UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1999
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______________________ to ______________________
Commission file number: 0-25789
WORLD MONITOR TRUST--SERIES C
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(Exact name of registrant as specified in its charter)
Delaware 13-3985042
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One New York Plaza, 13th Floor, New York, New York 10292
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 778-7866
Securities registered pursuant to Section 12(b) of the Act:
None
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Securities registered pursuant to Section 12(g) of the Act:
Limited Interests
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(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes CK No __
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ]
DOCUMENTS INCORPORATED BY REFERENCE
Second Amended and Restated Declaration of Trust and Trust Agreement of the
Registrant dated as of March 17, 1998, included as part of the Registration
Statement on Form S-1 (File No. 333-43043) filed with the Securities and
Exchange Commission on March 23, 1998, pursuant to Rule 424(b) of the Securities
Act of 1933, is incorporated by reference into Part IV of this Annual Report on
Form 10-K
Registrant's Annual Report to Interest holders for the year ended December
31, 1999 is incorporated by reference into Parts II and IV of this Annual Report
on Form 10-K
Index to exhibits can be found on pages 8 and 9.
WORLD MONITOR TRUST--SERIES C
(a Delaware Business Trust)
TABLE OF CONTENTS
PART I PAGE
Item 1 Business......................................................................... 3
Item 2 Properties....................................................................... 4
Item 3 Legal Proceedings................................................................ 4
Item 4 Submission of Matters to a Vote of Interest Holders.............................. 4
PART II
Item 5 Market for the Registrant's Interests and Related Interest Holder Matters........ 4
Item 6 Selected Financial Data.......................................................... 4
Item 7 Management's Discussion and Analysis of Financial Condition and Results of
Operations..................................................................... 4
Item 7A Quantitative and Qualitative Disclosures About Market Risk....................... 5
Item 8 Financial Statements and Supplementary Data...................................... 5
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure..................................................................... 5
PART III
Item 10 Directors and Executive Officers of the Registrant............................... 5
Item 11 Executive Compensation........................................................... 6
Item 12 Security Ownership of Certain Beneficial Owners and Management................... 7
Item 13 Certain Relationships and Related Transactions................................... 7
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K.................. 8
Financial Statements and Financial Statement Schedules........................... 8
Exhibits......................................................................... 8
Reports on Form 8-K.............................................................. 9
SIGNATURES.................................................................................. 10
2
PART I
Item 1. Business
General
World Monitor Trust (the 'Trust') is a business trust organized under the
laws of Delaware on December 17, 1997. The Trust commenced trading operations on
June 10, 1998 and will terminate on December 31, 2047 unless terminated sooner
as provided in the Second Amended and Restated Declaration of Trust and Trust
Agreement (the 'Trust Agreement'). The Trust consists of three separate and
distinct series ('Series'): Series A, B and C. The assets of each Series are
segregated from the other Series, separately valued and independently managed.
Each Series was formed to engage in the speculative trading of a diversified
portfolio of futures, forward and options contracts and may, from time to time,
engage in cash and spot transactions. The trustee of the Trust is Wilmington
Trust Company. The Trust's fiscal year for book and tax purposes ends on
December 31.
The Offering
Beneficial interests in each Series ('Interests') are being offered once each
week until each Series' subscription maximum has been issued either through sale
or exchange. On June 10, 1998, a sufficient number of subscriptions for each
Series had been received and accepted by the managing owner to permit each
Series to commence trading. Series C (the 'Registrant') completed its initial
offering with gross proceeds of $5,706,177 from the sale of 56,301.77 limited
interests and 760 general interests.
Series A was offered until it reached its subscription maximum of $34,000,000
during November 1999. Interests in Series B and C continue to be offered on a
weekly basis ('Continuous Offering Period') at the net asset value per Interest
until the subscription maximum of $33,000,000 for each Series is sold.
The Registrant is engaged solely in the business of commodity futures,
forward and options trading; therefore, presentation of industry segment
information is not applicable.
Managing Owner and its Affiliates
The managing owner of the Registrant is Prudential Securities Futures
Management Inc. (the 'Managing Owner'), a wholly owned subsidiary of Prudential
Securities Incorporated ('PSI') which, in turn, is a wholly owned subsidiary of
Prudential Securities Group Inc. PSI is the selling agent for the Registrant as
well as the commodity broker of the Registrant. The Managing Owner is required
to maintain at least a 1% interest in the capital, profits and losses of each
Series so long as it is acting as the Managing Owner, and it will make such
contributions (and in return will receive such general interests) as are
necessary to effect this requirement.
The Trading Advisor
Each Series has its own independent commodity trading advisor that makes that
Series' trading decisions. The Managing Owner, on behalf of the Registrant,
entered into an advisory agreement with Hyman Beck & Company, Inc. (the 'Trading
Advisor') to make the trading decisions for the Registrant. The advisory
agreement may be terminated at the discretion of the Managing Owner. The
Managing Owner has allocated 100% of the proceeds from the initial and
continuous offering of the Registrant to the Trading Advisor and it is currently
contemplated that the Trading Advisor will continue to be allocated 100% of
additional capital raised for the Registrant during the Continuous Offering
Period.
Competition
The Managing Owner and its affiliates have formed, and may continue to form,
various entities to engage in the speculative trading of futures, forward and
options contracts which have certain of the same investment policies as the
Registrant.
The Registrant is an open-end fund which will solicit the sale of additional
Interests on a weekly basis until the subscription maximum is reached. As such,
the Registrant may compete with other entities to attract new participants. In
addition, to the extent that the Trading Advisor recommends similar or identical
trades to the Registrant and other accounts which it manages, the Registrant may
compete with those accounts for the execution of the same or similar trades.
3
Employees
The Registrant has no employees. Management and administrative services for
the Registrant are performed by the Managing Owner and its affiliates pursuant
to the Trust Agreement as further discussed in Notes A, C and D to the
Registrant's annual report to limited owners for the year ended December 31,
1999 (the 'Registrant's 1999 Annual Report') which is filed as an exhibit
hereto.
Item 2. Properties
The Registrant does not own or lease any property.
Item 3. Legal Proceedings
There are no material legal proceedings pending by or against the Registrant
or the Managing Owner.
Item 4. Submission of Matters to a Vote of Interest Holders
None
PART II
Item 5. Market for the Registrant's Interests and Related Interest Holder
Matters
Information with respect to the offering of Interests is incorporated by
reference to Note A to the Registrant's 1999 Annual Report, which is filed as an
exhibit hereto.
A significant secondary market for the Interests has not developed, and it is
not expected that one will develop in the future. There are also certain
restrictions set forth in the Trust Agreement limiting the ability of an
Interest holder to transfer Interests. However, Interests may be redeemed on a
weekly basis, but are subject to a redemption fee if effected within one year of
the effective date of purchase. Additionally, Interests owned in one Series may
be exchanged, without any charge, for Interests of one or more other Series on a
weekly basis for as long as Interests in those Series are being offered to the
public. Exchanges and redemptions are calculated based on the applicable Series'
then current net asset value per Interest as of the close of business on the
Friday immediately preceding the week in which the exchange or redemption
request is effected.
There are no material restrictions upon the Registrant's present or future
ability to make distributions in accordance with the provisions of the Trust
Agreement. No distributions have been made since inception and no distributions
are anticipated in the future.
As of March 21, 2000, there were 1,519 holders of record owning 180,203.352
Interests which include 2,500 general interests.
Item 6. Selected Financial Data
The following table presents selected financial data of the Registrant. This
data should be read in conjunction with the financial statements of the
Registrant and the notes thereto on pages 2 through 9 of the Registrant's 1999
Annual Report which is filed as an exhibit hereto.
Period from June 10, 1998
Year Ended (commencement of operations) to
December 31, 1999 December 31, 1998
----------------- -------------------------------
Total revenues (including interest) $ 68,782 $ 1,011,204
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Net income/(loss) $(1,680,118) $ 465,857
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Net income/(loss) per weighted average
Interest $ (10.83) $ 5.80
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Total assets $18,684,023 $11,384,130
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Net asset value per Interest $ 95.98 $ 104.22
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This information is incorporated by reference to pages 11 through 13 of the
Registrant's 1999 Annual Report which is filed as an exhibit hereto.
4
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Information regarding quantitative and qualitative disclosures about market
risk is not required pursuant to Item 305(e) of Regulation S-K.
Item 8. Financial Statements and Supplementary Data
The financial statements are incorporated by reference to pages 2 through 9
of the Registrant's 1999 Annual Report which is filed as an exhibit hereto.
Supplementary data specified by Item 302 of Regulation S-K (selected
quarterly financial data) is not applicable.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
There are no directors or executive officers of the Registrant. The
Registrant is managed by the Managing Owner.
The Managing Owner's directors and executive officers and any person holding
more than ten percent of the Registrant's Interests ('Ten Percent Owners') are
required to report their initial ownership of such Interests and any subsequent
changes in that ownership to the Securities and Exchange Commission on Forms 3,
4 or 5. Such executive officers, directors and Ten Percent Owners are required
by Securities and Exchange Commission regulations to furnish the Registrant with
copies of all Forms 3, 4 or 5 they file. All of these filing requirements were
satisfied on a timely basis (other than Alan J. Brody who did not file Form 4 in
a timely manner upon becoming a beneficial owner but subsequently filed and is
now current in all filings). In making these disclosures, the Registrant has
relied solely on written representations of the Managing Owner's directors and
executive officers and Ten Percent Owners or copies of the reports that they
have filed with the Securities and Exchange Commission during and with respect
to its most recent fiscal year.
The directors and executive officers of Prudential Securities Futures
Management Inc. and their positions with respect to the Registrant are as
follows:
Name Position
Joseph A. Filicetti President and Director
Eleanor L. Thomas Executive Vice President and Director
Barbara J. Brooks Chief Financial Officer
Steven Carlino Vice President and Treasurer
Alan J. Brody Director
A. Laurence Norton, Jr. Director
Guy S. Scarpaci Director
Tamara B. Wright Senior Vice President and Director
JOSEPH A. FILICETTI, age 37, is the President and a Director of Prudential
Securities Futures Management Inc. He had been a Vice President of Prudential
Securities Futures Management Inc. and Seaport Futures Management, Inc. from
October 1998 to March 1999. In April 1999, Mr. Filicetti was named to his
current positions at Prudential Securities Futures Management Inc. and became an
Executive Vice President and a Director of Seaport Futures Management, Inc. Mr.
Filicetti is also a Vice President of PSI and the Director of Sales and
Marketing for its managed futures department. Prior to joining PSI, Mr.
Filicetti was with Rotella Capital Management as Director of Sales and Marketing
from September 1996 through September 1998, and was with Merrill Lynch as a
market maker trading bonds from July 1992 to August 1996.
ELEANOR L. THOMAS, age 45, is the Executive Vice President and a Director of
Prudential Securities Futures Management Inc. and is the President and a
Director of Seaport Futures Management, Inc. She is
5
primarily responsible for origination, asset allocation, and due diligence for
the managed futures department within PSI. She is also a First Vice President of
PSI. Prior to joining PSI in March 1993, she was with MC Baldwin Financial
Company from June 1990 through February 1993 and Arthur Andersen & Co. from 1986
through May 1990. Ms. Thomas is a certified public accountant.
BARBARA J. BROOKS, age 51, is the Chief Financial Officer of Prudential
Securities Futures Management Inc. She is a Senior Vice President of PSI. She is
also the Chief Financial Officer of Seaport Futures Management, Inc. and serves
in various capacities for other affiliated companies. She has held several
positions within PSI since April 1983. Ms. Brooks is a certified public
accountant.
STEVEN CARLINO, age 36, is a Vice President and Treasurer of Prudential
Securities Futures Management Inc. He is a First Vice President of PSI. He is
also a Vice President and Treasurer of Seaport Futures Management, Inc. and
serves in various capacities for other affiliated companies. Prior to joining
PSI in October 1992, he was with Ernst & Young for six years. Mr. Carlino is a
certified public accountant.
ALAN J. BRODY, age 48, is a Director of Prudential Securities Futures
Management Inc. and Seaport Futures Management, Inc. Mr. Brody has been a Senior
Vice President and Director of International Sales and Marketing for PSI since
1996. Based in London, Mr. Brody is currently responsible for the marketing and
sales of all PSI products and services to international clientele throughout the
firm's global branch system. Additionally, Mr. Brody has overall responsibility
for the managed futures department within PSI. Prior to joining PSI, Mr. Brody
was an Executive Director and Senior Vice President with Lehman Brothers'
Financial Services Division in London and President of Lehman Brothers Futures
Asset Management Corp. from 1990 to 1996. Prior to joining Lehman Brothers, Mr.
Brody served as President and Chief Executive Officer of Commodity Exchange,
Inc. from 1980 to 1989. Earlier in his career, Mr. Brody was associated with the
law firm of Baer Marks & Upham from 1977 to 1980.
A. LAURENCE NORTON, JR., age 61, is a Director of Prudential Securities
Futures Management Inc. He is an Executive Vice President of PSI and, since
March 1994, has been the director of the International and Futures Divisions of
PSI. He is also a Director of Seaport Futures Management, Inc. and is a member
of PSI's Operating Committee. From October 1991 to March 1994, he held the
position of Executive Director of Retail Development and Retail Strategies at
PSI. Prior to joining PSI in 1991, Mr. Norton was a Senior Vice President and
Branch Manager of Shearson Lehman Brothers.
GUY S. SCARPACI, age 53, is a Director of Prudential Securities Futures
Management Inc. He is a First Vice President of the Futures Division of PSI. He
is also a Director of Seaport Futures Management, Inc. Mr. Scarpaci has been
employed by PSI in positions of increasing responsibility since August 1974.
TAMARA B. WRIGHT, age 41, is a Senior Vice President and Director of
Prudential Securities Futures Management Inc. She is a Senior Vice President and
Chief Administrative Officer for the International and Futures Divisions of PSI.
She is also a Senior Vice President and Director of Seaport Futures Management,
Inc. and serves in various capacities for other affiliated companies. Prior to
joining PSI in July 1988, she was a manager with Price Waterhouse.
Effective April 1999, Eleanor L. Thomas and Joseph A. Filicetti were elected
as Directors of both Prudential Securities Futures Management Inc. and Seaport
Futures Management, Inc. In addition, Mr. Filicetti was elected as President of
Prudential Securities Futures Management Inc. replacing Thomas M. Lane, Jr. and
Ms. Thomas was elected as the Executive Vice President of Prudential Securities
Futures Management Inc. Additionally, Alan J. Brody was elected as a Director of
Prudential Securities Futures Management Inc. and Seaport Futures Management,
Inc. during May 1999.
There are no family relationships among any of the foregoing directors or
executive officers. All of the foregoing directors and/or executive officers
have indefinite terms.
Item 11. Executive Compensation
The Registrant does not pay or accrue any fees, salaries or any other form of
compensation to directors and officers of the Managing Owner for their services.
Certain directors and officers of the Managing Owner receive compensation from
affiliates of the Managing Owner, not from the Registrant, for services
performed
6
for various affiliated entities, which may include services performed for the
Registrant; however, the Managing Owner believes that any compensation
attributable to services performed for the Registrant is immaterial. (See also
Item 13, Certain Relationships and Related Transactions, for information
regarding compensation to the Managing Owner.)
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 21, 2000, no director or executive officer of the Managing Owner
owns directly or beneficially any interest in the voting securities of the
Managing Owner.
As of March 21, 2000, the following director is the only director or
executive officer of the Managing Owner who owns directly or beneficially any of
the Interests issued by the Registrant.
Title Name of Amount and Nature of Percent of
of Class Beneficial Owner Beneficial Ownership Class
- ------------------ --------------------------------- ----------------------------- ----------
Limited interests Alan J. Brody, Director 108.189 limited interests .06%
As of March 21, 2000, the following owner of limited interests beneficially
owns more than five percent (5%) of the limited interests issued by the
Registrant:
Title Name and Address of Amount and Nature of Percent of
of Class Beneficial Owner Beneficial Ownership Class
- ------------------ --------------------------------- ----------------------------- ----------
Limited interests Massachusetts Bay Transportation 17,666.828 limited interests 9.94%
Authority Retirement Fund
99 Summer Street, 17th Floor
Boston, MA 02110-1213
Item 13. Certain Relationships and Related Transactions
The Registrant has and will continue to have certain relationships with the
Managing Owner and its affiliates. However, except for the purchase of limited
interests by one of the directors which did not exceed $60,000, there have been
no direct financial transactions between the Registrant and the directors or
officers of the Managing Owner.
Reference is made to Notes A, C and D to the financial statements in the
Registrant's 1999 Annual Report which is filed as an exhibit hereto, which
identify the related parties and discuss the services provided by these parties
and the amounts paid or payable for their services.
7
PART IV
Page
Number
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Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements and Report of Independent Accountants--incorporated
by reference to the Registrant's 1999 Annual Report which is filed as an
exhibit hereto
Report of Independent Accountants 2
Financial Statements:
Statements of Financial Condition--December 31, 1999 and 1998 3
Statements of Operations--Year ended December 31, 1999 and the period
from June 10, 1998 (commencement of operations) to December 31, 1998 4
Statements of Changes in Trust Capital--Two years ended December 31, 1999 4
Notes to Financial Statements 5
2. Financial Statement Schedules
All schedules have been omitted because they are not applicable or the
required information is included in the financial statements or notes
thereto.
3. Exhibits
Description:
3.1 Second Amended and Restated Declaration of Trust and Trust Agreement of
and World Monitor Trust dated as of March 17, 1998 (incorporated by reference
4.1 to Exhibits 3.1 and 4.1 to the Registrant's Registration Statement on
Form S-1, File No. 333-43043, dated as of March 23, 1998)
4.2 Form of Request for Redemption (incorporated by reference to Exhibit 4.2
to the Registrant's Registration Statement on Form S-1, File No.
333-43043, dated as of March 23, 1998)
4.3 Form of Exchange Request (incorporated by reference to Exhibit 4.3 to the
Registrant's Registration Statement on Form S-1, File No. 333-43043,
dated as of March 23, 1998)
4.4 Form of Subscription Agreement (incorporated by reference to Exhibit 4.4
to the Registrant's Registration Statement on Form S-1, File No.
333-43043, dated as of March 23, 1998)
10.1 Form of Escrow Agreement among the Trust, Prudential Securities Futures
Management Inc., Prudential Securities Incorporated and The Bank of New
York (incorporated by reference to Exhibit 10.1 to the Registrant's
Registration Statement on Form S-1, File No. 333-43043, dated as of March
23, 1998)
10.2 Form of Brokerage Agreement between the Trust and Prudential Securities
Incorporated (incorporated by reference to Exhibit 10.2 to the
Registrant's Registration Statement on Form S-1, File No. 333-43043,
dated as of March 23, 1998)
8
10.3 Form of Advisory Agreement among the Registrant, Prudential Securities
Futures Management Inc., and the Trading Advisor (incorporated by
reference to Exhibit 10.3 to the Registrant's Registration Statement on
Form S-1, File No. 333-43043, dated as of March 23, 1998)
10.4 Form of Representation Agreement Concerning the Registration Statement
and the Prospectus among the Registrant, Prudential Securities Futures
Management Inc., Prudential Securities Incorporated, Wilmington Trust
Company and the Trading Advisor (incorporated by reference to Exhibit
10.4 to the Registrant's Registration Statement on Form S-1, File No.
333-43043, dated as of March 23, 1998)
10.5 Form of Net Worth Agreement between Prudential Securities Futures
Management Inc. and Prudential Securities Group Inc. (incorporated by
reference to Exhibit 10.5 to the Registrant's Registration Statement on
Form S-1, File No. 333-43043, dated as of March 23, 1998)
10.6 Form of Foreign Currency Addendum to Brokerage Agreement between the
Trust and Prudential Securities Incorporated (incorporated by reference
to Exhibit 10.6 to the Registrant's Quarterly Report on Form 10-Q, File
No. 333-43043, for the quarter ended March 31, 1998)
13.1 Registrant's 1999 Annual Report (with the exception of the information
and data incorporated by reference in Items 5, 7 and 8 of this Annual
Report on Form 10-K, no other information or data appearing in the
Registrant's 1999 Annual Report is to be deemed filed as part of this
report) (filed herewith)
27.1 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
9
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
World Monitor Trust--Series C
By: Prudential Securities Futures Management Inc.
A Delaware corporation, Managing Owner
By: /s/ Steven Carlino Date: March 30, 2000
----------------------------------------
Steven Carlino
Vice President and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities (with respect to the Managing Owner) and on the
dates indicated.
By: Prudential Securities Futures Management Inc.
A Delaware corporation, Managing Owner
By: /s/ Joseph A. Filicetti Date: March 30, 2000
-----------------------------------------
Joseph A. Filicetti
President and Director
By: /s/ Eleanor L. Thomas Date: March 30, 2000
-----------------------------------------
Eleanor L. Thomas
Executive Vice President and Director
By: /s/ Barbara J. Brooks Date: March 30, 2000
-----------------------------------------
Barbara J. Brooks
Chief Financial Officer
By: /s/ Steven Carlino Date: March 30, 2000
-----------------------------------------
Steven Carlino
Vice President and Treasurer
By: /s/ Alan J. Brody Date: March 30, 2000
-----------------------------------------
Alan J. Brody
Director
By: Date:
-----------------------------------------
A. Laurence Norton, Jr.
Director
By: /s/ Guy S. Scarpaci Date: March 30, 2000
-----------------------------------------
Guy S. Scarpaci
Director
By: Date:
-----------------------------------------
Tamara B. Wright
Senior Vice President and Director
10