<PAGE>


                             MANAGEMENT STOCK OPTION
                         AND RESTRICTED STOCK AGREEMENT

                  STOCK OPTION AND 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 R.
Bellotti (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
(i) an option (the "Option") to purchase shares of the Company's Class A Common
Stock, par value $.01 per share (the "Class A Common Stock"), and shares of the
Company's Class B Common Stock, par value $.01 per share (the "Class B Common
Stock" and, together with the Class A Common Stock, the "Common Stock"), and
(ii) a Restricted Stock award consisting of additional shares of Class A Common
Stock and Class B Common Stock (the "Restricted Shares"), each on the terms and
conditions set forth herein, and hereby grants such Option and Restricted Stock
award. It is intended that the Option shall constitute an "incentive stock
option" within the meaning of Section 422 of the Code (an "ISO") to the maximum
extent permitted under the Code. Additional provisions relating to the ISO
status of the Option are set forth in Section 1 below.

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

                  1. TERMS OF OPTION GRANT. (a) The Option entitles the
Executive to purchase 18 shares of the Company's Class A Common Stock at a
price equal to $33.109 per share (the "Class A Option Exercise Price"), which
the parties acknowledge is not less than the fair market value of one share
of the Class A Common Stock as of the Effective Date. The Option also
entitles the Executive to purchase 1,800 shares of the Company's Class B
Common Stock at a price equal to $33.109 per share (the "Class B Option
Exercise Price" and, collectively with the Class A Option Exercise Price, the
"Option Exercise Price"), which the parties acknowledge is not less than the
fair market value of one share of the Class B Common Stock as of the
Effective Date. The shares of Class A Common Stock and Class B Common Stock
subject to the Option are referred to herein as the "Option Shares."


                                        1
<PAGE>


                           (b) The term of the Option (the "Option Term") shall
commence on the Effective Date (the "Date of Grant") and, unless the Option is
previously terminated pursuant to this Agreement, shall terminate upon the
expiration of ten (10) years from the Date of Grant. Upon expiration of the
Option Term, all rights of the Executive hereunder shall terminate.

                           (c) The Option shall vest as to 20% of the Option
Shares on each of the first five anniversaries of February 2, 1999, regardless
of whether Executive was employed by the Company as of such date, PROVIDED, that

                                    i) the Option and such vesting shall be
         subject to the forfeiture provisions of Section 7(c) below (the
         "Special Forfeiture Provisions"), such that any such vested portion of
         the Option shall be exercisable from time to time only if and to the
         extent that such vested portion shall not be subject to forfeiture
         pursuant to the Special Forfeiture Provisions; and

                                    ii) upon the occurrence of a Change in
         Control (as defined in Section 3 below) at any time prior to the
         effective date of Executive's termination of employment with the
         Company for any or no reason, the Option shall immediately vest and
         become exercisable as to 100% of the Option Shares and the Special
         Forfeiture Provisions shall immediately expire.

Those Option Shares which, as of any date, have vested pursuant to the first
clause of this Section 1(c) but remain subject to the Special Forfeiture
Provisions shall be referred to herein as "Vested Option Shares."

                           (d) Except as otherwise provided herein, the right of
the Executive to purchase Option Shares with respect to which the Option has
become exercisable may be exercised in whole or in part at any time or from time
to time prior to expiration of the Option Term, PROVIDED, that any exercise of
the Option shall be deemed to relate in tandem to both the Class A Common Stock
and the Class B Common Stock subject to the Option, such that the ratio of (i)
the number of shares of Class A Common Stock issuable upon such exercise to (ii)
the total number of shares of Class A Common Stock outstanding on the date
hereof shall be the same as the ratio of (iii) the number of shares of Class B
Common Stock


                                        2
<PAGE>


issuable upon such exercise to (iv) the total number of shares of Class B Common
Stock outstanding on the date hereof.

                           (e) The Option may be exercised by means of written
notice of exercise to the Company specifying the number of Option Shares to be
purchased, accompanied by payment in full of the aggregate Option Exercise Price
and any applicable withholding amounts (i) in cash or by check, (ii) at any time
following the closing of the Company's Initial Public Offering (as defined in
Section 3 below) by means of a broker cashless exercise procedure, on terms
reasonably acceptable to the Company, providing proceeds sufficient to pay the
exercise price and any applicable withholding amounts, or (iii) by any other
means of exercise authorized from time to time in the Plan and/or by the Board.
In addition, with respect to any exercise of the Option that occurs following
Executive's termination of employment with the Company at any time prior to the
closing of the Company's Initial Public Offering, the Option may, at Executive's
election, be exercised through withholding of shares of Common Stock otherwise
issuable upon exercise of the Option having an aggregate Fair Market Value
equivalent to the aggregate Option Exercise Price plus applicable withholding
amounts.

                           (f) To the extent the Option is intended to
constitute an ISO, the ratio of (i) the number of shares of Class A Common Stock
to which the ISO portion of the Option relates to (ii) the total number of
shares of Class A Common Stock outstanding on the date hereof shall be the same
as the ratio of (iii) the number of shares of Class B Common Stock to which the
ISO portion of the Option relates to (iv) the total number of shares of Class B
Common Stock outstanding on the date hereof.

                  2. TERMS OF RESTRICTED STOCK AWARD. (a) The Restricted Stock
award entitles the Executive as of the Date of Grant to receive 24 shares of
Class A Common Stock and 2,356 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 as of February
2, 1999, by and among the Company, Executive and the other parties thereto (the
"Stockholders Agreement"), and except as provided in Section 2(c) below, the
Restricted Shares may not be sold, assigned, transferred, pledged, hypothecated
or otherwise


                                        3
<PAGE>


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 2(c)(i) AND 2(c)(ii) are met,
except to the extent that provisions set forth at 2(c)(iii) - 2(c)(v) 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.

                                    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 December 1, 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
<PAGE>


                           (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
                                    Performance 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 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 lapse of
         Transfer Restrictions shall be subject to the Special Forfeiture
         Provisions of Section 7(c), 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 forfeiture
         pursuant to the Special Forfeiture Provisions. Those Restricted Shares
         as to which, as of any date, the Transfer Restrictions have lapsed
         pursuant to Sections 2(c)(i) and 2(c)(ii), but which 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 of Executive's
         termination of employment with the Company for any or no reason, the
         vesting of the Restricted Shares shall be immediately accelerated if
         necessary so that 100% of the Restricted Stock Award shall have vested
         and the Transfer Restrictions shall immediately lapse as to such
         Restricted Shares and the Special Forfeiture


                                       5
<PAGE>


         Provisions shall immediately expire as to same, all as of the
         date of the Change in Control.

                                    v) 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.

                  3. 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;


                                        6
<PAGE>


                                    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 (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.


                                        7
<PAGE>


                           (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 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


                                        8
<PAGE>


         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 valuation. 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.

                                    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


                                        9
<PAGE>


         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.

                  4. 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.

                  5. 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 and in the
kind, number and option price of shares of Common Stock subject to the Option,
as may be determined by the Board in good faith.

                  6. NONTRANSFERABILITY OF OPTION AND OPTION SHARES; OPTION
SHARES AND RESTRICTED SHARES SUBJECT TO STOCKHOLDERS AGREEMENT. (a) The Option
and this Agreement shall not be transferable and, during the lifetime of
Executive, the Option may be exercised only by Executive; PROVIDED, HOWEVER,
that the Executive shall be permitted to transfer the Option and this Agreement
to a trust controlled by the Executive during the Executive's lifetime for
estate planning purposes, and PROVIDED, further, that the limited
transferability provisions set forth in the immediately preceding provison shall
apply to any portion of the Option that constitutes an ISO only to the extent
such provisions are consistent with Section 422(b) of the Code. Without limiting
the generality of the foregoing, except as otherwise provided herein, the Option
may not be assigned, transferred, pledged or hypothecated in any way, shall not
be assignable by operation of law, and shall not be subject to execution,
attachment or similar process. Any attempted assignment,


                                       10
<PAGE>


transfer, pledge, hypothecation or other disposition of the Option contrary to
the provisions hereof, and the levy of any execution, attachment or similar
process upon the Option shall be null and void and without effect.

                           (b) The Executive, the Restricted Shares and, upon
exercise of the Option, the Option 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.

                  7. EFFECT OF TERMINATION OF EMPLOYMENT; SPECIAL FORFEITURE
PROVISIONS. (a) Option Grant. 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 or the
sale of such Subsidiary), the Option shall immediately terminate as to all
Option Shares that shall not have vested as of the effective date (as determined
under the Employment Agreement) of such termination of employment.

                           (b) Restricted Stock Award. 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 or the sale of such Subsidiary), the Executive shall forfeit all
Restricted Shares as to which the Transfer Restrictions have not lapsed as of
such date of termination.

                           (c) 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 February 2, 1999 by Executive or (ii) at any time by the Company
for Cause, Executive shall thereupon forfeit that portion of the Vested Option
Shares and 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 or (y) a 50% Colony Sell-


                                       11
<PAGE>


         Down that occurs at any time subsequent to the Company's Initial
         Public Offering (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 less than 50% of the largest total number of
         such shares theretofore owned by such persons.

                           (d) Subject to the Company's call rights set forth in
Section 8, any portion of the Option that, pursuant to Section 1(c) above, shall
be vested and exercisable as of the effective date of Executive's termination of
employment (the "Termination Date") shall be exercisable in whole or in part for
a period of 90 days following the Termination Date (180 days in the event of
termination by reason of disability, and one year in the event of termination by
reason of death). All Option Shares with respect to which the Option shall be so
vested and exercisable shall be referred to herein as "Vested and Exercisable
Option Shares." Upon expiration of such period, any unexercised portion of the
Option shall terminate in full; PROVIDED, HOWEVER, that if the Company provides
notice to the Executive of its intent to exercise the Call pursuant to Section
8, any portion of the Option subject to such exercise shall terminate as of the
closing of the Call.

                  8. 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
Option Shares or 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") (x) any or all of


                                       12
<PAGE>


such portion of the Option as shall relate to Vested and Exercisable Option
Shares as of the date such written notice is given (the "Call Exercise Date"),
(y) any or all Option Shares owned by the Executive as of the end of business on
the Call Exercise Date and/or (z) 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 2(c) and which shall not theretofore have been
forfeited by Executive pursuant to Section 7(c).

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

                                    i) If exercising its rights under (x) above,
         the Company shall pay the Executive an amount in cash equal to the
         product of (A) the excess, if any, of the Fair Market Value of a share
         of Class A Common Stock or Class B Common Stock, as applicable, as of
         the Termination Date (the "Call Price") over the Class A Option
         Exercise Price or Class B Option Exercise Price, as applicable, and
         (B) the number of shares of Class A Common Stock or Class B Common
         Stock, as applicable, that the portion of the Option being purchased
         by the Company pursuant to the Call would otherwise entitle the
         Executive to purchase.

                                    ii) If exercising its rights under (y) or
         (z) above, the Company shall pay the Executive an amount equal to the
         product of (A) the Call Price and (B) the number of Option Shares or
         Restricted Shares, as applicable, 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.


                                       13
<PAGE>


                  9. 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.

                  10. 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 R. Bellotti
                                    ___________________________
                                    ___________________________
                                    ___________________________


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

                  11. SECURITIES LAWS REQUIREMENTS. The Option shall not be
exercisable to any extent, and the Company shall not be obligated to transfer
any Option Shares to the Executive upon exercise of the Option, if such
exercise, in the opinion of counsel for the Company, would violate the
Securities Act (or any other


                                       14
<PAGE>


federal or state statutes having similar requirements as may be in effect at
that time). Further, the Company may require as a condition of transfer of any
Option Shares pursuant to any exercise of the Option that the Executive furnish
a written representation that he is purchasing or acquiring the Option Shares
for investment and not with a view to resale or distribution to the public, and
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 Option Shares and the Restricted Shares are "restricted securities," as
defined in Rule 144 under the Securities Act, and that any resale of the Option
Shares or the Restricted Shares must be in compliance with the registration
requirements of the Securities Act or an exemption therefrom. Each certificate
representing Option Shares or 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 ACCOR DANCE 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 STOCK OPTION AND 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.


                                       15
<PAGE>


Further, if the Company determines that the listing or qualification of the
Option Shares under any securities or other applicable law is necessary in order
to avoid a violation of any securities laws, the Option shall not be
exercisable, in whole or in part, unless and until such listing or
qualification, or a consent or approval with respect thereto, shall have been
effected or obtained free of any conditions not acceptable to the Company,
PROVIDED, that the Company shall pursue such listing or qualification diligently
and in good faith.

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

                  13. 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 or Option 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 Company will not transfer any of said Restricted
Shares or Option Shares on its books nor will any of the Restricted Shares or
Option 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.

                  14. 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.

                  15. 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.


                                       16
<PAGE>


                  16. 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.

                  17. INCORPORATION OF PLAN. The Plan is hereby incorporated by
reference and made a part hereof, and the Option, the Restricted Stock award and
this Agreement shall be subject to all terms and conditions of the Plan. In the
event of a conflict between the terms of this Agreement and the Plan, the terms
of the Plan shall govern.

                  18. AMENDMENTS. Any award granted pusuant to this Agreement
may be amended or modified in accordance with Section 9  of the Plan.

                  19. RIGHTS AS A STOCKHOLDER. Neither the Executive nor any of
the Executive's successors in interest shall have any rights as a stockholder of
the Company with respect to any shares of Common Stock subject to the Option
until the date of issuance of a stock certificate for such shares of Common
Stock.

                  20. AGREEMENT NOT A CONTRACT OF EMPLOYMENT. Neither the Plan,
the granting of the Restricted Stock award and the Option, 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.

                  21. 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.

                  22. 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.

                  23. 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
Com-


                                       17
<PAGE>


pany 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 indi rectly, 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 or Option 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 commensurate job duties and responsibilities
in the Company is subject, or that would prevent the Executive from
effectuating a sale pursuant to


                                       18
<PAGE>


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:  Charles W. Scharer
                                        Title: President and
                                               Chief Executive Officer


                                     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 R. Bellotti

                                      Address:
                                               ---------------------------------

                                               ---------------------------------



                                       19