Exhibit 10.1


 


SEPARATION
AGREEMENT


 


1.                                      PARTIES.


 


The parties to this
Separation Agreement (hereinafter referred to as “Agreement”) are MELODY SHERRILL (hereinafter referred to as “Employee”) and AMERICAN WAGERING, INC. (hereinafter referred to as “Employer.”)


 


2.                                      CONSIDERATION.


 


Employee acknowledges,
represents and warrants that she has given, received and accepted good,
valuable and sufficient consideration for this Agreement.  In consideration of executing this Agreement,
Employee agrees to resign her employment as Chief Financial Officer and her
officer position as Treasurer of the American Wagering, Inc., Leroy’s
Horse and Sports Place, Computerized Bookmaking Systems, Inc., AWI
Manufacturing, Inc., and AWI Gaming, Inc. effective February 24, 2010.


 


In return, Employer shall
pay to Employee a monetary amount equal to (i) three months of salary and (ii) accrued
but unused paid time off, less all applicable taxes and withholdings paid by
check and reported on Internal Revenue Service (“IRS”) Form W-2. The monetary
amount payable to the Employee shall be made payable in three monthly
installments commencing within five (5) business days following Employee’s
execution of this Agreement and General Release of Claims AND THE EXPIRATION OF
THE APPLICABLE TIME LIMITS SET FORTH IN PARAGRAPH 4 OF THIS AGREEMENT (IF THERE
IS TO BE AN ADEA WAIVER) and continuing on the last day of the month for the
second and third payments.  Employee also
acknowledges that the Employer has no legal obligation to pay the compensation identified
above and that it is in excess of that which the Employee is currently
entitled.  Employee understands and
affirms that, except as specifically set out in this Agreement, no other wages,
overtime pay, vacation pay, sick pay, leave time, commissions, bonuses,
benefits, or other compensation is due to Employee.


 


3.                                      NEUTRAL EMPLOYMENT
REFERENCE.


 


Employee agrees that any
inquiries by prospective employers regarding Employee’s employment with
Employer shall be directed to Employer’s Human Resources Department and that in
response to such inquiries Employer will state only Employee’s position(s),
dates of employment, and salary/wages.


 


4.                                      RELEASE OF CLAIMS.


 


(A)                              Except for the specific covenants
elsewhere in this Agreement, and to the extent consistent with law, Employee
for himself/herself, her spouse, children, heirs, executors, administrators,  successors and assigns (hereinafter “Releasors”),
hereby fully and forever releases, acquits, discharges 


 


	
  Employee’s Initials:     

  	
   

  	
  Employer’s Initials:    

  



 


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and promises not to sue Employer, and its past,
present and future parent and/or subsidiary corporations, divisions, affiliates
or their successors and any past, present, or future partners, owners, joint
venturers, stockholders, predecessors, successors, officers, directors,
administrators, employees, agents, representatives, attorneys, heirs,
executors, assigns, retirement plans and/or their trustees, and any other
person, firm or corporation with whom any of them is now or may hereafter be
affiliated (hereinafter “Releasees”), over any and all claims, demands,
obligations, losses, causes of action, costs, expenses, attorney’s fees,
liabilities, and indemnities of any nature whatsoever, whether negligent or
intentional, whether now known or unknown, including but not limited to any
claims arising out of or in any manner relating to Employee’s employment with
or separation from employment with Employer, whether based on race, age,
disability, national origin, gender, sexual orientation, marital status,
veteran status, protected activity, compensation and benefits from employment,
including stock, stock options, stock option agreements and retirement plans,
whether based on contract, tort, statute, or other legal or equitable theory of
recovery, which from the beginning of time of the world to the date of this
Agreement, Employee had, now has, or claims to have against Employer or any
other person or entity described above. 
Employee herewith forfeits all rights to any stock, stock options, or
under any stock option agreements.


 


Without limiting the
foregoing, this Agreement applies to any and all matters that have been or
which could have been asserted in a lawsuit or in any state or federal judicial
forum, up to the date of this Agreement, specifically including, but not by way
of limitation, claims under the Equal Pay Act, the National Labor Relations
Act, as amended, Title VII of the Civil Rights Act of 1964, as amended, the
Post-Civil War Reconstruction Acts, as amended (42 U.S.C. §§ 1981-1988),
the Age Discrimination in Employment Act of 1967, as amended, the Americans
with Disabilities Act of 1990, as amended, the Rehabilitation Act of 1973, as
amended, the Family Medical Leave Act of 1993, as amended, the Employee
Retirement Income Security Act of 1974, as amended, the Civil Rights Act of
1991, the Pregnancy Discrimination Act, any other federal statute, any state
civil rights act, any state statutory wage claim such as those contained in
Chapter 608 of the Nevada Revised Statutes, any other statutory claim, any
claim of wrongful discharge, any claim in tort or contract, any claim seeking
declaratory, injunctive, or equitable relief, or any other claim of any type
whatsoever arising out of the common law of any state (hereinafter “Released
Claims”).


 


Employee acknowledges
that there are certain specific exceptions to this release of claims.  Specifically, Employee understands that this
Release does not pertain to claims for any rights to benefits under applicable
workers’ compensation statutes or government-provided unemployment benefits or 


 


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any claims relating to
the validity of this release of claims under the Age Discrimination in
Employment Act (“ADEA”), as amended. 
Employee further acknowledges that this release of claims does not limit
either party’s right, where applicable, to file an administrative charge with,
or participate in an investigative proceeding of, any governmental agency, but
does operate as a waiver of any personal recovery if related to the claims
released herein.


 


To the extent consistent
with law, should Employee breach this Paragraph and institute any court
proceeding based on claims released, Employee shall indemnify and hold Employer
and/or Releasees harmless from all fees, costs and expenses, including
reasonable attorney’s fees incurred by and all liability imposed on Employer
and/or Releases in defending against any such court proceeding, including any
and all judicial appeals.


 


(B)                               EMPLOYEE HEREBY ACKNOWLEDGES THAT
BY EXECUTING THIS AGREEMENT SHE IS AGREEING TO WAIVE ANY AND ALL RIGHTS OR
CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, 29 U.S.C.
§ 626 et. seq.  EMPLOYEE IS ADVISED TO CONSULT WITH AN
ATTORNEY PRIOR TO EXECUTING THE AGREEMENT. IN ADDITION, EMPLOYEE ACKNOWLEDGES
THAT UPON RECEIPT OF THIS AGREEMENT, SHE HAS A PERIOD OF TWENTY-ONE (21) DAYS
WITHIN WHICH TO CONSIDER THE AGREEMENT BEFORE SIGNING IT.


 


EMPLOYEE
FURTHER UNDERSTANDS THAT FOR A PERIOD OF SEVEN (7) DAYS FOLLOWING HER
EXECUTION OF THIS AGREEMENT, SHE MAY REVOKE HER WAIVER OF ANY POTENTIAL
AGE DISCRIMINATION CLAIM AND THIS AGREEMENT SHALL NOT BECOME EFFECTIVE OR
ENFORCEABLE AS TO ANY SUCH WAIVER OF AN AGE DISCRIMINATION CLAIM UNTIL THE
REVOCATION PERIOD HAS EXPIRED.  HOWEVER,
ALL OTHER ASPECTS OF THIS AGREEMENT, EXCEPT FOR HER WAIVER OF ANY POTENTIAL AGE
DISCRIMINATION CLAIM, BECOMES EFFECTIVE AT THE TIME EMPLOYEE EXECUTES THIS
AGREEMENT. BY INITIALING BELOW, EMPLOYEE INDICATES THAT (SHE) HAS READ AND
UNDERSTANDS THIS PARAGRAPH AND (HER) RIGHTS.


 


	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Employee
  Initials)

  



 


(C)                                The parties agree that the twenty-one
(21) day consideration period shall start on the date upon which this Agreement
is presented to Employee or her counsel, and shall expire at midnight twenty-one
(21) calendar days later.  The parties
further agree that the seven (7) day revocation period 


 


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shall start on the date
upon which the Employee executes this Agreement, and shall expire at midnight
seven (7) calendar days later.  If
Employee elects to sign the Agreement and General Release prior to the end of
the twenty-one (21) day consideration period, the mandatory seven (7) day
revocation period will commence immediately the day after the date of
execution.


 


(D)                               The parties hereby agree that any
modifications to the proposed Agreement originally forwarded to Employee or her
counsel, whether considered or deemed to be material or nonmaterial, shall not
restart the twenty-one (21) day consideration period.


 


(E)                                 If Employee does sign this Agreement
before the end of the twenty-one (21) day consideration period, she affirms
that that the waiver of the twenty-one (21) day consideration period is
knowing, voluntary and not induced by Employer through fraud,
misrepresentation, a threat to withdraw or alter the offer prior to the
expiration of the time period or by providing different terms to those persons
who sign the release prior to the expiration of the time period.


 


5.                                      CONFIDENTIAL BUSINESS
INFORMATION.


 


Employee hereby
agrees that her affiliation with
Employer has given him/her access
to and familiarity with confidential information, business and trade secrets
and business methods of Employer. 
Employer and its successors would be irreparably injured, and the good
will of Employer and its successors would be irreparably damaged if Employee
were to disclose any confidential information, business or trade secrets or
business methods concerning Employer. 
Therefore, Employee will not use or disclose “Company Information” at
any time subsequent to her execution
of this Agreement, except as required by law. 
“Company Information” is defined as any confidential legal, financial,
marketing, business, technical, customer or other information, including
specifically but not exclusively, the Employer’s marketing plans, customer data
and information which Employee prepared, caused to be prepared, or received in
connection with her affiliation
with Employer, such as management and business plans, business strategies,
customer lists, and trade secrets. 
Company Information does not include: (1) information or knowledge
which may now be in or subsequently may come into the public domain other than
by way of unauthorized disclosure by Employee; or (2) information or
knowledge which Employee is required to disclose by order of a governmental
agency or court after timely notice has been provided to Employer of such
order.


 


6.                                      COMPANY PROPERTY.


 


Employee, upon
execution of this Agreement, shall return to Employer (if she has not already done so), all “Company
Property,” defined as including, but not limited to, motor vehicles, keys,
access cards, files, memoranda, reports, software, credit cards, computer
disks, customer data, instructional and 


 


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management
manuals, books, cellular phones and computer equipment, and all tangible
company property not purchased from Employer and all documents containing
Company Information, as well as any copies of such property.  Employee agrees that she will not retain copies, duplicates, reproductions or excerpts
of Company Information, except to the extent the Company Information relates to
his salary, benefits and/or
compensation from Employer.  Should
Employer have to initiate litigation for monetary or injunctive relief based
upon Employee’s breach of Paragraphs 5 or 6, it shall be entitled to recover
from Employee its costs and attorney’s fees.


 


7.                                      NON-COMPETITION AND
NON-SOLICITATION.


 


a.               Non-Competition:


 


i)                 The Employee agrees that for a period of
six (6) months immediately following the execution of this Agreement, the
Employee shall not be employed by or perform independent contract services in
the State of Nevada for any entity engaged in the race and sports business,
including but not limited to, offering financial services or project management
services to an entity that desires to exploit the Employee’s knowledge of the
race and sports business—gained as a direct result of the Employee’s employment
with Employer.  For example, the Employee
may take an employment position with or perform consulting services for (i) a
hotel/casino entity that operates a race and sports book and/or (ii) vendors
of race and sports book hardware and/or software so long as the Employee’s job
description or actual job duties do not permit the Employee to use or exploit
her knowledge of the race and sports book industry, including but not limited
to confidential information and/ trade secrets of the Employer or any of its
subsidiaries, in the performance of her duties.


 


b.              Non-Solicitation


 


i)                 Further, the Employee expressly covenants
and agrees that for a period of six (6) months immediately following the
execution of this Agreement, she will not: (i) induce, attempt to induce,
or encourage, or cooperate in, cause, or permit any person or entity to induce
or encourage, any employees or agents of the Employer to terminate or
materially alter any relationship with the Employer; (ii) take any action
to disturb the existing business and/or customer relationships of the Employer
and/or solicit business or referral sources from Employer’s customers or
vendors; or (iii) induce, attempt to induce, or encourage, or cooperate
in, cause, or permit any person or entity to induce or encourage any of Employer’s
customer’s or vendor’s to terminate or materially alter any relationship with
the Employer.


 


The parties agree
that the restrictions and limitations contained in this Section 7 are
reasonable as to scope and duration and are necessary to protect the Employer’s
interests and to preserve for Employer the 


 


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competitive
advantage derived from maintaining its business practices, unconsolidated
financials, information, trade secrets, and business relationships as
confidential.  In the event that any of
the restrictions and limitations contained in this Section are deemed to
exceed the time or geographic limitations permitted by Nevada law, then such
provisions of this Section shall be reformed to the maximum time and
geographic limitations permitted by Nevada law.


 


8.                                      NO ADMISSION.


 


The parties agree that
this Agreement constitutes the good faith, fair and equitable dissolution of
their employment relationship.  The
parties further agree that the offer of a severance agreement to Employee, the
entry into this Agreement, or performance of the terms and covenants of this
Agreement are not and shall not in any way be construed as admissions by any
party as to the merits of any party’s positions, claims and/or disputes they
may have with respect to the other.


 


9.                                      DISSOLUTION.


 


The parties agree that
this Agreement is intended to cause the complete and final dissolution of their
employment relationship.  As such, in
consideration of the covenants set forth in this Agreement, Employee agrees to
resign her employment and, and to the extent allowed by law, waives any rights
to reinstatement and shall not apply for or accept employment with Employer, or
any parent, subsidiary, affiliate entity of Employer, or successor thereof.


 


10.                               NON-DISPARAGEMENT.


 


Employee agrees that she
shall not make, issue or produce any disparaging comments, whether orally or in
writing, about Employer or its representatives, including the Releasors as
defined in Paragraph 4(a) above, including but not limited to statements
in e-mails, Internet blogs, and on-line social networks, such as Facebook,
MySpace, and Twitter.  Nothing herein
prohibits Employee from responding to a court or government agency order,
subpoena or inquiry concerning any matter related to this Agreement or Employee’s
employment.  In turn, Employer agrees
that upon Employer’s execution of this Agreement and for so long as they remain
in its employ Vic Salerno and Terina Salerno, Esq. shall not make, issue
or produce any disparaging comments, whether orally or in writing, about
Employee, including the Releasees as defined in Paragraph 4(a) above,
including but not limited to statements in e-mails, Internet blogs, and on-line
social networks, such as Facebook, MySpace, and Twitter.  Nothing herein prohibits said individuals
from responding to a court or government agency order, subpoena or inquiry or a
request from a member of the Board of Directors, shareholder, or other
individual employed by American Wagering, Inc.  or its parent, subsidiary or affiliated
entities with a business need to know, any matter related to this Agreement or
Employee’s employment.  Upon breach of
this Paragraph either 


 


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party may immediately
apply for injunctive relief from any court with jurisdiction over the breach of
this Agreement and the prevailing party will be entitled to recover its costs
and reasonable attorney’s fees.


 


11.                               KNOWLEDGE OF EMPLOYEE.


 


Employee
represents that she is not aware of any conduct by Employer or its agents that
may violate any federal, state, or local law, rule, or regulation that has not
already been reported by Employee in writing to Employer.


 


12.                               REPRESENTATIONS.


 


Employee represents and
agrees that she has not relied upon any representations by Employer or
Releasees concerning the terms or effects of this Agreement other than those
expressly contained in this Agreement.


 


13.                               UNKNOWN FACTS OR CLAIMS REGARDING THE
MATTERS RELEASED.


 


Employee expressly
acknowledges her understanding there may exist damages or claims in her favor
pertaining to the matters released of which she has no knowledge, reason to
know, or suspicion at the time of execution of this Agreement.  Employee acknowledges further that she may
discover facts different from or in addition to those she now knows or believes
to be true with respect to the actions of those persons released in Paragraph 4
above prior to the date of this Agreement. 
Employee acknowledges this Agreement shall apply to all such unknown and
unanticipated damages or claims as well as to those now known or disclosed,
and, further, that this Agreement shall remain in full force and effect in all
respects notwithstanding any such different or additional facts.


 


14.                               NO OTHER CLAIMS.


 


Employee represents that
she has no lawsuits, claims, charges, complaints or demands of any kind
whatsoever currently pending against Employer or Releasees with any local,
state, or federal government agency based upon events occurring prior to and
including the date of execution of this Agreement.


 


15.                               ASSIGNMENT/TRANSFER.


 


Employee represents and
warrants that she has not heretofore assigned or transferred, or purported to
assign or transfer, to any person or entity not a signatory to this Agreement
any claim or matter herein released, disclaimed, or discharged.  Employee agrees to indemnify and hold
harmless Employer against any liability or loss or for any cost, expense,
judgment, or settlement arising in connection with any such assignment or
transfer.


 


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16.                               ENFORCEMENT.


 


This Agreement shall be
construed and interpreted in accordance with the laws of the State of Nevada
and/or federal law, as applicable. The parties agree that all actions or
proceedings arising in connection with this Agreement shall be tried and
litigated exclusively in the State and Federal courts located in Clark County,
Nevada and consent to the personal jurisdiction and venue over each of them by
these courts for such purpose(s).


 


17.                               SEVERABILITY.


 


If any portion,
provision, or part of this Agreement is held, determined or adjudicated to be
invalid, unenforceable or void for any reason whatsoever, each such portion,
provision or part of this Agreement shall be severed from the remaining portions,
provisions or parts of this Agreement and shall not affect the validity or
enforceability of such remaining portions, provisions or parts.


 


18.                               MERGER.


 


This Agreement
constitutes a single integrated contract expressing the entire agreement of the
parties hereto.  There are no other
agreements, written or oral, express or implied, between the parties hereto
concerning the subject matter hereof except the agreements as set forth in this
Agreement.  No amendment of, addition to,
or modification of this Agreement shall be effective unless the same is in
writing and signed by both of the parties.


 


19.                               AMBIGUITY.


 


Each party to this
Agreement and her/its attorney(s) have reviewed this Agreement, and
accordingly the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party will not be employed
in any interpretation of this Agreement.


 


20.                               COUNTERPARTS.


 


This Agreement may be
executed as one or more counterparts, and each such counterpart shall be deemed
an original as to the party to be charged.


 


21.                               HEADINGS.


 


The headings of the
Paragraphs of this Agreement are for convenience only and shall not affect the
construction or interpretation of any of its provisions.


 


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22.                               REVIEW/UNDERSTANDING OF
AGREEMENT.


 


Employee further states
that she has carefully read this Agreement, was afforded the opportunity to
seek and consult with counsel, that the only promises made to him/her to sign
the Agreement are those stated above, and that she is signing this Agreement
freely, voluntarily, and with full knowledge of its terms and consequences.


 


 


DATED this 24 day of February,
2010.


 


 


	
   

  	
   

  	
  AMERICAN WAGERING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Melody
  Sherrill

  	
   

  	
  By:

  	
  /s/ Vic
  Salerno

  
	
  Melody
  Sherrill

  	
   

  	
  Name:
  

  	
  Vic
  Salerno

  
	
   

  	
   

  	
  Title:
  

  	
  Chief
  Executive Officer

  



 


 


STATE OF NEVADA                             )


 


) ss.


 


COUNTY OF CLARK                             )


 


 


On this 24th day of February       ,
2010, personally appeared before me, a notary public, Melody Sherrill, known
(or proved) to me to be the person whose name is subscribed to the above
instrument, who acknowledged that (she) executed the above document.


 


 


(SEAL)


 


	
   

  	
  /s/ Nicole M. Bell

  
	
   

  	
  Notary Public

  



 


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