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In Re Ulta Salon Cosmetics _ Fragrance_ Inc. Securities Litigation

VIEWS: 7 PAGES: 72

									     Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 1 of 72




                          UNITED STATES DISTRICT COURT
                          NORTHERN DISTRICT OF ILLINOIS
                                    DIVISION


  IN RE ULTA SALON COSMETICS
  & FRAGRANCE, INC. SECURITIES 	                               Master File No. 07 C 7083
  LITIGATION
                                                               CLASS ACTION
 This Document Relates To:
 All Actions	                                                 Hon. Robert W. Gettleman


                STIPULATION AND AGREEMENT OF SETTLEMENT


         Subject to the approval of the Court and pursuant to Rule 23 of the Federal Rules

 of Civil Procedure, this Stipulation and Agreement of Settlement (the "Stipulation" or

 "Settlement Agreement") is entered into among Lead Plaintiffs Marc Mirsky, Nedra

 Fischer and Stephanie Carroll, on behalf of themselves and the Class (as hereinafter

 defined), and Defendants Ulta Salon, Cosmetics & Fragrance, Inc. ("ULTA"), Lynelle P.

 Kirby ("Kirby") and Gregg R. Bodnar ("Bodnar") (collectively, "Defendants"), by and

 through their respective, duly authorized counsel. This Stipulation is intended by both

Lead Plaintiffs and Defendants to fully, finally and forever compromise, resolve,

discharge and settle the Settled . Claims (as defined herein), and dismiss this Action with

prejudice, upon and subject to the terms and conditions hereof.

       WHEREAS:

        I . Beginning on or about December 17, 2007, three class actions were filed

in the United States District Court for the Northern District of Illinois These actions were

subsequently consolidated into the above captioned action (the "Action") by the Court's

Order dated March 18, 2008, and Marc Mirsky, Nedra Fischer and Stephanie Carroll

were appointed Lead Plaintiffs and Law Offices Bernard M. Gross, P.C. was appointed
     Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 3 of 72




  litigation is being voluntarily settled after advice of counsel, and that the terms of the

  settlement are fair, adequate and reasonable.

         6.      Lead Counsel have conducted an investigation relating to the claims and

  the underlying events and transactions alleged in the Amended Complaint, have

 consulted with experts on issues relating to liability and damages and have researched the

 applicable law with respect to the claims of Lead Plaintiffs and the Class against the

 Defendants and the potential defenses thereto.

         7.     With the assistance of retired . United States District Judge Nicholas L.

 Politan acting as mediator, Lead Plaintiffs, by their Lead Counsel, and Defendants

 through their counsel, have conducted extensive discussions and arm's length

 negotiations with respect to a compromise and settlement of the Action.

        8.      Based upon their investigation and the mediation, Lead Counsel and Lead

 Plaintiffs have concluded that the terns and conditions of this Stipulation are fair,

reasonable and adequate and in the best interests of Lead Plaintiffs and the Class and

have agreed to the terms and provisions of this Stipulation, after considering (a) the

substantial benefits that Lead Plaintiffs and the members of the Class will receive from

settlement of the Action, (b) the attendant risks of litigation, and (c) the desirability of

permitting the settlement to be consummated as provided by the terms of this Stipulation.

       NOW THEREFORE, it is hereby STIPULATED AND AGREED, by and

among the parties to this Stipulation, through their respective attorneys, subject to

approval of the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, in

consideration of the benefits flowing to the parties hereto from the Settlement, that all

Settled Claims (as defined below) as against the Released Parties (as defined below) shall




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 be compromised, settled, released and dismissed with prejudice, upon and subject to the

 following terms and conditions:

                                   CERTAIN DEFINITIONS

        9. As used in this Stipulation and the related documents attached as exhibits

 hereto and incorporated by reference herein, the following terms shall have the following

 meanings:

                (a)    "Administrative Expenses" means costs and expenses actually

 incurred in connection with giving notice to the Class, processing Proofs of Claim and

 administering the Settlement and Gross Settlement Fund, including but not limited to the

fees and costs of a Claims Administrator and the costs of publishing, printing and mailing

to Class Members the Notice and the Proof of Claim. Administrative Expenses shall not

include attorneys' legal fees or fees for other legal personnel, whether incurred in

connection with provision of notice to Class Members, processing Proofs of Claim, or

otherwise.

               (b)     "Authorized Claimant" means a Class Member who submits a

timely and valid Proof of Claim form to the Claims Administrator.

               (c)    "Claimant" means any Class Member who files or purports or

attempts to submit a Proof of Claim form to the Claims Administrator.

               (d)    "Claims Administrator" means Valley Forge Administrative

Services.

               (e)    "Class" means all persons who purchased ULTA common stock

during the Class Period, which Class shall be certified for settlement purposes only. The

Class shall exclude Defendants in this Action, the underwriters of ULTA's IPO, members




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  of the immediate family (parents, spouses, siblings and children) of Kirby or Bodnar, the

  executive officers, directors, employees, subsidiaries and affiliates of ULTA, and any

  person, trust, corporation, officer, director or other individual or entity in which any

 Defendant has a controlling interest or which is related to or affiliated with any of the

 Defendants, and legal representatives, heirs, successors in interest or assigns of any such

 excluded party. Also excluded from the Class are any putative Class Members who

 exclude themselves by filing a request for exclusion in accordance with the requirements

 set forth in the Notice, Exhibit A hereto.

                (f)     "Class Member" means any member of the Class defined above.

                (g)     "Class Period" means the period of time from October 25, 2007

 through December 10, 2007, inclusive.

                (h)     "Defendants" means the defendants named in the Amended

 Complaint in this Action: ULTA, Kirby and Bodnar.

                (i)     "Defendants' Counsel" means the law firm of Latham & Watkins

LIP.

                (j)     "Effective Date" means the date upon .which the Settlement

contemplated by this Stipulation shall become effective, as set forth in paragraph 30

below.

               (k)       "final" means the latest to occur of the following: (i) the dates as

of which the time to seek review, alteration, amendment or appeal of the Court's Order

and Final Judgment has expired without any review, alteration, amendment or appeal

having been sought or taken, including, if applicable, any three (3) day period for service

by mail under the federal Rules of Civil Procedure 6(a) and (e), which time shall, for




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 purposes hereof, be deemed to be 33 days after entry of the Order and Final Judgment; or

 (ii) if a motion or other application for review, alteration, amendment or appeal is filed,

 sought or taken, the date as of which such request for review, alteration, amendment or

 appeal shall have been finally determined in such a manner as to permit the

 implementation of the Settlement in substantial accordance with the terms set out in this

 Stipulation. For purposes of this Stipulation, an "appeal" shall include any petition for

 writ of certiorari or other writ that might be filed in connection with approval or

 disapproval of this Stipulation, but shall not include any appeal which concerns only the

 issue of attorneys' fees and reimbursement of costs and disbursements awarded to

 Plaintiffs' Counsel or the Plan of Distribution, as hereinafter defined. Any proceeding or

order, or any appeal or petition for writ of certiorari pertaining solely to any plan of

distribution and/or application for attorneys' fees, costs or expenses, shall not in any way

delay or preclude the Order and Final Judgment from becoming Final.

               (1)	    The "Gross Settlement Amount" means the amount of three

million seven hundred and fifty thousand dollars ($3,750,000.00) cash.

               (m)     The "Gross Settlement Fund" means the Gross Settlement

Amount plus all interest earned thereon.

               (n)    The "Insurer" means AIU Holdings, Inc.

               (o)    "Lead Counsel" means Law Offices Bernard M. Gross, P.C.

               (p)    "Lead Plaintiffs" means Marc Mirsky, Nedra Fischer and

Stephanie Carroll.

               (q)    The "Net Settlement Fund" has the meaning defined in paragraph

12(d) hereof




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                  (r)     "Notice" means the Notice of Pendency and Proposed Settlement

  of Class Action, Settlement Hearing and Application for Attorneys' Fees, which is to be

  sent to Class Members substantially in the form attached hereto as Exhibit A.

                 (s)     "Or" shall mean "and/or."

                 (t)     "Order and Final Judgment" means the proposed order approving

  the Stipulation to be entered in substantially the form attached hereto as Exhibit B.

                 (u)     "Order for Notice and Hearing" means the proposed order entitled

 "Preliminary Order in Connection with Settlement Proceedings," which, among other

 things, preliminarily approves the Settlement and directs notice to the Class, substantially

 in the form attached hereto as Exhibit C.

                 (v)     "Plaintiffs' Counsel" means Lead Counsel, Liaison Counsel,

 Cohen Milstein Sellers & 'Poll PLLC, and The Law Offices of Kenneth A. Elan.

                (w)     "Publication Notice" means the Summary Notice of Pendency of

 Class Action, Proposed Settlement and Settlement Hearing for publication substantially

in the form attached here as Exhibit D.

                (x)     "Proof of Claim" means the form of instructions and Proof of

Claim form annexed hereto as Exhibit E.

                (y)     "Released Parties" means any and all of the Defendants, their past

or present subsidiaries, parents, affiliates, successors and predecessors, and the officers,

directors, agents, employees, attorneys, underwriters, auditors, accountants, insurers,

reinsurers, legal representatives, heirs, executors, administrators, successors in interest or

assigns of any of the foregoing.




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                     (z) "Settled Claims" means any and all claims, debts, demands, rights

      or causes of action or liabilities of any kind whatsoever (including, but not limited to, any

     claims for damages, interest, attorneys' fees, expert or consulting fees, and any other

     costs, expenses or liabilities whatsoever), whether based on federal, state, local, statutory

     or common law or any other law, rule or regulation, whether fixed or contingent, accrued

     or un-accrued ; liquidated or un-liquidated, at law or in equity, matured or un-matured,

     including both known claims and Unknown Claims (as defined below), (i) that have been

     asserted in this Action against any of the Released Parties, or (ii) that could have been

     asserted in any forum by the Class Members or any of them against any of the Released

     Parties which arise out of or are related to the allegations, transactions, facts, matters or

     occurrences, representations or omissions, including any public statement by any

     Defendant during the Class Period, involved, set forth, or referred to in the Amended

    Complaint.

                    (aa) "Settled Defendants' Claims" means any and all claims, rights, or

    causes of action or liabilities whatsoever based on federal, state, local, statutory or

    common law or any other law, rule or regulation, including both known claims and

    Unknown Claims, that have been or could have been asserted in the Action or any forum

    by the Defendants or any of them or their heirs, agents, executors, administrators,

    beneficiaries, predecessors, successors or assigns (in their capacities as such), against any

    of the Lead Plaintiffs, Class Members or their attorneys, which arise out of or relate in

    any way to the institution, prosecution or settlement of the Action.

                   (bb)	   "Settlement" means the Settlement set forth in this Stipulation.




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                 (cc) "Unknown Claims" means any and all Settled Claims which any

  Lead Plaintiff or Class Member does not know or suspect to exist in his, her or its favor

 at the time ofthe release of the Released Parties, which if known by him, her or it might

 have affected his, her or its decision(s) with respect to the Settlement. With respect to

 any and all such Unknown Claims, the parties stipulate and agree that upon the Effective

 Date, Lead Plaintiffs and each Class Member shall expressly be deemed to have, and by

 operation of the Order and Final Judgment shall have, expressly waived and relinquished

 any and all provisions, rights and benefits conferred by Cal. Civ. Code § 1542, or by any

 law of any state or territory of the United States, or principle of common law, which is

 similar, comparable, or equivalent to Cal. Civ. Code § 1542, which provides:

        A general release does not extend to claims which the creditor does
        not know or suspect to exist in his favor at the time of executing the
        release, which if known by him must have materially affected his
        settlement with the debtor.

                           SCOPE AND EFFECT OF SETTLEMENT

        10.     The obligations incurred pursuant to this Stipulation shall be in full and

final disposition of the Action and any and all Settled Claims as against all Released

Parties and any and all Settled Defendants' Claims.

        11.     Upon the Effective Date of this Settlement:

                (a) Lead Plaintiffs and all Class Members, on behalf of themselves,

their heirs, executors, administrators, personal representatives, successors and assigns (in

their capacities as such), shall, with respect to the Settled Claims, release and forever

discharge, and shall forever be enjoined from prosecuting, any Settled Claims against any

of the Released Parties.




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                 (b) Upon the Effective Date of this Settlement, each of the Defendants

  and each of the other Released Parties shall release and forever discharge each and every

  of the Settled Defendants' Claims, and shall forever be enjoined from prosecuting the

 Settled Defendants' Claims against Lead Plaintiffs, all Class Members and their

 respective counsel.

                           THE SETTLEMENT CONSIDERATION

         12.	    In full consideration of the Settlement of the Action and the releases by

 the Class Members of the Settled Claims:

                 (a)    Defendants shall pay or cause to be paid a cash payment in the

 amount of three million seven hundred and fifty thousand dollars ($3,750;000.00) (the

 "Gross Settlement Amount") within thirty (30) days after entry of the Order for Notice

 and I-Icaring granting, inter alia, preliminary approval of this Stipulation. The Gross

Settlement Amount, payable to Ulta Salon Securities Litigation Settlement Fund, shall be

mailed by overnight delivery to Lead Counsel, c/o Deborah R. Gross, for deposit into an

escrow account (the "Escrow Account") maintained by Lead Counsel.

                (b)    The Escrow Account shall be maintained in a segregated account

in a major banking institution and invested in U.S. Treasury or agency securities or

money market accounts.

                (c)    Lead Counsel shall have the right, prior to the Effective Date, to

withdraw up to the sum of $100,000.00 from the Gross Settlement Amount, without

further approval from the Defendants, or the Court, to pay for Administrative Expenses

as incurred.




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                  (d)    The Gross Settlement Fund, net of any Taxes (as defined below)

  and Tax Expenses (as defined below), shall be used to pay (i) Administ rative Expenses,

  including and (ii) the attorneys' fees and expenses awarded by the Court. The balance of

  the Gross Settlement Fund (the "Net Settlement Fund") shall be distributed to Authorized

  Claimants in accordance with the terms of this Stipulation, including the Exhibits hereto.

                 (e)     All funds held in the Escrow Account shall be deemed and

 considered to be in the custody of the Court, and shall remain subject to the jurisdiction

 of the Court, until such time as such funds shall be distributed or returned to the Insurer

 pursuant to this Stipulation and/or further order of the Court.

                 (0     The parties hereto and their counsel agree to treat the Gross

 Settlement Fund as being at all times a "qualified settlement fund" within the meaning of

 the Internal Revenue Service, Department of Treasury Regulations ("Treas. Reg.")

 Section §1.46813-1, In addition, Lead Counsel, Defendants and the Insurer shall jointly

 and timely make the "relation-back" election (as defined in Treas. Reg. Section 1.46813-

 1) to the earliest permitted date. Such election shall be made in compliance with the

procedures and requirements contained in such regulations. It shall be responsibility of

Lead Counsel to timely and properly prepare and deliver the necessary documentation for

signature by all necessary parties, and thereunder to cause the appropriate filing to occur,

and to promptly provide copies of such filings to Defendants and the Insurer upon their

request. Lead Counsel may delegate responsibilities hereunder to their agents, but shall

remain responsible to ensure the proper completion of these duties.

               (g)	     For the purposes of Treas. Reg. Section 1.468B, the

"administrator" shall be Lead Counsel. Lead Counsel shall promptly obtain a taxpayer




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    Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 12 of 72




  identification number for the Gross Settlement Fund, and shall timely and properly file all

 tax returns necessary or advisable with respect to the Gross Settlement Fund. Such

 returns (as well as the elections described in paragraph 12(o above) shall be consistent

 with this subparagraph and in all events, shall reflect all taxes (including any estimated

 taxes, interest or penalties) on the income earned by the Gross Settlement Fund and shall

 be paid out of the Gross Settlement Fund as provided in paragraph 12(h) hereof.

                (h) All (i) taxes, including any estimated taxes, interest or penalty,

 arising with respect to the income earned by the Gross Settlement Fund, including any

 taxes or tax determinations that may be imposed upon Defendants or upon Defendants'

 Counsel with respect to income earned by the Gross Settlement Fund for any period

 during which the Gross Settlement Fund does not qualify as a "qualified settlement fund"

 for federal or state income tax purposes ("Taxes"), and (ii) expenses and costs incur red in

 connection with the taxation of the Gross Settlement Fund, including but not limited to

any expenses of tax attorneys and/or accountants and mailing and distribution costs and

expenses relating to filing or failure to file the tax returns described in this Section ("Tax

Expenses") shall be paid out of the Gross Settlement Fund and in all events neither

Defendants nor the Insurer nor any other of the Released Parties shall have any liability

or responsibility for payment of Taxes or Tax Expenses. In the event that Defendants or

the Insurer or any Released Party are taxed on income of the Gross Settlement Fund, the

Gross Settlement Fund shall pay such Taxes. Further, Taxes and Tax Expenses shall be

treated as, and considered to be, a cost of administration of the Settlement and shall be

timely paid by Lead Counsel out of the Gross Settlement Fund without prior order of the

Court, and Lead Counsel shall be obligated, notwithstanding anything herein to the




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    Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 13 of 72




  contrary, to withhold from distribution to Class Members any funds necessary to pay

  such amounts including the establishment of adequate reserves for any Taxes and Tax

  Expenses (as well as any amounts that may be required to be withheld under Treas. Reg.

 Sec. 1.468B-2(1)(2); neither the Released Parties nor Defendants' Counsel al-e

 responsible nor shall they have any liability therefor. The parties hereto agree to

 cooperate with Lead Counsel, each other, and their tax attorneys and accountants to the

 extent reasonably necessary to carry out the provisions of this Stipulation.

                (1) If the Settlement is not finally approved or consummated, or fails

 to become effective for any reason, the Gross Settlement Fund, plus interest thereon, less

 any Administrative Expenses paid or incurred, and less any Taxes and Tax Expenses,

 shall be retur ned to the Insurer within five (5) business days after Defendants' Counsel or

 Defendants provide written instructions to Lead Counsel. In that event ; Lead Counsel

shall provide Defendants' Counsel with an accounting of funds not returned.

                                  ADMINISTRATION

        13. The Claims Administrator shall administer the Settlement under Lead

Counsel's supervision and subject to the jurisdiction of the Court. Defendants and the

Insurer shall have no responsibility for, or right in connection with, the administration of

the Settlement and shall have no liability to the Class in conneciiori- with such

administration. Defendants' Counsel shall cooperate in the administration of the

Settlement to the extent reasonably necessary to effectuate its terms, including providing

all information reasonably available from their transfer records concerning the identity of

Class Members and their transactions.




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    Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 14 of 72




         14.     In the event that the Settlement does not receive Final Approval or does

 not otherwise become effective, ULTA or the Insurer shall remain liable for all

 Administrative Expenses incurred, and shall not be entitled to return of any sums

 advanced or paid for that purpose (unless not incurred or spent).

                         ATTORNEYS' FEES AND EXPENSES

        15.     Lead Counsel will apply to the Court on behalf of Plaintiffs' Counsel for

 an award from the Gross Settlement Fund of attorneys' fees and reimbursement of

 litigation expenses, and interest on such fees and expenses. Notice of such application

 shall be included in the Notice. Neither Defendants nor Defendants' Counsel nor counsel

for the Insurer nor the Insurer shall take any position as to the amount of any such

application or award unless required to do so by the Court.

        16.     Such fees and disbursements and reimbursement of litigation expenses to

Plaintiffs' Counsel and interest as the Court may award, are to be paid out of the Gross

Settlement Fund to Lead Counsel immediately upon the Court's entry of an order

awarding such fees and expenses, subject to the Lead Counsel's obligation to pay back

any such amount — plus accrued interest at the same rate as is earned by the Gross

Settlement Fund — if, or to the extent that, the order awarding fees and expenses is

amended or does not become Final, and/or the Order and Final Judgment does not

become Final.

                 DISTRIBUTION TO AUTHORIZED CLAIMANTS

       17.      The Claims Administrator shall determine each Authorized Claimant's pr-o

ram share of the Net Settlement Fund based upon each Authorized Claimant's

Recognized Loss as defined in the Plan of Distribution set forth in the Notice, as




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  approved by the Court. 'Phis is not a claims-made settlement. The Plan of Distribution

  shall provide for the distribution of all of the Net Settlement Fund to Authorized

  Claimants. Neither Defendants nor the Insurer nor their respective counsel shall have any

  involvement in reviewing or challenging claims submitted by Claimants.

          18.    The Plan of Distribution proposed in the Notice is not a necessary term of

  this Stipulation and it is not a condition of this Stipulation that the Plan of Distribution be

 approved.

         19.     After all claims have been processed, and all Claimants whose claims have

 been rejected or disallowed, in whole or in part, have been notified of the opportunity to

 be heard concerning such rejection or disallowance, Lead Counsel will apply to the

 Court, on notice to Defendants' Counsel and to any Claimants who have requested the

 Court's review of the rejection of their Claim, for an order (the "Class Distribution

 Order") approving the Claims Administrator's administrative determinations concerning

 the acceptance and rejection of the Claims filed herein and approving any Administrative

Expenses not previously applied for.

        20.     Subject to the approval and further order(s) of the Court, the Net

Settlement Fund shall be distributed to Authorized Claimants in accordance with the

"Plan of Distribution of the Net Settlement Fund to Class Members" contained within the

Notice attached as Exhibit A hereto.

        21.     No Claimant or Authorized Claimant shall have any claim against Lead

Plaintiffs, Plaintiffs' Counsel or the Claims Administrator based on the determinations

made concerning any claim submitted, or the distributions made, in accordance with this

Stipulation, including the Exhibits hereto.




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    Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 16 of 72




                          ADMINISTRATION OF THE SETTLEMENT

           22.    Any Class Member who does not file a valid Proof of Claim will not be

  entitled to receive any of the Net Settlement Fund but will otherwise be bound by all of

  the terms of this Stipulation and the Settlement, including the terms of the Order and

  Final Judgment to be entered in the Action and the releases provided for herein, and will

 be barred from bringing any action against the Released Parties concerning the Settled

 Claims.

           23.    Lead Counsel shall be responsible for supervising the administration of the

 Net Settlement Fund by the Claims Administrator. Except for their obligations to pay the

 Gross Settlement Amount and to cooperate in the production of information with respect

 to the identification of potential Class Members from ULTA's shareholder transfer

 records, as provided herein, Defendants and the Insurer shall have no liability, obligation

 or responsibility for the administration of the Net Settlement Fund or the processing of

 claims. Lead Counsel shall have the right, but not the obligation, to waive what they

deem to be formal or technical defects in any Proofs of Claim filed in the interests of

achieving substantial justice.

         24.     For purposes of determining the extent, if any, to which a Class Member

shall be entitled to be treated as an "Authorized Claimant," the following conditions shall

apply:

                 (a) Each Class Member shall be required to submit a Proof of Claim

(see Exhibit E), supported by such documents as are designated therein, including proof

of the Claimant's loss, or such other documents or proof as Lead Counsel or the Claims

Administrator, in their discretion, may deem acceptable;




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                (b) All Proofs of Claim must be submitted by the date specified in the

 Notice unless such period is extended by order of the Court. Any Class Member who

 fails to submit a Proof of Claim by such date shall be forever barred from receiving any

 payment pursuant to this Stipulation (unless, by order of the Court, a later filed Proof of

 Claim by such Class Member is approved), but shall in all other respects be bound by all

 of the terms of this Stipulation and the Settlement including the terms of the Order and

 Final Judgment to be entered in the Action and the releases provided for herein, and will

 be barred from bringing any action against the Released Parties concerning the Settled

 Claims. Provided that it is received before the motion for to approve distribution of the

 Net Settlement Fund is filed, a Proof of Claim shall be deemed to have been submitted

 when posted, if received with a postmark indicated on the envelope and if mailed first-

 class postage prepaid and addressed in accordance with the instructions thereon. In all

other cases, the Proof of Claim shall be deemed to have been submitted when actually

received by the Claims Administrator;

               (c)     Each Proof of Claim shall be submitted to and reviewed by the

Claims Administrator, under the supervision of Lead Counsel, who shall determine in

accordance with this Stipulation the extent, if any, to which each claim shall be allowed,

subject to review by the Court pursuant to subparagraph (f) below;

               (d)     Prior to the rejection of a Proof of Claim, the Claims Administrator

shall communicate with the Claimant in order to remedy the curable deficiencies in the

Proof of Claims submitted. The Claims Administrator, under the supervision of Lead

Counsel, shall notify, in a timely fashion and in writing, all Claimants whose Proofs of

Claim they propose to reject, in whole or in part, setting forth the reasons therefor, and




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  shall indicate in such notice that the Claimant whose claim is to be rejected has the right

  to review by the Court if the Claimant so desires and complies with the requirements of

  subparagraph (e) below;

                  (e)    If any Claimant whose claim has been rejected in whole or in part

  desires to contest such rejection, the Claimant must, within twenty (20) days after the

 date of mailing of the notice required under subparagraph (e) above, serve upon the

 Claims Administrator a notice and statement of reasons indicating the Claimant's

 grounds for contesting the rejection along with any supporting documentation. and

 requesting a review thereof by the Court. if a dispute concerning a claim cannot be

 otherwise resolved, Lead Counsel shall thereafter present the request for review to the

 Court; and

                 (f)    The administrative determinations of the Claims Administrator

 accepting and rejecting claims shall be presented to the Court, on notice to Defendants'

 Counsel, for approval by the Court.

          25, Each Claimant shall be deemed to have submitted to the jurisdiction of the

Court with respect to the Claimant's claim, and the claim will be subject to investigation

and discovery under the Federal Rules of Civil Procedure, provided that such

investigation and discovery shall be limited to that Claimant's status as a Class Member

and the validity and amount of the Claimant's claim. No discovery shall be allowed on

the merits of the Action or Settlement in connection with processing of the Proofs of

Claim.

         26.	   Payment pursuant to this Stipulation shall be deemed final and conclusive

against all Class Members. All Class Members whose claims are not approved by the




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  Court shall be barred from participating in distribution of the Net Settlement Fund, but

  otherwise shall be bound by all of the terms of this Stipulation and the Settlement,

  including the terms of the Order and Final Judgment to be entered in the Action and the

  releases provided herein, and will be barred from bringing any action or other proceeding

 against the Released Parties concerning the Settled Claims.

         27.     All proceedings with respect to the administration, processing and

 determination of claims and the determination of all controversies relating thereto,

 including disputed questions of law and fact with respect to the validity of claims, shall

 be subject to the jurisdiction of the Court.

                     TERMS OF PRELIMINARY ORDER IN
                CONNECTION WITH SETTLEMENT PROCEEDINGS

        28.     Concurrently with their application for preliminary Court approval of the

 Settlement contemplated by this Stipulation, l.,ead Counsel and Defendants , Counsel

Jointly shall apply to the Court for entry of a Preliminary Order in Connection with

Settlement Proceedings, substantially in the form attached hereto as Exhibit C.

                    TERMS OF ORDER AND FINAL JUDGMENT

        29.     If the Settlement contemplated by this Stipulation is approved by the

Court, and all prior conditions, requirements and events set forth in this Stipulation have

been met or have occurred, counsel for the parties shall request that the Court enter an

Order and Final Judgment of Dismissal with Prejudice of Class Action substantially in

the form attached hereto as Exhibit B.



     EFFECTIVE DATE OF SETTLEMENT, WAIVER OR TERMINATION




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    Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 20 of 72




         30. Provided that the Settlement has not been terminated in accordance with

 the provisions of paragraphs 31 or 32 hereof, the Effective Date shall be the date when

 all of the following shall have occurred:

                (a)     approval by the Court of the Settlement, following notice to the

 Class and a hearing, as prescribed by Rule 23 of the Federal Rules of Civil Procedure;

 and;

                (b)     entry by the Court of an Order and Final Judgment, in all material

 respects in the form set forth in Exhibit B attached hereto; and

                (c)     the Order and f= inal Judgment has become Final, as that term is

 defined in paragraph 9(k) above;

        31.     Defendants' Counsel or Lead Counsel shall have the right to terminate the

 Settlement and this Stipulation by providing written notice of their election to do so

("Termination Notice") to all other parties hereto within thirty (30) days of: (a) the

Court's declining to enter the Order for Notice and Hearing in any material respect; (b)

the Court's refusal to approve this Stipulation or any material part of it; (c) the Court's

declining to enter the Order and Final Judgment in any material respect; or (d) the date

upon which the Order and Final Judgment is modified or reversed in any material respect

by the Court of Appeals or the Supreme Court.

        32.    Simultaneously herewith, Defendants' Counsel and Lead Counsel are

executing a "Supplemental Agreement." The Supplemental Agreement will set forth

certain conditions under which the Settlement may be terminated by ULTA if members

of the CIass holding an aggregate number of shares of ULTA common stock exceeding a

specified number of shares of ULTA common stock purchased during The Class Period




                                             20
       Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 21 of 72




     (the "Opt-Out Threshold") opt out of the Settlement. Unless otherwise directed by the

     Court, the Supplemental Agreement will not be fled with the Court. The Opt-Out

     Threshold may be disclosed to the Court for purposes of the approval of the Settlement,

    as may be required by the Court, but such disclosure shall be carried out to the fullest

    extent possible in accordance with the practices of the Court so as to maintain the Opt-

    Out Threshold as confidential. In the event of a termination of this Settlement pursuant

    to the Supplemental Agreement, this Stipulation shall become null and void and of no

    further force and effect, with the exception of the provisions of 1133 which shall continue

    to apply.

            33. Except as otherwise provided herein, in the event the Settlement is

    terminated or modified in any material respect or fails to become effective for any reason,

    then the parties to this Stipulation shall be deemed to have reverted to their respective

   positions in the Action as of May 29, 2009 and except as otherwise expressly provided,

   the parties shall proceed in all respects as if this Stipulation and any related orders had

   not been entered, and the Gross Settlement Fund, together with any interest earned

   thereon, shall be returned to the Insurer in accordance with paragraph 12(i) hereto,

                           NO ADMISSION OF WRONGDOING

	34.	             This Stipulation, whether- or not consummated, and any negotiations,

   discussions or proceedings in connection herewith shall not be:

                  (a) offered or received against any Defendant as evidence of or

  construed as or deemed to be evidence of any presumption, concession, or admission by

  any Defendant of the truth of any fact alleged by Lead Plaintiffs or the validity of any

  claim that has been or could have been asserted in the Action or in any other proceeding,




                                              21
    Case 1:07-cv-07083 Document 71 	                  Filed 07/13/2009 Page 22 of 72




  or the deficiency of any defense that has been or could have been asserted in the Action

  or in any other proceeding, or of any alleged liability, negligence, fault or wrongdoing of

  Defendants;

                 (b)     offered or received against any Defendant as evidence of a

 presumption, concession or admission of any fault, misrepresentation or omission with

 respect to any statement or written document, report or financial statement issued, filed,

 approved or made by any Defendant, or against the Lead Plaintiffs and the Class as

 evidence of any infirmity in the claims of Plaintiffs and the Class;

                 (c)    offered or received against any Defendant as evidence of a

 presumption, concession or admission of any liability, negligence, fault or wrongdoing,

 or in any way referred to for any other reason as against any of the parties to this

 Stipulation, in any other civil, criminal or administrative action or proceeding, other than

 such proceedings as may be necessary to effectuate the provisions of this Stipulation;

provided, however, that if this Stipulation is approved by the Court, Defendants may refer

to it to effectuate the liability protection granted them hereunder;

                (d)    construed against Defendants or Lead Plaintiffs and the Class as an

admission or concession that the consideration to be given hereunder represents the

amount which could be or would have been recovered after trial; or

                (e)    construed as or received as evidence as an admission, concession

or presumption against Lead Plaintiffs or the Class or their counsel or any of them that

any of the claims asserted in this Action are without merit or that damages recoverable

under the Complaint would not have exceeded the Net Settlement Fund.

                          MISCELLANEOUS PROVISIONS




                                             22
     Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 23 of 72




          35.     All of the exhibits attached hereto are hereby incorporated by reference as

  though fully set forth herein.

          36.    if a case is commenced in respect of ULTA or the Insurer under Title 1 1

  of the United States Bankruptcy Code, or a trustee, receiver or conservator is appointed

  under any similar law, and in the event of the entry of a final order of a court of

  competent jurisdiction determining the transfer of money to the Gross Settlement Fund or

 any portion thereof by or on behalf of such Defendant to be a preference, voidable

 transfer, fraudulent transfer or similar transaction and any portion thereof is required to

 be returned, and such amount is not promptly deposited into the Gross Settlement Fund

 by others, then, at the election of the Lead Counsel, the parties shall jointly move the

 Court to vacate and set aside the releases given and Order and Final Judgment entered in

 favor of the Defendants pursuant to this Stipulation, which releases and Order and Final

 Judgment shall be null and void, and the parties shall be restored to their respective

 positions in the litigation as of the Stipulation had never been executed, and any cash

 amounts in the Gross Settlement Fund shall be returned as provided in paragraph 12(i)

above.

         37.    The Parties to this Stipulation intend the Settlement to be a final and

complete resolution of all disputes asserted or which could be asserted by the Class

Members against the Released Parties with respect to the Settled Claims. Accordingly,

Plaintiffs and Defendants agree not to assert in any forum that the Action was brought or

defended in bad faith or without a reasonable basis. The parties hereto shall assert no

claims of any violation of Rule 11 of the Federal Rules of Civil Procedure relation to the

prosecution or defense of the Action. The parties agree that the amount paid and the




                                            23
    Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 24 of 72




  other terms of the Settlement were negotiated at arm's length in good faith by the parties,

  and reflect a settlement that was reached voluntarily after consultation with experienced

  legal counsel

          A This Stipulation may not be modified or amended, not- may any of its

  provisions be waived, except by a writing signed by all parties hereto or their successors-

 in-interest, and approved by the Court where necessary.

         39.      The headings herein are used for the purpose of convenience only and are

 not meant to have legal effect.

         40.      The administration and consummation of the Settlement as embodied in

 this Stipulation shall be under the authority of the Cou rt and the Cou rt shall retain

 jurisdiction for the purpose of entering orders providing for awards of attorneys' fees and

 expenses to Lead Counsel and enforcing the terms of this Stipulation.

        41.       The waiver by one party of any breach of this Stipulation by any other

party shall not be deemed a waiver of any other prior or subsequent breach of this

Stipulation.

        41. ]'his Stipulation and its exhibits constitute the entire agreement among the

parties hereto concerning the Settlement of the Action, supersede all prior written or oral

understandings other than written agreements regarding confidentiality, and no

representations, warranties, or inducements have been made by any party hereto

concerning this Stipulation and its exhibits and the Supplemental Agreement other than

those contained and memorialized in such documents.

       43.	    This Stipulation may be executed in one or more counterparts. All

executed counterparts and each of them shall be deemed to be one and the same




                                           24
     Case 1:07-cv-07083 Document 71 	                  Filed 07/13/2009 Page 25 of 72




 instrument provided that counsel for the parties to this Stipulation shall exchange among

 themselves original and signed counterparts.

         44.     This Stipulation shall be binding upon, and inure to the benefit of, the

 heirs, executors, legal representatives, successors and assigns of the parties hereto.

         45.     The construction, interpretation, operation, effect and validity of this

 Stipulation, and all documents necessary to effectuate it, shall be governed by the internal

 laws of the State of Illinois without regard to conflict or choice of law rules, except to the

 extent that federal law requires that federal law governs.

        46.     This Stipulation shall not be construed more strictly against one party than

another merely by virtue of the fact that it, or any part of it, may have been prepared by

counsel for one of the parties, it being recognized that it is the result of arm's length

negotiations between the parties and all parties have contributed substantially and

materially to the preparation of this Stipulation.

      - . 47. All counsel executing this Stipulation and any of the exhibits hereto, or

any related settlement documents, warrant and represent that they have the full authority

to do so and that they have'the authority to take appropriate action required or permitted

to be taken pursuant to the Stipulation to effectuate its terms.




                                             25
	

      Case 1:07-cv-07083 Document 71 	                     Filed 07/13/2009 Page 26 of 72




            48. Lead Counsel and Defendants' Counsel agree to cooperate fully with one

    another in seeking Court approval of the Order for Notice and Hearing, the Stipulation

    and the Settlement, and to promptly agree upon and execute all such other documentation

    as may be reasonably required to obtain final approval by the Court of the Settlement in

    accordance with the terms of this Stipulation.

    Dated: June 29, 2009

                                                   LAW O CLS
                                                   BERN • DGROSS, P.


                                                   By:	         11                    , c/l/^,
                                                   Deborah R. Gross
                                                   Robert P. Frutkin
                                                   Suite 450, Wanamaker Building
                                                   100 Penn Square Bast
                                                   Philadelphia, PA 19107
                                                   Tel: (215) 561-3600
                                                   Fax: (215) 561-3000

                                                   Lead Counsel for Lead Plaintiffs
                                                   and the Class

                                                   LATHAM & WATKINS LLP



                                                By:       ^^^
                                                Sea Berkowitz
                                                Michael Faris
                                                Sears Tower, Suite 5800
                                                233 S. Wacker Dr.
                                                Chicago, 1L 60606
                                                Tel: (312) 876-7700
                                                Fax: (312)993-9767


                                                Counsel for Defendants




                                              26
Case 1:07-cv-07083 Document 71 	   Filed 07/13/2009 Page 27 of 72
        Case 1:07-cv-07083 Document 71 	               Filed 07/13/2009 Page 28 of 72




                            UNITED STATES DISTRICT COURT
                            NORTHERN DISTRICT OF ILLINOIS
                                      DIVISION


 IN RE ULTA SALON COSMETICS
 & FRAGRANCE, INC. SECURITIES 	                              Master File No. 07 C 7083
 LITIGATION
                                                             CLASS ACTION
 This Document Relates To:

 ALL ACTIONS	                                                Hon. Robert W. Gettleman




     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION,
       SETTLEMENT HEARING AND APPLICATION FOR ATTORNEYS' FEES


        TO: ALL PERSONS WHO PURCHASED ULTA SALON, COSMETICS &
             FRAGRANCE, INC, ("ULTA") COMMON STOCK DURING THE
             PERIOD BETWEEN OCTOBER 25, 2007 AND DECEMBER 10, 2007,
             INCLUSIVE.

  PLEASE READ THIS NOTICE IN ITS ENTIRETY FOR FURTHER INFORMATION


     THIS NOTICE IS TO INFORM YOU OF THE PENDENCY OF THE ABOVE -
      CAPTIONED CLASS ACTION LAWSUIT (THE "ACTION") AND THAT A
   SE'T'TLEMENT OF THE ACTION HAS BEEN PROPOSED TO THE COURT FOR
              APPROVAL AT A HEARING ON 	          , 2009.

        SECURITY AND TIME PERIOD: The Action is brought on behalf of persons who

purchased the common stock of Ulta Salon, Cosmetics & Fragrance, Inc, ("UL,TA") between

October 25, 2007 and December 10, 2007, inclusive (the "Class Period"). If you purchased

ULTA common stock during the Class Period, you are a Class Member and your legal rights are

affected by the Action and the proposed settlement, whether you act or do not act.

       SETTLEMENT FUND:	             A fund in the amount of $3,750,000, in cash, has been

created by the proposed settlement for the Class. Your recovery from the Settlement Fund will
        Case 1:07-cv-07083 Document 71 	                   Filed 07/13/2009 Page 29 of 72




  depend on the number of shares of common stock of ULTA you purchased in the Class Period,

  whether you sold those shares during the Class Period, and the aggregate number of eligible

  shares that participate in the settlement. Assu p ing that all of the Class Members participate in

  the settlement by filing Proof of Claim forms, the estimated recovery per share would be

  approximately $0.44, before deduction of any court-ordered attorneys' fees and expenses and

  costs of administration of the Settlement Fund.

         REASONS FOR SETTLEMENT: The proposed settlement provides the Class with a

 substantial dollar recovery and avoids the additional costs and risks associated with continued

 litigation, including the risk of no recovery for the Class.

         IF THE CASE HAD NOT SETTLED: Continuing to litigate the case could result in

 dismissal of the Action by summary judgment or loss after a trial. Defendants vigorously deny

 any allegation of fault, wrongdoing or liability whatsoever. Lead Plaintiffs and Defendants do

 not agree on the amount of money that could have been won (damages) even if' the Lead

 Plaintiffs won at trial. Lead Plaintiffs and Defendants also disagree on the following issues,

among others: (1) whether the statements made or facts allegedly omitted were false, material, or

otherwise actionable under the federal securities laws; (2) whether defendants acted recklessly or

intentionally in making their statements to the market; (3) the amount by which ULTA common

stock was artificially inflated (if at all) during the Class Period ,   the effect of various market

forces influencing the trading price of ULTA common stock at various times during the Class

Period; and (5) the extent (if any) to which the statements that Lead Plaintiffs alleged were

materially false or misleading influenced the trading price of ULTA common stock during the

Class Period.




                                                  2
          Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 30 of 72




           FEES AND EXPENSES: Lead Counsel for Lead Plaintiffs have not received any

  payment for their work investigating the facts, conducting this litigation and negotiating the

  settlement on behalf of Lead Plaintiffs and the Class. Lead Counsel, on behalf of all Plaintiffs'

  Counsel, will ask the Court to award attorneys' fees in an amount not to exceed 30% of the

  Settlement Fund and reimbursement of out-of-pocket expenses in an amount not to exceed

 $60,000. The amounts awarded by the Court will be paid out of the Settlement Fund. If these

 amounts are awarded by the Court, the average cost per share will be approximately $0.14.

          COURT HEARING: The Court has scheduled a hearing on the fairness of the proposed

 settlement, including the certification of the Class and the request for attorneys' fees and

 reimbursement of expenses (the "Settlement Fairness Hearing"). The Settlement Fairness

 Hearing will be held before the Honorable Robert W. Gettleman, United States District Judge, in

 Courtroom 	          of the United States Courthouse, 	                         Chicago, Illinois,
     	     on 	          , 2009 at 	

         THE FOLLOWING DEADLINES APPLY:


                  Submit Proof of Claim: 	                    , 2009


                  Request to be Excluded From the Class Action:	        , 2009


                  File an Objection to the Settlement or Attorneys' Fees: 	      .2009


                                       I. SUMMARY OF THE ACTION

         Beginning on or about December 17, 2007, several actions were filed in this Court, and

were subsequently consolidated into the Action by order of the Court dated March 18, 2008. The

Court appointed Marc Mirsky, Nedra Fischer and Stephanie Carroll as the Lead Plaintiffs and




                                                 3
        Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 31 of 72




  approved Law Offices Bernard M. Gross, P.C. as Lead Counsel ("Lead Counsel"), and Miller

  Law LI.0 as Liaison Counsel,

         On May 19, 2008, Lead Plaintiffs filed the Amended Complaint in the Action, alleging

  that Defendants violated Sections l 1 and 12 of the Securities Act of 1933,U.S.C. §§77k and
                                                                         15

  77o, and Sections 10(b) and 20 of the Securities Exchange Act of 1934, 15 U.S.C. §§78j(b) and

 78t, and SEC Rule l Ob-5 promulgated thereunder, 17 C.F.R. §240.1 Ob-5. Lead Plaintiffs alleged

 that Defendants made misstatements and omissions in the registration statement and prospectus

 for ULTA's initial public offering of its common stock on October 25, 2007 (the "IPO")

 concerning: (1) ULTA's selling, general and. administrative expenses in the Third Quarter of

 2007, and (ii) the levels of ULTA's merchandise inventories in the Third Quarter of 2007.

         On July 21, 2008, Defendants filed a motion to dismiss the Amended Complaint in its

 entirety pursuant to Federal Rules of Civil Procedure 8(a), 9(b) and 12(b), and the Private

 Securities Litigation Reform Act of 1995.

        On March 19, 2009, after extensive briefing by the parties, the Court issued an order

denying Defendants' motion to dismiss the Amended Complaint. On April 20, 2009, Defendants

filed their Answer to the Complaint denying the material allegations set forth therein, and

asserting that they did not commit any wrongdoing, that they have no liability whatsoever for the

alleged acts or omissions alleged therein, and asserting thirty two affirmative defenses to the

allegations of the Amended Complaint.

                              I1. THE PROPOSED SETTLEMENT

       Lead Plaintiffs and Defendants engaged in mediation before retired United States District

Court Judge Nicholas E. Politan in an effort to reach a settlement of the Action. Pursuant to that

mediation, the parties agreed to the proposed settlement of $3,750,000. The complete terms of




                                                4
                    Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 32 of 72




               the proposed settlement are set forth in Stipulation and Agreement of Settlement, dated

           	                , 2009, (the "Stipulation"), on file with the Clerk of the Court.

                     I11. CERTIFICATION OF THE CLASS AND REQUESTS FOR EXCLUSION

           Certification of the Class

	For purposes of the proposed settlement, the Court, by order dated 	                                 , 2009,

           has conditionally certified the Class. The Class is defined as all persons who purchased shares of

           ULTA common stock between October 25, 2007 and December 10, 2007, inclusive (the "Class

          Period"). Excluded from the Class are defendants ULTA and defendants Lynelle P. Kirby and

          Gregg R. Bodnar, their parents ; spouses, siblings and children, the underwriters of UL TA's

          initial public offering of common stock, any subsidiary or affiliate of ULTA, and the directors

          and executive officers of ULTA or its subsidiaries or affiliates, or any entity in which any

          excluded person has a controlling interest, and the legal representatives, heirs, successors and

          assigns of any excluded person.

          Right to Exclusion From the Class

                    You may choose to exclude yourself from the Class. If you choose to exclude yourself,

         you will not participate in the Class Action and will not share in the Settlement Fund, if the

         settlement is approved by the Court. You may wish to consult your own legal advisor in order to

         properly evaluate those rights.

                   The Court will exclude you from the Class if you make a proper request to be excluded

         ("Request for Exclusion"). To be valid, your Request for Exclusion must be in writing, and

         include: (a) your name and address; (b) the name and number of the Action as shown at the top

         of the first page of this Notice; (c) the name and address of the person in whose name the stock

         was registered (if other than you); (d) a clear statement requesting to be excluded from the Class;

         and (e) your signatu re. It is also requested that you include: (a) the date(s) of your purchase(s)


                                                            5
           Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 33 of 72




 acquisition(s), sale(s) or disposition(s), of ULTA common stock; (b) the number of shares

 purchased or sold during the Class Period; and (c) the price(s) paid and/or received for the

 shares.

           A Request for Exclusion must be postmarked no later than 	                      2009, and

 addressed to:

                                     ULTA Request For Exclusion
                  In re Ulta Salon, Cosmetics & Fragrance, Inc. Securities Litigation
                               c/o Valley Forge Administrative Services
                                             P.O. Box 220
                                         Villanova, PA 19085

                         IV. THE PLAN OF DISTRIBUTION OF
                    THE NET SETTLEMENT FUND TO CLASS MEMBERS

           The Settlement Fund, after deduction of Cowl-ordered attorneys' fees and expenses, and

 administrative fees and costs, including taxes (the "Net Settlement Fund"), shall be distributed to

members of the Class who file approved Proofs of Claim ("Authorized Claimants"). The Claims

Administrator shall determine each Authorized Claimant's Recognized Loss as explained below.

Your Recognized Loss is not the amount of money you will receive. "The amount of money you

will receive will be your pro rota share of the Net Settlement Fund based upon your Recognized

Loss and the aggregate Recognized Loss of all Authorized Claimants. You must file a Proof of

Claim no later than 	         	       , 2009, to be eligible to share in the Net Settlement Fund.

Recognized Loss

        For each share of stock you purchased in the Class Period and continued to own through

the close of trading on December 10, 2007, your Recognized Loss is $6.59, the amount the price

of ULTA common stock dropped on December 11, 2007, the first trading day after the disclosure

of the facts Lead Plaintiffs' allege were misrepresented by Defendants in the prospectus and

registration statement for the IPO.



                                                   6
          Case 1:07-cv-07083 Document 71 	                     Filed 07/13/2009 Page 34 of 72




             For each share of ULTA common stock you purchased and sold during the Class Period,

  you have no Recognized Loss and you will not receive any money from the Net Settlement

  Fund. If you engaged in multiple purchases and/or sales of ULTA common stock during the

  Class Period, the first-in first-out method ("FIFO") will be applied to determine the relevant

  purchases and sales in calculating your Recognized Loss.

                   V. ATTORNEYS' FEES AND REIMBURSEMENTS OF COSTS

           Lead Counsel for the Lead Plaintiffs and the Class is Deborah R. Gross, Esquire, Law

 Offices Bernard M. Gross, P.C., Suite 450, 100 Penn Square Last, Philadelphia, Pennsylvania

 19107.

          Lead Counsel, on behalf of all Plaintiffs' Counsel, will apply to the Court for an award of

 attorneys' fees not to exceed 30% of the Settlement Fund and reimbursement of expenses,

 including experts' fees, in an amount not to exceed $60,000.

          The amount of attorneys' fees and reimbursed expenses must be awarded by the Court,

 and the amounts awarded by the Court will be paid from the Settlement Fund.

                           VI. THE SETTLEMENT FAIRNESS HEARING

          At the Settlement Fairness Hearing on 	          	        2009, The Court will consider
whether:

          1.      the certification of the Class should become final,

        2.        the proposed settlement of the Action, which includes the Settlement Fund in the

amount of $3,750,000, plus interest, is fair, reasonable and adequate and should be approved,

       3.        an Order and Final Judgment should be entered dismissing all claims in the

Action against the Defendants and dismissing the Action with prejudice and in its entirety, and

without costs,




                                                   7
        Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 35 of 72




         4.       the Plan of Distribution of the Net Settlement 1-und to Class Members should be

  approved, and

         5.       the award of attorneys' fees and reimbursement of expenses requested by Lead

  Counsel,

      VII. LEAD PLAINTIFFS' AND DEFENDANTS' REASONS FOR SETTLEMENT

         Lead Plaintiffs and Lead Counsel have carefully weighed the benefits to the Class of the

 Settlement of the Action for the consideration offered by Defendants against the significant

 costs, risks of recovery, and delay that continued prosecution of the Action would involve. Lead

 Plaintiffs and Lead Counsel recognize the expense and length of continued proceedings

 necessary to continue the Action against Defendants through trial and Iikely appeals, have

 considered the problems of proof against Defendants.. and believe that the certainty and amount

 of this recovery outweigh the risks and delays of proceeding further with the Action.

 Defendants, while denying any fault, wrongdoing, or liability whatsoever, or that any of the

allegations of the Action are true, have concluded that the further conduct of the Action would be

expensive and protracted. Substantial amounts of time, energy and resources of these parties

have been and, unless this Seftlement is made, will continue to be devoted to the defense of the

claims asserted by the Lead Plaintiffs in the Action. Thus, without conceding any infirmity in its

defenses or the validity of any claims, Defendants in order to avoid the cost and distraction of

burdensome, protracted an uncertain litigation, have agreed to enter into the Settlement in order

to terminate the Action with prejudice.

         VIII. DEFENDANTS' DENIAL OF WRONGDOING AND LIABILITY

       Defendants vigorously deny any allegation of fault, wrongdoing or liability whatsoever.

Defendants considers it desirable, however, to enter into this Settlement without in any way




                                               8
       Case 1:07-cv-07083 Document 71 	                      Filed 07/13/2009 Page 36 of 72




 acknowledging any fault, wrongdoing or liability, solely for the purpose of terminating the

 Action, and to avoid the cost ; expense, inconvenience, and time and effort required to continue to

 defend such complex, burdensome and protracted litigation.

         This Settlement and all related documents are not and shall not be construed or be

 deemed to be evidence or an admission or a concession on the part of any of the Defendants of

 any fault, wrongdoing, liability or damages whatsoever, and Defendants do not concede; any

 infirmity in the defenses that they have asserted or intended to assert in the Action.

             IX. APPEARANCES AND OBJECTIONS BY CLASS MEMBERS

        Any Class Member who does not request exclusion from the Class may file an objection

 with the Court to the proposed settlement or to Lead Counsel's application for attorneys' fees

and reimbursement of expenses. The objection must be filed with the Clerk of the United States

District Cour t for the Northern District of Illinois, United States Courthouse.

                        Chicago, Illinois 	              	      The objection must be filed with the

Court by 	     , 2009, in order to be considered by the Court.

        The objection also must be mailed to the following:

        Lead Counsel for Lead Plaintiffs and the Class: Deborah R. Gross, 1- squire of the
                                                                           -

Law Offices Bernard M. Gross, P.C., Suite 450, 100 Penn Square Last, Philadelphia,

Pennsylvania 19107.

       Defendants' Counsel: Michael Faris, Esquire, Latham & Watkins LLI', Sears Tower,

Suite 5800, 233 S. Wacker Drive, Chicago, Illinois 60606.

       Any Class Member who fails to file an objection in the manner provided above shall be

deemed to have waived such objection and shall be foreclosed fi-om making any such objection.

                              X. PROOF OF CLAIM PROCESS




                                                 9
          Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 37 of 72




             7'o be eligible to participate in the Net Settlement Fund, a Class Member who has not

      requested exclusion from the Class must mail a properly completed Proof of Claim on or before

  	             2009; to the following address:

                                           ULTA Proof of Claim
                    In re Ulta Salon, Cosmetics & Fragrance, Inc. Securities Litigation
                                 c/o Valley Forge Administrative Services
                                               P.O. Box 220
                                           Villanova, PA 19085


             If you do not submit a Proof of Claim, you will not be entitled to share in the Net

 Settlement Fund. You will, however, be bound by the Settlement and barred and enjoined from

 asserting any claims which have been or might have been asserted in the Action.

            Each Proof of Claim received shall be deemed to have been submitted when posted, if

 mailed by First Class Mail postage prepaid and addressed in accordance with the instructions

 given in the Proof of Claim.

           If you did not receive a Proof of Claim form in the mail with this Notice, you may obtain

 a Proof of Claim form by request to the Claims Administrator. You may contact the Claims

Administrator, toll free, at 1-877-965-3300. You may also contact the Claims Administrator at

the following address:

                                          ULTA Proof of Claim
                   In re Ulta Salon, Cosmetics & Fragrance, Inc. Securities Litigation
                                c/o Valley Forge Administrative Services
                                              P.O. Box 220
                                          Villanova, PA 19085


You should submit only one Proof of Claim.

 XL EFFECT OF APPROVAL OF THE PROPOSED SETTLEMENT AND RELEASE

          If the Court approves the proposed Settlement, judgment will be entered approving the

Settlement as fair, reasonable and adequate. From and after the Effective Date (defined in the


                                                  10
        Case 1:07-cv-07083 Document 71 	                  Filed 07/13/2009 Page 38 of 72




 Stipulation as the date on which the Order and Final Judgment approving the Settlement and

dismissing the Action with prejudice is final and is no longer- subject to any further appeal or

judicial review), each Lead Plaintiff and each Class Member on behalf of themselves and any of

their heirs, executors, agents, administrators, successors, and assigns, forever and fully

RELEASE, REMISE and DISCHARGE the Released Parties from all Settled Claims, as those

terms are defined below.

        "Released Parties" means any and all of the Defendants, their past or present

subsidiaries, parents, affiliates, successors and predecessors, and the officers, directors, agents,

employees, attorneys, underwriters, auditors, accountants, insurers, reinsurers, legal

representatives, heirs, executors, administrators, successors in interest or assigns of any of the

foregoing.

       "Settled Claims" means any and all claims, debts, demands, rights or causes of action or

liabilities of any kind whatsoever (including, but not limited to, any claims for damages, interest,

attorneys' fees, expert or consulting fees, and any other costs, expenses or liabilities whatsoever),

whether based on federal, state, local, statutory or common law or any other law, rule or

regulation, whether fixed or contingent, accrued or un-accrued, liquidated or un-liquidated, at

law or in equity, matured or un-matured, including both known claims and Unknown Claims (as

defined below), (i) that have been asserted in this Action against any of the Released Parties, or

(ii) that could have been asserted in any forum by the Class Members or any of them against any

of the Released Parties which arise out of or are related to the allegations, transactions, facts,

matters or occurrences, representations or omissions, including any public statement by any

Defendant during the CIass Period, involved, set forth, or referred to in the Amended Complaint.




                                                 I1
        Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 39 of 72




         "Unknown Claims" means any and all Settled Claims which any Lead Plaintiff or Class

 Member does not know or suspect to exist in his, her or its favor- at the time of the release of the

 Released Parties, which if known by him, her or it might have affected his, her or its decision(s)

 with respect to the Settlement. With respect to any and all such Unknown Claims, the parties

 stipulate and agree that upon the Effective Date, the Lead Plaintiffs and each Class Member shall

 expressly be deemed to have, and by operation of the Order and Final Judgment shall have,

 expressly waived and relinquished any and all provisions, rights and benefits conferred by Cal.

 Civ. Code § 1542, or by any law of any state or territory of the United States, or principle of

 common law, which is similar, comparable, or equivalent to Cal. Civ. Code § 1542, which

provides:

        A general release does not extend to claims which the creditor does not know
        or suspect to exist in his favor at the time of executing the release, which if
        known by him must have materially affected his settlement with the debtor.

        In addition, each Class Member will be precluded from bringing suit against any of the

Released Parties or otherwise asserting, directly or indirectly, any of the Settled Claims against

any of the Released Parties.

            XII. NOTICE TO BANKS, BROKERS AND OT14ER NOMINEES

       If you purchased ULTA common stock during the Class Period for the beneficial interest

of a person or entity other than yourself, you must promptly provide the name and last known

address for each person or entity for whom or which you effected such purchases. The

information should be sent to the Claims Administrator, Valley Forge Administrative Services, at

the address set forth above. Upon receipt of such information, copies of this Notice will be sent

to each beneficial owner so designated. Alternatively, you may request, in writing, additional

copies of this Notice and Proof of Claim and you may mail the Notice and Proof of Claim

directly to the beneficial owners of ULI'A common stock. `1'he name of the beneficial owner


                                                12
            Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 40 of 72




  must be provided to the Claims Administrator within seven (7) business days of receipt of this

  Notice. After additional copies are received, they must be sent directly to the beneficial owner

  within seven (7) business days of receipt. Lead Counsel shall cause you or your designee to be

 reimbursed from the Settlement Fund for reasonable expenses actually incurred in mailing copies

 of this Notice directly or in identifying beneficial owners.

                                               XIII. QUESTIONS

             If you have any questions about the Action, the proposed settlement, class certification,

 Lead Counsel's attorney fees and expenses, this Notice, the Proof of Claim form, or any other

 matter, please contact Plaintiffs' Lead Counsel: Deborah R. Gross, Esquire, Law Offices

 Bernard M. Gross, P.C., Suite 450, 100 Penn Square East, Philadelphia, Pennsylvania 19107,

 (215) 561-3600, or the Claims Administrator at 1-877-965-3300 or in writing at:

                                             ULTA Questions
                    In re Ulta Salon, Cosmetics & Fragrance, Inc. Securities Litigation
                                 c/o Valley Forge Administrative Services
                                               P.O. Box 220
                                           Villanova, PA 19085

                                 XIl7 , EXAMINATION OF PAPERS

            You may inspect the papers and pleadings that have been filed in the Action at the Office

of the Clerk of the United States District Count, Northern District of Illinois,

   	                         Chicago, Illinois 	             during normal business hours of each
business day.

Dated: Chicago, Illinois 	                                      By Order of the Court
        	                    2009	                              CLERK OF THE COURT




                                                   13
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        Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 42 of 72




                               UNITED STATES DISTRICT COURT
                               NORTHERN DISTRICT OF ILLINOIS
                                         DIVISION


  IN RE ULTA SALON COSMETICS
  & FRAGRANCE, INC. SECURITIES 	                                Master File No. 07 C 7083
  LITIGATION
                                                               CLASS ACTION
  This Document Relates To:

  ALL ACTIONS	                                                 Hon. Robert W. Gettleman



                        ORDER AND FINAL JUDGMENT OF DISMISSAL
                           WITH PREJUDICE OF CLASS ACTION

         This matter having come before the Court for approval of a settlement of the above-

 captioned consolidated class action litigation (the "Action"), pursuant to this Court's

 2009 Preliminary Order in Connection with Settlement Proceedings (the "Preliminary Order")

 and the Court having heard all parties and having considered all papers filed in connection

 therewith, and good cause appearing therefor, it is this __day of 	                 	       2009,
 ORDERED, ADJUDGED AND DECREED:

        1.       Unless otherwise defined herein, all terms that are capitalized herein shall have

the meanings ascribed to those terms in the Stipulation and Agreement of Settlement dated

              , 2009 (the "Stipulation")

        2.       This Court has jurisdiction over the subject matter of the Action (and all actions

and proceedings consolidated in the Action), and over Lead Plaintiffs, all Class Members and

Defendants.

       3.       The Court finds and determines that the Action may proceed as a class action

Pursuant to Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure, on behalf of a class
        Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 43 of 72




  consisting of all persons who purchased the common stock of Ulta Salon, Cosmetics &

  Fragrance, Inc. ("ULTA") during the period October 25, 2007 through December 10, 2007,

  inclusive (the "Class Period") (the "Class"). The Class excludes Defendants, members of the

  immediate families (parents, spouses, siblings and children) of Lynelle S. Kirby and Gregg R.

  Bodnar, the underwriters of ULTA's initial public offering, the executive officers, directors,

 employees, subsidiaries and affiliates of ULTA, and any person, trust, corporation, officer,

 director or other individual or entity in which any Defendant has a controlling interest or which

 is related to or affiliated with any of the Defendants, and legal representatives, heirs, successors

 in interest or assigns of any such excluded person. Also excluded from the Class are persons or

 entities, if any, who requested exclusion as listed on Exhibit A hereto_ The Court further finds

 and determines, pur suant to Rule 23(a) of the Federal Rules of Civil Procedure, that those

 Persons who purchased ULTA common stock during the Class Period are so nunerous that

joinder is impracticable, that there are issues of law or fact common to the Class, that the claims

of the Lead Plaintiffs are typical of the Class, and that Lead Plaintiffs and their Lead Counsel

will fairly and adequately represent the interests of the members of the Class in enforcing their

rights in the Action. The Court also finds that under Rule 23(b)(3) of the Federal Rules of Civil

Procedure, questions of' law or fact common to the Class Members predominate over any

questions affecting only individual members, and that a class action is superior to other available

methods for the fair and efficient adjudication of the subject matter of the Action.

       4. Based upon the evidence submitted by Lead Counsel, this Court finds that the

method of dissemination of both the published and the individual notices, as previous]) , approved

by the Court, to all Class Members who could be identified through reasonable effort, was




                                                 2
        Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 44 of 72




  adequate and reasonable and constituted the best notice practicable under the circumstances.

             5.    The Court also finds that the notice, as given, complied with the requirements of

  Rule 23 of the Federal Rules of Civil Procedure, satisfied the requirements of due process,

  Section 21D of the Securities Exchange Act of 1934, U.S.C. §78u-4(a)(7), and any other
                                                  15

  applicable law, and constituted due and sufficient notice of the matters set forth therein.

          6.       The proposed Settlement of the Action pursuant to the Stipulation is, in all

  respects, approved as fair, reasonable and adequate, meets the requirements of due process, and

 is in the best interests of the Class, especially in light of the complexity, expense and probable

 duration of further litigation, the risks of establishing liability and damages, the intensive arm's

 length negotiation of experienced counsel, and the reasonableness of the recovery herein

 considering the range of possible recovery and the attendant risks of litigation. The parties are

 directed to consummate the Settlement in accordance with the terms and provisions of the

 Stipulation.

        7.        The method for distribution of the Net Settlement Fund, as set forth in the Plan of

Distribution in the Notice, is approved as fair and reasonable. Lead Counsel and the Claims

Administrator are directed to administer the Plan of Distribution in accordance with its terms and

provisions. The Court further declares that any appeal of the approval of the Plan of Distribution

shall not prevent the Settlement from becoming effective.

        8.        This Court hereby dismisses the Amended Complaint and the Action (and all

actions consolidated into the Action) with prejudice and in their entirety, on the merits, as against

all Defendants, as well as all Settled Claims (as that term is defined in the Stipulation) that were

made, could have been made, or could in the future be made, in the Action, or in any other action




                                                  3
       Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 45 of 72




  or proceeding as against Defendants, with prejudice and in their entirety on the merits, and in full

  and final discharge of any and all Settled Claims against Defendants and the Released Parties,

  and without costs (except as provided in the Stipulation), such dismissal to be binding on Lead

  Plaintiffs and all Class Members. This Court specifically finds that all Class Members are bound

 by the Settlement and this Order and Final Judgment.

         9.      'file Lead Plaintiffs and all Class Members, and their respective heirs, executors,

 administrators, personal representatives, successors, assigns, guardians, conservators, attorneys-

 in-fact, or other agents who purchased shares of ULTA common stock during the Class Period in

 such capacity for and in consideration of the Settlement and other good and sufficient

 consideration, are hereby permanently barred and permanently enjoined from instituting,

 maintaining, prosecuting or participating in, either directly or indirectly, any action or other

 proceeding relating in any way to, or otherwise asserting, any of the Settled Claims, including all

Unknown Claims, against any of the Defendants or the Released Parties, and shall conclusively

be deemed to have released and forever discharged as by all under seal, any and all

Settled Claims whatsoever, including all Unknown Claims, against Defendants and the other

Released Parties. Lead Plaintiffs, and all other Class Members who have not properly excluded

themselves from the Class, shall further and conclusively be deemed to have waived the rights

afforded by California Civil Code Section 1542 and any other statute or law, or principle of

common law, of any other jurisdiction which is similar, comparable., or equivalent to Cal. Civ.

Code § 1542.

       10.     Ul-TA and all the Released Parties are hereby barred and permanently enjoined

from prosecuting against any Lead Plaintiff or Class Member, and their respective heirs,




                                                 4
      Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 46 of 72




 executors, administrators, personal representatives, successors, assigns, guardians, conservators,

 attorneys-in-fact, or other agents who purchased shares of ULTA common stock during the Class

 Period in such capacity, and Plaintiffs' Counsel, and each of them, any claim arising out of or

 relating to the institution, prosecution, assertion or resolution of the Action, except against any

 Lead Plaintiff, Class Member or Plaintiffs' Counsel who or which commences an action or other

 proceeding in violation of this Order and Final Judgment.

         11.    The Court hereby enters a bar order, pursuant to Section 21D of the Securities

 Exchange Act of 1934, 15 U.S.C. §78u-4(g)(7), constituting the final .discharge of all obligations

 to all Lead Plaintiffs or Defendants arising out of the Action (the "Contribution Bar Order").

The Contribution Bar Order shall bar all future claims for contribution arising out of the Action

by any person or entity against Defendants.

        12.    Without in any way affecting the finality of this Order and Final Judgment, this

Court shall retain continuing exclusive jurisdiction over all matters relating to the Action and the

Settlement, including but not limited to matters relating to the administration, interpretation,

effectuation or enforcement of the Settlement and related papers hereby approved, enforcement

of this Order and Final Judgment, as well as matters relating to applications for fees and

expenses incurred relating to the Action.

        13.    All persons, if any, whose names appear on Exhibit A, which is attached hereto

and incorporated by reference herein, who purport to have been members of the Class and who

have duly and timely requested exclusion from the Class are hereby excluded from the Class, not

bound by this Order and Final Judgment, and may not under the circumstances make any claim

or receive any benefit from the Settlement. Said excluded persons may not pursue any Settled




                                                5
       Case 1:07-cv-07083 Document 71 	                  Filed 07/13/2009 Page 47 of 72




 Claims on behalf of those who are bound by this Order and Final Judgment. Each Class Member

 not appearing on Exhibit A is bound by this Order and Final Judgment, and will remain forever

 bound, regardless of whether such member files a Proof of Claim.

         14. Neither the Settlement, nor this Order and Final Judgment, nor the Stipulation,

 nor any other papers relating to the Settlement, nor any negotiations, discussions or proceedings

 in connection herewith shall be:

                 (a)   offered or received against any Defendant as evidence of or construed as or

 deemed to be evidence of any presumption, concession, or admission by any Defendant of the

 truth of any fact alleged by Lead Plaintiffs or the validity of any claim that has been or could

 have been asserted in the Action or in any other proceeding, or the deficiency of any defense that

 has been or could have been asserted in the Action or in any other proceeding, or of any alleged

liability, negligence, fault, or wrongdoing of Defendants;

                (b)    offered or received against any Defendant as evidence of a presumption,

concession, or admission of any fault, misrepresentation or omission with respect to any

statement or written document approved or made by any Defendant, or against Lead Plaintiffs

and the Class as evidence of any infirmity in the claims of Lead Plaintiffs and the Class;

                (c)    offered or received against any Defendant as evidence of a presumption,

concession, or admission of any alleged liability, negligence, fault or wrongdoing, or in any way

referred to for any other reason as against any of the parties to the Stipulation, in any other civil,

criminal or administrative action or other proceeding, other than such proceedings as may be

necessary to effectuate the provisions of the Stipulation; provided, however, that if the

Stipulation is approved by the Court, Defendants may refer to it to effectuate the liability




                                                  6
        Case 1:07-cv-07083 Document 71 	                    Filed 07/13/2009 Page 48 of 72




  protection granted them hereunder;

                 (d)   construed against any Defendant or Lead Plaintiffs and the Class as an

 admission or concession that the consideration to be given hereunder represents the amount

 which could be or would have been recovered after trial; and

                (e)    construed as or received in evidence as an admission, concession or

 presumption against Lead Plaintiffs or the Class or their counsel or any of them that any of the

 claims asserted in this Action are without merit or that damages recoverable under the Complaint

 would not have exceeded the Net Settlement Fund,

         15.    Neither the Settlement, nor this Order and Final Judgment, nor the Stipulation,

 nor any other papers relating to the Settlement, nor any negotiations, discussions or proceedings

 in connection herewith shall be construed as an admission by any person or entity with regard to

the merit or lack of merit of their claims in the Action.

        16.     The Court finds that each party and each attorney representing any party in the

Action complied with the requirements of Rule) 1 of the Federal Rules of Civil Procedure.

        17.    The provisions of this Order and Final Judgment constitute a full and complete

adjudication of the matters considered and adjudged herein, and the Court determines that there

is no just reason for delay in the entry of judgment pursuant to Rule 54(b) of the Federal Rules of'

Civil Procedure. The Clerk is hereby directed to enter judgment in accordance with this Order

and Final Judgment as a final judgment with respect to all matters ordered, judged and decreed.

        18.    Entry of final judgment and final approval of the Settlement settles and disposes

of and discharges all claims that have been asserted or could have been asserted in the Action.

       19.     Plaintiffs' Counsel in the action are hereby awarded attorneys' fees in the amount




                                                  7
           Case 1:07-cv-07083 Document 71 	              Filed 07/13/2009 Page 49 of 72




  of $	                     , amounting to 	          % of the Gross Settlement Fund, plus interest

  on such amount at the same rate as earned by the Gross Settlement Fund from the date hereof to

  the date they are actually paid to Lead Counsel. Plaintiffs' Counsel are further awarded

  reimbursement of expenses (including experts' fees and expenses) in the amount of

  $	         	   	       , plus interest on such expenses at the same rate as earned by the Gross

  Settlement ]f und from the date hereof to the date they are actually paid to Lead Counsel. The

 foregoing awards of fees and expenses shall be paid out of, and shall not be in addition to, the

 Gross Settlement Fund at the time and in the manner provided in the Stipulation, and shall be

 paid to Lead Counsel as provided in the Stipulation. Any and all allocations of attorneys' fees

 and expenses shall be allocated among Plaintiffs' Counsel at the direction of Lead Counsel at its

 discretion, who .shall apportion the fees and expenses based upon their assessment, in its sole

 discretion, of the respective contributions to the litigation made by each counsel. The Court

 further declares that any appeal of the award of attorneys' fees and reimbursement of expenses

shall not prevent the Settlement from becoming effective.

           20. Lead Counsel is - granted leave to file a supplemental application for

reimbursement of expenses incurred and/or billed subsequent to the date of its pending

application, including, for the fees and expenses of the Claims Administrator. Lead Counsel is

also granted leave to file a supplemental petition for fees upon good cause shown.



Dated: 	             	              12009




                                                      Honorable Robert W. Gettleman
                                                      United States District Judge



                                                  8
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        Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 51 of 72




                        1N THE UNITED STATES DISTRICT COURT
                       FOR THE NORTHERN DISTRICT OF ILLINOIS
                                  EASTERN DIVISION

  IN RE ULTA SALON, COSMETICS	                         Master File No. 07 C 7083
  & FRAGRANCE, INC. SECURITIES
  LITIGATION	                                          CLASS ACTION


  This Document Relates to:
                                                       Hon. Robert W. Gettleman
  ALL ACTIONS


                          PRELIMINARY ORDER IN CONNECTION
                            WITH SETTLEMENT PROCEEDINGS

         WHEREAS, on 	                    , 2009, Lead Plaintiffs Marc Mirsky, Nedra Fischer and

 Stephanie Carroll, and Defendants Ulta Salon, Cosmetics & fragrance, Inc, ("ULTA"), Lynelle

 S. Kirby ("Kirb), ") and Gregg R. Bodnar ("Bodnar") entered into a Stipulation and Agreement of'

 Settlement (the "Stipulation") in the above-entitled action (the "Action") which is subject to

 review under Rule 23 of the federal Rules of Civil Procedure and which, together with the

 exhibits thereto, sets forth the terms and conditions for the proposed settlement of the claims

alleged in the Amended Complaint on the merits and with prejudice; and the Court having read

and considered the Stipulation and the accompanying documents; and the parties to the

Stipulation having consented to the entry of this Order; and all capitalized terns used herein

having the meanings defined in the Stipulation;

       NOW THEREFORE IT IS HEIZE13Y ORDERED this _ day of _ , 2009 that:

        1. Pursuant to Rule 23(b)(3) of the federal Rules of Civil Procedure, and for the

purposes of the Settlement only, this Action is hereby conditionally certified as a class action on

behalf of all persons who purchased the common stock of ULTA during the period from October

25, 2007 through December- 10, 2007, inclusive (the "Class Period"). The Class shall exclude
        Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 52 of 72




  Defendants, the underwriters of ULTA's initial public offering, members of the immediate

  family (parents, spouses, siblings and children) of Kirby and Bodnar, an) , subsidiary or affiliate

  of ULTA, and the directors and executive officers of ULTA or its subsidiaries or affiliates, or

  any entity in which any excluded person has a controlling interest, and the legal representatives,

  heirs, successors and assigns of any excluded person. If the Settlement is not approved by the

  Court, or is not consummated for any other reason, this conditional determination shall be null

  and void and Defendants shall not be precluded from opposing certification of the class, or any

 part thereof.

         2. For purposes of this Settlement only, the Court conditionally minds that the

 prerequisites for a class action under Rules 23(a) and (b)(3) of the Federal Rules of Civil

 Procedur e have been satisfied in that: (a) the number of Class Members is so numerous that

 joinder of all members of the Class is impracticable; (b) there are questions of law and fact

 common to the Class; (c) the claims of the named representatives are typical of the claims of the

 Class they seek to represent; (d) Lead Plaintiffs will fairly and adequately represent the interests

of the Class; (e) the questions of law and fact common to the members of the Class predominate

over any questions affecting only individual members of the Class; and (f) a class action is

superior- to other available methods for the fair and efficient adjudication of the controversy.

        3. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, and for the purposes

of this Settlement only, Lead Plaintiffs Marc Mirsky, Nedra Fischer and Stephanie Carroll are

certified as class representatives and Law Offices Bernard M. Gross, P.C. is appointed Lead

Counsel for the Class.




                                                 2
        Case 1:07-cv-07083 Document 71 	                     Filed 07/13/2009 Page 53 of 72




              4.	     A hearing (the "Settlement Fairness Hearing") pursuant to Rule 23 (e) of the

  Federal Rules of Civil Procedure is hereby scheduled to be held before the Court on 	

  2009, at 	         _.m. for the following purposes:

                       (a)    to finally determine whether this Action satisfies the applicable

   rerequisites for class action treatment under Rules 23(a) and (b) of the Federal Rules of Civil

   Procedure;

                       (b)    to determine whether the proposed Settlement is fair, reasonable, and

  adequate, and should be approved by the Court;

                      (c)    to determine whether the Order and Final Judgment as provided under the

  Stipulation should be entered, dismissing the Amended Complaint filed herein, on the merits

  and with prejudice, and to determine whether the release by the Class to the Released Parties, as

  set forth iii the Stipulation, should be provided to the Released Parties;

         -	          (d)	    to determine whether the proposed PIan of Distribution for the proceeds of

 the S:Mement is. fair and reasonable and should be approved by the Court;

                             to consider Lead Counsel's application for an award of attorneys' fees and

 reimbtimement of expenses; and

                     (f)	    to consider and rule upon such other matters as the Court may deem

 appropriate.

        5.          The Court may enter its Order and Final Judgment approving the Stipulation and

dismissing the Complaint with prejudice regardless of whether it has approved the Plan of

Distribution or awarded attorneys' fees and expenses.

        6.          The Court approves the form ; substance and requirements of the Notice of

Pendency and Proposed Settlement of Class Action, Settlement Nearing and Application for



                                                      3
          Case 1:07-cv-07083 Document 71 	             Filed 07/13/2009 Page 54 of 72




  Attorneys' Fees (the "Class Notice"), and the Proof of Claim form annexed hereto as Exhibits I

  and 2 respectively.

           7. The Court approves the appointment of Valley Forge Administrative Services as

  the Claims Administrator. The Claims Administrator shall cause the Class Notice and the Proof

  of Claim, substantially in the forms annexed hereto, to be mailed, by first class mail postage

 prepaid, within fifteen (15) days from the date hereof, to all Class Members who can be

 identified with reasonable effort. ULTA shall cooperate in making its transfer records and

 shareholder infonnation available to Lead Counsel or the Claims Administrator for the purpose

 of identifying and giving notice to the Class. The Claims Administrator shall use reasonable

 efforts to give notice to nominee owners such as brokerage firms and other persons or entities

 who purchased ULTA common stock during the Class Period as record owners but not as

 beneficial owners. Additional copies of the Class Notice shall be made available to any record

 holder requesting such for the purpose of distribution to beneficial owners, and such record

 holders shall be reimbursed from the Gross Settlement Fund, upon receipt by the Claims

Administrator of proper documentation, for the reasonable expense of sending the Class Notice

and Proof of Claim forms to beneficial owners. Lead Counsel shall, at or before the Settlement

Fairness Hearing, file with the Court proof of mailing of the Class Notice and Proof of Claim.

          8, The Court approves the form of Publication Notice of the pendency of this class

action and the proposed Settlement in substantially the form and content annexed hereto as

Exhibit 3 and directs that Lead Counsel shall cause the Publication Notice to be published in the

PR Newswire within ten days of the mailing of the Class Notice. Lead Counsel shall, at or

before the Settlement Fairness Hearing, file with the Court proof of publication of the Published

Notice.



                                               4
      Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 55 of 72




        9.      The form and method set forth herein of notifying the Class of the Settlement and

 its terms and conditions meet the requirements of Rule 23 of the Federal Rules of Civil

 Procedure, Section 21 D(a)(7) of the Securities Exchange Act of 1934, 1.5 U.S.C. 78u-4(a)(7) as

amended by the Private Securities Litigation Reform Act of 1995, and due process, constitute the

best notice practicable under the circumstances, and shall constitute due and sufficient notice to

all persons and entities entitled thereto.

        10.     In order to be entitled to participate in the Net Settlement Fund, in the event the

Settlement is effected in accordance with all of the terms and conditions thereof, each Class

Member shall take the following actions and be subject to the following conditions:

                (a)     A properly executed Proof of Claim (the "]'roof of Claim"), substantially

 in the form attached hereto as Exhibit 2, must be submitted to the Claims Administrator, at the

 Post Office Box indicated in the Class Notice, postmarked not later than thirty (30) days after

the date scheduled in paragraph 4 above for the Settlement Fairness Hearing. Such deadline

may be further extended by Court order. Each Proof' of Claim shall be deemed to have been

submitted when postmarked (if properly addressed and mailed by first class mail, postage

prepaid) provided such Proof of Claim is actually received prior to the motion for ail of

the Court approving distribution of the Nei Settlement Fund. Any Proof of Claim submitted in

any other manner shall be deemed to have been submitted when it was actually received at the

address designated in the Class Notice.

               (b)    'Ihe Proof of Claim submitted by each Class Member must satisfy the

following conditions: 0) it must be properly filled out, signed and submitted in a timely manner

in accordance with the provisions of the preceding subparagraph; (ii) it must be accompanied by

adequate supporting documentation for the transactions reported therein, in the form of broker



                                               5
       Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 56 of 72




   confirmation slips, broker account statements, all statement from the broker

   containing the transactional information found in a broker confirmation slip, or such other

   documentation as is deemed adequate by Lead Counsel; (iii) if the person executing the Proof of

   Claim is acting in a representative capacity, a certification of his current authority to act on

   behalf of the Class Member must be included in the Proof of Claim; and (iv) the Proof of Claim

   must be complete and contain no material deletions or modifications of any of the printed

  matler contained therein and must be signed under penalty of perjury.

                 (c) As part of the Proof of Claim, each Class Member shall submit to the

  jurisdiction of the Court with respect to the claim submitted, and shall (subject to the Settlement

  becoming effective) release all claims as provided in the Stipulation.

         11. Class Members shall be bound by all determinations and judgments in this

 Action, whether favorable or unfavorable, unless such persons request exclusion from the Class

 in a timely and proper manner, as hereinafter provided. A Class Member wishing to make such

 request ("Request for Exclusion") shall mail the request in written form by first class mail

postmarked no later than fifteen (15) business days prior to the date set in paragraph 4 above for

the Settlement Fairness Hearing to: In re Uha Salon, Cosmetics & Fragrance, Inc. Securities

Litigation, c/o Valley Forge Administrative Services, P.O. Box 220, Villanova, Pennsylvania

19085. Such Request for Exclusion shall clearly indicate the name and address of the person

seeking exclusion ; that the sender requests to be excluded from the Class in the Ulta Salon.

Cosmetics &Fragrance Inc. Securities Litigation, and must be signed by such person. Such

persons requesting exclusion are also requested to state: their telephone number and the date(s),

price(s), and number(s) of shares of all purchases and sales of ULTA common stock during the

Class Period. The Request for Exclusion shall not be effective unless the Request for Exclusion



                                                 6
       Case 1:07-cv-07083 Document 71 	                   Filed 07/13/2009 Page 57 of 72




provides the required information and is made within the time stated above, or the exclusion is

otherwise accepted by the Court.

          12.    Class Members requesting exclusion from the Class shall not be entitled to

receive any payment out of the Net Settlement Fund as described in the Stipulation and Class

Notice.

          13.   Any Class Member who has not requested exclusion in the time and manner

specified in Paragraph l 1 hereof may appear at the Settlement Fairness Hearing in person, or

through duly authorized counsel of its, his or her choice, and show cause, if any, as to why the

proposed Settlement, the Plan of Distribution, of the award of attorneys' fees and reimbursement

of expenses should not be approved. No such person, however, will be heard unless that person

has:

                 (a)	   filed with the Clerk of the Court, United States District Court for the

Northern District of Illinois, located at 	           	      , Chicago, Illinois	   	    , no later

than fifteen (15) business days prior to the date set in paragraph 4 above for the Settlement

Fairness Hearing, the. following documents:

                (1) a written objection and any supporting memoranda or other papers and

                        information (including documentary proof of membership in the Class);

                        and

                (ii) a written statement signed by the objector and setting forth (a) the name,

                        address, and telephone number of the objector; (b) the number and price of

                        shares of ULTA common stock purchased by the objector during the Class

                        Period, and the date of each such transaction with proof thereof; (c) the

                        number and price of shares of ULTA common stock sold during the Class



                                                 7
       Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 58 of 72




                        Period or thereafter, and the date of each such transaction withp roof

                        thereof, and (d) the reason the person is objecting; and

                  (b) served copies of all papers listed in section 13(a) above, no later than

  fifteen (15) business days prior to the date set in paragraph 4 above for the Settlement Fairness

  Hearing, upon each of the following: Deborah R. Gross, flsquire, Law Offices Bernard M.

  Gross, P.C., Suite 450, Wanamaker Building, Philadelphia, Pennsylvania 19107, and Michael

  Faris, Esquire, Latham & Watkins, LLP, Scars Tower ; Suite 5800, Chicago, Illinois 60606.

         14.    Attendance at the hearing is not necessary; however, persons wishing to be heard

 orally in opposition to the approval of the Settlement, the Plan of Distribution, and/or the request

 for attorneys' fees are required to indicate in their written objection their intention to appear at

the hearing. Persons who intend to object to the Settlement, the Plan of Distribution, and/or

cowisel's application for an award of attorneys' fees and expenses and desire to present evidence

at the Settlement Fairness Hearing must include in their written objections the identity of any

witnesses they may call to testify and exhibits they intend to introduce into evidence at the

Settlement Fairness blearing.

        15.    Any Class Member who does not make any objection in the manner and within

the time period provided shall be deemed to have waived such objection and shall forever be

foreclosed from making any objection to the fairness or adequacy of the proposed Settlement as

incorporated in the Stipulation, the Plan of Distribution, or the award of attorneys' fees and

reimbursement of expenses, unless otherwise ordered by the Court.




                                                 8
          Case 1:07-cv-07083 Document 71 	             Filed 07/13/2009 Page 59 of 72




           16.   Class Members do not need to appear at the hearing or take any other action to

indicate their approval.

           17.   Pending final determination of whether the Settlement should be approved, the

Plaintiffs, all Class Members, and each of them, and anyone who acts or purports to act on their

behalf, shall not institute, commence or prosecute any action which asserts Settled Claims

against any of the Released Parties.

          18.    The Court retains exclusive jurisdiction over the Action to consider all further

matters arising out of or connected with the Settlement.

Dated:	                	      , 2009



                                       Honorable Robert W. Gettleman
                                       United States District Judge




                                               9
Case 1:07-cv-07083 Document 71 	   Filed 07/13/2009 Page 60 of 72
       Case 1:07-cv-07083 Document 71 	               Filed 07/13/2009 Page 61 of 72




                             UNITED STATES DISTRICT COURT
                             NORTHERN DISTRICT OF ILLINOIS
                                       DIVISION


  IN RE ULTA SALON, COSMETICS
  & FRAGRANCE, INC. SECURITIES 	                             Master File No. 07 C 7083
  LITIGATION
                                                             CLASS ACTION
 This Document Relates To:

 ALL ACTIONS	                                                Hon. Robert W. Gettleman


                SUMMARY NOTICE OF PENDENCY OF CLASS ACTION,
                PROPOSED SETTLEMENT AND SET'T'LEMENT HEARING

  TO: ALL PURCHASERS OF ULTA SALON, COSMETICS & FRAGRANCE, INC.
     COMMON STOCK BETWEEN OCTOBER 25, 2007 AND DECEMBER 10, 2007.
     INCLUSIVE (THE "CL,ASS").

          YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil
 Procedure and an Order of the Court, that the above-captioned action (the "Action") has been
 conditionally certified as a class action and that a settlement for $3,750,000 has been proposed.
 A hearing will be held before the Honorable Robert W. Getlleman, United States District .Judge
 on	    	   , 2009 at	     	     m. in Courtroom 	           of the United States Courthouse,
                  Chicago, Illinois 	     	   ; to determine whether:

        I .	    The Class should be finally certified for settlement purposes;
        2.     The proposed settlement of the Action for $3;750,000, plus interest, is
               fair, reasonable and adequate and should be approved by the Court;
        3.     An Order and Final Judgment should be entered dismissing all claims in the
               Action against the Defendants and dismissing the Action with prejudice, and
               without costs;
       4.      The Plan of Distribution of the Net Settlement Fund should be approved; and
       5.      To award attorneys' fees and expenses requested by Lead Counsel on behalf of
               Plaintiffs' Counsel.

       IF YOU ARE A MEMBER OF ]'HE CLASS DESCRIBED ABOVE-', YOUR R1GFITS
WILL BE AFFECTED AND YOU MAY BE ENTITLED TO SHARE IN THE SETTLEMENT
FUND. If you have not yet received the full printed Notice of Pendency and Proposed
Settlement of Class Action, Settlement ]-Tearing and Application For Attorneys' Fees (the "Class
Notice") and a Proof of Claim form, you may obtain copies of these documents by contacting:
          Case 1:07-cv-07083 Document 71 	            Filed 07/13/2009 Page 62 of 72




                   Ulta Salon, Cosmetics & Fragrance, Inc. Securities Litigation
                            c/o Valley Forge Administrative Services
                                          P.O. Box 220
                                      Villanova. PA 19085

        Inquiries, other than requests for the forms of Class Notice and Proof of Claim, may be
made to Plaintiffs' Lead Counsel: Deborah R. Gross, Esquire, Law Offices Bernard M. Gross,
P.C., Suite 450, 100 Penn Square Last, Philadelphia, Pennsylvania 19107, Telephone (215) 561-
3600.

        To participate in the settlement, you must submit a Proof of Claim no later than
        	    , 2009. If you are a Class Member and do not exclude yourself from the Class, you
will be bound by the Order and Final Judgment of the Court. To exclude yourself from the
Class, you must submit a Request for Exclusion postmarked no later than 	      	      , 2009. If
you are a Class Member and do not submit a proper Proof of Claim, you will not share in the
settlement but you nevertheless will be bound by the Order and Final Judgment of the Court.

       Further information may be obtained by directing your inquiry in writing to Valley Forge
Administrative Services, the Claims Administrator, at the address listed above. [phone, e-mail,
web site]

Dated 	      	       .2009	                         By Order of the Court
Case 1:07-cv-07083 Document 71 	   Filed 07/13/2009 Page 63 of 72
   Case 1:07-cv-07083 Document 71 	        Filed 07/13/2009 Page 64 of 72




                     UNITED STATES DISTRICT COURT
                     NORTHERN DISTRICT OF ILLINOIS
                               DIVISION


 IN RE ULTA SALON COSMETICS
 & FRAGRANCE, INC. SECURITIES 	                     Master File No. 07 C 7083
 LITIGATION
                                                    CLASS ACTION
 This Document Relates To:

 ALL ACTIONS	                                       Hon. Robert W. Gettleman



                               PROOF OF CLAIM

 IF YOU PURCHASED THE' COMMON STOCK OF ULTA SALON, COSMETICS &
 FRAGRANCE, INC ("ULTA") BETWEEN OCTOBER 25, 2007 AND DECEMBI^IZ
 10, 2007 : INCLUSIVE (THE "CLASS PERIOD"), YOU ARE A "CLASS MEMBER"
 AND YOU MAY I3E ENTITLED TO SHARE IN THE SETTLEMENT PROCI:.EDS.
EXCLUDED FROM THI: CLASS ARE DEFENDANT ULTA, DEFENDANTS
LYNI LLE P. KIRBY ("KIRBY") AND GREGG R. BODNAR ("BODNAR"),
MEMBERS OF THEIR IMMEDIATE FAMILIES (PARENTS, SPOUSES, SIBLINGS
AND CHILDREN), ]'HE UNDERWRITERS OF ULTA'S INITIAL, PUBLIC
OFFERING OF COMMON STOCK, ANY SUBSIDIARY OR AFFILIATE OF ULTA,
AND THE DIREC'T'ORS AND EXECUTIVE OFFICERS. OF ULTA OR I1-S
SUBSIDIARIES OR AFFILIATES, OR ANY ENTITY IN WHICH ANY EXCLUDED
PERSON_ HAS A CONTROLLING INTEREST, AND THE LEGAL.
REPRESENTATIVES, HEIRS, SUCCESSORS AND ASSIGNS OF ANY EXCLUDED
PERSON.

 IF YOU ARE A CLASS MEMBER, YOU MUST COMPLETE AND SUBMIT TIIIS
 FORM IN ORDER 1'O BE ELIGIBLE FOR ANY SETTLEMENT BENEFITS.
YOU MUST COMPLETE AND SIGN THIS PROOF OF CLAIM AND MAIL, IT BY
FIRST CLASS MAIL, POSTMARKED NO LATER -1-11AN 	       , 2009, TO
']"HE FOLLOWING ADDRESS:


                             ULTA Proof of Claim

    In re Ulta Salon, Cosmetics & Fragrance, Inc. Securities Litigation
                 c/o Valley Forge Administrative Services
                               P.O. Box 220
                           Villanova, PA 19085
    Case 1:07-cv-07083 Document 71 	                  Filed 07/13/2009 Page 65 of 72




    YOUR FAILURE TO SUBMIT YOUR CLAIM BY 	          12009 WILL
       SUBJECT YOUR CLAIM TO REJECTION AND PRECLUDE YOUR
   RECEIVING ANY MONEY IN CONNECTION WITH THE SETTLEMENT OF
  THIS ACTION. DO NOT MAIL OR DELIVER YOUR CLAIM TO THE COURT
  OR TO ANY OF THE PARTIES OR THEIR COUNSEL AS ANY SUCH CLAIM
    WILL BE DEEMED NOT TO HAVE 13EEN SUBMITTED. SUBMIT YOUR
            CLAIM ONLY TO THE CLAIMS ADMINISTRATOR.

                               CLAIMANT'S STATEMENT

         1.     I purchased the common stock of Ulta Salon, Cosmetics & Fragrance, Inc.
 ("ULTA") during the period between October 25, 2007 and December 10, 2007,
 inclusive. (Do not submit this Proof of Claim if you did not purchase ULTA common
 stock during this period.)

         2.      By submitting this Proof of Claim ; I state that 1 believe in good faith that I
 arn a Class Member as defined above and in the Notice of Pendencv and Proposed
 Settlement of Class Action, Settlement Hearing and Application For Attorneys' lees (the
 "Class Notice"), or am acting for such person; that I am not a Defendant in the Action or
 anyone else excluded from the Class; that 1 have read and understand the Class Notice;
 that 1 believe that 1 am entitled to receive a share of the Settlement proceeds; that I elect
to participate in the proposed Settlement described in the Class Notice, and that I have
not filed a request for exclusion. (]f you are acting in a representative capacity on behalf
of a Class Member (such as an executor, administrator, trustee ; guardian, attorney-in-fact
or other representative), you must certify that you arc currently authorized to act on
behalf of the Class Member- and submit evidence of your current authority to act on
behalf of that Class Member. Such evidence would include, for example, letters
testamentary, letters of administration, or a copy of the trust documents.)

        3.      1 have set forth where requested below all relevant information with
respect to each purchase of ULTAs common stock during the Class Period, and each sale,
if any, of such common stock.

      4.      1 have enclosed photocopies of the stockbroker's confirmation slips,
stockbroker's statements, relevant portions of my tax returns or other documents
evidencing each purchase, sale or retention of ULTA common stock listed below in
support of my claim. (IF ANY SUCH DOCUMENTS ARE NOT IN YOUR
POSSESSION, PLEASE OBTAIN A COPY OR EQUIVALENT DOCUMENTS FROM
YOUR STOCKBROKER OR TAX ADVISOR BECAUSE THESE DOCUMENTS ARE-
NECESSARY TO PROVE AND PROCESS YOUR CLAIM. PLEASE DO NOT SEND
ORIGINALS OF SUCH DOCUMENTS.)




                                              2
    Case 1:07-cv-07083 Document 71 	                     Filed 07/13/2009 Page 66 of 72




          5.     1 understand that the information contained in this Proof of Claim is
  subject to such verification as the Court may direct, and I agree to cooperate in any such
  verification.

          6.       Upon the occurrence of the Effective Date (as defined in the Class Notice)
  my signature hereto will constitute a full and complete release, remise and discharge by
  me or, if l am submitting this Proof of Claim on behalf of a corporation, a partnership,
  estate or one or more other persons, by it, him, her or them, and by my, its, his, her or
  their heirs, executors, administrators, successors, and assigns of each of the "Released
  Parties" of all "Settled Claims,'' as defined herein.

          7.      By submitting this Proof of Claim, the undersigned and any person or
  entity on whose behalf the undersigned is acting, submits to the jurisdiction of the United
  States District Court for the District of Massachusetts for the purposes of the Action.

         8.      Statement of Claim

 Name(s) of Beneficial Owner(s):


 Name



 Name



 Street No.



City	                                  State	                               Zip Code



Telephone No. (Day) 	                               Telephone No. (Night)



Social Security Number (for individuals) or



Taxpayer Identification Number- (for estates, trusts, corporations, etc.)



                                                3
   Case 1:07-cv-07083 Document 71 	             Filed 07/13/2009 Page 67 of 72




 Check One:

    Individual _ Corporation u 'Trust 	       Estate _ IRA Account-
                                                               (speciy)



 Joint Owner's Name (if any)


        SHARES PURCHASED AND SOLD DURING THE CLASS PERIOD
             (OCTOBER 25, 2007 — DECEMBER 10, 2007)

 SHARES PURCHASED

         9.      I made the following PURGIASES of ULTA common stock between
 October 25, 2007 and December 10, 2007, inclusive. (Persons who received ULTA
 common stock during the Class Period other than by purchase, such as by gift or
 inheritance are not eligible to submit claims for those transactions.):

Date(s) of Purchase	    Number of Share(s) Purchase Price Per Aggregate Cost
(List Chronologically) of Common Stock	     Share of Common (incl. commisions and
(Month/Day/Year)	       Purchased	          Stock	             fees)




SHARES SOLD

       10.    1 made the following SALES of UL"rA common stock between October
25, 2007 and December 10, 2007, inclusive:


Date(s) of Sales	      Number of Shares) Sale Price Per 	  Amount Received
(List Chronologically of Common Stock 	   Share of Common (net commissions
(Month/Day/Year)	      Sold	              Stock	           and fees)



                                          4
       Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 68 of 72




    SHARES OWNED ON DECEMBER 10, 2007

          11.  At the close of business on December 10, 2007, 1 owned 	        shares of
    ULTA common stock.

    SHARES SOLD BETWEEN DECEMBER 10, 2007 AND MARCH 10, 2008

           12.    1 made the following SALES of ULTA common stock between December
    10, 2007 and March 10, 2008, inclusive:


    Date(s) of Sales	      Number of Share(s) Sale Price Per 	      Amount Received
    (List Chronologically of Common Stock	     Share of .        	(net commissions
    (Month/Day/Year) 	     Sold	               Stock	               and fees)




	        /	     /	     	                          $	               $




SUBSTITUTE FORM W-9

       (You must provide the requested information here even if you have already
provided the same or similar information at Section 8 of this Proof of Claim.)

          Request for "taxpayer Identification Number:



                                              5
    Case 1:07-cv-07083 Document 71 	                 Filed 07/13/2009 Page 69 of 72




         Enter taxpayer identification number below for the Beneficial Owner(s). For
  most individuals, this is your Social Security Number The Internal Revenue Service
  ("I.R.S.") requires such taxpayer identification number. If you fail to provide this
  information, your claim may be rejected.


  Social Security Number (for individuals) or



  Taxpayer Identification Number (for estates, trusts, corporations, etc.)

  RELEASE


         For purposes of this Release, the word "I" shall mean I or we, as the context
  requires; and the term "Class" shall mean all persons who purchased the common stock
  of ULTA during the period October 25, 2007 through December 10, 2007, inclusive (the
  "Class Period"). Excluded from the Class are Defendants, members of the immediate
 families (parents, spouses, siblings and children) of Kirby and Bodner, the underwriters
 of ULTA's initial public offering of common stock, any subsidiary or affiliate of ULTA,
 and the directors and executive officers of ULTA or its subsidiaries or affiliates, or any
 entity in which any excluded person has a controlling interest, and the legal
 representatives, heirs, successors and assigns of any excluded person. Also excluded
 from the Class are any persons or entities who submit valid and timely requests for
 exclusions from the Class.

        For puposes of this Release, the term "Released Parties" means any and all of the
 Defendants, their past or present subsidiaries, parents, affiliates, successors and
 predecessors, and the officers, directors, agents, employees, attorneys, underwriters.
 auditors, accountants, insurers, reinsurers, legal representatives, heirs, executors.
 administrators, successors in interest or assigns of any of the foregoing.

          For purposes of this Release, the term "Settled Claims'' means any and all claims,
 debts, demands, rights or causes of action or liabilities of any kind whatsoever (including,
 but not limited to, any claims for damages, interest, attorneys' fees, expert or consulting
 fees, and any other costs, expenses or liabilities whatsoever), whether based on federal,
 state, local, statutory or common law or any other law, rule or regulation, whether fixed
 or contingent, accrued or un-accrued, liquidated or un-liquidated, at law or in equity,
matured or un-matured, including both known claims and Unknown Claims (as defined
below), (i) that have been asserted in this Action against any of the Released Parties,or
(ii) that could have been asserted I'll forum by the Class Members or any of them
against any of the Released Parties which arise out of or are related to the allegations,
transactions, facts, matters or occu r rences, representations or omissions, including any
public statement by any Defendant during the Class Period, involved, set forth, or
referred to in the Amended Complaint.


                                             6
    Case 1:07-cv-07083 Document 71 	                  Filed 07/13/2009 Page 70 of 72




          For purposes of this Release, the term "Unknown Claims' means any and all
  Settled Claims which any Lead Plaintiff or Class Member does not know or suspect to
  exist in his, her or its favor at the time of the release of the Released Parties, which if
  known by hirn, her or it might have affected his, her or its decision(s) with respect to the
  Settlement. With respect to any and all such Unknown Claims, the parties stipulate and
  agree that upon the Effective Date, the Lead Plaintiffs and each Class Member shall
  expressly be deemed to have, and by operation of the Order and Final Judgment shall
  have, expressly waived and relinquished any and all provisions, rights and benefits
  conferred by Cal. Civ. Code § 1542, or by any law of any state or territory of the United
  States, or principle of common law, which is similar, comparable, or equivalent to Cal.
  Civ. Code § 1542, which provides:

         A general release does not extend to claims which the creditor does
         not know or suspect to exist in his favor at the time of executing the
         release, which if known by him must have materially affected his
         settlement with the debtor.

         I, (and if 1 am an individual, on behalf of myself, and my heirs, executors,
 administrators, personal representatives, successors and assigns, and if I am acting on
 behalf of a corporation; partnership, trust or other legal entity on behalf of it and its
successors and assigns, and if I am acting or acted as trustee, guardian, conservator,
attorney-in-fact or other agent with, respect to ULTA shares purchased during the Class
Period in such capacity, on behalf of any persons or entities for whom I act or acted as
such trustee, guardian, conservator, attorney-in-fact or agent), for and in consideration of
the Settlement set forth in that certain Stipulation and Agreement of Settlement dated
   	    , 2009, filed in the Action (the "Stipulation"), and other good and sufficient
consideration, the receipt and sufficiency of which are hereby acknowledged, agree to
dismiss with prejudice, and hereby release and forever discharge, effective upon the
Effective Date of the Stipulation, as by an instrument under sea] without further act by
any person, each and-every one of the Released Parties from any and all Settled Claims.

         I agree that there is a risk that I may incur damages, expenses or liabilities relating
 to the Settled Claims, but which were unknown and unanticipated at the time I executed
 this Release, and that I acknowledge and agree that the Stipulation and this Release is
 intended to be a full and final accord and satisfaction of such Unknown Claims and a
 release thereof and shall apply to all unknown and unanticipated results of said matters,
as well as those now known and anticipated. In furtherance thereof; 1 hereby waive any
and all provisions, rights and benefits conferred by law of any state or territory of the
United States, or principle of common law, or of international or foreign law, which
prohibits releases of Unknown Claims. l understand that I may hereafter discover facts in
addition to or different from those which I now know or believe to be true with respect to
the Settled Claims, but hereby stipulate and agree that I am fully releasing such claims
and, upon the Effective Date and by operation of the Order and Final Judgment, I will
have, fully, finally, and forever settled and released any and all Settled Claims
whatsoever against the Released Parties, known or unknown, suspected or unsuspected,
contingent or non-contingent, whether or not concealed or hidden, including any and all
    Case 1:07-cv-07083 Document 71 	                Filed 07/13/2009 Page 71 of 72




  Unknown Claims, which now exist, or heretofore have existed upon any theory of law or
  equity now existing or coming into existence in the future, including, but not limited to,
  conduct which is negligent, intentional, with or without malice, or a breach of any duty,
  law or rule, with regard to the subsequent discovery or existence of such different or
  additional facts. I acknowledge that the foregoing waiver and release was bargained for
  and a key element of the Settlement of which this Release is a part.

         By executing this Release, I represent and warrant that I have not assigned,
 hypothecated, granted, conveyed, transferred, or otherwise given or agreed to assign,
 hypothecate, grant, convey transfer or otherwise give any interest in the Settled Claims,
 or any of them or any portion of them, to any other person or entity.

         1 have read the foregoing Release carefully and, knowing and understanding its
 contents and the full legal effect thereof, I certify, under penalty of perjury, that I have
 signed the same as my own free act and deed as an instrument under seal.

 CERTIFICATION

      UNDER THE PENALTIES OF PERJURY, 1 (WE) CERTIFY THAT ALL OF
 THE INFORMATION PROVIDED ON THIS FORM 1S TRUE, CORRECT AND
 COMPLETE.

        1 ( W O certify that I am (we are) NOT subject to backup withholding under the
provisions of Section 3406 (a)(1)(c) of the Internal Revenue Code because: (a) I am (we
are) exempt from backup withholding, or (b) l (We) have not been notified by the I.R.S.
that 1 am (we are) subject to backup withholding as a result of failure to report all interest
or dividends, or (c) the I.R.S. has notified me (us) that I am (we are) no longer subject to
backup withholding.

        NOTE: If you have been notified by the I.R.S. that you are subject to backup
withholding, please strike out the language that you are not subject to backup withholding
in the certification above.

     1 (we) certify that, if I am (we are) acting as the representative for a Class
Member I am (we are) cur r ently authorized to act on behalf of the Class Member.

        Signature of Claimant (If this claim is being made on behalf of Joint Claimants,
then each must sign):

Signature: 	       	                                          Date: 	



Signature: 	   	                                             Date: 	



        If the person executing this Proof of Claim is acting in a representative capacity,

                                             8
     Case 1:07-cv-07083 Document 71 	               Filed 07/13/2009 Page 72 of 72




    evidence of such person's current authority to act on behalf of the Class Member must be
    submitted with this Proof of Claim.

           THIS PROOF OF CLAIM MUST BE SUBMITTED NO LATER THAN
	           , 2009, AND MUST BE MAILED TO:


                                  ULTA Proof of Claim

         In re Ulta Salon, Cosmetics & Fragrance, Inc. Securities Litigation
                      c/o Valley Forge Administrative Services
                                    P.O. Box 220
                                Villanova, PA 19085

       A Prooi' of Claim received by the Claims Administrator shall be deemed to have
been submitted when posted, if mailed by 	         	   , 2009, and if a postmark is indicated
on the envelope and it is mailed by First Class Mail, and addressed in accordance with
the above instructions. In all other cases, a Proof of Claim shall be deemed to have been
submitted when actually received by the Claims Administrator.

       If you wish to be assured that your Proof of Claim is actually received by the
Claims Administrator, then you should send it by Certified Mail, Return Receipt
Requested. No acknowledgment will be made as to the receipt of Proof of Claim forms.
You should be aware that it will take a significant amount of time to process fully all of
the Proof of Claim forms and to administer the Settlement. This work will be completed
as promptly as time permits, given the need to investigate and tabulate each ] , roof of
Claim. Please notify the Claims Administrator of any change of address.




                                              9

								
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