Document:

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

                  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 calendar 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.

                  "Calendar Year" means the period beginning on January 1 of
each year and ending on December 31 of each year.

                  "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.

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

                  "Mandatory Fee and Retainer Shares" means (a) Common Stock
awarded pursuant to Section 6(a) with an aggregate Market Value per Share
generally equal to a Non-Employee Director's Meeting Fees and (b) Common Stock
awarded pursuant to Section 6(b) with an aggregate Market Value per Share
generally equal to a Non-Employee Director's Retainer.

                  "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 for purposes of Section 6 of this Plan shall 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 Mandatory Retainer 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.

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                  "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 held, as determined by the
Board from time to time, but for purposes of Section 7 of this Plan shall not
include (a) 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
and (b) any such compensation which is issued to a Non-Employee Director as
Mandatory Retainer Shares pursuant to Section 6(b) hereof.

                  "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 Date" has the meaning set forth in Section 6(a).

                  "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(1) shares, which may be shares of original issuance or shares held in
treasury or a combination thereof. If an Option Right lapses or terminates

--------
(1)   The proposed amendment will increase the rate of usage of Common Stock
      reserved for the Plan.

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<PAGE>

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, Mandatory Retainer
Shares, or Voluntary Shares under this Plan.

                  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.

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<PAGE>

                        (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.

                        (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

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<PAGE>

            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 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 and Retainer Shares.

                        (a) 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

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<PAGE>

            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.

                        (b) Commencing on January 1, 2001, 50% of each
            Non-Employee Director's Retainer shall be payable in the form of
            Mandatory Retainer Shares. Upon the Issuance Date, the Company shall
            issue to each Non-Employee Director a number of mandatory Retainer
            Shares equal to (i) 50% of the amount of such Director's Retainer
            for such accounting period, divided by (ii) the Market Value per
            Share on the applicable 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 fractions shares shall
            be disregarded, and the remaining amount of such portion of the
            Non-Employee Director's Retainer shall be paid in cash. The Company
            shall pay any and all fees and commissions incurred in connection
            with the payment of Mandatory Retainer 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:

                        (a) Prior to the commencement of the Company's Calendar
            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 Calendar 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 Calendar Year.
            Once an election has been terminated, another election may not be
            made effective until the commencement of the next subsequent full
            Calendar 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, Mandatory Retainer Shares and
            Voluntary Shares issued or granted under this Plan shall be issued
            only to a Participant, (ii) Option Rights and

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<PAGE>

            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,
            Mandatory Retainer 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 Mandatory Fee Shares or Mandatory Retainer 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 compete
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, Mandatory Retainer 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, Mandatory Retainer 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

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<PAGE>

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 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, Mandatory Retainer 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 or Mandatory Retainer 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, Mandatory Retainer 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 (including the administration of this Plan
            in conjunction with

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<PAGE>

            the Deferred Compensation 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, Mandatory Retainer 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 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.

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<PAGE>

                  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.

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<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

1. Purpose.....................................................................1

2. Definitions.................................................................1

3. Shares Available under the Plan.............................................3

4. Option Rights...............................................................4

5. Common Stock Grants and Restricted Stock....................................5

6. Mandatory Fee and Retainer Shares...........................................6

7. Voluntary Shares............................................................7

8. Transferability.............................................................7

9. Adjustments.................................................................8

10. Fractional Shares..........................................................8

11. Withholding Taxes..........................................................8

12. Certain Terminations of Directorships......................................9

13. Administration.............................................................9

14. Amendment, Suspension, Termination and Other Matters......................10

15. Termination of the Plan...................................................11

16. Effective Date............................................................11

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                 1997 EQUITY PLAN FOR NON-EMPLOYEE DIRECTORS OF

                      PLAYBOY ENTERPRISES, INC., AS AMENDED

                  I hereby certify that the foregoing Plan was duly adopted by
the Board of Directors of Playboy Enterprises, Inc. on September 10, 1997.

                  Executed this ______ day of December 1997.

                                        ________________________________________
                                           Secretary

                                      * * *

                  I hereby certify that the foregoing Plan was duly adopted by
the stockholders of Playboy Enterprises, Inc. on November 6, 1997.

                  Executed this ______ day of December 1997.

                                        ________________________________________
                                           SecretaryPLAYBOY ENTERPRISES, INC.

                                CHRISTIE HEFNER
                                  CHAIRMAN AND
                            CHIEF EXECUTIVE OFFICER

November 30, 2000

Michael Carr
7309 Westcliff Drive
West Hills, CA 91307

Dear Michael:

It is with great pleasure that we offer you the position of President,
Publishing Group; Executive Vice President, Playboy Enterprises, Inc. and
Publisher, Playboy Magazine to start on Monday, December 4, 2000. You will be
reporting directly to me. You will be based at the Playboy offices in New York,
although you will be expected to do such traveling as may be necessary and
appropriate for the performance of your duties.

You will be paid a base salary of $350,000 per year, to be paid on a biweekly
basis on our normal payroll dates. You are entitled to participate in a Board
approved incentive plan with a maximum annual potential of 100% of your base
salary. The bonus will be based on corporate and group financial performance.

You will also be entitled to participate in a special bonus plan based on the
profitability of advertising sales. You will receive 3% of the increase
year/year in advertising profit contribution (ad revenue less ad expense) with a
maximum award opportunity of $350,000.

You are eligible to participate in the Executive Stock Plan and will receive a
grant of 25,000 options of Playboy's Class B stock which will vest in equal
annual installments over two years. This stock grant will be for 2001 but will
be given to you immediately upon your hire. The strike price will be based on
the stock's closing price on the day prior to your start date. Also, you will
participate in the existing restricted stock plan, which will provide you with
5,000 and 10,000 shares of Class B stock upon the Company's achieving $15
million and $20 million in Corporate operating income, respectively.

To assist in your move, the Company will arrange and pay for the reasonable
costs of transporting your household goods from Los Angeles to New York under
the Company's relocation policy.

You will be entitled to Playboy's health benefits plans (effective on the first
day of your employment) as well as participation in the executive vacation
policy, matching 401k plan, and Deferred Compensation plan. Details of these
plans/benefits will be provided to you. While we cannot promise that these plans
will not change in the future, we can assure you that you will be treated no
less favorably than other executives at your level.

<PAGE>

If the above is acceptable, please sign, date and return the enclosed copy of
this letter. Once again, welcome back to the Playboy family.

ACCEPTED:                               Sincerely,

/s/ Michael T. Carr                     /s/ Christie Hefner
-----------------------------------     Christie Hefner
Michael T. Carr

12/01/00
-----------------------------------
Date

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