Document:

AnnTaylor Stores Corporation 2003 Equity Incentive Plan

 Exhibit 10.7 
 THE ANNTAYLOR STORES CORPORATION 
 2003 EQUITY INCENTIVE PLAN, AS AMENDED 
 1. Purpose. 
 This 2003 Equity Incentive Plan (the
“Plan”) is intended to encourage stock ownership by employees of AnnTaylor Stores Corporation (the “Corporation”), its divisions and Subsidiary Corporations, so that they may acquire or increase their proprietary interest in the
Corporation, and to encourage such employees to remain in the employ of the Corporation, its divisions and Subsidiary Corporations, and to put forth maximum efforts for the success of the business. The Plan is also intended to encourage Directors of
the Corporation who are not employees or officers of the Corporation or its Subsidiary Corporations (“Eligible Directors”) to acquire or increase their proprietary interest in the Corporation and to further promote and strengthen the
interest of such Eligible Directors in the development and financial success of the Corporation and to assist the Corporation in attracting and retaining highly qualified Directors. 
 2. Definitions. 
 As used in this Plan, the following words and phrases shall have the meanings
indicated: 
  

	 	(a)	“CAUSE” used in connection with the termination of employment or service of a Grantee, shall, unless otherwise determined by the Committee, mean a termination of
employment or service of the Grantee by the Corporation or a division or Subsidiary Corporation due to (i) the Grantee’s failure to render services in accordance with the terms of such Grantee’s employment or service, which failure
amounts to a material neglect of such Grantee’s duties, (ii) the commission by the Grantee of an act of fraud, misappropriation (including, without limitation, the unauthorized disclosure of confidential or proprietary information) or
embezzlement, or (iii) a conviction of or guilty plea or confession to any felony. 

  

	 	(b)	“CODE” shall mean the Internal Revenue Code of 1986, as amended. 

  

	 	(c)	“COMMON STOCK” shall mean shares of the Corporation’s Common Stock, par value $.0068 per share. 

  

	 	(d)	“DISABILITY” shall mean a Grantee’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that
can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve (12) months. 

  

	 	(e)	“EXCHANGE ACT” shall mean the Securities Exchange Act of 1934, as amended. 

  

	 	(f)	“EXECUTIVE OFFICER” shall mean an officer of the Corporation who is an “executive officer” within the meaning of Rule 3b-7 under the Exchange Act.

  

	 	(g)	“FAIR MARKET VALUE” per share as of a particular date shall mean (i) the closing sales price per share of Common Stock as reported on the New York Stock Exchange (or
if the shares of Common Stock are not then traded on such exchange, on the principal national securities exchange on which they are then traded) for the last preceding date on which there was a sale of such Common Stock on such exchange, or
(ii) if the shares of Common Stock are not then traded on a national securities exchange but are traded on an over-the-counter market, the average of the closing bid and asked prices for the shares of Common Stock in such over-the-counter
market for the last preceding date on which there was a sale of such Common Stock in such market, or (iii) if the shares of Common Stock are not then listed on a national securities exchange or traded in an over-the-counter market, such value
as the Committee (as defined in Section 3 hereof) in its discretion may determine. 

  

	 	(h)	“GRANTEE” shall mean a person to whom an Option, Restricted Stock Award or Restricted Unit Award has been granted. 

	 	(i)	“INCENTIVE STOCK OPTION” shall mean an Option that is intended to be an “incentive stock option” within the meaning of Section 422 of the Code.

  

	 	(j)	“NONSTATUTORY STOCK OPTION” shall mean an Option that is not intended to be an Incentive Stock Option. 

  

	 	(k)	“OPTION” shall mean the right, granted to a Grantee pursuant to Section 6, to purchase a specified number of shares of Common Stock, on the terms and subject to the
restrictions set forth in this Plan and by the Committee upon the grant of the Option to the Grantee. 

  

	 	(l)	“PERFORMANCE GOAL” shall mean the specific objectives that may be established by the Committee, from time to time, with respect to an award granted under the Plan, which
objectives may be based on one or more of the following, determined in accordance with generally accepted accounting principles, as applicable: revenue; net or gross comparable store sales; net income; gross margin; operating profit (corporate
and/or divisional); earnings before all or any of interest, taxes, depreciation and/or amortization; cash flow; working capital; return on equity, assets, capital or investment; market share; sales (net or gross) measured by store, product line,
territory, operating or business unit, customers, or other category; earnings or book value per share of Common Stock; earnings from continuing operations; net worth; turnover or shrinkage in inventory; levels of expense, cost or liability by store,
product line, territory, operating or business unit or other category; appreciation in the price of Common Stock; total shareholder return (stock price appreciation plus dividends); implementation of critical projects or processes consisting of one
or more objectives based on meeting specified market penetration, geographical business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to
acquisitions, divestitures, joint ventures and similar transactions and budget comparisons; and personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of
transactions, the development of long term business goals, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions. Where applicable, the Performance Goal may be expressed in terms of
attaining a specified level of the selected criterion or the attainment of a percentage increase or decrease in the selected criterion, or may be applied to the performance of the Corporation relative to a market index, a group of other companies or
a combination thereof, all as determined by the Committee. Performance Goals may relate to the performance of a store, business unit, product line, division, territory, or the Corporation or a combination thereof. 

  

	 	(m)	“RESTRICTED SHARE” shall mean a share of Common Stock, awarded to a Grantee pursuant to Section 7, that is subject to the terms and restrictions set forth in this
Plan and by the Committee upon the award of the Restricted Share to the Grantee. 

  

	 	(n)	“RESTRICTED UNIT” shall mean the right, awarded to a Grantee pursuant to Section 7, to receive a share of Common Stock or an amount in cash equal to the Fair Market
Value of one share of Common Stock, on the terms and subject to the restrictions set forth in this Plan and by the Committee upon the award of the Restricted Unit to the Grantee. 

  

	 	(o)	“RETIREMENT” shall mean a Grantee’s voluntary termination of employment with the Corporation and its Subsidiary Corporations after age 65 with at least 5 years of
service with the Corporation or its Subsidiary Corporations. 

  

	 	(p)	“SUBSIDIARY CORPORATION” shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the employer corporation if, at the
time of granting an Option, Restricted Stock Award or Restricted Unit Award, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain. 

 3. Administration. 
 The Plan shall be administered by the Compensation Committee (the “Committee”) of the Board of Directors of the Corporation (the
“Board”). The Committee shall consist solely of two or more members of 

 
the Board, each of whom shall be an “outside director” within the meaning of Section 162(m) of the Code, a “nonemployee director”
within the meaning of Rule 16b-3, as from time to time amended, promulgated under Section 16 of the Exchange Act, and an “independent director” within the meaning of the New York Stock Exchange Listed Company Manual. 
 The Committee shall have the authority in its discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan
and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation, the authority to grant Options and to make awards of
Restricted Shares and Restricted Units (“Restricted Stock Awards” and “Restricted Unit Awards,” respectively, and sometimes collectively with the grant of Options, “Grants”); to determine the purchase price of the
shares of Common Stock covered by each Option (the “Option Price”); to determine the persons to whom, and the time or times at which, Options, Restricted Stock Awards and Restricted Unit Awards shall be granted; to determine the number of
shares to be covered by each Option and to determine the number of Restricted Shares and Restricted Units to be covered by each Restricted Stock Award and Restricted Unit Award; to interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the agreements (which need not be identical) entered into in connection with grants of Options (“Option Agreements”) and Restricted Stock Awards and Restricted Unit
Awards (“Restricted Award Agreements”); and to make all other determinations deemed necessary or advisable for the administration of the Plan. Notwithstanding the foregoing (but subject to the provisions of Section 6(j)), the
Committee shall not have the authority to reduce the exercise price for any Option by repricing or replacing such Option unless the Corporation shall have obtained the prior consent of its stockholders. 
 The determinations of the Committee shall be binding and conclusive on all parties. The Committee may delegate to one or more of its members or to one or
more agents such administrative duties as it may deem advisable, and the Committee or any person to whom it has delegated duties as aforesaid may employ one or more persons to render advice with respect to any responsibility the Committee or such
person may have under the Plan. The Committee shall have the authority in its discretion to delegate to specified officers of the Corporation the power to make Grants, including, without limitation, to determine the terms of such Grants, and the
power to extend the exercisability of Options pursuant to Section 6(f), 6(g) or 8(f) or 8(g) hereof, in each case consistent with the terms of this Plan (but only to the extent permissible under Section 409A of the Code, hereinafter,
“Section 409A” and the provisions of Section 157 of the Delaware General Corporations Law) and subject to such restrictions, if any, as the Committee may specify when making such delegation; provided that the delegates shall
not have authority to make Grants to, or extend the exercisability of Options held by, such delegates or any Executive Officer. 
 No member
of the Board or Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any Grant made hereunder. 
 4. Eligibility. 
 Options, Restricted Stock Awards and Restricted Unit Awards may be granted to employees (including, without
limitation, officers who are employees) of the Corporation or its present or future divisions and Subsidiary Corporations, and to Eligible Directors. In determining the persons to whom Options, Restricted Stock Awards and Restricted Unit Awards
shall be granted and the number of shares to be covered by each Option and the number of Restricted Shares and Restricted Units to be covered by each Restricted Stock Award and Restricted Unit Award, the Committee shall take into account the duties
of the respective persons, their present and potential contributions to the success of the Corporation and such other factors as the Committee shall deem relevant in connection with accomplishing the purpose of the Plan. A person to whom an Option
has been granted hereunder is sometimes referred to herein as an “Optionee.” 
 A Grantee shall be eligible to receive more than
one Grant during the term of the Plan, but only on the terms and subject to the restrictions hereinafter set forth. 

 5. Stock. 
 The shares of Common Stock subject to Options and Restricted Stock Awards hereunder may, in whole or in part, be authorized but unissued shares or shares that shall have been or may be reacquired by the Corporation. Subject to the next
sentence, the aggregate number of shares of Common Stock as to which Options, Restricted Shares and Restricted Units may be granted from time to time under this Plan shall not exceed 8,750,000, of which no more than an aggregate of 2,760,000 shares
may be used for grants of Restricted Shares and Restricted Units. The limitations established by the preceding sentence shall be subject to adjustment as provided in Section 6(j) or 7(f) hereof, as applicable. Under the Plan, no single employee
may be granted Options covering more than 800,000 shares of Common Stock or Restricted Stock and Restricted Unit Awards (constituting performance based compensation within the meaning of Section 162(m) of the Code) covering more than 400,000
shares of Common Stock (subject to any adjustments pursuant to Section 6(j) or 7(f) hereof, as applicable) during any fiscal year of the Corporation. 
 If any shares subject to an Option grant or Restricted Stock Award are forfeited, canceled, exchanged or surrendered or if a Grant otherwise terminates or expires without a distribution of shares to the Grantee, the
shares of Common Stock with respect to such Grant shall, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or expiration, again be available for Grants under the Plan. If any Restricted Units are forfeited,
canceled, exchanged or surrendered or if a Restricted Unit Award otherwise terminates or expires without any payment being required to be made with respect to any of the Restricted Units subject thereto, then such Restricted Units (and, if
applicable, the Common Stock subject thereto) shall, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or expiration, again be available for Grants under the Plan. Notwithstanding the foregoing, the shares of
Common Stock available for Grants under the Plan shall be reduced by the following: (i) shares tendered in payment of the exercise price of an award and (ii) shares tendered or withheld in respect of tax withholding obligations.

 6. Terms and Conditions of Options. 
 Each Option granted pursuant to the Plan shall be evidenced by a written Option Agreement between the Corporation and the Optionee, which agreement shall comply with and be subject to the following terms and conditions (and with such other
terms and conditions not inconsistent with the terms of this Plan as the Committee, in its discretion, shall establish): 
  

	 	(a)	NUMBER OF SHARES. Each Option Agreement shall state the number of shares of Common Stock to which the Option relates. The number of shares subject to any Option shall be subject to
adjustment as provided in Section 6(j) hereof. 

  

	 	(b)	TYPE OF OPTION. Each Option Agreement shall specifically state whether the Option is intended to be an Incentive Stock Option. 

  

	 	(c)	OPTION PRICE. Each Option Agreement shall state the Option Price, which shall be not less than one hundred percent (100%) of the Fair Market Value of the shares of Common Stock
of the Corporation on the date of grant of the Option. The Option Price shall be subject to adjustment as provided in Section 6(j) hereof. The date on which the Committee adopts a resolution expressly granting an Option shall be considered the
day on which such Option is granted, unless such resolution expressly provides for a specific later date. 

  

	 	(d)	MEDIUM AND TIME OF PAYMENT. The Option Price shall be paid in full, at the time of exercise, (i) in cash, (ii) in shares of Common Stock having a Fair Market Value equal
to such Option Price provided that such shares have been held by the Grantee for at least six months prior to such exercise, (iii) in a combination of cash and shares provided that such shares have been held by the Grantee for at least six
months prior to such exercise, or (iv) in the sole discretion of the Committee, through a cashless exercise procedure involving a broker; provided, however, that such method and time for payment shall be permitted by and be in
compliance with applicable law. 

  

	 	(e)	 TERM AND EXERCISE OF OPTIONS. Except as provided in Section 6(j) hereof or unless otherwise determined by the Committee (but subject to Section 9), the
shares covered by an Option shall become exercisable over such period, in cumulative installments or otherwise, or 

	 	 
upon the satisfaction of such Performance Goals or other conditions, as the Committee shall determine; provided, however, that, subject to Section 9,
the Committee shall have the authority to accelerate the exercisability of all or any portion of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate, and provided further, however, that
such exercise period shall not (i) be earlier than one year from the date of grant of such Option (subject to Section 6(j)(2)), and (ii) exceed 10 years from the date of grant of such Option. The exercise period shall be subject to
earlier termination as provided in Sections 6(f) and 6(g) hereof. An Option may be exercised, as to any or all full shares of Common Stock as to which the Option has become exercisable, by giving written notice of such exercise to the Secretary of
the Corporation; provided, however, that an Option may not be exercised at any one time as to fewer than 100 shares (or such number of shares as to which the Option is then exercisable if such number of shares is less than 100).

  

	 	(f)	TERMINATION. Except as provided in this Section 6(f) and in Section 6(g) hereof (and except as otherwise provided in the applicable award agreement), an Option may not be
exercised unless the Optionee is then in the employ or service of the Corporation or one of its divisions or Subsidiary Corporations, and unless the Optionee has remained continuously so employed or in service since the date of grant of the Option.
In the event that the employment or service of an Optionee shall terminate or cease other than by reason of death, Disability, Retirement or a termination by the Company for Cause, all Options theretofore granted to such Optionee that are
exercisable at the time of such termination may, to the extent not theretofore exercised or canceled, be exercised at any time within the earlier of when the Options expire pursuant to Section 6(e) hereof and three (3) months after such
termination of employment or cessation of service, as applicable; provided, however, that the Committee may in its discretion extend the period for exercise of such Options to a date later than three (3) months after such
separation or cessation date, but in any event not beyond the date on which the Option would otherwise expire pursuant to Section 6(e) hereof. Notwithstanding the foregoing, if the employment of an Optionee shall terminate voluntarily by the
Optionee or by the Company for Cause, all Options theretofore granted to such Optionee shall, to the extent not theretofore exercised, terminate on the day following termination. 

  

	 	(g)	DEATH, DISABILITY OR RETIREMENT OF OPTIONEE. If an Optionee shall die while employed by or in service to the Corporation or a Subsidiary Corporation, or if the Optionee’s
employment or service shall terminate or cease by reason of Disability or Retirement, all Options theretofore granted to such Optionee, to the extent exercisable on the date of death or separation, may be exercised by the Optionee or by the
Optionee’s estate or by a person who acquired the right to exercise such Option by bequest or inheritance or otherwise by reason of the death or Disability of the Optionee, at any time within three (3) years after the date of death or
termination by reason of Disability or Retirement, or at such later time as the Committee may in its discretion determine, but in any event not beyond the date on which the Option would otherwise expire pursuant to Section 6(e) hereof.

  

	 	(h)	NONTRANSFERABILITY OF OPTIONS. Options granted under the Plan shall not be transferable except (i) by will or the laws of descent and distribution, or (ii) as specifically
provided below in this Section (6)(h). Any Optionee may transfer Nonstatutory Stock Options to members of his or her Immediate Family (as defined below) if (x) the Option Agreement pursuant to which the Nonstatutory Stock Option was granted so
provides, (y) such agreement was approved by the Board or the Committee, and (z) the Optionee does not receive any consideration for the transfer. “Immediate Family” means children, grandchildren, and spouse of the Optionee
(including domestic partners under applicable law) or one or more trusts for the benefit of such family members or partnerships in which such family members are the only partners. Any Nonstatutory Stock Option agreement may be amended to provide for
the transferability feature as outlined above, provided that such amendment is approved by the Board or the Committee. Any Nonstatutory Stock Option not granted pursuant to an Option Agreement expressly permitting its transfer shall not be
transferable. During the lifetime of the Optionee, Options may be exercised only by the Optionee, the guardian or legal representative of the Optionee, or the transferee as permitted under this Section 6(h). 

	 	(i)	SPECIAL PROVISIONS APPLICABLE TO INCENTIVE STOCK OPTIONS. The provisions of this Section 6(i) shall apply to the grant of Incentive Stock Options, notwithstanding any other
provision of the Plan to the contrary. Only employees of the Corporation or any Subsidiary Corporation may be granted Incentive Stock Options under the Plan. In the case of any Incentive Stock Option, to the extent the aggregate Fair Market Value
(determined at the time such Option is granted) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under the Plan and all other Incentive Stock Option plans
of the Corporation and any Subsidiary Corporation) exceeds $100,000, such Option shall be treated as a Nonstatutory Stock Option. In no event shall any employee who, at the time such employee would otherwise be granted an Option, owns (within the
meaning of Section 424(d) of the Code) stock of the Corporation or any Subsidiary Corporation possessing more than 10% of the total combined voting power of all classes of stock of the Corporation or any Subsidiary Corporation, be eligible to
receive an Incentive Stock Option under the Plan. To the extent an Incentive Stock Option is exercised more than three months following the termination of the Grantee’s employment (other than a termination resulting from the Grantee’s
death or Disability), such Option shall be treated as a Nonstatutory Stock Option. 

  

	 	(j)	EFFECT OF CERTAIN CHANGES. (1) In the event that any dividend or other distribution is declared (whether in the form of cash, Common Stock, or other property), or there occurs
any recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange or other similar corporate transaction or event, the Committee shall adjust, (i) the number and
kind of shares of stock which may thereafter be issued in connection with Options hereunder, (ii) the number and kind of shares of stock or other property issued or issuable in respect of outstanding Options, (iii) the exercise price,
grant price or purchase price relating to any award, and (iv) the limitations set forth in Section 5; in such equitable manner as it deems appropriate, in its sole discretion, to prevent the dilution or enlargement of rights; provided
that, with respect to Incentive Stock Options, such adjustment shall be made in accordance with Section 424 of the Code. Any fractional shares resulting from such adjustment shall be disregarded. 

 (2) If an Acceleration Event (as defined below) shall occur while unexercisable Options remain outstanding under the Plan, such Options not theretofore
exercisable by their terms shall become exercisable in full. An “Acceleration Event” shall occur if: 
 (A) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than any person who on the date hereof is a director or officer of the Corporation, any trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation, or any corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 20% or more of the combined voting power of the Corporation’s then outstanding securities; 
 (B) during any period of 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 Corporation to effect a transaction described in clause (A) or (C) of this
Section 6(j)(2)) whose election by the Board or nomination for election by the Corporation’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; 
 (C) there is consummated a merger or consolidation of the
Corporation with any other entity other than a merger or consolidation which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 80% of the combined voting power of the voting securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation; or 

 (D) the stockholders of the Corporation approve a plan of complete liquidation of the
Corporation or an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation’s assets. 
 Following the Acceleration Event, the Committee may provide for the cancellation of all Options then outstanding. Upon such cancellation, the Corporation shall make, in exchange for each such Option, a payment either
in (i) cash; (ii) shares of the successor entity; or (iii) some combination of cash or shares thereof, at the discretion of the Committee, and in each case in an amount per share subject to such Option equal to the difference between
the per share exercise price of such Option and the Fair Market Value of a share of Common Stock on the date of the Acceleration Event. 
 (3)
In the event of a change in the Common Stock of the Corporation as presently constituted which is limited to a change of all of its authorized shares with par value into the same number of shares with a different par value or without par value, the
shares resulting from any such change shall be deemed to be the Common Stock within the meaning of the Plan. 
 (4) The foregoing adjustments
shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. 
 (5) Except as hereinbefore
expressly provided in this Section 6(j), the Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of
shares of stock of any class or by reason of any dissolution, liquidation, merger, or consolidation or spin-off of assets or stock of another corporation; and any issue by the Corporation of shares of stock of any class, or securities convertible
into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to the Option. The grant of an Option pursuant to the Plan shall not affect
in any way the right or power of the Corporation to make adjustments, reclassifications, reorganizations or changes of its capital or business structures or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or part of its
business or assets. 
  

	 	(k)	RIGHTS AS A STOCKHOLDER. An Optionee or a transferee of an Option shall have no rights as a stockholder with respect to any shares covered by the Option until the date of the
issuance of a stock certificate for such shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distribution of other rights for which the record date is prior to the date such
stock certificate is issued, except as provided in Section 6(j) hereof. 

  

	 	(l)	PERFORMANCE GOALS. The Committee may determine that the vesting and/or payment of an Option shall be made subject to one or more Performance Goals. Performance Goals established by
the Committee may be different with respect to different Grantees. The Committee shall have the authority to make equitable adjustments to any Performance Goal in recognition of unusual or nonrecurring events affecting the Corporation, its financial
statements or its shares, in response to change in applicable laws or regulations, or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence, including any major settlement,
judgment or any other material liability in connection with a litigation or governmental proceeding or investigation, or any gain, loss or expense related to the acquisition, disposition or discontinuance of a business or a segment of a business, or
related to a change in accounting principles, or to reflect capital charges. With respect to Options granted to Executive Officers, the vesting and/or payment of which are to be made subject to Performance Goals, the Committee may comply with the
applicable provisions of Section 162(m) of the Code, including, without limitation, those provisions relating to the pre-establishment and certification of such Performance Goals. With respect to Grantees who are not Executive Officers,
Performance Goals may also include such individual objective or subjective performance criteria as the Committee may, from time to time, establish. Performance Goals applicable to any Option may include a threshold level of performance below which
no portion of such Grant shall become vested and/or payable, and levels of performance at which specified percentages of such Grant shall become vested and/or payable. 

	 	(m)	OTHER PROVISIONS. The Option Agreements authorized under the Plan may contain such other provisions, including, without limitation, the imposition of (1) restrictions upon the
exercise of an Option and (2) provisions that will result in the forfeiture of an Option and/or the shares acquired thereunder in the event the Optionee breaches covenants relating to non-competition, confidentiality and non-solicitation of
employees and customers, as the Committee shall deem advisable. 

 7. Terms and Conditions of Restricted Stock Awards and Restricted Unit
Awards. 
 Each Restricted Stock Award and Restricted Unit Award granted under the Plan shall be evidenced by a written Restricted Award
Agreement between the Corporation and the Grantee, which agreement shall comply with, and be subject to, the following terms and conditions (and with such other terms and conditions not inconsistent with the terms of this Plan as the Committee, in
its discretion, shall establish): 
  

	 	(a)	NUMBER OF SHARES AND UNITS. The Committee shall determine the number of Restricted Shares to be awarded to a Grantee pursuant to the Restricted Stock Award and the number of
Restricted Units to be awarded to a Grantee pursuant to a Restricted Unit Award. 

  

	 	(b)	NONTRANSFERABILITY. Except as set forth in subsections (f) and (h) of this Section 7, a Grantee may not sell, assign, transfer, pledge, hypothecate or otherwise
dispose of any Restricted Shares or Restricted Units awarded to said Grantee under this Plan, or any interest therein, except by will or the laws of descent and distribution, until the Restricted Period (as defined below) shall have elapsed, which
Restricted Period shall be subject to Section 9 hereof. The Committee may also in its discretion impose such other restrictions and conditions on Restricted Shares and Restricted Units awarded as it deems appropriate including, without
limitation, the imposition of provisions that will result in the forfeiture of Restricted Shares and Restricted Units in the event the Grantee breaches covenants relating to non-competition, confidentiality and non-solicitation of employees and
customers. In determining the Restricted Period of an award, the Committee may provide that the restrictions shall lapse with respect to specified percentages of the awarded shares or units on successive anniversaries of the date of such award or
upon the satisfaction of such other conditions as the Committee may impose, including, without limitation, the attainment of one or more Performance Goals. Subject to the occurrence of an Acceleration Event, as defined in Section 6(j)(2) (in
which case the Restricted Period with respect to Restricted Stock Awards shall immediately end and the Restricted Period with respect to Restricted Units shall immediately end if permissible under Section 409A), the Restricted Period shall not
end with respect to a Restricted Stock Award or a Restricted Unit Award prior to one year following the date of grant, except for the Restricted Period of a Restricted Stock Award of 200 shares or less (as such shares may be appropriately adjusted
by the Committee in the event of any change as set forth in Section 6(j)), which may end earlier than one year, but no earlier than 30 days following the date of grant. In no event shall the Restricted Period end with respect to a Restricted
Stock Award or Restricted Unit Award prior to the satisfaction by the Grantee of any liability arising under Section 8 hereof. Any attempt to dispose of any Restricted Shares in contravention of any such restrictions shall be null and void and
without effect. The period during which such restrictions on transfer, and such other restrictions as the Committee may impose, are in effect is referred to as the “Restricted Period”. 

  

	 	(c)	CERTIFICATES REPRESENTING RESTRICTED SHARES. The Corporation shall not be required to issue stock certificates representing Restricted Shares awarded to a Grantee until the
Restricted Period related to such shares has lapsed. If any stock certificates representing Restricted Shares awarded pursuant to a Restricted Stock Award are issued prior to the lapse of the Restricted Period, such stock certificate shall bear an
appropriate legend referring to such restrictions. Such certificates may be retained by the Corporation during the Restricted Period. 

  

	 	(d)	 TERMINATION. If the Grantee’s continuous employment or service with the Corporation or any of its divisions or Subsidiary Corporations shall terminate for any
reason prior to the expiration of the Restricted Period applicable to any Restricted Shares or Restricted Units granted to such Grantee, or prior to the satisfaction of any other conditions established by the Committee applicable to such Grant, any
such Restricted Shares or Restricted Units then 

	 	 
remaining subject to restrictions (after taking into account the provisions of subsections (f) and (h) of this Section 7) shall thereupon be
forfeited by the Grantee and any such Restricted Shares shall be transferred to, and reacquired by, the Corporation or its Subsidiary Corporation at no cost to the Corporation or the Subsidiary Corporation. In such event, the Grantee, or in the
event of his/her death, his/her personal representative, shall, with respect to any such shares, forthwith deliver to the Secretary of the Corporation any stock certificates in the possession of the Grantee or the Grantee’s representative
representing the Restricted Shares remaining subject to such restrictions, accompanied by such instruments of transfer, if any, as may reasonably be required by the Secretary of the Corporation. 

  

	 	(e)	RIGHTS AS A STOCKHOLDER. Upon receipt by a Grantee of a Restricted Stock Award, the Grantee shall possess all incidents of ownership of the Restricted Shares (subject to subsection
(b) of this Section 7), including, without limitation, the right to receive or reinvest dividends (to the extent declared by the Corporation) with respect to such shares and to vote such shares. 

  

	 	(f)	EFFECT OF CERTAIN CHANGES. The number of Restricted Shares or Restricted Units subject to a Grant shall be appropriately adjusted by the Committee in the event of any circumstance
described in Section 6(j)(1). Upon the occurrence of an Acceleration Event, as defined in Section 6(j)(2), all restrictions then outstanding with respect to a Restricted Stock Award shall automatically expire and be of no further force and
effect. Upon the occurrence of an Acceleration Event, as defined in Section 6(j)(2), all restrictions then outstanding with respect to a Restricted Unit Award shall automatically expire and be of no further force and effect, and full payment in
respect of such Restricted Unit Award shall be made as soon as practicable thereafter, but only if permissible under Section 409A; if such settlement is not permissible under Section 409A, then settlement shall occur in accordance with the
other terms of the Restricted Unit Award. 

  

	 	(g)	PERFORMANCE GOALS. The Committee may determine that the vesting and/or payment of a Restricted Stock Award or a Restricted Unit Award shall be made subject to one or more
Performance Goals. Performance Goals established by the Committee may be different with respect to different Grantees. The Committee shall have the authority to make equitable adjustments to any Performance Goal in recognition of unusual or
nonrecurring events affecting the Corporation, its financial statements or its shares, in response to change in applicable laws or regulations, or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or
infrequent in occurrence or related to the acquisition, disposition or discontinuance of a business or a segment of a business, or related to a change in accounting principles, or to reflect capital charges. With respect to Restricted Stock Awards
or Restricted Unit Awards granted to Executive Officers, the vesting and/or payment of which are to be made subject to Performance Goals, the Committee may comply with the applicable provisions of Section 162(m) of the Code, including, without
limitation, those provisions relating to the pre-establishment and certification of such Performance Goals. With respect to Grantees who are not Executive Officers, Performance Goals may also include such individual objective or subjective
performance criteria as the Committee may, from time to time, establish. Performance Goals applicable to any Restricted Stock Award or Restricted Unit Award may include a threshold level of performance below which no portion of such Grant shall
become vested and/or payable, and levels of performance at which specified percentages of such Grant shall become vested and/or payable. 

  

	 	(h)	OTHER PROVISIONS. Subject to Section 9, the Committee shall have the authority (and the Restricted Award Agreement may so provide) to cancel all or any portion of any
outstanding restrictions and conditions prior to the expiration of the Restricted Period with respect to all or part of a Restricted Stock Award or Restricted Unit Award on such terms and conditions as the Committee may deem appropriate, provided
that any such cancellation with respect to Restricted Unit Awards shall only be made in compliance with the provisions of Section 409A. The Restricted Award Agreements authorized under this Plan shall contain such other provisions not
inconsistent with the terms hereof as the Committee shall deem advisable. Restricted Unit Awards shall be granted with terms and conditions which comply with or are exempt from the provisions of Section 409A and shall be administered and
interpreted in a manner which causes such Restricted Unit Awards to continue to comply with or be exempt from the applicable provisions of Section 409A. 

 8. Withholding Taxes. 
 When a Grantee or other person becomes entitled to receive shares of Common Stock pursuant to the exercise of an Option or upon the lapse of restrictions relating to a Restricted Stock Award, or to receive a cash
payment with respect to a Restricted Unit Award upon the lapse of restrictions relating thereto, the Corporation shall have the right to require the Grantee or such other person to remit to the Corporation an amount sufficient to satisfy any
federal, state and local withholding tax requirements related thereto. Unless otherwise prohibited by the Committee or by applicable law, satisfaction of the withholding tax obligation may be accomplished by any of the following methods or by a
combination of such methods: (a) tendering a cash payment, (b) authorizing the Corporation to withhold from the shares of Common Stock or cash otherwise payable (1) one or more of such shares having an aggregate Fair Market Value,
determined as of the date the withholding tax obligation arises, less than or equal to the amount of the minimum withholding tax obligation or (2) cash in an amount less than or equal to the amount of the total withholding tax obligation and
(c) delivering to the Corporation shares of Common Stock (provided that such shares shall have been held for at least six months) having an aggregate Fair Market Value, determined as of the date the withholding tax obligation arises, less than
or equal to the amount of the total withholding tax obligation. 
 9. Special Vesting Provisions. 
 (a) Subject to paragraph (c) below, to the extent that an Option is to become exercisable, or an award of Restricted Shares or Restricted Units is to
vest, based upon the continued employment of the Grantee, such award shall become exercisable or vest (as the case may be) pursuant to a schedule that provides for exercisability or vesting at a rate no more rapid than in three equal increments on
each of the first three anniversaries of the date of grant (subject to earlier exercisability or vesting upon an Acceleration Event or as may provided in an award agreement with respect to the grantee’s death, Disability, Retirement or
termination without Cause). 
 (b) Subject to paragraph (c) below, to the extent an award of Restricted Shares is to vest, subject to
one or more Performance Goals, such award shall vest no earlier than one (1) year from the date of grant (subject to earlier vesting upon an Acceleration Event or as may be provided in an award agreement with respect to the grantee’s
death, Disability, Retirement or termination without Cause). 
 (c) Notwithstanding the provisions of subparagraphs (a) and (b) of
Section 9, the Board and the Committee shall have the right to make awards on the following terms and accelerate the exercisability or vesting of awards as set forth below, provided that the aggregate of all such awards granted and so
accelerated in any fiscal year shall not exceed 5.0% of the total shares then authorized under the Plan: 
  

	 	(i)	Grant time-vesting Options, time-vesting Restricted Shares and time-vesting Restricted Units pursuant to a schedule that provides for exercisability or vesting at a rate more rapid
than in three equal increments on each of the first three anniversaries of the date of grant and performance-vesting Restricted Shares vesting sooner than one year from the date of grant (in all cases excluding earlier exercisability or vesting upon
an Acceleration Event or as may be provided in an award agreement with respect to the Grantee’s death, Disability, Retirement or termination without Cause); and 

  

	 	(ii)	Accelerate the exercisability or vesting of an award other than upon an Acceleration Event or as may be provided in an award agreement with respect to the Grantee’s death,
Disability, Retirement or termination without Cause). 

 10. Term of Plan. 
 Unless terminated earlier by the Board, the term of this Plan shall be 10 years from the date the Plan was adopted. No Option, Restricted Stock Award or
Restricted Unit Award shall be granted pursuant to this Plan later than May 1, 2013, but Options, Restricted Shares and Restricted Units theretofore granted may extend beyond that date in accordance with their terms. 

 11. Amendment and Termination of the Plan. 
 The Board may, at any time and from time to time, suspend, terminate, modify or amend the Plan. Except as provided in Section 6 hereof, no
suspension, termination, modification or amendment of the Plan may adversely affect any Grant previously made, unless the written consent of the Grantee is obtained. Furthermore, except as provided in Section 6 hereof, no modification or
amendment of the Plan shall be made that, without the approval of stockholders, would: 
 (a) increase the total number of
shares reserved for the purpose of the Plan; 
 (b) reduce the exercise price for Options by repricing or replacing such
Grants; or 
 (c) otherwise require approval under applicable law or the rules of the New York Stock Exchange (or such other
national stock exchange upon which the Common Stock is listed). 
 The Committee shall not have the authority to cancel any outstanding
Option and issue a new Option in its place with a lower exercise price; provided, however, that this sentence shall not prohibit an exchange offer whereby the Corporation provides certain Grantees with an election to cancel an outstanding Option and
receive a grant of a new Option at a future date if such exchange offer only occurs with stockholder approval. Notwithstanding the foregoing, the Committee shall have the authority to amend the Plan and any award made hereunder to the extent
necessary to cause the Plan or such award to comply with the provisions of Section 409A and such amendment shall not require the consent of the Grantee. 
 12. Effective Date. 
 The Plan was initially adopted on March 11, 2003 by the Board of Directors. The Plan has been
amended from time to time thereafter, through August 21, 2008. 
 13. Miscellaneous. 
  

	 	(a)	EFFECT OF HEADINGS. The section and subsection headings contained herein are for convenience only and shall not affect the construction hereof. 

  

	 	(b)	COMPLIANCE WITH LEGAL REQUIREMENTS. The Plan and the other obligations of the Corporation under the Plan and any agreement shall be subject to all applicable federal and state laws,
rules and regulations, and to such approvals by any regulatory or governmental agency as may be required. The Corporation, in its discretion, may postpone the issuance or delivery of Common Stock under any Grant as the Corporation may consider
appropriate, and may require any Grantee to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Common Stock in compliance with applicable laws, rules and regulations.

  

	 	(c)	NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in the Plan or in any agreement entered into pursuant hereto shall confer upon any Grantee the right to continue in the employ or service
of the Corporation or any of its divisions or Subsidiary Corporations, to be entitled to any remuneration or benefits not set forth in the Plan or such agreement or to interfere with or limit in any way the right of the Corporation or such division
or Subsidiary Corporation to terminate such Grantee’s employment. 

  

	 	(d)	GRANTEE RIGHTS. No Grantee shall have any claim to be made any Grant under the Plan, and there is no obligation for uniformity of treatment for Grantees. Except as provided
specifically herein, a Grantee or a transferee of a Grant shall have no rights as a stockholder with respect to any shares covered by any Grant until the date of the issuance of a stock certificate for such shares. 

  

	 	(e)	BENEFICIARY. A Grantee may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or
revoke such designation. If no designated beneficiary survives the Grantee, the executor or administrator of the Grantee’s estate shall be deemed to be the Grantee’s beneficiary. 

 14. Governing Law. 
 The Plan shall be construed and administered in accordance with the laws of the State of Delaware without regard to its principles of conflicts of law.AnnTaylor Stores Corporation Special Severance Plan

 Exhibit 10.8 
 ANNTAYLOR STORES CORPORATION 
 SPECIAL SEVERANCE PLAN, AS AMENDED 
 AnnTaylor Stores Corporation, a Delaware corporation (the “Company”), hereby adopts the AnnTaylor Stores Corporation Special Severance Plan
(the “Plan”) for the benefit of certain employees of the Company and its subsidiaries, on the terms and conditions hereinafter stated. 
 The Plan, as set forth herein, is intended to help retain qualified employees, maintain a stable work environment and provide economic security to certain employees of the Company in the event of a Qualifying Termination (as defined
herein). The Plan, as a “severance pay arrangement” within the meaning of Section 3(2)(B)(i) of ERISA, is intended to be excepted from the definitions of “employee pension benefit plan” and “pension plan” set forth
under Section 3(2) of ERISA, and is intended to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title 29, Code of Federal
Regulations, ss. 2510.3-2(b). 
 SECTION 1. DEFINITIONS. As hereinafter used: 
 1.1 “Affiliate” shall mean any corporation, directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with the Company. 
 1.2 “Annual Compensation” shall mean (i) the Severed Employee’s current rate of base salary (determined immediately prior to the
Qualifying Termination and without regard to any decrease in such salary constituting Good Reason), plus (ii) the average of the Severed Employee’s annual bonuses earned in respect of the three full fiscal years (or the number of full
years worked with the Company, if fewer than three) immediately preceding the year in which the Change in Control occurs or, if higher, in which the Qualifying Termination occurs. 
 1.3 “Board” shall mean the Board of Directors of the Company. 
 1.4 “Cause” shall mean, with respect to a termination of the Employee’s employment with the Company, (i) the willful and continued failure by the Employee to substantially perform the
Employee’s duties with the Company (other than by reason of physical or mental incapacity) or (ii) the conviction of the Employee for the commission of a felony involving moral turpitude. 
 1.5 “Change in Control” shall be deemed to have occurred if: 
 (I) any “person”, as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit
plan of the Company, or (C) 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 1.5) whose election by the Company’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) there is consummated a merger or consolidation of the Company with any other entity, other than (A) a merger or
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). 
 1.6 “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time. 
 1.7 “Committee” shall mean the Compensation Committee of the Board. 
 1.8 “Company” shall mean AnnTaylor Stores Corporation, a Delaware corporation, or any successor thereto. 
 1.9 “Disability” shall mean a physical or mental condition causing the Employee to be unable to substantially perform his or her duties with
the Company, including, without limitation, such condition entitling him or her to benefits under any sick pay or disability income policy or program of the Company. 
 1.10 “Effective Date” shall mean January 1, 2000. 
 1.11 “Employee” shall mean any
employee of the Company or any direct or indirect subsidiary of the Company who is a Level I, Level II, Level III or Level IV Employee. 

 1.12 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time. 
 1.13 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
 1.14 “Good Reason” shall mean any of the following acts or omissions that take place on or after the occurrence of a Change in Control:
(i) the material diminution in the Employee’s duties or authority; (ii) a change of the Employee’s place of employment by more than fifty (50) miles; or (iii) a reduction in the Employee’s salary or bonus
opportunity; provided, however, that clause (i) above shall only be applicable to an Employee who is as a Level I or Level II Employee. 
 1.15 “Level I Employee” shall mean an Employee who has the title of (i) President of the AnnTaylor Stores, LOFT or AnnTaylor Factory divisions of the Company, or (ii) Executive Vice President of the Company or any direct
or indirect subsidiary of the Company. 
 1.16 “Level II Employee” shall mean an Employee who has the title of Senior Vice
President of the Company or any direct or indirect subsidiary of the Company. 
 1.17 “Level III Employee” shall mean an Employee
who has the title of Vice President of the Company or any direct or indirect subsidiary of the Company. 
 1.18 “Level IV Employee”
shall mean an Employee who is a Director-level employee of the Company or any direct or indirect subsidiary of the Company (including District Managers and Merchandising Managers). 
 1.19 “Person” shall mean any individual, entity or group, within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.

 1.20 “Plan Administrator” shall mean the person or persons designated by the Committee or by the Board to administer the Plan.

 1.21 “Potential Change in Control” shall be deemed to occur in the event that, after the Effective Date, the Company enters into
an agreement, the consummation of which would result in a Change in Control or the Company, or any Person publicly announces an intention to take or to consider taking action which, if consummated, would constitute a Change in Control. 

1.22 “Qualifying Termination” shall mean a termination of an Employee’s employment following a Change in Control and on or before such
Employee’s Qualifying Termination Date, either (i) by the Company without Cause or (ii) by the Employee for 

 
Good Reason. Severance Benefits will not be paid in the event of termination of an Employee’s employment by reason of retirement or death, by the
Company for Cause or Disability or by the Employee without Good Reason. A termination of employment will not be deemed to have occurred upon (1) the transfer of the Employee to employment with an Affiliate of the Company if the Affiliate
assumes the Company’s responsibilities under the Plan with respect to the Employee or (2) the divestiture of a business with which the Employee is primarily associated if the Employee is offered comparable employment by the successor
company and such successor company assumes the Company’s responsibilities under the Plan with respect to such Employee. 
 1.23
“Qualifying Termination Date” shall mean the date occurring twenty-four (24) months following a Change in Control. 
 1.24
“Severance Benefits” shall mean the payments and benefits provided to Severed Employees pursuant to Section 2.1 and 2.2 hereof. 
 1.25 “Severance Date” shall mean the date on which an Employee incurs a Qualifying Termination. 
 1.26 “Severance
Multiple” shall mean: 
 (a) with respect to Level I Employees, two and one-half; 
 (b) with respect to Level II employees, two; 
 (c) with respect to Level III Employees, one and one-half; and 
 (d) with respect to Level IV
Employees, one. 
 1.27 “Severed Employee” shall mean an Employee who has incurred a Qualifying Termination. 
 Additional definitions are set forth within the Plan and shall have the meanings ascribed to them in the Plan. 
 SECTION 2. BENEFITS. 
 2.1 (a) Subject to Section 2.4 hereof and to subsections (b) and (c) of this Section 2.1, each Severed Employee shall be entitled to receive from the Company an amount equal to the product of
(i) the Severed Employee’s Annual Compensation and (ii) the Severed Employee’s Severance Multiple (the “Severance Amount”). The Severance Amount shall be paid to such Severed Employee in a lump sum as soon as
practicable following the first date on which the Release referred to in Section 2.5 hereof is no longer revocable, but in no event later than the last day of the “applicable 2  1/2 month period”, as such term in defined in Treasury Regulation § 1.409A-1(b)(4)(i)(A). 
 (b) Notwithstanding the foregoing, if a Change in Control under the Plan does 

 
not constitute a “change in the ownership or effective control of the corporation or in the ownership of a substantial portion of the assets of the
corporation” (within the meaning of Section 409A of the Code and applicable guidance issued thereunder), then in the case of a Severed Employee who is either (i) a participant in the AnnTaylor Stores Corporation Severance Plan or
(ii) party to an individual agreement with the Company providing for non-Change in Control-related severance payments which are payable other than in a lump sum, the Severance Amount under this Plan shall be paid to the Severed Employee in
substantially equal monthly installments over a number of years corresponding to the Severed Employee’s Severance Multiple. 
 (c)
Notwithstanding the foregoing, to the extent required by Section 409A of the Code and applicable guidance issued thereunder, the payment of amounts under this Section 2.1 to a Severed Employee who is a “specified employee”
(within the meaning of said Section 409A) shall not be made until the expiration of six (6) months following the Severed Employee’s Severance Date. 
 (d) The Severance Amount that a Severed Employee receives under this Plan shall not be taken into account for purposes of determining benefits under any other qualified or nonqualified plans of the Company.”

 2.2 Subject to Section 2.4 hereof, commencing on the date immediately following the Severed Employee’s Severance Date and
continuing for the period set forth below (the “Welfare Benefit Continuation Period”), the Company shall provide each Severed Employee and anyone entitled to claim under or through such Severed Employee with all Company-paid benefits under
any group health plan and life insurance plan of the Company (as in effect immediately prior to the such Severed Employee’s Severance Date or, if more favorable to the Severed Employee, immediately prior to the Change in Control) for which
employees of the Company and its subsidiaries are eligible, to the same extent as if such Severed Employee had continued to be an employee of the Company or any subsidiary thereof during the Welfare Benefit Continuation Period. To the extent that
the Severed Employee’s participation in Company benefit plans is not practicable, the Company shall arrange to provide, at the Company’s sole expense, the Severed Employee and anyone entitled to claim under or through such Severed Employee
with equivalent health and life insurance benefits under an alternative arrangement during the Welfare Benefit Continuation Period. The coverage period for purposes of the group health continuation requirements of Section 4980B of the Code
shall commence at the expiration of the Welfare Benefit Continuation Period. For purposes of this Section 2.2, the Welfare Benefit Continuation Period shall be the product of (a) the Severed Employee’s Severance Multiple and
(b) twelve months. Notwithstanding the foregoing, to the extent required by Section 409A of the Code and applicable guidance issued thereunder, the provision of benefits under this Section 2.2 to a Severed Employee who is a
“specified employee” (within the meaning of said Section 409A) shall not commence until the expiration of six (6) months following the Severed Employee’s Severance Date, at which time the Company shall provide such benefits
in respect of such six-month period (including by way of reimbursement of expenses incurred by such Severed Employee during such period in respect of the provision of such benefits). 
  

 2.3 In the event of a claim by an Employee as to the amount or timing of any payment or benefit under the
Plan, such Employee shall present the reason for his or her claim in writing to the Plan Administrator. The Plan Administrator shall, within thirty (30) days after receipt of such written claim, send a written notification to the Employee as to
its disposition. In the event the claim is wholly or partially denied, such written notification shall (i) state the specific reason or reasons for the denial, (ii) make specific reference to pertinent Plan provisions on which the denial
is based, (iii) provide a description of any additional material or information necessary for the Employee to perfect the claim and an explanation of why such material or information is necessary, and (iv) set forth the procedure by which
the Employee may appeal the denial of his or her claim. In the event an Employee wishes to appeal the denial of his or her claim, he or she may request a review of such denial by making application in writing to the Plan Administrator within fifteen
(15) days after receipt of such denial. Such Employee (or his or her duly authorized legal representative) may, upon written request to the Plan Administrator, review any documents pertinent to his or her claim, and submit in writing issues and
comments in support of his or her position. Within thirty (30) days after receipt of a written appeal (unless special circumstances, such as the need to hold a hearing, require an extension of time, but in no event more than thirty
(30) days after such receipt), the Plan Administrator shall notify the Employee of the final decision. The final decision shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood
by the claimant, and specific references to the pertinent Plan provisions on which the decision is based. 
 2.4 No Employee shall be
eligible to receive Severance Benefits under Section 2.1 or 2.2 above, unless, within forty-five (45) days following such Employee’s Severance Date, he or she first executes a Release (substantially in the form of Exhibit A hereto) in
favor of the Company and others set forth on said Exhibit A, relating to all claims or liabilities of any kind relating to his or her employment with the Company or a subsidiary thereof and the termination of the Employee’s employment. In the
event that a Severed Employee’s Severance Date occurs within fifty two (52) days before the end of a calendar year, the provision of Severance Benefits (other than continued life insurance benefits under Section 2.2) to such Severed
Employee shall not commence until January 1 of the next calendar year. 
 2.5 The Company shall pay to each Employee all reasonable
legal fees and expenses incurred by such Employee in seeking in good faith to obtain or enforce any right or benefit provided under this Plan (other than any such fees and expenses incurred in pursuing any claim determined to be frivolous by an
arbitrator or by a court of competent jurisdiction). 
 2.6 (a) In the event that any payment or benefit received or to be received
hereunder by a Severed Employee who is a Level I Employee or a Level II Employee (a “Severed Executive”) would be subject (in whole or in part) to the tax (the “Excise Tax”) imposed under Section 4999 of the Code, the
Company shall pay to the Severed 

 
Executive such additional amounts (the “Gross-Up Payment”) as may be necessary to place the Severed Executive in the same after-tax position in
which he or she would have been had no portion of the Total Payments (as hereinafter defined) been subject to the Excise Tax. The Gross-Up Payment shall be paid as soon as practicable following determination of the Excise Tax (but in no event later
than the end of the calendar year following the calendar year in which the Excise Tax is paid). For purposes of the Plan, “Total Payments” shall mean any payments made or benefits provided in connection with a Change in Control of the
Company or the termination of the Severed Executive’s employment, whether such payments or benefits are received pursuant to the terms of this Plan or any other plan, arrangement or agreement with the Company, any person whose actions result in
a Change in Control of the Company or any person affiliated with the Company or such person. 
 (b) In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder, the Severed Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment
attributable to the reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Severed Executive to the extent that such repayment
results in a reduction in Excise Tax and/or federal, state or income tax deduction) plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the
amount taken into account hereunder (including by reason of any payment the existence of which cannot be determined as the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Severed Executive with respect of such excess) at the time that the amount of such excess if finally determined. The Severed Executive and the Company shall each reasonably cooperate with the other in
connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Total Payments. 
 SECTION 3. PLAN ADMINISTRATION. 
 3.1 The Plan shall be interpreted, administered and operated by the Plan Administrator, which
shall have complete authority, in its sole discretion subject to the express provisions of the Plan, to determine who shall be eligible for Severance Benefits, to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to
it, and to make all other determinations necessary or advisable for the administration of the Plan. 
 3.2 All questions of any character
whatsoever arising in connection with the interpretation of the Plan or its administration or operation shall be submitted to and settled and determined by the Plan Administrator in an equitable and fair manner in accordance with the procedure for
claims and appeals described in Section 2.3 hereof. 

 3.3 The Plan Administrator may delegate any of its duties hereunder to such person or persons from time
to time as it may designate. 
 3.4 The Plan Administrator is empowered, on behalf of the Plan, to engage accountants, legal counsel and such
other personnel as it deems necessary or advisable to assist it in the performance of its duties under the Plan. The functions of any such persons engaged by the Plan Administrator shall be limited to the specified services and duties for which they
are engaged, and such persons shall have no other duties, obligations or responsibilities under the Plan. Such persons shall exercise no discretionary authority or discretionary control respecting the management of the Plan. All reasonable expenses
thereof shall be borne by the Company. 
 SECTION 4. PLAN MODIFICATION OR TERMINATION. 
 The Plan may be amended or terminated by the Board at any time; provided, however, that (i) no termination or amendment of the Plan may reduce the
Severance Benefits payable under the Plan to an Employee if the Employee’s termination of employment with the Company has occurred prior to such termination of the Plan or amendment of its provisions and (ii) during the pendency of a
Potential Change in Control and following a Change in Control, the Plan may not be terminated and may not be amended without the consent of each affected Employee, if such amendment would be adverse to the interests of any Employee. 
 SECTION 5. GENERAL PROVISIONS. 
 5.1 Except as otherwise
provided herein or by law, none of the payments, benefits or rights of any Employee shall be subject to any claim of any creditor, and, in particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be free from
attachment, garnishment, trustee’s process, or any other legal or equitable process available to any creditor of such Employee. No Employee shall have the right to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or
payments which he or she may expect to receive, contingently or otherwise, under this Plan. 
 5.2 Neither the establishment of the Plan, nor
any modification thereof, nor the creation of any fund, trust or account, nor the payment of any benefits shall be construed as giving any Employee, or any person whomsoever, the right to be retained in the service of the Company or any subsidiary
thereof, and all Employees shall remain subject to discharge to the same extent as if the Plan had never been adopted. 
 5.3 If any
provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provisions had not been included. 

5.4 This Plan shall be binding upon the heirs, executors, administrators, successors and assigns of the parties, including each Employee, present and
future, and any successor to the Company. 
  

 5.5 The headings and captions herein are provided for reference and convenience only, shall not be
considered part of the Plan, and shall not be employed in the construction of the Plan. 
 5.6 The Plan shall not be funded. No Employee
shall have any right to, or interest in, any assets of the Company which may be applied by the Company to the payment of benefits or other rights under this Plan. 
 5.7 Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of giving a receipt therefor shall be deemed paid when paid to such person’s guardian or to the party
providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Company, its subsidiaries, the Plan Administrator and all other parties with respect thereto. If a Severed Employee dies prior to
the payment of all benefits due such Severed Employee, such unpaid amounts shall be paid to the executor, personal representative or estate of such Employee. 
 5.8 Any notice or other communication required or permitted pursuant to the terms hereof shall have been duly given when delivered or mailed by United States mail, first class, postage prepaid, addressed to the
intended recipient at his, her or its last known address. 
 5.9 This Plan shall be construed and enforced according to the laws of the State
of Delaware, without giving effect to its principles of conflicts of law, to the extent not preempted by federal law, which shall otherwise control. 

 EXHIBIT A 
 RELEASE AGREEMENT 
 In consideration of the payments and benefits provided for in the annexed AnnTaylor
Stores Corporation Special Severance Plan (the “Plan”), and the release from [insert employee’s name] (the “Employee”) set forth herein, AnnTaylor Stores Corporation (the “Company”) and the Employee agree to the
terms of this Release Agreement. Capitalized terms used and not defined in this Release Agreement shall have the meanings assigned thereto in the Plan. 
 1. The Employee acknowledges and agrees that the Company is under no obligation to offer the Employee the payments and benefits set forth in the annexed Plan, unless the Employee consents to the terms of this Release
Agreement within forty-five (45) days following the Employee’s severance date. 
 2. The Employee voluntarily, knowingly and
willingly releases and forever discharges the Company and its Affiliates, together with its and their respective officers, directors, partners, shareholders, employees and agents, and each of its and their predecessors, successors and assigns
(collectively, “Releasees”), from any and all charges, complaints, claims, promises, agreements, controversies, causes of action and demands of any nature whatsoever that the Employee or his/her executors, administrators, successors or
assigns ever had, now have or hereafter can, shall or may have against Releasees by reason of any matter, cause or thing whatsoever arising prior to the time of signing of this Release Agreement by the Employee. The release being provided by the
Employee in this Release Agreement includes, but is not limited to, any rights or claims relating in any way to the Employee’s employment relationship with the Company or any its Affiliates, or the termination thereof, or under any statute,
including the federal Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1990, the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974, the Family
and Medical Leave Act of 1993, each as amended, and any other federal, state or local law or judicial decision. 
 3. The Employee
acknowledges and agrees that he/she shall not, directly or indirectly, seek or further be entitled to any personal recovery in any lawsuit or other claim against the Company or any other Releasee based on any event arising out of the matters
released in paragraph 2. 
 4. Nothing herein shall be deemed to release (i) any of the Employee’s rights under the Plan or
(ii) any of the vested benefits that the Employee has accrued prior to the date this Release Agreement is executed by the Employee under the employee benefit plans and arrangements of the Company or any of its Affiliates. 
 5. In consideration of the Employee’s release set forth in paragraph 2, the Company knowingly and willingly releases and forever discharges the
Employee from 

 
any and all charges, complaints, claims, promises, agreements, controversies, causes of action and demands of any nature whatsoever that the Company now has
or hereafter can, shall or may have against him/her by reason of any matter, cause or thing whatsoever arising prior to the time of signing of this Release Agreement by the Company, provided, however, that nothing herein is intended to release any
claim the Company may have against the Employee for any illegal conduct. 
 6. The Employee acknowledges that the Company has advised him/her
to consult with an attorney of his/her choice prior to signing this Release Agreement. The Employee represents that, to the extent he/she desires, he/she has had the opportunity to review this Release Agreement with an attorney of his/her choice.

 7. The Employee acknowledges that he/she has been offered the opportunity to consider the terms of this Release Agreement for a period of
at least forty-five (45) days, although he/she may sign it sooner should he/she desire. The Employee further shall have seven additional days from the date of signing this Release Agreement to revoke his/her consent hereto by notifying, in
writing, the General Counsel of the Company. This Release Agreement will not become effective until seven days after the date on which the Employee has signed it without revocation. 
  

							
	Dated:                     	 		 	  

		 		 	[Employee Name]
			
		 		 	ANNTAYLOR STORES CORPORATION
				
		 		 	By:	 	  

		 		 	Title:

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