Exhibit 10.6

COMPENSATION ARRANGEMENTS FOR NON-EMPLOYEE DIRECTORS

Director Cash Fees

Each Non-Employee Director is paid an annual retainer of $40,000, payable
quarterly in advance (February 1st, May 1st, August 1st and November 1st). In
addition, each Non-Employee Director receives

 

  •  

a per Board meeting attendance fee of $1,500, which is paid only for the fifth
and any subsequent Board meetings attended by the Director in any fiscal year;
and

 

  •  

a per Board Committee attendance fee of $1,500.

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

Grant of Restricted Shares of Common Stock

Each Non-Employee Director receives an annual grant of restricted shares of Ann
Taylor Stores Corporation (the “Company”) Common Stock (“Common Stock”) valued
at $90,000 on the “grant date”, which is the date of the Company’s 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.

A Non-Employee Director joining the Board of Directors receives an initial grant
of restricted shares of Common Stock valued at $150,000 on the “grant date”,
which is the date such Non-Employee Director’s election to the Board becomes
effective. The number of shares granted to each such Director is determined by
the same method described in the previous paragraph. The restricted shares of
Common Stock vest on the third anniversary of the grant date. If a Director
ceases to be a Director for any reason prior to the third anniversary of the
grant date, the unvested restricted shares will be forfeited.

Non-Executive Chairman Fees

The Non-Executive Chairman of the Board receives an 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”, which is the date of the Company’s Annual
Meeting of Stockholders. 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.

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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 Taylor’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.