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 shall remain exercisable for 30 days from the
Separation Date, or through March 2, 2009, that the vested portion of her 2007
stock option award for 77,385 shares shall remain exercisable for one year from
the Separation Date, or through January 31, 2010, and that her unvested stock
option awards for a total of 525,833 shares shall terminate on the Separation
Date, all in accordance with the terms of the award and the Company's 2005 Stock
Award and Incentive Plan.

8. Ms. McGalla will be paid all amounts due to her under the Company 401k Plan
in accordance with the terms of the plan.

9. If Ms. McGalla makes a timely election of continuation of group medical
coverage under federal law (COBRA), the Company will provide the COBRA coverage
elected to Ms. McGalla at her expense as required by law.

10. Ms. McGalla acknowledges and agrees that because of the payments specified
in this Agreement, she will be paid no additional compensation by the Company
following the Separation Date, all of which are forfeited.

11. The Employment Agreement is hereby terminated and superseded by this
Agreement; except that Ms. McGalla hereby acknowledges and reaffirms that all of
her obligations under paragraph 4 of the Employment Agreement remain in full
force and effect, except where specifically modified by this Agreement, and
shall survive the termination of her employment with the Company and the
execution of this Agreement.

12. In consideration of the payments and other benefits provided herein, Ms.
McGalla agrees to release and forever discharge the Company, as well as its
officers, directors, employees, agents, and shareholders, individually and in
their representative capabilities (the "Released Parties") of and from any and
every legal claim, right to recovery, or cause of action, of any kind or any
nature, whether known or unknown, including, but not limited to attorney's fees
and including any rights or claims arising under any federal, state, or local
law, including but not limited to, the Age Discrimination in Employment Act or
the Older Workers Benefit Protection Act, and including any contract or alleged
agreement or promise, whether written or oral, arising directly or indirectly
out of her employment with, or the end of her employment with the Company,
excluding only any action by Ms. McGalla to enforce her rights under this
Agreement. Ms. McGalla also waives and releases any right she may have to
recover any damages resulting from any action or suit instituted on her behalf
against any of the Released Parties by the Equal Employment Opportunity
Commission or any other government agency.

13. Ms. McGalla agrees to continue to hold all of the Company's confidential
and/or privileged information in confidence and to treat it as proprietary to
the Company. She promises that she has not used or disclosed any confidential
and/or privileged information and that she has not taken or copied any documents
that constitute or contain confidential and/or privileged information.
"Confidential and/or privileged information" means any information regarding the
business, operations, properties or personnel of the Company which were
disclosed to or learned by Ms. McGalla as a result of her employment and
includes, but is not limited to, any confidential data, figures, projections,
estimates, policy and/or procedure manuals or handbooks, business methods,
supplier/vendor information, quality control methods and information, design
and/or production processes, initial markups and mark-downs, personnel
information, sales information, and similar information. Confidential and/or
privileged information shall not include any information that Ms. McGalla
possessed prior to her employment or which becomes a matter of public knowledge
hereafter through sources independent of Ms. McGalla.

14. Ms. McGalla agrees to return to the Company on or prior to the Separation
Date any property of the Company in her possession or control, including, but
not limited to, any Company computer, phone, pda, credit card, documents and
keys.

15. This Agreement contains the entire agreement between the parties and no
additional promises have been made or relied upon and they supersede and replace
all prior agreements

16. This Agreement shall be governed and interpreted in accordance with the laws
of the Commonwealth of Pennsylvania without regard to its conflict of laws
provisions, and the courts of the Commonwealth of Pennsylvania shall have
jurisdiction over any disputes arising under this Agreement.

17. Should any provision of this Agreement be declared illegal or unenforceable
by any court of competent jurisdiction and that provision cannot be modified to
be enforceable, such provision shall immediately become null and void, leaving
the remainder of this Agreement in full force and effect.

17. Ms. McGalla agrees that she received the first draft of this Agreement on
August 20, 2008.

THE PARTIES HAVE READ THIS AGREEMENT CONSISTING OF 4 PAGES, INCLUDING THE
SIGNATURE PAGE AND FULLY UNDERSTAND ALL OF THE TERMS. MS. MCGALLA ACKNOWLEDGES
THAT SHE WAS GIVEN UP TO 21 DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT, THAT
SHE WAS ADVISED TO CONSULT WITH LEGAL COUNSEL PRIOR TO SIGNING THIS AGREEMENT
AND THAT SHE HAS THE RIGHT TO REVOKE THIS AGREEMENT, IN WRITING, FOR A PERIOD
NOT TO EXCEED 7 DAYS AFTER THE DATE ON WHICH IT IS SIGNED BY HER. IF, AFTER
SIGNING THIS AGREEMENT, MS. MCGALLA DECIDES TO EXERCISE HER RIGHT TO REVOKE, SHE
CAN DO SO ONLY BY SUBMITTING WRITTEN NOTICE OF REVOCATION TO THE COMPANY'S
EXECUTIVE VICE PRESIDENT - HUMAN RESOURCES AT ITS CORPORATE OFFICES AT 77 HOT
METAL STREET, PITTSBURGH, PA 15203. TO BE EFFECTIVE, THE NOTICE MUST BE RECEIVED
AT THE CORPORATE OFFICE BEFORE THE CLOSE OF BUSINESS ON THE SEVENTH DAY AFTER
MS. MCGALLA SIGNS THIS AGREEMENT. THE PARTIES HEREBY ACKNOWLEDGE THAT IF MS.
MCGALLA DOES NOT EXERCISE THIS RIGHT TO REVOKE, THIS AGREEMENT WILL BE A BINDING
CONTRACT AS TO ITS TERMS. THE PARTIES NOW VOLUNTARILY SIGN THIS AGREEMENT ON THE
DATE INDICATED, SIGNIFYING THEIR AGREEMENT AND WILLINGNESS TO BE BOUND BY ITS
TERMS.

AMERICAN EAGLE OUTFITTERS, INC.

By: /s/James V. O'Donnell

Its: Chief Executive Officer  

Date: August 27, 2008

 

/s/ Susan P. McGalla

Susan P. McGalla

Date: August 26, 2008