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Exhibit 10.1
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release ("Agreement") is made
between the following parties:
American Eagle Outfitters, Inc., hereinafter referred to,
together with its predecessors, successors, assigns, and affiliated
companies, as "the Company"; and
Susan P. McGalla , hereinafter referred to, together with
her heirs, administrators, executors, successors, assigns, and
other personal representatives as "Ms. McGalla."
Ms. McGalla and the Company are making this agreement in
connection with the termination of the Employment Agreement, dated
March 1, 2007 between the Company and Ms. McGalla (the "Employment
Agreement") and her separation from employment with the Company;
and to resolve any potential differences or any and all claims
related to Ms. McGalla's employment or the end of her employment
with the Company.
Therefore, in consideration of the mutual promises and
agreements set forth herein, the Company and Ms. McGalla hereby
agree as follows:
1. The Company will continue to employ Ms. McGalla and Ms.
McGalla agrees to continue her employment with the Company
continuously through termination of her employment with the Company
effective on Saturday, January 31, 2009 (the "Separation
Date").
2. The Company agrees to pay Ms. McGalla her base salary earned
through the Separation Date.
3. Ms. McGalla agrees that, in exchange for good
and valuable consideration set forth in this Agreement, she shall
not prior to or for twenty-four (24) months after the Separation
Date, either directly or indirectly, solicit, induce or attempt to
influence any associate to leave the employment of the Company, nor
will I in any way assist anyone else in doing so.
4. If Ms. McGalla is continuously employed through the
Separation Date, the Company will not exercise its right to invoke
the covenant for Ms. McGalla to not compete in subparagraph 4.3 of
the Employment Agreement and Ms. McGalla shall not be entitle to
any salary continuation following the Separation Date. If Ms.
McGalla breaches this Agreement, the Company retains the right to
elect to exercise its rights under subparagraph 4.3 of the
Employment Agreement.
5. If Ms. McGalla is continuously employed through the
Separation, the Company will pay to Ms. McGalla the amount of any
annual cash bonus she would have earned if Company performance
goals are met. Payment of the bonus, less all legally required
payroll and withholding taxes, will be made at the same time as to
executive officers of the Company. Also, if Ms. McGalla is
continuously employed through the Separation, the restrictions on
the applicable portion, if any, of her 2008 Restricted Stock award
for 70,489 shares shall lapse and those shares shall vest if and to
the extent that the Company achieves the fiscal 2008 performance
goals. Such shares shall vest, if at all, on the same date as for
executive officers of the Company. If the goals are not met, the
shares shall be forfeited.
6. If Ms. McGalla is continuously employed through the
Separation, Ms. McGalla will be paid the value of her account (at
the close of a business day prior to payment in accordance with the
Company practice) under the Company Long Term Incentive
Compensation Plan (the "LTIP"). If Ms. McGalla is continuously
employed through the Separation Date, Ms. McGalla's LTIP account
will be increased by the amount, if any, that is earned for fiscal
2008 base on achievement of Company performance goals. Ms.
McGalla's LTIP account will be paid out in three payments, the
first third to be paid six months after Separation Date and the
remaining two thirds in two payments when payouts under the LTIP
are made in 2010 and 2011, subject in each case to her continuous
compliance with her obligations under this Agreement. Ms. McGalla
understands and agrees that if she breaches any provision of this
Agreement as determined in the sole discretion of the Company, then
the Company may refrain from paying to Ms. McGalla her account
balance under the LTIP, all of which Ms. McGalla will forfeit in
that event.
7. Ms. McGalla acknowledges and agrees that her outstanding
vested stock option awards for 330,000 shares
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