SUPERIOR COURT FOR THE STATE OF CALIFORNIA COUNTY OF SOLANO

SUPERIOR COURT FOR THE STATE OF CALIFORNIA COUNTY OF SOLANO GENNADIY TUZ, et al., Plaintiffs, vs. CAMPBELLS CARPETS, INC., et al., Defendants. Case No.: FCS028149 NOTICE OF PROPOSED CLASS ACTION SETTLEMENT To: All persons who worked for Campbells Carpets, Inc., as a tile setter or tile setter helper in California any time between July 13, 2002 and August 4, 2007 ( Class Members ). PLEASE READ THIS NOTICE CAREFULLY YOUR LEGAL RIGHTS ARE AFFECTED WHETHER YOU ACT OR NOT You may be entitled to money from this settlement. In order to receive your share of the settlement, you must return the claim form postmarked no later than October 30, 2007. WHY SHOULD YOU READ THIS NOTICE? The Solano County Superior Court (the Court ) has granted preliminary approval to a proposed settlement (the Settlement ) of this class action lawsuit (the Lawsuit ). Because your rights may be affected by the Settlement, it is important that you read this notice carefully. Campbells Carpets records show that you worked for the company as a tile setter or tile setter helper in California at some time between July 13, 2002 and August 4, 2007 ( Class Period ). Therefore, you are a Class Member in this Lawsuit. The Court ordered that this Notice be sent to you because you may be entitled to money under the Settlement and because the Settlement affects your legal rights. The purpose of this notice is to provide you with a brief description of the Lawsuit, to inform you of the terms of the proposed Settlement, and to discuss your rights and options in connection with the Lawsuit and the Settlement. WHAT IS THIS CASE ABOUT? On July 13, 2006, Plaintiffs Gennadiy Tuz, Oleg Prachkin and Alex Perepelka ( Plaintiffs ) filed a complaint in Solano County Superior Court against Campbells Carpets and Robert C. Miller (collectively, Campbells ) on behalf of similarly situated employees who worked for Campbells Carpets as tile setters and tile setter helpers. Plaintiffs contend that Campbells owes the Class Members wages, reimbursements and penalties under California labor law. Specifically, Plaintiffs contend that Campbells failed to provide meal periods and rest breaks in compliance with California law, failed to pay overtime wages, failed to pay reporting time and travel time, did not reimburse Class Member for tools used on the job, for mileage for driving on company business and for other business expenses, failed to pay compensation upon termination of employment, failed to keep adequate payroll records or provide accurate itemized wage statements, and engaged in unfair business practices based on those alleged violations. Plaintiffs also contended that Campbells illegally retaliated against Class Members and caused Class Members to suffer emotional distress. Campbells denies all liability for Plaintiffs claims. Specifically, Campbells contends that the Class Members were, at all relevant times, correctly paid and provided with all compensation and penalties due to them. Campbells also denies that it retaliated against any Class Members. Campbells denies that it owes Class Members any wages, restitution, penalties, or other damages. Accordingly, this class Settlement constitutes a compromise of disputed claims and should not be construed as an admission of liability on the part of Campbells, by whom all liability is expressly denied. Campbells reserves the right to cancel the Settlement and challenge all claims if certain conditions are not met or if the Court does not approve the Settlement. The Court has not ruled on the merits of Plaintiffs claims. 1

If you are still employed by Campbells Carpets, your decision about whether to submit a Claim Form will not affect your employment. California law and Campbells Carpets policy strictly prohibit unlawful retaliation. Campbells Carpets will not take any adverse employment action against, or otherwise target, retaliate or discriminate against, any Class Member because of the Class Member s decision to either participate or not participate in this Settlement. If you have any questions about your rights to file a Claim Form or participate in the Settlement, you should immediately contact counsel for the Plaintiffs/Class Members. If you have any questions regarding the administration or processing of the Proof of Claim form, please submit such questions to the Settlement Claims Administrator, The Garden City Group, at 1 (888) 404-8013. WHO ARE THE ATTORNEYS REPRESENTING THE PARTIES? Attorneys for the Plaintiffs/Class Members: Arif Virji, Esq. Gary M. Ittig, Esq. LYNCH, GILARDI & GRUMMER A Professional Corporation 475 Sansome Street, Suite 1800 San Francisco, CA 94111 Telephone: (415) 397-2800 Facsimile: (415) 397-0937 Attorneys for Defendants Campbells Carpets, Inc. and Robert C. Miller: Felicia R. Reid John F. Baum CURIALE DELLAVERSON HIRSCHFELD & KRAEMER, LLP 727 Sansome Street San Francisco, CA 94111 Robin J. Samuel HOGAN & HARTSON LLP. 1999 Avenue of the Stars, Suite 1400 Los Angeles, CA 90067 WHAT ARE THE BASIC SETTLEMENT TERMS? On August 22, 2007, the Court certified a class, for settlement purposes only, of all Campbells Carpets employees who worked in California as tile setters and tile setter helpers any time between July 13, 2002, and August 4, 2007 (the Class ). Class Members who do not opt out of the Class pursuant to the procedures set forth in this Notice will be bound by the Settlement and will release all of their claims against Campbells. Campbells has agreed to pay One Million Eight Hundred Thousand Dollars ($1,800,000) (the Settlement Sum ) to fully resolve all claims in the Lawsuit, including claims by eligible Class Members, attorneys fees, costs, half of Settlement Administration costs, and half of class representative Service Payments. Campbells also will pay one half (50%) of Settlement Administration costs and one half (50%) of class representative Service Payments. The remainder of the Settlement estimated to exceed $1 million will be available for distribution to Class Members according to a formula based on their gross wages. In addition, as a result of the Lawsuit and the Settlement, Campbells has implemented changes to its time-keeping procedures, overtime policies, and payroll systems to ensure that Class Members receive overtime wages, meal periods and rest breaks, and expense reimbursement in compliance with California law. The Court has preliminarily approved the following deductions from the Settlement Sum: Settlement Administration Costs. Payment to the Settlement Claims Administrator of 50% of the expense of notifying the Class Members of the Settlement and processing claims submitted by Class Members, currently estimated to total approximately $30,000, for a estimated deduction from the settlement of $15,000; Attorneys Fees and Expenses. Attorneys fees and costs will be paid to Court-approved Class Counsel from the Settlement Sum. Class Counsel may ask for fees and costs of up 40% ($720,000) of the Settlement Sum as reasonable compensation for the work Class Counsel performed and will perform in this Lawsuit through settlement finalization. Since July 2006, Class Counsel have been prosecuting the Lawsuit on behalf of the Class Members on a contingency fee basis (that is, without being paid any money to date) and have been paying all litigation costs and expenses. The Court will determine the actual amount awarded. Class Members are not personally responsible for any of Class Counsel s attorney s fees or expenses. 2

Service Payments to Named Plaintiffs. One half of the Service Payments awarded to the named plaintiffs by the Court will be paid from the Settlement Sum, up to a maximum of $15,000. The Settlement provides for service payments of up to $10,000 to each of the class representatives/named plaintiffs Gennadiy Tuz, Oleg Prachkin and Alex Perepelka, for a total of $30,000, to compensate them for the services they provided on behalf of the Class Members. One half of this amount will be paid from the Settlement Sum, and the other half will be paid directly by Campbells. The class representatives also will be eligible to receive Settlement Payments as Class Members. WHAT MONEY CAN YOU RECEIVE IF YOU FILE A CLAIM? To receive money under the settlement, you must file a valid claim by October 30, 2007. Your individual recovery will be determined as follows and is subject to the following conditions. Calculation of Individual Class Member Settlement Payments. After deducting the Court-approved amounts above, the balance of the Settlement Sum ( Net Settlement Sum ) will be distributed to Class Members, based on the total amount of Gross Wages that each Class Member earned through employment at Campbells during the period between July 13, 2002, and August 4, 2007 (the Settlement Class Period ). Each Class Member s individual settlement payment will be a percentage share of the Net Settlement Sum equal to the Class Member s Gross Wages divided by the total of all Gross Wages earned by those Class Members who submit valid claims in a timely fashion (Authorized Claimants). Specifically, each Authorized Claimant s share of the Net Settlement Sum shall be computed by: (1) dividing the Authorized Claimant s gross wages by the total of all Gross Wages paid to all Authorized Claimants, and (2) multiplying the resulting percentage by the amount of the Net Settlement Sum. Disputing Gross Wages. Class Members will have the opportunity to dispute the data on their Claim Forms, including the Gross Wages used to calculate Settlement Payments, if they believe the data is incorrect. To dispute the Gross Wages information provided by the Settlement Claims Administrator, Class Members must sign and date their Claim Form and return it by the Notice deadline with convincing documentation to establish the Gross Wages the Class Member claims to have actually earned during the Settlement Class Period. Documentation sent to the Settlement Claims Administrator must be submitted under penalty of perjury. DOCUMENTATION SENT TO THE SETTLEMENT CLAIMS ADMINISTRATOR WILL NOT BE RETURNED OR PRESERVED; DO NOT SEND ORIGINALS. The Settlement Claims Administrator will use Campbells records and information provided by Class Members to resolve disputes about the Gross Wages earned. Payments to Class Members. Only Class Members who file a properly completed and valid Claim Form postmarked by October 30, 2007, will receive their allocated share of the settlement. If the conditions of the Settlement are met, and after the Court grants final approval to the Settlement, settlement checks will be mailed to Authorized Claimants. Class Members who do not file valid or timely Claim Forms will not receive their allocated shares of the settlement, but still will be bound by the terms of the Settlement, including the Release described below, unless they submit timely Requests for Exclusion. Tax Matters. Forty percent (40%) of the settlement payment amounts distributed to each Authorized Claimant shall be considered and reported as wages (W-2 reporting). Campbells or its proxy shall take all usual and customary deductions from this portion of the settlement payments, including, but not limited to, state and federal tax withholding, state disability premiums, and unemployment insurance premiums. The remaining sixty percent (60%) of the settlement payment amounts shall be allocated to statutory penalties, interest and expense reimbursements and shall not be subject to withholding (1099 reporting). Class Members are responsible for the proper tax treatment of the settlement payments. The Settlement Claims Administrator, Campbells, its counsel, and Class Counsel cannot provide tax advice. Accordingly, Class Members should consult with their tax advisors concerning the tax consequences and treatment of payments they receive under the Settlement. HOW ARE MY RIGHTS AFFECTED BY THIS SETTLEMENT? If you submit a claim, or if you do nothing, your legal rights will be affected if the Court approves the proposed Settlement, and you will be deemed to have agreed to the Release of claims below. Upon approval, the Court will dismiss with prejudice the class action and the Settlement Agreement will bind all members of the Class (whether or not they timely submit a Claim Form) who have not opted out of the Settlement, and will bar Class Members from bringing certain claims against Campbells as described below. Release. Specifically, after approval by the Court, the settlement will fully release and discharge Robert C. Miller, his successors, heirs and assigns, and Campbells Carpets, Inc., and its related and affiliated companies, subsidiaries, parent companies, insurers, attorneys, successors, assigns, and its present and former managers, executives, owners, shareholders, 3

employees, directors, agents, and operators from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts, and expenses, for or related in any way to the claims, causes of action, facts, matters, transactions, or occurrences that were alleged, stated, or referred to in the complaints filed in the Lawsuit, or any such claim, or cause of action that could have been alleged in the Lawsuit and that is based in whole or in part upon, arises out of, is related to, or is in any way connected with the allegations, claims, or causes of action asserted in the Complaint, whether known or unknown, suspected or unsuspected, anticipated or unanticipated, which the Class and each and every Class Member (excluding those who have opted out) has had, ever had, or hereafter may claim to have from the beginning of time through August 4, 2007 ( Released Claims ). Examples of Specific Claims Released: The Released Claims include, but are not limited to: (1) meal period and rest break violations and payments pursuant to California Labor Code Sections 226.7, 512, 553, 558 and IWC 16-2001; (2) wage statement and/or payroll recordkeeping violations pursuant to Labor Code sections 226, 1174, IWC 16-2001; (3) unpaid wages of any kind, including but not limited to overtime, minimum wage, vacation pay, and/or wages for off the clock work, under federal and state law, including California Labor Code Sections 204 and 558 and the FLSA; (4) penalties of any kind, including but not limited to waiting time penalties under Labor Code section 203, penalties pursuant to California Labor Code Section 226, civil penalties under Labor Code section 2699 et seq., or penalties under any other Labor Code provision; (5) unfair competition and unfair business practices pursuant to Business and Professions Code Section 17200 et seq. for alleged wage and hour violations; (6) retaliation under Labor Code section 98.6 or any other statutory or common law theory; (7) conversion; (8) interest and costs pursuant to California Civil Code Section 3287 and California Labor Code Section 218.6; (9) statutory or common law rights to attorney fees and costs, including those pursuant to FLSA Section 216(b) and California Labor Code Section 1194 et seq.; (10) the alleged violation or breach of any other state or federal statute, rule and or regulation governing wages or working conditions; including all applicable Industrial Welfare Commission Wage Orders, and all similar causes of action, including but not limited to, any claim for interest, penalties, punitive and/or exemplary damages, negligence, fraud, or misrepresentation in connection with any of the foregoing. Class Members Claims Not Released. The Released Claims do not include claims by any Class Member other than Plaintiffs for: (1) age discrimination under the Age Discrimination in Employment Act; (2) unemployment insurance; (3) worker s compensation benefits; (4) state disability compensation; (5) previously vested benefits under any Employer-sponsored benefits plan; (6) discrimination or harassment in employment under the California Fair Employment and Housing Act, Title VII of the Federal Civil Rights Act of 1964, and/or Federal Civil Rights Act of 1991, or any similar state or federal laws; (7) violations of California s Pregnancy Disability Leave laws; (8) violations of the California Family Rights Act, the Federal Family Medical Leave Act, or similar state or federal laws; (9) the Federal Equal Pay Act of 1963; (10) violations of the Americans with Disabilities Act of 1990; (11) violations of any other state or federal law, rule or regulation concerning discrimination and /or harassment; (12) the right to file a charge (including a challenge to the validity of the Settlement Agreement) with the Equal Employment Opportunity Commission ( EEOC ), the National Labor Relations Board ( NLRB ), the California Department of Fair Employment and Housing ( DFEH ), or any other similar state or local agency, or from participating in any investigation or proceeding conducted by such an agency (except that Class Members shall waive any and all rights to recover any monetary relief and other personal relief as a result of any such agency proceeding or subsequent legal action; and (13) any other rights that cannot by law be released by private agreement. Waiver of California Civil Code Section 1542. With respect to the Released Claims only, the Class, each and every Class Member (excluding any who may have opted out) will expressly waive any rights or benefits available to them under the provision of Section 1542 of the California Civil Code, which provides as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. All members who do not opt out elect to, and do, assume all risks for claims that have arisen, whether known or unknown, from the subject of this release, and specifically waive all rights they may have under California Civil Code Section 1542. If the facts relating in any manner to this release and dismissal are found hereinafter to be other than or different from the facts now believed to be true, they expressly accept and assume the risk and agree that this Agreement and the release of claims contained herein shall remain effective. Waiver of Labor Code Section 206.5(e). Class Members who do not opt out shall be deemed to have acknowledged and agreed that their claims for wages and/or penalties in the Lawsuit are disputed, and that the settlement payments constitute payment of all sums allegedly due to them. Class Members will be deemed to have acknowledged and agreed that California Labor Code Section 206.5 is not applicable to the settlement payments. That section provides in pertinent part as follows: 4

No employer shall require the execution of any release of any claim or right on account of wages due, or to become due, or made as an advance on wages to be earned, unless payment of such wages has been made. Conditions of Settlement. This Settlement is conditioned upon the Court entering an order at or following the Settlement Hearing finally approving the Settlement as fair, reasonable, adequate, and in the best interests of the Settlement Class. HOW CAN I CLAIM MONEY FROM THE SETTLEMENT? You have the right to claim money from the settlement if you received a copy of this Notice and you actively worked for Campbells Carpets as a tile setter or tile setter helper at any time between July 13, 2002, and August 4, 2007. Eligible Class Members who want to receive money under the Settlement must completely fill out, sign, and date the enclosed Claim Form, thereby certifying that the Class Member was employed in a tile setter and/or tile setter helper capacity by Campbells during the Class Period and that any documentation submitted with the Claim Form is true and correct under penalty of perjury, and mail the completed Claim Form postmarked by no later than October 30, 2007, to the Settlement Claims Administrator at the following address: Tuz, et al. v. Campbells Carpets, Inc., et al. Settlement Claims Administrator c/o The Garden City Group, Inc. P.O. Box 91171 Seattle, WA 98111-9271 Claim Forms postmarked after October 30, 2007, will be rejected. If you would like confirmation that the Settlement Claims Administrator received your Claim Form, send it by certified mail, return-receipt requested. Class Members who do not submit a valid and properly completed Claim Form or who mail a Claim Form after the October 30, 2007 deadline will not receive any money from the Settlement and will be forever barred from asserting any of the Released Claims. It is your responsibility to ensure that the Settlement Claims Administrator receives your Claim Form within the prescribed time period. It is also your responsibility to ensure that the Settlement Claims Administrator has your current address on file. WHAT OTHER OPTIONS DO I HAVE? If you do not wish to take part in the Settlement, you must opt out of the Class by sending to the Settlement Claims Administrator a Request for Exclusion Form postmarked no later than October 30, 2007. Alternatively, you may request exclusion by sending a letter to the Claims Administrator, stating: I WISH TO BE EXCLUDED FROM THE SETTLEMENT CLASS IN THE CASE GENNADIY TUZ, ET AL. V. CAMPBELLS CARPETS, INC., ET AL., SOLANO COUNTY SUPERIOR COURT NO. FCS028149. I UNDERSTAND THAT BY ASKING TO BE EXCLUDED FROM THE SETTLEMENT CLASS, I WILL NOT RECEIVE ANY MONEY FROM THE SETTLEMENT. Send the Request for Exclusion directly to Tuz, et al. v. Campbells Carpets, Inc. et al., Settlement Claims Administrator, c/o The Garden City Group, Inc., P.O. Box 91171, Seattle, WA 98111-9271. The judgment following approval of the Settlement by the Court will bind all Class Members who do not request exclusion from the Settlement. If you wish to object to the proposed Settlement, or any portion of it, you may file with the Court an objection stating why you object to the Settlement. Objections must be in writing and must be filed with the Court on or before November 16, 2007. At the same time, you must mail copies of your objections to Class Counsel and Campbells counsel at the addresses stated above. If you wish to object to the settlement and have the objection considered by the Court, you also may appear at the Final Approval Hearing scheduled for December 14, 2007 at 8:30 a.m., before Judge Paul L. Beeman, in Department 1 of the Solano County Superior Court, located at 321 Tuolumne Street, Vallejo, California. You have the right to appear either in person or through your own attorney at this hearing. Objections not previously filed in writing in a timely manner as described above will not be considered by the Court. Any attorney who intends to represent an individual objecting to the Settlement must file a notice of appearance with the Court and serve counsel for all parties on or before November 16, 2007. All objections or other correspondence must state the name and number of the case, which is Tuz, et al. v. Campbells Carpets, Inc. et al., Case No. FCS028149. 5

If you object to the Settlement, you will remain a member of the Class, and if the Court approves the Settlement, you will be bound by the terms of the Settlement in the same way as Class Members who do not object. Any member of the Class who does not object in the manner provided above shall have waived any objection to the Settlement, whether by appeal or otherwise. WHAT IS THE NEXT STEP? The Final Approval Hearing on the adequacy, reasonableness, and fairness of the Settlement Agreement will be held at on December 14, 2007 at 8:30 a.m., before Judge Paul L. Beeman, in Department 1 of the Solano County Superior Court, located at 321 Tuolumne Street, Vallejo, California. The Hearing may be continued without further notice. You are not required to attend the Final Approval Hearing, although any Class Member is welcome to attend the hearing. HOW CAN I GET ADDITIONAL INFORMATION? This Notice is only a summary of the Lawsuit and the Settlement. For more information, you may inspect the Court files and the Settlement Agreement at the Office of the Clerk of the Solano County Superior Court, located at 321 Tuolumne Street, Vallejo, California, during regular court hours. You may also contact Class Counsel, listed above, for more information. PLEASE DO NOT CALL OR WRITE THE COURT, CAMPBELLS CARPETS OR ITS ATTORNEYS ABOUT THIS NOTICE REMINDER AS TO TIME LIMITS The deadline for submitting a Claim Form to claim your share of the Settlement funds is October 30, 2007. You must complete and return the enclosed Claim Form to the Settlement Claims Administrator, postmarked not later than that date, to participate in the Settlement. The deadline for submitting a request for exclusion from the Settlement is October 30, 2007. The deadline for filing an objection to the Settlement with the Court and mailing it to all counsel is November 16, 2007. These deadlines will be strictly enforced. BY ORDER OF THE SUPERIOR COURT FOR THE COUNTY OF SOLANO DATED: August 22, 2007 Hon. Paul L. Beeman, Judge 6