Management Performance Compensation Plan - AnnTaylor Stores Corp.

                                                                      AMENDMENT TO THE
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                          ANNTAYLOR STORES CORPORATION
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                   MANAGEMENT PERFORMANCE COMPENSATION PLAN
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      This  Amendment is made to the  AnnTaylor  Stores  Corporation  Management
Performance  Compensation  Plan, which was most recently amended and restated as
March 12, 1998 (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 8 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

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          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  5 of the  Plan  is  amended  by  adding  thereto  a new
paragraph (f) to read as follows:

     '(f) Notwithstanding  the  preceding  provisions  of this Section 5, in the
          event of a Change in Control, a pro rata cash payment, in cancellation
          of outstanding  Awards in respect of the Performance  Period in effect
          as of the  date  of the  Change  in  Control,  shall  be  made to each
          Participant within thirty (30) business days following the date of the
          Change in  Control.  The pro rata  payment  to such  Participant  with
          respect to such Performance  Period shall be calculated by multiplying
          (X) and (Y),  where (X)  equals  the  amount to which the  Participant
          would have been entitled had the  Performance  Period been  completed,
          assuming for this purpose that all Performance Goals applicable to the
          Participant  were achieved at a level equating to a Performance  Ratio
          of 100% and (Y) equals a fraction the numerator of which is the number
          of full and  partial  months  in such  Performance  Period  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 Period.'

          Except as herein  modified,  the Plan shall remain in full force and
          effect.


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