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Licensing and Merchandising Plan October 5, 2011

This plan outlines our strategy to maximize the licensing and merchandising opportunities for Smurfs in North America and globally. We aim to double revenue and secure control of international retail management to drive growth.

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Licensing and Merchandising Plan October 5, 2011

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  1. Licensing and Merchandising Plan October 5, 2011

  2. Executive Summary • Our responsibility for securing Smurfs merchandise licensees and retail space is limited to North American based companies and global “primary category” deals, for which we are compensated at 30% - 51% agency commissions • Our go forward plan is to maximize the opportunity in these categories with additional headcount • 5 additional FTEs at SPCP • Double Smurfs merch revenue • With a $600K annual investment in incremental headcount, increase SPE’s Smurf merch revenue from $6.3MM (Smurfs 1) to $12.8MM (Smurfs 2) on an ultimate basis • Domestic (which we drive) from $4.0MM to $8.2MM • International (which is a passive interest) from $2.3MM to $4.6MM • We will attempt to restructure deal terms with Lafig that could ultimately drive upside for both parties and we have a reasonable chance of gaining their support • Release of frozen non-theatrical content rights (e.g., DTV, TV animation) • Establishment of CMF funded/co-funded by Lafig • Control of international retail management to SPE • We will also request full control of international, with related commissions topped up to domestic levels, but Lafig is unlikely to accept unless it takes place between Smurfs 2 and Smurfs 3

  3. Smurfs Relationship Overview Roles • SPE is the agent for North America (U.S. and Canada) only • Lafig controls international • SPE has no licensor participation and can be legally dismissed as the agent for North America, which would leave SPE with zero overall participation • 51% for licenses solicited by SPE covering North America only • 30% of licenses (“global licenses”) with U.S. companies solicited by SPE • 15% of licenses solicited by Lafig covering international territories only General SPE Commission Rates

  4. We are projecting Smurfs 1 SPE worldwide share of $6MM, which implies a $347MM global retail spend with 40% domestic vs. 60% international split Smurfs 1 – Domestic Value Chain Smurfs 1 – International Value Chain ($ in millions) ($ in millions) 60% 60% 12% 12% 15% 40% Smurfs 1 – Global Value Chain ($ in millions) 60% 12% 25%

  5. Smurfs 2 Retail Estimate vs. Select Film Properties (1) Retail Sales: Life-to-Date Hello Kitty: Toy Story 3: Cars 2: Spider-Man: Peanuts: $8.2B $5.6B $5.0B $4.0B $4.0B Average: $267 Retail as % of WWBO Toy Story 3: Cars 2: Spider-Man: 527% 908% 495% Average: 47% (1) Hello Kitty, Toy Story 3, Cars 2, Spider-Man and Peanuts converted to retail ultimate by multiplying by 2 years.

  6. Smurfs 1 vs. 2 Merch Performance (000s)

  7. Smurfs Licensing Revenue Analysis Smurfs 2 domestic business plan assures revenues double and category shares % of total are consistent with industry averages Note: Box indicates categories covered by new headcount.

  8. SPCP will need 5 additional heads to support Smurfs 2 merch target Global SVP Domestic VP Adm Asst Director Paper Products, BTS, Publishing Director Toys, Games, Sporting Goods Exec Dir Retail Director Hardlines, Food/Bev, HBA Director Apparel, Access, Footwear Coordinator Retail Director Home Décor, Housewares, Gift/Novelty, Collectibles Director Interactive, Video, Mob Apps Current Manager Coordinator New Position

  9. Smurfs 2 vs. Smurfs 1 Incremental Contribution (000s) • Incremental headcount cost assumes 4 Director-level hires and 1 Coordinator with 60% of time spent on Smurfs over 3.5 year time period.

  10. Cross-SPE Opportunities for Retail Contribution Resulting Campaign • Secure in-store promotion • Secure licensee to provide Christmas plush SPCP • Produce additional content, e.g., “Smurfs: A Christmas Carol” SPA • Holiday Campaign • DVD/Blu-ray with short and plush featured at retail on end caps 2011 Planned • Promote “Smurfs: A Christmas Carol” on DVDs & Blu-ray with sticker on front of package SPHE SPT • Sell “Smurfs: A Christmas Carol” into TV 2012 Potential • TV special increases awareness and drives purchase

  11. Target Deal Terms to Pursue Restructuring Term Resulting Upside(s) for SPE • Release of frozen non-theatrical content rights (e.g., DTV, TV animation) to SPE • Stand-alone profitable brand extensions • Support for merch between films and with expanded demo Modest asks with reasonable chance for Lafig support • Lafig funding / co-funding of CMF • Increased retail support for merch • Int’l retail management to SPE (distinct from ownership of int’l licensee relationships) • Retail management fee to SPE • Increased SPE control of int’l film promotion • Incremental $1.5MM ultimate contribution(1) to SPE • Full control of int’l to SPE • SPE int’l commissions increased to domestic levels • Incremental $7.7MM ultimate contribution(2) to SPE Aggressive ask Lafig is unlikely to support • Assumes additional 5% fee to SPE (i.e., 15% + 5% = 20% total SPE commission). Would require the conversion of one consultant into FTE plus one full-time coordinator hire. • Assumes 25% increase in int’l merch commission (i.e., 15% + 25% = 40% commission in-line with domestic wtd. Avg. commission).

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