Playboy Enterprises, Inc. Employee Stock Purchase Plan, as amended and restated

(as amended through February 22, 2010)

SECTION 1.

PURPOSE.

SECTION 2.

ADMINISTRATION.

SECTION 3.

ELIGIBILITY.

For purposes of the Plan:

(a)            The term "Subscription Date" means the first business day of each fiscal quarter of the Company during which the Plan is effective or, in the case of a participant who is not an employee of the Company or a participating subsidiary of the Company as of a particular Subscription Date, the date thereafter on which such participant became an employee of the Company or a participating subsidiary of the Company.  The first Subscription Date under the Plan will be July 1, 1996.

 

(b)            The term "Purchase Date" means the last business day of the fiscal quarter in which the related Subscription Date occurs.

SECTION 4.

PARTICIPATION.

(a)            An eligible employee shall evidence his or her agreement to subscribe for shares by completing a written agreement (the "Subscription and Authorization Form") provided by the Committee and filing it as directed by the Committee.  A Subscription and Authorization Form will take effect within a reasonable time after it has been filed with the Company.  Once an employee provides the Committee with the Subscription and Authorization Form, he or she continues as a participant in the Plan on the terms provided in such form until he or she provides a new form or withdraws from the Plan.

(b)            In the Subscription and Authorization Form, an eligible employee shall designate any whole dollar amount to be withheld from such employee's compensation in each pay period and used to purchase shares of Common Stock on the next Purchase Date, subject to the following limitations:  (i) the whole dollar amount (on an annualized basis) shall not exceed 10 percent of his or her compensation (as defined below) on an annualized basis; (ii) the maximum number of shares of Class B Common Stock which can be purchased by any one employee on any Purchase Date shall not exceed 2,000 shares of the Class B Common Stock; and (iii) the Committee may establish from time to time minimum payroll deductions.  For purposes of this Plan, the term "compensatio n" means an eligible employee's bi-weekly base salary.

SECTION 5.

STOCK.

SECTION 6.

TERMS AND CONDITIONS OF SUBSCRIPTIONS.

(a)            Purchase Price.  The purchase price shall be an amount equal to 85 percent of the fair market value of such stock on the Purchase Date.  During such time as the Class B Common Stock is traded on the New York Stock Exchange, the fair market value per share shall be the closing price of the Class B Common Stock (as reported in the record of Composite Transactions for New York Stock Exchange listed securities and printed in The Wall Street Journal) on such Purchase Date (or on the next regular business date on which shares of the Class B Common Stock of the Company shall be traded in the event that no shares of the Class B Common Stock shall have been traded on the Purchase Date).  Subject to the foregoing, the Committee shall have full authority and discretion in fixing the purchase price.

(b)            Medium and Time of Payment.  The purchase price shall be payable in full in United States dollars, pursuant to uniform policies and procedures established by the Committee.  The funds required for such payment will be derived by withholding from an employee's compensation.  An employee shall have the right at any time to terminate the withholding from his or her compensation of amounts to be paid toward the purchase price.  An employee shall have the right, one time in each quarter, to change the amount so withheld, by submitting a written request to the Company at least 15 business days before any Purchase Date.  An employee shall have the right to cancel his or her subscription in whole and to obtain a refu nd of amounts withheld from his or her compensation by submitting a written request to the Company at least 15 business days before any Purchase Date.  Any cancellation of a subscription in whole will constitute a withdrawal under Section 4(a) of the Plan.  Such amounts shall thereafter be paid to the employee within a reasonable period of time.

 

(c)            No Interest on Employee Funds.  No interest shall accrue on any amounts withheld from an employee's compensation.

(d)            Accrual Limitation.  No subscription shall permit the rights of an employee to purchase stock under all "employee stock purchase plans" (as defined in the Code) of the Company and its subsidiaries to accrue, under the rules set forth in Section 423(b)(8) of the Code, at a rate which exceeds $25,000 of fair market value of such stock (determined at the time of subscription) for each calendar year.

 

(e)            Termination of Employment.  If an employee who has subscribed for shares ceases to be employed by the Company or a participating subsidiary before any applicable Purchase Date:

i.          Because of retirement or disability, he or she may elect to continue making payments equal to the rate of payroll deductions made before retirement or disability until the first Purchase Date following retirement or disability; or otherwise the accumulated payment in his or her account at the time of retirement or disability will be applied to purchase shares at the applicable purchase price on the first Purchase Date following such retirement or disability, unless the Company is otherwise notified in writing.

ii.         For any other reason, he or she may elect to have the accumulated payment in his or her account at the time of termination applied to purchase shares at the applicable purchase price on the first Purchase Date following such termination; or otherwise the total unused payments credited to his or her account on the date of termination will be refunded within a reasonable time without interest, unless the Company is otherwise notified in writing.

(f)             Transferability.  Neither payments credited to an employee's account nor any rights to subscribe to purchase shares of Class B Common Stock under the  Plan may be transferred by an employee except by the laws of descent and distribution.  Any such attempted transfer will be without effect, except that the Company may treat such act as an election by the employee to withdraw in accordance with Section 6(b).  Shares of Class B Common Stock may be purchased under the Plan only by subscribing employees who have legal capacity as determined under applicable state law or, in the event of the employee's legal incapacity, by his or her guardian or legal representative acting in a fiduciary capacity on behalf of the emplo yee under state law or court supervision.

(g)            Death and Designation of Beneficiary.  An employee may file with the Company a written designation of beneficiary and may change such designation of beneficiary at any time by written notice to the Company.  On the death of an employee, the elections provided on termination of employment for retirement or disability may be exercised by the employee's beneficiary, executor, administrator, or other legal representative.

(h)            Adjustments.  The Committee may make or provide for such adjustments in the purchase price and in the number or kind of shares of the Class B Common Stock or other securities covered by outstanding subscriptions, or specified in the second sentence of Section 5 of the Plan, as the Committee in its sole discretion, exercised in good faith, may determine is equitably required to prevent dilution or enlargement of the rights of employees that would otherwise result from (i) any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company; (ii) any merger, consolidation, spin-off, split-off, spin-out, split-up, separation, reorganization, partial or complete liquidation, or other distribut ion of assets, issuance of rights or warrants to purchase stock; or (iii) any other corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the event of any such transaction or event, the Committee, in its discretion, may provide in substitution for any or all outstanding subscriptions under this Plan such alternative consideration as it, in good faith, may determine to be equitable in the circumstances.

(i)             Rights as a Stockholder.  An employee shall have no rights as a stockholder with respect to any Class B Common Stock covered by his or her subscription until the Purchase Date following payment in full.  No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date of such purchase, except as provided in Section 6(h) of the Plan.

 

(j)             Fractional Shares.  Fractional shares may be purchased under the Plan and credited to an account for the employee.  The Company, however, shall have the right to pay cash in lieu of any fractional shares of Class B Common Stock to be distributed from an employee's account under the Plan.

(k)            Other Provisions.  The Subscription and Authorization Form authorized under the Plan shall contain such other provisions as the Committee may deem advisable, provided that no such provisions may in any way be in conflict with the terms of the Plan.

SECTION 7.

TERM OF PLAN.

SECTION 8.

AMENDMENT OF THE PLAN.

SECTION 9.

APPROVAL OF STOCKHOLDERS.

 

 

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