Good Morning:

Merry Christmas to those of you who celebrate Christmas and Happy Holidays to everyone else! Today marks the end of a very successful holiday season for Pacific Pillows. Your hard work and dedication are the only reason it has been so successful. For this, thank you!

A few things to note …

Matt did an amazing job with his first holiday season of being in charge of ordering. We have no backorders except for the 100% Pure which have been on backorder for about a year (supposedly some are being made for us right now in India).

Everyone did an amazing job helping to meet shipping deadlines so that our orders got out on time under Matt’s supervision. Dan has again been a tremendous asset for our company in the warehouse. And, Amazon is totally rocking under Matt’s direction.

Our customer service team has done a great job really moving in a direction where we are taking customer service to the next level. Our company was founded upon delivery superior customer service in an attempt to make every customer satisfied. We strayed from this a little bit after the economic downturn in 2008 and the turmoil associated with the Mr. Appliance debacle. However, I believe we are now back at this level due to Shanah and Ashley. Moreover, our bookkeeping and other administrative matters under Shanah’s supervision are generally in the best state we have seen in since I left the Marine Corps active duty (2007). We can use this solid foundation to really develop more efficiencies and metrics in the coming years to allow us to develop metrics that will allow us to make even better decisions. And, I absolutely love the initiative shown by Shanah and her team (pretty much Ashley). They are always suggesting changes to the website, new product ideas, ways to make our company better, etc.

All of our part-timers should also be recognized. As always Brooke has done an amazing job adding products. She is a talented writer and has a tremendous future ahead of her wherever her career may take her (maybe it will take her to Pacific Pillows). Sydney, Shawn, New Matt, and Ryan have each contributed greatly. I consider all of you part of the Pacific Pillows family. Merritt was amazing this summer in cleaning up a lot of lose ends. I hope all of you part-timers will consider working for us as your schedules allow (just send me an email whenever you are able to work as each and every one of you really help our business).

And, finally Jerry really needs our thanks. Our business has grown tremendously this year. It has grown so much that we have 5 trailers sitting in our lot with product in them, record sales, solid cash flow, etc. A lot of this growth in sales can be attributed to all of the new great products we have developed with Jerry’s help. But, we need more space to continue this growth.

We have a ton of areas where we can grow next year: PacificPillows.ca (Canada), Choo Choo Wagons, Bounce Houses, Rooftop Tents, DownPillows.com, PacificPillows.com upgrade (more video, more pictures, facebook), Pillow Menu (wholesale business), Pillowtex.com, etc. And, as you can probably guess I have a ton of other ideas to grow our business. This is a great time to be in business and I am confident that 2012 will also be great with all of you as Pacific Pillows team members.

So, best wishes to you and your family this holiday season and into 2012.

Sincerely,

Craig Clark

Good Morning:

This morning Tim let me know that he has accepted a position with Nationwide Insurance and his last day at Pacific Pillows will be December 12, 2011.

Please join me in congratulating Tim in this new adventure.

Additionally, this is a good learning point for everyone.

As a leader you have two choices when it comes to situations like this. You can create a hostile atmosphere where you are bitter and angry at those who have decided that leaving your company is in their best interests claiming disloyalty. Or, you can support your employees in the decisions they make that they feel are in the best interests of themselves and their family.

Please know that I will support any of you if you make a decision that you feel advances yourself professionally or you feel is best for your family. And, frankly I feel that it is my job as a leader in this organization to support all of you in your professional and personal development. You all are our greatest asset and the company would not be successful without you.

My only expectation is that you are honest with me and that you give at least two weeks notice prior to your departure.

In this instance Tim informed me of this opportunity several weeks ago and I supported him completely as he felt that this move was in the best interests of his family considering that he now lives in Ohio, has a baby, etc. I applaud, appreciate, and respect Tim’s professionalism in how he handled this situation.

Finally, beyond congratulating Tim … it should be known that Tim will be missed. Since he started with PacificPillows.com in 2007 his skill set has truly matured and he has become an invaluable asset for our business (marketing, leader, ambassador, customer service, etc.). So, thank you Tim for everything you have done for the Pacific Pillows family. And, again … congratulations!

Craig