Document:

Exhibit 10.5

                            PLAYBOY ENTERPRISES, INC.
                           Deferred Compensation Plan

                           Effective: October 1, 1992
                      Amended and Restated: January 1, 2005

<PAGE>

                            PLAYBOY ENTERPRISES, INC.
                           Deferred Compensation Plan

<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----
<S>    <C>                                                                                 <C>
I.     PURPOSE..............................................................................1
II.    DEFINITIONS..........................................................................1
       2.01   "Administrative Committee"....................................................1
       2.02   "Age".........................................................................1
       2.03   "Agreement"...................................................................1
       2.04   "Beneficiary".................................................................2
       2.05   "Change in Control"...........................................................2
       2.06   "Company".....................................................................2
       2.07   "Company Allocation"..........................................................3
       2.08   "Compensation"................................................................3
       2.09   "Deferred Compensation Account"...............................................3
       2.10   "Deferred Compensation Plan Trust" and "Trust"................................3
       2.11   "Determination Date"..........................................................3
       2.12   "Disability"..................................................................3
       2.13   "ERISA Funded"................................................................3
       2.14   "Incentive Award".............................................................3
       2.15   "IRC".........................................................................4
       2.16   "Participant".................................................................4
       2.17   "Plan"........................................................................4
       2.19   "Retirement Date" and "Retirement"............................................4
       2.20   "Salary"......................................................................4
       2.21   "Sales Commissions"...........................................................4
       2.22   "Savings Plan"................................................................4
       2.23   "Tax Funded"..................................................................4
       2.24   "Termination of Service"......................................................4
       2.25   "Year of Service".............................................................5
III.   ELIGIBILITY; PARTICIPATION LIMITS....................................................5
       3.01   Participation.................................................................5
       3.02   Deferral of Salary and Incentive Award or Sales Commissions...................5
       3.03   Deferral Limitations..........................................................6
       3.04   Suspension of Agreement to Defer Salary, Incentive Award, or Sales
              Commissions...................................................................7
       3.05   Timing of Deferral Credits....................................................7
       3.06   Company Allocation............................................................7
       3.07   Vesting.......................................................................9
       3.08   Determination of Account.....................................................10
       3.09   Deferred Compensation Account Investment Options.............................10
       3.10   Change of Investment Election................................................11
IV.    DISTRIBUTIONS.......................................................................11
       4.01   Distribution on Retirement...................................................11
       4.02   Distribution on Death........................................................12
       4.03   Distribution on Termination of Service.......................................12
</TABLE>

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<TABLE>
<S>    <C>                                                                                 <C>
       4.04   Disability Benefit...........................................................12
       4.05   Method and Timing of Distribution............................................13
       4.06   Interim Distribution.........................................................14
       4.07   Hardship Distributions; Cessation of Deferrals...............................14
       4.08   Withholding; Employment Taxes................................................15
       4.09   Change in Control Distribution Election......................................15
       4.10   Recipients of Payments: Designation of Beneficiary...........................16
       4.11   Distributions in Cash........................................................16
V.     CLAIM FOR BENEFITS PROCEDURE........................................................16
       5.01   Claim for Benefits...........................................................16
       5.02   Request for Review of a Denial of a Claim for Benefits.......................16
       5.03   Decision Upon Review of a Denial of a Claim for Benefits.....................17
VI.    ADMINISTRATION......................................................................17
       6.01   Plan Administrative Committee................................................17
       6.02   General Rights, Powers and Duties of Administrative Committee................17
       6.03   Information to be Furnished to Committee.....................................18
       6.04   Responsibility...............................................................18
VII.   AMENDMENT AND TERMINATION...........................................................18
       7.01   Amendment....................................................................19
       7.02   Company's Right to Terminate.................................................19
       7.03   Special Termination..........................................................19
VIII.  MISCELLANEOUS.......................................................................20
       8.01   Separation of Plan...........................................................20
       8.02   No Right to Company Assets...................................................20
       8.03   No Employment Rights.........................................................20
       8.04   Offset.......................................................................20
       8.05   Protective Provisions........................................................21
       8.06   Non-assignability............................................................21
       8.07   Gender and Number............................................................21
       8.08   Notice.......................................................................21
       8.09   Governing Laws...............................................................21
       8.10   Deferred Compensation Plan Trust.............................................21
</TABLE>

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                            PLAYBOY ENTERPRISES, INC.
                           Deferred Compensation Plan

Playboy Enterprises,  Inc. hereby amends and restates in its entirety, effective
as of January 1, 2005, the Playboy Enterprises, Inc. Deferred Compensation Plan,
which was originally  established  October 1, 1992 and last restated  January 1,
1998.

I.    PURPOSE

The purpose of the Playboy  Enterprises,  Inc. Deferred  Compensation Plan is to
provide a means  whereby  the Company may afford  certain  employees  and senior
management  with an  opportunity  to build  additional  financial  security,  by
providing  a vehicle  to defer  compensation  amounts  in  excess of the  dollar
limitation of IRC ss.402(g)  applicable to the amount of compensation  which may
be deferred under the Company's Savings Plan.

By providing a means whereby Salary,  Incentive Award,  and/or Sales Commissions
may be deferred into the future,  the Plan will aid in attracting  and retaining
managers  of  exceptional  ability.  In  addition,  the  Company  may credit the
Deferred  Compensation Account of certain Participants with an amount equivalent
to the "annual  addition"  which would be  credited to a  Participant's  account
under the Savings Plan but for the limits of IRC Sections 401(a)(17) and 415(c).

The Plan is a defined contribution plan.  Deferrals of Salary,  Incentive Award,
and/or Sales Commissions, together with Company Allocations made pursuant to the
Plan, will be credited with investment  gains or losses,  in accordance with the
Plan, and paid to the Participant (or his Beneficiary) as described herein.  The
Plan is also designed to provide  additional  financial  security at the time of
Retirement,  and to supplement other Company-sponsored  benefits in the event of
death or Disability.

This restatement is made primarily to comply with the new deferred  compensation
rules of IRC Section  409A and shall be construed  consistent  with that intent.
This restatement shall govern the maintenance of Deferred  Compensation Accounts
for Plan Years beginning on and after January 1, 2005 and all distributions that
commence on or after that date.

II.   DEFINITIONS

2.01  "Administrative   Committee"  and  "Committee"  mean  the  Plan  Committee
      appointed pursuant to Article VI to manage and administer the Plan.

2.02  "Age" means the Participant's chronological age on the relevant date.

2.03  "Agreement"  means the Playboy  Enterprises,  Inc.  Deferred  Compensation
      Election  Agreement,  executed  between  a  Participant  and the  Company,
      whereby  a  Participant  agrees  to  defer a  portion  of his  Salary  and
      Incentive  Award  (or  Sales  Commissions,  as the case may be),  or both,
      pursuant to the  provisions  of the Plan,  and the Company  agrees to make
      benefit payments in accordance with the provisions of the Plan.

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2.04  "Beneficiary"  means the person,  persons or trust designated  Beneficiary
      pursuant to Section 4.11.

2.05  "Change  in  Control"  means the  occurrence  of any one of the  following
      events:

      a)    Hugh M.  Hefner and  Christie  Ann Hefner  cease,  collectively,  to
            beneficially own at least fifty percent (50%) of the combined voting
            power of the then-outstanding  securities entitled to vote generally
            in the election of Directors  of the Company  ("Voting  Stock") (for
            purposes of this  Subsection,  Voting Stock  beneficially  owned [as
            such term is defined  under Rule  13d-3,  or any  successor  rule or
            regulation,  under the Securities  Exchange Act of 1943, as amended]
            by the Hugh M. Hefner  Foundation shall be deemed to be beneficially
            owned by  Christie  Ann Hefner if and so long as she has sole voting
            power with respect to such Voting Stock); or

      b)    except as provided in Section 2.05(f),  a sale,  exchange,  or other
            disposition of Playboy Magazine; or

      c)    except  as  provided  in  Section   2.05(f),   any   liquidation  or
            dissolution of the Company; or

      d)    except as  provided  in  Section  2.05(f),  the  Company  is merged,
            consolidated,  or  reorganized  into or with another  corporation or
            other legal person; or

      e)    except  as  provided  in  Section  2.05(f),  the  Company  sells  or
            otherwise  transfers  all or  substantially  all of  its  assets  to
            another corporation or other legal person;

      f)    provided,    however,   that   no   such   merger,    consolidation,
            reorganization,  sale,  or  transfer  will  constitute  a Change  in
            Control  if the  merger,  consolidation,  reorganization,  sale,  or
            transfer is initiated by the Company and as a result of such merger,
            consolidation,  reorganization,  sale,  or transfer  not less than a
            majority  of the  combined  voting  power  of  the  then-outstanding
            securities  of  the  surviving,   resulting,   or  ultimate   parent
            corporation or other legal person,  as the case may be,  immediately
            after such transaction, is held in the aggregate by persons who held
            not  less  than a  majority  of the  combined  voting  power  of the
            outstanding  Voting Stock of the Company  immediately  prior to such
            merger, consolidation, reorganization, sale, or transfer.

      The foregoing  definition  of "Change in Control"  shall apply in order to
      vest a  Participant's  Deferred  Compensation  Account 100% as provided in
      Section 4.09 below,  but only to the extent that the  foregoing  Change in
      Control events  constitute a "change in the  ownership" of the Company,  a
      "change  in  effective  control"  of  the  Company,  or a  "change  in the
      ownership of a substantial portion of the assets" of the Company, as those
      terms are defined in regulation under IRC Section 409A(a)(2)(A)(v),  shall
      the distribution rights of Section 4.09 below apply.

2.06  "Company" means Playboy Enterprises, Inc., a Delaware corporation, and its
      successors and assigns.

                                       2
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2.07  "Company  Allocation"  means an amount added to a  Participant's  Deferred
      Compensation Account, as provided in Section 3.06.

2.08  "Compensation"  means  Eligible  Earnings  as that term is  defined in the
      Savings Plan.

2.09  "Deferred  Compensation Account" means the accounting record(s) maintained
      by the Company for each  Participant,  pursuant to Article  III.  Separate
      Deferred Compensation  Account(s) shall be utilized solely as a device for
      the  measurement  and  determination  of  the  amount  to be  paid  to the
      Participant  pursuant to this Plan,  and shall be subject to Section  7.02
      hereof.  Notwithstanding  the provisions of Section 8.10, a  Participant's
      Deferred  Compensation  Account  shall not  constitute  or be treated as a
      trust fund or escrow arrangement of any kind.

2.10  "Deferred   Compensation   Plan  Trust"  and  "Trust"  mean  the  Deferred
      Compensation   Plan  Trust,   an  irrevocable   grantor  trust  or  trusts
      established  by the Company,  in  accordance  with Section  8.10,  with an
      independent  trustee  for the  benefit  of  persons  entitled  to  receive
      payments under this Plan and any other deferred compensation plan or plans
      which the  Company  chooses,  from time to time,  to operate  through  the
      Trust.

2.11  "Determination Date" means the date on which the amount of a Participant's
      Deferred  Compensation  Account is  determined  as provided in Article III
      hereof.  The  last  day  of  each  calendar  quarter  and  the  date  of a
      Participant's Termination of Service shall be a Determination Date.

2.12  "Disability" means that either:

      (i)   the  Participant  is unable to  engage  in any  substantial  gainful
            activity by reason of any medically  determinable physical or mental
            impairment  that  can be  expected  to  result  in  death  or can be
            expected  to last for a  continuous  period of not less than  twelve
            (12) months; or

      (ii)  the Participant is, by reason of any medically determinable physical
            or mental  impairment that can be expected to result in death or can
            be expected to last for a continuous  period of not less than twelve
            (12) months,  receiving short or long term disability benefits under
            a Company-maintained benefit plan.

      Disability  may  be  determined   under  the  Company's   Group  Long-Term
      Disability  Insurance Plan to the extent that plan's  definition  complies
      with the definition above (or any modified or replacement  definition that
      applies under IRC Section 409A(a)(2)(C) from time to time); otherwise, the
      Administrative Committee shall determine, in its sole discretion,  whether
      a Disability has occurred.

2.13  "ERISA  Funded"  means  that  the  Plan  is  prevented  from  meeting  the
      "unfunded"  criterion  of the  exceptions  to the  application  of Parts 2
      through  4 of  Subtitle  B of Title I of the  Employee  Retirement  Income
      Security Act of 1974, as amended ("ERISA").

2.14  "Incentive Award" means the Participant's Management Incentive Plan Award,
      if any,  for the Company  fiscal year  coinciding  with the Plan Year (but
      payable after the end of

                                       3
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      the Plan Year) otherwise payable in cash, and considered  "wages" for FICA
      and federal income tax withholding, but before any deferrals made pursuant
      to this Plan.

2.15  "IRC" means the Internal Revenue Code of 1986, as amended.

2.16  "Participant"  means  an  employee  of  the  Company  who is  eligible  to
      participate  in the Plan pursuant to Section 3.01,  and who enters into an
      Agreement.  Such an individual shall remain a Participant for so long as a
      Deferred  Compensation Account balance is maintained for that person under
      the Plan.

2.17  "Plan" means the Playboy Enterprises,  Inc. Deferred Compensation Plan, as
      in effect and amended from time to time.

2.18  "Plan Year" means a calendar year.

2.19  "Retirement Date" and "Retirement" mean the date of Termination of Service
      of a Participant  for reasons other than death or Disability  after he (i)
      attains age  sixty-five  (65),  (ii) attains age  fifty-five  (55) and has
      fifteen  (15)  Years  of  Service,   or  (iii)  terminates  service  under
      circumstances  which the Committee  elects to treat as a Retirement  under
      this Plan.

2.20  "Salary" for purposes of the Plan shall be the total of the  Participant's
      base salary paid during a Plan Year, and  considered  "wages" for FICA and
      federal income tax withholding,  but before any deferrals made pursuant to
      this or any other plan. For purposes of the Plan, Salary shall not include
      severance  or  other  payments  made in  connection  with a  Participant's
      Termination of Service.

2.21  "Sales  Commissions"  means  the  earnings  of  a  Participant  which  are
      attributable  to sales  results,  payable  at the end of each  month,  and
      considered "wages" for FICA and federal income tax withholding, but before
      any deferrals made pursuant to this or any other plan.

2.22  "Savings Plan" means the Playboy  Enterprises,  Inc. Employees  Investment
      Savings Plan, as in effect and amended from time to time.

2.23  "Tax Funded" means that the interest of a Participant  in the Plan will be
      includable in the gross income of the  Participant  for federal income tax
      purposes prior to actual receipt of Plan benefits by the Participant.

2.24  "Termination   of  Service"  means  the   Participant's   ceasing  his/her
      employment with the Company for any reason whatsoever, whether voluntarily
      or involuntarily, including by reason of Retirement, death, or Disability;
      provided,   however,  that  the  employment  relationship  is  treated  as
      continuing  intact while the Participant is on military leave,  sick leave
      or other bona fide leave of absence  (such as temporary  employment by the
      government) if the period of such leave does not exceed six (6) months or,
      if longer,  so long as the  Participant's  right to reemployment  with the
      Company is provided either by statute or by contract.  Notwithstanding the
      foregoing,   this  definition  shall  be  construed  to  comply  with  the
      definition of "separation from service" under IRC Section 409A(a)(2)(A)(i)
      and regulations thereunder.

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<PAGE>

2.25  "Year of Service"  means a Plan Year in which an employee is credited with
      at least 1,000 hours of service as defined and measured  under the Savings
      Plan.

III.  ELIGIBILITY; PARTICIPATION LIMITS

3.01  Participation.  Participation  in the  Plan  for any  Plan  Year  shall be
      limited to Employees of the Company  (including any Employee  serving as a
      Director of the  Company) who satisfy  either of the minimum  compensation
      requirements set forth below:

      a)    The Participant's  base rate Salary as of the start of the Plan Year
            (or as the start of his or her employment as an Employee,  if later)
            is not less than $125,000; or

      b)    The Participant's  actual earnings as reported by the Company on his
            or her Form W-2,  plus (i) any amounts  deferred by the  Participant
            under  Section  125  and/or  401(k) of the IRC and (ii) any  amounts
            deferred  under  this Plan  equaled  or  exceeded  $125,000  for the
            immediately preceding calendar year.

      c)    The  $125,000  figure  presented  in (a)  and  (b)  above  shall  be
            increased  (if  adjusted  at all)  for  each  successive  Plan  Year
            beginning  on or after  January 1, 2004 by  multiplying  that dollar
            amount by a fraction,  the  numerator of which shall be the Consumer
            Price  Index-Urban  (the "CPI-U  index") (Base Period 1982-84 = 100;
            not seasonally adjusted) as published by the Bureau of Labor for the
            month of  September  immediately  preceding  such  Plan Year and the
            denominator  of which shall be the CPI-U  index for the  immediately
            preceding month of September (12 months  earlier).  If such fraction
            is not more  than  1.0 for the next  upcoming  Plan  Year,  then the
            $125,000  (indexed) amount shall remain unchanged for that Plan Year
            from the dollar amount in effect for the then current Plan Year.

            The  Administrative  Committee shall have discretion to exclude from
            eligibility  to  participate  for any  particular  Plan  Year(s) any
            employees who meet the Plan's minimum  compensation  requirement but
            do not  have a  sufficient  managerial  role  within  the  Company's
            operations  to  justify  inclusion  as an  active  participant  in a
            select,  "top-hat"  plan such as this for purposes of preserving the
            Plan's exemption from ERISA  regulation.  Any Participant as of June
            30, 2003 who met the Plan's  prior  compensation  requirement  shall
            continue to be eligible to  participate  even if he does not satisfy
            this higher compensation  requirement,  subject to being excluded by
            the  Administrative  Committee's  discretion if and when appropriate
            under this paragraph.

      d)    An employee of the Company who is a non-resident alien whose primary
            work  domicile is outside the United States shall not be eligible to
            participate in this Plan.

3.02  Deferral of Salary and Incentive Award or Sales  Commissions.  Individuals
      who  elect to  participate  in the Plan must  file an  Agreement  with the
      Company as follows:

      a)    Plan Year First  Eligible.  In the initial year of  eligibility,  an
            eligible employee who elects to participate in the Plan must file an
            Agreement with the Company

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<PAGE>

            within  thirty  (30)  days  from  the date he or she  first  becomes
            eligible to  participate  in the Plan. The Agreement to defer Salary
            or Sales  Commissions  must be filed with the  Company  prior to the
            beginning  of the  payroll  period  for  which  the  Salary or Sales
            Commission  to be deferred is  otherwise  payable.  A  Participant's
            Agreement  to defer a portion of his or her  Incentive  Award may be
            filed with the Company not less than six (6) months prior to the end
            of the  calendar  year to which the  Incentive  Award to be deferred
            relates; provided that the Participant has provided services covered
            by such  Incentive  Award since the start of that  calendar year (or
            the date as of which the  performance  criteria are  established for
            that year,  if later)  and, at the time the  Participant's  deferral
            election is made, the Incentive Award is not  substantially  certain
            to be paid  and is not  readily  ascertainable  (to the  extent  the
            conditions  of this proviso are required by  applicable  regulations
            under IRC Section 409A).  An eligible  employee who fails to file an
            Agreement  before such time shall not be eligible to participate for
            the subject Plan Year.

      b)    Subsequent  Years of Eligibility.  For any Plan Year subsequent to a
            Participant's or eligible employee's first year of eligibility,  his
            or  her  Agreement  to  defer  Salary,  Incentive  Award,  or  Sales
            Commissions must be filed with the Company prior to the beginning of
            the Plan  Year or  within  thirty  (30) days from the date he or she
            first became eligible to participate in the Plan if later.

            Subject to the  limitations of this Section 3.02(b) and Section 3.01
            above,  a  Participant  or  eligible  employee  who  does not file a
            deferral  Agreement  for a Plan Year may file an  Agreement  for any
            subsequent Plan Year.

            The filing of deferral  Agreements and other  Participant  elections
            under the Plan shall be made using the Plan's website or web link as
            designated  by the  Administrative  Committee or by such  telephonic
            process as such  Committee may approve,  in lieu of filing hard copy
            paper  documents.  Exceptions  to the  approved  election and filing
            processes may be allowed by the Administrative Committee in its sole
            discretion  on a case  by  case  basis  considering  the  particular
            circumstances,  but exceptions to the election  timing  requirements
            can only be allowed to the extent permitted under IRC Section 409A.

3.03  Deferral Limitations. A Participant's Agreement to defer Salary, Incentive
      Award, or Sales Commissions shall be subject to the following limitations:

      a)    A  Participant  may elect to defer no less than six percent (6%) and
            no more than twenty-five  percent (25%) of Salary,  in increments of
            one percentage point (1%),

      b)    A Participant  may elect to defer no less than ten percent (10%) and
            up to one hundred  percent  (100%) of his or her Incentive  Award or
            Sales Commissions, in increments of ten percentage points (10%); and

      c)    A  Participant  may elect to defer under (a) or (b) above,  or both.
            The Agreement  shall be irrevocable  upon acceptance by the Company,
            subject to Section 3.04 below.

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<PAGE>

3.04  Suspension  of  Agreement  to  Defer  Salary,  Incentive  Award,  or Sales
      Commissions.

      a)    A Participant's Agreement to defer Salary, Incentive Award, or Sales
            Commissions shall be suspended in the event that the  Administrative
            Committee,  in its sole  discretion,  reasonably  determines  that a
            Participant ceases to meet the eligibility requirements of the Plan.

      b)    In the event a  Participant  who  resides  in the  United  States is
            transferred  to a work  domicile  outside  the  United  States,  the
            Participant shall have a one-time option to elect to suspend his/her
            participation in the Plan until he/she returns to his/her employment
            with the Company in the United States on a full-time  basis.  In the
            event that a Participant elects to suspend his/her  participation in
            the Plan under this  Section  3.04(b),  he/she  shall be eligible to
            begin making  deferrals  into this Plan upon  his/her  return to the
            United  States  and  upon the  filing  of a new  Agreement  with the
            Company.  The new Agreement  must be filed with the Company at least
            thirty (30) days prior to the  calendar  quarter in which  deferrals
            are to commence if permitted  under IRC Section 409A;  otherwise the
            new  Agreement  shall  take  effect as of the start of the next Plan
            Year  beginning  after  the  Agreement  is  filed.  In the  event  a
            Participant does not elect to suspend his/her participation pursuant
            to this Section  3.04(b),  his/her  participation  shall continue as
            elected under the Agreement then in effect.

Except as  otherwise  provided  in  Section  7.03(a)(iv),  a  Participant  whose
Agreement has been suspended  pursuant to this Section 3.04, shall not be deemed
to have incurred a Termination of Service, and his or her Deferred  Compensation
Account  shall  continue  to be  maintained  under  the  terms of the  Plan.  In
addition,  no additional  Company  Allocations  shall be made to a Participant's
Deferred  Compensation  Account for the period the  Participant's  Agreement  is
suspended.

3.05  Timing of Deferral  Credits.  The amount of Salary,  Incentive  Award,  or
      Sales Commission that a Participant elects to defer in the Agreement shall
      cause  an  equivalent  reduction  in  Salary,  Incentive  Award,  or Sales
      Commission  payment,  and shall be credited to the Participant's  Deferred
      Compensation Account throughout the Plan Year as the Participant otherwise
      would have been paid the deferred  portion of Salary,  Incentive  Award or
      Sales Commission in each Plan Year.

3.06  Company  Allocation.  The Company  shall credit a Company  Allocation to a
      Participant's  Deferred Compensation Account as of December 31st of a Plan
      Year as set forth in this Section 3.06. Such Company  Allocation  shall be
      determined   based  on  Plan  Year-end  data  and,  for  purposes  of  any
      distributable benefit Account valuation,  shall be credited as of December
      31st of the Plan Year for which the  Allocation  is made even  though  the
      Allocation  amount may be determined  and credited (for deemed  investment
      purposes) early in the following Plan Year.

      a)    Participant  Eligible to Participate in the Company's  Savings Plan.
            If a Participant is eligible to participate in the Company's Savings
            Plan and is  contributing  at least six percent  (6%) to the Savings
            Plan and is also deferring an amount

                                       7
<PAGE>

            (including all amounts  deferred in a Plan Year from his/her Salary,
            Incentive  Award and Sales  Commissions  pursuant  to this  Plan) at
            least equal to six percent (6%) of his/her Salary,  then the Company
            Allocation  credited  to  the  Participant's  Deferred  Compensation
            Account shall be equal to three and one-half percent (3 1/2%) of the
            Participant's   annual  compensation   (including  amounts  deferred
            pursuant to this Plan) that is in excess of the annual  compensation
            limit  prescribed  in IRC Section  401(a)(17)  for the current  Plan
            Year.

            If a  Participant  satisfies  all the  provisions  of  this  Section
            3.06(a) except that the Participant is deferring an amount into this
            Plan which is less than six percent (6%) of his/her Salary, then the
            Participant  will not be  entitled  to the full  Company  Allocation
            available  under this Section  3.06(a).  Instead,  the amount of the
            Company  Allocation will be based on the matching  formula  provided
            for in the Company's  Savings Plan but counting all  compensation in
            excess of the Savings Plan's legal limits.

            If  a  Participant   under  this  Plan  becomes  eligible  to  be  a
            Participant  in the Savings Plan after the beginning of a Plan Year,
            the  Company  Allocation  under  this Plan shall  equal the  Company
            Allocation  based on the  Participant's  total  Compensation for the
            Plan Year less the  Company  Allocation  contributed  to the Savings
            Plan.

            If a Participant  is eligible to participate in the Savings Plan but
            chooses  not  to   participate  in  the  Savings  Plan,  no  Company
            Allocation   shall  be  credited  to  the   Participant's   Deferred
            Compensation  Account  regardless of the amount deferred pursuant to
            this Plan.

      b)    Participant  Not Currently  Eligible to Participate in the Company's
            Savings Plan. If a Participant is not eligible to participate in the
            Company's  Savings Plan but is  contributing  to this Plan an amount
            (including all amounts  deferred in a Plan Year from his/her Salary,
            Incentive Award and Sales  Commissions) equal to or greater than six
            percent (6%) of his/her Salary, then the Company Allocation credited
            to the Participant's Deferred Compensation Account shall be equal to
            three and  one-half  percent  (3 1/2%) of the  Participant's  annual
            Compensation (including amounts deferred pursuant to this Plan). For
            purposes  of  this  Section  3.06(b),  the  amount  of  Compensation
            utilized in calculating the amount of the Company  Allocation  shall
            not be  limited  to the  excess  of the  annual  compensation  limit
            prescribed in IRC Section 401(a)(17),  but instead shall include all
            Compensation earned by the Participant in a Plan Year.

            If a  Participant's  contribution  to this  Plan is less  than 6% of
            Salary and the  Participant  is not eligible to  participate  in the
            Company's  Savings  Plan,  the  Participant  will  receive a Company
            Allocation  based  on  the  matching  formula  provided  for  in the
            Company's  Savings Plan, but counting all  compensation for the Plan
            Year, without regard to limits in the Savings Plan.

                                       8
<PAGE>

      c)    If a Participant  incurs a Termination  of Service prior to December
            31st of a specific  Plan Year,  the  Participant  shall  forfeit the
            right to any Company Allocation for the current Plan Year.

3.07  Vesting.  A  Participant  shall have a one hundred  percent  (100%) vested
      entitlement to the portion of his/her Deferred  Compensation Account which
      consists  of the amount of Salary,  Incentive  Award and Sales  Commission
      he/she  deferred  into  his/her  Deferred  Compensation  Account  and  the
      investment gains or losses credited thereon.

      The  portion  of  a  Participant's  Deferred  Compensation  Account  which
      consists  of  Company  Allocations  and the  investment  gains  or  losses
      credited  thereon  shall  vest on a five year  vesting  schedule  based on
      completed Years of Service as follows:

                  Years of Service         Vested Percentage
                  ----------------         -----------------
                    Less than 1                    0%
                         1                        20%
                         2                        40%
                         3                        60%
                         4                        80%
                     5 or more                    100%

      For this purpose Years of Service  shall be measured  based on the elapsed
      time  method  described  in  ERISA  Regulation  Section  2530.200b-9,   as
      described  in this  paragraph,  with  Years of  Service  running  from the
      Participant's  date of hire through each  consecutive  anniversary of that
      date of hire to the Participant's  Termination of Service,  subject to any
      excluded  periods under this  paragraph.  For this purpose,  any period of
      severance or absence from employment of less than twelve (12)  consecutive
      months between  periods of employment with the Company shall be counted as
      a period of  service.  Any  periods  of  service  separated  by a break in
      service of at least one year but less than five years shall be  aggregated
      when  counting the  Participant's  Years of Service for  vesting,  but the
      break in service period will not count as service. If the break in service
      period is at least  five (5) years  long,  then only the Years of  Service
      completed  before such break shall count towards vesting of the portion of
      the   Participant's   Deferred   Compensation   Account   attributable  to
      contributions made with respect to service before the break and only Years
      of Service  completed  after the break shall count towards  vesting of the
      portion of the Participant's Deferred Compensation Account attributable to
      contributions  for service  after the break.  Both portions of the Account
      will  share in the  allocation  of net  phantom  investment  earnings  and
      losses.  After  a  break  in  service  of  at  least  one  (1)  year,  the
      Participant's re-employment or resumption of service date shall be treated
      as a new date of hire from which subsequent Years of Service are measured.

      Any unvested  portion of a  Participant's  Deferred  Compensation  Account
      shall  become  100%  vested in the event of his/her  Retirement,  death or
      Disability.  A Participant's vested percentage shall not change once he or
      she has incurred a distributable event under Article IV.

                                       9
<PAGE>

3.08  Determination of Account. Each Participant's Deferred Compensation Account
      as of  each  Determination  Date  shall  consist  of  the  balance  of the
      Participant's   Deferred   Compensation  Account  as  of  the  immediately
      preceding Determination Date, adjusted for:

            o     additional deferrals pursuant to Section 3. 02,

            o     Company Allocations made pursuant to Section 3. 06,

            o     distributions (if any); and

            o     the appropriate  deemed  investment  earnings and gains and/or
                  losses and expenses pursuant to Section 3. 09.

      All adjustments and deemed investment  experience related thereto, will be
      determined on a daily basis.

      The  Administrative  Committee  shall  account  for  contributions  to the
      Participant's Deferred Compensation Account separately for each Plan Year,
      and make adjustments to each year's contribution  sub-account  separately.
      Unless otherwise determined by the Administrative Committee, distributions
      and  investment  experience  shall be  allocated  pro rata  across all the
      Participant's   class-year  sub-accounts  based  on  relative  sub-account
      balances.   Such   class-year   accounting   shall  include  one  or  more
      sub-accounts representing  contributions from one or more Plan Years prior
      to the  effective  date of this Plan  restatement  only to the extent such
      class-year  accounting for prior years is determined to be feasible by the
      Administrative Committee.

3.09  Deferred  Compensation  Account  Investment  Options.  The  Administrative
      Committee shall designate from time to time one or more investment options
      in  which  Deferred  Compensation  Accounts  may  be  deemed  invested.  A
      Participant (or Beneficiary of a deceased  Participant) shall allocate his
      or her Deferred  Compensation  Account among the deemed investment options
      (in  1%  increments)  by  filing  with  the  Administrative  Committee  an
      investment  allocation election.  Subject to change from time to time, the
      Administrative Committee designates one or more phantom investment options
      within the following investment categories:

      a)    Money Market;

      b)    Bond;

      c)    Balanced;

      d)    Growth and Income;

      e)    Large Cap Growth;

      f)    Large Cap Value;

                                       10
<PAGE>

      g)    Small Cap Growth;

      h)    International; and

      i)    Age-Based Lifecycle.

      Any such  investment  allocation  election  shall be made initially in the
      Agreement  and  shall  be  subject  to such  rules  as the  Administrative
      Committee may prescribe,  including,  without limitation, rules concerning
      the manner of making investment allocation elections and the frequency and
      timing of changing such investment allocation elections.

      The  Administrative  Committee shall have the sole discretion to determine
      the number of deemed investment options to be designated hereunder and the
      nature of the options and, with notice to Participants, may change, add or
      eliminate  one or more of the  phantom  investment  options or  investment
      categories  provided  hereunder  from  time to time.  For each  investment
      option the Administrative Committee shall, in its sole discretion,  select
      a mutual fund, or an investment index, or shall create a phantom portfolio
      of such investments as it deems appropriate,  to constitute the investment
      option.  The  Company  may,  but is under no  obligation  to,  acquire any
      investment  or  otherwise  set aside assets for the deemed  investment  of
      Deferred  Compensation  Accounts hereunder.  The Administrative  Committee
      shall determine the amount and rate of deemed  investment  gains or losses
      with respect to any such  investment  option for any period,  and may take
      into  account  deemed  expenses  which  would be  incurred,  as if  actual
      investments  were  made  in  accordance  with  the  Participant's   deemed
      investment directions.

3.10  Change of  Investment  Election.  Participants  may  change  their  deemed
      investment  choices effective as of any business day on which the New York
      Stock  Exchange  (or other  exchange(s)  on which any  phantom  investment
      choices  which are the  subject of the  Participant's  new  direction  are
      traded) is open for trading by giving advance notice by such  procedure(s)
      as the Administrative Committee has approved. Investment direction changes
      may be made over a designated website or over the telephone as approved by
      the Administrative  Committee from time to time. Participants may, if they
      so desire,  designate how existing  account  balances are deemed  invested
      separate from how future contribution credits shall be deemed invested.

      To the extent that an investment election is not in effect with respect to
      any  portion  of a  Participant's  Account  for any  period  of time,  the
      undirected  portion of the Account shall be deemed  invested by default in
      the Money  Market  investment  fund if only one fund in that  category  is
      offered under the Plan;  otherwise in whichever of the phantom  investment
      options  the  Administrative  Committee  determines,  from  time to  time,
      provides the least risk of loss of principal.

IV.   DISTRIBUTIONS

4.01  Distribution on Retirement. Upon a Participant's Termination of Service on
      or after a  Retirement  Date,  distribution  of the  Participant's  entire
      Deferred  Compensation  Account,  determined  under Section 3.08 as of the
      Determination Date coincident with or next

                                       11
<PAGE>

      following the sixth (6th) monthly  anniversary  of such  Retirement  Date,
      shall be made or commence.  The distribution  shall be made or commence as
      soon as practicable  following such valuation  Determination  Date, in the
      manner  designated by the  Participant  in his/her  Agreement,  subject to
      Section 4.05.  Once a  distribution  has been  commenced  pursuant to this
      Section 4.01, the Participant  shall  immediately cease to be eligible for
      any other benefit provided under this Plan. Deferred Compensation Accounts
      automatically  become one hundred  percent  (100%) vested upon an employed
      Participant attaining his or her Retirement eligibility.

4.02  Distribution  on  Death.  Upon  the  death of a  Participant  prior to the
      distribution  of any vested  portion of his or her  Deferred  Compensation
      Account,  distribution of the unpaid balance of such vested portion of the
      Deferred Compensation Account shall be made or continue to be made to such
      Participant's  Beneficiary.  If  the  distribution  of  the  Participant's
      Deferred  Compensation Account had not yet commenced as of the date of his
      or her death, distribution to the Beneficiary of such Account,  determined
      as of the  Determinate  Date coincident with or next following the date of
      death,  shall be made or commence as soon as practicable  and in any event
      within ninety (90) days following such  Determination  Date. The method of
      distribution  shall  be  as  designated  by  the  Participant  in  his/her
      Agreement, subject to Section 4.05.

4.03  Distribution on Termination of Service.  Unless otherwise  directed by the
      Administrative Committee, upon the Termination of Service of a Participant
      prior  to his or her  Retirement  Date for  reasons  other  than  death or
      Disability,  distribution  of the  vested  portion  of  the  Participant's
      Deferred  Compensation  Account,  determined as of the Determination  Date
      coincident  with or next following the sixth (6th) monthly  anniversary of
      the  Termination  of Service  date,  shall be made as soon as  practicable
      after  such   valuation   Determination   Date,  in  a  single  lump  sum,
      notwithstanding  the  provisions  of  Section  4.05(a)  and  (b).  Upon  a
      Termination  of Service  prior to his or her  Retirement  Date or death or
      Disability,  the benefit shall be determined  under this Section 4.03, any
      portion of the  Participant's  Account that is not vested as of his of her
      Termination of Service date shall  immediately be forfeited and cancelled,
      and the Participant  shall  immediately cease to be eligible for any other
      benefit provided under this Plan. Forfeited amounts shall be applied first
      to the  payment  of Plan  administrative  expenses,  then to  satisfy  any
      Company  Allocation  obligations  as they come due under the Plan, but any
      forfeitures not used up within one year may, in the Company's  discretion,
      be used for any other corporate purposes.

4.04  Disability  Benefit.  In the event a Participant incurs a Disability which
      first manifests itself after the  Participant's  initial  participation in
      the Plan but  prior to his or her  Retirement  Date,  distribution  of the
      Participant's   Deferred  Compensation  Account,   determined  as  of  the
      Determination  Date  coincident  with or  next  following  the  Disability
      commencement  date determined by the  Administrative  Committee,  shall be
      made or commence as soon as practicable  after the Participant  incurs the
      Disability.   The  distribution   shall  be  made  as  designated  by  the
      Participant in the Agreement,  subject to Section 4.05. Such benefit shall
      be payable  until the earliest of the  following  events:  (i) there is no
      longer any  balance in the vested  portion of the  Participant's  Deferred
      Compensation  Account;  (ii) the  Participant  ceases to be  Disabled  and
      resumes

                                       12
<PAGE>

      employment  with the Company;  or (iii) the Participant  dies.  Disability
      benefits shall be treated as distributions  from a Participant's  Deferred
      Compensation Account.

      If  a  Disability   occurs  while  the   Participant  is  making  deferral
      contributions  to  this  Plan  under  his/her   Agreement,   the  Disabled
      Participant's Agreement shall be suspended and further deferrals shall not
      be required during the period of Disability.

4.05  Method and Timing of Distribution.

      a)    Election  in  Agreement.  Except  in the  case of a  Termination  of
            Service prior to the Participant's Retirement Date for reasons other
            than death or Disability,  distribution of a Participant's  Deferred
            Compensation Account shall be made in a lump sum or installments, as
            elected  by  the  Participant  in the  Agreement  relating  to  each
            respective Deferred Compensation Account. Installment payments shall
            be made  quarterly over a period of either ten (10) years or fifteen
            (15) years,  as elected by the  Participant  in the  Agreement.  The
            amount of each installment  shall be equal to the quotient  obtained
            by dividing the balance of the Deferred  Compensation  Account being
            distributed in installments by the number of installments  remaining
            to be paid, including the current  installment.  In the event of the
            Participant's  Termination of Service or Retirement, no distribution
            under  Sections 4.01 and 4.03 may commence  within six (6) months of
            such  distributable   event  or,  if  earlier,   the  death  of  the
            Participant;  each  Participant  shall be  treated  as a  "specified
            employee" for purposes of IRC Section 409A(a)(2)B)(i).  In the event
            no election is on file, the distribution will be made in a lump sum.

      b)    Election to Change Method of Distribution.  A Participant may change
            either the timing or the form of distribution of any benefit payable
            under  the Plan by  making  and  filing a new  written  election  in
            accordance  with this Section  4.05(b).  Any such election shall not
            take effect  until the one year  anniversary  of its filing.  If the
            election is to change an interim distribution election date or other
            specified payment date previously  elected by the Participant,  then
            the new  election  must be filed not less than one year  before  the
            date as of which the payment is scheduled to be paid (or in the case
            of installments,  the date as of which the first installment payment
            is  scheduled).  Installment  payments  shall  be  treated  for this
            purpose  like a lump sum  payable  as of the  scheduled  date of the
            first installment payment. In addition, if the new election involves
            a  change  in the  timing  or form of a  benefit  distributable  for
            reasons other than the Participant's death,  Disability or Hardship,
            then any new  distribution  commencement  date must be at least five
            (5) years later than the date as of which the  benefit  distribution
            had been scheduled to commence.  No acceleration of benefit payments
            may be permitted, except to the extent allowed by the Administrative
            Committee  in  accordance   with   regulations   under  IRC  Section
            409A(a)(3).

      c)    Small Benefit Cash-Out.  Notwithstanding  any payment method elected
            by a  Participant  or  Beneficiary,  the  Company  may,  in its sole
            discretion,  elect to pay any  distributable  Deferred  Compensation
            Account whose entire vested balance at the time  distribution is due
            to commence is not more than $10,000 in a lump sum.

                                       13
<PAGE>

            Such  lump sum  cashouts  shall be  permitted,  in  accordance  with
            regulations under IRC Section 409A, only if the Participant's entire
            interest under any and all other non-qualified deferred compensation
            plans  maintained  by the  Company  is also  being  distributed  and
            payment  under this Plan is made on or before the later of  December
            31 of the calendar year in which the distributable  event under this
            Article IV  occurred  or the 15th day of the third  month  following
            that distributable event.

4.06  Interim  Distribution.  At the time a  Participant  executes an Agreement,
      he/she may elect to receive an interim  distribution.  A  Participant  may
      elect  to  receive,  as an  interim  distribution,  an  amount  equal to a
      specified  percentage  (up to  100%)  of the  vested  portion  of  his/her
      class-year  sub-account   attributable  to  contributions   credited,  and
      investment  experience  thereon,  for that specific  Plan Year;  provided,
      however,  that with respect to any Agreement  applicable to  contributions
      creditable  for any Plan Year  that  begins  on or after  January,  2007 a
      Participant may elect an interim  distribution  percentage of either 0% or
      100% but nothing in between. Pursuant to the Participant's election at the
      time he/she executes an Agreement, each such interim distribution shall be
      made in a lump sum on January  2nd, or as soon as  reasonably  practicable
      thereafter,  of the year elected by the Participant in his/her  Agreement,
      subject to earlier  distribution upon death,  Disability or Termination of
      Employment.   The   Account   shall  be  valued  as  of  and  through  the
      Determination  Date next  preceding  that  January 2nd  distribution  date
      before the elected interim distribution percentage is applied. In no event
      may the interim  distribution  be paid prior to four full Plan Years after
      the  Plan  Year  for  which  the  deferral  was  originally  made.  Once a
      Participant elects to receive an interim distribution,  the election shall
      be  irrevocable.   Any  interim   distribution  paid  shall  be  deemed  a
      distribution,  and  shall  be  deducted  from the  Participant's  Deferred
      Compensation  Account. A separate interim  distribution  election shall be
      made, if any, for each Plan Year in which amounts are deferred.

4.07  Hardship  Distributions;  Cessation  of  Deferrals.  In the event that the
      Administrative  Committee,  upon written  petition of the Participant (or,
      after  the  Participant's  death,  the  written  petition  of  his  or her
      Beneficiary),  determines in its sole  discretion that the Participant (or
      his  or  her  Beneficiary)  has  suffered  a  Hardship,  the  Company  may
      distribute  to the  Participant  (or  his or her  Beneficiary)  as soon as
      reasonably  practicable  following such  determination,  an amount, not in
      excess of the value of the Participant's  Deferred  Compensation  Account,
      necessary to satisfy the Hardship.  For purposes of this Plan,  "Hardship"
      is  a  severe  financial  hardship  of  the  petitioning   Participant  or
      Beneficiary  resulting  from (i) an illness or  accident  suffered by that
      individual  or by his/her  spouse or dependent  (as defined in IRC Section
      152(a);  (ii)  loss  of the  petitioning  Participant's  or  Beneficiary's
      property due to casualty  (including  the need to rebuild a home following
      damage  not  otherwise  covered  by  insurance);  or (iii)  other  similar
      extraordinary  and  unforeseeable  circumstances  arising  as a result  of
      events beyond the petitioner's control. A distribution due to Hardship may
      not be  made to the  extent  that  such  emergency  is or may be  relieved
      through  reimbursement  or  compensation  from insurance or otherwise,  by
      liquidation  of the  petitioner's  assets (to the extent such  liquidation
      would not cause  severe  financial  hardship) or by cessation of deferrals
      under the Plan.  The amount  necessary to satisfy the Hardship  may,  upon
      request, include

                                       14
<PAGE>

      amounts  necessary  to pay any  federal,  state or local  income  taxes or
      penalties   reasonably   anticipated  to  result  from  the  distribution.
      Notwithstanding  the foregoing,  each determination of Hardship and of the
      corresponding  distributable  amount  shall be made by the  Administrative
      Committee so as to comply with the  conditions  for  distribution  upon an
      "unforeseeable  emergency"  under  IRC  Sections  409(A)(a)(2)(A)(vi)  and
      409A(a)(2)(B)(ii).

      For the purposes of determining  the order of Hardship  withdrawals  under
      this  Plan and the  Savings  Plan,  exhaustion  of the  loan and  hardship
      withdrawal  rights under the Savings Plan shall be required as a condition
      for receiving a benefit under this Section 4.07.

4.08  Withholding; Employment Taxes. To the extent required by the law in effect
      at the time  payments  are made,  the  Company  shall  withhold  any taxes
      required to be withheld by the federal, or any state or local, government.

4.09  Change in Control Distribution  Election.  If there is a Change in Control
      then, notwithstanding any other provision of this Plan:

      a)    If the Participant  incurs a Termination of Employment in connection
            with the Change in Control,  then the other distribution  provisions
            of this Article IV shall apply, without regard to this Section 4.09.

      b)    If the Participant continues employment after the Change in Control,
            then his/her Deferred  Compensation Account shall become 100% vested
            as of the date of the Change in Control and:

            (i)   shall be valued and distributed in a single lump sum as of the
                  Determination  Date coincident with or next following the date
                  of such Change in  Control,  if the  Participant  made a valid
                  initial   election  (as   provided   below)  to  receive  such
                  distribution upon a Change in Control;

            (ii)  shall be  valued  and  commence  being  distributed  as of the
                  Determination  Date  specified by the  Participant  in a valid
                  change of election made at least one year before the effective
                  date of the Change in Control and  specifying a  Determination
                  Date for  valuation and payment that is not less than five (5)
                  years after the effective date of the Change in Control; or

            (iii) shall  be  valued  and   distributed   upon  any   appropriate
                  subsequent  distributable event without regard to this Section
                  4.09, if no initial or change election is made under parts (i)
                  and (ii) above.

            For purposes of this Section 4.09(b), an initial election to receive
            a  Change  in  Control  distribution  shall  be valid if made by the
            Participant  and filed with the  Administrative  Committee  no later
            than the later of December  31, 2006 or when the  Participant  files
            his or her initial  deferral  Agreement  under the Plan. A change of
            election  shall be valid if made by the  Participant  and filed with
            the

                                       15
<PAGE>

            Administrative  Committee  by the advance date  required  under part
            (ii)  above  and  the  election  may  provide  for  a  change  to an
            installment distribution in lieu of a lump sum.

4.10  Recipients of Payments:  Designation  of  Beneficiary.  All payments to be
      made by the Company under the Plan shall be made to the Participant during
      his  lifetime,  provided  that  if  the  Participant  dies  prior  to  the
      commencement or completion of such payments,  then all subsequent payments
      under  the  plan  shall  be  made by the  Company  to the  Beneficiary  or
      Beneficiaries  determined  in  accordance  with  this  Section  4.10.  The
      Participant  shall  designate a Beneficiary  by filing a written notice of
      such designation with the Committee in such form as the Committee requires
      and may  include  contingent  Beneficiary  or  Beneficiaries  without  the
      consent of such  Beneficiary or  Beneficiaries by filing a new designation
      in writing with the Committee.  (In community  property states, the spouse
      of a married  Participant  shall join in any  designation of a Beneficiary
      other than the spouse).  If no  designation  is in effect or no designated
      Beneficiary  is  surviving  at the time of the  Participant's  death,  the
      Beneficiary shall be the Beneficiary  designated by the Participant in the
      Savings Plan, if any, or the Participant's estate.

4.11  Distributions in Cash. All distributions of Deferred Compensation Accounts
      shall be paid in United States dollars.

V.    CLAIM FOR BENEFITS PROCEDURE

5.01  Claim for Benefits. Any claim for benefits under the Plan shall be made in
      writing  to the  Committee.  If such  claim  for  benefits  is  wholly  or
      partially  denied  by  the  Committee,   the  Committee  shall,  within  a
      reasonable  period  of time,  but not later  than  sixty  (60) days  after
      receipt of the claim, notify the claimant of the denial of the claim. Such
      notice of denial shall be in writing and shall contain:

      a)    The specific reason or reasons for the denial of the claim;

      b)    A reference to the relevant Plan provisions upon which the denial is
            based;

      c)    A description  of any additional  material or information  necessary
            for the claimant to perfect the claim,  together with an explanation
            of why such material or information is necessary; and

      d)    An explanation of the Plan's claim review procedure.

5.02  Request for Review of a Denial of a Claim for  Benefits.  Upon the receipt
      by the claimant of written  notice of the denial of a claim,  the claimant
      may  within  ninety  (90) days file a written  request  to the  Committee,
      requesting a review of the denial of the claim, which review shall include
      a hearing if deemed  necessary by the  Committee.  In connection  with the
      claimant's  appeal of the  denial of  his/her  claim,  he/she  may  review
      relevant  documents  and may submit  issues and  comments in  writing.  To
      provide for fair review and a full  record,  the  claimant  must submit in
      writing all facts, reasons and arguments in

                                       16
<PAGE>

      support of his/her  position  within the time allowed for filing a written
      request for  review.  All issues and matters not raised for review will be
      deemed waived by the claimant.

5.03  Decision  Upon Review of a Denial of a Claim for  Benefits.  The Committee
      shall  render a decision on the claim  review  promptly,  but no more than
      sixty (60) days after the  receipt of the  claimant's  request for review,
      unless special  circumstances (such as the need to hold a hearing) require
      an  extension  of time,  in which case the sixty (60) day period  shall be
      extended to one hundred-twenty (120) days. Such decision shall:

      a)    Include specific reasons for the decision;

      b)    Be written in a manner  calculated to be understood by the claimant;
            and

      c)    Contain  specific  references to the relevant Plan  provisions  upon
            which the decision is based.

      The decision of the  Committee  shall be final and binding in all respects
      on the Company,  the claimant and any other person claiming an interest in
      the Plan  through  or on  behalf of the  claimant.  No  litigation  may be
      commenced  by or on behalf of a claimant  with  respect to this Plan until
      after the claim and review  process  described  in this Article V has been
      exhausted. Judicial review of Committee action shall be limited to whether
      the Committee acted in an arbitrary and capricious manner.

VI.   ADMINISTRATION

6.01  Plan  Administrative  Committee.  The Plan  shall be  administered  by the
      Compensation  Committee of the Board,  except to the extent that action is
      required  by a  committee,  selected  from time to time by the  Board,  of
      non-employee  Directors under Rule 16b-3 under the Securities Exchange Act
      of 1934. The  Administrative  Committee may assign duties to an officer or
      other  employees of the Company,  and may delegate  such duties as it sees
      fit. A member of the  Administrative  Committee  who is also a Participant
      shall not be involved in the  decisions  of the  Administrative  Committee
      regarding any determination of any specific claim for benefit with respect
      to himself or herself.

6.02  General  Rights,  Powers  and  Duties  of  Administrative  Committee.  The
      Administrative   Committee   shall  be  responsible  for  the  management,
      operation  and  administration  of the Plan.  In  addition  to any powers,
      rights and duties set forth  elsewhere in the Plan, it shall have complete
      discretion to exercise the following powers and duties:

      a)    To adopt such rules and  regulations  consistent with the provisions
            of the Plan as it  deems  necessary  for the  proper  and  efficient
            administration of the Plan;

      b)    To administer  the Plan in  accordance  with its terms and any rules
            and regulations it establishes;

      c)    To  maintain  records  concerning  the Plan  sufficient  to  prepare
            reports,  returns,  and other information required by the Plan or by
            law;

                                       17
<PAGE>

      d)    To construe and  interpret  the Plan,  and to resolve all  questions
            arising under the Plan;

      e)    To direct the Company to pay  benefits  under the Plan,  and to give
            such other  directions and  instructions as may be necessary for the
            proper administration of the Plan;

      f)    To employ or retain  agents,  attorneys,  actuaries,  accountants or
            other  persons,  who may  also  be  Participants  in the  Plan or be
            employed by or represent the Company,  as it deems necessary for the
            effective  exercise of its duties,  and may delegate to such persons
            any power and duties, both ministerial and discretionary,  as it may
            deem  necessary  and   appropriate,   and  the  Committee  shall  be
            responsible for the prudent monitoring of their performance; and

      g)    To be responsible  for the  preparation,  filing,  and disclosure on
            behalf of the Plan of such  documents and reports as are required by
            any applicable federal or state law.

6.03  Information to be Furnished to Committee. The records of the Company shall
      be determinative of each Participant's  period of employment,  Termination
      of  Service  and  the  reason  therefor,  Disability,  leave  of  absence,
      reemployment,  Years of Service,  personal  data,  and  Salary,  Incentive
      Award, or Sales Commissions.  Participants and their  Beneficiaries  shall
      furnish to the Committee such evidence,  data or information,  and execute
      such documents as the Committee requests.

6.04  Responsibility.  No member of the Administrative Committee shall be liable
      to any  person for any action  taken or  omitted  in  connection  with the
      administration  of this Plan unless  attributable  to his/her own fraud or
      willful   misconduct   (or  that  of  the   Committee,   in  which  he/she
      participated);  nor shall the Company be liable to any person for any such
      action unless attributable to fraud or willful misconduct on the part of a
      Director,  officer or employee of the Company.  Further, the Company shall
      hold harmless and defend any  individual in the employment of the Company,
      and any  director of the Company who has or exercises  any  administrative
      responsibility  with  respect to the Plan  against any claim,  action,  or
      liability  asserted  against  him/her  in  connection  with any  action or
      failure  to act  regarding  the  Plan,  except as and to the  extent  such
      liability  may be based upon the  individual's  own willful  misconduct or
      fraud; provided,  however, that to the extent required by Delaware General
      Corporation  law,  the  payment  by the  Company  of such  defense-related
      expenses  under this Section to any such person shall be made prior to the
      final  disposition  of the subject  proceeding  only upon  delivery to the
      Company of an  undertaking,  by or on behalf of such person,  to repay all
      amounts so advanced if it shall  ultimately be determined that such person
      is not entitled to this  indemnification.  This indemnification  shall not
      duplicate, but may supplement, any coverage available under any applicable
      insurance coverage.

VII.  AMENDMENT AND TERMINATION

                                       18
<PAGE>

7.01  Amendment.  The Plan  may be  amended  in  whole  or in part by a  written
      instrument  adopted by the Board of  Directors of the Company at any time.
      Notice  of any  material  amendment  shall  be  given  in  writing  to the
      Administrative Committee and to each Participant,  retired Participant and
      each   Beneficiary  of  a  deceased   Participant.   No  amendment   shall
      retroactively  decrease  either the  balance of a  Participant's  Deferred
      Compensation  Account or a  Participant's  interest  in  his/her  Deferred
      Compensation  Account as  existing  immediately  prior to the later of the
      effective date or adoption date of such amendment.

7.02  Company's  Right to  Terminate.  The  Company  reserves  the sole right to
      terminate,  by action  of its  Board of  Directors,  the Plan  and/or  the
      Agreement   pertaining  to  a  Participant   at  any  time  prior  to  the
      commencement  of  payment of  his/her  benefits.  In the event of any such
      termination,  a Participant shall be deemed to have incurred a Termination
      of Service, and his/her Deferred Compensation Account shall be paid in the
      manner provided in Section 4.03 (without regard to the six (6) month delay
      thereunder)  to the  extent  such Plan  termination  may be  treated  as a
      distributable event under IRC Section 409A.

7.03  Special  Termination.  Any  other  provision  of the Plan to the  contrary
      notwithstanding, the Plan shall terminate:

      a)    If the Plan is held to be ERISA  Funded  or Tax  Funded by a federal
            court,  and appeals from that  holding are no longer  timely or have
            been exhausted.  In addition,  the Company may terminate the Plan if
            it determines, based on a legal opinion which is satisfactory to the
            Company,  that either judicial authority or the opinion of the U. S.
            Department of Labor, Treasury Department or Internal Revenue Service
            (as expressed in proposed or final regulations, advisory opinions or
            rulings,  or  similar   administrative   announcements)   creates  a
            significant  risk that the Plan  will be held to be ERISA  Funded or
            Tax  Funded,  and  failure  to so amend the Plan could  subject  the
            Company or the  Participants  to  material  penalties.  Upon  either
            termination   due  to  such  a  failure  of  the   Plan's   purpose,
            contributions  to the Plan shall not be  permitted  with  respect to
            periods  of  employment  after  the  Plan  termination  date and the
            Company may:

            i)    Transfer the rights and  obligations of the  Participants  and
                  the Company to a new or other plan  established  or maintained
                  by the Company,  which is not deemed to be ERISA Funded or Tax
                  Funded,  but  which  is  substantially  similar  in all  other
                  respect to this Plan,  if the  Company  determines  that it is
                  possible to establish or maintain  such a Plan and make such a
                  transfer   without   material   adverse  tax  consequences  or
                  penalties to the Company or the Participants; or

            ii)   If the Company, in its sole discretion,  determines that it is
                  not feasible to make the transfer  under (i) above,  this Plan
                  shall   continue  in  frozen   status  (with  respect  to  new
                  contributions  as provided  above) and  distribution  shall be
                  made of each Participant's  Deferred  Compensation  Account as
                  soon   thereafter   as   possible  in   accordance   with  the
                  distribution rights set

                                       19
<PAGE>

                  forth in  Article  IV or any  applicable  acceleration  rights
                  permitted under IRC Section 409A.

      b)    In the event of a Change in Control if the Company acts to terminate
            the  Plan  and  all  substantially   similar  deferred  compensation
            arrangements  within the thirty  (30) days  preceding  or the twelve
            (12) months  following  the Change in Control.  Following  such Plan
            termination, contributions for any post-termination period shall not
            be permitted and distribution of all Deferred  Compensation Accounts
            shall be made in a lump sum to each respective Participant as if all
            Participants incurred a Termination of Employment on the date of the
            Change in Control,  but without regard to the six (6) month delay in
            such distributions under Section 4.03.

      Payments made upon  termination of the Plan shall  commence  within ninety
      (90) days after the Plan  termination  date unless  special  circumstances
      require  longer.  The  Administrative  Committee  shall seek to reasonably
      minimize any such delays.

VIII. MISCELLANEOUS

8.01  Separation  of Plan.  No Implied  Rights.  The Plan  shall not  operate to
      increase  any  benefit  payable to or on behalf of a  Participant  (or his
      Beneficiary)  from any other Plan  maintained by the Company.  Neither the
      establishment of the Plan nor any amendment  thereof shall be construed as
      giving  any  Participant,  Beneficiary,  or any other  person any legal or
      equitable  right unless such right shall be  specifically  provided for in
      the Plan or conferred by specific action of the Company in accordance with
      the terms and provisions of the Plan. Except as expressly provided in this
      Plan,  the Company  shall not be required or be liable to make any payment
      under this Plan.

8.02  No Right to Company  Assets.  Neither the Participant nor any other person
      shall  acquire by reason of the Plan any right in or title to any  assets,
      funds or property of the Company whatsoever,  including,  without limiting
      the  generality  of the  foregoing,  any specific  funds,  assets or other
      property  which  the  Company,  in its sole  discretion,  may set aside in
      anticipation of a liability  hereunder.  Any benefits which become payable
      hereunder  shall be paid  from the  general  assets  of the  Company.  The
      Participant and his/her Beneficiary shall have only a contractual right to
      the  amounts,  if any,  payable  hereunder,  unsecured by any asset of the
      Company.  Nothing  contained  in the Plan  constitutes  a guarantee by the
      Company  that the assets of the  Company  shall be  sufficient  to pay any
      benefits to any person.

8.03  No  Employment  Rights.  Nothing  herein  shall  constitute  a contract of
      employment or of continuing  service or in any manner obligate the Company
      to continue the services of the  Participant,  or obligate the Participant
      to continue in the service of the Company, or as a limitation of the right
      of the Company to discharge any of its  employees,  with or without cause.
      Nothing  herein  shall be construed  as fixing or  regulating  the Salary,
      Incentive Award, or Sales Commissions payable to the Participant.

8.04  Offset.  If, at the time  payments or  installments  of payments are to be
      made hereunder, the Participant, retired Participant or the Beneficiary is
      indebted or obligated to the

                                       20
<PAGE>

      Company,  then  the  payments  remaining  to be made  to the  Participant,
      retired  Participant  or the  Beneficiary  may, at the  discretion  of the
      Company,  be  reduced by the amount of such  indebtedness  or  obligation.
      However,  an election  by the  Company  not to reduce any such  payment or
      payments  shall not  constitute  a waiver of its  claim,  or  prohibit  or
      otherwise  impair the Company's  right to offset future  payments for such
      indebtedness or obligation.

8.05  Protective  Provisions.  In order to  facilitate  the  payment of benefits
      hereunder,  each employee  designated eligible to participate in the Plan,
      shall  cooperate  with the Company by furnishing  any and all  information
      requested by the Company,  including taking such physical  examinations as
      the Company  may deem  necessary,  and taking  such other  action as my be
      requested by the Company.  If the employee  refuses to  cooperate,  he/she
      shall not become a  Participant  in the Plan and the Company shall have no
      further  obligation  to  him/her  under  the  Plan.  In  such  event,  the
      Participant  or  his/her  Beneficiary  shall  receive a  benefit  equal to
      his/her Deferred  Compensation Account determined pursuant to Section 3.08
      and paid in accordance with Section 4.03.

8.06  Non-assignability. Neither the Participant nor any other person shall have
      any  voluntary or  involuntary  right to commute,  sell,  assign,  pledge,
      anticipate,  mortgage or otherwise  encumber,  transfer,  hypothecate,  or
      convey  in  advance  of  actual  receipt  the  amounts,  if  any,  payable
      hereunder,  or any  part  thereof,  which  are  expressly  declared  to be
      unassignable  and  non-transferable.  No part of the amounts payable shall
      be, prior to actual payment,  subject to seizure or sequestration  for the
      payment of any debts,  judgments,  alimony or separate maintenance owed by
      the  Participant or any other person,  or be  transferable by operation of
      law in the event of the Participant's or any other person's  bankruptcy or
      insolvency.

8.07  Gender and Number.  Wherever  appropriate  herein,  the masculine may mean
      feminine and the singular may mean the plural, or vice versa.

8.08  Notice.  Any notice required or permitted to be given under the Plan shall
      be sufficient if in writing and hand  delivered,  or sent by registered or
      certified  mail,  and if given to the Company,  delivered to the principal
      office of the Company,  directed to the  attention  of the  Administrative
      Committee.  Such notice  shall be deemed given as of the date of delivery,
      or, if delivery is made by mail,  as of the date shown on the  postmark or
      the receipt for registration or certification.

8.09  Governing Laws. The Plan shall be construed and administered  according to
      the laws of the State of Illinois.

8.10  Deferred  Compensation  Plan Trust. The Company may establish a Trust with
      (an) independent trustee(s), and shall comply with the terms of the Trust.
      The Company may transfer to the  trustee(s) an amount of cash,  marketable
      securities,  or  other  property  acceptable  to  the  trustee(s)  ("Trust
      Property")  equal in value to all or a portion  of the  amount  necessary,
      calculated in accordance with the terms of the Trust, to pay the Company's
      obligations under the Plan (the "Funding Amount"), and may make additional
      transfers to the  trustee(s)  as may be necessary in order to maintain the
      Funding

                                       21
<PAGE>

      Amount.  Trust  Property  so  transferred  shall  be  held,  managed,  and
      disbursed by the trustee(s) in accordance  with the terms of the Trust. To
      the  extent  that  Trust  Property  shall  be used  to pay  the  Company's
      obligations  under the Plan, such payments shall discharge  obligations of
      the Company;  however, the Company shall continue to be liable for amounts
      not paid by the Trust.  Trust  Property  will  nevertheless  be subject to
      claims of the Company's creditors in the event of bankruptcy or insolvency
      of the  Company,  and the  Participant's  rights  under the Plan and Trust
      shall at all times be subject to the provisions of Section 8.02.

IN  WITNESS   WHEREOF,   the  Company  has  amended  and  restated  the  Playboy
Enterprises, Inc. Deferred Compensation Plan as of January 1, 2005.

                                                PLAYBOY ENTERPRISES, INC.

                                                By: Robert Campbell
                                                    ---------------
                                                Its: Treasurer
                                                     ---------

                                       22Exhibit 10.6

                                FOURTH AMENDMENT
                        TO THE PLAYBOY ENTERPRISES, INC.
                        EMPLOYEES INVESTMENT SAVINGS PLAN
               (As Amended and Restated Effective January 1, 1997)

      WHEREAS,  Playboy Enterprises,  Inc. (the "Company") maintains the Playboy
Enterprises,  Inc.  Employees  Investment  Savings  Plan,  as  amended  and most
recently  restated  effective January 1, 1997 and amended three times thereafter
(the "Plan"), and

      WHEREAS,  the Company  wishes to further  amend the Plan,  effective as of
January 1, 2006,  to comply with final 401(k)  regulations  concerning  QNEC and
QMAC corrective contribution limits, safe harbor hardship withdrawal events, and
converting  employees to leased employee  status,  and to further amend the Plan
eligibility  provisions  retroactively  to comply with recent  Internal  Revenue
Service guidance (in a Quality  Assurance  Bulletin issued on February 14, 2006)
regarding the need to apply the 1,000 hour rule under Code Section 410(a) to all
part-time and limited time employees;

      NOW THEREFORE,  pursuant to its authority  under Section 9.01 of the Plan,
the Company hereby amends the Plan in the following respects:

      1. Section  3.06,  Excess  Contributions  Under the ADP and ACP Tests,  is
hereby  amended,  effective for the testing of Plan Years that begin on or after
January 1, 2006, by adding the  following new  paragraphs to the end of part (b)
thereof:

            "Notwithstanding  any  provisions  of Section  3.06(b) or (c) to the
            contrary,  any  supplemental  contribution  made to correct  for ADP
            testing   (a  "QNEC"   contribution)   or  ACP   testing  (a  "QMAC"
            contribution)  shall comply with the further  provisions of this and
            the  following  two  paragraphs  in  order  to  satisfy   applicable
            regulations under Code Sections 401(k) and 401(m).  Any QNEC or QMAC
            contribution  for a  particular  Plan Year shall be  credited to the
            affected  Participant's  Accounts  as of the last  day of that  Plan
            Year,  and  shall  be made no  later  than  the last day of the next
            following Plan Year. The amount of QNEC and QMAC  contributions made
            for any Plan  Year  shall  not  discriminate  in  violation  of

<PAGE>

            Code  Section  401(a)(4).  The QNEC and QMAC limits  stated in these
            three  paragraphs are intended to satisfy  Treasury  Regulations ss.
            1.401(k)-2(a)(6) and ss.  1.401(m)-2(a)(6) and so shall be construed
            and administered in compliance therewith.

            The aggregate  amount of QNEC or QMAC  contributions  credited for a
            Plan Year to the Account of any Participant  cannot separately (with
            respect to either QNEC or QMAC contributions)  exceed the product of
            the  Participant's  Compensation  for the  Plan  Year  being  tested
            multiplied  by the  greater  of (i) 5% or (ii) two times the  Plan's
            Representative   Contribution   Rate  for  that   Plan   Year.   The
            Representative   Contribution   Rate   is  the   lowest   Applicable
            Contribution Rate for the group of Non-Highly  Compensated Employees
            consisting  of the  half  of all  Non-Highly  Compensated  Employees
            counted for ADP testing  for the Plan Year whose  lowest  Applicable
            Contribution Rate is the highest.  Such  determination of the Plan's
            Representative  Contribution  Rate may be made by  ranking  all such
            Non-Highly  Compensated  Employees for the Plan Year from lowest (or
            zero percent) to highest  respective  Applicable  Contribution Rate,
            then identifying the Applicable Contribution Rate for the Non-Highly
            Compensated  Employee whose Applicable  Contribution  Rate is lowest
            within  the  top  half  (the  half  with  the   highest   Applicable
            Contribution Rates) of all Non-Highly  Compensated Employees on that
            list. A Participant's Applicable Contribution Rate, for all purposes
            under  this  Section  3.06,  shall  be the sum of the  QNEC and QMAC
            contributions  allocated  to the  Participant  for  the  Plan  Year,
            divided by the Participant's Compensation for the Plan Year.

            Any QMAC contributions taken into account for ACP testing compliance
            shall not be taken into  account  for  purposes of  determining  the
            Plan's Representative Contribution Rate for purposes of ADP testing.
            Similarly, any QNEC contributions taken into account for ADP testing
            compliance   shall  not  be  taken  into  account  for  purposes  of
            determining the Plan's Representative Contribution Rate for purposes
            of ACP testing."

      2. Section 5.04, Vesting and Termination of Employment, is hereby amended,
effective as of January 1, 2006, by adding the following new sentence to the end
of part (a) thereof:

            "In accordance with final regulations under Code Section 401(k), any
            change in a  Participant's  status  from a W-2  Employee to a Leased
            Employee  that takes effect on or after January 1, 2006 shall not be
            treated as a  termination  of the  Participant's  employment  and so
            shall not constitute a distributable event under this Plan."

                                       2
<PAGE>

      3. Section 7.02, Hardship Withdrawals,  is hereby amended, effective as of
January 1, 2006, by rewriting  the second  paragraph of part (d) thereof to read
as follows:

            "Unless  the Plan  Administrator  decides,  from  time to  time,  to
            determine  financial  need on the  basis of all  relevant  facts and
            circumstances,  a  Participant's  financial  need  shall  be  deemed
            sufficiently  immediate  and heavy to justify a hardship  withdrawal
            under this Section only with respect to:

                  (i)         expenses for (or necessary to obtain) medical care
                              that would be deductible under Code Section 213(d)
                              (determined without regard to whether the expenses
                              exceed  7.5% of  adjusted  gross  income  or other
                              applicable    dollar   limit   for   deductibility
                              thereunder);

                  (ii)        costs  directly  related  to  the  purchase  of  a
                              principal residence for the Participant (excluding
                              mortgage payments);

                  (iii)       payment of tuition,  related educational fees, and
                              room  and  board  expenses,  for up to the next 12
                              months  of   post-secondary   education   for  the
                              Participant,  his spouse,  children or  dependents
                              (as defined in Code Section 152 and without regard
                              to Sections  152(b)(1),  (b)(2) and  (d)(1)(B)  of
                              that statute);

                  (iv)        payments  necessary to prevent the eviction of the
                              Participant   from  his  principal   residence  or
                              foreclosure on the mortgage on that residence;

                  (v)         payments  for burial or funeral  expenses  for the
                              Participant's deceased parent, spouse, children or
                              dependents  (as  defined in Code  Section  152 and
                              without  regard to  Section  152(d)(i)(B)  of that
                              statute);

                  (vi)        expenses   for  the   repair   of  damage  to  the
                              Participant's   principal   residence  that  would
                              qualify  for the  casualty  deduction  under  Code
                              Section 165 (determined  without regard to whether
                              the loss  exceeds 10% of adjusted  gross income or
                              other  applicable  dollar limit for  deductibility
                              thereunder);

                                       3
<PAGE>

                  (vii)       emergency or restorative  expenses incurred by the
                              Participant  directly  as a result  of a  disaster
                              that has been  recognized  by the President of the
                              United   States  in  an   emergency   or  disaster
                              declaration; provided that the Participant applies
                              for the withdrawal  within a reasonable  time (not
                              to exceed 6 months,  unless  good  cause for later
                              application   is  shown)  after  the   President's
                              declaration; or

                  (viii)      any other circumstances determined by the Internal
                              Revenue Service to constitute  immediate and heavy
                              financial need for this purpose."

      4. Section 12.13,  Eligible Employee,  is hereby amended,  effective as of
January 1, 1997, by rewriting part (iii) thereof to read as follows:

                  "(iii)      A Class X Employee  (as  defined in Section  12.14
                              below) shall be  considered  an Eligible  Employee
                              only upon completion of a Year of Service;"

      IN WITNESS WHEREOF, this Fourth Amendment, having been first duly adopted,
is hereby executed below by a duly authorized  officer of the Company on this 30
day of August 2006, to take effect as provided herein.

                                                PLAYBOY ENTERPRISES, INC.

                                                By: Robert Campbell
                                                    ---------------

                                                Title: Treasurer
                                                       ---------

                                       4

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