Apple of Hillsborough's eye.

• Position: Triangle

For a purveyor of pornography, Adam & Eve has become a respected business leader. As the country's biggest adult retailer celebrates its 40th anniversary, the mayor and the chamber of commerce in Hillsborough, where it and parent PHE Inc. have been based since 1994, can't say enough about its economic and philanthropic contributions.

In 1969, Phil Harvey, then a UNC Chapel Hill graduate student, started out selling condoms by mail--then illegal--to finance population-control efforts in the Third World. Two years later, when the business branched into catalog sales, Adam & Eve was born, offering not only condoms but sex toys, lingerie and erotica. After it started selling adult videos in 1981--it began producing them in 1993--the company drew the attention of law-enforcement officials. The ensuing battles cost Harvey $3 million in legal fees.

Nowadays, the privately owned company is considered a model corporate citizen. Its headquarters, which includes a call center, the marketing department and a 58,000-square-foot distribution center, provides jobs for 350, making it the town's fourth-largest employer. It's the sixth-largest property-tax payer. Town Manager Eric Peterson credits it with helping establish a growing distribution cluster.

The company's generosity...