IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

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1 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IF YOU WORKED AS AN ENTERTAINER FOR RICK S CABARET IN NEW YORK, YOU COULD GET A PAYMENT FROM A CLASS ACTION SETTLEMENT. A federal court authorized this notice. This is not a solicitation from a lawyer. A proposed settlement will provide $15,000,000 to entertainers who worked at Rick s Cabaret in New York from September 10, 2005 through October 31, 2012 and class counsel in this case. The settlement resolves a lawsuit over whether the entertainers were employees of Rick s Cabaret in New York and whether they should have been paid wages, received the full value of dance dollars, and should not have been required to pay fines, fees, and tip outs in violation of the Federal Fair Labor Standards Act ( FLSA ) and New York Labor Law ( NYLL ). The lawyers for the entertainers will ask the Court for up to $5,500,000 as fees and expenses for litigating this case and negotiating this settlement. In addition to the amount allocated to them under the settlement, the two entertainers who started this lawsuit will each ask the Court for up to $15,000 for starting this lawsuit, participating in the process, and achieving this settlement. Likewise, the 25 other entertainers who sat for depositions in this case will each ask the Court for up to $2,000 for their time and participation in this case. These amounts are in addition to the amounts they are otherwise entitled to under the Settlement Agreement. The two sides disagree on how much money could have been won if the entertainers won at trial. This notice is personalized. Your personal estimated settlement amount is set forth in Section 9 on Page 4 of this Notice. Your legal rights are affected whether you act or don t act. Read this notice carefully. YOUR LEGAL RIGHTS AND OPTIONS IN THIS LAWSUIT SUBMIT A VERIFICATION FORM EXCLUDE YOURSELF OBJECT GO TO A HEARING DO NOTHING This is the only way for you to get a payment. Other entertainers may not be required to submit a Verification Form, but you are required to submit a form if you want to receive money from this settlement because your payment under the settlement will exceed $10,000. Get no payment. This is the only option that allows you to possibly be part of any other lawsuit about the legal claims in this case that involve Rick s Cabaret in New York. Write to the Court about why you don t like the settlement. Ask to speak in Court about the fairness of the settlement. Get no payment. Give up your rights. These rights and options and the deadlines to exercise them are explained in this notice. The Court in charge of this case still has to decide whether to approve the settlement. Payments will be made if the Court approves the settlement and after appeals are resolved. Please be patient. 1

2 WHAT THIS NOTICE CONTAINS BASIC INFORMATION... Page 3 1. Why did I get this notice package? 2. What is this lawsuit about? 3. Why is there a class action? 4. Why is there a settlement? WHO IS IN THE SETTLEMENT... Page 4 5. How do I know if I am part of the settlement? 6. Are there exceptions to being included? 7. I m still not sure if I am included. THE SETTLEMENT BENEFITS-- WHAT YOU GET... Page 4 8. What does the settlement provide? 9. How much will my payment be? HOW YOU GET A PAYMENT SUBMITTING A VERIFICATION FORM... Page How can I get a payment? 11. When would I get my payment? 12. What am I giving up to get a payment or stay in the Class? EXCLUDING YOURSELF FROM THE SETTLEMENT... Page How do I get out of the settlement? 14. If I don t exclude myself, can I sue the Defendants for the same thing later? 15. If I exclude myself, can I get money from this settlement? THE LAWYERS REPRESENTING YOU... Page Do I have a lawyer in this case? 17. How will be the lawyers be paid? OBJECTING TO THE SETTLEMENT... Page How do I tell the court that I don t like the settlement? 19. What s the difference between objecting and excluding? THE COURT S FAIRNESS HEARING... Page When and where will the Court decide whether to approve the settlement? 21. Do I have to come to the hearing? 22. May I speak at the hearing? IF YOU DO NOTHING... Page What happens if I do nothing at all? GETTING MORE INFORMATION... Page Are there more details about the settlement? 2

3 1. Why did I get this notice package? BASIC INFORMATION You got this notice because the club s records show that you performed at Rick s Cabaret in New York as an entertainer at some point between September 10, 2005 and October 31, The Court had this notice sent to you because you have a right to know about a proposed settlement of a class action lawsuit, and about all of your options, before the Court decides whether to approve the Settlement. If the Court approves it and after objections and appeals are resolved, an administrator approved by the Court will make the payments that the settlement allows. This package explains the lawsuit, the settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them. The Court in charge of this case is the United States District Court for the Southern District of New York, and the case is known as Sabrina Hart and Reka Furedi, et al. v. RCI Hospitality Holdings, Inc. f/k/a Rick s Cabaret International, Inc., RCI Entertainment (New York), Inc., and Peregrine Enterprises, Inc., Case No. 09-CV-3043-PAE-RLE (S.D.N.Y.). The people who sued are Sabrina Hart and Reka Furedi. They are called Plaintiffs. The companies the Plaintiffs sued are RCI Hospitality Holdings, Inc. f/k/a Rick s Cabaret International, Inc., RCI Entertainment (New York), Inc., and Peregrine Enterprises, Inc. The companies are called the Defendants. What is this lawsuit about? 2. What is this lawsuit about? The main question in this lawsuit was whether the entertainers who worked at Rick s Cabaret in New York were properly classified independent contractors, or whether they should have been classified as employees. To date, the Court has determined that the entertainers should have been classified as employees, and that Rick s Cabaret in New York violated the law by 1) failing to pay entertainers the minimum wage for every hour worked; 2) charging entertainers money, such as house fees; and 3) retaining a portion of the value of your tips. The Defendants deny that they did anything wrong and intended to appeal the Court s rulings after trial if this case had not settled. 3. Why is this a class action? In a class action, one or more people called Class Representatives (in this case Sabrina Hart and Reka Furedi), sue on behalf of people who have similar claims. All these people are a Class or Class Members. One court resolves the issues for all Class Members, except those who exclude themselves from the Class. United States District Court Judge Paul A. Engelmayer is in charge of this class action. 3

4 4. Why is there a settlement? The Court did not decide all of the issues in this case. Among other things, the Plaintiffs think they could have won more money for the class if there was a trial. The Defendants disagree. But there was not a trial. Instead, both sides agreed to a settlement. That means they avoid the risk and cost of a trial, and the class members will get compensation. The Class Representatives and the lawyers think the settlement is best for all Class Members. WHO IS IN THE SETTLEMENT? To see if you will get money from this settlement, you first have to decide if you are a Class Member. 5. How do I know if I am part of the settlement? Judge Engelmayer decided that everyone who fits this description is a Class Member: All persons who worked at Rick s New York or were employed by Defendant Rick s Cabaret International Inc., RCI Entertainment (New York) Inc. and/or Peregrine Enterprises, Inc. in the state of New York as entertainers at any time six years prior to the filing of the Complaint through October 31, Are there exceptions to being included? You are not a Class Member if you previously excluded yourself from this lawsuit or if you were dismissed by the Court. 7. I m still not sure if I am included. If you are still not sure whether you are included, you can ask for free help. You can call or visit for more information. THE SETTLEMENT BENEFITS WHAT YOU GET 8. What does the settlement provide? At least $9,395,000 from the $15,000,000 will be paid to class members. The fund will be divided among class members. The size of the fund will not be reduced. It may be increased if the Court awards the lawyers, Class Representatives, and other entertainers who were deposed in this case less than the amounts listed on the first page of this notice. 9. How much will my payment be? Your personal estimated share of the fund is $. 4

5 You will be fully responsible for all tax obligations resulting from your acceptance of this money and are advised to seek tax advice from a qualified tax advisor. This amount was based on the parties calculation of your estimated proportionate share of any ultimate judgment that may have been obtained in this case. The Plaintiffs expert used the club s data to estimate how many hours each class member worked, how much they paid to the club, and how many dance dollars they redeemed. The hours were multiplied by the applicable New York state minimum wage rates to determine alleged minimum wage loss. The number of dance dollar redemptions were multiplied by $2 to determine alleged loss of gratuities. The wage loss and gratuity loss were added together and the total estimated fines, fees, and tip outs paid were then additionally added to determine total damages. You are not receiving your total damages because this is a settlement. Rather, your total damages amount was be used to determine the estimated share you can receive from the fund, which will be at least $9,395,000. The estimated shares including yours listed above are proportionate so that class members with higher total damages amounts receive more than class member with lower total damages amounts. People who worked at Rick s longer will receive larger payments. HOW YOU GET A PAYMENT SUBMITTING A VERIFICATION FORM 10. How can I get a payment? To qualify for payment, you must verify your identity and address by sending in a Verification Form. A Verification Form is attached to this Notice. You may also get a Verification Form on the internet at Read the instructions carefully, fill out the form, include all the documents the form asks for, sign it, and mail it postmarked no later than July 22, 2015 to: RG/2 Claims Administration LLC Rick s NY Wage Settlement P.O. Box Philadelphia, PA You may also submit the form by July 22, 2015 via or fax: or (215) When would I get my payment? The Court will hold a hearing on September 18, 2015 to decide whether to approve the settlement. If Judge Engelmayer approves the settlement and there are no appeals by objectors, you will receive your payment approximately 14 to 44 days after the approval. It is always uncertain whether these appeals will be filed and/or can be resolved, and resolving them can take time, perhaps more than a year. Everyone who sends in a Verification Form will be informed of the progress of the settlement during an appeal. Please be patient. 12. What am I giving up to get a payment or stay in the Class? Unless you exclude yourself, you are staying in the class, and that means you can t sue, continue to sue, 5

6 or be part of any other lawsuit against any of the Defendants (including their directors, officers, employees, and affiliates) about the legal issue arising from the facts in this case. It also means that all of the Court s orders will apply to you and legally bind you. EXCLUDING YOURSELF FROM THE SETTLEMENT If you don t want a payment from this settlement, but you want to keep the right to sue or continue to sue Defendants on your own about the legal issues arising from the facts of this case, then you must take steps to get out. This is called excluding yourself or is sometimes referred to as opting out of the settlement Class. 13. How do I get out of the settlement? To exclude yourself from the settlement, you must send a letter indicating your name and address and stating that you want to be excluded from the settlement in this case. Be sure to indicate the name of the case and sign your request. You must mail your exclusion request postmarked no later than July 6, 2015 to: RG/2 Claims Administration LLC Rick s NY Wage Settlement P.O. Box Philadelphia, PA You may also send your exclusion request by July 6, 2015 to or by fax to (215) If you ask to be excluded, you will not get any settlement payment, and you cannot object to the settlement. You will not be legally bound by anything that happens in this lawsuit. You may be able to sue (or continue to sue) Defendants in the future if you file a new lawsuit but you need to be aware of the applicable statutes of limitations. If you opted in to the Collective, you must file a new lawsuit within 30 days of the settlement becoming effective in order to avoid the statute of limitations reducing or eliminating your claims. 14. If I don t exclude myself, can I sue Defendants for the same thing later? No. Unless you exclude yourself, you give up the right to sue the Defendants (including their directors, officers, employees, and affiliates) about the legal issue arising from the facts in this case during the class period. If you have a different pending lawsuit against Defendants or their directors, officers, employees, or affiliates, speak to your lawyer in that case immediately. You must exclude yourself from this Class to continue your own lawsuit. However, if you have asserted claims in this case under federal law, your right to pursue these federal claims will only be waived if you accept the settlement by depositing or cashing the settlement check. Remember, the exclusion deadline is July 6,

7 15. If I exclude myself, can I get money from this settlement? No. If you exclude yourself, do not send in a Verification Form to ask for any money. But, you may sue, continue to sue, or be part of a different lawsuit against Defendants or their directors, officers, employees, or affiliates. 16. Do I have a lawyer in this case? THE LAWYERS REPRESENTING YOU The Court decided that the following lawyers and law firm are qualified to represent you and the other class members: E. Michelle Drake, Steven Andrew Smith, Anna P. Prakash, and John G. Albanese of the law firm of Nichols Kaster, PLLP in Minneapolis. These lawyers are called Class Counsel. You will not be charged out of pocket for these lawyers. They will be paid from the settlement fund. If you want to be represented by a different lawyer, you may hire one at your own expense. 17. How will the lawyers be paid? Class Counsel has worked on this case for six years and has not yet been paid any money for their work, or for the out of pocket expenses they incurred in litigating this case. They will ask the Court to approve payment of up to $5,500,000 in fees and expenses. The Class Representatives who started this lawsuit will each ask the Court for up to $15,000 for starting this lawsuit, participating in the process, and achieving this settlement. The 25 other entertainers who were deposed in this case will each ask the Court for up to $2,000 for their time and participation in this case. The Court will examine the reasonableness of this request, and may award less than these amounts. These amounts will not reduce the minimum fund of $9,395,000 that will be made available to class members. The fund may be increased if the lawyers, Class Representatives, and other entertainers who were deposed in this case are awarded less than the amounts listed above. OBJECTING TO THE SETTLEMENT You can tell the court that you don t agree with the settlement or some part of it. 18. How do I tell the Court that I don t like the settlement? If you are a class member, you can object to the settlement if you don t like any part of it. You can give reasons why you think the Court should not approve it. The Court will consider your views. To object, you must file a written objection with the Court and mail a copy of the objection to both Class Counsel and Defense Counsel. The objection must be filed by July 6, 2015, which shall be a postmark date if filed by mail. The copies mailed to Class Counsel and Defense Counsel must be postmarked by July 6, The applicable mailing addresses are as follows. 7

8 COURT CLASS COUNSEL DEFENSE COUNSEL Clerk of Court U.S. District Court for the Southern District of New York Daniel Patrick Moynihan U.S. Courthouse 500 Pearl Street New York, NY Nichols Kaster, PLLP Attn: Anna P. Prakash 4600 IDS Center 80 South Eighth Street Minneapolis, MN Meister Seelig & Fein LLP Attn: Jeffrey A. Kimmel 125 Park Avenue, 7 th Floor New York, NY The objection must state its factual and legal basis. You must include your name, address, telephone number, and address (if available), as well as any names by which you were known when you worked at Rick s Cabaret in New York. The objection must be personally signed by you. If you are represented by a lawyer, your notice of objection should state that you are represented and should contain your lawyer s name, address, telephone number, and address. 19. What s the difference between objecting and excluding? Objecting is simply telling the Court that you don t like something about the settlement. You can object only if you stay in the class. If the Court approves the settlement, you will be bound by its terms. Excluding yourself is telling the Court that you don t want to be part of the Class. If you exclude yourself, you have no basis to object because the case no longer affects you. THE COURT S FAIRNESS HEARING The Court will hold a hearing to decide whether to approve the settlement. You may attend and you may ask to speak, but you don t have to. 20. When and where will the Court decide whether to approve the settlement? The Court will hold a Fairness Hearing at 9:30 a.m. on September 18, 2015 at the United States Courthouse, 40 Centre Street in New York, New York in Courtroom At this hearing, the Court will consider whether the settlement is fair, reasonable, and adequate. If there are objections, the Court will consider them. Judge Engelmayer will listen to people who have asked to speak at the hearing. The Court may also decide how much to pay Class Counsel. After the hearing, the Court will decide whether to approve the settlement. We do not know how long these decisions will take. 21. Do I have to come to the hearing? No. Class Counsel will answer questions Judge Engelmayer may have. But, you are welcome to come at your own expense. If you send an objection, you don t have to come to Court to talk about it. As long as you mailed your written objection on time and it contains the required information, the Court will consider it. You may also pay your own lawyer to attend, but it s not required. 8

9 22. May I speak at the hearing? You may ask the Court for permission to speak at the Fairness Hearing. To do so, you must send a letter saying that you intend to appear at the fairness hearing in the Hart v. RCI Hospitality Holdings, Inc. case. Be sure to include your name, address, telephone number, and your signature. Your notice must be postmarked no later than July 22, 2015, and be sent to the Clerk of the Court, Class Counsel, and Defense Counsel, at the three addresses in question 18. If you file your notice electronically with the Court, it must be filed by July 22, You cannot speak at the hearing if you excluded yourself. IF YOU DO NOTHING 23. What happens if I do nothing at all? Because the value of your settlement payment is over $10,000, you must return a Verification Form in order to receive a payment. If you do nothing, you ll get no money from this settlement. But, unless you exclude yourself, you won t be able to start a lawsuit or continue with a lawsuit against Defendants or their directors, officers, employees, or affiliates about claims arising from the facts in this case. GETTING MORE INFORMATION 24. Are there more details about the settlement? This notice summarizes the proposed settlement. More details are in the Settlement Agreement. You can get a copy of the Settlement Agreement and more information about the settlement process by contacting RG/2 Claims Administration LLC at (866) or or visiting April 2,

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