The Shortbus Bailout

I want to start by thanking the US government for making a very wise decision to pass the recent bailout bill. We believe that it is a very bold move that acknowledges how important business is to the American economy. Shortbus Ventures banking subsidiaries will no doubt be beneficiaries of this bold step to rescue business in danger.

Shortbus Banking has been a proud institute for decades. We have always believed that reputation trumps what "the numbers" may say. When lending regulations opened up and allowed us to truly demonstrate our commitment to help the little guy, we were happy to help. A lot of people came to us down on their luck, with histories that didn't look great, but we knew they WANTED to pay us back.

Of course, shortbus didn't really think there would be any risk. Just in case, however, we moved these loans to companies specifically designed to service these loans. Even better, since these loans had value, we could use them as collateral for other loans.

We realize now this may not have been the best "business decision" but it made us feel good to help out the little guy and make some obscene profits in the mean time. Sure we risked the entire company lending to people who really couldn't pay us back, but we made boatloads of money when times were good.

Now that time are worse, we're very happy see the government make the right decision to help good companies like ours. We were motivated by two important things, helping consumers get into home's they shouldn't and our own profits. For a while we could do both. Now at least we'll get to preserve our profits.

Expense Reduction Measures

Shortbus Ventures has not been immune to the downturns in the economy, and we are in the process of reviewing all of our expenses to reduce them where ever possible.

One early measure suggested by our CFO is to reduce "padding" of expense reports with extraneous mileage. We understand that gas prices are affecting all of us, but cheating in this way can rob the company of resources at a time when whe despartely need them.

Effective immediately the following verification methods will be required to receive a mileage reimbursement.

1. When ever possible a trip plan should be approved in advance by a member of the management committee. This shall include a google or other map which details the route as mapped for least distance. If this is filed 24 hours in advance, only trip verification will be required.
2. If this is not possible, a member of the management committee may check your odometer before and after your trip. A post trip map must be filed with your report and the minimum of the two will be payed.

Trip Verification - In order to prove that you in fact visited the facility, we will now require a photo at the visited location upon arrival. This must include a photo of the day's newspaper and either the company logo or address of the visitation. Ideally a timepiece would be clearly visible, but is not required.

Failure to follow these guidelines will result in reimbursement being withheld. Repeated violations can involve termination.

Managment committee members are exempt from these requirements, as company cars such as my Aston Martin are considered advertising for the success of our company and partners.

Policy Reminder

Just a quick reminder that accrued vacation is only payable if an employee is terminated due to job elimination or as part of a buyout package. Terminations for cause will cause the employee to forfeit any remaining vacation.

A failure to use vacation, in some cases, may be considered cause.

Vacation Count

We are currently in the process of reviewing the outstanding vacation left for every employee in the company. This will assist us with planning out the labor requirements and expenses for the remainder of the year.

Please forward your remaining vacation days, along with an updated resume to your immediate supervisor. Those with the lowest remaining vacation may be interviewed to discuss some of the usage.

Acquisitions and Divestitures

We have recently had some questions about our lack of activity in the merger markets. We have neither bought nor sold assets in the recent past. Many have speculated that this is due to the recent credit crunch. In fact that is not the case. We are as liquid as ever and have plenty of available cash and available credit lines.

Our simple reason for inaction comes down to the multiples that are offered in the market. Companies frequently will make offers based upon some multiple of earnings and present this as a price or offer. We have found that the multiples are either too high or too low for us to take action.

We freqently find multiples are too high when a buyout offer is made for one of our divisions. This can only be due to our financial projections for the division being too low. Managment of these divisions must have been sandbagging their growth estimates, or we would see a similar price as fair. As a matter of policy we now will raise the profit targets for divisions which have been approached in this manner.

The opposite is freqently true when we go to buy a company or division. Our projections indicate that our negotiated multiple is too low to make the purchase. If they were as good as we think they are, they could clearly ask for more money. The only logical answer is that our analysis is wrong, so we have been documenting these lapses in judgment from our business development team. It is quite likely that if this continues, some of these people will need to be fired.

If there is one thing that I've learned, there is no such thing as free money. If the price isn't fair some one is going to loose money, and that will not be short bus ventures.

Bonuses

With the fourth quarter books closed, we are able to set annual bonuses according to target achievement levels. But first, a quick review as to how bonuses are calculated.

For most of you, those on the LPBP (little people bonus plan), your bonus is set at between 1% and 1.25% of your base annual wages, with a target level of 1.05%, which is achieved if the corporation attains 100% of target earnings per share (EPS). The bonus payout is scaled such that a 1% bonus is paid if the firm achieves 90% of its EPS goal, while the 1.25% payout level is paid upon achievement of 200% of the EPS goal.

For management on the IPBP (important people bonus plan), bonuses are set between 15% and 50% of annual wages, with the minimum bonus level achieved at 10% of EPS goal and the maximum bonus paid at 105% of EPS goal.

What this all means is that, because of the difficult year SBV has experienced, LPBP participants will receive 1% bonus if they were born on a Monday, Wednesday, or Saturday (and can substantiate that fact by producing a birth certificate and an original Word-A-Day calendar from the year of their birth). Likewise, IPBP participants will only be receiving a 35% bonus payout, unless they ask for more.

As well, our CEO and Chairman, the founder and majority shareholder of this company, will be receiving a special performance and retention award. While his leadership is, strictly speaking, priceless, the compensation committee of the board of directors determined that $3.5 million is a good number to start with, and so he will be receiving this amount in addition to his regular salary, options package, dividend income and pager allowance. He will, however, be foregoing his participation in the IPBP package.

We hope that your bonus payment, which should be distributed with your second paycheck following the vernal equinox, will be a constant reminder of the value of your contributions to the SBV team.

Happy MLK Day

Today we celebrate the life of a great American hero, Martin Luther King Jr. Our country owes a great debt to Dr. King and all he worked for to end slavery and bring equality to all people, no matter if they are black or another color.

Many have asked why ShortBus Ventures doesn't count MLK day as a regular holiday. The short answer is that because we are not a bank or a government office, we are not required to offer MLK day as a holiday. The Management Council, of which I am a member along with our CEO, COO, SVP of HR, EVP of Facilities, Chief Legal Officer, Chief Accounting Officer, EVP of Investment Policy, SVP of Government Relations, Chief Marketing Officer, SVP of Treasury, EVP of Auditing, SVP of Risk Management, SVP of Recruiting and Personnel Development, SVP of Manufacturing, and EVP of Euro-Mexi-Asian Operations, have all decided that the best way to honor Dr. King's legacy is to allow our minority employees to continue working for a fair wage on the day set aside to remember his tragic death.

As you know, we have a strong minority recruiting and retention policy at SBV. We actively seek out qualified candidates at all levels, from assembly line right up through entry-level management. We have worked with our Director of Minority Development, Tor Jorgensen, to establish a mentoring program in which minority employees are grouped together in common work locations so that they may effectively mentor each other and share their experiences. We think that by giving these valued employees a work experience that is both separate from that of their white co-workers, yet in every respect equal to theirs, we can best nurture them to fulfill their role in society.

By the way - I wish to apologize to all readers for what I now realize are several misspellings and typos in my previous posts. My admin explained that the red underlining signified wrongly spilled words in my entries, and not simply visual highlights. That should save me an embarrassment or too in the future!