Document:

<PAGE>

                                                                   EXHIBIT 4.9

                                                      Office Use Only:

                                       -----------------------------------------
DEAN HELLER                                           CERTIFICATE OF
SECRETARY OF STATE                                      AMENDMENT
                                                            TO
101 NORTH CARSON STREET, SUITE 3                      CERTIFICATE OF
CARSON CITY, NEVADA 89701-4786                         DESIGNATION
(775) 684 5708                                  (PURSUANT TO NRS 78.1955)
                                       -----------------------------------------

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         IMPORTANT: READ ATTACHED INSTRUCTIONS BEFORE COMPLETING FORM.
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                            CERTIFICATE OF AMENDMENT
                          TO CERTIFICATE OF DESIGNATION
                            (PURSUANT TO NRS 78.1955)
                             - REMIT IN DUPLICATE -

1.       The name of corporation:  HARVEYS CASINO RESORTS

2.       Description of the document which is being amended:

         CERTIFICATE OF DESIGNATION OF THE 13 1/2% SERIES A SENIOR REDEEMABLE
         CONVERTIBLE CUMULATIVE PREFERRED STock ($.01 PAR VALUE PER SHARE) AND
         THE 13 1/2% SERIES B SENIOR REDEEMABLE CONVERTIBLE CUMULATIVE PREFERrED
         STOCK ($.01 PAR VALUE PER SHARE) OF HARVEYS CASINO RESORTS (THE
         "CERTIFICATE OF DESIGNATION")

3.       The Certificate of Designation is hereby amended as follows:

         THE FIRST SENTENCE OF SUBSECTION 6(e) OF THE CERTIFICATE OF DESIGNATION
         IS HEREBY DELETED IN ITS ENTIRETY AND REPLACED BY THE FOLLOWING
         SENTENCE:

         FOR THE PURPOSES OF THE CONVERSION OF PREFERRED STOCK INTO
         CORRESPONDING COMMON STOCK PURSUANT TO SUBSECTION 6(a), (I) EACH SHARE
         OF SERIES A PREFERRED STOCK SHALL INITIALLY BE CONVERTIBLE INTO
         2,844.6452000 SHARES (THE "SERIES A CONVERSION RATE") OF CORRESPONDING
         COMMON STOCK, AND (II) EACH SHARE OF SERIES B PREFERRED STOCK SHALL
         INITIALLY BE CONVERTIBLE INTO 28.44929681 SHARES (THE "SERIES B
         CONVERSION RATE" AND, TOGETHER WITH THE SERIES A CONVERSION RATE, THE
         "CONVERSION RATE") OF CORRESPONDING COMMON STOCK.

4.       The proposed amendment set forth in paragraph 3 above has been approved
         by the vote of stockholders holding shares in the corporation entitling
         them to exercise a majority of the voting power of (i) each class of
         stock being amended and (ii) each class or series of stock which,
         before the amendment, is senior to the classes being amended as to the
         payment of distributions upon dissolution of the corporation,
         regardless of any limitations or restrictions on the voting power of
         that class or series.

                            (SIGNATURE PAGE FOLLOWS)

<PAGE>

5.       Signatures (Required):

<TABLE>
<CAPTION>
<S>                                              <C>                           <C>
/s/ Charles W. Scharer                           President                     September 26 , 2000
--------------------------------------------     -------------------------     --------------------------------------
CHARLES W. SCHARER                               TITLE OF OFFICER              DATE

/s/ John J. McLaughlin                           Secretary                     September 26, 2000
--------------------------------------------     -------------------------     --------------------------------------
JOHN J. MCLAUGHLIN                               TITLE OF OFFICER              DATE

I acknowledge that the statements made herein are true under penalties of perjury.

/s/ Charles W. Scharer                           President                     September 26, 2000
--------------------------------------------     -------------------------     --------------------------------------
CHARLES W. SCHARER                               TITLE OF OFFICER              DATE
</TABLE>

County of Douglas                   )
                                    )  ss:
State of Nevada                     )

Sworn before me this 26th day of September 2000.

/s/ Connie M. Friedman
----------------------
Notary Public

IMPORTANT: Failure to include any of the above information and remit the
proper fees may cause this filing to be rejected.

                                       2<PAGE>

                                                            EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT (the "Agreement") is made and entered into this 30th day
of June, 2000, (the "Commencement Date") by and between HARVEYS CASINO RESORTS,
a Nevada corporation, hereinafter referred to as "HARVEYS" and/or "EMPLOYER,"
and GARY ARMENTROUT, hereinafter referred to as "EMPLOYEE":

                              W I T N E S S E T H:

         WHEREAS, HARVEYS desires to continue to secure the benefits of
EMPLOYEE's background, knowledge, experience, ability, expertise and industry to
promote and maintain HARVEYS' stability, growth, viability and profitability;
and
         WHEREAS, HARVEYS desires to continue to engage the services of EMPLOYEE
who is desirous of being employed by HARVEYS under the terms and conditions as
herein set out; and

         NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, together with other good and valuable consideration
the receipt of which is hereby acknowledged, the parties hereto do hereby agree
as follows:

                                        I

                                   DEFINITIONS

         1.01  EMPLOYEE shall at all times mean GARY ARMENTROUT.

         1.02  EMPLOYER shall at all times mean HARVEYS CASINO RESORTS, a Nevada
corporation, and its Successors in Interest together with its subsidiaries.

         1.03  HARVEYS shall at all times mean HARVEYS CASINO RESORTS, a Nevada
corporation, and its Successors-in-Interest together with its subsidiaries.

         1.04  Successor in Interest shall mean any entity which is the
successor or assign of HARVEYS, at law or at equity, and shall include
without limitation, any entity into which

                                        1

<PAGE>

HARVEYS is merged or consolidated, and any entity to which all or substantially
all of the assets or businesses of HARVEYS are transferred.

                                       II

                   NATURE OF EMPLOYMENT AND DUTIES OF EMPLOYEE

         2.01 Effective upon the Commencement Date of this Agreement, EMPLOYEE
shall remain Senior Vice-President Business Development and Government Relations
of HARVEYS CASINO RESORTS, or assume such other position as determined by the
President/Chief Executive Officer of HARVEYS. EMPLOYEE shall do and perform all
services, acts, or things necessary or advisable to assist in the management and
conduct of the business of EMPLOYER, subject always to the policies as set forth
by the Board of Directors.

         2.02 EMPLOYEE shall be responsible for the strategic planning of
EMPLOYER's long range expansion and development programs in accordance with
growth and profitability objectives articulated by the Board of Directors and
shall be responsible for Government Relations in all jurisdictions. EMPLOYEE
shall research, analyze and develop recommendations for new properties and
business venture opportunities; direct and implement market development
strategies and criteria for new business opportunities. EMPLOYEE shall be
responsible for the achievement of EMPLOYER's growth objectives, which aim to
increase shareholder value through effective target selection and efficient
resource development, and such other responsibilities or duties that HARVEYS may
assign from time to time.

         2.03 EMPLOYEE has reviewed and concurs with his responsibilities and
duties as set forth in Section 2.02 above.

         2.04 EMPLOYEE shall devote his entire productive time, ability and
attention to the business of EMPLOYER during the term of this Agreement.
EMPLOYEE shall not directly or indirectly render any service of a business,
commercial or professional nature, to any other person

                                        2

<PAGE>

or organization, whether for compensation or otherwise, without the prior
written consent of the President/Chief Executive Officer of HARVEYS except that
EMPLOYEE shall not be precluded from involvement in charitable or civic
activities or his personal financial investments provided the same do not
interfere with EMPLOYEE's time or attention to the business of EMPLOYER.

         2.05 EMPLOYEE agrees, to the best of his ability and experience, to at
all times conscientiously perform all of the duties and obligations expressly
required of EMPLOYEE.

                                       III

                               TERM OF EMPLOYMENT

         3.01 EMPLOYER hereby employs EMPLOYEE, and EMPLOYEE hereby agrees to be
employed by EMPLOYER for a period of at least one (1) year commencing on the
Commencement Date. This Agreement may be terminated earlier as hereinafter
provided or may be extended or modified only by written document signed by both
parties hereto specifically referencing this instrument.

                                       IV

                     TERMINATION OF EMPLOYMENT WITHOUT CAUSE

         4.01 EMPLOYEE may be terminated at any time, without cause, or as
referenced in Paragraph 5 herein, by EMPLOYER on thirty (30) days' prior written
notice to EMPLOYEE. In the event of such termination without cause, EMPLOYEE
shall continue to be paid EMPLOYEE's annual salary as set forth in Paragraph
6.01, as such salary may be modified from time to time, and continue to receive
medical, vision and dental benefits as set forth in Paragraph 7.06 for the
balance of the contract term, or twelve (12) months, whichever is lesser.

         4.02 EMPLOYEE may, at EMPLOYEE's option and right, terminate this
Agreement at any time by giving HARVEYS thirty (30) days prior written notice.
Upon any such termination of this Agreement by EMPLOYEE, EMPLOYER shall be under
no obligation to EMPLOYEE except

                                        3

<PAGE>

to pay EMPLOYEE's then annual salary and perquisites for services performed up
to the effective date of termination.

         4.03 If during the term hereof EMPLOYEE shall die or become disabled,
EMPLOYEE shall be entitled to such death and/or disability benefits that may be
due EMPLOYEE under any benefit plans of EMPLOYER in effect from time to time in
which EMPLOYEE is eligible to participate.

                                        V

                       TERMINATION OF EMPLOYMENT FOR CAUSE

         5.01 EMPLOYER may at any time, at its election, by providing written
notice to EMPLOYEE stating with specificity the reason for the termination,
immediately terminate this Agreement and the employment term should EMPLOYEE:

                  (a) be negligent or willfully malfeasant in the performance of
EMPLOYEE's duties to EMPLOYER set forth in Article II hereof;

                  (b) be convicted of any felony or a crime involving moral
turpitude;

                  (c) be dishonest with respect to EMPLOYER (including without
limitation, fraud);

                  (d) use or impart any confidential or proprietary information
of EMPLOYER or any of its subsidiaries or affiliates in violation of EMPLOYER's
policy regarding confidentiality or any confidentiality or proprietary agreement
to which EMPLOYER is a party, which act or actions have a material adverse
affect on EMPLOYER; or

                  (e) fail to obtain or retain any permits, licenses, or
approvals which may be required by any state or local authorities in order to
permit EMPLOYEE to continue employment as contemplated by this Agreement.

                                        4

<PAGE>

         Upon the occurrence of any of the above, at EMPLOYER's sole option,
EMPLOYEE's employment shall immediately terminate and EMPLOYER shall be under no
further obligation to EMPLOYEE except to pay EMPLOYEE his annual salary for such
services as may have been performed up to the date of such termination.

                                       VI

                            COMPENSATION OF EMPLOYEE

         6.01 ANNUAL SALARY - EMPLOYEE shall receive an annual salary of TWO
HUNDRED FORTY FIVE THOUSAND AND 00/100 DOLLARS ($245,000), payable in at least
monthly installments, less all applicable Federal, State and Local Taxes, Social
Security and any other government mandated deductions. EMPLOYEE's annual salary
shall be subject to an annual review, as determined by EMPLOYEE's direct
supervisor, and the President/Chief Executive Officer of HARVEYS within the
parameters set forth by HARVEYS' Board of Directors.

                                       VII

                                OTHER PERQUISITES

         7.01 HARVEYS 401(k) PLAN - During the employment term, EMPLOYEE shall
be allowed to participate in HARVEYS 401(k) Plan as such plan may be in effect
and amended from time to time.

         7.02 VACATION - EMPLOYEE shall be entitled to vacation and holiday pay
in accordance with EMPLOYER's policy for EMPLOYEE's position as may be in place
from time to time, with credit being given as of EMPLOYEE's original
hire date.

         7.03 COMPLIMENTARY PRIVILEGES - EMPLOYEE shall be entitled to Level I
complimentary privileges as are afforded all other corporate employees of equal
job code.
         7.05 MANAGEMENT INCENTIVE PLAN (MIP) - EMPLOYEE shall be eligible to
participate in

                                        5

<PAGE>

EMPLOYER's Management Incentive Plan as such plan may be in effect or amended
from time to time.

         7.06 MEDICAL, VISION AND DENTAL INSURANCE - EMPLOYER shall provide
medical, vision and dental benefits to EMPLOYEE and EMPLOYEE's spouse and
dependents in accordance with EMPLOYER's Class I coverage under EMPLOYER's
Executive Medical Plan, as such plan may be in effect or amended from time to
time.

         7.07 DEFERRED COMPENSATION PROGRAM - EMPLOYEE shall be allowed to
participate in EMPLOYER's Deferred Compensation Program as said program may be
in effect or amended from time to time.

         7.08 GROUP LIFE INSURANCE - During the term of this Agreement, EMPLOYER
shall furnish EMPLOYEE with Group Term Life Insurance and Accidental
Death/Dismemberment Insurance with the maximum benefit being equal to two (2)
times EMPLOYEE's annual salary, up to a maximum of $500,000.00.

         7.09 GROUP LONG TERM DISABILITY - During the term of this Agreement,
EMPLOYER shall furnish EMPLOYEE with Group Term Disability insurance in
accordance with EMPLOYER's then existing policy. The maximum insurance benefit
to be paid EMPLOYEE shall be sixty percent (60%) of EMPLOYEE's annual salary to
be paid for the duration of EMPLOYEE's permanent disability.

         7.10 STOCK OPTIONS AND STOCK GRANTS - EMPLOYEE's rights to stock
options and/or stock grants, are those set forth in the Management Stock Option
and Restricted Stock Agreement, dated as of February 2, 1999, as may be amended
from time to time and as supplemented by action of the Board of Directors in
Resolution 1999-5.

         7.11 SERP. EMPLOYEE shall be allowed to participate in EMPLOYER's
Supplemental

                                        6

<PAGE>

Executive Retirement Program, as the same is amended from time to
time.

                                      VIII

                                   ARBITRATION

         8.01 Except as necessary for EMPLOYER and its subsidiaries, affiliates,
successors or assigns or EMPLOYEE to specifically enforce or enjoin a breach of
this Agreement (to the extent such remedies are otherwise available), the
parties agree that any and all disputes that may arise in connection with,
arising out of or relating to this Agreement, or any dispute that relates in any
way, in whole or in part, to EMPLOYEE's employment with EMPLOYER or any
subsidiary, the termination of that employment or any other dispute by and
between the parties or their subsidiaries, affiliates, successors or assigns,
shall be submitted to binding arbitration in Douglas County, Nevada according to
the National Employment Dispute Resolution Rules and procedures of the American
Arbitration Association. The parties agree that the prevailing party in any such
dispute shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which he or it may be entitled.
This arbitration obligation extends to any and all claims that may arise by and
between the parties or their subsidiaries, affiliates, successors or assigns and
expressly extends to, without limitation, claims or causes of action for
wrongful termination, impairment of ability to compete in the open labor market,
breach of an express or implied contract, breach of the covenant of good faith
and fair dealing, breach of fiduciary duty, fraud, misrepresentation,
defamation, slander, infliction of emotional distress, disability, loss of
future earnings and claims under the Nevada Constitution, the United States
Constitution, and applicable state and federal fair employment laws, federal and
state equal employment opportunity laws, and federal and state labor statutes
and regulations, including, but not limited to, the Civil Rights Act of 1964, as
amended, the Fair Labor Standards Act, as amended, the Americans With
Disabilities Act of 1990, as amended, the Rehabilitation Act of 1973, as
amended, the Employee Retirement Income

                                        7

<PAGE>

Security Act of 1974, as amended, the Age Discrimination in Employment Act of
1967, as amended, and other state or federal law.

                                       IX

                                  MISCELLANEOUS

         9.01 This Agreement shall be construed and governed by the laws of the
State of Nevada.

         9.02 This Agreement, shall bind and inure to the benefit of the
EMPLOYER, its successors and assigns and EMPLOYEE, his heirs, executors and
administrators. No transfer or assignment of this Agreement shall release
EMPLOYER from any obligation to EMPLOYEE hereunder.

         9.03 Notices to or for the respective parties shall be given in writing
and delivered in person or mailed by certified or registered mail, addressed to
the respective party at the address as set out below, or at such other address
as either party may elect to provide in advance in writing, to the other party:

                  EMPLOYEE:

                           GARY ARMENTROUT
                           310 Bryn Wyer
                           St. Louis, MO 63141

                  EMPLOYER:

                           HARVEYS CASINO RESORTS
                           Attn: CHARLES W. SCHARER
                           President/Chief Executive Officer
                           Highway 50 and Stateline Avenue
                           Post Office Box 128
                           Stateline, NV 89449

                  WITH A COPY TO:

                           Ronald D. Alling, Esq.
                           SCARPELLO & ALLING, LTD.
                           276 Kingsbury Grade, Suite 2000
                           Post Office Box 3390
                           Stateline, NV 89449

                                        8

<PAGE>

         9.04 Should any provision of this Agreement be held to be invalid,
illegal, or unenforceable by reason of any rule of law or public policy, all
other provisions of this Agreement shall remain in effect. No provision of this
Agreement shall be deemed dependent on any other provision unless so expressed
herein.

         9.05 Nothing contained in this Agreement shall be construed to require
the commencement of any act contrary to law. Should any conflict between any
provision of this Agreement and any statute, law, ordinance, or regulation,
contrary to which the parties have no legal right to contract arise or exist,
then the latter shall prevail; but in such event, the provisions of this
Agreement so affected shall be curtailed and limited only to the extent
necessary to bring it within the legal requirements.

         9.06 The several rights and remedies provided for in this Agreement
shall be construed as being cumulative, and no one of them shall be deemed to be
exclusive of the others or of any right or remedy allowed by law. No waiver by
EMPLOYER or EMPLOYEE of any failure by EMPLOYEE or EMPLOYER, respectively, to
keep or perform any provision of this Agreement shall be deemed to be a waiver
of any preceding or succeeding breach of the same or other provision.

         9.07 This Agreement supersedes any and all other agreements, either
oral or in writing, between the parties hereto with respect to the employment of
EMPLOYEE by EMPLOYER along with the other instruments executed concurrently
herewith, contain all of the covenants, conditions and agreements between the
parties with respect to such employment. Each party to this Agreement
acknowledges that no representations, inducements, promises or other agreements
excepting those specifically set forth herein, oral or otherwise, have been made
by any party, or anyone acting on behalf of any party, which are not embodied
herein, and that no other agreement, statement or promise not contained in this
Agreement shall be valid or binding. Any addendum to or

                                        9

<PAGE>

modification of this Agreement shall be effective only if it is in writing and
signed by the parties to be charged.

         IN WITNESS WHEREOF, the parties hereto have signed this Agreement on
the day and year first set forth above.

                          EMPLOYEE:

                                 /s/Gary Armentrout
                              ---------------------------
                              GARY ARMENTROUT

                          EMPLOYER:

                          HARVEYS CASINO RESORTS, a Nevada
                          corporation

                          By:    /s/ Charles W. Scharer
                              ---------------------------
                              CHARLES W. SCHARER
                              President/Chief Executive Officer

                                       10

<PAGE>

                    AGREEMENT AND COVENANT NOT TO COMPETE OR
                          USE OR DISCLOSE TRADE SECRETS

         THIS AGREEMENT AND COVENANT NOT TO COMPETE OR USE OR DISCLOSE
TRADE SECRETS (the "Agreement") is made and entered into this 30th day of June
2000, by and between GARY ARMENTROUT ("EMPLOYEE") and HARVEYS CASINO RESORTS, a
Nevada corporation ("EMPLOYER"):

                                    RECITALS

         WHEREAS, EMPLOYER is one of the limited entities engaged in the hotel
and gaming establishment business (the "Business") in Lake Tahoe, Nevada holding
a "Non-restricted License" as defined in Nevada Revised Statute Section
463.0177; and

         WHEREAS, EMPLOYEE and EMPLOYER simultaneously herewith have executed an
employment agreement whereby EMPLOYEE is employed by EMPLOYER as the Senior
Vice-President Business Development and Government Relations of HARVEYS CASINO
RESORTS (along with any addition or extension thereof, the "Employment
Agreement"); and

         WHEREAS, EMPLOYEE acknowledges and agrees that EMPLOYER was induced
into executing the Employment Agreement with EMPLOYEE in material reliance upon
EMPLOYEE's executing and being bound by this Agreement.

         NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth herein and in the Employment
Agreement, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged the parties hereto intending to be legally bound
hereby, agree as follows:

                                        1

<PAGE>

         1.01 During the term of EMPLOYEE'S employment with EMPLOYER, and for
any period of time thereafter during which EMPLOYEE receives any compensation
under the Employment Agreement (the "Restricted Period"), EMPLOYEE warrants,
represents and agrees that he shall not, in any city, town, county, parish or
other municipality located within a seventy-five (75) mile radius of Harveys
Resort Hotel & Casino located at Lake Tahoe, Nevada, where the EMPLOYER or any
of its subsidiaries, affiliates, successors or assigns engages in the Business
directly or indirectly, do any of the following: (A) engage in the Business for
EMPLOYEE's own account; (B) enter the employ of, or render any services to or
for any entity that is engaged in the Business; and/or (C) become interested in
any such entity in any capacity, including as an employee, partner, stockholder,
officer, principal, agent, trustee or consultant; provided, however, EMPLOYEE
may own solely as a passive investment, securities of any entity traded on any
national securities exchange or automated quotation system if EMPLOYEE is not a
controlling person of such entity and does not beneficially own three percent
(3%) or more of any class of securities of such entity. The duration of the
non-competition as defined in this Paragraph 1.01 shall be extended for an
additional period of three hundred sixty-five (365) days if EMPLOYEE terminates
the Employment Agreement pursuant to Paragraph 4.02 thereof or EMPLOYER
terminates EMPLOYEE pursuant to Paragraph 5.01 of the Employment Agreement.

         1.02. NONINTERFERENCE. During the Restricted Period, EMPLOYEE shall not
directly or indirectly (i) solicit, induce or attempt to solicit or induce any
person known to EMPLOYEE to be an employee of EMPLOYER or any of its
subsidiaries, affiliates, successors or assigns, that is involved in the
Business to terminate his or her employment or other relationship with EMPLOYER
or any of its subsidiaries, affiliates, successors or assigns for the purpose of
associating with (A) any

                                        2

<PAGE>

entity of which EMPLOYEE is or becomes an employee, officer, director, partner,
stockholder, agent, trustee or consultant or (B) any competitor of EMPLOYER or
any of its subsidiaries, affiliates, successors or assigns in the Business; or
(C) otherwise encourage any person to terminate his or her employment or other
relationship with EMPLOYER or any of its subsidiaries, affiliates, successors or
assigns for any other purpose or no purpose.

         1.03. NONSOLICITATION. During the Restricted Period, EMPLOYEE shall
not, directly or indirectly, solicit, induce or attempt to solicit or induce
any customers, clients, vendors, suppliers or consultants in the Business
then under contract to EMPLOYER or any of its subsidiaries, affiliates,
successors or assigns (a "Customer or Supplier") to terminate his, her, or
its relationship with EMPLOYER or any of its subsidiaries, affiliates,
successors or assigns for any purpose, including the purpose of associating
with or becoming a Customer or Supplier of or consultant to (whether or not
exclusive) of EMPLOYEE or any entity of which EMPLOYEE is or becomes an
employee, partner, stockholder, officer, director, principal, agent, trustee
or consultant, or otherwise solicit, induce or attempt to solicit or induce
any such Customer or Supplier to terminate his, her or its relationship with
EMPLOYER or any of its subsidiaries, affiliates, successors or assigns for
any other purpose or no purpose.

         1.04. CONFIDENTIAL INFORMATION. EMPLOYEE acknowledges that he will have
access to proprietary information, trade secrets and confidential material
(including, but not limited to, accounting information, business plans, lists of
key personnel, customers, clients, vendors, suppliers, distributors and
consultants) of EMPLOYER (the "Confidential Information"), EMPLOYEE agrees that
upon termination of his employment with EMPLOYER, EMPLOYEE shall not be entitled
to keep or preserve any of EMPLOYER's records, documents or other materials
evidencing

                                        3

<PAGE>

Confidential Information. EMPLOYEE further agrees, without limitation in time or
until such information shall become public other than by the EMPLOYEE's
unauthorized disclosure, to maintain the confidentiality of and refrain from
disclosure or otherwise using in any respect the Confidential Information to the
detriment of EMPLOYER.

         1.05 REMEDIES UPON BREACH. If EMPLOYEE breaches or threatens to breach
any term, covenant, or provision of this Agreement, EMPLOYEE agrees that
EMPLOYER shall be entitled to injunctive relief, both PENDENTE LITE and
permanently without the requirement of the posting of a bond since the remedy at
law would be inadequate or insufficient. In addition, EMPLOYER shall be entitled
to require EMPLOYEE to account for and pay to EMPLOYER all compensation,
profits, monies, accruals, increments or other benefits derived or received by
EMPLOYEE by reason of such breach.

         1.06 SEVERABILITY OF COVENANTS. If any provision of this Agreement, as
applied to any part or to any circumstances, shall be adjudged by a court to be
invalid or unenforceable, the same shall in no way affect any other provision of
this Agreement, the application of such provision in any other circumstances, or
the validity or enforceability of this Agreement. If any provision, or any part
hereof, is held to be unenforceable because of the duration of such provision or
the area covered hereby, the parties hereto agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provisions, and/or to delete specific words or phrases ("blue-penciling"), and
in its reduced or blue-penciled form, such provision shall then be enforceable
and shall be enforced.

         1.07 ENFORCEABILITY IN ALL JURISDICTIONS. The parties hereto intend to
and hereby confer jurisdiction to enforce the terms, covenants and provisions
contained herein upon the courts of any

                                        4

<PAGE>

state of the United States and any other governmental jurisdiction within the
geographical scope of such covenants. If the courts of any one or more such
states or jurisdictions shall hold such covenants wholly unenforceable by reason
of the breadth of such scope or otherwise, it is the intention of the parties
hereto that such determination shall not bar or in any way affect EMPLOYER'S
right to the relief provided above in the courts of any other state or
jurisdiction within the geographical scope of such covenants, as to breaches of
such covenants and such respective states or jurisdictions, the above covenants
as they relate to each state or jurisdiction being, for this purpose, severable
into diverse and independent covenants.

          1.08 ATTORNEYS' FEES. In the event that action, either legal or
equitable, is instituted by EMPLOYER to enforce and/or interpret this Agreement,
the prevailing party shall be entitled to reimbursement from the other party
hereto of court costs, reasonable attorneys' fees and accountants' fees incurred
in connection therewith.

         1.09 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned in whole or in
part, by EMPLOYEE without the prior written consent of EMPLOYER. EMPLOYER and
any of its subsidiaries, affiliates, and successors may sell, assign, or
otherwise transfer any or all of its or their right and interest in the
Business, whether by operation of law or otherwise, and in this Agreement, in
which case this Agreement shall remain in full force after such sale, assignment
or other transfer.

         1.10 GOVERNING LAW. This Agreement shall be construed, interpreted and
governed in accordance with the laws of the State of Nevada, regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

         1.11. ENTIRE AGREEMENT.  This Agreement and the Employment Agreement by
and between

                                        5

<PAGE>

EMPLOYEE  and  EMPLOYER,  dated  as of the date  hereof,  represent  the  entire
agreement  of the parties with  respect to the subject  matter  hereof and shall
supersede any and all previous contracts, arrangements or understandings between
the parties hereto and with respect to the subject matter hereof. This Agreement
may not be modified or amended except by an instrument in writing signed by each
of the parties hereto.

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and date first above written.

                                          EMPLOYEE:

                                               /s/ Gary Armentrout
                                               -------------------------
                                               GARY ARMENTROUT

                                          EMPLOYER:

                                               HARVEYS CASINO RESORTS,
                                               a Nevada corporation

                                               By /s/ Charles W. Scharer
                                                  ------------------------------
                                               CHARLES W. SCHARER, President and
                                               Chief Executive Officer

                                        6

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