FREDRIC'S CORPORATION

Fredric's Corporation began operations in 1983 with a strategic focus on the beauty, health and fitness industries. Initially, Fredric's Corporation concentrated on the distribution of tanning and fitness equipment. In 1985, after reviewing the Corporation's innovative and focused business plan, Aveda Corporation granted Fredric's Corporation exclusive distribution rights in the State of Ohio for Aveda Corporation's line of Environmental Beauty Products. Since 1985, Fredric's Corporation has continued to experience growth and success as an exclusive distributor of Aveda serving Ohio (1985), Indiana (1988), Michigan (1992) and Kentucky (1992) and is now celebrating 20 years as an Aveda Concept Distributor.

Fredric's Corporation has supported the relationship with the salon customer base through the integrity of a single line focus and commitment to education, communication and networking. Utilizing the latest technology, Fredric's Corporation supports the salon customer base with prompt delivery service and accuracy of product shipments, current product information and education, and such advanced educational resources as Lifestyle Development Centers and licensed Distributor Specialists. The company has implemented advanced telecommunications technology to provide excellent customer service to its salon customer base well into the twenty-first century.

In 1994, Fredric's Corporation, through Essential Concepts, entered the retail industry with the opening of the Aveda Experience Center at the Kenwood Towne Centre in Cincinnati, Ohio. From 1994-2001, ten Aveda Experience Centers opened were the following locations: Indianapolis, Indiana, at the Fashion Mall at Keystone at the Crossing; in Troy, Michigan, at the Somerset Collection North and South; in Strongsville, Ohio, at SouthPark Center; in Dublin, Ohio at Tuttle Crossing; in Beachwood, Ohio at Beachwood Place and Lexington and Louisville, Kentucky at Fayette and St. Matthews respectively; and in Easton Town Center in Columbus, Ohio. The majority of the Aveda Environmental Experience Centers supported by Fredric's Corporation ranked in the top 35% in sales of all Aveda Environmental Experience Centers located in the United States and Canada. In February of 2003, the 10 Aveda/Fredric's owned stores were acquired by Aveda Corporation allowing for additional and consistent support to the consumer and salon network.

In 1999, the Aveda Fredric's Institute opened in Cincinnati, Ohio, offering courses to become licensed in Cosmetology, Esthiology and Manicuring focusing not only on high standards in beauty, health and education, but on healthy lifestyles and environmental awareness. Students focus on theory, demonstrations and extensive practical, hands-on experience. This 6,800 square feet state of the art facility was built using the most environmental and ergonomic materials available from natural flooring to the energy efficient lighting and promotes a healthy non-smoking, cellular phone free environment. In 2002, the Aveda Fredric's Institute completed a 2,500 square foot addition. The expansion included an addition of a Hair Color room, classroom, expanded Esthiology department, second makeup area, 2 restrooms and an office. This has facilitated accommodation of the increasing demand for enrollment and client services.

The Aveda/Fredric's Institute has received numerous awards including the Ohio State Board of Cosmetology Award of Excellence which has been given to the Institute each year since its inception in 1999. This Award of Excellence is given to schools that have placed in the top 20% of all schools as measured by passage percentage and recognize that excellence is a result of the effort and energy of the staff and students. The Institute was a Cincinnati Better Business Bureau Torch Award for Marketplace Ethics finalist in October of 2001, 2002 and has again in 2004 .This award is given in recognition of a business's outstanding commitment to ethical standards in their relationship to their customers, employees, suppliers, competitors and surrounding community. The Institute's goal is to provide quality education and services while helping to fill the growing demand for licensed cosmetologists in the beauty industry. They have also been recognized by Cincinnati Magazine and City Beat as the Best of the City.

Fredric's Corporation's commitment to the environment, health and well-being of their associates and visitors is demonstrated by providing a non-smoking environment enhanced with an aroma ventilation system and a recycling program that results in 70% of all waste produced by the company being recycled in local recycling plants. Product orders are shipped to Lifestyle Development Centers, Institutes and select salon spas in reusable totes. This virtually eliminates the use of cardboard boxes and reduces the amount of packing materials required for these shipments. Bio-degradable, earth-friendly cleaning products are utilized in every location and are promoted to the network. In addition, alternative environmental resources are utilized where possible in an effort to protect the earth and its resources.

The Corporation has submitted itself to an environmental audit. This audit consisted of an extensive 2-day research, investigation and assessment of the company's environmental resources, usage and impact on the environment. The Corporation is one of the first in the country to work with Sustainability Associates, a consulting firm working with business and communities to achieve cost saving, improved performance, strategic advantage and social and ecological responsibility through leading edge sustainability thinking, training, policy, marketing, eco-auditing and capital formation.

In order to further environmental awareness, Fredric's Corporation has adopted an environmental mission statement which reads: "To strive for environmental and resource efficiency, education and alternative environmental methods through Distribution, Experience Centers, Salons and Spas, Institutes, Associates and Consumers. To be a leader in Environmental Action for our business community and earth." In addition, the Corporation has committed to the Natural Step program; a creative new approach for addressing environmental challenges based on consensus and systems thinking. Its purpose is to develop and share a common framework comprised of easily understood, scientifically based principles that can serve as a compass to guide society toward a just and sustainable future. The Corporation's associates have addressed the environmental challenges in their respective departments and have signed an agreement stating their intentions to correct the challenges and adhere to the Natural Step principles.

Taking their environmental commitment one step further, Fredric's Corporation has joined the US Green Building Council. Their mission statement reads: "The U.S. Green Building Council is the nation's foremost coalition of leaders from across the building industry working to promote buildings that are environmentally responsible, profitable, and healthy places to live and work." Fredric's Corporation is proud to be a part of an organization that is leading the way in providing alternative resources in environmentally conscious building materials.

As a testament to Fredric's environmental commitment, a Toyota Prius and two Honda Civic Hybrids have been purchased for use as company vehicles. To further press the need for environmental activism and concern and to raise awareness and encourage people to do their part, special parking spaces have been provided for carpooler's and owners of Hybrid vehicles.

In 2002, a partnership with Cincinnati Habitat for Humanity was formed to build one of the first Habitat Homes in Hyde Park, an upscale Cincinnati suburb. It was a unique partnership allowing an avenue for the Fredric's team, families, salons, Experience Centers and the Aveda/Fredric's Institute staff and students, to participate in helping build a future for a local father and his family. It continues to be a rich, rewarding experience; construction was completed on a second Habitat/Fredric's Corporation home in 2003 and rehabilitation of a fire-damaged home was begun in October 2004.

"The Plant, a Gathering Scenter" was built on Fredric's Corporation's grounds in September of 2001. The Plant is a 2000 sq. ft. environmental organic greenhouse dedicated to growing items specific to themed gardens while serving as a gathering place for small events. The various gardens have been given names such as: The Vegetable Patch, The Fruit Stand, Edible Petals and Salad Mix to name a few. In addition, aromatic gardens, healing gardens and seasonal gardens are represented. This greenhouse also serves as a library for a variety of plants that Aveda uses in their products allowing students and visitors to see first hand some of the ingredients in their original form.

Fredric's Corporation's socially responsible activities include employment of Fairfield High School students through a Co-Op Student Program. Time and money are contributed to the Cincinnati Children's Theatre, University of Cincinnati School of Fashion Design, Cincinnati School for Creative and Performing Arts and the Haven House of Hamilton (a family shelter). Food and gifts are donated continuously to the underprivileged in Butler County. The Earth and Humanity Foundation was created to further the efforts of grass roots organizations. Aveda products are donated to St. John Project Daymaker in Over the Rhine, Cincinnati, Ohio. This salon is the first of its kind and was the beginning of a relationship between Frederic Holzberger and Sister Bonnie Steinlage. Fredric's Corporation has also been involved in Aveda's Give to the Earth Foundation and has received support for Project Daymaker through the Give to the Earth Foundation and the BBSI Maximizer's grant program.

Through integrity and leadership Frederic Holzberger and Frederic's Corporation has received numerous, prestigious awards and appointments:

• Aveda Distributor of the Year 1987
• Aveda Outstanding Environmental Award in 1993, 1994 and 1995
• Aveda Sales Award 1995
• Aveda Lifestyle Sales award 1995
• Aveda Master of Arts 1995
• Cincinnati Better Business Bureau Torch Award Finalist 2001
• Cincinnati Better Business Bureau Torch Award Finalist 2002
• Cincinnati /Northern Kentucky Entrepreneur of the Year Finalist (Wholesale/Distribution category) 1996
• Cincinnati/ Northern Kentucky Entrepreneur of the Year Finalist (Service category) 1997
• Elected member of Fairfield Chamber of Commerce Board of Directors 1997-2002
• Cincinnati Northern Kentucky Entrepreneur of the Year Winner (Emerging Category) 1998
• Numerous Industry Trade Show Awards
• Member of Fairfield and Cincinnati Chamber of Commerce
• Member of Children's Theatre Advisory Board
• Fairfield Business Person of the Year Award 2000
• Aveda Community Leadership Award 2000
• Award of Excellence, Ohio State of Board of cosmetology, Aveda Fredric's Institute 2000-2003
• Creative Thinking Association, Creative Thinking Award, March 2000
• Better Business Bureau Torch Award Finalist- Aveda Fredric's Institute, October 2001, 2002 and August 2004
• Fairfield Volunteer Spirit Award April 2002
• Goering Center Family Business of the Year Award Finalist, August 2003.
• Goering Center Family Business of the Year Award for Community Service, awarded August 24, 2004
• Co-chair, Pyramid Hill Art Fair 2003-2004