Exhibit 10.27

COMPENSATION ARRANGEMENTS FOR NON-EMPLOYEE DIRECTORS

 
Annual Cash Retainers
 
Each Non-Employee Director is paid an annual retainer of $55,000 for service on
the Board of Directors of ANN INC. (the “Company”).

Each Audit Committee member will receive an additional annual retainer of
$15,000 and each Compensation Committee and Nominating and Corporate Governance
Committee member will receive an additional annual retainer of $10,000.

The Chair of the Audit Committee receives an additional annual retainer of
$30,000 and the Chairs of the Nominating and Corporate Governance Committee and
the Compensation Committee each receive an additional annual retainer of
$20,000.

Payment of Cash Retainers

The annual retainers described under the heading “Annual Cash Retainers” shall
be earned ratably over the fiscal year and paid in arrears in quarterly
installments based on a fiscal quarter by the 15th of the month following the
end of each fiscal quarter. In the event a Non-Employee Director ceases serving
as a Non-Employee Director, or in the applicable positions described under the
heading “Annual Cash Retainers” for any reason, the retainer paid to such
Non-Employee Director shall be pro-rated for the portion of such fiscal quarter
actually served as a Non-Employee Director, or in such positions, as applicable.

Grant of Restricted Shares of Common Stock
 
In connection with the Annual Meeting of Stockholders, each Non-Employee
Director receives an annual grant of restricted shares of Company Common Stock
(“Common Stock”) valued at $115,000 on the “grant date” (determined in
accordance with the Policy on Grant of Equity Awards).

If a Non-Employee Director joins the Board of Directors after an Annual Meeting
of Stockholders, the Director shall receive a pro-rated amount of the annual
grant of restricted stock, based on the portion of the year the Director served
and according to the following schedule:

•
if a Non-Employee Director is appointed to the Board within 90 days after an
Annual Meeting of Stockholders, the Director shall receive a grant of restricted
stock valued at $115,000 on the “grant date” (determined in accordance with the
Policy on Grant of Equity Awards);

•
if a Non-Employee Director is appointed to the Board within between 91 days and
270 days after an Annual Meeting of Stockholders, the Director shall receive a
grant of restricted stock valued at $57,500 on the “grant date” (determined in
accordance with the Policy on Grant of Equity Awards); and

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•
if a Non-Employee Director is appointed to the Board 271 or more days after an
Annual Meeting of Stockholders, the Director shall not receive any grant of
restricted stock prior to the date of the Annual Meeting of Stockholders.

The number of shares granted to each such Director is determined by using the
“fair market value” of the Common Stock on the grant date. The “fair market
value” is the closing price of the Common Stock on the preceding business day.
The restricted shares of Common Stock vest on the date of the next Annual
Meeting of Stockholders. If a Director ceases to be a Director for any reason
prior to the date of the next Annual Meeting of Stockholders, the unvested
restricted shares will be forfeited.

Non-Executive Chairman Retainer

The Non-Executive Chairman of the Board receives an additional annual retainer
of $125,000, comprised of $60,000 in cash and a grant of restricted shares of
Common Stock valued at $65,000 on the “grant date”. The number of shares granted
to the Non-Executive Chairman is determined by the same method as the annual
grant to Non-Employee Directors. The restricted shares of Common Stock vest on
the date of the next annual meeting of the Board of Directors. If the
Non-Executive Chairman ceases to be the Non-Executive Chairman for any reason
prior to the date of the next annual meeting of the Board of Directors, the
unvested restricted shares will be forfeited.

The Non-Executive Chairman’s $60,000 annual cash retainer shall be earned
ratably over the fiscal year and paid in arrears in quarterly installments based
on a fiscal quarter by the 15th of the month following the end of each fiscal
quarter. If the Non-Executive Chairman ceases to be the Non-Executive Chairman
for any reason, the retainer paid to such Non-Executive Chairman shall be
pro-rated for the portion of the fiscal quarter actually served as a
Non-Executive Chairman.

Travel Expense Reimbursements and Other Benefits
 
Directors are entitled to reimbursement of their reasonable travel expenses for
attending Board of Directors and Board Committee meetings.  Travel arrangements
should be made by calling Ultramar Travel Management International, ANN INC.’s
third party travel agency services provider, at 1-866-856-0441.  Directors
should identify themselves as members of the Board of Directors when speaking to
the Ultramar agent. The Corporate Secretary’s Office will arrange for
reimbursement upon receiving receipts for any related out-of-pocket expenses.

Non-Employee Directors are also eligible to receive discounts on their purchases
of the Company’s products under the same terms and conditions available to
Company associates.