**Exhibit 4.8**

** **

**DIRECTORSTOCK OPTION AGREEMENT**

**(NON-QUALIFIEDSTOCK OPTION)**

** **

THIS DIRECTOR STOCKOPTION AGREEMENT (the “Agreement”) is entered into and effective January 10,2006 (the “Date of Grant”), by and between Southwest Casino Corporation (the “Company”)and                          (the “Optionee”).

 

A.                 The Company hasadopted its 2004 Stock Incentive Plan (the “Plan”) which authorizes the Boardof Directors of the Company, or a committee as provided for in the Plan (theBoard or this committee are referred to as the “Committee” in this Agreement),to grant incentive stock options to directors of the Company (as defined in thePlan).

 

B.                   The Companydesires to give the Optionee an inducement to acquire a proprietary interest inthe Company and an added incentive to advance the interests of the Company bygranting to the Optionee an option to purchase shares of common stock of theCompany under the Plan.

 

C.                   Terms statedbut not otherwise defined in this Agreement have the meanings assigned to thoseterms in the Plan.

 

Accordingly, the partiesagree as follows:

 

# **1.****                                     *****Grant of Option.***

#  

The Company herebygrants to the Optionee the right, privilege, and option (the “Option”) topurchase 150,000 shares (the “Option Shares”) of the Company’s common stock,$.001 par value (the “Common Stock”), according to the terms and subject to theconditions stated in this Agreement and as stated in the Plan. This Option is notintended to be an “incentive stock option,” as that term is used in Section 422of the Internal Revenue Code of 1986, as amended (the “Code”).

 

# **2.****                                     *****Option Exercise Price.***

#  

The per share price to bepaid by Optionee upon exercise of this Option will be $0.65.

 

# **3.****                                     *****Duration of Option andTime of Exercise.***

#  

## 3.1                                 Initial Period of Exercisability. Subject to Sections 3.2 and 3.3 below,this Option will become exercisable with respect to the Option Shares in 12quarterly installments beginning on December 31, 2005 and continuing onthe last day of each fiscal quarter of the Company, as provided in the tablebelow. The table below states the initial dates of exercisability of eachinstallment and the number of Option Shares as to which this Option will becomeexercisable on those dates:

 
| **Initial Date of  Exercisability**                       | ** ** | **Number of Option Shares  Available for  Exercise at each Date** |
|-----------------------------------------------------------|------------|-------------------------------------------------------------------|
| Mar. 31, June 30, Sept. 30, Dec. 31,  2006 |       | 12,500                                                            |
| Mar. 31, June 30, Sept. 30, Dec. 31,  2007 |       | 12,500                                                            |
| Mar. 31, June 30, Sept. 30, Dec. 31,  2008 |       | 12,500                                                            |

 

The right to exercisethis Option is cumulative with respect to the Option Shares becomingexercisable on the dates stated above; provided, however, that in no event willthis Option be

 

----

 

exercisable after, andthis Option will become void and expire as to all unexercised Option Shares at,5:00 p.m. (Minnesota time) on January 9, 2016 (the “Time ofTermination”).

 

## 3.2                                 Termination of Service.

##  

### (a)                                  Termination Due to Mandatory Retirement. If Optionee’s service with the Board ofDirectors of the Company is terminated by reason of the Optionee’s mandatoryretirement in accordance with the policies of the Company and its Board ofDirectors, this Option will continue to become exercisable and remainexercisable as if the Optionee continued to serve as a Director of the Company(but not after the Time of Termination).

###  

### (b)                                 Termination Due to Death or Disability. If Optionee’s service with the Board ofDirectors of the Company is terminated by reason of the Optionee’s death orDisability, this Option will become immediately exercisable in full as of thedate of death or Disability and remain exercisable for a period of 12 monthsafter such termination (but not after the Time of Termination).

###  

### (c)                                  Termination for Reasons Other Than Death,Disability or Retirement. Except as provided in Section 3.3, if Optionee’s service withthe Board of Directors is terminated for any reason other than death,Disability or mandatory retirement, this Option will remain exercisable to theextent exercisable on the date of termination of Optionee’s service on theBoard of Directors and remain exercisable for a period of 90 days after suchtermination.

###  

## 3.3                                 Change in Control.

##  

### (a)                                  Impact of Change in Control. If a Change in Control of the Companyoccurs whereby the acquiring entity or successor to the Company does not assumethis Option or replace it with a substantially equivalent incentive award,then, as of the date of the Change of Control, this Option will vest as to allshares and become immediately exercisable in full and will remain exercisableuntil the Time of Termination, regardless of whether the Optionee remains inthe service of the Company. In addition, if a change in control occurs, theCommittee, in its sole discretion and without consent of the Optionee, may determinethat the Optionee will receive, with respect to some or all of the OptionShares, cash in the amount of the excess of the Fair Market Value (as definedin the Plan) of those Option Shares immediately before the effective date ofthe Change in Control over the per share exercise price of this Option.

###  

### (b)                                 Limitation on Change in Control Payments. Notwithstanding anything in this Section 3.3to the contrary, if, with respect to the Optionee, the acceleration of thevesting of this Option as provided above (which acceleration could be deemed a “payment”within the meaning of Section 280G(b)(2) of the Code), together withany other payments that the Optionee has the right to receive from the Companyor any corporation which is a member of an “affiliated group” (as defined in Section 1504(a) ofthe Code without regard to Section 1504(b) of the Code) of which theCompany is a member, would constitute a “parachute payment” (as defined in Section 280G(b)(2) ofthe Code), the payments to the Optionee stated herein will be reduced to thelargest amount that will result in no portion of the payments being subject tothe excise tax imposed by Section 4999 of the Code; provided, however,that if the Optionee is subject to a separate agreement with the Company thatexpressly addresses the potential

 

2

----

 

### application of Sections 280G or 4999 of the Code(including, without limitation, that “payments” under such agreement orotherwise will be reduced, that the Optionee will have the discretion todetermine which “payments” will be reduced, that such “payments” will not bereduced or that such “payments” will be “grossed up” for tax purposes), thenthis Section 3.3(b) will not apply, and any payments to the Optioneeunder Section 3.3(a) of this Agreement will be treated as paymentsarising under such separate agreement.

###  

# **4.****                                     *****Manner of Option Exercise.***

#  

## 4.1                                 Notice. Optionee may exercise this Option, in whole orin part from time to time, subject to the conditions in the Plan and inthis Agreement, by delivery, in person, by facsimile or electronic transmission(if confirmed) or through the mail, to the Company at its principal executiveoffice (Attention: Chief Financial Officer), of a written notice of exercise. Thisnotice must (a) be in a form substantially similar to the form attachedto this Agreement as Exhibit A, or such other form as issatisfactory to the Committee, (b) identify this Option, (c) specifythe number of Option Shares with respect to which this Option is beingexercised, and (d) be signed by the person or persons so exercising thisOption. The notice must be accompanied by payment in full of the total purchaseprice of the Option Shares purchased. If this Option is being exercised asprovided by the Plan and Section 3.2 above, by any person or persons otherthan the Optionee, the notice must be accompanied by appropriate proof of rightof that person or persons to exercise this Option. As soon as practicable afterthe effective exercise of this Option, the Optionee will be recorded on thestock transfer books of the Company as the owner of the Option Sharespurchased, and the Company will deliver to the Optionee one or more duly issuedstock certificates evidencing ownership.

##  

## 4.2                                 Payment. At the time of exercise of this Option, theOptionee must pay the total purchase price of the Option Shares to be purchasedentirely in cash (including a check, bank draft or money order, payable to theorder of the Company); provided, however, that the Committee, in its solediscretion, may allow such payment to be made, in whole or in part, bytender of a promissory note (on terms acceptable to the Committee in its solediscretion) or a Broker Exercise Notice or Previously Acquired Shares, or by acombination of such methods. If Optionee is permitted to pay the total purchaseprice of this Option in whole or in part with Previously Acquired Shares,the value of those shares will equal their Fair Market Value on the date ofexercise, in whole or in part, of this Option.

##  

# **5.****                                     *****Rights of Optionee;Transferability.***

#  

## 5.1                                 Rights as a Shareholder. The Optionee has no rights as ashareholder with respect to the Option Shares issuable upon exercise of thisOption unless and until all conditions to the effective exercise of this Option(including, without limitation, the conditions stated in Sections 4 and 6 ofthis Agreement) have been satisfied and the Optionee has become the holder ofrecord of the Option Shares. No adjustment will be made for dividends ordistributions for which the record Date precedes the date the Optionee becomesthe holder of record of the Option Shares, except as may otherwise beprovided in the Plan or determined by the Committee in its sole discretion.

##  

## 5.2                                 Restrictions on Transfer. Except under testamentary will or thelaws of descent and distribution or as otherwise expressly permitted by thePlan, no right or interest of the Optionee in this Option before exercise may beassigned or transferred, or subjected to any lien, during the lifetime of theOptionee, either voluntarily or involuntarily, directly or indirectly, by

 

3

----

 

## operation of law orotherwise. The Optionee will, however, be entitled to designate a beneficiaryto receive this Option upon Optionee’s death, and, in the event of the Optionee’sdeath, exercise of this Option (to the extent permitted under Section 3.2(a) ofthis Agreement) may be made by the Optionee’s legal representatives, heirsand legatees.

##  

## 5.3                                 Breach of Confidentiality, Assignment ofInventions or Non-Compete Agreements. Notwithstanding anything in this Agreement or thePlan to the contrary, if Optionee materially breaches the terms of any writtenconfidentiality, assignment of inventions or non-compete agreement entered intowith the Company or any Subsidiary, whether such breach occurs before or aftertermination of the Optionee’s service to the Company, the Committee may immediatelyterminate all rights of the Optionee under the Plan and this Agreement.

##  

# **6.****                                     *****Securities Law and OtherRestrictions.***

#  

# Notwithstanding any otherprovision of the Plan or this Agreement, the Optionee may not sell,assign, transfer or otherwise dispose of, any Option Shares unless (a) thereis in effect with respect to the Option Shares a registration statement underthe Securities Act and any applicable state or foreign securities laws or anexemption from such registration, and (b) there has been obtained anyother consent, approval or permit from any other regulatory body that theCommittee, in its sole discretion, deems necessary or advisable. The Company may conditiona sale or transfer by Optionee upon the receipt of any representations oragreements from the parties involved, and the placement of any legends oncertificates representing Option Shares, as may be deemed necessary by theCompany in order to comply with such securities law or other restrictions.

#  

# **7.****                                     *****Withholding Taxes.***

#  

The Company is entitledto (a) withhold and deduct from future amounts owed to Optionee, or makeother arrangements for the collection of, all legally required amountsnecessary to satisfy any federal, state or local withholding andemployment-related tax requirements attributable to this Option including,without limitation, the grant or exercise of this Option or a disqualifyingdisposition of any Option Shares, or (b) require the Optionee promptly toremit the amount of such withholding to the Company before acting on theOptionee’s notice of exercise of this Option. If the Company is unable towithhold such amounts, for whatever reason, the Optionee agrees to pay to theCompany an amount equal to the amount the Company would otherwise be requiredto withhold under federal, state or local law.

 

# **8.****                                     *****Adjustments.***

#  

If any reorganization,merger, consolidation, recapitalization, liquidation, reclassification, stockdividend, stock split, combination of shares, rights offering, divestiture orextraordinary dividend (including a spin-off), or any other similar change inthe corporate structure or shares of the Company occurs, the Committee (or, ifthe Company is not the surviving corporation in any such transaction, the boardof directors of the surviving corporation), in order to prevent dilution orenlargement of the rights of the Optionee, must make appropriate adjustment tothe number and kind of securities or other property (including cash) subjectto, and the exercise price of, this Option.

 

4

----

 

# **9.****                                     *****Subject to Plan.***

#  

This Option and theOption Shares granted and issued under this Agreement have been granted andissued under, and are subject to the terms of, the Plan. The terms of the Planare incorporated by reference in this Agreement in their entirety, and theOptionee, by execution of this Agreement, acknowledges having received a copyof the Plan. The provisions of this Agreement will be interpreted as to beconsistent with the Plan, and any ambiguities in this Agreement will beinterpreted by reference to the Plan. If any provision of this Agreement isinconsistent with the terms of the Plan, and the Plan does not permit thatprovision to vary from the terms of the Plan, the terms of the Plan willprevail.

 

# **10.****                              *****Miscellaneous.***

#  

## 10.1                           Binding Effect. This Agreement will be binding upon theheirs, executors, administrators and successors of the parties to thisAgreement.

##  

## 10.2                           Governing Law. This Agreement and all rights andobligations under this Agreement will be construed in accordance with the Planand governed by the laws of the State of Minnesota, without regard to conflictsof laws provisions. Any legal proceeding related to this Agreement will bebrought in an appropriate Minnesota court and the parties to this Agreementconsent to the exclusive jurisdiction of the court for this purpose.

##  

## 10.3                           Entire Agreement. This Agreement and the Plan state theentire agreement and understanding of the parties to this Agreement withrespect to the grant and exercise of this Option and the administration of thePlan and supersede all prior agreements, arrangements, plans and understandingsrelating to the grant and exercise of this Option and the administration of thePlan.

##  

## 10.4                           Amendment and Waiver. Other than as provided in the Plan,this Agreement may be amended, waived, modified or canceled only by awritten instrument executed by the parties to this Agreement or, in the case ofa waiver, by the party waiving compliance.

##  

The parties to this Agreementhave executed this Agreement effective the day and year first above written.

 
| ** **                       | **SOUTHWEST CASINO CORPORATION** |
|----------------------------------|----------------------------------|
| ** **                       | ** **                       |
| ** **                       | ** **                       |
|                             | By                               |   |
|                             |                             | Thomas E. Fox, President |
|                             |                             |
|                             |                             |
| By execution of this Agreement,  | **OPTIONEE**                     |
| the Optionee acknowledges having | ** **                       |
| received a copy of the Plan.     | ** **                       |
|                             | (Signature)                      |
|                             |                             |
|                             | (Name and Address)               |
|                             |                             |
|                             |                             |

 

5

----