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                       1997 EQUITY PLAN FOR NON-EMPLOYEE
                    DIRECTORS OF PLAYBOY ENTERPRISES, INC.


     1. Purpose. The purposes of the Plan are (1) to promote the growth and 
long-term success of Playboy Enterprises, Inc., a Delaware corporation (the
"Company"), by offering Non-Employee Directors the ability to acquire Common
Stock of the Company, (2) to enable the Company to attract and retain qualified
persons to serve as Non-Employee Directors, which services are considered
essential to the long-term success of the Company, by offering them an
opportunity to own Common Stock of the Company, and (3) to more closely align
the interests of Non-Employee Directors with the interests of the Company's
stockholders by paying certain amounts of compensation for services as a
Director in the form of shares of Common Stock.

     2. Definitions. In addition to the other terms defined elsewhere herein,
wherever the following terms are used in this Plan with initial capital letters,
they have the meanings specified below, unless the context clearly indicates
otherwise.

     "Accounting Period" means each fiscal quarter of the Company, such quarters
beginning on January 1, April 1, July 1 and October 1 of each year.

     "Award" means an award of an Option Right, Restricted Stock or Common Stock
Grant under this Plan.

     "Board" means the Board of Directors of the Company.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

     "Common Stock" means the Class B Common Stock, par value $0.01 per share,
of the Company, and any security into which such Common Stock may be converted
or for which such Common Stock may be exchanged by reason of any transaction or
event of the type described in Section 9 of this Plan.

     "Common Stock Grant" means Common Stock, other than Restricted Stock,
awarded pursuant to Section 5 of this Plan.

     "Company" has the meaning set forth in Section 1, and includes its
successors.

     "Date of Award" means the date specified by the Board on which an Award
becomes effective, which shall not be earlier than the date on which the Board
takes action with respect thereto.

     "Deferred Compensation Plan" means the Playboy Enterprises, Inc. Board of
Directors' Deferred Compensation Plan, effective as of October 1, 1992, as it
may be amended from time to time.
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     "Employee" means any officer or other employee of the Company or of any
corporation which is then a Subsidiary.

     "Fiscal Year" means the period beginning on July 1 of each year and ending
on June 30 of the subsequent year.

     "Issuance Date" has the meaning set forth in Section 6.

     "Mandatory Fee Shares" means Common Stock awarded pursuant to Section 6 in
an amount equal to a Non-Employee Director's Meeting Fees.

     "Meeting Fees" means the compensation payable to a Non-Employee Director
with regard to the number of Board or Committee meetings attended, or Committee
positions held, as determined by the Board from time to time, but does not
include any such compensation subject to deferral under the Deferred
Compensation Plan pursuant to an agreement executed by a Non-Employee Director
and the Company in accordance with the terms of the Deferred Compensation Plan.

     "Market Value per Share" means either (a) the closing price of a share of
Common Stock as reported on the New York Stock Exchange (the "NYSE") on the date
as of which such value is being determined, or, if there are no reported
transactions for such date, on the next preceding date for which transactions
were reported, as published in the Midwest Edition of The Wall Street Journal,
or (b) if there is no reporting of transactions on the NYSE, the fair market
value of a share of Common Stock as determined by the Board from time to time.

     "Non-Employee Director" means a member of the Board who is not an Employee.

     "Optionee" means a Non-Employee Director to whom an Option Right is awarded
under this Plan.

     "Option Price" means the purchase price payable upon the exercise of an
Option Right.

     "Option Right" means the right to purchase shares of Common Stock from the
Company upon the exercise of an option awarded hereunder.

     "Participant" means a Non-Employee Director (or a person who has agreed to
commence serving in such capacity) who is selected by the Board to receive
Awards under this Plan, who is entitled to receive Mandatory Fee Shares or who
has elected to receive Voluntary Shares.

     "Participation Agreement" means the agreement submitted by a Non-Employee
Director to the Secretary of the Company pursuant to which a Non-Employee
Director may elect to receive all or any portion of his or her Retainer in the
form of Voluntary Shares for a specified period in the future.

                                       2
<PAGE>

 
     "Performance Objectives" means the performance objectives that may be
established by the Board pursuant to this Plan for Participants who have
received Awards.

     "Plan" means the 1997 Equity Plan for Non-Employee Directors of Playboy
Enterprises, Inc. as set forth herein, as the same may be amended or restated
from time to time.

     "Restricted Stock" means Common Stock awarded pursuant to Section 5 of this
Plan as to which neither the substantial risk of forfeiture nor the restrictions
on transfer referred to in Section 5 hereof have expired.

     "Restricted Stockholder" means a Non-Employee Director to whom Restricted
Stock has been awarded under this Plan.

     "Retainer" means the portion of a Non-Employee Director's annual
compensation that is payable without regard to the number of board or committee
meetings attended or committee positions, as determined by the Board from time
to time, but does not include any such compensation subject to deferral under
the Deferred Compensation Plan pursuant to an agreement executed by a Non-
Employee Director and the Company in accordance with the terms of the Deferred
Compensation Plan.

     "Rule 16b-3" means Rule 16b-3 under the Securities Exchange Act of 1934, as
amended or any successor rule.

     "Subsidiary" means any corporation, partnership, joint venture, limited
liability company, unincorporated association or other entity (each, an
"Entity") in an unbroken chain of Entities beginning with the Company if each of
the Entities other than the last Entity in the unbroken chain then owns stock or
other interests possessing 50 percent or more of the total combined voting power
of all classes of stock or other interests in one of the other Entities in such
chain.

     "Termination of Directorship" means the time when a Participant ceases to
be a Director for any reason, including, without limitation, a termination by
resignation, removal, failure to be elected or reelected, death or retirement.

     "Valuation Dates has the meaning set forth in Section 6.

     "Voluntary Shares" has the meaning set forth in Section 7(a).

     3. Shares Available under the Plan. Subject to adjustment as provided in
Section 9 of this Plan, the number of shares of Common Stock issued or
transferred, plus the number of shares of Common Stock covered by outstanding
Awards and not forfeited under this Plan, shall not in the aggregate exceed
200,000 shares, which may be shares of original issuance or shares held in
treasury or a combination thereof. If an Option Right lapses or terminates
before such Option is exercised or shares of Restricted Stock or Common Stock
Grants are forfeited, for any reason, the shares covered thereby may again be
made subject to Awards or issued as Mandatory Fee Shares or Voluntary Shares
under this Plan.

                                       3
<PAGE>
 

     4. Option Rights. The Board may from time to time authorize Awards to
Participants of Options to purchase shares of Common Stock upon such terms and
conditions as the Board may determine in accordance with the following
provisions:

          (a) Each Award shall specify the number of shares of Common Stock to
     which the Option Rights pertain.

          (b) Each Award of Option Rights shall specify an Option Price per
     share of Common Stock, which shall be equal to or greater than the Market
     Value per Share on the Date of Award.

          (c) Each Award of Option Rights shall specify the form of
     consideration to be paid in satisfaction of the Option Price and the manner
     of payment of such consideration, which may include (i) cash in the form of
     currency or check or other cash equivalent acceptable to the Company, (ii)
     nonforfeitable, nonrestricted shares of Common Stock, which are already
     owned by the Optionee and have a value at the time of exercise that is
     equal to the Option Price, (iii) any other legal consideration that the
     Board may deem appropriate, including, without limitation, any form of
     consideration authorized under Section 4(d) below, on such basis as the
     Board may determine in accordance with this Plan, and (iv) any combination
     of the foregoing.

          (d) On or after the Date of Award of any Option Right, the Board may
     determine that payment of the Option Price may also be made in whole or in
     part in the form of shares of Restricted Stock or other shares of Common
     Stock that are subject to risk of forfeiture or restrictions on transfer.
     Unless otherwise determined by the Board on or after the Date of Award,
     whenever any Option Price is paid in whole or in part by means of any of
     the forms of consideration specified in this Section 4(d), the shares of
     Common Stock received by the Optionee upon the exercise of the Option Right
     shall be subject to the same risks of forfeiture or restrictions on
     transfer as those that applied to the consideration surrendered by the
     Optionee; provided, however, that such risks of forfeiture and restrictions
     on transfer shall apply only to the same number of shares of Common Stock
     received by the Optionee as applied to the forfeitable or restricted shares
     of Common Stock surrendered by the Optionee.

          (e) Any Award of Option Rights may provide for the deferred payment of
     the Option Price from the proceeds of sale through a broker of some or all
     of the shares of Common Stock to which the exercise relates.

          (f) Successive Awards may be made to the same Participant regardless
     of whether any Option Rights previously awarded to the Participant remain
     unexercised.

          (g) Each Award shall specify the period or periods of continuous
     service as a Non-Employee Director by the Optionee that are necessary or
     Performance Objectives that must be achieved before the Option Rights or
     installments thereof shall become exercisable, and any Award may provide
     for the earlier exercise of the Option Rights in the event of a change in
     control of the Company or other transaction or event.

                                       4
<PAGE>
 

          (h) The term of an Option Right shall be set by the Board; provided,
     however, that no Option Right awarded pursuant to this Section 4 may have a
     term of more than 10 years from the Date of Award.

          (i) Each Award of an Option Right shall be evidenced by a written
     Stock Option Agreement, which shall be executed on behalf of the Company by
     any officer thereof and delivered to and accepted by the Optionee and shall
     contain such terms and provisions as the Board may determine consistent
     with this Plan.

     5. Common Stock Grants and Restricted Stock. The Board may also authorize
Awards to Participants of Common Stock Grants and Restricted Stock upon such
terms and conditions as the Board may determine in accordance with the following
provisions:

          (a) A Common Stock Grant consists of the transfer by the Company to a
     Participant of shares of Common Stock in consideration and as additional
     compensation for services performed for the Company. Each Award of Common
     Stock Grants and Restricted Stock shall constitute an immediate transfer of
     the ownership of shares of Common Stock to the Participant in consideration
     of the performance of services, entitling such Participant to dividend,
     voting and other ownership rights, subject to, in the case of Awards of
     Restricted Stock, the substantial risk of forfeiture and restrictions on
     transfer hereinafter referred to.

          (b) Each Award of Restricted Stock shall provide that the shares of
     Restricted Stock covered thereby shall be subject to a "substantial risk of
     forfeiture" within the meaning of Section 83 of the Code for a period to be
     determined by the Board on the Date of Award, and may provide for the
     termination of such risk of forfeiture upon the achievement of certain
     Performance Objectives, in the event of a change in control of the Company,
     or upon any other transaction or event.

          (c) Each Award of Restricted Stock shall provide during the period for
     which such substantial risk of forfeiture is to continue, and any Award of
     Common Stock Grants may provide, that the transferability of the shares of
     Common Stock subject to such Awards shall be prohibited or restricted in
     the manner and to the extent prescribed by the Board on the Date of Award.
     Such restrictions may include, without limitation, rights of repurchase or
     first refusal in the Company or provisions subjecting the shares of
     Restricted Stock to a continuing substantial risk of forfeiture in the
     hands of any transferee.

          (d) Any Award of a Common Stock Grant or Restricted Stock may be made
     in consideration of payment by the Participant of an amount that is less
     than the Market Value per Share on the Date of Award, but in no event shall
     the value of the consideration provided with respect to any such Award be
     less than the par value per share of Common Stock.

          (e) Any Award of Restricted Stock may require that any or all
     dividends or other distributions paid on the shares of Restricted Stock
     during the period of such restrictions be automatically sequestered and
     reinvested on an immediate or

                                       5
<PAGE>
 

     deferred basis in additional shares of Common Stock, which may be subject
     to the same restrictions as the underlying award or such other restrictions
     as the Board may determine.

          (f) Each Award of a Common Stock Grant and Restricted Stock shall be
     evidenced by a Stock Grant Agreement or Restricted Stock Agreement (as the
     case may be), which shall be executed on behalf of the Company by any
     officer thereof and delivered to and accepted by the Participant and shall
     contain such terms and provisions as the Board may determine consistent
     with this Plan. Unless otherwise directed by the Board, Restricted Stock
     will be held in book-entry form by the Company as custodian for the
     Participant. Any certificates representing shares of Restricted Stock,
     together with a stock power endorsed in blank by the Participant with
     respect to the shares of Restricted Stock, shall be held in custody by the
     Company until all restrictions thereon lapse.

          (g) The Board may provide, at or after the Date of Award of any Common
     Stock Grant or Restricted Stock, for the payment of a cash award intended
     to offset the amount of tax that the Participant may incur in connection
     with such Common Stock Grant or Restricted Stock, including, without
     limitation, tax on the receipt of such cash award.

          (h) The Board may provide in any individual Stock Grant Agreement or
     Restricted Stock Agreement that the Company shall have the right to
     repurchase the Restricted Stock then subject to restrictions under the
     Restricted Stock Agreement, or the Common Stock subject to the Common Stock
     Grant, immediately upon a Termination of Directorship for any reason at a
     cash price per share equal to the cash price paid by the Participants for
     such Restricted Stock or Common Stock. In the discretion of the Board,
     provision may be made that no such right of repurchase shall exist in the
     event of a Termination of Directorship without cause or because of the
     Participant's retirement, death or permanent and total disability.

     6. Mandatory Fee Shares. Commencing with the first meeting of the Board
following the effective date of this Plan, all Meeting Fees shall be payable in
the form of Mandatory Fee Shares. No later than ten (10) days following the end
of an Accounting Period (the "Issuance Date"), the Company shall issue to each
Non-Employee Director a number of Mandatory Fee Shares equal to (i) the amount
of such Director's Meeting Fees for such Accounting Period, divided by (ii) the
Market Value per Share on the last day of each Accounting Period (the "Valuation
Date") with respect to which such Meeting Fees are payable. To the extent that
the application of the foregoing formula would result in the issuance of
fractional shares of Common Stock, any such fractional shares shall be
disregarded, and the remaining amount of Meeting Fees shall be paid in cash. The
Company shall pay any and all fees and commissions incurred in connection with
the payment of Mandatory Fee Shares to a Director.

     7. Voluntary Shares. Each Non-Employee Director shall be eligible to elect
to receive shares of Common Stock in accordance with the following provisions:

                                       6
<PAGE>
 

          (a) Prior to the commencement of the Company's Fiscal Year (or by such
     other date as may be specified by the Board), a Participant may elect, by
     the filing of a Participation Agreement, to have up to 100 percent of his
     or her Retainer paid by the Company in the form of shares of Common Stock
     in lieu of a cash payment (the "Voluntary Shares"). Such Participation
     Agreement must, except as the Board may otherwise provide, be filed as a
     one-time election for the applicable Fiscal Year. Unless the Director
     revokes or changes such election by filing a new Participation Agreement by
     the due date therefor specified in this Section 7(a), such election shall
     apply to a Participant's Retainer for each subsequent Fiscal Year. Once an
     election has been terminated, another election may not be made effective
     until the commencement of the next subsequent full Fiscal Year unless the
     Board shall have otherwise provided.

          (b) No later than the Issuance Date, the Company shall issue to each
     Participant who has made an election under Section 7(a), a number of
     Voluntary Shares for the prior Accounting Period equal to (i) the amount of
     such Director's Retainer for such Accounting Period that such Director has
     elected to receive as Voluntary Shares, divided by (ii) the Market Value
     per Share on the Valuation Date. To the extent that the application of the
     foregoing formula would result in the issuance of fractional shares of
     Common Stock, any such fractional shares shall be disregarded, and the
     remaining amount of the Retainer shall be paid in cash. The Company shall
     pay any and all fees and commissions incurred in connection with the
     payment of the Voluntary Shares to a Director.

     8. Transferability.

          (a) Except as may be otherwise determined by the Board, (i) Awards,
     Mandatory Fee Shares and Voluntary Shares issued or granted under this Plan
     shall be issued only to a Participant, (ii) Option Rights and Restricted
     Stock may be transferred by a Participant only by will or the laws of
     descent and distribution, and (iii) Option Rights may not be exercised
     during a Participant's lifetime except by the Participant or, in the event
     of the Participant's legal incapacity, by his guardian or legal
     representative acting in a fiduciary capacity on behalf of the Participant
     under state law and court supervision.

          (b) Any Award made under this Plan may provide that all or any part of
     the shares of Common Stock that are to be issued or transferred by the
     Company upon the exercise of Option Rights, or are no longer subject to the
     substantial risk of forfeiture and restrictions on transfer referred to in
     Section 5 of this Plan, shall be subject to further restrictions upon
     transfer.

          (c) To the extent required to satisfy any condition to exemption
     available pursuant to Rule 16b-3, Mandatory Fee Shares and Voluntary Shares
     acquired by a Participant shall be held by the Participant for a period of
     at least six months following the date of such acquisition.

     9. Adjustments. The Board may make or provide for such adjustments in the
(a) number of shares of Common Stock covered by outstanding Awards, payable as

                                       7
<PAGE>
 

Mandatory Fee Shares or subject to elections to receive Voluntary Shares, (b)
prices per share applicable to Option Rights, and (c) kind of shares (including,
without limitation, shares of another issuer) covered thereby, as the Board in
its sole discretion may in good faith determine to be equitably required in
order to prevent dilution or enlargement of the rights of Participants that
otherwise would result from (x) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company, (y) any merger, consolidation, spin-off, split-off, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
or issuance of rights or warrants to purchase securities or (z) any other
corporate transaction or event having an effect similar to any of the foregoing.
In the event of any such transaction or event, the Board may provide in
substitution for any or all outstanding Awards, Mandatory Fee Shares or
Voluntary Shares to be issued under this Plan such alternative consideration as
it may in good faith determine to be equitable under the circumstances and may
require in connection therewith the surrender of all Awards, Mandatory Fee
Shares or Voluntary Shares so replaced. The Board may also make or provide for
such adjustments in the numbers and kind of shares specified in Section 3 of
this Plan as the Board may in good faith determine to be appropriate in order to
reflect any transaction or event described in this Section 9.

     10. Fractional Shares. The Company shall not be required to issue any
fractional shares of Common Stock pursuant to this Plan. The Board may provide
for the elimination of fractions, for the settlement thereof in cash or for such
other adjustments as the Board may deem appropriate under this Plan.

     11. Withholding Taxes. To the extent, if any, that the Company is required
to withhold federal, state, local or foreign taxes in connection with any
payment made or benefit realized by a Participant or other person under this
Plan, and the amounts available to the Company for the withholding are
insufficient, it shall be a condition to the receipt of any such payment or the
realization of any such benefit that the Participant or such other person make
arrangements satisfactory to the Company for payment of the balance of any taxes
required to be withheld. At the discretion of the Board, any such arrangements
may include relinquishment of a portion of any such payment or benefit. The
Company and any Participant or such other person may also make similar
arrangements with respect to the payment of any taxes with respect to which
withholding is not required.

     12. Certain Terminations of Directorships.

          (a) Notwithstanding any other provision of this Plan to the contrary,
     in the event of a Termination of Directorship by reason of death or
     disability, or in the event of hardship or other special circumstances, of
     a Participant who holds an Option Right that is not immediately and fully
     exercisable or any Award as to which the substantial risk of forfeiture or
     the prohibition or restriction on transfer has not lapsed, the Board may in
     its sole discretion take any action that it deems to be equitable under
     the circumstances or in the best interests of the Company, including,
     without limitation, waiving or modifying any limitation or requirement
     with respect to any Award under this Plan.

          (b) If a Non-Employee Director becomes an Employee while continuing to
     serve as a Director, that fact alone shall not result in a Termination of

                                       8
<PAGE>
 

     Directorship or otherwise impair the rights such Director may have under
     this Plan, including, without limitation, the rights such Director may have
     under any Award outstanding under this Plan, but such Director shall no
     longer be eligible to receive any further Awards, Mandatory Fee Shares or
     Voluntary Shares under this Plan.

     13. Administration.

          (a) Administration by the Board; Delegation. This Plan shall be
     administered by the Board, which may from time to time delegate all or any
     part of its authority under this Plan to a committee or subcommittee of not
     less than two Directors appointed by the Board who are "non-employee
     directors" within the meaning of that term as defined in Rule 16b-3. To the
     extent of any delegation by the Board under this Plan, references in this
     Plan to the Board shall also refer to the applicable committee or
     subcommittee. The majority of any such committee or subcommittee shall
     constitute a quorum, and the action of a majority of its members present at
     any meeting at which a quorum is present, or acts unanimously approved in
     writing, shall be the acts of such committee or subcommittee.

          (b) Administrative Powers. The Board shall have the power to interpret
     this Plan, the Option Rights, the Common Stock Grants, the Restricted
     Stock, the procedures for issuance of Mandatory Fee Shares and elections to
     receive Voluntary Shares, and the agreements pursuant to which the Option
     Rights, the Common Stock Grants, the Restricted Stock, the Mandatory Fee
     Shares and the Voluntary Shares are awarded and issued (including
     Participation Agreements), and to adopt such rules for the administration,
     interpretation and application of this Plan and such agreements as are
     consistent therewith and to interpret, amend or revoke any such rules. Any
     Award under this Plan need not be the same with respect to each Optionee or
     Restricted Stockholder.

          (c) Professional Assistance; Good Faith Actions. All expenses and
     liabilities which members of the Board incur in connection with the
     administration of this Plan shall be borne by the Company. The Board may
     employ attorneys, consultants, accountants, appraisers, brokers or other
     persons. The Board, the Company and the Company's officers and Directors
     shall be entitled to rely upon the advice, opinions or valuations of any
     such persons. All actions taken and all interpretations and determinations
     made by the Board in good faith shall be final and binding upon all
     Participants, the Company and all other interested persons. No members of
     the Board shall be personally liable for any action, determination or
     interpretation made in good faith with respect to this Plan, or any Option,
     Common Stock Grant, Restricted Stock, Mandatory Fee Shares or Voluntary
     Shares, and all members of the Board shall be fully protected by the
     Company in respect of any such action, determination or interpretation.

     14. Amendment, Suspension, Termination and Other Matters.

          (a) This Plan may be wholly or partially amended or otherwise
     modified, suspended or terminated at any time or from time to time by the
     Board. However, without further approval of the stockholders of the
     Company, no action of the Board

                                       9
<PAGE>
 

     may, except as provided in Section 9 of this Plan, increase the limits
     imposed in Section 3 on the maximum number of shares of Common Stock which
     may be issued under this Plan, and no action of the Board may be taken that
     would otherwise require stockholder approval as a matter of applicable law
     or the rules of any U.S. stock exchange, including the NYSE, on which the
     Common Stock may be listed for trading or authorized for quotation. No
     amendment, suspension or termination of this Plan shall, without the
     consent of the holder of an Award, alter or impair any rights or
     obligations under any Award theretofore granted, unless the Award itself
     otherwise expressly so provides.

          (b) The Board may make under this Plan any Award or combination of
     Awards authorized under this Plan in exchange for the cancellation of an
     Award that was not made under this Plan.

          (c) Except as provided in Section 14(b) of this Plan, the making of
     one or more Awards to a Non-Employee Director under this Plan shall not
     preclude the making of Awards to such Non-Employee Director under any other
     stock option or incentive plan previously or subsequently adopted by the
     Board, nor shall the fact that a Non-Employee Director has received one or
     more awards under any other stock option or incentive plan of the Company
     preclude such Non-Employee Director from receiving awards under this Plan.

     15. Termination of the Plan. No further awards shall be made under this
Plan after the passage of 10 years from the date on which this Plan is first
approved by the stockholders of the Company.

     16. Effective Date. The effective date of this Plan shall be the date of
its adoption by the Board of Directors. This Plan and all Awards granted,
Mandatory Fee Shares issued, and any elections to receive Voluntary Shares
effected prior to the stockholder approval hereinafter mentioned, shall be void
and of no further force and effect unless this Plan shall have been approved at
a meeting of stockholders of the Company called for such purpose by the
affirmative vote of a majority of the shares of Class A Common Stock of the
Company represented in person or by proxy.

                                      10
<PAGE>
 
                           PLAYBOY ENTERPRISES, INC.

                          RESTRICTED STOCK AGREEMENT

     THIS RESTRICTED STOCK AGREEMENT (the "Agreement") dated __________, 1997
(the "Award Date"), is made by and between PLAYBOY ENTERPRISES, INC., a Delaware
corporation (the "Company"), and _____________, a Non-Employee Director of the
Company (the "Director"):

     WHEREAS, the Company has established the 1997 Equity Plan for Non-Employee
Directors of Playboy Enterprises, Inc. (the "Plan");

     WHEREAS, the Company wishes to carry out the Plan (the terms of which are
incorporated by reference in and made a part of this Agreement, and which shall
control in the event of any inconsistency between this Agreement and the Plan or
any interpretation of this Agreement);

     WHEREAS, the Plan provides for the issuance of shares of the Company's
Common Stock (as hereinafter defined), subject to certain restrictions thereon
(hereinafter referred to as "Restricted Stock"); and 

     WHEREAS, the Board of Directors of the Company, appointed to administer the
Plan, has determined that it would be in the best interests of the Company to
issue the shares of Restricted Stock provided for herein to the Director in
partial consideration of past services to the Company and/or its Subsidiaries
and to provide further incentives for performance and continued service during
the vesting periods provided herein, and has advised the Company thereof and
instructed the undersigned officer to issue said Restricted Stock;

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

                                   ARTICLE I

                                  DEFINITIONS

     Whenever the following terms are used in this Agreement, they have the
meanings specified below unless the context clearly indicates to the contrary.
Capitalized terms used but not defined herein have the meanings set forth in the
Plan. 

     "Change in Control" means the occurrence of any of the following events:
(i) except in a transaction described in clause (iii) below, Hugh M. Hefner,
Christie Hefner, the Hugh M. Hefner 1991 Trust (for so long as Hugh M. Hefner
and Christie Hefner are
<PAGE>

joint trustees or one of them is sole trustee), and the Hugh M. Hefner
Foundation (for so long as Hugh M. Hefner and Christie Hefner are joint trustees
or one of them is sole trustee) cease collectively to own a majority of the
total number of votes that may be cast for the election of directors of the
Company; or (ii) a sale of Playboy magazine by the Company; or (iii) the
liquidation or dissolution of the Company, or any merger, consolidation or other
reorganization involving the Company unless (x) the merger, consolidation or
other reorganization is initiated by the Company, and (y) is one in which the
stockholders of the Company immediately prior to such reorganization become the
majority stockholders of a successor or ultimate parent corporation of the
Company resulting from such reorganization and (z) in connection with such
event, provision is made for an assumption of outstanding options and rights or
a substitution thereof of a new option or right in such successor or ultimate
parent of substantially equivalent value.

     "Common Stock" means the Class B Common Stock, par value $0.01 per share,
of the Company and any security into which such Common Stock may be converted or
for which such Common Stock may be exchanged by reason of any transaction or
event of the type described in Section 3.9 of this Agreement.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.

     "Plan" means the 1997 Equity Plan for Non-Employee Directors of Playboy
Enterprises, Inc., as it may be amended or restated from time to time.

     "Restrictions" means the transferability restrictions or substantial risk
of forfeiture imposed upon Restricted Stock under this Agreement.

     "Restricted Stock" means the Common Stock of the Company issued under this
Agreement and subject to the Restrictions imposed hereunder.

     "Rule 16b-3" means Rule 16b-3 under the Exchange Act, as amended or any
successor rule.

     "Secretary" means the Secretary of the Company.

     "Securities Act" means the Securities Act of 1933, as amended from time to
time.

     "Termination of Directorship" means the time when the Director ceases to
be a Director for any reason, including, without limitation, a termination by
resignation, removal, failure to be elected or reelected, death or retirement.

     "Vested Stock" means Restricted Stock with respect to which the Director
has satisfied the time or performance vesting standards of this Agreement as
specified in Article III hereof.

                                       2
<PAGE>
 
                                  ARTICLE II

                         ISSUANCE OF RESTRICTED STOCK

     In consideration of past services rendered to the Company by the Director
and for other good and valuable consideration that the Board has determined to
be equal to not less than the par value of the Restricted Stock issued
hereunder, on the date hereof the Company issues to the Director 5,000 shares of
Common Stock, upon the terms, conditions and restrictions set forth in this
Agreement.

                                  ARTICLE III     

                                 RESTRICTIONS

Section 3.1 - Vesting Period
     
     All Restrictions will lapse automatically and Vested Stock will be issued
on ______, 2007, if and only if (i) there has been no Termination of
Directorship of the Director for any reason prior to such date, and (ii) there
has been no forfeiture of shares due to a Change of Control as specified in
Section 3.8 prior to such date.

Section 3.2 - Accelerated Vesting: Performance Objectives

     Performance objectives have been established as a condition to accelerated
vesting of the Restricted Stock. The performance objectives are based on the
Company's "Operating Income" as such term is used and determined by the Company
for purposes of the Company's financial reports filed with the Securities and
Exchange Commission under the Exchange Act. Operating Income will be measured
before any unusual or "one-time" economic or accounting instances that would
distort the actual Operating Income of the Company as determined by the Board,
which may rely in its discretion on the Company's publicly reported Operating
Income Before One-Time Items. The Restrictions will lapse with respect to
specified percentages of the shares of Restricted Stock subject to this Award,
without duplication, on the second business day following the issuance by the
Company's independent auditors of their audit report after the end of any fiscal
year of the Company, beginning with the fiscal year ended June 30, 1997, during
which Operating Income first equals or exceeds each of the following thresholds:

   Annual Operating Income Objective  Percentage of Total Restricted
               ($ million)                     Stock Award
               -----------                     -----------
                   15                              30%

                   20                      100% less any amount
                                             previously vested

                                       3
<PAGE>
 
     For example, if no Restrictions have yet lapsed, and the Company's
Operating Income equals $17 million in a given year, the Restrictions would
lapse with respect to 30% of the Restricted Stock, whereas if 30% of the
Restricted Stock had previously vested, no additional Restricted Stock would
vest; if in a subsequent fiscal year, Operating Income equals $21 million, the
Restrictions would lapse with respect to the remaining 70% of the Restricted
Stock.

     The lapse of the Restrictions shall be effective on the second business day
following the issuance by the Company's independent auditors of their audit
report with respect to the prior fiscal year.

Section 3.3 - Right to Payment of Restricted Stock

     Upon issuance of an independent auditor's report with respect to each
fiscal year, a determination will be made as to the amount of Restricted Stock
earned, if any, on the basis of the vesting guidelines in Sections 3.1 and 3.2
and what Restricted Stock has thereby become Vested Stock. Participants must be
Directors of the Company on the second business day following the issuance by
the Company's independent auditors of their audit report with respect to such
year in order to receive any Vested Stock. Unlegended stock certificates will be
issued to Participants only after the independent audit report confirms that
vesting requirements have been satisfied; pending such issuance, Restricted
Stock will be held in book-entry form by the Company as custodian for the
Director. Unless the Secretary determines that certificates must be issued
pursuant to applicable law or contractual obligations, Restricted Stock shall
not be issued to the Director in certificated form. The Secretary of the Company
shall establish book-entry procedures sufficient to prevent unauthorized
transfers of the Restricted Stock.

Section 3.4 - Legend

     The Secretary shall, or shall instruct the Company's transfer agent to,
provide stop transfer instructions in the Company's stock transfer records to
prevent any transfer of Restricted Stock for any purpose until the stock is
vested. Any certificate that the Secretary or transfer agent deems necessary to
issue to represent shares of Restricted Stock shall, until all restrictions
lapse and new certificates are issued pursuant to Section 3.5, bear the
following legend:

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
     VESTING REQUIREMENTS AND MAY BE SUBJECT TO REACQUISITION BY THE COMPANY
     UNDER THE TERMS OF THAT RESTRICTED STOCK AGREEMENT BY AND BETWEEN PLAYBOY
     ENTERPRISES, INC. (THE "COMPANY") AND THE HOLDER OF THE SECURITIES. PRIOR
     TO THE VESTING OF OWNERSHIP IN THE SECURITIES, THEY MAY NOT BE, DIRECTLY OR
     INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
     OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES. COPIES OF THE ABOVE
     REFERENCED AGREEMENT ARE ON FILE AT THE OFFICES

                                       4
<PAGE>
 
     OF THE COMPANY AT 680 NORTH LAKE SHORE DRIVE, CHICAGO, IL 60611.

Section 3.5 - Lapse of Restrictions

     Upon the vesting of the shares of Restricted Stock as provided in Sections
3.1 through 3.3 and subject to Sections 4.2 and 4.3, the Company shall cause new
certificates to be issued with respect to such Vested Stock and delivered to the
Director or his legal representatives, free from the legend provided for in
Section 3.4 and any of the other Restrictions. Such Vested Stock shall thereupon
cease to be considered Restricted Stock subject to the terms and conditions of
this Agreement.

Section 3.6 - Restricted Stock Not Transferrable

     Prior to the issuance of Vested Stock, no Restricted Stock or any interest
or right therein or part thereof shall be liable for the debts, contracts or
engagements of the Director or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgement, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect.

Section 3.7 - Termination of Directorship

     If there is a Termination of Directorship for any reason, whether voluntary
or involuntary, with or without cause, by retirement or by reason of death or
disability or otherwise, at any time prior to ____________, 2007, the Director
shall forfeit all unvested Restricted Stock, and all Restricted Stock shall, on
the effective date of such Termination of Directorship, be immediately cancelled
and returned to the status of authorized and unissued Common Stock. If a
Director was a Non-Employee Director on the last day of a fiscal year and there
is a Termination of Directorship of such Director prior to the second business
day following the issuance of an independent audit report that shows that
Restrictions have lapsed with respect to any unvested Restricted Stock, such
Employee shall not receive (and shall forfeit all rights to) such Restricted
Stock.

Section 3.8 - Change in Control

     Upon a Change in Control specified in clause (iii) of the definition
thereof, any Restricted Stock that has not vested shall be forfeited on the
effective date of such Change in Control, and all Restricted Stock shall, on the
effective date of such Change in Control, be immediately cancelled and returned
to the status of authorized and unissued Common Stock; provided, however, that
a Change in Control specified in clause (i) or (ii) of the definition thereof
occurs, such Restricted Stock shall remain outstanding, subject to any 
remaining Restrictions.

                                       5
<PAGE>
 
Section 3.9 - Changes in Common Stock

     In the event that the outstanding shares of the Company Common Stock are
changed into or exchanged for a different number or kind of shares or other
securities of the Company pursuant to a recapitalization, reclassification,
stock split-up, stock dividend, or other combination of shares or similar
transaction, any new, additional or different shares or securities which are
issued in the name of the Director as a holder of Restricted Stock shall be
considered to be Restricted Stock and shall be subject to all of the
Restrictions.

                                  ARTICLE IV

                                 MISCELLANEOUS
Section 4.1 - Administration

     The Board shall have the power to interpret the Plan, this Agreement and
all other documents relating to Restricted Stock and to adopt such rules for
administration, interpretation and application of the Plan as are consistent
herewith and to interpret, amend or revoke any such rules. All actions taken and
all interpretations and determinations made by the Board in good faith shall be
final and binding upon the Director, the Company and all other interested
persons. No member of the Board shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
Restricted Stock and all members of the Board shall be fully protected by the
Company in respect of any such action, determination or interpretation. The
Board may from time to time delegate all or any part of its authority under this
Agreement to a committee or subcommittee of not less than two Directors
appointed by the Board who are "non-employee directors" within the meaning of
that term as defined in Rule 16b-3. To the extent of any delegation by the Board
under this Agreement, references in this Agreement to the Board shall also refer
to the applicable committee or subcommittee.

Section 4.2 - Approval of Plan by Stockholders

     The Restricted Stock will not vest prior to the approval of the Plan by the
stockholders, and, if such approval is not obtained at a meeting of stockholders
of the Company called for such purpose by the affirmative vote of a majority of
the shares of Class A Common Stock of the Company represented in person or by
proxy such Restricted Stock shall thereupon be cancelled and become null and
void.

Section 4.3 - Conditions to the Issuance of Stock Certificates

     The Company shall not be required to issue or deliver any certificate or
certificates for Vested Stock pursuant to this Agreement prior to the
fulfillment of all of the following conditions: 

     (a) The admission of such shares to listing on all stock exchanges on which
such Common Stock is then listed;

                                       6
<PAGE>
 
     (b) The completion of any registration or other qualification of such
shares under any state or Federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Board shall, in its absolute discretion, deem necessary or advisable;

     (c) The obtaining of any approval or clearance from any state or Federal
governmental agency which the Board shall, in its absolute discretion, determine
to be necessary or advisable;

     (d) Subject to the provisions of Section 4.8 the payment by the Director of
any amounts required to be withheld, under federal, state and local tax laws,
with respect to the issuance of Restricted Stock and/or the lapse or removal
of any of the Restrictions; and

     (e) The lapse of such reasonable period of time as the Board may establish
from time to time for reasons of administrative convenience.

Section 4.4 - Notices

     Any notice to be given under the terms of this Agreement will be by
registered mail, return receipt requested and if to the Company shall be
addressed in care of its Secretary at 680 North Lake Shore Drive, Chicago,
Illinois 60611, and any notice to be given to the Director shall be addressed
to the Director at the address given beneath the Director's signature hereto. By
a notice given pursuant to this Section 4.4, either party may hereafter
designate a different address for notices to be given to the Company or such
Director. Any notice which is required to be given to the Director shall, if the
Director is then deceased, be given to the Director's personal representative if
such representative has previously informed the Company of such Director's
status and address by written notice under this Section 4.4. Any notice shall be
deemed duly given when received.

Section 4.5 - Rights as a Stockholder

     Upon issuance of the Restricted Stock in the name of the Director, the
Director shall have all the rights of a stockholder with respect to said shares
including the right to receive all dividends and other distributions paid or
made with respect to the shares.

Section 4.6 - Headings

     Headings are provided for herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

Section 4.7 - Amendment

     This Agreement may be amended only in writing executed by the parties
hereto which specifically states that it is amending this Agreement.

                                       7
<PAGE>
Section 4.8 - Tax Withholding

     The Company's obligation (i) to issue or deliver to the Director any
certificate or certificates for Vested Stock or (ii) to pay to the Director any
dividends or make any distributions with respect to the Restricted Stock, is
expressly conditioned upon receipt from the Director, on or prior to the date
the same is required to be withheld, of:

     (a) Full payment (in cash or by check) of any amount that must be withheld
by the Company for federal, state or local tax purposes; or

     (b) Subject to the Board's consent and Section 4.8(c), full payment by
delivery to the Company of unrestricted shares of the Company's Common Stock
previously owned by the Director duly endorsed for transfer to the Company by
the Director with an aggregate fair market value equal to any amount that must
be withheld by the Company for federal, state or local tax purposes; or

     (c) With respect to any withholding obligation for shares of Restricted 
Stock that become unrestricted shares of stock as of a certain date (the
"Vesting Date"), subject to the Board's consent, full payment by retention by
the Company of a portion of such shares of Restricted Stock which become Vested
Stock with an aggregate fair market value (determined as of the Vesting Date)
equal to the amount that must be withheld by the Company for federal, state or
local tax purposes; or

     (d) Any combination of payments provided for in the foregoing subsections
(a), (b) or (c).

Section 4.9 - Governing Law

     The laws of the State of Delaware shall govern the interpretation,
validity, administration, enforcement and performance of the terms of this
Agreement regardless of the law that might be applied under principles of
conflicts of laws.

                                       8
<PAGE>
 
     IN WITNESS HEREOF, this Agreement has been executed and delivered by the
parties hereto.

                                      PLAYBOY ENTERPRISES, INC.



                                      By
                                        ---------------------------------------
                                      Its
                                         --------------------------------------

                                                            
-------------------------------------
            Director


-------------------------------------
-------------------------------------
Address

Restricted Stock Issued: 5,000 shares
Par Value of Stock: $0.01 per share
Date Issued:  _____________, 1997

                                       9