ANNTAYLOR STORES
CORPORATION
DEFERRED COMPENSATION PLAN
1. Purpose
The purpose of this AnnTaylor Stores Corpora
tion Deferred Compensation Plan (the "Plan") is to enable
select employees of AnnTaylor Stores Corporation and its
subsidiaries (collectively, the "Company") to defer
compensation in accordance with the terms and conditions
set forth herein.
2. Administration
(a) The Plan shall be administered by the
Board of Directors of AnnTaylor Stores Corporation
("AnnTaylor"), by a committee thereof, or by a committee
of three or more persons appointed by the Board (the
Board serving in such function, or such committee, or
their respective delegate, hereinafter referred to as the
"Committee").
(b) The Committee shall have full power and
authority to administer the Plan and otherwise to perform
the duties and responsibilities specified hereunder. All
determinations by the Committee shall be binding and
conclusive on all parties. Without limiting the foregoing,
the Committee shall have the following specific powers
and duties:
(i) to interpret the provisions of the
Plan and make any and all determinations arising thereunder;
(ii) to maintain such records as it shall
deem necessary or appropriate for the proper administration
of the Plan;
(iii) to establish such rules and procedures
not inconsistent with the terms of the Plan as it
shall deem necessary or appropriate to effectuate the
purpose of the Plan.
3. Plan Year
The Plan Year for each year beginning in 1996
shall be the calendar year. The Plan Year for 1995 shall
be the effective date of the Plan through December 31, 1995.
4. Eligible Employees
Subject to the following sentence, eligibility
to make deferrals under the Plan for any Plan Year shall
be limited to those employees of the Company who, as of
the day prior to the start of such Plan Year, hold the
title of vice president or above (the "Participants").
For the Plan Year beginning in 1995, employees who hold
the title of vice president or above as of the effective
date of the Plan shall be eligible to participate in the
Plan for 1995.
5. Deferral of Compensation
(a) Subject to such restrictions and limitations
as the Committee may impose, each Participant may
elect, in writing on a form or forms prescribed by the
Committee and at the time prescribed below, to have the
Company defer payment of (1) up to 25% of the
Participant's Compensation (as defined herein) with
respect to a Plan Year, or (2) up to 100% of the
Participant's Incentive Compensation (as defined herein)
with respect to a Plan Year. For purposes hereof, (i)
the term "Compensation" with respect to a Plan Year shall
mean the total salary and Incentive Compensation (as defined
herein) paid to or earned by the Participant for
services rendered in respect of such Plan Year (without
regard to his or her deferral election hereunder), and
(ii) the term "Incentive Compensation" with respect to a
Plan Year shall mean all incentive compensation (attributable
to "incentive compensation periods" which begin
during the Plan Year) paid to or earned by the Participant
for services rendered in respect of such Plan Year
(without regard to his or her deferral election hereunder).
For this purpose, Performance Compensation paid or
earned under the AnnTaylor Stores Corporation Management
Performance Compensation Plan shall be considered Incentive
Compensation. Deferrals of salary shall be effected
through payroll deductions. For purposes of the 1995
Plan Year, a Participant's salary to be included as
Compensation shall be limited to salary earned during pay
periods which commence after the effective date of the
Plan.
(b) Subject to the following sentence, any
election made pursuant to subparagraph (a) above to defer
Compensation shall be submitted to the Committee at such
time prior to the beginning of the Plan Year with respect
to which such Compensation will be earned as the Committee
shall determine, and such election shall become
irrevocable as of the commencement of such Plan Year.
For the Plan Year beginning in 1995, any election pursuant
to subparagraph (a) above shall be submitted to the
Committee prior to the effective date of the Plan.
6. Deferred Compensation Account
The Company shall establish a memorandum account
("Deferred Compensation Account") for each Participant in
the Plan. A Participant's Deferred Compensation
Account shall be (i) credited with all amounts deferred
by the Participant under the Plan as of the date such
amounts would otherwise have been paid to such Participant,
and (ii) charged with any distributions made with
respect to the Participant pursuant to Paragraph 7. A
Participant's Deferred Compensation Account will be
credited quarterly on the last day of each calendar quarter
with an amount representing interest at an annual
rate equal to the rate on one-year Treasury Bills, determined
as of the first day of each Plan Year, plus two
percentage points.
7. Payment of Deferred Compensation
(a) Except as otherwise provided in subparagraphs
(b), (c) or (d) below, the amount then credited to
a Participant's Deferred Compensation Account shall be
paid to him or her by the Company, in a single lump sum
cash payment (less any mandatory withholding as provided
in Paragraph 12 hereof), as soon as practicable following
January 1 of the calendar year following the
Participant's termination of employment with the Company.
(b) In the event of the Participant's termination
of employment by reason of death or Disability (as
defined herein), the Company shall pay to such Participant
(or to such Participant's Beneficiary, as defined in
Paragraph 8 hereof), in a single lump sum cash payment,
the amount then credited to such Participant's Deferred
Compensation Account (less any mandatory withholding as
provided in Paragraph 12 hereof) as soon as practicable
following the date of death or Disability. For purposes
hereof, "Disability" of a Participant shall mean such
Participant's termination as a result of a condition which
entitles the Participant to receive benefits under the
Company's long-term disability plan.
(c) In the event that a Participant incurs a
severe financial hardship occasioned by accident, illness
or other emergency beyond the control of the Participant,
the Committee, in its sole discretion and upon written
application of such Participant, may authorize immediate
payment of all or a portion of the amount then credited
to such Participant's Deferred Compensation Account (less
any mandatory withholding as provided in Section 12
hereof) (a "Hardship Withdrawal"); provided that such
payment shall in no event exceed the amount necessary to
alleviate such financial hardship. The circumstances
that will give rise to the approval of a Hardship Withdrawal
will depend upon the facts of each case, but, in
any case, payment under subparagraph (c) herein may not
be made to the extent that such hardship is or may be relieved
(i) through reimbursement or compensation by
insurance or otherwise, (ii) by liquidation of the
Participant's assets, to the extent the liquidation of
such assets would not itself cause severe financial
hardship, or (iii) by cessation of deferrals under the
Plan.
(d) In the event of a Change in Control (as
defined in subparagraph (e) hereof), the Company shall
pay each Participant the amount then credited to such
Participant's Deferred Compensation Account in a single
lump sum cash payment (less any mandatory withholding as
provided in Paragraph 12 hereof) as soon as practicable
thereafter.
(e) A "Change in Control" shall be deemed to
have occurred if the conditions set forth in any one of
the following paragraphs shall have been satisfied:
(i) 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 thereof,
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 AnnTaylor
in substantially the same proportion as their
ownership of shares of common stock of
AnnTaylor)(a "Person"), is or becomes the
"beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly,
of securities of AnnTaylor representing
30% or more of the combined voting power of
AnnTaylor'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 AnnTaylor's then
outstanding voting securities but including any
such securities acquired directly from ML
representing up to 15% of such combined voting
power);
(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 AnnTaylor to effect a
transaction described in clause (i), (iii),
or (iv) of this Paragraph 7(e)) whose election
by the Board or nomination for election
by AnnTaylor'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;
(iii) the stockholders of AnnTaylor approve
a merger or consolidation of AnnTaylor
with any other corporation, other than (1) a
merger or consolidation which would result in
the voting securities of AnnTaylor 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 AnnTaylor or such surviving or
parent entity outstanding immediately after
such merger or consolidation or (2) a merger
or consolidation effected to implement a re
capitalization of AnnTaylor (or similar
transaction) in which no Person is or becomes
the beneficial owner (as defined in (A)
above), directly or indirectly, of securities
of AnnTaylor representing 30% or more of the
combined voting power of AnnTaylor's then out
standing 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 AnnTaylor's then outstanding voting securities
but including any such securities acquired directly
from ML representing up to 15% of such combined
voting power); or
(iv) the stockholders of AnnTaylor approve
a plan of complete liquidation of
AnnTaylor or an agreement for the sale or
disposition by AnnTaylor of all or substantially
all of AnnTaylor's assets (or any
transaction having a similar effect).
8. Designation of Beneficiary
A Participant may designate a Beneficiary or
Beneficiaries to receive any amount due him or her hereunder
at his or her death by executing a form prescribed by the
Committee and delivering it to the Committee at any time
prior to his or her death. A Participant may revoke or
change his or her Beneficiary designation without the
Beneficiary's consent by executing a new form and delivering
it to the Committee at any time and from time to time prior
to his or her death. If a Participant shall have failed to
designate a Beneficiary, or if no such Beneficiary shall survive
him or her, then such amounts shall be paid to his or
her spouse, if then living, or, if not, to his or her
estate.
9. Other Employee Benefits
Any Compensation deferred and any benefits
paid under the Plan shall not be included in creditable
compensation in computing benefits under any employee
benefit plans of the Company, except to the extent provided
for thereunder.
10. No Right to Employment
Nothing contained herein shall be construed
as conferring upon any Participant the right to continue
in the employ of the Company.
11. Deferred Compensation as an Unsecured Promise
The Company shall not be required to segregate
any funds representing the Deferred Compensation
Accounts of Participants hereunder, and nothing in the
Plan shall be construed as providing for such segregation.
All payments provided for under the Plan shall be
paid in cash from general assets of the Company. Nothing
in the Plan, and no action taken pursuant to its
terms, shall create or be construed to create a trust
or escrow account of any kind, or a fiduciary relationship
between the Committee or the Company and any Participant,
designated Beneficiary or any other person.
The Participants, their designated Beneficiaries and
any other persons under the Plan, shall rely solely on
the unsecured promise of the Company to make payments
required hereunder, but shall have the right to enforce
such a claim in the same manner as any unsecured general
creditor of the Company.
12. Withholding
The Company shall deduct and withhold from
any payments made hereunder all sums which it then may
be required to deduct or withhold pursuant to any applicable
statute, law, regulation or order of any jurisdiction whatsoever.
13. No Assignment
No Participant, designated Beneficiary, or
any other person entitled to any payment hereunder
shall have the power to transfer, assign, anticipate,
mortgage or otherwise encumber any right to receive a
payment in advance of any such payment and any attempted
transfer, assignment, anticipation, mortgage or
encumbrance shall be void.
14. Obligations to the Company
If a Participant becomes entitled to a distribution
of benefits under the Plan, and if at such time
the Participant has outstanding any debt, obligation,
or other liability representing an amount owed to the
Company, then the Company may offset such amounts owing
it against the amount of benefits otherwise distributable.
15. Amendment and Termination
The Board reserves the absolute right to
amend or terminate the Plan, in whole or in part, at
any time and from time to time; provided that no such
amendment or termination shall adversely affect the
right of any Participant or Beneficiary hereunder to
receive payment of any benefits deferred hereunder prior
to the date of such amendment or termination.
Notwithstanding the foregoing or any other provision of
the Plan, upon termination of the Plan, the Committee, in
its sole discretion, may accelerate payment of all benefits
deferred hereunder in such manner as it shall determine.
16. Distribution of Plan and Amendments; Acknowledgments
(a) The Committee shall furnish each Participant
with a copy of the Plan prior to his or her initial
deferral election hereunder. In addition, the
Committee shall furnish each Participant, or in the
case of a deceased Participant, his or her Beneficiary,
with a copy of any amendment of the Plan.
(b) Each Participant, prior to or simultaneously
with his or her initial deferral election,
shall acknowledge receipt of a copy of the Plan. Such
acknowledgment shall constitute an agreement by the
Participant that the Participant, his or her Beneficiary
and any representatives shall be bound by all of the
terms and conditions of the Plan.
17. Governing Law
Except to the extent preempted by federal
law, the Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, AnnTaylor has caused this
Deferred Compensation Plan to be adopted on this 24th
day of February, 1995, to be effective as of April 1,
1995.
ANNTAYLOR STORES CORPORATION
By: /s/ Jocelyn Barandiaran
-------------------------
Vice President/General
Counsel and Secretary
- ------------------------------------------------------
ANNTAYLOR STORES CORPORATION
DEFERRED COMPENSATION PLAN
1995 Salary/Bonus Election Form
I. Pursuant to the AnnTaylor Stores Corporation De
ferred Compensation Plan (the "Plan"), I elect to
defer (subject to Section II below):
(Choose ONE of the following)
______% of COMPENSATION (up to a maximum of 25%) that I
earn for the remainder of the 1995 calendar
year. Compensation consists of (1) my salary
earned from and after April 1, 1995, plus (2)
any Incentive Compensation earned for periods
commencing in 1995;
-OR-
______% of the INCENTIVE COMPENSATION (up to a maximum
of 100%) that I earn for periods commencing in
the 1995 calendar year.
II. a) Payment of Deferred Compensation -- I hereby
acknowledge that the above amounts deferred (in
creased in accordance with the Plan) will be paid to
me in a single lump sum as soon as practicable
following January 1 of the year following the year
of my termination of employment (or at such sooner
time as may be provided in the Plan).
b) Receipt of Plan Document -- I hereby acknowledge
receipt of a copy of the AnnTaylor Stores Corporation
Deferred Compensation Plan, and agree to be
bound by its terms and conditions. I further agree
that I shall have no right to cause any distribution
to be made to me of the amounts deferred under Plan,
except in accordance with its terms.
c) Timely Elections -- I understand that in order
to be effective, this election form must be completed
by me and returned to the Company no later than
March 31, 1995.
______________________________
Associate's Name (please print)
______________________ ______________________________
Date Associate's Signature
- ----------------------------------------------------------
ANNTAYLOR STORES CORPORATION
DEFERRED COMPENSATION PLAN
Beneficiary Designation Form
I hereby elect that in the event of my death
before all amounts due under the AnnTaylor Stores Corpo
ration Deferred Compensation Plan have been paid to me,
such amounts shall be paid, as soon as practicable after
my death, in a single cash payout to the following Benefi
ciary or Beneficiaries:
Beneficiary(ies) Share of Payment (%)
_________________________ __________
Name
_________________________
Address
_________________________ __________
Name
_________________________
Address
______________________________
Associate's Name (please print)
_____________________ ______________________________
Date Associate's Signature
This designation revokes any previous designation
under the aforesaid plan. I hereby reserve the
right to change my Beneficiary designation without notice
to or consent of any previously designated Beneficiaries.