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                                                                 EXHIBIT 10.3(e)



                             EMPLOYMENT AGREEMENT
                             --------------------


     AGREEMENT, made and entered into as of the 7th day of April 1997 by and 
between Playboy Enterprises, Inc., a Delaware company (together with its 
successors and assigns permitted under this Agreement, the "Company"), and Ms. 
Marianne Howatson (the "Executive").


                             W I T N E S S E T H :
                             -------------------

     WHEREAS, the Company desires to employ the Executive and to enter into an 
agreement embodying the terms of such employment (this "Agreement") and the 
Executive desires to enter into this Agreement and to accept such employment, 
subject to the terms and provisions of this Agreement;

     NOW, THEREFORE, in consideration of the premises and mutual covenants  
contained herein and for other good and valuable consideration, the receipt of 
which is mutually acknowledged, the Company and the Executive (individually a 
"Party" and together the "Parties") agree as follows:

     1.  Definitions.
         -----------

         (a)  "Base Salary" shall mean the salary provided for in Section 4 
below or any increased salary granted to the Executive pursuant to Section 4.

         (b)  "Board" shall mean the Board of Directors of the Company.

         (c)  "Cause" shall mean that, prior to any termination pursuant to
Section 11(c) hereof, the Executive shall have:

              (i)  been convicted of a criminal violation involving dishonesty, 
fraud or breach of trust; or 

             (ii)  willfully engaged in misconduct in the performance of 
Executive's duties that materially injures the 

                                  

  
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                                                                               2

Company or any entity in which the Company directly or indirectly beneficially 
owns 50% or more of the voting securities (a "Subsidiary").

               (d)  "Constructive Termination without Cause" shall mean 
termination by the Executive of her employment following occurrence of any of 
the following events without her written consent:

                    (i)  a reduction in the Executive's compensation (Base 
Salary, bonus opportunity or equity opportunity) or material reduction of any 
employee benefit or perquisite that is not equally applicable to other members

of senior management of the Company;

                   (ii)  the failure to continue the Executive in a position 
which she then holds or removal of her from any such position;

                  (iii)  a material diminution in the Executive's duties, the 
assignment to the Executive of duties which are materially inconsistent with her
current duties or, so long as the Executive is serving as President of the 
Publishing Group of the Company, a change in the reporting relationship of the 
Executive so that she no longer reports directly to the Chief Executive 
Officer;

                   (iv)  the relocation of the Executive's office to a location 
more than 50 miles from New York, NY; and

                    (v)  the failure of the Company to obtain the assumption of 
the Agreement by any successor.


          2.   Term of Employment.

               The Company hereby employs the Executive, and the Executive 
hereby accepts such employment, for the period commencing April 21, 1997 and 
ending June 30, 2001, subject to earlier termination as provided in Section 11, 
below.

          3.   Position, Duties and Responsibilities.

               (a)  During the Term of Employment, the Executive shall be 
employed as an Executive Vice President of the Company and President of the 
Publishing Group.  The Executive, in carrying out her duties under this 
Agreement, shall report to the Chairman of the Board and Chief Executive 
Officer.
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                                                                               3

               (b)  Anything herein to the contrary notwithstanding, nothing 
shall preclude the Executive from (i) serving, subject to approval of the 
Chairman of the Board, on the boards of directors of a reasonable number  
of other corporations or the boards of a reasonable number of trade 
associations and/or charitable organizations, (ii) engaging in charitable 
activities and community affairs, and (iii) managing her personal investments 
and affairs, provided that such activities do not interfere with the proper 
performance of her duties and responsibilities as the President of the 
Publishing Group.

          4.   Base Salary.

               The Executive shall be paid an annualized Base Salary, payable in
accordance with the regular payroll practices of the Company, of no less than 
$400,000.  The Base Salary shall be increased annually at a rate of no less than
5% commencing July 1, 1998.

          5.   Annual Incentive Compensation.

               Commencing in FY 1998, the Executive shall participate in the 
Executive Incentive Compensation Plan with an annual target award opportunity of
60% of Base Salary (80% of which will be tied to Publishing Group performance to
budget and 20% of which will be tied to corporate performance to budget), 50% of
which amount ($120,000) shall be guaranteed in respect of FY 1998 and paid when 
incentive compensation is customarily paid to the Company's senior executives.

               The Executive shall receive guaranteed incentive compensation for
FY 1997 of an amount equal to the product of $120,000 times a fraction, the 
numerator of which is the number of days Executive is in the employ of the 
company in FY 1997 and the denominator of which is 365, payable when FY 1997 
incentive compensation is paid to the Company's senior executives.

          6.   Profit Participation.

               The Executive shall receive additional annual compensation based 
on the profits of Playboy Publishing Group for each fiscal year during the Term 
of Employment computed as follows:

               (a)  The Executive shall receive a sum equal to 5% of the amount 
by which the Pre-tax Profits of the Playboy Publishing
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                                                                               4

Group for each fiscal year (July 1 through June 30) exceeds the Profits Base (as
defined below) for the previous fiscal year.  Each fiscal year shall be deemed a
separate accounting period for purposes of computing Profit Participation.

               (b)  The Profits Base is defined as the amount of Pre-tax Profits
of the Playboy Publishing Group computed in accordance with Generally Accepted 
Accounting Principles ("GAAP") by the Company's outside auditors in the 
preparation of the Company's audited financial statements for the applicable 
fiscal year.

               (c)  Pre-tax Profits of the Playboy Publishing Group for any 
fiscal year shall be the amount, if any, by which the total net revenues of the 
Playboy Publishing Group, including its subsidiaries and the Group's pro-rata 
share of revenues derived from all controlled affiliates, exceeds all reasonable
and applicable operating expenses attributable to same, in accordance with GAAP 
used by the Company's outside auditors in the preparation of the Company's 
audited financial statements.

                    In computing the Pre-tax Profits of the Playboy Publishing 
Group for any fiscal year, there shall be allowed all fair and reasonable 
allocations of items of revenue and expense between divisions, subsidiaries and 
affiliates of the Company, including, but not limited to, inter company sales, 
expenses such as rent, occupancy, general administrative and personnel salaries,
MIS, insurance, employee benefit costs, security, payroll processing, legal and 
tax advisory fees, depreciation, profit sharing and auditing expenses; provided,
however, the Executive and the Chief Executive Officer of the Company may agree 
to exclude from the computation of Pre-tax Profits expenses associated with 
acquisitions or investments.

                    Further, the effect of any one time gains or losses 
accounted for as part of the Playboy Publishing Group shall be amortized evenly 
over four (4) years, beginning in the month of occurrence, for purposes of 
calculating Pre-tax Profit, regardless of how the transaction is accounted for 
under GAAP.  A "One Time Gain or Loss" is a gain or loss resulting from a 
transaction not in the ordinary course of business.

                    In no event shall profits or losses, except as described in 
the preceding paragraph, from any fiscal year be carried over or back to any 
fiscal year during the base period or otherwise taken into consideration in 
computing the Pre-tax Profits for any other fiscal year during the base period.
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                                                                               5

               (d)  Profit Participation, if any, for any fiscal year, including
any Pro Rata Profit Participation as defined below, shall be paid to the
Executive no later than ninety (90) days following the end of such fiscal year.

               (e)  In the event that the Executive is to receive a Pro Rata
Profit Participation upon termination as provided in Section 11 below, the Pro
Rata Profit Participation shall be that percentage of the Profit Participation
otherwise payable for the fiscal year in which termination occurs equal to a
fraction, the numerator of which is the number of calendar days in the period
commencing July 1 of such fiscal year and ending on the effective date of the
Executive's termination, and the denominator of which is 365.

          7.   Long-term Incentives.

               (a)  The Executive shall participate on an ongoing basis in any 
long-term incentive programs made available to senior-level executives of the 
Company.

               (b)  As soon as practicable after commencement of the Executive's
employment, the Company shall grant the Executive a 10-year option, 
substantially in the form attached to this Agreement as Exhibit A, to purchase 
75,000 shares of stock.

               (c)  As soon as practicable after commencement of the Executive's
employment the Company shall grant the Executive 15,000 shares of restricted
stock substantially in the form attached to this Agreement as Exhibit B.

          8.   Employee Benefit Programs.

               The Executive shall be eligible to participate in the employee 
benefit programs of the Company applicable to senior level executives, 
including, without limitation, qualified and supplemental retirement and savings
plans, medical/dental and hospitalization plans, life insurance, short- and 
long-term disability programs, accidental death and dismemberment protection and
travel accident insurance.  In addition, the Executive shall be entitled to five
weeks per annum vacation.
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          9.   Perquisites.

               The Executive shall be entitled to perquisites on the same basis 
as made available to other senior executives of the Company, including without 
limitation, the following:

               (a)  residential security and
               (b)  expensing the cost of upgrade certificates or coupons.

          10.  Reimbursement of Business and Other Expenses.

               The Executive is authorized to incur reasonable expenses in 
carrying out her duties and responsibilities under this Agreement and the 
Company shall promptly reimburse her for all business expenses incurred in 
connection with carrying out the business of the Company, including up to 
$15,000 for legal expenses incurred in connection with her employment 
arrangements with the Company, upon submission of documentation reasonably 
satisfactory to the Company of such expenses.

          11.  Termination of Employment.

               (a)  Termination Due to  Death.  In the event the Executive's 
employment is terminated due to her death, her estate or her beneficiaries, as 
the case may be, shall be entitled to:

                    (i)  Base Salary for a period of 90 days following the date 
of death;

                   (ii)  a pro rata Annual Incentive Compensation award (based 
on the amount of Incentive Compensation payable for the fiscal year in which the
death occurs;

                  (iii)  if death occurs after the 6th month of the fiscal year,
a pro rata Profit participation award for the year of death, calculated as 
provided in Section 6 above;

                   (iv)  the right to exercise any stock option which was 
exercisable at the date of the Executive's death for a period of 1 year
following the Executive's death;

                    (v)  any amounts earned, accrued or owing to the Executive 
but not yet paid; and

                   (vi)  other benefits in accordance with applicable plans and 
programs of the Company.
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                                                                              7 

               (b)  Termination Due to Disability.  In the event the Executive 
becomes totally disabled or disabled such that she is rendered unable to perform
substantially all of her usual duties for the Company, and if such disability
shall persist for a continuous period in excess of four (4) months, or an
aggregate period in excess of four (4) months in any one fiscal year, the
Company shall have the right at any time after the end of such period to
terminate the Executive's employment under this Agreement by delivering a thirty
(30) day prior written notice to her.

               For purposes of this agreement, if the Executive and the Company 
shall disagree as to whether she is totally disabled, or disabled such that she 
is rendered unable to perform substantially all of her usual duties for the 
Company, the decision of a doctor, mutually agreed upon by the parties, shall be
binding as to both questions. If the parties cannot agree upon a doctor, the
Executive and the Company shall each select a doctor. The two (2) doctors so
selected shall select a third doctor who shall resolve either or both of the
questions referred to above.

               In the event the Executive's employment is terminated due to 
disability, she shall be entitled to:

                    (i)  Base Salary for six months following the effective date
of her termination due to disability;

                   (ii)  a pro rata Annual Incentive Compensation award (based 
on the higher of (A) the actual bonus earned in the prior year or (B) the target
bonus for the year of termination);

                  (iii)  if termination due to disability occurs after the sixth
month of the fiscal year, a pro rata Profit Participation award for the year of 
termination, calculated as provided in Section 6 above;

                   (iv)  the right to exercise any option which is exercisable 
on the date of termination for a period of one (1) year;

                    (v)  any amounts earned, accrued or owing to the Executive 
but not yet paid; and

                   (vi)  disability and other benefits in accordance with the 
applicable plans and programs of the Company.
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                                                                               8
         (c)   Termination by the Company for Cause.  In the event the Company
terminates the Executive's employment for Cause, she shall be entitled to:

                 (i)  Base Salary through the date of the termination of her 
employment for Cause;

                (ii)  any amounts earned, accrued or owing to the Executive but 
not yet paid; and

               (iii)  other benefits, if any, in accordance with applicable 
plans and programs of the Company.

               A Termination for Cause shall not take effect unless the 
Executive is given written notice of the Company's intention to terminate her 
for Cause and unless she is given an opportunity to be heard by the Board.

          (d)  Termination Without Cause or Constructive Termination Without 
Cause.  In the event the Executive's employment is terminated without Cause or 
in the event there is a Constructive Termination Without Cause, the Executive 
shall be entitled to:

                 (i)  Base Salary through the date of termination of the 
Executive's employment;

                (ii)  Base Salary, at the annualized rate in effect on the date 
of termination of the Executive's employment, (x) for a period of 12 months (the
"Salary Continuation Period") and (y) if termination occurs prior to the end of 
the Executive's first year of employment, Base Salary for the remainder of the 
first year, all payable in a single installment immediately after her 
termination;

               (iii)  Incentive Compensation payments for the year in which 
termination occurs and if termination occurs after the 6th month of such fiscal 
year, Incentive Compensation in the next succeeding fiscal year as if 
Executive's employment had not been terminated, payable when Incentive 
Compensation is paid to the Company's senior executives for such fiscal year.

                (iv)  if termination occurs after the 6th month of the fiscal 
year, a pro rata Profit Participation award for the year of termination, 
calculated as provided in Section 6 above;
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                                                                               9

                  (v)  the right to exercise any stock option which was 
exercisable at the date of Executive's termination for a period of 3 months 
following the date of termination;

                 (vi)  continued participation in all medical, dental, 
hospitalization and life insurance coverage and in other employee benefit plans 
or programs in which she was participating on the date of the termination of her
employment and in which she is entitled to continue until the earlier of the end
of the Salary Continuation Period or the date, or dates, she receives equivalent
coverage and benefits under the plans and programs of a subsequent employer; in 
the event that any of the benefit plans do not permit the Executive's 
participation, the Company shall provide the Executive with the economic 
equivalent on an after-tax basis during and only during the Salary Continuation 
Period;

                (vii)  Company-provided executive outplacement;

               (viii)  any amounts earned, accrued or owing to the Executive but
not yet paid; and

                 (ix)  other benefits in accordance with applicable plans and 
programs of the Parent and the Company.

          (e)  Voluntary Termination.  Same consequences as Termination for 
Cause.

          (f)  Termination Following a Change in Control.  The Company and the 
Executive are entering into a Severance Agreement which is attached to this 
Agreement as Exhibit C.  In the event the Executive's employment is terminated 
following a Change in Control, (as defined in the Severance Agreement), the 
Executive's rights and entitlements shall be determined in accordance with the 
Severance Agreement.

               Any amounts payable to the Executive under Section 11(d) will be 
reduced by any amounts paid to her pursuant to the Severance Agreement.

          (g)  No Mitigation; No Offset.  In the event of any termination of 
employment, the Executive shall be under no obligation to seek other employment 
and there shall be no offset against amounts due her under the Agreement on 
account of any remuneration attributable to any subsequent employment that she 
may obtain or any claims the Company may have against her.
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                                                                              10

     12.  Resolution of Disputes.

          Any disputes arising under or in connection with this Agreement shall,
at the election of the Executive or the Company, be resolved by binding
arbitration, to be held in New York, NY in accordance with the rules and
procedures of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Costs of the arbitration or litigation, including, without limitation,
reasonable attorneys' fees of both Parties, shall be borne by the Company.
Pending the resolution of any arbitration or court proceeding, the Company shall
continue payment of all amounts due the Executive under this Agreement and all
benefits to which the Executive is entitled at the time the dispute arises.

     13.  Indemnification.

          (a)  The Executive shall be entitled to indemnification by the 
Company in accordance with the provisions of Section 6 of the Company's bylaws 
and the implementing Board resolutions as in effect on the date of this 
agreement or, if more favorable to Executive, the provisions of such bylaws as 
in effect at the time indemnification is requested.

          (b)  The Executive shall be entitled to coverage under any policy of
directors' and officers' liability insurance maintained by the Company, if any.

     14.  Effect of Agreement on Other Benefits.

          Except as specifically provided in this Agreement, the existence of
this Agreement shall not prohibit or restrict the Executive's entitlement to
full participation in the employee benefit and other plans or programs in which
senior executives of the Company are eligible to participate.

     15.  Assignability; Binding Nature.

          This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs (in the case of the Executive)
and assigns. Without the prior written consent of the Company, no rights or
obligations of the Executive under this Agreement may be assigned or 
transferred by the Executive other than her rights to compensation and benefits,
which may be
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                                                                              11

transferred only by will or operation of law, except as provided in Section 20 
below.

     16.  Conflicts of Interest.

          (a)  It is hereby acknowledged that Executive is aware of Company's 
conflict of interest policies (a copy of which is attached hereto as Exhibit "D"
and by this reference made a part hereof), and understands that compliance 
therewith is of the essence of and is material to this Agreement.  Company 
agrees that Executive shall have a period of sixty (60) days from commencement 
of services hereunder during which to divest herself of ownership of any firms,
corporation, stock or similar items which are in violation of said conflict of 
interest policy.  Nothing herein shall be construed to prevent Executive from 
owning an interest of less than one percent (1%) of the outstanding stock of any
publicly traded company, whether or not such publicly traded company is in a 
business competitive to Company.

          (b)  Executive recognizes and acknowledges that a breach of the 
provisions of this paragraph would result in immeasurable and irreparable harm 
to Company.  Executive accordingly agrees that in addition to, and not in lieu 
of, all other remedies available to Company against Executive by reason of such 
breach, Company shall be entitled to temporary and permanent injunctive relief
to prevent the occurrence or continuation thereof.

     17.  Non-Competition.

          Executive acknowledges that (i) by virtue of her employment with the 
Company, Executive will obtain knowledge, know-how, confidential and proprietary
information, training and experience, (ii) the Company has a protectible
interest in such knowledge, know-how, training, information and experience and
there is a substantial probability that such knowledge, know-how, training,
information and experience could be used to the substantial advantage of a
competitor of the Company and to the Company's substantial detriment, and (iii)
the agreements and covenants contained in this Agreement are essential to
protect the value of the Company's business and assets, including such
protectible interest. Therefore, Executive agrees that, for the period
commencing on April 21, 1997 and ending at the later of Executive's termination
or the Salary Continuation Period, Executive will not engage in any Competitive
Activity. Competitive Activity means a business that engages in men's
sophisticate publishing, including both print and electronic media.
<PAGE>
                                                                             12
 
          18.  Nondisclosure of Confidential Information.

               During and after the term of this Agreement, Executive will not 
disclose any information about the Company that is not in the public domain that
was acquired by Executive in the course of her employment by the Company except 
(i) as such disclosure is required or appropriate in connection with her work as
an employee of the Company and (ii) when required to do so by a court of law, by
any governmental agency having supervisory authority over the business of the 
Company or by any administrative or legislative body with apparent jurisdiction 
to order her to disclose such information.

          19.  Entire Agreement.

               This Agreement contains the entire understanding and agreement 
between the Parties concerning the subject matter hereof and supersedes all 
prior agreements, understandings, discussions, negotiations and undertakings, 
whether written or oral, between the Parties with respect thereto.

          20.  Amendment or Waiver.

               No provision in this Agreement may be amended unless such 
amendment is agreed to in writing and signed by the Executive and an authorized 
officer of the Company.  No waiver by either Party of any breach by the other 
Party of any condition or provision contained in this Agreement to be performed 
by such other Party shall be deemed a waiver of a similar or dissimilar 
condition or provision at the same or any prior or subsequent time.  Any waiver 
must be in writing and signed by the Executive or an authorized officer of the 
Company, as the case may be.

          21.  Severability.

               In the event that any provision or portion of this Agreement 
shall be determined to be invalid or unenforceable for any reason, in whole or 
in part, the remaining provisions of this Agreement shall be unaffected thereby 
and shall remain in full force and effect to the fullest extent permitted by 
law.

          22.  Survivorship.

               The respective rights and obligations of the Parties
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                                                                              13
 
hereunder shall survive any termination of the Executive's employment to the 
extent necessary to the intended preservation of such rights and obligations.

          23.  Beneficiaries/References.
               ------------------------

               The Executive shall be entitled to select (and change, to the 
extent permitted under any applicable law) a beneficiary or beneficiaries to 
receive any compensation or benefit payable hereunder following the Executive's 
death by giving the Company written notice thereof.  In the event of the 
Executive's death or a judicial determination of her incompetence, reference in 
this Agreement to the Executive shall be deemed, where appropriate, to refer to 
her beneficiary, estate or other legal representative.

          24.  Governing Law.
               -------------

               This Agreement shall be governed by and construed and interpreted
in accordance with the laws of New York without reference to principles of 
conflict of laws.

          25.  Notices.
               -------

               Any notice given to a Party shall be in writing and shall be 
deemed to have been given when delivered personally or sent by certified or 
registered mail, postage prepaid, return receipt requested, duly addressed to 
the Party concerned at the address indicated below or to such changed address as
such Party may subsequently give such notice of:

     If to the Company:            Playboy Enterprises, Inc.
                                   680 North Lake Shore Drive
                                   Chicago, IL 60611
                                   Attention:  Howard Shapiro
                                               General Counsel

     If to the Executive:          Ms. Marianne Howatson
                                   c/o Playboy Enterprises, Inc.
                                   730 Fifth Avenue
                                   New York, New York 10019
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          26.  Headings.
               --------       

               The headings of the sections contained in this Agreement are for 
convenience only and shall not be deemed to control or affect the meaning or 
construction of any provision of this Agreement.

          27.  Counterparts.
               ------------

               This Agreement may be executed in two or more counterparts.

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

                             
                                       Playboy Enterprises, Inc.



                                       By:  /s/ Christie Hefner
                                            ---------------------
                                            Christie Hefner
                                            Chairman, and
                                            Chief Executive Officer



                                            /s/ Marianne Howatson
                                            --------------------- 
                                            Marianne Howatson