*Organizational Changes at the North Pole*

[Cheesecake]

The recent announcement that Donner and Blitzen have elected to take the
early reindeer retirement package has triggered a good deal of concern
about whether they will be replaced, and about other restructuring
decisions at the North Pole. Streamlining was necessary due to the North
Pole's loss of dominance of the season's gift distribution business.
Home shopping channels and mail order catalogs have diminished Santa's
market share. He could not sit idly by and permit further erosion of the
profit picture.

The reindeer downsizing was made possible through the purchase of a late
model Japanese sled for the CEO's annual trip. Improved productivity
from Dasher and Dancer, who summered at the Harvard Business School, is
anticipated. Reduction in reindeer will also lessen airborne
environmental emissions for which the North Pole has received
unfavorable press. I am pleased to inform you that Rudolph's role will
not be disturbed. Tradition still counts for something at the North
Pole. Management denies, in the strongest possible language, the earlier
leak that Rudolph's nose got that way, not from the cold, but from
substance abuse. Calling Rudolph "a lush who was into the sauce and
never did pull his share of the load" was an unfortunate comment, made
by one of Santa's helpers and taken out of context at a time of year
when he is known to be under executive stress.

As a further restructuring, today's global challenges require the North
Pole to continue to look for better, more competitive steps. Effective
immediately, the following economy measures are to take place in the
"Twelve Days of Christmas" subsidiary:

The partridge will be retained, but the pear tree never turned out to be
the cash crop forecasted. It will be replaced by a plastic hanging
plant, providing considerable savings in maintenance;

The two turtle doves represent a redundancy that is simply not cost
effective. In addition, their romance during working hours could not be
condoned. The positions are therefore eliminated;

The three French hens will remain intact. After all, everyone loves the
French;

The four calling birds were replaced by an automated voice mail system,
with a call waiting option. An analysis is underway to determine who the
birds have been calling, how often and how long they talked;

The five golden rings have been put on hold by the Board of Directors.
Maintaining a portfolio based on one commodity could have negative
implications for institutional investors. Diversification into other
precious metals as well as a mix of T-bills and high technology stocks
appear to be in order;

The six geese-a-laying constitutes a luxury which can no longer be
afforded. It has long been felt that the production rate of one egg per
goose per day is an example of the decline in productivity. Three geese
will be let go, and an upgrading in the selection procedure by personnel
will assure management that from now on every goose it gets will be a
good one;

The seven swans-a-swimming is obviously a number chosen in better times.
The function is primarily decorative. Mechanical swans are on order. The
current swans will be retrained to learn some new strokes and therefore
enhance their outplacement;

As you know, the eight maids-a-milking concept has been under heavy
scrutiny by the EEOC. A male/female balance in the workforce is being
sought. The more militant maids consider this a dead-end job with no
upward mobility. Automation of the process may permit the maids to try
a-mending, a-mentoring or a-mulching;

Nine ladies dancing has always been an odd number. This function will be
phased out as these individuals grow older and can no longer do the
steps;

Ten Lords-a-leaping is overkill. The high cost of Lords plus the expense
of international air travel prompted the Compensation Committee to
suggest replacing this group with ten out-of-work congressmen. While
leaping ability may be somewhat sacrificed, the savings are significant
because we expect an oversupply of unemployed congressmen this year;

Eleven pipers piping and twelve drummers drumming is a simple case of
the band getting too big. A substitution with a string quartet, a
cutback on new music and no uniforms will produce savings which will
drop right down to the bottom line;

We can expect a substantial reduction in assorted people, fowl, animals,
and other expenses. Though incomplete, studies indicate that stretching
deliveries over twelve days is inefficient. If we can drop ship in one
day, service levels will be improved. Regarding the lawsuit filed by the
attorney's association seeking expansion to include the legal profession
("thirteen lawyers-a-suing) action is pending.

Lastly, it is not beyond consideration that deeper cuts may be necessary
in the future to stay competitive. Should that happen, the Board will
request management to scrutinize the Snow White Division to see if seven
dwarfs is the right number.


And then with the big trial.........click on attachment for more information...........

Things are tough up north..................

[Cheesecake]

*Worried About Santa*

Dear Santa,

We're worried about you. From your rosy red cheeks to your legendary
girth to your all-night sleigh ride around the world, you may be at risk
for diseases, maladies, mishaps and lawsuits that send chills through
our Santa-loving hearts.

The latest warning comes from the National Rosacea Society in
Barrington, Illinois. Dermatologist Dr. Jerome Litt says you have "a
clear-cut case of rosacea," a skin condition that also affects millions
of Americans, particularly at middle age. Unable to examine you
personally, the good doctor based his finding on a well-circulated
report that your "cheeks were like roses, (your) nose like a cherry."
Sadly, many observers conclude that red-skin condition comes from
hitting the Christmas-punch bowl a little too hard. Sadder still,
rosacea can be aggravated by holiday stress, hot chocolate and
overexertion...all things you may encounter this time of year.

The one bright note in Dr. Litt's message is that certain antibiotics
can help, and he advises you to see a North Pole dermatologist. But the
news about your facial tint is only our latest source of concern. A
careful examination of what we know about you and your lifestyle raises
a host of other trouble signs - OBESITY: Frankly, Santa, this may be
your biggest area of concern. Studies show overweight men have more
than double the normal risk of heart attacks and increased chances of
many other diseases. We've seen the pictures; we've noticed you in the
malls. And we've heard that your tummy shakes "like a bowlful of jelly"
when you chuckle. On this, we'll take part of the blame. All these
years, we've set out milk and cookies on Christmas Eve. With 102
million homes in the U.S. alone, even if 1 in 100 homes put out two
cookies and a cup of milk, that would make an overnight snack of
2,000,000 cookies and 63,750 gallons of milk. Maybe it's time for Mrs.
Claus to get you a NordicTrack or a Thighmaster. But be sure to consult
a physician before beginning any exercise regimen.

PIPE SMOKING: You've been pictured with a pipe, and even though an
apologist in The New York Times once claimed it's only a prop, a witness
who encountered you in his home said "the smoke it encircled his head
like a wreath." According to the Fred Hutchinson Cancer Research Center,
pipe and cigar smokers have twice a nonsmoker's risk for lung cancer,
four times the risk for larynx cancer and two to three times the risk
for cancers of the mouth and esophagus. Even if the pipe's just a prop,
it might be a good idea to lose it. Remember, you're not just a saint,
you're a role model.

STRESS: Dealing with Christmas wishes from millions of kiddies could
certainly put one on the emotional hot seat. And anxiety can surpass
even smoking as a risk for certain heart problems. On this point,
though, we have some good news A medical news service says laughter--as
evidenced by your trademark "Ho, ho, ho"--is one of the best
stress-busters going.

SOOT: We admire your ability to slip up and down the average chimney, an
opening about 12 inches by 16 inches. But creosote flakes on the
chimney walls are toxic and can lead to respiratory problems. Brent
Rigby of Emerald City Chimney Sweeps in Kirkland (WA) said his people
never actually go into a chimney, and wear protective masks when they
reach up through the fireplace to vacuum the soot.

RSI (REPETITIVE STRAIN INJURY): Cards and letters by the bagful arrive
on your doorstep through regular mail, but this year we've noticed
you're also receiving, and answering, e-mail on at least four Internet
addresses. We applaud your move on to the information superhighway,
with this caution: Too much keyboard work can result in painful injuries
to the hands, wrists and arms.

DEER MITES: Close, continuous contact with your trusty reindeer means if
they get mites, so might you, says Dr. David DuClos, a veterinary
dermatologist in Lynnwood (WA). Watch out for itchy rashes, and keep
the deer out of your bed.

FROSTBITE, HYPOTHERMIA: You usually bundle up, and that's good. A
Weather Service satellite recently showed the temperature at the North
Pole was 13 below zero, and high winds are common. Exposure to such
conditions can cause frostbite in minutes.

MALL THUGS: You spend a lot of time in shopping malls, so you already
know things are getting a little tough out there. Try not to walk back
to your sleigh at night alone.

MEMORY TROUBLE: It's been said that you make a list, then check it
twice.
Just being careful, or are you developing a little memory problem?

SAD (SEASONAL AFFECTIVE DISORDER): This time of year, there is virtually
no daylight at the North Pole, and a lack of sunlight can trigger
depression in some people. Maybe a full-spectrum light would help keep
you jolly.

VIRAL INFECTIONS: A young witness saw you kissing Mommy underneath the
mistletoe last night. You know this is cold and flu season, don't you?

JET LAG: Fatigue, dizziness and insomnia are all dangers that travelers
face when they cross through several times zones. And few travelers
cross all 24 of them in one night, like you do.

SLEIGH ACCIDENTS: We've seen plenty of pictures of you in that sleigh,
but never with a seat belt, and we'd sure hate to see you get hurt. By
the way, when you cruise through metropolitan areas, be sure to cover
the load. You wouldn't want to have an accident that would boost your
insurance rates would you.

Which reminds us: You DO have insurance, don't you?