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 appropriate  in view  of the reality  that the North  Pole no
          longer dominates  the season's  gift distribution business.  Home
          shopping  channels  and  mail  order  catalogues have  diminished
          Santa's market  share and 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 and should take up the slack with no discernible loss
          of service.    Reduction in  reindeer will  also lessen  airborne
          environmental emissions for which the North Pole has been cited =
          and received unfavorable press.  We are pleased to inform you and
          yours 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 from 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 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.

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