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                                                                   Exhibit 10.56

                           RESTRICTED STOCK AGREEMENT

                  RESTRICTED STOCK AGREEMENT (this "Agreement"), dated as of May
26, 2000 (the "Effective Date"), by and between Harveys Casino Resorts, a Nevada
corporation (the "Company"), and John J. McLaughlin (the "Executive"), an
employee of the Company or a Subsidiary of the Company.

                  Pursuant to the Company's 1999 Omnibus Stock Incentive Plan
(the "Plan"), the Board of Directors of the Company (the "Board"), as the
Administrator of the Plan, has determined that the Executive is to be granted a
Restricted Stock award consisting of additional shares of Class A Common Stock
and Class B Common Stock (the "Restricted Shares"), on the terms and conditions
set forth herein, and hereby grants such Restricted Stock award.

                  Any capitalized terms not defined herein shall have their
respective meanings set forth in the Plan.

                  1.  TERMS OF RESTRICTED STOCK AWARD. (a) The Restricted Stock
award entitles the Executive as of the Date of Grant to receive 130 shares of
Class A Common Stock and 12,798 shares of Class B Common Stock (the "Restricted
Shares"), subject to the terms and conditions of this Agreement.

                           (b) Subject to the rights and obligations of
Executive pursuant to that certain Stockholders Agreement, dated February 2,
1999, by and among the Company, Executive and the other parties thereto (the
"Stockholders Agreement"), and except as provided in Section 1(c) below, the
Restricted Shares may not be sold, assigned, transferred, pledged, hypothecated
or otherwise disposed of in any manner or under any circumstances (the "Transfer
Restrictions").

                           (c) The Restricted Shares shall vest to the extent
that BOTH of the sets of conditions set forth at 1(c)(i) AND 1(c)(ii) are met,
except to the extent that provisions set forth at 1(c)(iv) - 1(c)(vii) apply:

                                    i) Time-based Schedule. Provided that such
         Restricted Shares have vested pursuant to 2(c)(ii) below, the Transfer
         Restrictions shall lapse as to 20% of the Restricted Shares on each of
         the first five anniversaries of February 2, 1999, regardless of whether
         Executive was employed by the Company on such date.


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                                    ii) Performance-based Vesting. The first 25%
         of the Restricted Stock Award shall immediately vest as of the Date of
         Grant. The remaining 75% of the Restricted Stock Award shall vest in
         annual one-third increments on each of the first three anniversaries
         of February 2, 1999, regardless of whether Executive was employed by
         the Company on such date, PROVIDED THAT the applicable performance
         criteria described immediately below are satisfied:

                           (1)      For the fiscal year ended November 30, 2000,
                                    1/3 of the remaining 75% of the Restricted
                                    Shares (25% of the total Restricted Stock
                                    Award) shall vest provided that Bluffs Run
                                    Casino ("Bluffs Run") generates at least
                                    $34,000,000 of EBITDA (the "2000 Target").

                           (2)      For the fiscal year ended November 30, 2001,
                                    1/3 of 75% of the Restricted Shares (25% of
                                    the total Restricted Stock Award) shall
                                    vest provided that Bluffs Run generates at
                                    least $35,000,000 of EBITDA (the "2001
                                    Target").

                           (3)      For the fiscal year ended November 30, 2002,
                                    1/3 of 75% of the Restricted Shares (25% of
                                    the total Restricted Stock Award) shall
                                    vest provided that Bluffs Run generates at
                                    least $36,000,000 of EBITDA (the "2002
                                    Target" and, together with the 2000 Target
                                    and the 2001 Target, each a "Performance
                                    Target").

                           (4)      The 2001 Target and the 2002 Target shall be
                                    subject to equitable adjustment for any
                                    annual increase in state gaming taxes in
                                    such fiscal year and for revenue enhancing
                                    capital expenditures made during the
                                    preceding fiscal year.

                           (5)      In the event that Bluffs Run fails to meet a
                                    Perfor mance Target in a fiscal year (a
                                    "Shortfall Year"), no portion of the
                                    Restricted Shares shall vest in such
                                    Shortfall Year; PROVIDED, HOWEVER, that if
                                    the Performance Target for the year
                                    immediately following a


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                                    Shortfall Year is exceeded by at least the
                                    amount of the shortfall in the Shortfall
                                    Year (the difference between the Shortfall
                                    Year's Performance Target and the EBITDA
                                    actually generated by Bluffs Run in such
                                    Shortfall Year), then the amount of
                                    Restricted Shares that would have vested in
                                    the Shortfall Year if the Performance Target
                                    had been satisfied, shall vest retroactively
                                    as if the Performance Target in the
                                    Shortfall Year had been satisfied.

                                    iii) the Restricted Shares and such lapse
         shall be subject to the Special Forfeiture Provisions of Section 6(b),
         such that the Transfer Restrictions shall continue to apply to the
         Restricted Shares for so long and to the extent that the Restricted
         Shares shall be subject to forfei ture pursuant to the Special
         Forfeiture Provisions. Those Restricted Shares which, as of any date,
         have vested pursuant to the first clause of the provisions of this
         Section 1(c)(i) and 1(c)(ii) but remain subject to the Special
         Forfeiture Provisions shall be referred to herein as "Lapsed Restricted
         Shares."

                                    iv) upon the occurrence of a Change in
         Control at any time prior to the effective date (as determined under
         the Employment Agreement) of Executive's termination of employment
         with the Company for any or no reason, the Transfer Restrictions shall
         immediately lapse as to 100% of the Restricted Shares and the Special
         Forfeiture Provisions shall immediately expire, all as of the date of
         the change in control.

                                    v) if Executive's employment with the
         Company is terminated (A) by the Company without Cause (as defined in
         that certain Employment Agreement between the Executive and the
         Company dated February 2, 1999, the "Employment Agreement") within the
         12 month period immediately preceding a Change in Control (or such
         longer period, not to exceed 18 months prior to such Change in
         Control, during which significant discussions or other material action
         regarding such Change in Control occurred) at the request, directly or
         indirectly, of a third party who has taken steps reasonably calculated
         to effect a Change in Control or otherwise in connection with, or in
         anticipation of a Change in Control, or (B) by Executive for Good
         Reason (as defined in the Employment Agreement) if the grounds
         constituting Good Reason occur as the result of a


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         Change in Control or within the above-referenced time frame at the
         request, directly or indirectly, of such a third party or otherwise in
         connection with, or in anticipation of a Change in Control, (i) the
         Restricted Shares shall be deemed to have immediately vested and become
         exercisable as to 100% of the Restricted Shares as of the effective
         date of such Change in Control and (ii) the Special Forfeiture
         Provisions shall be deemed to have immediately expired as of the
         effective date of such Change in Control.

                                    vi) if Executive's employment with the
         Company is terminated by the Company without Cause or by Executive for
         Good Reason (as defined in the Employment Agreement), the Restricted
         Shares shall immediately vest and become exercisable and the Special
         Forfeiture Provisions shall immediately expire as to that number of
         Restricted Shares that would have vested pursuant to the provisions of
         this Section 1(c)(i) and 1(c)(ii) had Executive's employment continued
         without interruption through the date that is 18 months following the
         effective date of such termination as determined under the Employment
         Agreement.

                                    vii) Effect of the Iowa Referendum.
         Notwithstanding any other provision herein, no Restricted Shares and no
         Lapsed Restricted Shares may be sold, assigned, transferred, pledged,
         hypothecated or otherwise disposed of prior to Referendum Approval (as
         such term is defined in Section 2.2.1 of that certain Purchase and Sale
         Agreement and Joint Escrow Instructions dated August 31, 1999, by and
         between HBR Realty Company, Inc. and Iowa West Racing Association),
         except to the extent that vesting is accelerated pursuant to Sections
         2(c)(iv) and 2(c)(v) above. In the event that the Referendum Approval
         does not occur, the Executive shall immediately forfeit all Restricted
         Shares and all Lapsed Restricted Shares awarded under this agreement,
         except to the extent that vesting was accelerated pursuant to Sections
         2(c)(iv) and 2(c)(v) above prior to defeat of the Referendum.

                           (d) From and after the Date of Grant and for so long
as the Restricted Shares are held by or for the benefit of the Executive, except
as limited by the Stockholders Agreement, the Transfer Restrictions and the
Special Forfeiture Provisions, the Executive shall have all the rights of a
stockholder of the Company with respect to the Restricted Shares, including but
not limited to the right to receive dividends on and the right to vote such
shares.



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                  2. CERTAIN DEFINITIONS. (a) For purposes of this Agreement,
"Initial Public Offering" shall mean the closing of a public offering pursuant
to an effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering shares of the Company's Common Stock,
which shares are approved for listing or quotation on the New York Stock
Exchange, American Stock Exchange or Nasdaq National Market.

                           (b) For purposes of this Agreement, "Change in
Control" means the occurrence of one or more of the following events:

                                    i)  the sale, lease, transfer, conveyance or
         other disposition, in one or a series of related transactions, of all
         or substantially all of the assets of the Company and its Subsidiaries,
         taken as a whole;

                                    ii)  the adoption by the Company's
         stockholders of a plan of liquidation or dissolution of the Company;

                                    iii) prior to the time the Company or any
         Parent Corporation completes an Initial Public Offering, the Company
         becomes aware (by way of a report or any other filing pursuant to
         Section 13(d) of the Exchange Act, proxy vote, written notice or
         otherwise) of the acquisition by any "Person" or related group
         (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
         Exchange Act, or any successor provision to either of the foregoing,
         including any "group" acting for the purpose of acquiring, holding or
         disposing of securities within the meaning of Rule 13d-5(b)(1) under
         the Exchange Act), other than a group consisting of the Principals and
         their Related Parties, in a single transaction or in a related series
         of transactions, by way of merger, consolidation or other business
         combination or purchase of direct or indirect beneficial ownership
         (within the meaning of Rule 13d-3 under the Exchange Act, or any
         successor provision) of 50% or more of the total voting power
         entitled to vote in the election of the Board of Directors of the
         Company or such other Person surviving the transaction;

                                    iv)  subsequent to the time the Company or
         any Parent Corporation completes an Initial Public Offering, the
         Principals and their Related Parties shall directly or indirectly
         beneficially own shares of capital stock representing less than 25% of
         the total voting power entitled to vote in the election of the Board
         of Directors of the Company and either


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         (A) any other Person directly or indirectly beneficially owns shares of
         capital stock representing voting power in excess of the voting power
         represented by shares of capital stock owned by the Principals and
         their Related Parties or (B) individuals who were the voting members of
         the Company's Board of Directors at the beginning of any two year
         period commencing subsequent to the Initial Public Offering (together
         with any new voting directors whose election or appointment by such
         board or whose nomination for election by the shareholders of the
         Company was approved by a vote of a majority of the directors then
         still in office who were either directors at the beginning of such
         period or whose election or nomination for election was previously so
         approved) cease for any reason to constitute a majority of the
         Company's Board of Directors then in office.

                           (c) For purposes of this Agreement, the following
terms shall have the meanings as set forth below:

                                    i)  "Exchange Act" means the Securities
         Exchange Act of 1934, as amended, and the rules and regulations
         promulgated thereunder;

                                    ii) "Principals" means Colony Investors III,
         L.P., Colony Capital, Inc. and any of their respective affiliates and
         any of the Company's officers and directors; and

                                    iii) "Related Party" with respect to any
         Principal means (A) any controlling stockholder, 80% (or more) owned
         Subsidiary, or spouse or immediate family member (in the case of an
         individual) of such Principal or (B) any trust, corporation,
         partnership or other entity, the beneficiaries, stockholders,
         partners, owners or Persons beneficially holding an 80% or more
         controlling interest of which consist of such Principal and/or such
         other Persons referred to in the immediately preceding clause (A).

                           (d) For purposes of this Agreement, "Fair Market
Value" (when capitalized, unless the context clearly indicates otherwise) means,
as of any given date, (A) if the Common Stock is publicly traded, the closing
sale price of the Common Stock on such date (or the nearest preceding date on
which the Common Stock was traded) as reported in the Western Edition of THE
WALL STREET JOURNAL, or (B) if the Common Stock is not publicly traded, the fair
market value


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of the Common Stock as determined in accordance with the procedures set forth
below, in each case based on the per share value of the Company as a whole as of
the relevant date, without any discount for the sale of a minority interest and
without considering lack of liquidity, including transfer and other restrictions
on the Common Stock:

                                    i) The Board shall determine the fair market
         value of the Common Stock in good faith, using commercially reasonable
         methods and at the Company's sole expense, PROVIDED, that if Executive
         is a member of or non-voting observer on the Board, Executive shall
         recuse himself from all deliberations of the Board regarding such
         determination, and except as otherwise provided herein shall not be
         entitled to receive or be provided access to any minutes or other
         records of the Board with respect to such determination. The Board
         shall communicate the per share valuation as so determined in writing
         to Executive within 20 business days following the date written notice
         is provided or the Board takes cognizance of the need to determine the
         Fair Market Value of the Common Stock, and upon Executive's request,
         the Board shall provide Executive appropriate supporting documentation
         regarding the methods, assumptions and other bases used in arriving at
         such valuation. If acceptable to Executive, the fair market value of
         the Common Stock shall be as so determined.

                                    ii) If the fair market value as determined
         under (i) is not acceptable to Executive, Executive shall determine
         the fair market value of the Common Stock in good faith, using
         commercially reasonable methods and at Executive's sole expense, and
         shall communicate the per share valuation as so determined in writing
         to the Board within 20 business days following the Board's
         communication to Executive of the per share valuation pursuant to (i)
         above and, upon the Board's request, Executive shall provide to the
         Board appropriate supporting documentation regarding the methods,
         assumptions and other bases used in arriving at such valua tion. If
         acceptable to the Board, the fair market value of the Common Stock
         shall be as so determined.

                                    iii) If the fair market value as determined
         under (ii) is not acceptable to the Board, the Board and Executive
         shall then negotiate in good faith to agree upon the fair market value
         of the Common Stock, based on the valuations under (i) and (ii) above.



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                                    iv) If the Board and Executive shall be
         unable by the foregoing means to agree upon the fair market value of
         the Common Stock within ten business days after the Board has been
         advised of Executive's valuation, the issue shall then be submitted
         to binding arbitration in Las Vegas, Nevada according to the rules and
         procedures of the American Arbitration Association. The Company and
         Executive shall each submit to the arbitrator their valuations under
         (i) and (ii) above, together with all supporting documentation
         regarding the methods, assumptions and other bases used in arriving at
         such valuation. The arbitrator shall then be instructed to choose
         which of the two valuations more closely reflects the fair market
         value of the Common Stock, and shall not have the right to choose a
         third valuation as the appropriate fair market value of the Common
         Stock. The party whose valuation is not so chosen by the arbitrator
         shall pay any and all costs and expenses of the arbitration (but not
         the initial valuation of the other party), including without
         limitation reasonable attorneys' fees and other fees incurred by the
         prevailing party in such arbitration. Judgment may be entered on the
         arbitrator's determination and award.

                  3. DEFERRED COMPENSATION ARRANGEMENT WITH RESPECT TO
RESTRICTED SHARES. Notwithstanding anything herein to the contrary, at any time
prior to the occurrence of a Distribution Event (as defined in the Deferred
Compensation Agreement between Executive and the Company as in effect as of the
date hereof, or as may be amended from time to time (the "Deferred Compensation
Agreement")) that the Transfer Restrictions and Special Forfeiture Restrictions
would otherwise lapse with respect to any portion of the Restricted Shares and
result in the recognition of income by Executive, such Restricted Shares (the
"Deferred Shares") shall be cancelled and an equivalent number of Deemed
Deferred Shares (as defined in the Deferred Compensation Agreement) shall be
added to the Restricted Stock Sub-Account under the Deferred Compensation
Agreement.

                  4. ADJUSTMENTS. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split or similar change
affecting the Common Stock, an equitable substitution or proportionate
adjustment shall be made in the kind and number of Restricted Shares, as may be
determined by the Board in good faith.



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                  5. RESTRICTED SHARES SUBJECT TO STOCKHOLDERS AGREEMENT. The
Executive and the Restricted Shares shall at all times and in all respects be
subject to the Stockholders Agreement, the provisions of which shall be deemed
to be incorporated into this Agreement.

                  6. EFFECT OF TERMINATION OF EMPLOYMENT; SPECIAL FORFEITURE
PROVISIONS. (a) Upon the termination of Executive's employment with the Company
under any circumstances and for any or no reason (including without limitation
by reason of the death or Disability of the Executive, except under
circumstances where Section 1(c)(v) and 1(c)(vi) are applicable, the Executive
shall forfeit all Restricted Shares as to which the Transfer Restrictions have
not lapsed as of such date of termination.

                           (b) In addition, in the event the Executive's
employment with the Company is terminated prior to the Forfeiture Provision
Expiration Date (as defined below) (i) at any time prior to the fifth
anniversary of the Date of Grant by the Executive other than for Good Reason or
(ii) at any time by the Company for Cause (each as defined above), Executive
shall thereupon forfeit that portion of the Lapsed Restricted Shares equal to
the Applicable Reduction Percentage (as defined below).

                                    i) The "Applicable Reduction Percentage"
         shall mean (A) at all times prior to the occurrence of an Initial
         Public Offering, two-thirds and (B) at all times following an Initial
         Public Offering but prior to the occurrence of a 50% Colony Sell-Down,
         one-third.

                                    ii) The Special Forfeiture Provisions shall
         expire in their entirety as of the date of (x) the Company's Initial
         Public Offering, if such Initial Public Offering occurs subsequent to
         a 50% Colony Sell-Down, (y) a 50% Colony Sell-Down that occurs at any
         time subsequent to the Company's Initial Public Offering or (z) a
         Change in Control (the "Forfeiture Provision Expiration Date").

                                    iii) A "50% Colony Sell-Down" shall be
         deemed to occur when the Principals and their affiliates (excluding
         officers and employees of the Company who are Principals or affiliates
         merely by reason of their being such an officer or employee) shall,
         directly or indirectly, beneficially own shares of capital stock of
         the Company representing


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         less than 50% of the largest total number of such shares theretofore
         owned by such persons.

                  7. CALL RIGHTS. In the event of (I) the termination of the
Executive's employment with the Company at any time, under any circumstances and
for any or no reason, (II) a Change in Control or (III) any transfer of any
Restricted Shares by the Executive under any circumstances (other than to a
trust controlled by Executive for estate planning purposes, the trustee of which
agrees in writing to be subject in all events and for all purposes to the
Company's Call as set forth herein), including pursuant to any arrangement,
proceeding, decree, judgement, order or application of law relating to the
division of property for domestic relations purposes, for a period commencing on
the date of such event and expiring upon the Company's Initial Public Offering
(the "Call Exercise Period"), the Company shall have the right to purchase from
the Executive, by giving written notice to the Executive pursuant hereto and in
accordance with the terms and conditions of Section 8(a) below (the "Call") any
or all Restricted Shares as of the end of business on the Call Exercise Date as
to which the Transfer Restrictions shall have lapsed pursuant to Section 1(c)
and which shall not theretofore have been forfeited by Executive pursuant to
Section 6(b).

                           (a) The following terms and conditions shall apply to
the exercise of the Call:

                                    i) The Company shall pay the Executive an
         amount equal to the product of (A) the Call Price and (B) the number of
         Restricted Shares, being purchased pursuant thereto.

                           (b) The closing with respect to the exercise of the
Call shall take place at the Company's executive offices within 30 days
following the Call Exercise Date (the "Scheduled Closing Date").

                           (c) Notwithstanding any other provision hereof, the
Company may assign, without the consent of the Executive, its rights under this
Section 8; PROVIDED, that no such assignment shall release the Company from its
obligations hereunder.

                           (d) The Call shall terminate upon the closing of the
Company's Initial Public Offering.



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                  8. INVESTMENT REPRESENTATION. The Executive hereby represents
and warrants to the Company that the Executive, by reason of the Executive's
business or financial experience (or the business or financial experience of the
Executive's professional advisors who are unaffiliated with and who are not
compensated by the Company or any affiliate or selling agent of the Company,
directly or indirectly), has the capacity to protect the Executive's own
interests in connection with the transactions contemplated under this Agreement.

                  9. NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be given by first class mail, certified
or registered with return receipt requested, or by a nationally recognized
overnight delivery service to the respective parties named below:

         If to Company:             Harveys Casino Resorts
                                    Highway 50 and Stateline Avenue
                                    P.O. Box 128
                                    Lake Tahoe, Nevada 89449
                                    Attention:  Charles Scharer
                                    Facsimile:  775-586-6852

         with a copy to:            Colony Capital, Inc.
                                    1999 Avenue of the Stars
                                    Los Angeles, California 90067
                                    Attention:  Kelvin L. Davis
                                    Facsimile:  310-282-8808


         If to the Executive:       John J. McLaughlin
                                    106 Willow Drive
                                    Zephyr Cove, Nevada  89448
                                    Facsimile:  775 - 588-0998

Either party hereto may change such party's address for notices by notice duly
given pursuant hereto.

                  10. SECURITIES LAWS REQUIREMENTS. The Executive hereby
represents and warrants that he is acquiring the Restricted Shares for
investment and not with a view to resale or distribution to the public. The
Executive hereby represents and warrants that he understands that the Restricted
Shares are "re-

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stricted securities," as defined in Rule 144 under the Securities Act, and that
any resale of the Restricted Shares must be in compliance with the registration
requirements of the Securities Act or an exemption therefrom. Each certificate
representing Restricted Shares shall bear the legend set forth below:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED,
         SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF (A "TRANSFER")
         EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THAT CERTAIN STOCKHOLDERS
         AGREEMENT, DATED AS OF FEBRUARY 2, 1999, BY AND AMONG HARVEYS CASINO
         RESORTS, A NEVADA CORPORATION, AND CERTAIN OF ITS STOCKHOLDERS AND THAT
         CERTAIN RESTRICTED AWARD AGREEMENT, OF EVEN DATE HEREWITH, BETWEEN THE
         COMPANY AND ONE OF ITS SENIOR EXECUTIVES. ANY TRANSFEREE OF THESE
         SECURITIES SHALL TAKE SUBJECT TO THE TERMS OF SUCH AGREEMENTS, COPIES
         OF WHICH ARE ON FILE WITH THE COMPANY.

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES
         LAWS, AND NO TRANSFER OF THESE SECURITIES MAY BE MADE EXCEPT (A)
         PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR (B)
         PURSUANT TO AN EXEMPTION THEREFROM WITH RESPECT TO WHICH THE COMPANY
         MAY, UPON REQUEST, REQUIRE A SATISFACTORY OPINION OF COUNSEL FOR THE
         HOLDER THAT SUCH TRANSFER IS EXEMPT FROM THE REQUIREMENTS OF THE ACT.

                  11. NO OBLIGATION TO REGISTER SHARES. Except as provided in
the Stockholders Agreement, the Company shall be under no obligation to register
the Restricted Shares.

                  12. PROTECTIONS AGAINST VIOLATIONS OF AGREEMENT. No purported
sale, assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift,
transfer in trust (voting or other) or other disposition of, or creation of a
security interest in or lien on, any of the Restricted Shares by any holder
thereof in violation of the provisions of this Agreement, the Stockholders
Agreement or the Certificate of Incorporation or the Bylaws of the Company, will
be valid, and the


                                       12

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Company will not transfer any of said Restricted Shares on its books nor will
any of the Restricted Shares be entitled to vote, nor will any dividends be paid
thereon, unless and until there has been full compliance with such provisions to
the satisfaction of the Company. The foregoing restrictions are in addition to
and not in lieu of any other remedies, legal or equitable, available to enforce
such provisions.

                  13. WITHHOLDING REQUIREMENTS. Executive shall, no later than
the date as of which the value of any award hereunder becomes includable in his
gross income (after taking into account the provisions of Section 4 hereof), pay
to the Company, or make arrangements satisfactory to the Company regarding
payment of, any federal, state, or local taxes or other amounts of any kind
required by law to be withheld with respect thereto. The obligations of the
Company hereunder shall be conditional on the making of such payments or
arrangements, and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to
Executive.

                  14. FAILURE TO ENFORCE NOT A WAIVER. The failure to enforce at
any time any provision of this Agreement shall in no way be construed to be a
waiver of such provision or of any other provision hereof.

                  15. GOVERNING LAW. This Agreement shall be governed by and
construed according to the laws of the State of Nevada without regard to its
principles of conflict of laws.

                  16. INCORPORATION OF PLAN. The Plan is hereby incorporated
by reference and made a part hereof, and the Restricted Stock award and this
Agreement shall be subject to all terms and conditions of the Plan; provided,
however, that in the event of a conflict between the terms of this Agreement
and the Plan, the terms of the Plan shall govern.

                  17. AMENDMENTS. Any Award granted pursuant to this Agreement
may be amended or modified in accordance with Section 9 of the Plan.

                  18. AGREEMENT NOT A CONTRACT OF EMPLOYMENT. Neither the Plan,
the granting of the Restricted Stock award, this Agreement nor any other action
taken pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that the Executive has a right to continue as
an employee of the Company or any Subsidiary or affiliate of the Company for any
period of time or at any specific rate of compensation.



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                  19. AUTHORITY OF THE BOARD. The Board shall have full
authority to interpret and construe the terms of the Plan and this Agreement,
and shall do so in good faith.

                  20. DISPUTE RESOLUTION. Any dispute arising under this
Agreement shall be resolved in accordance with the arbitration provisions of
the Employment Agreement as in effect as of the date hereof, or as the same may
be amended from time to time, regardless of the expiration of the Employment
Agreement prior to the resolution of such dispute, and such arbitration
provisions shall be deemed to be incorporated herein by this reference.

                  21. MARKET STAND-OFF. In connection with any underwritten
public offering by the Company of its equity securities pursuant to an effective
registration statement filed under the Securities Act for such period as the
Company or its underwriters may request (such period not to exceed 180 days
following the date of the applicable offering), the Executive shall not,
directly or indirectly, sell, make any short sale of, loan, hypothecate,
pledge, offer, grant or sell any option or other contract for the purchase of,
purchase any option or other contract for the sale of, or otherwise dispose of
or transfer, or agree to engage in any of the foregoing transactions with
respect to, any Restricted Shares acquired under this Agreement without the
prior written consent of the Company or its underwriters, PROVIDED, that the
Executive shall not be required to be subject to "lock-up" restrictions that are
more restrictive than such restrictions to which any other Employee Stockholder
(as defined in the Stockholders Agreement) having


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commensurate job duties and responsibilities in the Company is subject, or that
would prevent the Executive from effectuating a sale pursuant to Section 2.5 of
the Stockholders Agreement or Section 3.1 of the Stockholders Agreement.

                  IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement on the day and year first above written.

                                       HARVEYS CASINO RESORTS


                                       By:
                                          -------------------------------
                                          Name:
                                          Title:



                                       The undersigned hereby accepts and agrees
                                       to all the terms and provisions of the
                                       foregoing Agreement and to all the terms
                                       and provisions of the Plan and the
                                       Stockholders Agreement herein
                                       incorporated by reference.


                                       -----------------------------------------
                                                 John J. McLaughlin

                                       Address:  106 Willow Drive
                                                 Zephyr Cove, Nevada 89448


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