EXHIBIT
10.1


EMPLOYMENT
AGREEMENT


THIS
EMPLOYMENT AGREEMENT IS SUBJECT TO THE

PROVISIONS OF SECTION 181.78 OF THE MINNESOTA STATUTES


Southwest
Casino and Hotel Corp., a Minnesota corporation (the “Company”),
and Tracie L. Wilson (“Employee”)
enter into this Employment Agreement (“Agreement”) effective June 7, 2006 (“Effective
Date”). Company and Employee
are collectively referred to in this Agreement as the “Parties”.


BACKGROUND:


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


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


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


AGREEMENT:


NOW, THEREFORE, in consideration
of the Parties’ agreement as to Employee’s commencement or continuation of
employment, the payment of compensation and other benefits (as defined in this
Agreement), the Parties’ mutual agreements stated in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which
Company and Employee acknowledge, the Parties agree as follows:


1.                 EMPLOYMENT
TERMS AND DUTIES


Section 1.1 
Term. 
Subject to the provisions of Section 5 of this Agreement regarding
termination, Company agrees to employ Employee and Employee agrees to be
employed by Company for a term ending June 1, 2007, which will renew
automatically for additional one year terms subject to termination by either
Party 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 and
accounting officer of the Company. 
Initially, Employee’s title will be Chief Financial Officer (although
Employee will not serve as the Company’s principal financial and accounting
officer for purposes of filings with the United States Securities and Exchange
Commission until approved for that role by the Board of Directors).  Employee will perform any and all other
duties as the Chief Executive Officer, President, or Board of Directors may
reasonably direct.


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









 



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


c.    Employee represents and warrants to the Company, and acknowledges
that the Company has expressly relied on this representation and warranty in
hiring Employee, that Employee is not subject to any non-competition or other
agreement that limits or prohibits Employee from serving the Company in the
capacity described in this Agreement.


2.                 COMPENSATION


Section 2.1 
Salary. 
For all services rendered by Employee, Company will pay Employee an
annual salary of $140,000.00 (the “Salary”).  Employee’s Salary will be subject to annual
performance reviews and merit increases as determined by the Compensation
Committee of the Company’s Board of Directors. Company will pay the Salary in
equal semi-monthly installments on the fifteenth and the last day of each month
during the term of this Agreement (or, if the fifteenth or last day falls on a
Saturday, Sunday or holiday, on the last business day preceding the fifteenth
or last day of each month).


Section 2.2  Stock
Option.  Upon the execution of this Agreement by the
Parties, the Company shall grant Employee, under the terms of the Company’s
2004 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 equal
to the closing share price of the Company’s common stock on the
Over-the-Counter Bulletin Board market on that date (the “Option”). 
The option will become exercisable (“vest”) over three years in
12 equal installments on the last day of each fiscal quarter of the Company
during which Employee is employed. 
Except as otherwise stated in the written option agreement, the Option
will 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 when
determined by the CEO and President of the Company and approved by its
Compensation Committee of the Board of Directors.  Employee acknowledges that the Compensation
Committee is in the process of evaluating the Company’s overall compensation
and benefits policies and may adopt bonus or incentive plans applicable to
Employee.  If the Company adopts such a
bonus or incentive plan or plans, Employee’s bonus compensation, if any, will
be determined in accordance with the bonus or incentive compensation plan or
plans established by the Company.  All
bonus compensation will be at the discretion of the Company.


Section 2.4 Benefits.  During Employee’s employment under this
Agreement, Employee is entitled to participate in those employee benefits or
benefit 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 any
benefit or benefit plans.  Company
reserves the right to unilaterally add to, amend or terminate all or any of
Employee’s benefits without prior notice, subject to the terms and conditions
of such plans and to applicable laws.



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Section 2.5  Vacation.  Employee will receive three weeks of paid
vacation per year.  The Company has
established its paid vacation policy based on the belief that both the employee
and the employer benefit when employees take vacations.  For that reason, Southwest prefers strongly
that employees take their entire allotted vacation each year.  Unused vacation time will not carry forward
into subsequent years.


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


3.                 REPRESENTATIONS,
WARRANTIES AND ACKNOWLEDGMENTS


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


Section 3.2 
Insider Trading Policy.  Employee
acknowledges that the Company is a wholly-owned subsidiary of Southwest Casino
Corporation and that securities of Southwest Casino Corporation are traded in
the public markets and subject to the periodic reporting requirements of the
Commission.  Employee further
acknowledges that, in her role as Chief Financial Officer, Employee will
frequently possess material non-public information regarding the Company and
Southwest Casino Corporation.  Employee
agrees that she will not engage in any transaction in Southwest Casino
Corporation securities while in possession of material non-public information
regarding the Company or Southwest Casino Corporation.  Employee acknowledges that engaging in any
transaction in Southwest Casino Corporation securities while in possession of
material non-public information, or providing material non-public information
to any third party who engages in any transaction in Southwest Casino
Corporation securities, may violate federal securities laws.  Employee agrees to abide the provisions of
Southwest Casino Corporation’s insider trading policy for executive officers in
connection with any transaction in Southwest Casino Corporation securities by
Employee or members of Employee’s immediate family.


Section 3.3. 
Third-Party Information. Employee understands and acknowledges that
the Company has a policy prohibiting the receipt by the Company of any
confidential information in breach of the Employee’s obligations to third
parties and does not desire to receive any confidential information under such
circumstances. Accordingly, the Employee will not disclose to the Company or
use in the performance of any duties for the Company any confidential
information in breach of an obligation to any third party. The Employee
represents that the Employee has provided the Company with a copy of any
agreement by which the



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


Section 3.4. 
Non-Competition Agreements. 
Employee represents and warrants to the Company that the Employee is not
currently subject to a non-competition, confidentiality or other similar
agreement with a former employer that prohibits the Employee from working for
the Company.


4.                 RESTRICTIVE
COVENANTS


Section 4.1 
Confidential Information.  Employee acknowledges that the confidential
information and data obtained by her during the course of her performance under
this Agreement (or her work prior to the date hereof for Company, if any)
concerning the business or affairs of Company (the “Confidential
Information”) are the property of Company.  Employee agrees that she will not disclose to
any unauthorized persons or use for her own account or for the benefit of any
third party any of such Confidential Information or data without the written consent
of the President of the Company, either during the term of her employment or
after the termination thereof for a period of three years.  Employee agrees to deliver to Company at the
termination of her employment all memoranda, notes, plans, records, reports and
other documentation (and copies thereof) relating to the business of Company or
the 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 the
business of Company, which are conceived or generated by Employee or come into
Employee’s possession during the Initial Term or any extension of employment
under this Agreement, are automatically assigned to and remain the exclusive
property of Company, and Employee agrees to return all such documents and
tangible 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 or
which relate in any way to the business, practices or techniques of Company,
and all other property of Company, including, but not limited to, all documents
which in whole or in part contain any Confidential Information of Company,
which are in the possession or under the control of Employee, to Company upon
termination of this Agreement or at any earlier time that Company requests such
return.


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



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Section 4.3 
Non-Solicitation Covenant.  In consideration of the covenants of the
Company in this Agreement, the receipt and sufficiency of which are
acknowledged by Employee, Employee agrees that for a period of one (1) year
after termination of Employee’s employment with the Company, the Employee must
not directly or indirectly:


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


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


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


Section 4.5 
Assignment. 
The transfer of Employee from Company to any subsidiary or affiliate or
to a successor company that results from any acquisition, merger or
reorganization thereof shall operate as an assignment to such company of
Company’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 as
of the date of such transfer.  All
covenants and agreements under this Agreement shall inure to the benefit of and
be enforceable by the successors and assigns of Company, including assignees by
operation of law.


Employee’s
performance under this Agreement requires Employee’s personal services, unique
skills and experience, and therefore, may not be assigned or transferred by
Employee nor may Employee delegate her duties under this Agreement to another
person without the prior written consent of the Board of Directors of
Company.  Company retains the exclusive
right to withhold consent for any reason.


Section 4.6 
Survival. 
Except as otherwise expressly provided herein, the provisions of this
Section 4 will survive (a) the termination of this Agreement as a result of
breach or otherwise, or (b) the termination of Employee’s employment under this
Agreement, provided further, that in the event of a breach of Company’s
obligation to make any payments to Employee required under this Agreement, the
provisions of Section 4.4 of this Agreement shall not survive a termination of
this 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 Agreement
may be terminated by Company at any time for “cause”, which is defined as (a)
the failure of Employee, individually, to meet the licensing requirements of
any jurisdiction in which Employee’s work for the Company requires that
Employee hold a license; (b) the conviction of Employee of any fraudulent or
criminal act; (c) the willful refusal by Employee to comply with or adequately
perform any duty or responsibility imposed upon Company pursuant to the terms
of this Agreement; (d) a determination by a majority of the Board of Directors
of the Company that Employee’s continued employment with Company may result in
(i) the disapproval, modification, or non-renewal of any contract or proposed
contract under which the Company or any of its subsidiaries has sole or shared
authority to develop, license or manage any gaming operations, wherever
located, or (ii) the disapproval, loss, modification, non-renewal or
non-reinstatement of any license, franchise, approval or consent issued by or
sought from any federal, state or tribal governmental authority with respect to
the 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 not
otherwise 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 continued
employment of Employee in connection with the operation of the Enterprise.  Company may terminate Employee’s employment
immediately (without any advance notice) in the event of a termination for
cause.  If Employee’s employment is
terminated for cause pursuant to this Section 5.1, no further payments of
Salary, Bonus or other forms of compensation or benefits shall be due or
payable to Employee with respect to any period following or events occurring
after the date of such termination, except as may be required by applicable
law, and all vested options may be exercised for only thirty (30) days.


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


Section 5.3  Change
in Control.  Upon
approval by the Board of Directors of the company, Employee and Company will
enter into a separate agreement that provides that if Employee’s employment
terminates in connection with a Change in Control of the Company (as defined in
the separate agreement), Employee will receive post-employment benefits
consistent 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 requirements
of Section 409A of the Internal Revenue Code.


Section 5.3 
Death or Disability.  In the event of Employee’s death or
disability, this Agreement shall terminate except that Company shall pay
Employee’s designated beneficiaries or estate, in the case of death, or
employee, 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 amount
of any death or disability payments which may be payable to Employee under any
death 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 of
performing the duties assigned to Employee under this 



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


6.                 PROVISIONS
OF GENERAL APPLICATION


Section 6.1 
Background Checks and Related Information.  Employee acknowledges that Company’s gaming
business is extensively regulated and, as a result, various regulatory bodies
may request or require background investigations and background information
regarding Employee.  During the term of
this Agreement, Employee agrees to comply with any and all background
investigations conducted or requested from time to time by Company or any
federal, state, tribal or other regulatory authority.  Employee acknowledges and agrees that the
provisions 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 Parties
hereto to any of the others shall be in writing and, except as otherwise
provided herein, shall be considered to have been duly given or served if sent
by certified or registered United States mail, postage prepaid, return receipt
requested, to the respective parties at their address set forth below or to
such other address as such party may hereafter designate by notice to the other
party.




	
  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 and
obligations provided in this Agreement inure to, the Parties and their
respective heirs, legal representatives, successors, assigns, transferees or
donees.


Section 6.5 
Entire Agreement.  Employee and Company intend this Agreement to
be the final and binding expression of their agreement and as the complete and
exclusive statement of its terms.  This
Agreement supersedes and revokes all other prior negotiations, representations
and agreements, whether oral or written, regarding the employment relationship
between 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 which
must be enforced according to their respective terms.


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



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their right to
seek legal or equitable relief for any subsequent violation of the
Agreement.  As used in this Agreement and
where necessary, the singular includes the plural and vice versa, and
masculine, feminine and neuter expressions are interchangeable.


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


Remainder
of page intentionally blank.

Signatures on next page.



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IN WITNESS WHEREOF, Company and
Employee have knowingly, voluntarily and with the right to seek independent
counsel, executed this Agreement on the date(s) reflected below with an
Effective Date as set forth above.


	
  EMPLOYEE

  	
  SOUTHWEST CASINO AND

  
	
   

  	
  HOTEL CORP.

  
	
   

  	
  By:

  	
   

  
	
  Tracie L. Wilson

  	
   

  	
  Its:

  	
   

  
				



 


 



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EXHIBIT B


NOTICE
PURSUANT TO


MINNESOTA
STATUTES 181.78 (Subd. 3)


TO:                         Tracie
Wilson


FROM:                  Southwest
Casino and Hotel Corp. (the “Company”)


You
have entered into an Employment Agreement with Company requiring you, among
other things, to assign or offer to assign your rights in certain inventions to
Company.  You are hereby notified that
such Employment Agreement does not apply to any invention for which no
equipment, supplies, facility or trade secret information of Company was used
and which was developed entirely on your own time, and (1) which does not
relate (a) directly to the business of Company, or (b) to Company’s actual or
demonstrably anticipated research or development; or (2) which does not result
from any work performed by you for Company.




	
  

  	
  SOUTHWEST
  CASINO AND HOTEL CORP.

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  






 


I
hereby acknowledge receipt of the foregoing notice.


	
  

  	
  Tracie L. Wilson

  



 


 



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