March 12, 1998 AMENDMENT to THE ANNTAYLOR STORES CORPORATION MANAGEMENT PERFORMANCE COMPENSATION PLAN The AnnTaylor Stores Corporation Management Performance Compensation Plan, as heretofore amended (the "Plan"), is hereby further amended, effective as of March 12, 1998, as follows: 1. The second sentence of Section 2(c) of the Plan is hereby amended by replacing the words "Executive Officers" with the words "Section 162(m) Officers". The last sentence of Section 2(c) of the Plan is hereby amended to read in its entirety as follows: With respect to Eligible Associates who are not Section 162(m) Officers, the Committee may, in its discretion, delegate to one or more officers of the Company its duties hereunder. 2. Section 2 of the Plan is hereby further amended by adding the following new subsection (n) at the end thereof: (n) "Section 162(m) Officer" means an Executive Officer whose applicable employee remuneration (as defined in Section 162(m) of the Code), for the year in which the Award would be payable and including amounts that may be earned under this Plan, is expected to exceed the limitation set forth in Section 162(m) of the Code for deductibility. 3. The fifth sentence of the first paragraph of Section 5(b) of the Plan is hereby amended by replacing the words "Executive Officers" with the words "Section 162(m) Officers", and the seventh sentence of the first paragraph of Section 5(b) of the Plan is hereby amended by replacing the phrase "for Executive officers and Executive Committee members" with the words "Section 162(m) Officers". 4. The third sentence of Section 5(d) of the Plan is hereby amended by replacing the words "an Executive Officer" with the words "a Section 162(m) Officer". 5. The second sentence of Section 5(3) of the Plan is hereby amended by replacing the words "an Executive Officer" with the words "a Section 162(m) Officer". The Plan, as amended hereby, is hereby ratified and affirmed in all respects.