TO: All Employees

FROM: The President

RE: Current Economic Conditions

My Fellow Employees:

All of us here at the Schenectady Small Arms & Biscuit Co., and I include myself in that number, have been aware for some time of the effects of the current economic slowdown. Certain painful decisions are facing us, and I must confess that my own position is not one to be envied. There are times when I wish with all my heart that I could be a simple cog in the machine, like all of you, instead of the leader to whom hundreds of employees look for inspiration.

For the past two years, our Mr. Ernest Poplar, Director of the Investments Department, has been warning senior executives, including myself, that certain investments in which we had placed the Company’s funds were not sound. With simple but elegant mathematical reasoning, he and his senior staff demonstrated that it was not possible for the funds in which we had invested to maintain the rate of return they had maintained unless some sort of fraud was at work.

Unfortunately, executives, including myself, were more persuaded by the arguments of Mr. Reginald Gull, our Chief Financial Officer, who reasoned that the concept of “soundness” was an outdated notion in what he called the age of postmodern investment. Basing our decisions on Mr. Gull’s advice, we placed much of the Company’s assets in a small number of funds which have now been revealed to be nothing less than “Fonzie schemes,” as I believe Mr. Poplar calls them. Although we are taking all possible steps to recover at least our initial investment, practically speaking we must regard that money as lost.

It is never an easy thing for me to announce layoffs, but painful realities dictate a tightening of the belt. A certain number of staff reductions must be made in order to keep our expenditures within our means.

It is therefore my difficult duty to announce that Mr. Ernest Poplar and his senior staff will no longer be employed by the Schenectady Small Arms & Biscuit Co., and that all remaining employees in the Investments Department will be transferred to the direct supervision of Mr. Reginald Gull, our Chief Financial Officer. Mr. Poplar has already been escorted from the building. In answer to some of your questions, the duct tape was only to prevent Mr. Poplar from injuring himself, as there was some fear that he might be subject to seizures.

A special notice to remaining senior executives: please stop by my office to pick up your bonus checks, which you have more than earned by facing the trauma of belt-tightening with a stiff upper lip.

Sincerely,

J. Rutherford Pinckney,

President