Estate of Paul Mitchell, Deceased, Patrick T. Fujieki, Executor - Page 18

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          policy matters.  Following  Mr. Mitchell's death, Mr. DeJoria               
          became critical to JPMS' future.                                            
          H.  JPMS' Position in the Industry                                          
               JPMS was known for its styling products.  Over the years, JPMS         
          developed into a major force in the hair care industry, with brand          
          recognition by the consuming public, a sophisticated distribution           
          network, and hundreds of hair stylists trained in the use of the            
          company's products.  From 1982 through April 21, 1989, JPMS' share          
          of the salon-only market, in comparison with those of its chief             
          competitors, improved every year.  In April 1989, JPMS was among            
          the top five companies in the salon-only market.  The success of            
          the salon-only product companies attracted the attention of the             
          large, well-capitalized mass-market companies, which competed in            
          the premium-price market with products that attempted to capture            
          the salon-only aura but were in reality mass marketed.                      
          I.  Compensation                                                            
               From JPMS' inception until Paul Mitchell's death, neither  Mr.         
          Mitchell nor Mr. DeJoria had any formal contract with JPMS                  
          regarding compensation.  Instead, they set sales and profitability          
          goals for JPMS at the beginning of each fiscal year.  Thereafter,           
          in September or October of each year, they divided equally the              
          company's available income.                                                 








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