posting any bond; and further provided
that, the Executive shall be entitled to seek specific
performance of her right to be paid until the Date of
Termination during the pendency of any dispute or 
controversy arising under or in connection with this 
Agreement.  The Company shall pay directly or reimburse 
the Executive for any legal fees incurred by the Executive 
in connection with any arbitration related to the last 
proviso of the preceding sentence and any other arbitration 
in which she prevails.

          18.  Entire Agreement.  This Agreement sets
forth the entire agreement of the parties hereto in
respect of the subject matter contained herein and 
supersedes the Prior Agreement and all other prior 
agreements, promises, covenants, arrangements, communications, 
representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto;
and any prior agreement of the parties hereto in respect
of the subject matter contained herein (including, but
not limited to, the Prior Agreement) is hereby terminated
and cancelled.

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

                         ANNTAYLOR STORES CORPORATION


                         By:
                              Name:
                              Title:



                         Sally Frame Kasaks
                                               Exhibit A


                    PROMISSORY NOTE
                        ('NOTE')


$500,000                                November 4, 1994


          Reference is made to that certain Employment
Agreement by and between the Company and the Borrower (as
hereinafter defined), dated as of February 1, 1994 (the
'Employment Agreement').  Capitalized terms which are not
defined in this Note shall have the meaning ascribed to
such term in the Employment Agreement.  The proceeds 
received by the Borrower to which this Note applies shall
constitute the 'Loan' described in Section 8 of the
Employment Agreement and shall be subject to the terms
hereof and to the applicable provisions of the Employment
Agreement, which provisions are incorporated herein by
reference.

          FOR VALUE RECEIVED, the undersigned, Sally
Frame Kasaks (the 'Borrower'), hereby promises to pay to
AnnTaylor Stores Corporation, a Delaware corporation (the
'Company'), or to the legal holder of this Note at the
time of payment, on the Maturity Date (as hereinafter 
defined) the principal sum (the 'Principal Sum') of Five
Hundred Thousand Dollars ($500,000) in lawful money of
the United States of America.  The Borrower also agrees
to pay interest (computed on the basis of a 365 or 366
day year, as the case may be) on any unpaid amount of the
Principal Sum, from and after the effective date of this
Note, at an annual rate equal to 7.32%, compounded 
semi-annually.

          This Note is subject to the following further
terms and conditions:

          1.  Time, Form and Place of Payments.

               The Principal Sum will become due and
payable on January 31, 1999 (the 'Maturity Date').  If
the Maturity Date falls on a Saturday, Sunday or legal
holiday, then such payment shall be made on the next
succeeding business day.

               Accrued interest shall be payable annually
on January 31, 1995 and on each January 31 thereafter,
with the final payment of all accrued interest to be paid
on the Maturity Date.

               All payments and prepayments of the Principal 
Sum of and the accrued interest on this Note shall
be made to the Company or its order, or to the legal
holder of this Note or such holder's order, in lawful
money of the United States of America at the principal
offices of the Company (or at such other place as the
holder hereof shall notify the Borrower in writing).

          2.  Prepayment.  The Borrower may, at her
option, prepay this Note in whole or in part at any time
or from time to time without penalty or premium.  Any 
prepayments of any portion of the Principal Sum of this Note
shall be accompanied by payment of all interest accrued
but unpaid hereunder.  Upon full and final payment of the
Principal Sum of and interest accrued on this Note, it
shall be surrendered to the Borrower, and canceled by the
Company or other holder.

          3.  Acceleration of Repayment.  Upon the earliest 
to occur of (i) the Borrower's voluntary termination
of employment with the Company without Good Reason or
(ii) the Company's termination of the Borrower's employment 
for Cause, the holder of this Note may declare, by
notice given to the Borrower, the entire outstanding
Principal Sum to be immediately due and payable, whereupon
such Principal Sum, and any accrued and unpaid interest 
thereon, shall become due and payable without presentment, 
demand, protest, notice of dishonor and all
other demands and notices of any kind, all of which are
hereby expressly waived.

          4.  Loan Forgiveness.  The outstanding Principal 
Sum and all accrued interest thereon shall be forgiven and 
the Borrower shall be free of all liability and
obligations under this Note if (i) the Borrower is 
employed by the Company on the Maturity Date, (ii) the 
Borrower dies or becomes Disabled (and there shall not have
previously occurred the Borrower's voluntary termination
of employment without Good Reason, or the termination of
Borrower's employment for Cause), (iii) the Borrower's
employment is involuntarily terminated by the Company
without Cause or voluntarily terminated by the Borrower
for Good Reason, or (iv) the Term of the Employment
Agreement expires by reason of a Nonrenewal Notice having
been provided by the Company.

          5.  Notice.  For the purposes of this Note,
notices, demands and all other communications provided
for herein shall be in writing and shall be deemed to
have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered 
mail, return receipt requested, postage prepaid,
addressed as follows:

          If to the Executive:

               Sally Frame Kasaks
               99 Anderson Avenue
               Demarest, New Jersey 07627

          If to the Company:

               AnnTaylor Stores Corporation
               142 West 57th Street
               New York, New York  10019

               Attn:  General Counsel

or to such other address as any party may have furnished
to the others in writing in accordance herewith, except
that notices of change of address shall be effective only
upon receipt.

          6.  Miscellaneous.

               (a)  No delay or failure by the Company or
the holder of this Note in the exercise of any right or
remedy shall constitute a waiver thereof, and no single
or partial exercise by the holder hereof of any right or
remedy shall preclude other or future exercise thereof or
the exercise of any other right or remedy.

               (b)  The headings contained in this Note
are for reference purposes only and shall not affect in
any way the meaning or interpretation of the provisions
hereof.

               (c)  Nothing in this Note shall confer
upon the Borrower the right to continue in the employment
of the Company or any of its affiliates or affect any
rights which the Company may have to terminate the 
employment of the Borrower.

               (d)  The provisions of this Note shall be
governed by and construed in accordance with laws of the
State of New York, without giving effect to the choice of
law principles thereof.

          IN WITNESS WHEREOF, this Note has been duly
executed and delivered to the Company by the Borrower on
the date first above written.




Witness:
                                     Sally Frame Kasaks