**EXHIBIT10.1**

**EMPLOYMENTAGREEMENT**

**THISEMPLOYMENT AGREEMENT IS SUBJECT TO THEPROVISIONS OF SECTION 181.78 OF THE MINNESOTA STATUTES**

SouthwestCasino and Hotel Corp., a Minnesota corporation **(the “Company”)**,and Tracie L. Wilson **(“Employee”)**enter into this Employment Agreement **(“****Agreement”)** effective June 7, 2006 **(“EffectiveDate”)**. Company and Employeeare collectively referred to in this Agreement as the **“Parties”**.

**BACKGROUND:**

A.   Employee wishes to be employed by Company andCompany wishes to employ Employee; and

B.   The Parties wish to set forth the finalbinding terms of Employee’s employment by Company in this Agreement; and

C.   The Parties agree to the term and conditionsof Employee’s employment by Company as stated in this Agreement.

**AGREEMENT:**

**NOW, THEREFORE,** in considerationof the Parties’ agreement as to Employee’s commencement or continuation ofemployment, the payment of compensation and other benefits (as defined in thisAgreement), the Parties’ mutual agreements stated in this Agreement, and forother good and valuable consideration, the receipt and sufficiency of whichCompany and Employee acknowledge, the Parties agree as follows:

**1.****                 EMPLOYMENTTERMS AND DUTIES**

**Section 1.1 Term**. Subject to the provisions of Section 5 of this Agreement regardingtermination, Company agrees to employ Employee and Employee agrees to beemployed by Company for a term ending June 1, 2007, which will renewautomatically for additional one year terms subject to termination by eitherParty in accordance with Section 5 below.

**Section 1.2 Duties**.

a.    Company will employ Employee on substantially a full-time basis.Employee’s primary responsibility will be acting as the chief financial andaccounting officer of the Company. Initially, Employee’s title will be Chief Financial Officer (althoughEmployee will not serve as the Company’s principal financial and accountingofficer for purposes of filings with the United States Securities and ExchangeCommission until approved for that role by the Board of Directors).  Employee will perform any and all otherduties as the Chief Executive Officer, President, or Board of Directors mayreasonably direct.

b.    During the term of Employee’s employment by Company, Employeewill devote her attention, and energy to the performance of Employee’s dutiesto Company.  Employee will performEmployee’s duties under the supervision of

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and report to the Chief Executive Officer and thePresident of Company. Employee and Company further agree and understand thatEmployee may engage in other activities during her employment under thisAgreement, provided such activities do not conflict or interfere with therendition of Employee’s duties and responsibilities as contemplated under thisAgreement.

c.    Employee represents and warrants to the Company, and acknowledgesthat the Company has expressly relied on this representation and warranty inhiring Employee, that Employee is not subject to any non-competition or otheragreement that limits or prohibits Employee from serving the Company in thecapacity described in this Agreement.

**2.****                 COMPENSATION**

**Section 2.1 Salary.** For all services rendered by Employee, Company will pay Employee anannual salary of $140,000.00 (the **“Salary”**).  Employee’s Salary will be subject to annualperformance reviews and merit increases as determined by the CompensationCommittee of the Company’s Board of Directors. Company will pay the Salary inequal semi-monthly installments on the fifteenth and the last day of each monthduring the term of this Agreement (or, if the fifteenth or last day falls on aSaturday, Sunday or holiday, on the last business day preceding the fifteenthor last day of each month).

**Section 2.2  StockOption. **Upon the execution of this Agreement by theParties, the Company shall grant Employee, under the terms of the Company’s2004 Stock Incentive Plan, an incentive stock option, exercisable for 10 years,to purchase 50,000 shares of Employer’s Common Stock at an exercise price equalto the closing share price of the Company’s common stock on theOver-the-Counter Bulletin Board market on that date****(the**“Option”**). The option will become exercisable (“vest”) over three years in12 equal installments on the last day of each fiscal quarter of the Companyduring which Employee is employed. Except as otherwise stated in the written option agreement, the Optionwill be subject to all terms and conditions of the 2004 Stock Incentive Plan.

**Section 2.3  Bonus.**Employee will be eligible for bonus compensation if and whendetermined by the CEO and President of the Company and approved by itsCompensation Committee of the Board of Directors.  Employee acknowledges that the CompensationCommittee is in the process of evaluating the Company’s overall compensationand benefits policies and may adopt bonus or incentive plans applicable toEmployee.  If the Company adopts such abonus or incentive plan or plans, Employee’s bonus compensation, if any, willbe determined in accordance with the bonus or incentive compensation plan orplans established by the Company.  Allbonus compensation will be at the discretion of the Company.

**Section 2.4 Benefits.**  During Employee’s employment under thisAgreement, Employee is entitled to participate in those employee benefits orbenefit plans Company provides from time to time to other full-time employees,including, but not limited to, health insurance coverage.  Company is not required to provide anybenefit or benefit plans.  Companyreserves the right to unilaterally add to, amend or terminate all or any ofEmployee’s benefits without prior notice, subject to the terms and conditionsof such plans and to applicable laws.

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**Section 2.5  Vacation**.  Employee will receive three weeks of paidvacation per year.  The Company hasestablished its paid vacation policy based on the belief that both the employeeand the employer benefit when employees take vacations.  For that reason, Southwest prefers stronglythat employees take their entire allotted vacation each year.  Unused vacation time will not carry forwardinto subsequent years.

**Section 2.6  Reimbursement of Expenses.**  Company will reimburse Employee for allreasonable and necessary out-of-pocket expenses incurred at the request ofCompany in the performance of employee’s duties under this Agreement subject toproviding adequate written documentation of such expenses.

**3.****                 REPRESENTATIONS,WARRANTIES AND ACKNOWLEDGMENTS**

**Section 3.1 Licensing**.  Employee represents and warrantsto the Company that Employee does not know of any reason, whether from Employee’sprofessional or personal life, that Employee will be unable to receive a gaminglicense from any gaming regulatory body that has jurisdiction over the Companyor any of its operations.  Employeerepresents and warrants to the Company that Employee has not been charged withor convicted of fraud; been convicted of or plead guilty or no contest to anycriminal offense (other than minor traffic violations), has not been found tohave violated any gaming law, regulation or rule in any jurisdiction, and hasnot had any gaming license revoked or any application for a gaming licensedenied.  Employee acknowledges that theCompany expressly relied on Employee’s representations that Employee was notaware of any reason Employee would not be able to receive a gaming license inoffering to employ or continuing to employ Employee.  Employee further acknowledges that failure toreceive any gaming license may be grounds, at the sole discretion of theCompany, for demotion or termination of Employee with cause.

**Section 3.2 Insider Trading Policy. **Employeeacknowledges that the Company is a wholly-owned subsidiary of Southwest CasinoCorporation and that securities of Southwest Casino Corporation are traded inthe public markets and subject to the periodic reporting requirements of theCommission.  Employee furtheracknowledges that, in her role as Chief Financial Officer, Employee willfrequently possess material non-public information regarding the Company andSouthwest Casino Corporation.  Employeeagrees that she will not engage in any transaction in Southwest CasinoCorporation securities while in possession of material non-public informationregarding the Company or Southwest Casino Corporation.  Employee acknowledges that engaging in anytransaction in Southwest Casino Corporation securities while in possession ofmaterial non-public information, or providing material non-public informationto any third party who engages in any transaction in Southwest CasinoCorporation securities, may violate federal securities laws.  Employee agrees to abide the provisions ofSouthwest Casino Corporation’s insider trading policy for executive officers inconnection with any transaction in Southwest Casino Corporation securities byEmployee or members of Employee’s immediate family.

**Section 3.3. Third-Party Information.**Employee understands and acknowledges thatthe Company has a policy prohibiting the receipt by the Company of anyconfidential information in breach of the Employee’s obligations to thirdparties and does not desire to receive any confidential information under suchcircumstances. Accordingly, the Employee will not disclose to the Company oruse in the performance of any duties for the Company any confidentialinformation in breach of an obligation to any third party. The Employeerepresents that the Employee has provided the Company with a copy of anyagreement by which the

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Employee is bound that restricts the Employee’s use of any third party’sconfidential information.

**Section 3.4. Non-Competition Agreements**. Employee represents and warrants to the Company that the Employee is notcurrently subject to a non-competition, confidentiality or other similaragreement with a former employer that prohibits the Employee from working forthe Company.

**4.****                 RESTRICTIVECOVENANTS**

**Section 4.1 Confidential Information**.  Employee acknowledges that the confidentialinformation and data obtained by her during the course of her performance underthis Agreement (or her work prior to the date hereof for Company, if any)concerning the business or affairs of Company (the “**ConfidentialInformation**”) are the property of Company.  Employee agrees that she will not disclose toany unauthorized persons or use for her own account or for the benefit of anythird party any of such Confidential Information or data without the written consentof the President of the Company, either during the term of her employment orafter the termination thereof for a period of three years.  Employee agrees to deliver to Company at thetermination of her employment all memoranda, notes, plans, records, reports andother documentation (and copies thereof) relating to the business of Company orthe Enterprise which she may then possess or have under her control.

**Section 4.2 Title.** Subject to the provisions of the attached Exhibit B, all documents,inventions, designs or other tangible property relating in any way to thebusiness of Company, which are conceived or generated by Employee or come intoEmployee’s possession during the Initial Term or any extension of employmentunder this Agreement, are automatically assigned to and remain the exclusiveproperty of Company, and Employee agrees to return all such documents andtangible property including, but not limited to, all records, manuals, books,blank forms, documents, letters, memoranda, notes, notebooks, reports, data,financial information or copies thereof, which are the property of Company orwhich relate in any way to the business, practices or techniques of Company,and all other property of Company, including, but not limited to, all documentswhich in whole or in part contain any Confidential Information of Company,which are in the possession or under the control of Employee, to Company upontermination of this Agreement or at any earlier time that Company requests suchreturn.

Allideas, designs, graphics, logos, slogans, copies, software, derivative worksand all other materials or intellectual property relating to the Enterprise orother endeavor of the Company created by or, on the behalf of, Employee in thecourse of her employment under this Agreement automatically becomes theproperty of and is solely owned by Company, its successors, assigns, andlicensees, in perpetuity, without reservation. Furthermore, all rights of whatever nature affixed to such ideas,designs, graphics, logos, slogans, copies, software, derivative works and othermaterials or intellectual property relating to any Enterprise or other endeavorof the Employee, including, without limitation, any trademark or service markrights or copyrights and any goodwill appurtenant thereto, any right ofpublicity, and any rights, title or interest which may affix under anycopyright laws now or hereafter in force and effect in the United States or anyother country or countries, automatically become the property of and are solelyowned by Company, its successors, assigns and licensees, in perpetuity, withoutreservation.

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**Section 4.3 Non-Solicitation Covenant.**  In consideration of the covenants of theCompany in this Agreement, the receipt and sufficiency of which areacknowledged by Employee, Employee agrees that for a period of one (1) yearafter termination of Employee’s employment with the Company, the Employee mustnot directly or indirectly:

(a)           Hireor solicit, or cause or induce others to hire or solicit for employment, any employeeof the Company or encourage any employee (including persons who were employedby the Company within 90 days of the Employee’s termination date) to leave theemployment of the Company.

(b)           Disparageor defame the Company or request or advise any customer, client, prospectiveclient or vendor to curtail or cancel such person’s business relationship withthe Company.

**Section 4.4 Remedies.** Employee acknowledges that any violation of Article 3 or 4 of thisAgreement by Employee would result in immediate and irreparable injury toCompany for which an award of money damages would not be an adequate remedy,Employee agrees that employer has the right to obtain equitable reliefincluding an injunction to specifically enforce the terms of this Agreement, andto obtain any other legal or equitable remedies that may be available toCompany.  In the event of any violationby Employee of this Agreement, Employee agrees to pay reasonable costs andlegal fees incurred by Company in pursuit of any of its rights with respect tothis Agreement, in addition to any damages sustained by Company by reason ofsuch breach.

**Section 4.5 Assignment.** The transfer of Employee from Company to any subsidiary or affiliate orto a successor company that results from any acquisition, merger orreorganization thereof shall operate as an assignment to such company ofCompany’s rights under this Agreement. Such assignment shall not operate to terminate or modify this Agreement,except that the company to which Employee is transferred shall be construed,for the purpose of this Agreement, as standing in the same place as Company asof the date of such transfer.  Allcovenants and agreements under this Agreement shall inure to the benefit of andbe enforceable by the successors and assigns of Company, including assignees byoperation of law.

Employee’sperformance under this Agreement requires Employee’s personal services, uniqueskills and experience, and therefore, may not be assigned or transferred byEmployee nor may Employee delegate her duties under this Agreement to anotherperson without the prior written consent of the Board of Directors ofCompany.  Company retains the exclusiveright to withhold consent for any reason.

**Section 4.6 Survival.** Except as otherwise expressly provided herein, the provisions of thisSection 4 will survive (a) the termination of this Agreement as a result ofbreach or otherwise, or (b) the termination of Employee’s employment under thisAgreement, provided further, that in the event of a breach of Company’sobligation to make any payments to Employee required under this Agreement, theprovisions of Section 4.4 of this Agreement shall not survive a termination ofthis Agreement for so long as such breach remains uncured.

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**5.****                 TERMINATION**

**Section 5.1 For Cause Termination.**  Employee’s employment under this Agreementmay be terminated by Company at any time for “cause”, which is defined as (a)the failure of Employee, individually, to meet the licensing requirements ofany jurisdiction in which Employee’s work for the Company requires thatEmployee hold a license; (b) the conviction of Employee of any fraudulent orcriminal act; (c) the willful refusal by Employee to comply with or adequatelyperform any duty or responsibility imposed upon Company pursuant to the termsof this Agreement; (d) a determination by a majority of the Board of Directorsof the Company that Employee’s continued employment with Company may result in(i) the disapproval, modification, or non-renewal of any contract or proposedcontract under which the Company or any of its subsidiaries has sole or sharedauthority to develop, license or manage any gaming operations, whereverlocated, or (ii) the disapproval, loss, modification, non-renewal ornon-reinstatement of any license, franchise, approval or consent issued by orsought from any federal, state or tribal governmental authority with respect tothe conduct of any portion of the business of the Company or any subsidiary;(e) a breach of any material provision of this Agreement by Employee nototherwise covered by clauses (a), (b) (c) or (d) of this Section 5.1; or (f)the loss of any tribal or other regulatory approval necessary for the continuedemployment of Employee in connection with the operation of the Enterprise.  Company may terminate Employee’s employmentimmediately (without any advance notice) in the event of a termination forcause.  If Employee’s employment isterminated for cause pursuant to this Section 5.1, no further payments ofSalary, Bonus or other forms of compensation or benefits shall be due orpayable to Employee with respect to any period following or events occurringafter the date of such termination, except as may be required by applicablelaw, and all vested options may be exercised for only thirty (30) days.

**Section 5.2 Termination Without Cause.**  Employee or Company may terminate Employee’semployment under this Agreement without cause at any time upon 30 days writtennotice of such intent to terminate. During the 30-day period following such notice, Employee shall continueto receive the compensation contemplated by Article II of this Agreement andshall, at the discretion of the Company, continue to perform the duties setforth herein during such 30-day period.

**Section 5.3  Changein Control.**  Uponapproval by the Board of Directors of the company, Employee and Company willenter into a separate agreement that provides that if Employee’s employmentterminates in connection with a Change in Control of the Company (as defined inthe separate agreement), Employee will receive post-employment benefitsconsistent with those provided to other senior managers of the company,including salary continuation of not less than 6 months.  Any such agreement must comply with the requirementsof Section 409A of the Internal Revenue Code.

**Section 5.3 Death or Disability.**  In the event of Employee’s death ordisability, this Agreement shall terminate except that Company shall payEmployee’s designated beneficiaries or estate, in the case of death, oremployee, in the case of disability, Employee’s Salary for (a) 60 days; or (b)the remaining term of this Agreement, whichever is less.  Such payments shall be reduced by the amountof any death or disability payments which may be payable to Employee under anydeath or disability insurance coverage in effect for Company’s employees.  For purposes of this Agreement, “disability”shall mean a physical or mental impairment which renders Employee incapable ofperforming the duties assigned to Employee under this 

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Agreement for aperiod of more than thirty (30) consecutive days, as determined solely by amajority of the Board of Directors of Company.

**6.****                 PROVISIONSOF GENERAL APPLICATION**

**Section 6.1 Background Checks and Related Information.**  Employee acknowledges that Company’s gamingbusiness is extensively regulated and, as a result, various regulatory bodiesmay request or require background investigations and background informationregarding Employee.  During the term ofthis Agreement, Employee agrees to comply with any and all backgroundinvestigations conducted or requested from time to time by Company or anyfederal, state, tribal or other regulatory authority.  Employee acknowledges and agrees that theprovisions of this Section 6.1 are a material part of this Agreement.

**Section 6.2 Notices.** All notices, requests and other communications from any of the Partieshereto to any of the others shall be in writing and, except as otherwiseprovided herein, shall be considered to have been duly given or served if sentby certified or registered United States mail, postage prepaid, return receiptrequested, to the respective parties at their address set forth below or tosuch other address as such party may hereafter designate by notice to the otherparty.

| As to Company:  |   | Southwest Casino and Hotel Corp. |
|-----------------|--------|----------------------------------|
|            |   | 2001 Killebrew  Drive, Suite 350 |
|            |   | Minneapolis, MN  55425           |
|            |   |                             |
| As to Employee: |   |                             |
|            |   |                             |
|            |   |                             |
|            |   |                             |

 

**Section 6.3 Amendment.** This Agreement may be amended only by a mutually agreed to writing,signed by both Company and Employee.

**Section 6.4 Parties in Interest.**  This Agreement binds, and the benefits andobligations provided in this Agreement inure to, the Parties and theirrespective heirs, legal representatives, successors, assigns, transferees ordonees.

**Section 6.5 Entire Agreement.**  Employee and Company intend this Agreement tobe the final and binding expression of their agreement and as the complete andexclusive statement of its terms.  ThisAgreement supersedes and revokes all other prior negotiations, representationsand agreements, whether oral or written, regarding the employment relationshipbetween Company and Employee.

**Section 6.6 Enforceability.** If any provision in this Agreement is declared unenforceable or invalid,said declaration will not impair any of the Agreement’s other provisions whichmust be enforced according to their respective terms.

**Section 6.7 Construction.** The headings preceding or the labeling of the paragraphs of thisAgreement are for the purpose of identification only and shall not be used forthe construction or interpretation of any portion of this Agreement.  Waiver by any party of any default, violationor nonperformance under this Agreement shall not be deemed a waiver of

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their right toseek legal or equitable relief for any subsequent violation of theAgreement.  As used in this Agreement andwhere necessary, the singular includes the plural and vice versa, andmasculine, feminine and neuter expressions are interchangeable.

**Section 6.8 Applicable Law.** This Agreement was made and entered into in Minnesota, and the laws ofthe State of Minnesota shall govern and be applicable to this Agreement and anyenforcement, construction or interpretation thereof.

*Remainderof page intentionally blank.Signatures on next page.*

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**IN WITNESS WHEREOF**, Company andEmployee have knowingly, voluntarily and with the right to seek independentcounsel, executed this Agreement on the date(s) reflected below with anEffective Date as set forth above.
| **EMPLOYEE**     | **SOUTHWEST CASINO AND** |
|------------------|--------------------------|
| ** **       | **HOTEL CORP.**          |
|             | By:                      |   |
| Tracie L. Wilson |                     | Its: |   |
|                  |                          |  |  |

 

 

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**EXHIBIT B**

**NOTICEPURSUANT TO**

**MINNESOTASTATUTES 181.78 (Subd. 3)**

**TO:                        **TracieWilson

**FROM:**                  SouthwestCasino and Hotel Corp. (the **“Company”**)

Youhave entered into an Employment Agreement with Company requiring you, amongother things, to assign or offer to assign your rights in certain inventions toCompany.  You are hereby notified thatsuch Employment Agreement does not apply to any invention for which noequipment, supplies, facility or trade secret information of Company was usedand which was developed entirely on your own time, and (1) which does notrelate (a) directly to the business of Company, or (b) to Company’s actual ordemonstrably anticipated research or development; or (2) which does not resultfrom any work performed by you for Company.

|        | **SOUTHWEST  CASINO AND HOTEL CORP.** |
|--------|---------------------------------------|
|   | By:                                   |   |
|   | Its:                                  |   |

 

Ihereby acknowledge receipt of the foregoing notice.
|  | Tracie L. Wilson |
|--|------------------|

 

 

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