Delaware		36-4249478
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

Proposed Maximum

Proposed Maximum

Title of Each Class of

Amount to be

Offering Price

Aggregate

Amount of

Securities to be Registered

Registered

Per Unit

Offering Price

Registration Fee

3.00% Convertible Senior Subordinated Notes due 2025

$115,000,000(1)

100%(2)

$115,000,000(1)(2)

$13,535.50

Class B Common Stock, par value $0.01

8,785,333 shares(3)

—

—

—(4)

(1)	Equals the aggregate principal amount of the notes being registered.
(2)	Estimated solely for the purpose of calculating the amount of the registration fee, pursuant to Rule 457(o) of the Securities Act of 1933, as amended (the “Securities Act”).
(3)	Represents the maximum number of shares of Class B common stock issuable upon conversion of the notes registered hereby at a conversion rate, corresponding to the Maximum Conversion Rate (as defined in the indenture governing the notes), of 76.3942 shares of Class B common stock for each $1,000 principal amount of notes. Pursuant to Rule 416 under the Securities Act, this registration statement is deemed to cover such indeterminate number of additional shares of Class B common stock as may be issued from time to time upon conversion of the notes as a result of the anti-dilution provisions contained therein.
(4)	No additional consideration will be received for the shares of Class B common stock issuable upon conversion of the notes, and, therefore, no registration fee is required, pursuant to Rule 457(i) under the Securities Act.

---

 

The information in this prospectus is not complete and may be changed. The selling securityholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS		SUBJECT TO COMPLETION		JUNE 10, 2005

†	This prospectus relates to the resale by various selling securityholders of $115,000,000 aggregate principal amount of our 3.00% convertible senior subordinated notes due 2025 and shares of our Class B common stock into which the notes are convertible. We will not receive any of the proceeds from the sale of the notes or the shares of our Class B common stock by the selling securityholders.
†	The notes and the shares of our Class B common stock may be sold by the selling securityholders in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale or at negotiated prices. The timing and amount of any sale are within the sole discretion of the selling securityholders. In addition, the shares of our Class B common stock may be offered from time to time through ordinary brokerage transactions on the New York Stock Exchange or the Pacific Exchange. See “Plan of distribution.”
†	Our Class B common stock is listed on the New York Stock Exchange and the Pacific Exchange under the symbol “PLA.” On June 9, 2005, the last reported sale price of our Class B common stock on the New York Stock Exchange was $12.65.
†	The notes are not listed on any national securities exchange or on the Nasdaq Stock Market.

---

 

Summary			1
Risk factors			8
Forward-looking statements			25
Use of proceeds			27
Price range of our Class B common stock; dividend policy			28
Ratio of earnings to fixed charges			29
Description of notes			30
Description of certain other indebtedness and preferred stock obligations			66
Description of capital stock			69
Certain US federal tax considerations			73
Selling securityholders			80
Plan of distribution			84
Where you can find additional information			87
Incorporation of certain documents by reference			87
Legal matters			88
Experts			88

---

 

---

 

Issuer		Playboy Enterprises, Inc.
Notes		3.00% convertible senior subordinated notes due 2025
Maturity		March 15, 2025
Interest		The notes bear interest at a rate of 3.00% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2005, to holders of record at the close of business on the preceding March 1 and September 1, respectively. Interest accrues on the notes from and including March 15, 2005 or from and including (i) the last date in respect of which interest has been paid or provided for, as the case may be, to, but excluding, (ii) the next interest payment date or maturity date, as the case may be.
Contingent interest		We will pay contingent interest to the holders of notes during any six-month period (i) from March 15 to and including September 14 and (ii) from September 15 to and including March 14, commencing with the six-month period beginning March 15, 2012, if the average trading price of the notes during the five consecutive trading days preceding the third trading day before the first day of the applicable six-month period equals at least 120% of the principal amount of the notes. The amount of contingent interest payable per $1,000 principal amount of notes in respect of any six-month period will be equal to a per annum rate of 0.25% of the average trading price of the notes during the applicable five consecutive day trading period described above.
Ranking		The notes are the issuer’s unsecured senior subordinated obligations and rank junior to all of the issuer’s senior debt, including its guarantee of borrowings by its subsidiary PEI Holdings, Inc., or Holdings, under Holdings’ credit facility, equally with all of the issuer’s future senior subordinated debt and senior to all of the issuer’s future subordinated debt. In the event that the issuer’s secured creditors, including the lenders under the credit facility, exercise their rights with respect to the issuer’s pledged assets, those secured creditors would be entitled to be repaid in full from the proceeds from the sale of those assets before the proceeds would be available for distribution to the issuer’s other creditors, including the holders of the notes. In addition, the assets of the issuer’s subsidiaries are subject to the prior claims of all creditors, including trade creditors, of those subsidiaries. The assets of the issuer and substantially all of its US subsidiaries, other than Playboy.com, Inc. and its subsidiaries, are currently pledged to secure obligations under Holdings’ credit facility.
Conversion rights		The notes are convertible into cash and, if applicable, shares of our Class B common stock based on an initial conversion rate, subject to adjustment, of 58.7648 shares per $1,000 principal amount of notes (which represents an initial conver-

---

 

	sion price of approximately $17.02 per share), under certain circumstances and to the following extent:

		† during any fiscal quarter after the fiscal quarter ending March 31, 2005, if the closing sale price of our Class B common stock for each of 20 or more consecutive trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter exceeds 130% of the conversion price in effect on that trading day;
		† during the five business day period after any five consecutive trading day period (the “note measurement period”) in which the average trading price per $1000 principal amount of notes over that five consecutive trading day period was equal to or less than 95% of the average conversion value of the notes during the note measurement period;
		† if certain fundamental changes occur, as described in this prospectus; or
		† if we call the notes for redemption.
		Upon conversion, holders of notes will receive cash and, if applicable, shares of our Class B common stock. The aggregate value (the “conversion value”) of the cash and, if applicable, shares of our Class B common stock per $1,000 principal amount of notes will be equal to the product of:
		† the conversion rate then in effect; and
		† the average of the daily volume-weighted average price per share of our Class B common stock for each of the ten consecutive trading days beginning on the second trading day immediately following the day the notes are tendered for conversion (the “ten-day weighted average price”).
		Except as described in this prospectus, we will deliver the conversion value of the notes surrendered for conversion to converting holders as follows:
		† a cash amount (the “principal return”) equal to the lesser of:
		† the aggregate conversion value of the notes to be converted; and
		† the aggregate principal amount of the notes to be converted;
		† if the aggregate conversion value of the notes to be converted is greater than the principal return, an amount in whole shares (the “net shares”), determined as set forth in this prospectus equal to the aggregate conversion value less the principal return (the “net share amount”); and
		† a cash amount in lieu of any fractional shares of our Class B common stock.

---

 

		If notes are surrendered for conversion in connection with certain fundamental changes that occur before March 15, 2012, holders may be entitled to an increase in the conversion rate, or, under certain circumstances, we may elect to change our conversion obligation to provide for conversion of the notes into shares of an acquiring company’s common stock, as described in this prospectus.
		See “Description of notes— Conversion rights.”
Sinking fund		None
Redemption of notes at our option		On or after March 15, 2010, if the closing sale price of our Class B common stock for each of 20 or more consecutive trading days in a period of 30 consecutive trading days exceeds 120% of the conversion price in effect on the 30th day before the mailing of the redemption notice, we may redeem the notes at our option at a redemption price in cash equal to 100% of the principal amount of the notes we redeem, plus any accrued and unpaid interest to, but excluding, the redemption date.
		On or after March 15, 2012, we may from time to time redeem the notes at our option, in whole or in part, at a redemption price in cash equal to 100% of the principal amount of the notes we redeem, plus any accrued and unpaid interest to, but excluding, the redemption date.
		See “Description of notes— Redemption of notes at our option.”
Purchase of notes by us at the option of the holder		On each of March 15, 2012, March 15, 2015 and March 15, 2020, holders may require us to purchase all or a portion of their notes at a purchase price in cash equal to 100% of the principal amount of the notes to be purchased, plus any accrued and unpaid interest to, but excluding, the purchase date. See “Description of notes— Purchase of notes by us at the option of the holder.”
Right of a holder to require us to repurchase notes upon a fundamental change		Holders may require us to repurchase all or a portion of their notes if a fundamental change occurs, as described in this prospectus, at a repurchase price in cash equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date.
		If certain fundamental changes occur before March 15, 2012, holders may be entitled to an increase in the conversion rate, or, under certain circumstances, we may elect to change our conversion obligation to provide for conversion of the notes into shares of an acquiring company’s common stock, as described in this prospectus.

---

 

		See “Description of notes— Holders may require us to repurchase their notes upon a fundamental change.”
Events of default		See “Description of notes— Events of default.”
Registration rights		Within 90 days of the date on which we issued the notes, we agreed to file a shelf registration statement for resales of the notes and the shares of our Class B common stock issuable upon conversion of the notes, and we will use our commercially reasonable efforts to cause such registration statement to become effective under the Securities Act of 1933, or the Securities Act, within 210 days after the date on which we first issued the notes.
		This prospectus is part of the shelf registration statement we agreed to file.
Use of proceeds		We will not receive any proceeds from the sale by selling securityholders of the notes or any shares of our Class B common stock issued upon conversion of the notes.
DTC eligibility		The notes are issued in book-entry-only form and are represented by one or more global certificates, without interest coupons, deposited with, or on behalf of, The Depository Trust Company, or DTC, and registered in the name of a nominee of DTC. Beneficial interests in the notes will be shown on, and transfers will be effected only through, records maintained by DTC and its direct and indirect participants. Except in limited circumstances, holders may not exchange interests in their notes for certificated securities. See “Description of notes— Form, denomination and registration of notes.”
Listing and trading		In connection with our issuance of the notes in March 2005, the notes were made eligible to be traded in the PORTAL® Market of the National Association of Securities Dealers, Inc. Any notes sold under this prospectus, however, will no longer be eligible for trading in the PORTAL® Market. The notes are not listed on any national securities exchange or on the Nasdaq Stock Market. Our Class B (non-voting) common stock trades on the New York Stock Exchange and the Pacific Exchange under the symbol “PLA” and our Class A (voting) common stock trades on the New York Stock Exchange and the Pacific Exchange under the symbol “PLAA.”
Trustee		LaSalle Bank National Association
Certain US federal tax considerations		We and each holder of the notes agree in the indenture to treat the notes, for US federal income tax purposes, as “contingent payment debt instruments” and to be bound by our application of the US Treasury regulations that govern contingent payment debt instruments. Under these regulations, even if we do not pay any contingent interest on the notes, a US holder (as defined below under “Certain US federal tax considerations”) of a note will be required to include interest in its gross income at a rate of 7.75%, compounded semi-annually, regardless of whether such owner uses the cash or

---

 

		accrual method of tax accounting. Accordingly, each US holder will recognize taxable income significantly in excess of cash received on the notes while they are outstanding. In addition, any gain recognized by a holder on the sale, exchange, repurchase, redemption, retirement or conversion of a note generally will be ordinary interest income; any loss generally will be ordinary loss to the extent of the interest previously included in income by the holder and, thereafter, capital loss. The proper US federal income tax treatment of contingent payment debt instruments is uncertain in some respects, and the agreed upon treatment of the notes could be challenged by the Internal Revenue Service. Prospective holders are urged to consult their tax advisors as to the US federal, state, local or other tax consequences of acquiring, owning and disposing of the notes and any Class B common stock received upon conversion of the notes. See “Certain US federal tax considerations.”
Risk factors		In analyzing an investment in the notes or the shares of our Class B common stock offered by the selling securityholders pursuant to this prospectus, you should carefully consider, along with other matters included or incorporated by reference in this prospectus, the information set forth under “Risk factors.”

---

 

						Year ended December 31,
		Quarter ended
		March 31, 2005				2004				2003				2002				2001				2000
Ratio of earnings to fixed charges			—				1.76x				0.96x				0.68x				—				—

		Quarter ended				Year ended
		March 31, 2005				December 31, 2004
Pro forma ratio of earnings to fixed charges			—				2.67x

---

 

---

 

†	we or the satellite owner is indicted or otherwise charged as a defendant in a criminal proceeding;
†	the FCC issues an order initiating a proceeding to revoke the satellite owner’s authorization to operate the satellite;
†	the satellite owner is ordered by a court or governmental authority to deny us access to the transponder;
†	we are deemed by a governmental authority to have violated any obscenity law; or
†	our satellite transponder providers fail to provide the required services.
†	In addition to the above, the access of Playboy TV, Spice and our other networks to transponders may be restricted or denied if a governmental authority commences an investigation or makes an adverse finding concerning the content of their transmissions. Technical failures may also affect our satellite transponder providers’ ability to deliver transmission services.

†	adverse political, regulatory, legislative and economic conditions in various jurisdictions;
†	costs of complying with varying governmental regulations;
†	fluctuations in currency exchange rates;
†	difficulties in developing, acquiring or licensing programming and products that appeal to a variety of different audiences and cultures;
†	scarcity of attractive licensing and joint venture partners;
†	the potential need for opening and managing distribution centers abroad; and
†	difficulties in protecting intellectual property rights in foreign countries.

---

 

†	inadequate Internet infrastructure;
†	unwillingness of customers to shift their purchasing to on-line vendors;
†	security and privacy concerns;
†	the lack of compelling content;
†	problems relating to the development of the required technology infrastructure; and
†	insufficient availability of cost-effective, high-speed service.

---

 

---

 

†	our ability to maintain a large, demographically attractive subscriber base for Playboy magazine and Playboy.com;
†	our ability to offer attractive advertising rates;
†	our ability to attract advertisers and sponsors; and
†	our ability to provide effective advertising delivery and measurement systems.

---

 

---

 

†	defamation;
†	invasion of privacy;
†	negligence;
†	copyright or trademark infringement; and
†	other claims based on the nature and content of the materials distributed.

---

 

†	unforeseen operating difficulties and expenditures arising from the process of integrating any acquired business, product or technology, including the related personnel;
†	diversion of a significant amount of management’s attention from the ongoing development of our business;
†	dilution of existing stockholders’ ownership interest in us;
†	incurrence of additional debt;
†	exposure to additional operational risk and liability, including risks arising from the operating history of any acquired businesses.
†	entry into markets and geographic areas where we have limited or no experience;
†	loss of key employees of any acquired companies;
†	adverse effects on our relationships with suppliers and customers; and
†	adverse effects on the existing relationships of any acquired companies, including suppliers and customers.

---

 

†	we may be unable to obtain additional financing for working capital, capital expenditures, acquisitions and general corporate purposes;
†	debt-service requirements could reduce the amount of cash we have available for other purposes;
†	we could be disadvantaged as compared to our competitors, such as in our ability to adjust to changing market conditions;
†	we may be restricted in our ability to make strategic acquisitions and to exploit business opportunities; and
†	we may not be able to satisfy our repurchase or conversion obligations with respect to the notes.

†	to seek additional financing in the debt or equity markets;
†	to refinance or restructure all or a portion of our debt, including the notes; and/or
†	to sell assets.

†	incur or guarantee additional indebtedness;
†	pay dividends or make other distributions on capital stock;
†	repurchase capital stock;
†	make loans and investments;

---

 

†	enter into agreements restricting the ability of the subsidiaries of Playboy Enterprises, Inc. to pay dividends;
†	create liens;
†	sell or otherwise dispose of assets;
†	enter new lines of business;
†	merge or consolidate with other entities; and
†	engage in transactions with affiliates.

†	minimum net worth;
†	minimum interest coverage ratio; and
†	limitation on capital expenditures.

---

 

---

 

---

 

†	the fundamental change occurs on or after March 15, 2012;
†	the applicable price is greater than $55.00 or less than $13.09 per share of our Class B common stock (in each case, subject to adjustment); or
†	we elect, in the case of a “public acquirer fundamental change”, to change the conversion right in lieu of increasing the conversion rate.

†	result in holders receiving no shares upon conversion or fewer shares relative to the conversion value of the notes;
†	reduce our liquidity;
†	delay holders’ receipt of the proceeds upon conversion; and
†	subject holders to market risk before receiving any shares upon conversion.

---

 

†	require us to maintain any financial ratios or specific levels of net worth, revenues, income, cash flows or liquidity;
†	limit our subsidiaries’ ability to incur debt, including secured debt;
†	limit our ability to incur debt, including secured debt, and any debt that is equal or senior in right of payment;
†	restrict our subsidiaries’ ability to issue securities that would be senior to their common stock;
†	restrict our subsidiaries’ ability to agree to limitations on dividend payments by them;
†	restrict our ability to repurchase our securities;
†	restrict our ability or the ability of our subsidiaries to pledge assets; or
†	restrict our ability to make investments or to pay dividends or make other payments in respect of our common stock or other securities ranking junior to the notes.

---

 

---

 

†	actual or anticipated fluctuations in our operating results;
†	changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;
†	the operating and stock performance of our competitors;
†	announcements by us or our competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
†	changes in interest rates;
†	general domestic or international economic, market and political conditions;
†	additions or departures of key personnel; and
†	future sales of our equity or convertible securities.

---

 

---

 

†	foreign, national, state and local government regulation, actions or initiatives, including:

	†	attempts to limit or otherwise regulate the sale, distribution or transmission of adult-oriented materials, including print, television, video and online materials,
	†	limitations on the advertisement of tobacco, alcohol and other products which are important sources of advertising revenue for us, or
	†	substantive changes in postal regulations or rates which could increase our postage and distribution costs;

†	risks associated with our foreign operations, including market acceptance and demand for our products and the products of our licensees;
†	our ability to manage the risk associated with our exposure to foreign currency exchange rate fluctuations;
†	changes in general economic conditions, consumer spending habits, viewing patterns, fashion trends or the retail sales environment which, in each case, could reduce demand for our programming and products and impact our advertising revenues;
†	our ability to protect our trademarks, copyrights and other intellectual property;
†	risks as a distributor of media content, including our becoming subject to claims for defamation, invasion of privacy, negligence, copyright, patent or trademark infringement, and other claims based on the nature and content of the materials we distribute;
†	the risk our outstanding litigation could result in settlements or judgments which are material to us;
†	dilution from any potential issuance of common or convertible preferred stock or convertible debt in connection with financings or acquisition activities;
†	competition for advertisers from other publications, media or online providers or any decrease in spending by advertisers, either generally or with respect to the adult male market;
†	competition in the television, men’s magazine, Internet and product licensing markets;
†	attempts by consumers or private advocacy groups to exclude our programming or other products from distribution;
†	our television and Internet businesses’ reliance on third parties for technology and distribution, and any changes in that technology and/or unforeseen delays in its implementation which might affect our plans and assumptions;
†	risks associated with losing access to transponders and competition for transponders and channel space;
†	the impact of industry consolidation, any decline in our access to, and acceptance by, DTH and/or cable systems and the possible resulting deterioration in the terms, cancellation of fee arrangements or pressure on margin splits with operators of these systems;

---

 

†	risks that we may not realize the expected increased sales and profits and other benefits from acquisitions and the restructuring of our international TV joint ventures;
†	any charges or costs we incur in connection with restructuring measures we may take in the future;
†	risks associated with the financial condition of Claxson Interactive Group, Inc., our Playboy TV-Latin America, LLC joint venture partner;
†	increases in paper or printing costs;
†	effects of the national consolidation of the single-copy magazine distribution system; and
†	risks associated with the viability of our primarily subscription- and e-commerce-based Internet model.

---

 

---

 

			High				Low
Year ended December 31, 2003
	First quarter		$	11.95			$	7.92
	Second quarter			13.74				8.47
	Third quarter			15.11				12.75
	Fourth quarter			16.91				14.45
Year ended December 31, 2004
	First quarter			16.48				13.05
	Second quarter			14.55				11.43
	Third quarter			12.00				8.00
	Fourth quarter			13.25				9.96
Year ending December 31, 2005
	First quarter			14.85				11.33
	Second quarter (through June 9, 2005)			13.37				11.80

---

 

						Year ended December 31,
		Quarter ended
		March 31, 2005				2004				2003				2002				2001				2000
Ratio of earnings to fixed charges			—				1.76x				0.96x				0.68x				—				—

		Quarter ended				Year ended
		March 31, 2005				December 31, 2004
Pro forma ratio of earnings to fixed charges			—				2.67x

---

 

†	are limited to $115 million aggregate principal amount;
†	bear interest at a rate of 3.00% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2005, to holders of record at the close of business on the preceding March 1 and September 1, respectively, except as described below;
†	bear contingent interest commencing with the six-month period beginning March 15, 2012, if the average trading price of the notes exceeds a specified amount, as described under “—Contingent interest”;
†	bear additional interest if we fail to comply with the obligations we describe under “—Registration rights, additional interest”;
†	were issued in denominations of integral multiples of $1,000 principal amount;
†	are our unsecured indebtedness and are subordinated in right of payment to our senior indebtedness and effectively subordinated to all liabilities and obligations of our subsidiaries, as described under “—Subordination”;
†	are convertible into cash and, if applicable, shares of our Class B common stock based on an initial conversion rate of 58.7648 shares per $1,000 principal amount of notes (which represents an initial conversion price of approximately $17.02 per share), under the conditions and subject to the adjustments described under “—Conversion rights”;
†	are redeemable, in whole or in part, by us on or after March 15, 2010, under certain circumstances and at any time on or after March 15, 2012, in each case at a redemption price in cash equal to 100% of the principal amount of the notes we redeem, plus accrued and unpaid interest to, but excluding, the redemption date, as described under “—Redemption of notes at our option”;
†	are subject to purchase by us at the option of the holder on each of March 15, 2012, March 15, 2015 and March 15, 2020, at a purchase price in cash equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest to, but excluding, the purchase date, as described under “—Purchase of notes by us at the option of the holder”;
†	are subject to repurchase by us at the option of the holder upon a fundamental change, as described under “—Holders may require us to repurchase their notes upon a fundamental change”, at a repurchase price in cash equal to 100% of the principal amount of the notes to be

---

 

	repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date; and
†	mature on March 15, 2025, unless previously redeemed, repurchased or purchased by us or converted.

---

 

---

 

---

 

†	a taxable distribution to holders of our Class B common stock which results in an adjustment to the conversion rate; or
†	an increase in the conversion rate at our discretion,

†	the date the holder surrenders the note for conversion; and
†	the fifth business day after the effective date of the make-whole fundamental change.

---

 

†	the conversion rate in effect at the time the notes are tendered for conversion; and
†	the average of the daily volume-weighted average price per share of our Class B common stock for each of the ten consecutive trading days beginning on the second trading day immediately following the day the notes are tendered for conversion (the “ten-day weighted average price”).

†	a cash amount (the “principal return”) equal to the lesser of:

	†	the aggregate conversion value of the notes to be converted; and
	†	the aggregate principal amount of the notes to be converted;

†	if the aggregate conversion value of the notes to be converted is greater than the principal return, an amount in whole shares (the “net shares”), determined as set forth below, equal to the aggregate conversion value less the principal return (the “net share amount”); and
†	a cash amount, based on the ten-day weighted average price per share of our Class B common stock, in lieu of any fractional shares of Class B common stock.

---

 

†	the event causing the notes to become convertible;
†	the time during which the notes will be convertible as a result of that event; and
†	the procedures holders must follow to convert their notes, including the name and address of the conversion agent.

---

 

†	if the bid solicitation agent can reasonably obtain only two such bids, then the average of the two bids will be instead used;
†	if the bid solicitation agent can reasonably obtain only one such bid, then that one bid will be used; and
†	if:

	†	the bid solicitation agent cannot reasonably obtain at least one bid for $5 million principal amount of notes from one of the independent nationally recognized securities dealers; or
	†	in the reasonable, good faith judgment of our board of directors, the bid quotation or quotations that the bid solicitation agent has obtained are not indicative of the secondary market value of the notes,

†	we are a party to a consolidation, merger or binding share exchange pursuant to which all of our Class B common stock would be converted into cash, securities or other property; or
†	a “fundamental change,” as described under “—Holders may require us to repurchase their notes upon a fundamental change,” occurs,

---

 

†	the close of business on the business day immediately preceding the “ex date” (as defined in the indenture) of the transaction; and
†	the date we announce that the transaction will not take place.

†	dividends or distributions payable in shares of our Class B common stock to all holders of our Class B common stock;
†	subdivisions, combinations or certain reclassifications of our Class B common stock;
†	distributions to all or substantially all holders of our Class B common stock of certain rights or warrants (other than, as described below, certain rights distributed pursuant to a stockholder rights plan) entitling them, for a period expiring not more than 60 days immediately following the record date for the distribution, to purchase or subscribe for shares of our Class B common stock, or securities convertible into or exchangeable or exercisable for shares of our Class B common stock, at a price per share, or having a conversion price per share, that is less than the “current market price” (as defined in the indenture) per share of our Class B common stock on the last trading day preceding the declaration date for such distribution;
†	dividends or other distributions to all or substantially all holders of our Class B common stock of shares of our capital stock (other than our Class B common stock), evidences of indebtedness or other assets (other than dividends or distributions described in the bullet points below) or the dividend or distribution to all or substantially all holders of our Class B common stock of certain rights or warrants (other than those covered in the third bullet point above or, as described below, certain rights or warrants distributed pursuant to a stockholder rights plan) to purchase or subscribe for our securities; however, we will not adjust the conversion rate pursuant to this provision for distributions of certain rights or warrants, if we make certain arrangements for holders of notes to receive those rights and warrants upon conversion of the notes;
†	cash dividends or other cash distributions by us to all or substantially all holders of our Class B common stock, other than distributions described in the immediately following bullet point; and
†	distributions of cash or other consideration by us or any of our subsidiaries in respect of a tender offer or exchange offer for our Class B common stock, where such cash and the value of any such other consideration per share of our Class B common stock validly tendered or exchanged exceeds the “current market price” (as defined in the indenture) per share of our Class B common stock on the last date on which tenders or exchanges may be made pursuant to the tender or exchange offer.

---

 

†	we will not adjust the conversion rate pursuant to the provisions described in the bullet points above until the earliest of these triggering events occurs; and
†	we will readjust the conversion rate to the extent any of these rights, options or warrants are not exercised before they expire.

---

 

†	a “fundamental change”, as described under the third bullet point of the description of “change in control” under “—Holders may require us to repurchase their notes upon a fundamental change”, occurs before March 15, 2012, and as a result of or in connection therewith, as part of a transaction or series of related transactions, all or substantially all of our Class B common stock is exchanged for, converted into, acquired for or constitutes solely the right to receive stock, other securities, other property, assets or cash and at least 10% of the consideration (excluding cash payments for fractional shares or pursuant to statutory appraisal rights) for our Class B common stock in the fundamental change consists of any combination of cash or securities (or other property) that are not traded on a US national securities exchange or quoted on the Nasdaq National Market (and are not scheduled to be so traded or quoted immediately after the fundamental change); or
†	a “fundamental change”, as described under the fourth bullet point of the description of “change in control” under “—Holders may require us to repurchase their notes upon a fundamental change”, occurs before March 15, 2012, and at least 10% of the consideration (excluding cash payments for fractional shares or pursuant to statutory appraisal rights) for our Class B common stock in the fundamental change consists of any combination of cash or securities (or other property) that are not traded on a US national securities exchange or quoted on the Nasdaq National Market (and are not scheduled to be so traded or quoted immediately after the fundamental change),

---

 

†	the numerator is the conversion rate in effect immediately before the adjustment; and
†	the denominator is the adjusted conversion rate.

---

 

		Effective Date
Applicable		March 9,				March 15,				March 15,				March 15,				March 15,				March 15,				March 15,				March 15,
Price		2005				2006				2007				2008				2009				2010				2011				2012
$13.09			20.40				20.62				19.81				18.98				18.22				18.17				18.37				0.00
$15.00			15.85				15.83				14.84				13.70				12.36				11.40				11.18				0.00
$17.50			11.80				11.64				10.56				9.25				7.53				5.36				5.12				0.00
$20.00			9.08				8.86				7.80				6.48				4.70				1.27				1.24				0.00
$22.50			7.18				6.94				5.94				4.71				3.03				0.00				0.00				0.00
$25.00			5.79				5.57				4.66				3.54				2.06				0.00				0.00				0.00
$27.50			4.76				4.57				3.75				2.75				1.48				0.00				0.00				0.00
$30.00			3.97				3.81				3.08				2.20				1.13				0.00				0.00				0.00
$32.50			3.35				3.22				2.57				1.81				0.92				0.00				0.00				0.00
$35.00			2.86				2.76				2.19				1.52				0.78				0.00				0.00				0.00
$37.50			2.47				2.39				1.88				1.31				0.68				0.00				0.00				0.00
$40.00			2.14				2.09				1.64				1.14				0.61				0.00				0.00				0.00
$42.50			1.87				1.84				1.44				1.01				0.56				0.00				0.00				0.00
$45.00			1.64				1.63				1.28				0.90				0.51				0.00				0.00				0.00
$47.50			1.44				1.46				1.14				0.81				0.47				0.00				0.00				0.00
$50.00			1.28				1.31				1.03				0.73				0.44				0.00				0.00				0.00
$52.50			1.13				1.17				0.93				0.67				0.41				0.00				0.00				0.00
$55.00			1.01				1.06				0.84				0.61				0.39				0.00				0.00				0.00

†	if the actual applicable price is between two applicable prices listed in the table above, or the actual effective date is between two dates listed in the table above, we will determine the number of additional shares by linear interpolation between the numbers of additional shares set forth for the two applicable prices or for the two dates, as applicable, based on a 365-day year;
†	if the actual applicable price is greater than $55.00 per share (subject to adjustment), no additional shares will be added to the conversion rate; and
†	if the actual applicable price is less than $13.09 per share (subject to adjustment), no additional shares will be added to the conversion rate.

---

 

†	the numerator of which is:

	†	if the public acquirer fundamental change is a share exchange, consolidation, merger or binding share exchange pursuant to which our Class B common stock is converted into cash, securities or other property, the fair market value (as determined in good faith by our board of directors), as of the effective time of the public acquirer fundamental change, of the cash, securities and other property paid or payable per share of our Class B common stock; or
	†	in the case of any other public acquirer fundamental change, the average of the “closing sale prices” (as defined in the indenture) per share of our Class B common stock for the five consecutive trading days before, and excluding, the effective date of the public acquirer fundamental change (subject to certain adjustments to be made in good faith by our board of directors); and

†	the denominator of which is the average of the last reported sale prices per share of the public acquirer common stock for the five consecutive trading days commencing on, and including, the trading day immediately after the effective date of the public acquirer fundamental change (subject to certain adjustments to be made in good faith by our board of directors).

---

 

---

 

†	the amount of the purchase price;
†	that notes with respect to which the holder has delivered a purchase notice may be converted, if otherwise convertible, only if the holder withdraws the purchase notice in accordance with the terms of the indenture; and
†	the procedures that holders must follow to require us to purchase their notes, including the name and address of the paying agent.

†	if those notes are certificated, the certificate numbers of the holder’s notes to be delivered for purchase;
†	the principal amount of the notes to be purchased, which must be an integral multiple of $1,000; and
†	that the notes are to be purchased by us pursuant to the applicable provisions of the indenture.

†	the name of the holder;
†	a statement that the holder is withdrawing its election to require us to purchase its notes;

---

 

†	if those notes are certificated, the certificate numbers of the notes being withdrawn;
†	the principal amount being withdrawn, which must be an integral multiple of $1,000; and
†	the principal amount, if any, of the notes that remain subject to the purchase notice, which must be an integral multiple of $1,000.

†	comply with the provisions of Rule 13e-4 and Regulation 14E under the Securities Exchange Act of 1934 and all other applicable laws; and
†	file a Schedule TO or any other required schedule under the Securities Exchange Act of 1934 or other applicable laws.

---

 

†	the events causing the fundamental change;
†	the date of the fundamental change;
†	the fundamental change repurchase date;
†	the last date on which a holder may exercise the repurchase right;
†	the fundamental change repurchase price;
†	the names and addresses of the paying agent and the conversion agent;
†	the procedures that holders must follow to exercise their repurchase right;
†	the conversion rate and any adjustments to the conversion rate that will result from the fundamental change; and
†	that notes with respect to which the holder has delivered a fundamental change repurchase notice may be converted only if the holder withdraws the fundamental change repurchase notice in accordance with the terms of the indenture.

†	the certificate numbers of the notes that the holder will deliver for repurchase, if those notes are certificated;
†	the principal amount of the notes to be repurchased, which must be an integral multiple of $1,000; and
†	that the notes are to be repurchased by us pursuant to the fundamental change provisions of the indenture.

†	the name of the holder;
†	a statement that the holder is withdrawing its election to require us to repurchase its notes;
†	the certificate numbers of the notes being withdrawn, if those notes are certificated;
†	the principal amount of notes being withdrawn, which must be an integral multiple of $1,000; and
†	the principal amount, if any, of the notes that remain subject to the fundamental change repurchase notice, which must be an integral multiple of $1,000.

---

 

†	any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934), other than us, any of our subsidiaries, any of our employee benefit plans or any Principal or Related Party, acquires beneficial ownership (determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of 50% or more of the total voting power of all classes of our capital stock entitled to vote generally in the election of directors (“voting stock”);
†	any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934), other than us, any of our subsidiaries or any of our employee benefit plans, acquires beneficial ownership (determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of 51% or more of the aggregate outstanding shares of our Class B common stock;
†	there occurs a sale, transfer, lease, conveyance or other disposition of all or substantially all of our property and assets to any “person” or “group” (as those terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934), including any group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Securities Exchange Act of 1934;
†	we consolidate with, or merge with or into, another person or any person consolidates with, or merges with or into, us, unless either:

	†	the persons that “beneficially owned,” directly or indirectly, the shares of our common stock immediately prior to such consolidation or merger, “beneficially own,” directly or indirectly, immediately after such consolidation or merger, shares of the surviving or continuing corporation’s voting stock representing at least a majority of the total voting power of all outstanding classes of voting stock of the surviving or continuing corporation; or
	†	both of the following conditions are satisfied:

	†	at least 90% of the consideration (other than cash payments for fractional shares or pursuant to statutory appraisal rights) in such consolidation or merger consists of common stock and any associated rights traded on a US national securities exchange or quoted on the Nasdaq National Market (or which will be so traded or quoted when issued or exchanged in connection with such consolidation or merger); and
	†	as a result of such consolidation or merger, the notes become convertible solely into such common stock, associated rights and cash for fractional shares;

---

 

†	the following persons cease for any reason to constitute a majority of our board of directors:

	†	individuals who on the first issue date of the notes constituted our board of directors;
	†	any new directors whose election to our board of directors or whose nomination for election by our stockholders was approved by at least a majority of our directors then still in office either who were directors on such first issue date of the notes or whose election or nomination for election was previously so approved; and
	†	any new directors elected by the Principal or any Related Party and new directors whose election to our board of directors or whose nomination for election by our stockholders was approved by at least a majority of such directors; or

†	we are liquidated or dissolved or holders of our capital stock approve any plan or proposal for our liquidation or dissolution.

---

 

†	comply with the provisions of Rule 13e-4 and Regulation 14E and all other applicable laws; and
†	file a Schedule TO or any other required schedule under the Securities Exchange Act of 1934 or other applicable laws.

---

 

†	there occurs any default or event of default with respect to any designated senior indebtedness, other than a payment default, pursuant to which maturity of the designated senior indebtedness may be accelerated (a “non-payment default”); and
†	we or a representative of holders of the designated senior indebtedness delivers to the trustee written notice (a “payment blockage notice”) of the non-payment default,

†	179 days after that date, so long as the designated senior indebtedness to which the non-payment default relates is not accelerated before that time;
†	the date when the non-payment default is cured or waived or ceases to exist;
†	the date when the designated senior indebtedness is discharged or paid in full; or
†	the date when the payment blockage period is terminated by written notice to the trustee from a representative of the designated senior indebtedness.

---

 

†	the notes;
†	indebtedness that by its terms provides that it is not “senior” in right of payment to the notes;
†	indebtedness that by its terms provides that it is “pari passu” or “junior” or “subordinated” in right of payment to the notes;
†	indebtedness for trade payables or any account payable or other accrued current liability or obligation incurred in the ordinary course of business in connection with the obtaining of materials or services; and
†	our indebtedness to any of our subsidiaries.

†	all indebtedness of such person for borrowed money (including all indebtedness evidenced by notes, bonds, debentures or other securities);
†	all obligations (other than trade payables) incurred by such person in the acquisition (whether by way of purchase, merger, consolidation or otherwise and whether by such person or another person) of any business, real property or other assets;
†	all reimbursement obligations of such person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such person;
†	all capital lease obligations of such person required to be recorded as such under US GAAP;
†	all net obligations of such person under interest rate swap, currency exchange or similar agreements of such person;
†	all obligations and other liabilities, contingent or otherwise, under any lease or related document, including a purchase agreement, conditional sale or other title retention agreement, in connection with the lease of real property or improvements thereon (or any personal property included as part of any such lease) which provides that such person is contractually obligated to purchase or cause a third party to purchase the leased property or pay an agreed-upon residual value of the leased property, including such person’s obligations under such lease or related document to purchase or cause a third party to purchase such leased property or pay an agreed-upon residual value of the leased property to the lessor;
†	guarantees by such person of indebtedness described in the above bullet points of another person; and
†	all renewals, extensions, refundings deferrals, restructurings, amendments and modifications of any indebtedness, obligation, guarantee or liability of the kind described in the above bullet points.

---

 

†	either:

	†	the transaction or series of related transactions is a merger or consolidation where we are the surviving corporation; or
	†	the surviving, resulting or transferee person (if other than us):
	†	is a corporation, limited liability company or other business entity organized and existing under the laws of the United States, any state of the United States or the District of Columbia; and
	†	assumes all of our obligations under the notes and the indenture; and

†	no default or event of default exists immediately after giving effect to the transaction or series of related transactions.

†	our failure to pay the principal of or premium, if any, on any note when due, whether at maturity, upon redemption, on the purchase date with respect to a purchase at the option of the holder, on a fundamental change repurchase date with respect to a fundamental change or otherwise, whether or not the subordination provisions of the indenture prohibit the payment;
†	our failure to pay an installment of interest or additional interest, if any, on any note when due (whether or not the subordination provisions of the indenture prohibit the payment), if the failure continues for 30 days after the date when due;
†	our failure to deliver the principal return, the net shares or any cash in lieu of fractional shares, as the case may be, upon conversion of notes within the time period required by the indenture, and such failure continues for a period of five days;

---

 

†	our failure to timely provide notice as described under “—Purchase of notes by us at the option of the holder” or “—Holders may require us to repurchase their notes upon a fundamental change”;
†	our failure to comply with any other term, covenant or agreement contained in the notes or the indenture, if the failure is not cured within 60 days after notice to us by the trustee or to the trustee and us by holders of at least 25% in aggregate principal amount of the notes then outstanding, in accordance with the indenture;
†	a default by us or any of our subsidiaries in the payment when due, after the expiration of any applicable grace period, of principal of, or premium, if any, or interest on, indebtedness for money borrowed in the aggregate principal amount then outstanding of $10.0 million or more, or acceleration of our or our subsidiaries’ indebtedness for money borrowed in such aggregate principal amount or more so that it becomes due and payable before the date on which it would otherwise have become due and payable, if such default is not cured or waived, or such acceleration is not rescinded, within 60 days after notice to us by the trustee or to us and the trustee by holders of at least 25% in aggregate principal amount of notes then outstanding, in accordance with the indenture;
†	failure by us or any of our subsidiaries to pay final and non-appealable judgments, the aggregate uninsured portion of which is at least $10.0 million, if the judgments are not paid or discharged within 60 days; and
†	certain events of bankruptcy, insolvency or reorganization with respect to us or any of our subsidiaries that is a “significant subsidiary” (as defined in Regulation S-X under the Securities Exchange Act of 1934) or any group of our subsidiaries that in the aggregate would constitute a “significant subsidiary”.

†	the rescission would not conflict with any governmental or court order or decree;
†	all events of default, other than the non-payment of accelerated principal, premium or interest, have been cured or waived; and
†	certain amounts due to the trustee are paid.

---

 

†	the holder gives the trustee written notice of a continuing event of default;
†	the holders of at least 25% in aggregate principal amount of the notes then outstanding make a written request to the trustee to pursue the remedy;
†	the holder or holders offer and, if requested, provide the trustee indemnity reasonably satisfactory to the trustee against any loss, liability or expense; and
†	the trustee fails to comply with the request within 60 days after the trustee receives the notice, request and offer of indemnity and does not receive, during those 60 days, from holders of a majority in aggregate principal amount of the notes then outstanding, a direction that is inconsistent with the request.

†	the payment of any amounts due on the notes after the applicable due date; or
†	the right to convert notes in accordance with the indenture.

†	in the payment of principal of, or premium, if any, or interest or additional interest, if any, on, any note or in the payment of the redemption price, purchase price or fundamental change repurchase price;
†	arising from our failure to deliver the principal return, the net shares or any cash in lieu of fractional shares, as the case may be, upon conversion of notes within the time period required by the indenture; or
†	in respect of any provision under the indenture that cannot be modified or amended without the consent of the holders of each outstanding note affected.

†	has been cured or waived; or
†	is not in the payment of any amounts due with respect to any note and the trustee in good faith determines that withholding the notice is in the best interests of holders.

---

 

†	change the stated maturity of the principal of, or the payment date of any installment of interest or any premium on, any note;
†	reduce the principal amount of, or any premium, interest or additional interest on, any note;
†	change the place or currency of payment of principal of, or any premium, interest or additional interest on, any note;
†	impair the right to institute a suit for the enforcement of any payment on, or with respect to, any note;
†	modify, in a manner adverse to the holders of the notes, the provisions of the indenture relating to the right of the holders to require us to purchase notes at their option or upon a fundamental change;
†	modify the ranking provisions of the indenture in a manner adverse to the holders of notes;
†	adversely affect the right of the holders of the notes to convert their notes in accordance with the indenture;
†	reduce the percentage in aggregate principal amount of outstanding notes whose holders must consent to a modification or amendment of the indenture or the notes;
†	reduce the percentage in aggregate principal amount of outstanding notes whose holders must consent to a waiver of compliance with any provision of the indenture or the notes or a waiver of any default or event of default; or
†	modify the provisions of the indenture with respect to modification and waiver (including waiver of a default or event of default), except to increase the percentage required for modification or waiver or to provide for the consent of each affected holder.

†	evidence the assumption of our obligations under the indenture and the notes by a successor upon our consolidation or merger or the sale, transfer, lease, conveyance or other disposition of all or substantially all of our property and assets in accordance with the indenture;
†	give effect to the election, if any, by us referred to under “—Fundamental changes involving an acquisition of us by a public acquirer”;
†	make adjustments in accordance with the indenture to the right to convert the notes upon certain reclassifications or changes in our Class B common stock and certain consolidations, mergers and binding share exchanges and upon the sale, transfer, lease, conveyance or other disposition of all or substantially all of our property and assets;
†	make any changes or modifications to the indenture necessary in connection with the registration of the public offer and sale of the notes under the Securities Act of 1933 pursuant to the registration rights agreement or the qualification of the indenture under the Trust Indenture Act of 1939;

---

 

†	secure our obligations in respect of the notes;
†	add to our covenants for the benefit of the holders of the notes or to surrender any right or power conferred upon us;
†	make provision with respect to adjustments to the conversion rate as required by the indenture or to increase the conversion rate in accordance with the indenture;
†	add any additional events of default with respect to the notes; or
†	provide for a successor trustee with respect to the notes in accordance with the indenture.

†	waive compliance by us with any provision of the indenture or the notes, as detailed in the indenture; and
†	waive any past default or event of default and its consequences, except a default or event of default:
†	in the payment of principal of, or premium, if any, or interest or additional interest on, any note or in the payment of the redemption price, purchase price or fundamental change repurchase price;
†	arising from our failure to deliver the principal return, the net shares or any cash in lieu of fractional shares, as the case may be, upon conversion of notes within the time period required by the indenture; or
†	in respect of any provision under the indenture that cannot be modified or amended without the consent of the holders of each outstanding note affected.

†	delivering all outstanding notes to the trustee for cancellation; or
†	depositing with the trustee or the paying agent after the notes have become due and payable, or when the notes will become due and payable within one year, in each case whether at stated maturity or any redemption date, purchase date or fundamental change repurchase date or otherwise, cash or non- callable government securities, or a combination thereof, sufficient to pay all amounts due on all outstanding notes and paying all other sums payable by us under the indenture. For purposes of this section, “government securities” means direct obligations of, or obligations guaranteed by, the United States of America, and the payment for which the United States pledges its full faith and credit.

---

 

---

 

†	register the transfer of or exchange any note for a period of 15 days before selecting notes to be redeemed;
†	register the transfer of or exchange any note during the period beginning at the opening of business 15 days before the mailing of a notice of redemption of notes selected for redemption and ending at the close of business on the day of the mailing; or
†	register the transfer of or exchange any note that has been selected for redemption or for which the holder has delivered, and not validly withdrawn, a purchase notice or fundamental change repurchase notice, except, in the case of a partial redemption, purchase or repurchase, that portion of the notes not being redeemed, purchased or repurchased.

---

 

---

 

†	DTC notifies us that it is unwilling or unable to continue as depositary for that global security or ceases to be a clearing agency registered under the Securities Exchange Act of 1934 and, in either case, we do not appoint a successor depositary within 90 days of such notice or cessation; or
†	an event of default has occurred and is continuing and the trustee has received a request from DTC to issue certificated securities.

---

 

†	to file with the SEC, by the 90th day after the date we first issued the notes, a shelf registration statement to cover resales of registrable securities (as described below) by the holders who satisfy certain conditions and provide the information we describe below for use with the shelf registration statement;
†	to use our commercially reasonable efforts to cause the shelf registration statement to become effective under the Securities Act of 1933 as promptly as reasonably practicable but in any event by the 210th day after the date we first issued the notes; and
†	to use our commercially reasonable efforts to keep the shelf registration statement continuously effective under the Securities Act of 1933 until there are no registrable securities outstanding.

†	the date the note or share has been effectively registered under the Securities Act of 1933 and disposed of in accordance with the shelf registration statement;
†	the date when the note or share may be resold without restriction pursuant to Rule 144(k) under the Securities Act of 1933 or any successor provision thereto;
†	the date when the note or share has been publicly sold pursuant to Rule 144 under the Securities Act of 1933 or any similar rule or regulation adopted by the SEC after the date of the registration rights agreement; and
†	the date that is two years after the latest date that we issue notes.

---

 

†	the shelf registration statement has not become effective under the Securities Act of 1933 by the 210th day after the date we first issued the notes;
†	a holder supplies the questionnaire referenced above after the tenth business day before the effective date of the shelf registration statement, and we fail to supplement or amend the shelf registration statement, or file a new registration statement, in accordance with the terms of the registration rights agreement, in order to add such holder as a selling securityholder;
†	the shelf registration statement is filed and has become effective under the Securities Act of 1933 but then ceases to be effective (without being succeeded immediately by an additional registration statement that is filed and immediately becomes effective) or usable for the offer and sale of registrable securities for a period of time (including any suspension period) that exceeds an aggregate of 45 days (or 60 days under certain circumstances in connection with a suspension period relating to certain acquisitions, financings, recapitalizations, business combinations or other similar transactions) in any three month period or an aggregate of 90 days in any 360-day period; or
†	we fail to name as a selling securityholder, in the shelf registration statement or any amendment to the shelf registration statement, at the time it becomes effective under the Securities Act of 1933, or in any prospectus relating to the shelf registration statement, at the time we file the prospectus or, if later, the time the related shelf registration statement or amendment becomes effective under the Securities Act of 1933, any holder that is entitled to be so named as a selling securityholder,

---

 

---

 

---

 

---

 

†	incur or guarantee additional indebtedness;
†	pay dividends or make other distributions on capital stock;
†	repurchase capital stock;
†	make loans and investments;
†	enter into agreements restricting the ability of the subsidiaries of Playboy Enterprises, Inc. to pay dividends;
†	create liens;
†	sell or otherwise dispose of assets;
†	enter new lines of business;
†	merge or consolidate with other entities; and
†	engage in transactions with affiliates.

†	minimum net worth;
†	minimum interest coverage ratio; and
†	limitation on capital expenditures.

---

 

---

 

---

 

---

 

---

 

---

 

†	an individual citizen or resident of the United States;
†	a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
†	an estate the income of which is subject to US federal income taxation regardless of its source; or
†	a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more US persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect under applicable US Treasury regulations to be treated as a US person.

---

 

---

 

†	the product of (a) the adjusted issue price (as defined below) of the notes as of the beginning of the accrual period and (b) the comparable yield (as defined below) of the notes, adjusted for the length of the accrual period;
†	divided by the number of days in the accrual period; and
†	multiplied by the number of days during the accrual period that the US holder held the notes.

---

 

---

 

---

 

†	holds the note in connection with the conduct of a US trade or business;
†	actually or constructively owns, or is deemed to own, 10% or more of the total combined voting power of all classes of our voting stock;
†	is a “controlled foreign corporation” that is directly or indirectly related to us;
†	is a bank that acquired a note in connection with an extension of credit made pursuant to a loan agreement entered into in the ordinary course of business; or
†	fails to properly certify to us or our paying agent as to its non-US status (generally on IRS Form W- 8BEN).

†	the non-US holder holds the Class B common stock in connection with the conduct of a US trade or business;
†	the non-US holder is an individual who is present in the US for 183 days or more during the taxable year in which gain is realized and certain other conditions are met;
†	the non-US holder fails to properly certify to us or our paying agent as to its non-US status (generally on IRS Form W-8BEN); or
†	we are or have been a US real property holding corporation (as defined in the Internal Revenue Code) at any time during the shorter of the five-year period preceding such disposition or the period the non- US holder held the Class B common stock, and (i) the non-US holder owns, or is deemed to own, more than 5% of our Class B common stock or (ii) our Class B common stock has ceased to be traded on an established securities market prior to the beginning of the calendar year in which the sale or disposition occurs. We believe that we are not, and we do not anticipate becoming, a US real property holding corporation.

---

 

---

 

---

 

											Number of
											shares of
											Class B
											common				Percentage of
			Principal amount				Percentage				stock that				Class B
			of notes that				of notes				may be				common stock
Selling Securityholder			may be sold				outstanding				sold(1)				outstanding(2)
Advent Convertible Master (Cayman) L.P.				925,000				*				70,665				*
BNP Paribas Equity Strategies, SNC(7)(8)				6,210,000				5.40	%			474,408				1.65%
BNP Parisbas Arbitrage(7)				500,000				*				38,197				*
BP Amoco PLC Master Trust				521,000				*				39,801				*
Calamos® Growth and Income Fund —
	Calamos® Investment Trust			9,930,000				8.63	%			758,594				2.62%
Calamos® Growth and Income Portfolio — Calamos® Advisors Trust				70,000				*				5,348				*
CNH CA Master Account, L.P.				500,000				*				38,197				*
Consulting Group Capital Markets Fund				117,000				*				8,938				*
CooperNeff Convertible Securities
	Strategies (Cayman) Master Fund, LP			2,277,000				1.98	%			173,950				*
Delaware Dividend Income Fund, a series of Delaware Group Equity Funds V(7)				1,400,000				1.22	%			106,952				*
Delaware Investments Dividend and Income Fund, Inc.(7)				600,000				*				45,837				*
Delaware Investments Global Dividend and Income Fund, Inc.(7)				160,000				*				12,223				*
DKR SoundShore Opportunity Holding Fund Ltd.				3,750,000				3.26	%			286,478				1.01%
FrontPoint Convertible Arbitrage Fund, L.P.(9)(10)				5,500,000				4.78	%			420,168				1.47%
HFR CA Opportunity Mst. Trst.				52,000				*				3,972				*
Highbridge International LLC(7)				8,500,000				7.39	%			649,351				2.25%
Hotel Union & Hotel Industry of Hawaii Pension Plan				80,000				*				6,112				*
KBC Financial Products USA Inc.(6)(11)				2,000,000				1.74	%			152,788				*
LDG Limited				50,000				*				3,820				*
Levco Alternative Fund, Ltd(7)(12)				7,211,000				6.27	%			550,879				1.92%
Lincoln National Convertible Securities Fund				1,840,000				1.60	%			140,565				*
Linden Capital LP				4,000,000				3.48	%			305,577				1.07%
Lyxor/Convertible Arbitrage Fund Limited				1,035,000				*				79,068				*
Lyxor Convertible Arb. Fund				23,000				*				1,757				*
Lyxor/JLC Fund Ltd(7)(13)				344,000				*				26,280				*
McMahan Securities Co. L.P.(6)				500,000				*				38,197				*
MSS Convertible Arbitrage 1 Fund c/o TQA Investors, LLC				9,000				*				688				*

---

 

											Number of
											shares of
											Class B
											common				Percentage of
			Principal amount				Percentage				stock that				Class B
			of notes that				of notes				may be				common stock
Selling Securityholder			may be sold				outstanding				sold(1)				outstanding(2)
Nations Convertible Securities Fund				7,000,000				6.09	%			534,759				1.86%
Polaris Vega Fund L.P.				7,000,000				6.09	%			534,759				1.86%
Purchase Associates, L.P.(7)(14)				427,000				*				32,620				*
Purchase Associates II, L.P.(7)(15)				618,000				*				47,212				*
S.G. Americas Securities, LLC(6)				5,000,000				4.35	%			381,971				1.34%
Singlehedge US Convertible Arbitrage Fund				909,000				*				69,442				*
Sphinx Convertible Arb Fund SPC				565,000				*				43,163				*
Sphinx Fund c/o TQA Investors, LLC				157,000				*				11,994				*
SSI Hedged Convertible Market Neutral L.P.				212,000				*				16,196				*
Sturgeon Limited				1,069,000				*				81,665				*
Sunrise Partners Limited Partnership(7)				4,500,000				3.91	%			343,774				1.20%
The City of Southfield Fire & Police Retirement System				19,000				*				1,451				*
The Estate of James Campbell CH				51,000				*				3,896				*
The Estate of James Campbell EST2				413,000				*				31,551				*
TQA Master Fund, Ltd.				931,000				*				71,123				*
TQA Master Plus Fund, Ltd.				1,528,000				1.33	%			116,730				*
UBS O’Connor f/b/o O’Connor Global
	Convertible Bond Master Limited			1,750,000				1.52	%			133,690				*
UBS Securities LLC(6)(16)				3,750,000				3.26	%			286,478				1.01%
Viacom Inc. Pension Plan Master Trust				22,000				*				1,681				*
Vicis Capital Master Fund				4,000,000				3.48	%			305,577				1.07%
Wachovia Capital Markets LLC(6)				7,500,000				6.52	%			572,957				1.99%
Whitebox Convertible Arbitrage Partners, L.P.				3,000,000				2.61	%			229,183				*
Xavex-Convertible Arbitrage 7 Fund c/o TQA Investors, LLC				66,000				*				5,042				*
Zurich Institutional Benchmarks Master Fund Ltd. c/o TQA Investors, LLC				210,000				*				16,043				*
All other holders of notes or future transferees, pledges, donees, assignees or successors of any such holders(3)				6,199,000				5.39	%			473,568				1.65%
Total				115,000,000				100.00	%			8,785,333	(4)			23.75%	(5)

	*	Less than 1%.

	(1)	Represents the maximum number of shares of our Class B common stock issuable upon conversion of all of the holder’s notes, based on the Maximum Conversion Rate of 76.3942 shares of our Class B common stock per $1,000 principal amount at maturity of the notes. This conversion rate is subject to adjustment, however, as described under “Description of the notes— Conversion rights— Adjustment to the conversion rate.” As a result, the maximum number of shares of our Class B common stock issuable upon conversion of the notes may increase or decrease in the future.

---

 

	(2)	Calculated based on 28,201,063 shares of our Class B common stock outstanding as of April 30, 2005. In calculating this amount for each holder, we treated as outstanding the number of shares of our Class B common stock issuable upon conversion of all that holder’s notes, but we did not assume conversion of any other holder’s notes.
	(3)	Information about other selling securityholders will be set forth in amendments to the registration statement of which this prospectus forms a part or in prospectus supplements, if required.
	(4)	Represents the maximum number of shares of our Class B common stock into which $115,000,000 aggregate principal amount of notes would be convertible at the conversion rate described in footnote 1 above.
	(5)	Represents the quotient obtained by dividing (a) the aggregate number of shares of our Class B common stock that the selling securityholders may sell under this prospectus, as described in footnote 1 above (the “Offered Shares”), by (b) the sum of the number of shares of our Class B common stock outstanding as of April 30, 2005 and the Offered Shares.
	(6)	Selling securityholder has identified itself as a broker-dealer. Each such selling securityholder has informed us that: (a) such selling securityholder acquired its notes in the ordinary course of business and (b) at the time that the notes were purchased, the selling securityholder had no agreements or understandings, directly or indirectly, with any person to distribute the notes.
	(7)	Selling securityholder has identified itself as an affiliate of a broker-dealer. Each such selling securityholder has informed us that: (a) such selling securityholder acquired its notes in the ordinary course of business and (b) at the time that the notes were purchased, the selling securityholder had no agreements or understandings, directly or indirectly, with any person to distribute the notes.
	(8)	Owns 89 shares of our Class B common stock.
	(9)	Has short position on 152,500 shares of our Class B common stock.

(10)	FrontPoint Convertible Arbitrage Fund GP LLC is the general partner of FrontPoint Convertible Arbitrage Fund, L.P. FrontPoint Partners LLC is the managing member of FrontPoint Convertible Arbitrage Fund GP, LLC and as such has voting and dispositive power over the securities held by fund. Philip Duff, W. Gillespie Caffray and Paul Ghaffari are members of the board of managers of FrontPoint Partners LLC and are the sole members of its management committee. Messrs. Duff, Caffray and Ghaffari and FrontPoint Partners LLC and FrontPoint Convertible Arbitrage Fund GP, LLC each disclaim beneficial ownership of the securities held by the fund except for their pecuniary interest therein.
(11)	KBC Financial Products USA Inc. is an indirect wholly-owned subsidiary of KBC Bank N.V., which in turn is a direct wholly-owned subsidiary of KBC Bank & Insurance Holding company N.V., a publicly traded entity.
(12)	Owns 290,500 shares of our Class A common stock.
(13)	Owns 21,600 shares of our Class A common stock.
(14)	Owns 56,200 shares of our Class A common stock.
(15)	Owns 23,000 shares of our Class A common stock.
(16)	Owns 31,938 shares of our Class B common stock.

---

 

†	at fixed prices;
†	at prevailing market prices at the time of sale;
†	at varying prices determined at the time of sale; or
†	at negotiated prices.

†	on any national securities exchange or quotation service on which the notes or shares of our Class B common stock may be listed or quoted at the time of sale;
†	in the over-the-counter market;
†	otherwise than on such exchanges or services or in the over-the-counter market; or
†	through the writing of options.

†	agrees to sell its notes or shares of our Class B common stock issuable upon conversion of the notes on the basis reasonably provided in any underwriting arrangements approved by the person entitled under the registration rights agreement described above under “Description of notes— Registration rights, additional interest” to approve such arrangements; and
†	completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

---

 

---

 

---

 

†	our Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (the “2004 Annual Report”);
†	Amendment No. 1 on Form 10-K/A to the 2004 Annual Report;
†	our Quarterly Report on Form 10-Q for the quarter ended March 31, 2005;
†	our Current Reports on Form 8-K, dated January 14, 2005 (filed January 18, 2005), March 9, 2005 (filed March 15, 2005) and March 28, 2005 (filed April 1, 2005);
†	the description of our Class B common stock contained in Exhibit 99.1 to our Current Report on Form 8-K, dated March 15, 1999, including any amendments or other reports filed with the SEC for the purpose of updating such description; and
†	future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to termination of this offering.

---

 

---

 

---

 

Item 14.	Other Expenses of Issuance and Distribution.

SEC registration fee		$	13,536
Printing expenses			15,000
Legal fees and expenses			75,000
Accounting fees and expenses			20,000
Miscellaneous			10,000
Total		$	133,536

Item 15.	Indemnification of Directors and Officers.

---

 

Item 16.	Exhibits.

Exhibit
Number				Description
	4	.1		Certificate of incorporation of Playboy Enterprises, Inc.
	4	.2		Amended and Restated Bylaws of Playboy Enterprises, Inc. (incorporated by reference to Exhibit 3.4 to Playboy Enterprises, Inc.’s Current Report on Form 8-K dated March 15, 1999).
	4	.3		Specimen certificate representing the Class B common stock of Playboy Enterprises, Inc.
	4	.4		Indenture, dated as of March 15, 2005, between Playboy Enterprises, Inc. and LaSalle Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Playboy Enterprises, Inc.’s Current Report on Form 8-K dated March 9, 2005 and filed March 15, 2005).
	4	.5		Form of 3.00% Convertible Senior Subordinated Notes due 2025 of Playboy Enterprises, Inc. (included in Exhibit 4.4).
	4	.6		Registration Rights Agreement, dated March 15, 2005, among Playboy Enterprises, Inc. and the Initial Purchasers named therein (incorporated by reference to Exhibit 4.3 to Playboy Enterprises, Inc.’s Current Report on Form 8-K dated March 9, 2005 and filed March 15, 2005).

---

 

Exhibit
Number				Description
	5			Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
	12			Statement regarding computation of ratio of earnings to fixed charges.
	23	.1		Consent of Ernst & Young LLP.
	23	.2		Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5).
	24			Powers of attorney (included on signature pages to the registration statement).
	25			Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of LaSalle Bank National Association.

Item 17.	Undertakings.

	(1)	To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	(i)	To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
	(ii)	To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
	(iii)	To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

	(2)	That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
	(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
	(4)	If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as

---

 

		current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed in include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.

(b)

The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

---

 

	PLAYBOY ENTERPRISES, INC.

	By:	/s/ LINDA HAVARD

	Name:  Linda G. Havard
	Title:    Executive Vice President,
	Finance and Operations
	and Chief Financial Officer

---

 

				Title
Signature
/s/ CHRISTIE HEFNER   Christie Hefner				Chairman of the Board, Chief Executive Officer and Director (Principal Executive Officer)
/s/ LINDA HAVARD   Linda G. Havard				Executive Vice President, Finance and Operations and Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ DENNIS S. BOOKSHESTER   Dennis S. Bookshester				Director
/s/ DAVID I. CHEMEROW   David I. Chemerow				Director
/s/ DONALD G. DRAPKIN   Donald G. Drapkin				Director
/s/ JEROME H. KERN   Jerome H. Kern				Director
/s/ SOL ROSENTHAL   Sol Rosenthal				Director
/s/ RICHARD S. ROSENZWEIG   Richard S. Rosenzweig				Director
/s/ RUSSELL I. PILLAR   Russell I. Pillar				Director

---

 

Exhibit
Number				Description
	4	.1		Certificate of incorporation of Playboy Enterprises, Inc.
	4	.2		Amended and Restated Bylaws of Playboy Enterprises, Inc. (incorporated by reference to Exhibit 3.4 to Playboy Enterprises, Inc.’s Current Report on Form 8-K dated March 15, 1999).
	4	.3		Specimen certificate representing the Class B common stock of Playboy Enterprises, Inc.
	4	.4		Indenture, dated as of March 15, 2005, between Playboy Enterprises, Inc. and LaSalle Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Playboy Enterprises, Inc.’s Current Report on Form 8-K dated March 9, 2005 and filed March 15, 2005).
	4	.5		Form of 3.00% Convertible Senior Subordinated Notes due 2025 of Playboy Enterprises, Inc. (included in Exhibit 4.4).
	4	.6		Registration Rights Agreement, dated March 15, 2005, among Playboy Enterprises, Inc. and the Initial Purchasers named therein (incorporated by reference to Exhibit 4.3 to Playboy Enterprises, Inc.’s Current Report on Form 8-K dated March 9, 2005 and filed March 15, 2005).
	5			Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
	12			Statement regarding computation of ratio of earnings to fixed charges.
	23	.1		Consent of Ernst & Young LLP.
	23	.2		Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5).
	24			Powers of attorney (included on signature pages to the registration statement).
	25			Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of LaSalle Bank National Association.