DISTRICT COURT DISTRICT OF SOUTHEAST DIVISION

—————————————————–————— X RAYMOND HANS, et al ., : : Plaintiffs : Civil Action No. : 3:05-CV-00115-RRE-KKK v. : : GARY D. THARALDSON, et al. ,: : Defendants, : : and : : THARALDSON MOTELS, INC. : EMPLOYEE STOCK OWNERSHIP PLAN, : : Nominal Defendant. : : —————————————————–————— X : BERNARD MCKAY, et al. ,: : Plaintiff : Civil Action No. : 3:08-CV-00113-RRE-KKK v. : : GARY D. THARALDSON, : : Defendant, : : and : : THARALDSON MOTELS, INC. : EMPLOYEE STOCK OWNERSHIP PLAN, : : Nominal Defendant. : —————————————————–————— X

NOTICE OF PROPOSED SETTLEMENTS OF CLASS ACTION LITIGATION, SETTLEMENT FAIRNESS HEARING, AND PROPOSED ORDER

Your legal rights might be affected if you are a member of one of the following groups: 1 I. PARTICIPANTS IN THE TMI HOSPITALITY, INC. (“TMI”) EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST (“TMI ESOP”) (FORMERLY KNOWN AS THE THARALDSON MOTELS, INC. ESOP) AT ANY TIME FROM DECEMBER 30, 1998 TO THE PRESENT WHO RECEIVED AN ALLOCATION OF PLAN ASSETS TO THEIR TMI ESOP ACCOUNTS WHICH THEY DID NOT SUBSEQUENTLY FORFEIT UNDER THE TERMS OF THE TMI ESOP AND WHO ARE NO LONGER EMPLOYEES OF TMI (OR AN AFFILIATE OF TMI), AND THE BENEFICIARIES OF SUCH PARTICIPANTS (“FORMER EMPLOYEE CLASS”);

1 Defendants (see below for a list of Defendants), members of their immediate families, their legal representatives, heirs, successors or assigns or any excluded party, are excluded from both classes in the Hans Action and the Class in McKay. II. PARTICIPANTS IN THE TMI ESOP AT ANY TIME FROM DECEMBER 30, 1998 TO THE PRESENT WHO ARE PRESENT EMPLOYEES OF TMI (OR AN AFFILIATE OF TMI), AND THE BENEFICIARIES OF SUCH PARTICIPANTS (“CURRENT EMPLOYEE CLASS”).

PLEASE READ THIS NOTICE CAREFULLY. A FEDERAL COURT HAS AUTHORIZED THIS NOTICE. THIS IS NOT A SOLICITATION. YOU HAVE NOT BEEN SUED.

This notice (“Notice”) advises you of two proposed settlements (the “Settlements”) in the above referenced litigation in Hans v. Tharaldson (the “Hans Action”) and McKay v. Tharaldson (the “McKay Action”) (collectively the “Actions”). In the Actions, Plaintiffs seek to recover losses which they allege were suffered by the TMI ESOP as the result of breaches of fiduciary duty by Defendants. The parties reached proposed settlements of these Actions on or about October 10, 2012. The United States District Court for North Dakota (the “Court”) has preliminarily approved the Settlements and has scheduled a final hearing (the “Fairness Hearing”) to evaluate the fairness and adequacy of each of the Settlements. At the Fairness Hearing, the Court will consider (i) whether to approve the Settlements as fair and adequate; (ii) whether to approve the Plan of Allocation in the Hans Action (see Question 5 below) which sets forth the manner in which the Settlement proceeds will be distributed to Settlement Participants; and (iii) whether to award attorneys’ fees and/or expenses to Plaintiffs’ Counsel (see Question 8 below). The Fairness Hearing, before the Honorable Ralph R. Erickson, has been scheduled for February 25, 2013, at 9:00 AM in Courtroom 1 at the United States District Court for North Dakota, 655 First Avenue North, Fargo, ND 58102. The terms of the Settlements are contained in two separate Settlement Agreements (the “Settlement Agreements”). A copy of the Settlement in the Hans Action (the “Hans Settlement”) is available at http://www.cohenmilstein.com/ cases/82/tharaldson-motels-inc-employee-stock-ownership-plan-hans-v-tharaldson or www.kellersettlements.com , or by contacting Plaintiffs’ Counsel in the Hans Action identified below. A copy of the Settlement Agreement in the McKay Action (the “McKay Settlement”) is available at http://www.cohenmilstein.com/cases/230/tharaldson-motels- inc-employee-stock-ownership-plan-litigation-ii-mckay-v-tharaldson or by contacting Cohen Milstein at the address below identified below. Capitalized and italicized terms used in this Notice and not defined herein have the meanings assigned to them in the Settlement Agreement. Any questions regarding the Hans Settlement should be directed to counsel listed below. If you are a member of the Former Employee Class, please contact counsel for the Former Employee Class. If you are a member of the Current Employee Class, please contact counsel for the Current Employee Class:

Counsel for the Former Employee Class: Counsel for the Current Employee Class: COHEN MILSTEIN KELLER ROHRBACK P.L.C. SELLERS & TOLL P.L.L.C. Gary Gotto R. Joseph Barton Gary Greenwald Bruce F. Rinaldi David Ko 1100 Avenue, N.W. 3101 North Central Avenue WestTower, Suite 500 Suite 1400 , D.C. 20005-3934 Phoenix, AZ 85012 Telephone: (202) 408-4600 Telephone: (602) 248-0088 Or Toll Free: 1-888-240-0775 Or Toll Free: 1-800-776-6044 Email: [email protected] Email: [email protected]

2 Counsel for North Star Trust Company: MOORE & VAN ALLEN PLLC Alton L. Gwaltney, III Mark A. Nebrig 100 North Tryon Street Suite 4700 Charlotte, NC 28202-4003 Telephone: 704-331-1000 Email: [email protected]

Any questions regarding the McKay Settlement should be directed to:

Counsel for the McKay Class: COHEN MILSTEIN SELLERS & TOLL P.L.L.C. R. Joseph Barton Bruce F. Rinaldi 1100 New York Avenue, N.W. WestTower, Suite 500 Washington, D.C. 20005-3934 Telephone: (202) 408-4600 Or Toll Free: 1-888-240-0775 Email: [email protected]

Please do not contact the Court, as Court personnel will not be able to answer your questions. PLEASE READ THIS NOTICE CAREFULLY AND COMPLETELY. IF YOU ARE A PARTICIPANT IN THE TMI ESOP, THE SETTLEMENT MAY AFFECT YOUR RIGHTS. YOU ARE NOT BEING SUED IN THIS MATTER. YOU DO NOT HAVE TO APPEAR IN COURT, AND YOU DO NOT HAVE TO HIRE AN ATTORNEY IN THIS CASE. IF YOU ARE IN FAVOR OF THE SETTLEMENTS, YOU NEED NOT DO ANYTHING. IF YOU DISAPPROVE, YOU MAY OBJECT TO EITHER OR BOTH OF THE SETTLEMENTS PURSUANT TO THE PROCEDURES DESCRIBED BELOW.

ACTIONS YOU MAY TAKE IN THE SETTLEMENTS

NO ACTION IS NECESSARY Unless the Court approves both the Hans Settlement and McKay Settlements TO RECEIVE BENEFITS. any party may withdraw from the Settlements. If both Settlements are approved by the Court and you are either a member of the Former Employee Class or the Current Employee Class (as defined above), you do not need to do anything in order to receive an allocation of the Hans Settlement. The portion, if any, of the Settlement Fund to be allocated for your benefit will be calculated as part of the implementation of the Hans Settlement. No additional allocations will be made to Plaintiffs as a result of the McKay Settlement. YOU CAN OBJECT If you wish to object to any part of the Hans Settlement and/or the McKay (NO LATER THAN Settlement, you can write to the Court and counsel and explain why you do not FEBRUARY 15, 2013) like the Settlement. YOU CAN GO TO Whether you support or object to the Hans Settlement and/or the McKay THE HEARING ON Settlement, you may attend the Final Fairness Hearing and speak in Court, but FEBRUARY 25, 2013 only if you have submitted a written objection or support to the Court and counsel, as explained below.

3 WHAT THIS NOTICE CONTAINS

SUMMARY OF SETTLEMENT ...... 4

BASIC INFORMATION ...... 5

1. Why did I get this Notice? ...... 5

2. What is this lawsuit about? What has happened so far? ...... 5

3. Why is there a Settlement? ...... 6

4. What does the Settlement provide? ...... 7

5. What will be my share of the Settlement Fund? ...... 7

6. How can I get my portion of the recovery? ...... 8

7. When would I receive my portion of the recovery? ...... 8

8. How will the lawyers be paid? ...... 8

OBJECTIONS ...... 9

9. If I don’t like the Settlement, how do I tell the Court? ...... 9

THE COURT’S FAIRNESS HEARING ...... 10

10. Do I have to come to the hearing? ...... 10

11. May I speak at the hearing? ...... 10

IF YOU DO NOTHING ...... 10

12. What happens if I do nothing at all? ...... 10

GETTING MORE INFORMATION ...... 11

13. How do I get more information? ...... 11

SUMMARY OF SETTLEMENTS The Hans Settlement provides a $4 million cash payment by TMI (the “Settlement Fund Cash Component”) and $11 million which shall be credited against principal owing under the ESOP Notes (the “Settlement Fund Principal Reduction”). Collectively, the Settlement Fund Cash Component and the Settlement Fund Principal Reduction comprise the entire “Hans Settlement Fund.” Disbursements or allocations will be made as promptly as practicable after the Court’s approval of the Settlement becomes final and after the Settlement Fund Cash Component and each Settlement Fund Principal Reduction installment is disbursed to the ESOP. The McKay Settlement provides for a $125,000 cash payment (the “McKay Settlement Amount”) with each party to bear its own costs. After litigation expenses have been paid, Plaintiffs have proposed that the remainder of the McKay Settlement Amount be paid to TMI as provided in the Plan of Distribution in the McKay Settlement. No additional allocations will be made to Plaintiffs as a result of the McKay Settlement. Any party to the Hans Settlement or the McKay Settlement may withdraw from the Settlements unless both the Hans Settlements and the McKay Settlement are approved by the Court.

4 BASIC INFORMATION

1. Why did I get this Notice?

This Notice relates to two separate class action lawsuits titled Hans, et al. v. Tharaldson, et al. , Civil No. 3:05-CV- 00115, and McKay, et al. v. Tharaldson , Case No. 3:08-CV-00113, both of which are pending before the Honorable Ralph R. Erickson, United States District Judge of the United States District Court for the District of North Dakota. Judge Erickson has ordered that this Notice be sent to persons who are included in the two above groups to advise them that the Court has preliminary approved the Settlements of both these Actions. You received this Notice because you were identified as a potential Class Member. In a class action, one or more people file suit on behalf of others with similar claims, called Class Members. If you are a Class Member, your rights will be affected by the Settlements of these Actions. Both classes are a mandatory class and you cannot opt-out of either Class. The Former Employee Class in the Hans Action, which is more specifically defined above, consists of any former employees of TMI (or its affiliates) who were participants in the TMI ESOP during their employment and vested in their account prior to termination (and their beneficiaries). The representatives of the Former Employee Class are Tammy Blake, Raymond Hans, Gayle Herbert, Bernard McKay, Larry Richman, Donna Walker and Michael Webster. They are all former employees of TMI. The Current Employee Class in the Hans Action, which is more specifically defined above, consists of any current employees of TMI (or its affiliates) who are participants in the TMI ESOP (and their beneficiaries). The representatives of the Current Employee Class are Carlos Gonzalez, Jolene Matheson-Godschalk, and Sidney Lien. Additionally, North Star Trust Company, which is and has been trustee of the TMI ESOP since Gary Tharaldson resigned as Trustee after the Hans Action was filed, also pursued claims in the Hans Action in its capacity as a fiduciary of the TMI ESOP. The Former Employee Class and the Current Employee Class in the Hans Action are also members of the Class in the McKay Action. This Notice only advises you of the existence of the proposed Settlements of these Actions and of your rights if you are a Class Member. The Court has not made any determination as to ultimate merits of the claims or the defenses in Hans Action. However, the Court on January 5, 2012 granted summary judgment in favor of the Defendant in the McKay Action and dismissed the Complaint with prejudice. If you received this Notice but are not a Class Member, your rights will not be affected, and you do not need to take any action.

2. What are these lawsuits about? What has happened so far?

The Hans Action Plaintiffs have brought the Hans Action on behalf of themselves and other participants and beneficiaries of the TMI ESOP. This lawsuit alleges that Defendants 2 violated the federal pension law (ERISA) in connection with two transactions in which Gary Tharaldson and his family sold virtually all of the shares of TMI to the TMI ESOP for approximately $500 million. Plaintiffs allege that Gary Tharaldson, as the Trustee of the TMI ESOP, caused the TMI ESOP to purchase the stock in TMI from the Tharaldson family at more than the fair market value of those shares. As a result, Plaintiffs allege that the TMI ESOP incurred an excessive amount of debt, which was financed in large part by loans from the Tharaldsons, which were designed to allow the Tharaldsons to nominally place the ownership of TMI in the hands of the TMI ESOP while retaining management control and draining the company’s cash flow. Plaintiffs allege that these transactions were undertaken not in the interest of the TMI ESOP and its participants, but

2 Defendants were originally Gary D. Tharaldson, Connie Tharaldson, Roger Tharaldson, Raymond Braun and James Lochow (as Trustees of the Michelle Tharaldson Trust and the Matthew Tharaldson Trust), Trust Company, LLC (as Trustee of the Michelle Lyn Tharaldson Lemaster Dynasty Trust, the Matthew Tharaldson Dynasty Trust, and the Michael Tharaldson Dynasty Trust), and Linda Tharaldson (individual - ly and in her capacity as Trustee for the Michael Tharaldson Trust). These persons are referred to collectively as “Defendants,” the Tharaldsons or the Tharaldson family. However, the District Court granted summary judgment on October 29, 2011, dismissing all Defendants except Gary Tharaldson. Plaintiffs have appealed from that Decision to the Eighth Circuit Court of Appeals, which appeal is currently pending.

5 for the benefit of the Tharaldson family, allowing the Tharaldson family to unload older, less economically viable hotel properties on the TMI ESOP while taking the profits of TMI and purchasing new profitable hotel and motel properties for entities owned by the Tharaldson family. This lawsuit only claims that Gary Tharaldson and certain members of his family violated the law. TMI is NOT a defendant or a party to this lawsuit. The TMI ESOP is named only for the purpose of awarding relief to the TMI ESOP participants. Neither TMI nor the TMI ESOP is alleged to have done anything wrong. Defendants have denied that they have any liability whatsoever or that they breached any fiduciary duties. If the litigation were to continue to trial, the sole remaining Defendant, Gary Tharaldson, would raise numerous defenses to liability, including that he did not breach any alleged duties, and that the price paid for the TMI shares by the TMI ESOP was for fair market value. The parties exchanged information through a legal process known as discovery. During discovery, Plaintiffs’ counsel requested and reviewed thousands of pages of documents and took deposition testimony of over 50 witnesses. The parties have also engaged in substantial motions practice, including motions to dismiss, class certification motions, summary judgment motions, and expert motions, where the parties sought to clarify the scope of this Action. At the time the Settlement was reached, Plaintiffs had filed a Fifth Amended Complaint with the Court that served as the operative complaint in this Action. The Court had also established a trial date of May 1, 2012. The Hans Settlement and the McKay Settlement are the product of intense, arm’s-length negotiations between Plaintiffs’ Counsel and Defendants and their counsel, including a mediation facilitated by an experienced third-party mediator, pursuant to which the terms of the Settlement were established. The McKay Action Plaintiffs have brought the McKay Action on behalf of themselves and other participants and beneficiaries of the TMI ESOP. This lawsuit alleges that Defendant Gary Tharaldson violated ERISA by failing to take steps to recover fees which he caused an affiliate of TMI to pay to his ex-wife, Linda Tharaldson as part of a divorce related settlement agreement entered into in 1998 (the “1998 Agreement”). The fees were purportedly in exchange for unnecessary marketing and sales consulting services which allegedly were of no value to TMI or its affiliate and which were never performed. Plaintiffs contend that among other things, Tharaldson in his capacity as Trustee of the ESOP, the sole shareholder of TMI, should have brought a derivative action against himself as President of TMI for improperly permitting the dissipation of the assets of the Corporation to satisfy his personal obligations to his ex-wife. Tharaldson has denied that he has any liability whatsoever or that he breached any fiduciary duties. The case was certified as a class action by the Court and after discovery was completed and Defendant moved for summary judgment. On January 5, 2012, the Court granted the Defendant’s motion and dismissed the Complaint ruling that because the ESOP did not own shares of TMI at the time Tharaldson entered into the 1998 Settlement Agreement with his ex-wife — a condition precedent for bringing a derivative action under North Dakota law — Tharaldson could not have successfully brought a derivative action against himself and thus Plaintiffs could not prove that Tharaldson breached his fiduciary obligations under ERISA by failing to initiate such an action. Judgment was thereafter entered by the Clerk dismissing the action “with prejudice.” Plaintiffs have moved to vacate the Judgment and the Defendants have filed a Motion for Bill of Costs seeking costs of the litigation from the Plaintiff. While these motions remained pending before the Court, the Parties reached the McKay Settlement. In addition to providing for the recovery by the ESOP of $125,000 in the Action, if the McKay Settlement is approved by the Court, the Motion for Bill of Cost will be dismissed. Any party to the McKay Settlement has the option to withdraw from the McKay Settlement unless the Court also approves the Settlement reached by the parties in the Hans Action.

3. Why is there a Settlement?

Trial of the Hans Action was scheduled for May 1, 2012. At the time of the Hans Settlement, the parties and their counsel recognized material risks to all sides in proceeding to trial, including the risk that a judgment at trial could be in favor of the Defendants, or in an amount less than the amount provided for in the Hans Settlement. Accordingly,

6 the parties and their counsel concluded that the Hans Settlement constituted a reasonable compromise and was the prudent and advisable course, because it avoided the risks inherent in this (or any) litigation, as well as the potential delays associated with trial and potential appeals. At the time of the McKay Settlement although the case had been dismissed, the parties and their counsel recognized that there were still material risks to all sides. If the Plaintiffs motion to vacate the judgment were successful or if the decision of the Court were reversed on appeal the Defendant could have been subject to liability in excess of the amount provided for in the McKay Settlement. Alternatively, if the Judgment remained in place, the Plaintiff and the Class would recover nothing. Accordingly, the parties and their counsel concluded that the McKay Settlement constituted a reasonable compromise of the case.

4. What do the Settlements provide?

The material economic terms of the Hans Settlement are set forth in the Summary of Settlement on Page 4 above. The Hans Settlement also provides for: (i) releases of Defendants by Plaintiff classes; (ii) releases of Defendants by the TMI ESOP, (iii) releases of Plaintiffs by Defendants and TMI, (iv) a release of TMI by Gary Tharaldson for all past and future claims for indemnification, and (v) a release of TMI by Plaintiff classes for matters related to the Hans complaint and the circumstances underlying the McKay complaint. The specific terms of the releases are set forth in Section XIII of the Settlement Agreement. The material terms of the McKay Settlement are set forth in the Summary of Settlement on Page 4. The McKay Settlement provides for mutual releases between all the settling parties.

5. What will be my share of the Settlement Fund?

Plaintiffs’ Counsel have submitted to the Court a Plan of Allocation in the Hans Action for approval at or after the Fairness Hearing. The Plan of Allocation describes in detail the manner by which the Hans Settlement proceeds paid into the TMI ESOP will be allocated. As set forth in the Settlement Agreement, any sums approved by the Court for attorneys’ fees (the “Fee Award”), incentive awards for Class Representatives (“Incentive Awards”) and reimbursement of litigation and settlement administration costs and expenses (the “Expense Award”) shall be paid first out of the Settlement Fund Cash Component and any balance remaining thereafter, if any, shall be paid to the TMI ESOP for distribution in accordance with the Plan of Allocation. Pursuant to the Plan of Allocation, any balance remaining, if any, shall be allocated to each Settlement Participants Other Investment Account in an amount equal to the product of (i) the total amount of cash to be allocated on the Allocation Date, and (ii) the Settlement Participant’s Settlement Multiplier. The $11 million in principal payments that will be credited against principal owing under the ESOP Notes under the Settlement Fund Principal Reduction portion of the Hans Settlement will occur in four annual installments. Each year as the principal on the ESOP Notes is reduced as provided in the Settlement Agreement additional shares of TMI stock will be released from the ESOP’s unallocated share account. A portion of these released shares will be converted to cash to pay a portion of any Deferred Fee Award, as described in Section V.6-7 of the Settlement Agreement. After payment of any Deferred Fee Award, the balance of the shares released as a result of each annual installment of the Settlement Fund Principal Reduction shall be allocated to each Settlement Participant’s Company Stock Account pursuant to the Plan of Allocation in an amount equal to the product of (i) the total number of shares to be allocated on the Allocation Date resulting from the Settlement Fund Principal Reduction and (ii) the Settlement Participant’s Settlement Multiplier. The Settlement Multiplier represents a Settlement Participant’s current or former balance in his or her TMI ESOP account divided by the sum of all outstanding current and former balances of TMI company stock. It is anticipated that the entire McKay Settlement Amount, less litigation expenses allowed by the Court, will be paid to TMI as the consulting payments to Linda Tharaldson which were at issue in this Action were paid by a TMI subsidiary.

7 6. How can I get my portion of the recovery?

You do not need to file a claim for recovery. If you are entitled to share in the net Settlement proceeds as a Settlement Participant, your share of the Settlement proceeds will be deposited in your TMI ESOP account in accordance with the Court-approved Plan of Allocation. If you are entitled to share in the net Settlement proceeds as a Settlement Participant, but no longer have an account in the TMI ESOP, accounts will be created for you and your share of the Settlement proceeds will be deposited in those accounts in accordance with the Court-approved Plan of Allocation. No allocation will be made to a Settlement Participant if the value of the recovery to such Settlement Participant under the Plan of Allocation is less than fifty dollars ($50) and such Settlement Participant does not have an existing account in the ESOP.

7. When would I receive my portion of the recovery?

Payment is conditioned on several matters, including the Court’s approval of the both the Hans Settlement and the McKay Settlement and such approvals becoming Final and no longer subject to any appeals. These matters may take up to a year or more to be finally resolved. If you are a member of the Current Employee Class and entitled to share in the net Settlement proceeds as a Settlement Participant any cash and/or shares allocated to your Accounts pursuant to the Plan of Allocation as described in Part 5, above, will be subject to distribution to you as provided in the TMI ESOP Plan and Trust that is in effect at the time of the distribution. If you are a member of the Former Employee Class and entitled to share in the net Settlement proceeds as a Settlement Participant, you may request and receive distribution of any cash and/or shares allocated to your Accounts pursuant to the Plan of Allocation as described in Part 5, during the four year period when allocations are being made pursuant to the Plan of Allocation. After the Allocation period is complete, your Accounts will be subject to distribution as provided in the TMI ESOP Plan and Trust that is in effect at the time of the distribution, and, if less than $5,000 in value, will be distributed to you immediately.

8. How will the lawyers be paid?

The Hans Action Counsel for the Former Employee Class and Counsel for the Current Employee Class have agreed to pursue the Hans Action on a contingent fee basis. This means that all attorneys’ fees and expenses are payable only out of the Settlement Fund recovered for the Former Employee Class, the Current Employee Class or the Plan, if any. Plaintiffs’ counsel will submit to the Court a summary of the time collectively expended by them in this Hans Action indicating that the time spent by them in the prosecution of this matter has a value of over $11 million, exclusive of the costs and expenses Plaintiffs’ Counsel have also incurred. Any award of attorneys’ fees and expenses must be approved by the District Court. Counsel for the Trustee of the TMI ESOP (i.e., North Star Trust Company), which is also pursuing claims in this case, is paid according to the terms of an engagement between North Star Trust Company and TMI. In that agreement, Counsel for North Star is paid by TMI without regard to whether there is a recovery for the Class or the Plan; however, this means that amounts recovered in the Settlement will not be reduced to pay or reimburse Counsel for the trustee of the TMI ESOP. Plaintiffs’ Counsel will apply for an award of attorneys’ fees and expenses on behalf of all Plaintiffs’ counsel in the Hans Action. Counsel will also seek an incentive award for certain Plaintiffs in the Hans Action who brought and pursued this action to conclusion. Plaintiffs’ Counsel will also seek from the Settlement Fund reimbursement of administration costs of the Settlement. The application for attorneys’ fees will not exceed one-third (1/3) of the Settlement Fund and the combined application for attorneys’ fees, reimbursement of expenses and incentive awards in the aggregate will not exceed $4,675,000. The incentive awards for certain Plaintiffs will not exceed the sum of $35,000. TMI shall be entitled to reimbursement of approved expenses related to the administration of the Settlement Agreement of up to $150,000. Any award of fees and expenses in the Hans Action to Plaintiffs’ Counsel will be paid

8 from the Settlement Fund as and when cash is deposited therein in accordance with the terms of the Hans Settlement Agreement. The written application for fees and expenses will be filed with the Court no later than 28 days prior to the Fairness Hearing, and the Court will consider this application at the Fairness Hearing. A copy of the application when filed will be available at http://www.cohenmilstein.com/cases/82/tharaldson-motels-inc-employee-stock- ownership-plan-hans-v-tharaldson or www.kellersettlements.com or by requesting a copy from Plaintiffs’ Counsel. To date, Plaintiffs’ Counsel have received no payment for their services in prosecuting the Hans Action, nor have Plaintiffs’ Counsel been reimbursed for their out-of-pocket expenses. The McKay Action Counsel for the Class in the McKay Action have also agreed to pursue the McKay Action on a contingent fee basis. Plaintiffs’ Counsel will apply for an award of expenses in the McKay Action but will not seek an award of attorney’s fees or an incentive award for the Plaintiff. Any award of expenses in the McKay Action, which must be approved by the Court, will be paid from the McKay Settlement Amount. Any monies in the McKay Settlement Amount remaining after the payment of expenses will be distributed to TMI pursuant to the Plan of Distribution attached to the McKay Settlement Agreement and used to reimburse TMI for out-of-pocket expenses incurred by TMI in the implementation of the Settlements. To date, Plaintiffs’ Counsel have received no payment for their services in prosecuting the McKay Action, nor have Plaintiffs’ Counsel been reimbursed for their out-of-pocket expenses.

OBJECTIONS

9. How do I tell the Court if I don’t like the Settlements?

Any Class Member may object to any aspect of either the Hans Settlement or the McKay Settlement or both by filing a written objection with the Court. To object, you must send a letter or other written statement saying that you object to the Settlement and/or the attorneys’ fee award in Hans, et al., v. Tharaldson, et al., Case No. 3:05-CV-00115-RRE- KKK or the Settlement in McKay, et al. v. Tharaldson, Case No. 3:08-CV-00113-RRE-KKK. Include your name, address, telephone number, signature, and a full explanation of all reasons you object to the Settlement(s). Please be advised that failure to include these details may result in the Court refusing to consider your objection. Your written objection must be filed with the Court, and served upon the counsel listed below by no later than 10 days prior to the Fairness Hearing: File with the Clerk of the Court: Clerk of the Court United States District Court for North Dakota 655 First Avenue North Fargo, ND 58102 Re: Hans, et al., v. Tharaldson, et al. , Case No. 3:05-CV-00115-RRE-KKK and McKay, et al. v. Tharaldson, Case No. 3:08-CV-00113-RRE-KKK

And, by the same date, serve copies of all such papers by mail and fax to each of the following:

Counsel for the Former Employee Class: Counsel for the Current Employee Class and the McKay Class: COHEN MILSTEIN KELLER ROHRBACK PLC SELLERS & TOLL PLLC Gary Gotto R. Joseph Barton Gary Greenwald Bruce F. Rinaldi David Ko 1100 New York Avenue, N.W. 3101 North Central Avenue, Suite 1400 WestTower, Suite 500 Phoenix, AZ 85012 Washington, D.C. 20005-3934 Telephone: (602) 248-0088 Telephone: (202) 408-4600 Facsimile: (602) 248-2822 Facsimile: (202) 408-4699

9 Counsel for North Star: Counsel for Defendants: MOORE & VAN ALLEN PLLC PROSKAUER ROSE LLP Alton L. Gwaltney, III Howard Shapiro Mark A. Nebrig Robert Rachal 100 N. Tryon Street, Suite 4700 Michael D. Spencer Charlotte, NC 28202-4003 Charles F. Seemann III Telephone: (704) 331-1000 650 Poydras Street, Suite 1800 Facsimile: (704) 331-1159 New Orleans, LA 70130 Telephone: (504) 310-4088 Facsimile: (504) 310-2022

The objection must state all supporting bases and reasons for the objection, set forth proof of your participation in the Plan, clearly identify any and all witnesses, documents and other evidence of any kind that are to be presented at the Fairness Hearing in connection with such objections, and further describe the substance of any testimony to be given by you as well as by any supporting witnesses.

UNLESS OTHERWISE ORDERED BY THE COURT, ANYONE WHO DOES NOT OBJECT IN THE MANNER DESCRIBED HEREIN WILL BE DEEMED TO HAVE WAIVED ANY OBJECTION, WILL NOT BE PERMITTED TO SPEAK AT THE FAIRNESS HEARING, AND SHALL BE FOREVER FORECLOSED FROM MAKING ANY OBJECTION TO THE PROPOSED SETTLEMENT AND THE APPLICATION FOR ATTORNEYS’ FEES AND EXPENSES AT THE COURT’S FAIRNESS HEARING.

THE COURT’S FAIRNESS HEARING

10. Do I have to come to the hearing?

Plaintiffs’ Counsel will answer questions the Court may have at the Fairness Hearing. You are welcome to come at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as you mailed your written objection on time and followed the instructions set forth in response to Question 9 above, it will be before the Court when the Court considers whether to approve the Settlement as fair, reasonable and adequate. You may also have your own lawyer attend the Fairness Hearing at your expense, but such attendance is not mandatory.

11. May I speak at the hearing?

If you have filed a timely objection and are a Class Member, and if you wish to speak, present evidence, or present testimony at the Fairness Hearing, you must state in your objection your intention to do so, and must identify any witnesses you intend to call or evidence you intend to present. The Fairness Hearing may be rescheduled by the Court without further notice to Class. If you wish to attend the Fairness Hearing, you should confirm the date and time with Plaintiffs’ Counsel.

IF YOU DO NOTHING

12. What happens if I do nothing at all?

If you do nothing and you are entitled to participate in the Hans Settlement proceeds, you will participate in those proceeds as described above in this Notice if the Settlement is approved.

10 GETTING MORE INFORMATION

13. How do I get more information?

This Notice contains only a summary of the proposed Settlements of these Actions and your rights as a potential Class Member. Full details of the Settlements are set forth in the Settlement Agreements. You may obtain copies of the Settlement Agreements by making a written request to a member of Plaintiffs’ Counsel identified on page 2 of this Notice. For more detailed information regarding the matters involved in these Actions, please refer to the papers on file in this litigation, which may be inspected at the Office of the Clerk of Court, United States Courthouse, 220 East Rosser Avenue, Bismarck, North Dakota, during business hours (or are available online for a fee by obtaining a password at www.uscourts.gov ). In addition to Class Counsel, inquiries regarding this litigation may be addressed to counsel for the ESOP Trustee, North Star Trust Company, at Moore & Van Allen PLLC, Alton L. Gwaltney, Mark A. Nebrig, 100 North Tryon Street, Suite 4700, Charlotte, NC 28202-4003, Telephone: (704) 331-1000, E-Mail: [email protected].

PLEASE DO NOT CALL THE COURT REGARDING THIS NOTICE.

Dated: November 13, 2012

BY ORDER OF THE COURT UNITED STATES DISTRICT COURT DISTRICT OF NORTH DAKOTA

11 Tharaldson Litigation PRESORTED c/o McGladrey LLP FIRST-CLASS MAIL P.O. Box 1367 U.S. POSTAGE PAID Blue Bell, PA 19422 PEARL PRESSMAN LIBERTY IMPORTANT LEGAL INFORMATION COMMUNICATIONS GROUP