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for services rendered to JPMS. For JPMS’s fiscal year ended July
31, 1990, Mr. DeJoria agreed to reduce his management fee from $15
million to $10 million, as promised to Mr. Mitchell. Mr. DeJoria
also received $2 million in salary for that year. In summary, JPMS
paid Mr. DeJoria the following amounts for fiscal years ended July
31, 1990 through 1994:
FYE 7/31 Amount
1990 $12,000,000
1991 17,025,000
1992 17,025,568
1993 17,000,000
1994 17,000,000
JPMS characterized these payments as compensation for services
rendered.
From August 1, 1989 through 1992, Mr. Fujieki repeatedly
requested that the board retain an independent compensation
consultant to consider the reasonableness of Mr. DeJoria’s
compensation. The board rejected Mr. Fujieki’s requests. At this
time, tension began to mount among members of the board.
In late 1990, Mr. Fujieki retained Coopers & Lybrand to
determine a reasonable level of compensation for Mr. DeJoria.
Coopers & Lybrand preliminarily determined that a reasonable level
of compensation was within the range of $600,000 to $1 million,
with a possible $2 million ceiling. At the January 10, 1992, board
meeting, the board approved Mr. DeJoria’s compensation at 13
percent of JPMS’s gross sales, not to exceed $17 million per year,
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