RESIGNATION AGREEMENT AND RELEASE
EXHIBIT 10.1
RESIGNATION AGREEMENT AND RELEASE
This Resignation Agreement and Release ("Agreement") is made between the following parties:
American Eagle Outfitters, Inc., hereinafter referred to, together with its predecessors, successors, assigns, affiliated companies, officers, directors, employees, agents, and shareholders, individually and in their representative capacities as "the Company"; and Xxxxxxx X. Xxxxx, hereinafter referred to, together with his heirs, administrators, executors, successors, assigns, and other personal representatives as "Xx. Xxxxx."
Xx. Xxxxx and the Company are making this agreement because:
1. Xx. Xxxxx has been employed by the Company, pursuant to an Employment Agreement, dated July 30, 2003; and
2. The Company and Xx. Xxxxx have come to a mutual agreement to end Xx. Xxxxx'x employment under the terms described herein; and
3. The Company and Xx. Xxxxx desire to resolve any potential differences or any and all claims related to Xx. Xxxxx'x employment or the end of his employment with the Company.
Therefore, in consideration of the mutual promises and agreements set forth herein, the Company and Xx. Xxxxx hereby agree as follows:
1. Xx. Xxxxx'x employment with the Company will end on Saturday, March 4, 2006 (the "Effective Date").
2. The Company agrees to pay Xx. Xxxxx his salary earned through the Effective Date.
3. The Company further agrees to pay Xx. Xxxxx severance pay in an amount equal Four Hundred Seventy Five Thousand Dollars ($475,000), minus all legally required payroll and withholding taxes, in accordance with normal Company pay practices over a severance period of up to 12 months (the "Severance Period"). If Xx. Xxxxx accepts or performs comparable employment at any time during the Severance Period, the Company's obligation to pay severance shall immediately cease and the Severance Period shall end at that time. Xx. Xxxxx will notify the Company of such comparable employment in writing as far in advance as is reasonable and will repay to the Company any severance pay received from the Company after accepting or performing comparable employment.
4. The Company will allow Xx. Xxxxx to receive the 20,600 shares of restricted stock represented by grant no. RS050018 if the Company achieves its 2005 fiscal year earnings per share goals, and which he would not otherwise receive under the 1999 Stock Incentive Plan if he were not employed on the date the earnings targets were certified, with such shares delivered at the same time as restricted shares are delivered to other employees, and subject to legally required payroll and withholding taxes.
5. Xx. Xxxxx'x stock option no. NQ03661 for 26,666 shares at an exercise price of $7.025 per share shall vest and become exercisable on March 4, 2006, and will expire in thirty days and will no longer be exercisable on and after April 4, 2006.
6. The Company will pay Xx. Xxxxx annual bonus compensation, to the extent that the Compensation Committee certifies the achievement of the Company's 2005 fiscal year earnings per share goals, in an amount up to $665,000 (the maximum 140% amount) as a cash bonus at the same time payments are made to other employees under the Management Incentive Plan, and subject to legally-required payroll and withholding taxes. No amount will be paid to Xx. Xxxxx under the Long Term Incentive Bonus Plan under the Company's 2005 Stock Award and Incentive Plan or any other compensation plan.
7. If Xx. Xxxxx elects continuation of group medical coverage under federal law (COBRA), the Company will reimburse him for the monthly COBRA premiums for the Severance Period, or until he is no longer eligible for COBRA coverage, whichever comes first.
8. In consideration of the severance payment, other cash payments, bonus payments, and other benefits provided herein, Xx. Xxxxx agrees to release and forever discharge the Company of and from any and every legal claim, right to recovery, or cause of action, of any kind or any nature, including, but not limited to attorney's fees and including any rights or claims, whether known or unknown, arising directly or indirectly out of his Employment Agreement or his employment with, or the end of his employment with the Company.
9. In accordance with the Company's policy, it agrees to provide a neutral reference in response to any inquiries from potential employers of Xx. Xxxxx.
10. Xx. Xxxxx agrees to keep the fact of, and details concerning, this Agreement strictly confidential and that he will not, in any manner, disclose the fact of, the terms of, or the circumstances surrounding this Agreement to any persons other than his legal counsel or members of his immediate family or as required by law. The Company and Xx. Xxxxx each agrees not to make any disparaging or negative statements about the other, including in the case of Xx. Xxxxx statements about any of the Company, its management, its employees or its business.
11. The Company agrees to continue to indemnify Xx. Xxxxx with respect to actions of events on or prior to the Effective Date in accordance with Sub-paragraph 1.3 of his Employment Agreement and Xx. Xxxxx agrees to abide by the obligations of confidentiality, non-solicitation, and cooperation as set forth in Paragraph 4 of his Employment Agreement, all of which provisions shall survive the termination of the Employment Agreement and shall continue in full force and effect. However, Xx. Xxxxx is released by the Company from the non-compete obligations in Sub-paragraph 4.3 of his Agreement and under the terms of the Company's 1999 Stock Incentive Plan, as amended.
12. On or prior to the Effective Date, Xx. Xxxxx agrees to return to the Company any property of the Company in his possession or control, including, but not limited to, any Company computer, pda, credit card, documents and keys. Xx. Xxxxx will keep his cell phone.
13. This Agreement contains the entire agreement between the parties and no additional promises have been made or relied upon.
14. Xx. Xxxxx agrees that he received the first draft of this Agreement on February 10, 2006.
WE HAVE READ THIS AGREEMENT CONSISTING OF 3 PAGES, INCLUDING THE SIGNATURE PAGE, AND FULLY UNDERSTAND IT. XX. XXXXX ACKNOWLEDGES THAT HE WAS GIVEN UP TO 14 DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT, THAT HE WAS ADVISED TO CONSULT WITH LEGAL COUNSEL PRIOR TO SIGNING THIS AGREEMENT. THE PARTIES HEREBY ACKNOWLEDGE THAT THIS AGREEMENT IS A BINDING CONTRACT AS TO ITS TERMS. WE NOW VOLUNTARILY SIGN THIS AGREEMENT ON THE DATE INDICATED, SIGNIFYING OUR AGREEMENT AND WILLINGNESS TO BE BOUND BY ITS TERMS.
| Witness: | AMERICAN EAGLE OUTFITTERS, INC. |
| /s/ Xxxx Xxxxxxx 2/20/06 | By: /s/ Xxxxxx X. XxXxxxxx |
| Xxxx Xxxxxxx | Xxxxxx X. XxXxxxxx |
| Title: EVP Human Resources | |
| Date: Feb. 20, 2006 | |
| /s/ Xxxxxxx X. Xxxxx | |
| Xxxxxxx X. Xxxxx | |
| Date: 2/20/06 |
