Notice

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reimbursement of litigation expenses; and (e) such other matters as may properly ... On July 12, 2010, Playboy announced that it had received a proposal from ...
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN RE PLAYBOY ENTERPRISES, INC. SHAREHOLDERS LITIGATION

CONSOLIDATED C.A. No. 5632-VCN

NOTICE OF PENDENCY OF CLASS ACTION, PROPOSED SETTLEMENT AND SETTLEMENT HEARING TO:

ALL PERSONS OR ENTITIES WHO HELD SHARES OF THE COMMON STOCK OF PLAYBOY ENTERPRISES INC. (“PLAYBOY” OR THE “COMPANY”), EITHER OF RECORD OR BENEFICIALLY, INCLUDING THEIR RESPECTIVE SUCCESSORS, HEIRS, OR ASSIGNS, IMMEDIATE AND REMOTE, AND ANY PERSON OR ENTITY ACTING FOR OR ON BEHALF OF, OR CLAIMING UNDER, ANY OF THEM, AND EACH OF THEM, AT ANY TIME BETWEEN AND INCLUDING JULY 12, 2010 AND MARCH 4, 2011.

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT OF A LAWSUIT AND CONTAINS IMPORTANT INFORMATION. YOUR RIGHTS WILL BE AFFECTED BY THESE LEGAL PROCEEDINGS IN THIS LITIGATION. IF YOU WERE NOT THE BENEFICIAL HOLDER OF COMMON STOCK OF PLAYBOY BUT HELD SUCH STOCK FOR A BENEFICIAL HOLDER, PLEASE TRANSMIT THIS DOCUMENT PROMPTLY TO SUCH BENEFICIAL HOLDER. The purpose of this Notice is to inform you of a proposed settlement (the “Settlement”) of the above-captioned consolidated action (the “Action”) pending before the Court of Chancery in the State of Delaware (the “Court”), and of a hearing to be held before the Court, in the courthouse at 38 The Green, Dover, Delaware 19901, on March 19, 2013 at 2:00 p.m. (the “Settlement Hearing”). The purpose of the Settlement Hearing is to determine: (a) whether the Court should certify the Class (defined herein) for purposes of the Settlement; (b) whether the Court should approve the proposed Settlement; (c) whether the Court should enter an Order and Final Judgment dismissing the claims asserted in the Action on the merits and with prejudice as against Plaintiffs and the Class and effectuating the releases described below; (d) whether the Court should grant the application of Plaintiffs’ Counsel for an award of attorneys’ fees and reimbursement of litigation expenses; and (e) such other matters as may properly come before the Court. If you are a member of the Class, this Notice will inform you of how, if you so choose, you may enter your appearance in the Action or object to the proposed Settlement and have your objection heard at the Settlement Hearing. THE FOLLOWING RECITATION DOES NOT CONSTITUTE FINDINGS OF THE COURT AND SHOULD NOT BE UNDERSTOOD AS AN EXPRESSION OF ANY OPINION OF THE COURT AS TO THE MERITS OF ANY CLAIMS OR DEFENSES BY ANY OF THE PARTIES. IT IS BASED ON STATEMENTS OF THE PARTIES AND IS SENT FOR THE SOLE PURPOSE OF INFORMING YOU OF THE EXISTENCE OF THIS ACTION AND OF A HEARING ON A PROPOSED SETTLEMENT SO THAT YOU MAY MAKE APPROPRIATE DECISIONS AS TO STEPS YOU MAY, OR MAY NOT, WISH TO TAKE IN RELATION TO THIS ACTION. Background and Description of the Action On July 12, 2010, Playboy announced that it had received a proposal from Hugh M. Hefner (“Mr. Hefner”) to acquire all of the outstanding shares of Playboy common stock not owned by Mr. Hefner for $5.50 per share in cash, and that Mr. Hefner intended to partner with Rizvi Traverse Management LLC (“Rizvi Traverse”) in connection with the proposal. Between July 13, 2010 and July 28, 2010, purported Playboy shareholders filed four putative class actions in the Court, all alleging, among other things, that Playboy’s board of directors and Mr. Hefner had breached their fiduciary duties in connection with Mr. Hefner’s proposal, and that Rizvi Traverse had aided and abetted those breaches of duty. The actions, and their respective filing dates, are as follows: Germershausen v. Hefner, et al., C.A. No. 5632-VCN, filed July 13, 2010 (“Germershausen”); Gottlieb v. Hefner, et al., C.A. No. 5654-VCN, filed July 21, 2010 (“Gottlieb”); DeVito v. Hefner, et al., C.A. No. 5661-VCN, filed July 22, 2010 (“DeVito”); and Glasser v. Playboy Enterprises Inc., et al., C.A. No. 5675-VCN, filed July 28, 2010 (“Glasser”). These actions shall collectively be referred to as the Delaware Actions. On July 15, 2010, Playboy filed its Answer and Affirmative Defenses to the Germershausen complaint. On July 15, 2010, Plaintiff Charles Germershausen filed his First Request for the Production of Documents Directed to All Defendants.

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On July 27, 2010, Playboy filed its Answer and Affirmative Defenses to the DeVito complaint and the Gottleib complaint. On July 29, 2010, the Playboy Defendants (Dennis S. Bookshester, David I. Chemerow, Charles Hirschhorn, Russ Pillar, and Playboy Enterprises, Inc.) filed their Answer and Affirmative Defenses to the Glasser complaint, and defendants Dennis Bookshester, David Chemerow, Scott Flanders, Charles Hirschhorn, Russ Pillar, Sol Rosenthal, and Kai-Shing Tao filed their Answer and Affirmative Defenses to the Germershausen complaint. On August 2, 2010, defendants Dennis S. Bookshester, David I. Chemerow, Scott N. Flanders, Charles Hirschhorn, Sol Rosenthal, and Kai-Shing Tao filed their Answer and Affirmative Defenses to the DeVito complaint and the Gottlieb complaint. On August 3, 2010, the Court ordered the Delaware Actions to be consolidated as In re Playboy Enterprises, Inc. Shareholders Litigation, Consol. C.A. No. 5632-VCN, appointed the law firms of Faruqi & Faruqi, LLP, Harold B. Obstfeld, P.C. and Wolf Popper, LLP as Plaintiffs’ Co-Lead Counsel and Rosenthal, Monhait & Goddess, P.A. as Delaware Liaison Counsel for Plaintiffs (collectively with Plaintiffs’ Co-Lead Counsel, “Plaintiffs’ Counsel”), and designated the Germershausen complaint as the operative complaint in the Action. On August 3, 2010, Playboy announced that its board of directors had formed a special committee (the “Special Committee”) composed of defendants Sol Rosenthal and Kai-Shing Tao (together, the “Special Committee Defendants”) to evaluate and determine the Company’s response to Mr. Hefner’s proposal to acquire Playboy’s outstanding common stock not owned by him. On August 4, 2010, defendant Rizvi Traverse filed its Motion to Dismiss. On August 5, 2010, defendant Hugh M. Hefner filed his Motion to Dismiss. On August 9, 2010, the Playboy Defendants served their Responses and Objections to Plaintiff’s First Request for the Production of Documents. On August 12, 2010, the Court granted the Stipulation and Order for the Production and Exchange of Confidential and Highly Confidential Information. On October 26, 2010, Judge Jane Johnson, of the Superior Court of the State of California, County of Los Angeles, granted Mr. Hefner’s motion to stay a putative class action, Brown v. Hefner, Case No. BC 431514 (“Brown”), in deference to the Action on the basis, among others, that the allegations in Brown are “‘inextricably intertwined’” with those in the Action. On January 10, 2011, Playboy announced that its board of directors had entered into a definitive merger agreement pursuant to which Icon Acquisition Holdings, L.P. (“Icon”), a limited partnership formed by Mr. Hefner and Rizvi Traverse, would conduct a tender offer for the outstanding shares of Playboy common stock not owned by Mr. Hefner and his affiliates for $6.15 per share (the “Tender Offer”). On January 24, 2011, Playboy filed a Solicitation/Recommendation Statement on Schedule 14D-9 (the “14D-9”) and a Rule 13d-3 Transaction Statement on Schedule 13E-3 (the “13E-3”) with the Securities and Exchange Commission (the “SEC”), and Icon and Icon Merger Sub, Inc. filed a combined Tender Offer Statement and Rule 13e-3 Transaction Statement filed under cover of Schedule TO (the “Schedule TO”) with the SEC. On February 4, 2011, a Verified Consolidated Amended Class Action Complaint was filed by the Plaintiffs. On February 4, 2011, Plaintiffs served Subpoenas Duces Tecum directed to Plainfield Asset Management LLC and Raine Securities LLC. On February 11, 2011, Playboy filed Amendment No. 2 to the 14D-9 (the “February 11 14D-9/A”) and Amendment No. 1 to the 13E-3 (the “February 11 13E-3/A”) with the SEC, and Icon and Icon Merger Sub, Inc. filed Amendment No. 2 to the Schedule TO (the “February 11 Schedule TO/A”) with the SEC. On February 23, 2011, Playboy filed Amendment No. 3 to the 14D-9 (the “February 23 14D-9/A”) with the SEC, and Icon and Icon Merger Sub, Inc. filed Amendment No. 3 to the Schedule TO (the “February 23 Schedule TO/A”) with the SEC.

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On March 3, 2011, the Tender Offer expired. As of the expiration of the Tender Offer, a total of 18,915,951 shares of Playboy Class A and Class B common stock had been tendered, representing approximately 84% of Playboy’s common stock, excluding Hefner’s shares. On March 4, 2012, the Tender Offer and related Merger (together the “Transaction”) closed. On June 10, 2011, Plaintiffs filed their Verified Consolidated Second Amended Class Action Complaint (the “Second Amended Complaint”). On June 15, 2011, the Playboy Defendants filed their Motion to Dismiss Plaintiffs’ Second Amended Complaint and Opening Brief in support thereof. On that same day, Defendant Richard S. Rosenzweig filed a Motion to Dismiss and Joinder to the Playboy Defendants’ Opening Brief; Defendant Scott N. Flanders filed a Motion to Dismiss Plaintiffs’ Second Amended Complaint and Opening Brief in support thereof; the Special Committee Defendants filed a Motion to Dismiss Plaintiffs’ Second Amended Complaint and Joinder to the Playboy Defendants’ Opening Brief; Defendant Rizvi Traverse filed a Motion to Dismiss Plaintiffs’ Second Amended Complaint and Opening Brief in support thereof; and Defendant Hugh M. Hefner filed a Motion to Dismiss Plaintiffs’ Second Amended Complaint and Opening Brief in support thereof. On September 12, 2011, Plaintiffs filed their Brief in Opposition to Defendants’ Motions to Dismiss the Verified Consolidated Second Amended Complaint. On October 10, 2011, the Playboy Defendants filed their Reply Brief in Support of their Motion to Dismiss the Second Amended Complaint. That same day, Defendant Scott N. Flanders filed his Reply Brief in Support of his Motion to Dismiss the Second Amended Complaint; Defendant Rizvi Traverse filed its Reply Brief in Support of its Motion to Dismiss the Second Amended Complaint; Defendant Richard S. Rosenzweig filed his Joinder to the Playboy Defendants’ Reply Brief; the Special Committee Defendants filed their Reply Brief in Support of their Motion to Dismiss the Second Amended Complaint; and defendant Hugh M. Hefner filed his Reply Brief in Support of his Motion to Dismiss the Second Amended Complaint. On February 14, 2012, the parties requested that the Court postpone the scheduling of argument on all dispositive motions, as well as the resolution of such motions, pending the outcome of mediation that the parties had agreed to engage in. On June 8, 2012, the parties to the Action engaged in a mediation session before former United States District Court Judge Layn Phillips, and as part of that mediation session, engaged in settlement discussions. The mediation session did not result in a definitive resolution of the Action. Following the mediation session and as a continuation of the mediation, the parties continued to engage in settlement discussions toward the goal of a negotiated resolution with the continued assistance of the mediator. After extensive discussions and arm’s-length negotiations, counsel to the parties in the Action reached an agreement-in-principle concerning the proposed settlement of the Action, which led to the execution of a memorandum of understanding (the “MOU”) on October 1, 2012. The MOU provided for an agreement in principle to settle the Action (the “Settlement”), subject to additional confirmatory discovery and approval of the Court, on the basis of the terms set forth therein. On October 1, 2012 the parties notified the Court regarding the MOU and of Plaintiffs’ intention to conduct confirmatory discovery relating to the proposed Settlement. Following the execution of the MOU, and as contemplated therein, Plaintiffs’ Counsel conducted a further investigation of the facts and circumstances underlying the claims asserted in the Action, which included, among other things, conducting the depositions of Special Committee Defendant Sol Rosenthal, defendant Scott Flanders of Playboy and Jason Shretter of Raine Securities LLC, financial advisor to the Special Committee. During discovery, defendants in the Action produced over 88,000 pages of documents. On the basis of information available to them, including publicly available information, the additional confirmatory discovery described herein, and consultations with an independent financial advisor retained by Lead Counsel, Plaintiffs, in consultation with Lead Counsel, have determined that the Settlement described herein is fair, reasonable, adequate, and in the best interests of the Plaintiffs and the Class. Plaintiffs in the Action represent to have owned shares of Playboy common stock during the relevant time period and that they are members of the Class (defined below), for which proof of ownership was provided to Defendants’ counsel.

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On January 7, 2013, the Court entered a scheduling order providing for, among other things, the scheduling of the Settlement Hearing; the temporary certification, for settlement purposes only, of a non-opt out class consisting of any and all record and beneficial holders of non-opt out class pursuant to Delaware Court of Chancery Rules 23(a), 23(b)(1) and (b)(2), defined as any and all record and beneficial holders of Playboy common stock, their respective successors in interest, successors, predecessors in interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any person or entity acting for or on behalf of, or claiming under, any of them, and each of them, together with their predecessors and successors and assigns, who held shares of Playboy common stock at any time between and including July 12, 2010 and March 4, 2011, except for Excluded Stockholders (defined below); a stay of the Action pending a hearing on the proposed Settlement; and an injunction against the commencement or prosecution of any action by any member of the Class asserting any of the claims subject to the Settlement of the Action. Reasons for the Settlement On the basis of information available to them, including publicly available information, the additional confirmatory discovery described herein, and consultations with an independent financial advisor retained by Lead Counsel, Plaintiffs, in consultation with Lead Counsel, have determined that the Settlement described herein is fair, reasonable, adequate, and in the best interests of the Plaintiffs and the Class. The Defendants have all denied, and continue to deny, that they have committed or aided and abetted the commission of any violation of law or engaged in any of the wrongful acts alleged in the Action, and expressly maintain that they diligently and scrupulously complied with their fiduciary and other legal duties and they are entering into this Settlement solely to eliminate the burden and expense of further litigation. In connection with settlement discussions and negotiations leading to this proposed Settlement, counsel for the parties in the Action did not discuss the amount of any application by counsel for the Plaintiffs for an award of attorneys’ fees and expenses until the substantive terms of the Settlement on behalf, and for the benefit, of the Class were negotiated at arm’s-length and agreed upon. The parties wish to settle and resolve the claims asserted by Plaintiffs and all claims relating to, or arising out of, the Transaction, and the parties have, following arm’s-length negotiations, reached an agreement set forth in a Stipulation of Settlement dated December 19, 2012 (the "Stipulation), providing for the settlement of the Action on the terms and subject to the conditions set forth therein and subject to the approval of the Court, and the parties believe the Settlement is in the best interests of the parties and the Class. Settlement Terms As a result of, among other things, the prosecution of the Action and discussions between and among the parties, it is agreed that in consideration for the full and final settlement and release of all Settled Claims (as defined below) the parties to the Action have agreed that: (a) a payment will be made by or on behalf of Defendants, directly or through their insurers, in the amount of $5.25 million (the “Settlement Payment”), to be distributed on a pro rata basis to holders of shares of Playboy Class A and Class B common stock (“Playboy shares”) as of the close of business on March 3, 2011 (the “Record Date”), subject to the limitations on Excluded Stockholders (defined below); and (b) Playboy included additional disclosures in the February 11 14D-9/A, the February 11 13E-3/A, the February 11 Schedule TO/A, the February 23 14D-9/A, and the February 23 Schedule TO/A (the “Supplemental Disclosures”), which can be found at www.gcginc.com/cases/PlayboyEnterprises. “Excluded Stockholders” shall consist of Defendants and their immediate family members, heirs and assigns, and any entities they control. Excluded Stockholders shall have no claim to and shall not receive any of the Settlement Payment, in whole or in part. The Excluded Stockholders relinquish any right to receive any part of the Settlement Payment, or any additional amount based on any claim relating to the fact that the Settlement Payment is being received by any other stockholder, in each case under any theory, including but not limited to contract, application of statutory or judicial law, or equity. The Settlement Payment shall not be paid until (a) the Court has finally certified the Class; (b) Final Approval (defined as the later of (i) the expiration of the time for the appeal of the Court’s entry of the Final Order and Judgment without an appeal being taken or (ii) the resolution of any such appeal which does not result in a reversal of the Court’s entry of the Final Judgment) of the Settlement has occurred; and (c) the Court has approved a complete release of all Released Parties (defined below), in the form customarily approved by the Court in connection with settlements of this type.

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Without admitting any wrongdoing, (i) Defendants acknowledge that the filing and prosecution of the Action and discussions with Plaintiffs’ counsel were a substantial and contributing cause of their decision to agree to the Settlement Payment; and (ii) Playboy acknowledges that the filing and prosecution of the Action and discussions with Plaintiffs’ counsel were a substantial and contributing cause of Playboy making the Supplemental Disclosures. The Settlement Hearing The Settlement Hearing shall be held on March 19, 2013 at 2:00 p.m. in the courthouse at 38 The Green, Dover, Delaware 19901 to: (a) determine whether the temporary class action certification should be made final; (b) determine whether the Settlement should be approved by the Court as fair, reasonable, adequate and in the best interests of the Class; (c) determine whether an Order and Final Judgment should be entered pursuant to the Stipulation; (d) consider Lead Counsel’s application for an award of attorneys’ fees and expenses; and (e) rule on such other matters as the Court may deem appropriate. The Court reserves the right to adjourn the Settlement Hearing or any adjournment thereof, including the consideration of the application for attorneys’ fees, without further notice of any kind other than oral announcement at the Settlement Hearing or any adjournment thereof. The Court reserves the right to approve the Settlement at or after the Settlement Hearing with such modification(s) as may be consented to by the Parties to the Stipulation and without further notice to the Class. Right To Appear and Object Any member of the Class who objects to the Settlement, the Order and Final Judgment to be entered in the Action, and/or Lead Counsel’s application for attorneys’ fees, or who otherwise wishes to be heard, may appear in person or by his attorney at the Settlement Hearing and present evidence or argument that may be proper and relevant; provided, however, that, except for good cause shown, no person shall be heard and no papers, briefs, pleadings or other documents submitted by any person shall be considered by the Court unless not later than ten (10) business days prior to the Settlement Hearing such person files with the Court and serves upon counsel listed below: (a) a written notice of intention to appear; (b) a statement of such person’s objections to any matters before the Court; and (c) the grounds for such objections and the reasons that such person desires to appear and be heard, documentation evidencing membership in the Class, as well as all documents or writings such person desires the Court to consider. Such filings shall be served upon the following counsel: ROSENTHAL, MONHAIT & GODDESS, P.A. Carmella P. Keener 919 N. Market Street, Suite 1401 Citizens Bank Center P.O. Box 1070 Wilmington, DE 19899-1070 (302) 656-4433

FARUQI & FARUQI Shane Rowley 369 Lexington Avenue, 10th Floor New York, NY 10017-6531 (212) 983-9330

Delaware Liaison Counsel for Plaintiffs

Plaintiffs’ Co-Lead Counsel

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Edward P. Welch One Rodney Square P.O. Box 636 Wilmington, DE 19899-0636 (302) 651-3000

MORRIS, NICHOLS, ARSHT & TUNNELL LLP S. Mark Hurd 1201 N. Market Shtreet P.O. Box 1347 Wilmington, DE 19899-1347 (302) 658-9200

Attorneys for Defendants Playboy Enterprises, Inc., Dennis S. Bookshester, David I. Chemerow, Russ Pillar and Charles Hirschhorn

Attorneys for Defendants Sol Attorneys for Defendant Attorneys for Defendant Rosenthal and Kai-Shing Richard S. Rosenzweig Hugh M. Hefner Tao

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WOLF POPPER LLP Chet B. Waldman Matthew Insley-Pruitt 845 Third Avenue New York, NY 10022 (212) 759-4600

HAROLD B. OBSTFELD, P.C. Harold B. Obstfeld th 100 Park Avenue, 20 Floor New York, NY 10017 (212) 696-1212

RICHARDS LAYTON & FINGER, P.A. Gregory P. Williams 920 North King Street Wilmington, DE 19801 (302) 651-7700

YOUNG CONAWAY STARGATT & TAYLOR, LLP Bruce L. Silverstein Rodney Square 1000 North King Street Wilmington, DE 19801 (302) 571-6600

POTTER ANDERSON & CORROON LLP Brian C. Ralston th Hercules Plaza – 6 Floor 1313 N. Market Street P.O. Box 951 Wilmington, DE 19899 (302) 984-6000

PROCTOR HEYMAN LLP Patricia L. Enerio 300 Delaware Avenue, Suite 200 Wilmington, DE 19801 (302) 472-7300

Attorneys for Defendant Rizvi Traverse Management LLC

Attorneys for Defendant Scott N. Flanders

and then filed with the Register in Chancery. Unless the Court otherwise directs, no person shall be entitled to object to the approval of the Settlement, any judgment entered thereon, the adequacy of the representation of the Class by Plaintiffs and their Lead Counsel, any award of attorneys’ fees, or otherwise be heard, except by serving and filing a written objection and supporting papers and documents as prescribed above. Any person who fails to object in the manner described above shall be deemed to have waived the right to object (including any right of appeal) and shall be forever barred from raising such objection in this or any other action or proceeding. Any member of the Class who does not object to the Settlement or the request by Plaintiffs’ Lead Counsel for an award of attorneys’ fees and expenses (described below) or to any other matter stated above need not do anything. The Final Order and Judgment If the Court determines that the Settlement, as provided for in the Stipulation, is fair, reasonable, adequate and in the best interests of the Class, the parties to the Action will ask the Court to enter the Order and Final Judgment, which will, among other things: a. approve the Settlement as fair, reasonable, adequate and in the best interests of the Class and direct consummation of the Settlement in accordance with its terms and conditions; b. permanently certify the Class as a non-opt out class pursuant to Delaware Court of Chancery Rules 23(a), 23(b)(1) and (b)(2) and designate Plaintiffs in the Action as the class representatives with Plaintiffs’ Lead Counsel as class counsel; c.

determine that the requirements of the rules of the Court and due process have been satisfied in connection with this Notice;

d. dismiss the Action with prejudice on the merits and grant the releases more fully described below in accordance with the terms and conditions of the Stipulation; e. permanently bar and enjoin Plaintiffs and all members of the Class from instituting, commencing or prosecuting any of the Released Claims against any of the Released Parties (as defined below); and f.

award attorneys’ fees and expenses to Plaintiffs’ Lead Counsel. Releases

The Stipulation provides that upon Final Approval of the Settlement and in consideration of the benefits provided by the Settlement: (a) The Court's Final Order and Judgment shall, among other things, provide for the full and complete dismissal of the Action with prejudice, and the settlement and release of, and a permanent injunction barring, any claims, demands, rights, actions, causes of action, liabilities, damages, losses, obligations, judgments, duties, suits, costs, expenses, matters and issues known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, liquidated or unliquidated, matured or unmatured, accrued or unaccrued, apparent or unapparent, that have been, could have been, or in the future can or might be asserted in any court, tribunal or proceeding, (including but not limited to any claims arising under federal, state, foreign or common law, including the federal securities laws and any state disclosure law), by or on behalf of Plaintiffs or any member of the class, whether individual, direct, class, derivative, representative, legal, equitable, or any other type or in any other capacity 6

(collectively, the “Releasing Persons”) against Playboy, Dennis S. Bookshester, David I. Chemerow, Scott N. Flanders, Charles Hirschhorn, Sol Rosenthal, Richard S. Rosenzweig, Kai-Shing Tao, Russ Pillar, Hugh M. Hefner, and Rizvi Traverse (collectively “Defendants”), individually and as officers or directors of Playboy, including but not limited to the Special Committee, or any of their families, parent entities, controlling persons, associates, affiliates or subsidiaries and each and all of their respective past or present officers, members, managers, directors, stockholders, principals, representatives, employees, attorneys, financial or investment advisors, insurers, consultants, accountants, investment bankers, commercial bankers, entities providing fairness opinions, advisors or agents, heirs, executors, trustees, general or limited partners or partnerships, limited liability companies, members, joint ventures, personal or legal representatives, estates, administrators, predecessors, successors or assigns (the “Released Persons”) which the Releasing Persons ever had, now have, or may have had by reason of, arising out of, relating to, or in connection with the acts, events, facts, matters, transactions, occurrences, statements, representations, misrepresentations or omissions or any other matter whatsoever set forth in or otherwise related, directly or indirectly, to the allegations in the Action, the Merger Agreement, the Tender Offer, 14D-9, the Schedule TO, the 13E-3, the February 11 14D-9/A, the February 11 13E-3/A, the February 11 Schedule TO/A, the February 23 14D-9/A, the February 23 Schedule TO/A, the March 4, 2011 Merger, and the transactions contemplated therein, or disclosures made in connection therewith (including the adequacy and completeness of such disclosures), or related in any manner, directly or indirectly, to any decision not to engage in any alternative transaction, or to decline to negotiate concerning any potential transaction with any potential buyer or investor with respect to the Company (collectively, the “Settled Claims”); provided, however that the Settled Claims shall not include any claims to enforce the Settlement or any claims properly asserted by Playboy stockholders for a statutory appraisal under Section 262 of the Delaware General Corporation Law. (b) Plaintiffs acknowledge, and the members of the Class by operation of law shall be deemed to have acknowledged, that they may discover facts in addition to or different from those now known or believed to be true by them with respect to the Settled Claims, but that it is the intention of Plaintiffs, and by operation of law the intention of the members of the Class, to completely, fully, finally and forever compromise, settle, release, discharge, extinguish, and dismiss any and all Settled Claims, known or unknown, suspected or unsuspected, contingent or absolute, accrued or unaccrued, apparent or unapparent, which now exist, or heretofore existed, or may hereafter exist, and without regard to the subsequent discovery of additional or different facts. Plaintiffs acknowledge, and the members of the Class by operation of law shall be deemed to have acknowledged, that “Unknown Claims” are expressly included in the definition of “Settled Claims,” and that such inclusion was expressly bargained for and was a key element of the Settlement and was relied upon by each and all of the Released Persons in entering into this Stipulation. “Unknown Claims” means any claim that Plaintiffs or any member of the Class does not know or suspect exists in his, her or its favor at the time of the release of the Settled Claims as against the Released Persons, including without limitation those which, if known, might have affected the decision to enter into the Settlement. With respect to any of the Settled Claims, the parties stipulate and agree that upon Final Approval of the Settlement, Plaintiffs shall expressly and each member of the Class shall be deemed to have, and by operation of the Final Order and Judgment by the Court shall have, expressly waived, relinquished and released any and all provisions, rights and benefits conferred by or under Cal. Civ. Code § 1542 or any law of the United States or any state of the United States or territory of the United States, or principle of common law, which is similar, comparable or equivalent to Cal. Civ. Code § 1542, which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. Plaintiffs acknowledge, and the members of the Class shall be deemed by operation of the entry of a Final Order and Judgment approving the Settlement to have acknowledged, that the foregoing waiver was separately bargained for, is an integral element of the Settlement, and was relied upon by each and all of the Defendants in entering into the Settlement. Application for Attorneys’ Fees and Expenses Plaintiffs’ Counsel intend to apply for an award of attorneys' fees in an amount not to exceed 25% of the gross Settlement Payment, as well as seek no more than $125,000 in reimbursement of their out-of-pocket expenses, subject to the Court’s approval. Defendants reserve the right to oppose the amount of such request, but acknowledge that Plaintiffs’ counsel are entitled to seek an award of attorneys’ fees and expenses in connection with the Settlement, subject to the Court’s approval. Plaintiffs’ Counsel agree not to seek an award of fees or expenses other than out of the Settlement Payment and/or in any other court in connection with the Action and the Settlement. However, in the event that the Settlement is not approved, Plaintiffs’ Counsel may nevertheless submit an application for fees and expenses in connection with the Supplemental Disclosures. Defendants reserve the right to oppose any such application. Any failure 7

of the Court to approve a request for attorneys’ fees and expenses in whole or in part shall not affect the remainder of the Settlement. Plaintiffs will be entitled to no fees or expenses from the Settlement in the absence of Final Approval by the Court of the Settlement. Notice to Persons or Entities That Held Ownership on Behalf of Others Brokerage firms, banks and/or other persons or entities who held shares of the common stock of Playboy during the period from and including July 12, 2010 and March 4, 2011, for the benefit of others are requested to promptly send this Notice to all of their respective beneficial owners. If additional copies of the Notice are needed for forwarding to such beneficial owners, any requests for such copies may be made to: In re Playboy Enterprises, Inc. Shareholders Litigation c/o GCG PO Box 9961 Dublin, Ohio 43017-5961 Scope of this Notice and Additional Information The foregoing description of the Settlement Hearing, the Action, the terms of the proposed Settlement and other matters described herein do not purport to be comprehensive. Accordingly, members of the Class are referred to the documents filed with the Court in the Action. PLEASE DO NOT WRITE OR CALL THE COURT. Inquiries or comments about the Settlement may be directed to the attention of Plaintiffs’ Counsel as follows: ROSENTHAL, MONHAIT & GODDESS, P.A. Carmella P. Keener 919 N. Market Street, Suite 1401 Citizens Bank Center P.O. Box 1070 Wilmington, DE 19899-1070 (302) 656-4433

FARUQI & FARUQI Shane Rowley 369 Lexington Avenue, 10th Floor New York, NY 10017-6531 (212) 983-9330

Delaware Liaison Counsel for Plaintiffs

Plaintiffs’ Co-Lead Counsel

WOLF POPPER LLP Chet B. Waldman Matthew Insley-Pruitt 845 Third Avenue New York, NY 10022 (212) 759-4600

HAROLD B. OBSTFELD, P.C. Harold B. Obstfeld th 100 Park Avenue, 20 Floor New York, NY 10017 (212) 696-1212

Dated: January 7, 2013 BY ORDER OF THE COURT /s/

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