AMENDMENT TO THE
----------------
ANNTAYLOR STORES CORPORATION
----------------------------
LONG-TERM CASH INCENTIVE COMPENSATION PLAN
------------------------------------------
This Amendment is made to the AnnTaylor Stores Corporation Long-Term Cash
Incentive Compensation Plan (the 'Plan'). This Amendment shall be effective as
of March 10, 2000. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Plan.
WHEREAS, by resolution adopted on March 10, 2000 by the Board of Directors
of AnnTaylor Stores Corporation (the 'Company'), the Company has determined that
it is in its best interest and that of its stockholders to amend the Plan as set
forth herein, pursuant to the authority retained by the Company in Section 9 of
the Plan;
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Section 2 of the Plan is amended by adding the following
definition as Section 2(d) and renumbering the following paragraphs of Section 2
accordingly:
'(d) A 'Change in Control' shall be deemed to have occurred if:
(I) any 'person', as such term is used in Section 13(d) and 14(d) of
the Exchange Act, other than (1) the Company, (2) any trustee or
other fiduciary holding securities under an employee benefits
plan of the Company, or (3) 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;
(II) 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 (I), (III) or (IV) of
this Section 2(d)) whose election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of the
directors at the beginning of the period or whose election or
nomination for election for election was previously so approved,
--------------------------------------------------------------------------------
cease for any reason to constitute at least a majority thereof;
(III) the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto 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 (B) 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 clause (I) above), directly or indirectly, of
securities of the Company representing 30% or more of the combined
voting power of the Company's then outstanding securities; or
(IV) 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).'
2. Section 6 of the Plan is amended by adding thereto a new
paragraph (f) to read as follows:
'(f) Notwithstanding the preceding provisions of this Section 6, in
the event of a Change in Control, a pro rata cash payment in
cancellation of outstanding Awards in respect of each incomplete
Performance Cycle shall be made to each Participant within thirty
(30) business days following the date of the Change in Control. The
pro rata payment with respect to each incomplete Performance Cycle
applicable to such Participant shall be calculated by multiplying
(X) times (Y), where (X) equals the amount to which the Participant
would be entitled had the Performance Cycle been completed, taking
into account for this purpose (1) actual earnings per share for any
fiscal year within the Performance Cycle that was completed prior to
the Change in Control, (2) for the fiscal year in which the Change
in Control occurs, the earnings per share derived from the
Board-approved operating budget for such fiscal year, and (3) for
any fiscal year in such Performance Cycle subsequent to the fiscal
year in which the Change in Control occurs, the projected earnings
per share for such fiscal year presented to the Committee at the
time the Performance Goal for such Performance Cycle was
--------------------------------------------------------------------------------
established, and (Y) equals a fraction the numerator of which is the
number of full and partial months in such incomplete Performance
Cycle that have elapsed as of the date of the Change in Control and
the denominator of which is the number of months in the complete
Performance Cycle.'
Except as herein modified, the Plan shall remain in full force and
effect.