Prospectus Cross Reference
June 9, 2003
TUDOR FUND FOR EMPLOYEES L.P.
(A Delaware Limited Partnership)
Supplement to the
Prospectus Dated June 9, 2003
-----------------------------------------------------------------------
This Supplement is an integral part of, and should be read together
with, the Prospectus dated June 9, 2003 ("Prospectus"), also delivered
herewith. All capitalized terms used in this Supplement and not defined
herein have the same meanings as used in the Prospectus.
-----------------------------------------------------------------------
CIS SECURITIES, INC.
Neither Tudor Fund For Employees L.P. nor Tudor Investment Corporation
is affiliated with Tudor Fund, a U.S. mutual fund registered under the
Investment Company Act of 1940, or with Tudor Management Co., Inc., a
wholly owned subsidiary of Weiss Peck & Greer.
The date of this Supplement is March 24, 2004
GENERAL INFORMATION
The Prospectus is amended to reflect the accuracy and timeliness of
information, including capitalization, selected financial data, financial
condition and results of operations, ownership, and performance information.
AMENDMENTS TO PROSPECTUS
1. The Partnership. The information regarding the Partnership's sale
of Units on page 8 (third full paragraph under "THE PARTNERSHIP") is deleted in
its entirety and the following is substituted therefor:
Since July 1990, the Partnership has been offering unsold Units
for sale at a price equal to 100% of the Net Asset Value of a Unit as
of the opening of business on the first day of each calendar quarter.
After the March 1, 2004 closing, 5,454 Units were outstanding, with
15,229 Units having been sold, 4,771 Units remaining unsold, 9,953 of
the sold Units having been redeemed, and 178 Units having been
allocated to the TIC 401(k) Plan. In addition, the General Partner
holds 197 units of general partnership interest.
2. Capitalization. The information regarding the capitalization of
the Partnership on page 14 (second full paragraph and table under
"CAPITALIZATION") is deleted in its entirety and the following is substituted
therefor:
The following table shows
o the actual capitalization of the Partnership as of March 1, 2004
based on the Units outstanding on that date; and
o the pro forma capitalization of the Partnership if all unsold
Units (4,771 Units) were sold at the estimated Net Asset Value
thereof as of March 1, 2004 (i.e., $11,902.29).
Pro Forma
Actual Amount if the
Amount Maximum Number of
Title of Class as of March 1, 2004 Unsold Units is Sold
-------------- ------------------- --------------------
Units of Limited Partnership Interest $64,860,199 $121,607,493
Units of General Partnership Interest(1) 2,343,374 2,343,374
----------- ------------
TOTAL $67,203,573 $123,950,867
=========== ============
------------------------
(1) The actual amount shown reflects the Net Asset Value of units of
general partnership interest outstanding as of March 1, 2004 (197
Units). The Net Asset Value of a unit of general partnership
interest is equal to the Net Asset Value of a Unit of limited
partnership interest. The General Partner has agreed to contribute
such amounts to the Partnership as are necessary from time to time
to make the General Partner's capital contribution equal to the
greater of (i) $200,000 and (ii) the sum of (a) the lesser of
$100,000 or 3% of the first $10,000,000 in aggregate capital
contributions to the Partnership by all Partners and (b) 1% of the
aggregate capital contributions to the Partnership by all Partners
in excess of $10,000,000.
2
3. Selected Financial Data. The table set forth on page 15 under
"SELECTED FINANCIAL DATA" following the first full paragraph thereof is deleted
in its entirety and the following is substituted therefor:
Nine Months Ended Years Ended December 31,
----------------- -------------------------------------------------------------------
September September
30, 2003 30, 2002 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------
Revenues ......................... $6,753,421 $7,459,112 $10,148,134 $8,850,572 $5,538,110 $1,981,370 $5,159,521
Expenses ......................... $1,601,926 $1,569,507 $2,068,306 $1,554,422 $1,035,471 $684,010 $962,387
------------------------------------------------------------------------------------------------
Net Income ....................... $5,151,495 $5,889,605 $8,079,828 $7,296,150 $4,502,639 $1,297,360 $4,197,134
Total Assets ..................... $58,229,334 $43,877,549 $48,756,213 $33,669,386 $27,918,377 $22,242,164 $18,265,036
Partners' Capital (see
"REDEMPTIONS").................. $55,396,703 $42,335,782 $45,362,746 $31,790,384 $22,161,072 $16,332,215 $14,891,112
Units Outstanding ................ 4,684 4,098 4,187 3,560 3,123 2,847 2,786
Net Asset Value Per Unit ......... $11,826 $10,331 $10,835 $8,929 $7,096 $5,737 $5,344
Change in Net Asset Value Per Unit $991 $1,402 $1,906 $1,833 $1,359 $393 $1,359
Net Income Per Unit .............. $1,085 $1,468 $1,988 $1,898 $1,337 $379 $1,327
4. Management's Discussion and Analysis of Financial Condition and
Results of Operations. The information set forth on pages 15 through 18 under
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" is deleted in its entirety and the following is substituted
therefor:
The following discussion should be read in conjunction with the
financial statements of the Partnership and related notes thereto.
Liquidity
The Partnership's assets are deposited and maintained with banks
and in trading accounts with clearing brokers and counterparties,
including BPL. These assets are used by the Partnership as margin and
collateral to engage in derivative instrument trading. Since the
Partnership's sole purpose is to trade in derivative instruments, it is
anticipated that the Partnership will continue to maintain substantial
liquid assets for margin and collateral purposes.
Cash and cash equivalents are part of the Partnership's inventory.
Cash and cash equivalents of $49,335,264 and $45,498,833 represented
approximately 85% and 93% of the Partnership's assets as of September
30, 2003 and December 31, 2002. The cash and cash equivalents satisfy
the Partnership's need for cash on both a short term and long term
basis.
Since futures trading generates a significant percentage of the
Partnership's income, any restriction or limit on that trading may
render the Partnership's investment in futures contracts illiquid. Most
U.S. commodity exchanges limit fluctuations in certain commodity
contract prices during a single day by regulations referred to as a
"daily price fluctuation limits" or "daily limits." Pursuant to such
regulations, during a single trading day, no trade may be executed at a
price beyond the applicable daily limit. If the price for a contract or
a particular commodity has
3
increased or decreased by an amount equal to the applicable "daily
limit," positions in such contracts can neither be taken nor liquidated
unless traders are willing to effect trades at or within such limit.
Futures contract prices have occasionally moved the applicable daily
limits for several consecutive days with little or no trading. Although
financial contracts can generally be closed out at TIC's discretion,
such market conditions could prevent the Partnership from promptly
liquidating its commodity positions. See "PRINCIPAL RISK
FACTORS--Commodity Interest Contract Trading May Be Iliquid."
Capital Resources
The Partnership does not have, nor does it expect to have, any
fixed assets. Redemptions and additional sales of Units in the future
will impact the amount of funds available for investment in commodity
interest contracts in subsequent periods. As the amount of capital
changes, the size of the positions taken by the Partnership is
adjusted.
The Partnership is currently open to new subscriptions and
contributions, which can be made quarterly. Periodically, the
Partnership opens up subscriptions and contributions on a monthly
basis. Such subscriptions and contributions are limited to employees of
TIC, its affiliates, their principals, and certain employee benefit
plans, including, but not limited to, the TIC 401(k) Plan. See
"INVESTMENT PROGRAM AND USE OF PROCEEDS."
Current Market Environment
The Partnership's trading results for the quarter ended September
30, 2003 were positive across a range of markets and instruments. The
Partnership benefited from positions held in currencies and fixed
income as the U.S. dollar weakened against several countries, while
long term interest rates in Japan reached new highs. The Partnership
also benefited from strategies in the European equity market as equity
indices exhibited a sharp decline during the third quarter of 2003.
Results of Operations for the Three and Nine Months Ended September 30,
2003 as Compared to the Three and Nine Months Ended September 30, 2002
The Partnership reported a net increase in Net Assets resulting
from operations of $4,666,431 and $5,151,495 for the three and nine
months ended September 30, 2003 compared to a net increase (decrease)
in Net Assets resulting from operations of $(760,407) and $5,889,605
for the three and nine months ended September 30, 2002.
4
The following table compares Net Asset Values at year-end 2002,
2001, and 2000:
Increase During
Net Asset Year
Value -------------------------
Per Unit $ %
---------- --------- ---------
December 31, 2002............ $10,834.75 $1,905.85 22.34%
December 31, 2001............ 8,928.90 1,833.12 25.83
December 31, 2000............ 7,095.78 1,358.85 23.69
The following table compares Net Asset Value per Unit for the
three and nine months ended September 30, 2003 and September 30, 2002:
Change in Net Asst Value Per Unit
---------------------------------
Net Asset Three Months Nine Months
Value per Ended Ended
Unit September 30 September 30
---- ------------ ------------
September 30, 2003........... $11,826.21 $ 944.65 8.68% $ 991.46 9.15%
September 30, 2002........... $10,331.04 $(192.85) (1.83)% $1,402.14 15.70%
Inflation is not expected to be a major factor in the
Partnership's operations, except that traditionally the commodities
markets have tended to be more active during inflationary periods.
Since the commencement of the Partnership's trading operations in July
1990, inflation has not been a major factor in the Partnership's
operations.
Investment Income
Interest income for the three and nine months ended September 30,
2003 was $136,473 and $438,211 compared to the three and nine months
ended September 30, 2002 of $189,599 and $507,309. The Partnership
earns interest income on cash and cash equivalents maintained with
banks and in trading accounts held with clearing brokers and
counterparties, including BPL, and used by the Partnership as
collateral to engage in futures, option and forward contracts and other
commodity interest contracts. The decrease in interest income was due
primarily to the periodic lowering of interest rates by the banking
authorities. The Partnership's interest income fluctuates in response
to the levels of collateral pledged with counterparties as well as
changes in overall interest rates.
Investment Expense
Interest expense for the three and nine months ended September 30,
2003 was $10,279 and $23,840 compared to the three and nine months
ended September 30, 2002 of $3,471 and $10,733. The Partnership's
interest expense fluctuates in response to the levels of collateral
pledged by counterparties on which the Partnership is required to pay
interest.
Brokerage commission expense for the three and nine months ended
September 30, 2003 was $88,215 and $284,844 compared to the three and
nine months ended September 30, 2002 of $75,480 and $254,882. These
expenses
5
represent all brokerage commissions, exchange, NFA and other fees
incurred in connection with the execution and clearing of commodity
interest trades, and will vary based on the Partnership's trading
activity during the period. The increase in brokerage commissions was
due to the increase in trading volume directly driven by the increase
in assets under management. The General Partner anticipates that the
Partnership will normally pay approximately 1% of its average Net
Assets in brokerage commissions and other transaction costs and charges
annually.
Operating Expenses
Management fees for the three and nine months ended September 30,
2003 were $218,074 and $626,512 compared to the three and nine months
ended September 30, 2002 of $172,607 and $479,255. Because management
fees are calculated as a percentage of the Partnership's Net Assets,
the increase in fees of approximately 26% and 31% was due to the
overall increase in assets under management of 25% and 31%.
Incentive fees for the three and nine months ended September 30,
2003 were $482,958 and $494,538 compared to the three and nine months
ended September 30, 2002 of $0 and $621,857. Incentive fees will
fluctuate based on the amount, if any, of Net Trading Profits earned by
the Partnership.
Professional fees and other expenses for the three and nine months
ended September 30, 2003 were $75,879 and $196,032 compared to the
three and nine months ended September 30, 2002 of $121,398 and
$213,513. Professional fees and other expenses remained relatively
stable for the three and nine months ended September 30, 2003 as
compared to September 30, 2002.
Net Realized and Unrealized Gains (Losses) On Trading Activities
Net realized and unrealized trading gains and losses are recorded
in the Partnership's statements of operations. The following table
summarizes the components (in thousands) of net realized and unrealized
gains and losses, net of brokerage commissions, for the three and nine
months ended September 30, 2003 and September 30, 2002:
6
Three Months
Ended Nine Months Ended
September 30, September 30,
------------- -------------
2003 2002 2003 2002
---- ---- ---- ----
Exchange-traded contracts:
Interest rate futures and options................... $ 2,509 $ (927) $ 3,272 $ 1,635
Foreign exchange futures............................ 142 (3) 190 159
Commodity futures and options....................... 123 -- 198 --
Equity index futures................................ 663 (575) (676) 992
Over-the-counter contracts:
Foreign exchange forwards and options............... 1,542 793 3,597 4,202
Commodity swaps..................................... (30) 62 (335) 33
Equity index swaps.................................. (93) -- (335) (334)
Forward rate agreements............................. -- -- (16) --
Interest rate swaps................................. -- 150 (35) 150
Non-financial derivative instruments................ 461 (152) 194 (129)
------- ------ ------- ------
Total............................................... $ 5,317 $ (652) $ 6,054 $6,708
======= ====== ======= ======
As the Partnership is a speculative trader in the commodities
markets, current period results are not comparable to prior period's
results.
The following table illustrates the Partnership's net realized and
unrealized gains and losses on trading activities as a percentage of
average Net Assets, brokerage commissions and fees as a percentage of
average Net Assets, and incentive fees as a percentage of net realized
and unrealized gains and losses on trading activities:
Three Months Ended, Nine Months Ended,
------------------- ------------------
September 30, September 30, September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
Net realized and unrealized gains (losses) on trading
activities as a percentage of average Net Assets 10.2% (1.3)% 12.6% 18.0%
Brokerage commissions and fees as a percentage of
average Net Assets 0.2% 0.2% 0.6% 0.7%
Incentive fees as a percentage of net realized and
unrealized gains on trading activities 8.9% 0.0% 7.8% 8.9%
Off-Balance Sheet Risk
In the normal course of business, the Partnership is a party to a
variety of off-balance sheet financial instruments in connection with
its trading of certain derivative instruments. Derivatives are often
referred to as "off-balance sheet instruments" as a derivative's
notional amount is not recorded on the balance sheet. Notional amounts
are generally not exchanged in a derivative transaction. Instead,
notional amounts represent the basis for calculating and exchanging
cash flows during the duration of the derivative contract. As a result,
notional amounts are generally not indicative of the amount of
Partnership assets that are at risk. As a writer of options, the
Partnership bears the risk of unfavorable changes in the price of the
underlying instruments which may be in excess of the premiums received.
The Partnership values its derivatives instruments at market
value, with the accompanying gains and losses reflected in the
statements of operations.
7
The determination of market value is generally based upon independent
market values when available from major exchanges or, if none are
available, from independent broker quotations. Additionally, in
determining market value, management utilizes pricing models with
market quoted inputs and also considers closing exchange prices of
related instruments, time value of money, volatility factors of the
underlying instruments, and other market conditions.
New Accounting Pronouncement
On May 15, 2003, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 150, Accounting for
Certain Instruments with Characteristics of both Liabilities and Equity
("SFAS 150"). SFAS 150 establishes standards for classifying and
measuring as liabilities certain financial instruments that embody
obligations of an issuer and have characteristics of both liabilities
and equity. SFAS 150 requires that financial instruments that are
issued in the form of shares that are mandatorily redeemable on a fixed
or determinable date or upon an event certain to occur in the future to
be classified as liabilities. For SEC registrants deemed "non-public"
entities under SFAS 150, SFAS 150 is effective for fiscal periods
beginning after December 15, 2003. The Partnership will adopt SFAS 150
on January 1, 2004. As a result of adopting the new standard, the
Partnership will reclassify those Units that are redeemable upon an
event certain (e.g., the death of the Partner) to liabilities from
equity with subsequent returns on such Units reflected on the statement
of operations. Adoption of SFAS 150 will affect the presentation of the
Partnership's financial position and ratios to average Net Assets as a
result of the reclassification, but it will have no impact on the value
of Units.
5. Risk Management. The section under the heading "Market Risk
Management" is amended by deleting the information beginning with the fourth
paragraph on page 19 and ending at the end of such section and the following is
substituted entirely therefor:
The following table illustrates the VaR for each component of
market risk as of September 30, 2003 and December 31, 2002. The dollar
values represent the VaR at the 99% confidence level.
September 30, December 31,
Risk Factors 2003 2002
------------ ---- ----
Interest rate derivatives........................................ $ 367,352 $ 152,864
Foreign exchange derivatives..................................... 849,956 332,771
Equity index derivatives......................................... 668,549 327,531
Non-financial derivative instruments............................. 673,085 --
Correlation offset(1)............................................ (1,828,942) (472,865)
----------- ----------
Aggregate VaR.................................................... $ 730,000 $ 340,301
----------- ----------
(1) The correlation offset equals the difference between Aggregate VaR
and the sum of the VaRs for the four risk factors. This offset arises
due to the correlation that exists in the individual items being
aggregated.
8
The following table illustrates the Partnership's high, low
and average daily VaR during the nine and twelve months ended September
30, 2003 and December 31, 2002 for each component of market risk noted
above:
September 30, 2003 December 31, 2002
------------------ -----------------
Risk Factors High(2) Low(2) Average High(2) Low(2) Average
- ------------ ------- ------ ------- ------- ------ -------
Interest rate derivatives $ 492,705 $ 114,740 $ 177,001 $ 1,051,417 $ 65,021 $ 303,459
Foreign exchange derivatives 734,244 114,123 275,066 1,424,552 203,257 500,126
Equity index derivatives 860,744 165,731 282,908 643,822 116,945 173,499
Non-financial derivative instruments 315,690 54,717 160,535 173,062 77,579 68,328
Correlation offset(1) (565,383) (288,311) (252,510) (1,770,951) (333,043) (411,412)
----------- --------- --------- ------------ --------- ---------
Aggregate VaR $ 1,838,000 $ 161,000 $ 643,000 $ 1,521,902 $ 129,759 $ 634,000
----------- --------- --------- ----------- --------- ---------
(1) The correlation offset equals the difference between Aggregate VaR and the
sum of the VaRs for the four risk factors. This offset arises due to the
correlation that exists in the individual items being aggregated.
(2) The balances shown for each component of market risk represent their daily
VARs on the day that the Partnership experienced its highest and lowest daily
VAR during the period.
At September 30, 2003, the Partnership's primary market exposure
was to foreign exchange, equity index, and non-financial derivatives.
Changes in interest rates directly affect the price of interest
rate futures and may, indirectly, affect the price of foreign exchange
futures and equity index futures. At September 30, 2003, the
Partnership's interest rate exposure was primarily to interest rate
fluctuations in the United States and other G-7 countries.
The Partnership's foreign exchange contract exposure results from
fluctuations in exchange rates. Exchange rates fluctuate due to many
factors, including changes in interest rates, rates of inflation and
government policies and programs.
The Partnership's equity index exposure was primarily attributable
to equity price risk in the United States and other G-7 countries.
Stock index futures traded by the Partnership are principally limited
to futures on broad-based equity indices.
The Partnership's exposure in non-financial derivative instruments
was primarily attributable to trading in metals and grains.
In addition to exchange traded instruments, the Partnership is
exposed to various OTC derivative instruments, including swaps and
forward contracts. In addition to having price risk that may be similar
to exchange traded instruments, OTC instruments may result in the
Partnership having credit risk associated with its OTC contract
counterparties.
Cash and due from brokers balances are held principally at U.S.
banks, U.S. securities dealers, and certain international financial
institutions.
9
Credit Risk Management
Derivative instruments are bilateral agreements that result in
credit exposure between counterparties. Exchange-traded derivatives
settle through clearing houses backed by multiple members and present
relatively low credit risk. OTC derivatives are settled with individual
counterparties and present potential credit risk exposure. TIC attempts
to minimize exposure to trading counterparties and brokers through the
use of bilateral collateral agreements ("Collateral Agreements") with
the Partnership's OTC derivative counterparties and through formal
credit policies and monitoring procedures. TIC has a Credit Committee,
comprised of senior managers from different disciplines throughout TIC
and its affiliates, that meets regularly to analyze the credit risks
associated with the Partnership's counterparties, intermediaries and
service providers. A significant portion of the Partnership's
positions, including cash and due from brokers, are invested with or
held at highly rated banks and securities dealers.
TIC establishes counterparty exposure limits and specifically
designates which product types are approved for trading with each
counterparty. TIC attempts to reduce the credit risk of the Partnership
by establishing stringent credit terms in its legal trade documentation
(i.e., ISDA agreements, master netting agreements, etc.) with
counterparties. In addition, TIC monitors exposure levels and actively
moves collateral with counterparties to reduce exposure.
Futures and forwards are typically liquidated by entering into
offsetting contracts with the same counterparty. Swaps and forward rate
agreements are either liquidated or held to maturity. For these
instruments, the unrealized gain or loss, rather than the contract or
notional amounts, represents the present value of future net cash
requirements.
Exchange-traded futures and option contracts are marked to market
daily, with variations in value settled on a daily basis with the
exchange upon which such instruments are traded and with the brokers
through which the futures and options contracts are cleared. Forward
contracts are generally cash settled with the Partnership's
counterparty two days after the trade.
Notwithstanding the risk monitoring and credit review performed by
TIC with respect to its counterparties, there is always a risk of
counterparty nonperformance.
Generally, financial contracts can be closed out at TIC's
discretion. An illiquid or closed market, however, could prevent the
close-out of positions.
6. Performance Record of the Partnership. The information regarding
the performance record of the Partnership beginning with the second paragraph on
page 22 under "PERFORMANCE RECORD OF THE PARTNERSHIP" is deleted in its entirety
and the following is substituted therefor:
10
The performance record of the Partnership from January 1, 1999
through February 29, 2004 is shown below. The Partnership's complete
performance record since it began trading (July 2, 1990 through
February 29, 2004) is shown in Item 8 below. The information below and
in Item 8 is the actual trading performance of the Partnership after
payment of advisory fees, transaction costs, and all other expenses and
costs. The rates of return shown below and in Item 8 are representative
of the rates of return experienced by each investor holding a Unit
during the period shown.
The information below and in Item 8 has not been audited. However,
the General Partner believes that such information is accurate and
fairly presented.
You should be aware that past performance information cannot
predict how the Partnership will perform in the future. It is possible
that the Partnership will incur losses in the future.
ACTUAL PERFORMANCE RECORD OF TUDOR FUND FOR EMPLOYEES L.P.
Rates of Return (1)(2)
2004 2003 2002 2001 2000 1999
---------------------------------------------------------------
January......................... -0.14% -1.05% 1.55% -0.64% -0.85% -4.05%
February........................ 0.58% -2.71% 0.64% 2.38% 5.10% 6.31%
March........................... -1.55% 1.24% 8.21% -7.98% -6.03%
April........................... 1.89% 2.71% -4.11% -0.43% -2.46%
May............................. 0.59% 4.88% 1.26% 5.69% -0.94%
June............................ 3.38% 5.76% 3.20% -3.87% -1.46%
July............................ -2.15% -2.26% 4.45% -0.95% 3.39%
August.......................... 2.56% -1.12% 5.87% 1.81% 2.05%
September....................... 8.30% 1.57% 4.07% 6.54% 0.07%
October......................... -3.88% -0.54% 2.05% -1.92% 4.52%
November........................ 0.66% 4.08% -4.19% 8.34% 4.49%
December........................ 3.57% 1.31% 1.40% 11.70% 2.01%
---------- ---------- --------- ---------- --------- ----------
Annual (Period) Rate of Return(2)(3) 0.44% 9.38% 21.34% 25.83% 23.69% 7.35%
========== ========== ========= ========== ========= ==========
Name of Fund: Tudor Fund For Employees L.P.
Type of Fund: Publicly Offered
Inception of Trading: July 2, 1990
Aggregate Subscriptions Since Inception (3): $73,748,000
Aggregate Redemptions Since Inception (3): $45,718,000
Current Net Assets (3): $67,249,000
Largest Monthly Percentage Drawdown (4): March 2000 (-7.98%)
Worst Peak to Valley Percentage Drawdown (5): March 1, 1999--June 30, 1999 (-10.53%)
THE ACCOMPANYING FOOTNOTES ARE AN INTEGRAL PART OF THIS TABLE.
11
FOOTNOTES TO TABLE
The performance data presented above has been calculated on an accrual
basis of accounting in accordance with U.S. generally accepted
accounting principles.
(1) "Monthly Rate of Return" is calculated by dividing Net Performance
by Beginning Net Assets plus Additions. Monthly Rate of Return
does not take into account Withdrawals. Because Withdrawals occur
only at the month-end, their effect on the calculation of Monthly
Rate of Return is not material.
"Additions" represents all additional capital contributed during a
month.
"Beginning Net Assets" represents the sum of cash and cash
equivalents and the equity in the Partnership accounts, less
accrued and paid expenses as of the beginning of a month.
"Net Assets" means the market value of the Partnership's assets
less any accrued liabilities.
"Net Performance" represents the change in Net Assets, net of
Additions and Withdrawals.
"Withdrawals" represents all withdrawals of capital during a
month.
(2) "Annual (Period) Rate of Return" is calculated by determining the
Monthly Rate of Return for each month during the relevant period
and compounding such returns by subsequent Monthly Rates of Return
achieved during such period.
(3) As of March 1, 2004.
(4) "Largest Monthly Percentage Drawdown" represents the greatest
cumulative percentage decline in month-end Net Assets due to
losses sustained by the Partnership during any one-month period
shown in the table.
(5) "Worst Peak to Valley Percentage Drawdown" represents the greatest
cumulative percentage decline in month-end Net Assets due to
losses sustained by the Partnership during any period shown in the
table in which Net Assets at any prior month-end are not equaled
or exceeded by subsequent Net Assets.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
7. Security Ownership of Certain Beneficial Owners and Management.
The information regarding "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
12
MANAGEMENT" of the Partnership beginning on page 45 is deleted in its entirety
and the following is substituted therefor:
Security Ownership of Certain Beneficial Owners
As of March 1, 2004, the only persons who owned more than five
percent (5%) of the outstanding interests in the Partnership were:
Number
Name (1) Address of Units Percent
---- ------- -------- -------
Tudor Investment Corporation 401(k) Savings 1275 King Street 913.6397 16.2%
and Profit-Sharing Plan ................ Greenwich, CT 06831
James Pulaski........................... c/o Tudor Investment Corporation 650.1644 11.5%
1275 King Street
Greenwich, CT 06831
John G. Macfarlane, III................. c/o Tudor Investment Corporation 380.2705 6.7%
1275 King Street
Greenwich, CT 06831
Spencer W. Lampert...................... c/o Tudor Investment Corporation 303.2106 5.4%
1275 King Street
Greenwich, CT 06831
------------------
(1) The persons named in this table have sole voting and investment
power with respect to all interests in the Partnership shown as
beneficially owned by them, subject to community property or similar
laws where applicable.
Security Ownership of Management
As of March 1, 2004, the General Partner and the executive
officers of the General Partner collectively owned 13.0% of the
outstanding interests in the Partnership. As of March 1, 2004, in
addition to the persons identified in the table above, Mark F. Dalton
and Andrew S. Paul, each of whom is a principal of both the General
Partner and the Trading Advisor, owned 24.6276 Units (0.4%) and
110.5747 Units (2.0%), respectively.
8. Additional Partnership Performance. The information regarding the
performance record of the Partnership on pages SAI-1 and SAI-2 is deleted in its
entirety and the following is substituted therefor:
ADDITIONAL PARTNERSHIP PERFORMANCE
The Partnership's complete performance record since it began
trading (July 2, 1990 through February 29, 2004) is shown below.
13
The information below is the actual trading performance of the
Partnership after payment of advisory fees, transaction costs, and all
other expenses and costs. The rates of return shown below are
representative of the rates of return experienced by each investor
holding a Unit during the period shown.
The information below has not been audited. However, the General
Partner believes that such information is accurate and fairly
presented.
You should be aware that past performance information cannot
predict how the Partnership will perform in the future. It is possible
that the Partnership will incur losses in the future.
ACTUAL PERFORMANCE RECORD OF TUDOR FUND FOR EMPLOYEES L.P.
Rates of Return (1)(2)
----------------------
2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
--------------------------------------------------------------------------------------------------------------------
January........ -0.14% -1.05% 1.55% -0.64% -0.85% -4.05% -0.35% 2.69% 9.92% 4.12% 4.61% -2.80% 9.61% 3.96%
February....... 0.58% -2.71% 0.64% 2.38% 5.10% 6.31% 1.27% 8.65% 0.69% 3.59% -2.24% -0.83% 6.07% -8.01%
March.......... -1.55% 1.24% 8.21% -7.98% -6.03% 4.23% 4.96% 1.70% 12.14% -0.23% -1.45% 8.13% 0.47%
April.......... 1.89% 2.71% -4.11% -0.43% -2.46% -4.32% 0.48% 7.93% 0.53% -1.28% -1.39% 3.02% 5.96%
May............ 0.59% 4.88% 1.26% 5.69% -0.94% -0.74% 1.65% -2.50% -3.96% -1.64% -2.99% -4.03% -0.75%
June........... 3.38% 5.76% 3.20% -3.87% -1.46% 1.07% -0.40% -1.42% -3.19% 5.62% 0.98% -6.88% 7.95%
July........... -2.15% -2.26% 4.45% -0.95% 3.39% 2.72% 3.49% 0.54% 0.18% -4.37% 1.59% -4.03% -4.41% -9.62%
August......... 2.56% -1.12% 5.87% 1.81% 2.05% 11.29% 3.94% -0.99% 5.50% 1.04% 0.05% 1.11% 0.10% 13.44%
September...... 8.30% 1.57% 4.07% 6.54% 0.07% 12.82% -5.13% -3.67% 1.49% 8.29% 1.23% 13.23% 1.55% 2.46%
October........ -3.88% -0.54% 2.05% -1.92% 4.52% -0.20% -1.55% -0.34% 4.73% -3.58% 2.57% 10.13% 5.78% 17.19%
November....... 0.66% 4.08% -4.19% 8.34% 4.49% -2.15% 4.33% -2.26% 0.50% 2.04% 1.02% -3.10% 9.07% -1.87%
December....... 3.57% 1.31% 1.40% 11.70% 2.01% 5.46% 1.74% 0.42% 2.08% -0.79% 4.12% -0.98% -1.76% 3.83%
- -----------------------------------------------------------------------------------------------------------------------------------
Annual (Period) 0.44% 9.38% 21.34% 25.83% 23.69% 7.35% 34.11% 27.05% 9.52% 30.26% 6.87% 1.88% 34.01% 20.13% 25.44%
Rate of Return(2)
===================================================================================================================================
Name of Fund: Tudor Fund For Employees L.P.
Type of Fund: Publicly Offered
Inception of Trading: July 2, 1990
Aggregate Subscriptions Since Inception (3): $73,748,000
Aggregate Redemptions Since Inception (3): $45,718,000
Current Net Assets (3): $67,249,000
Largest Monthly Percentage Drawdown (4): March 2000 (-7.98%)
Worst Peak to Valley Percentage Drawdown (5): March 1, 1999--June 30, 1999 (-10.53%)
THE ACCOMPANYING FOOTNOTES ARE AN INTEGRAL PART OF THIS TABLE.
FOOTNOTES TO TABLE
The performance data presented above has been calculated on an accrual
basis of accounting in accordance with U.S. generally accepted
accounting principles.
(1) "Monthly Rate of Return" is calculated by dividing Net Performance
by Beginning Net Assets plus Additions. Monthly Rate of Return
does not take
14
into account Withdrawals. Because Withdrawals occur only at the
month-end, their effect on the calculation of Monthly Rate of
Return is not material.
"Additions" represents all additional capital contributed during a
month.
"Beginning Net Assets" represents the sum of cash and cash
equivalents and the equity in the Partnership accounts, less
accrued and paid expenses as of the beginning of a month.
"Net Assets" means the market value of the Partnership's assets
less any accrued liabilities.
"Net Performance" represents the change in Net Assets, net of
Additions and Withdrawals.
"Withdrawals" represents all withdrawals of capital during a
month.
(2) "Annual (Period) Rate of Return" is calculated by determining the
Monthly Rate of Return for each month during the relevant period
and compounding such returns by subsequent Monthly Rates of Return
achieved during such period.
(3) As of March 1, 2004.
(4) "Largest Monthly Percentage Drawdown" represents the greatest
cumulative percentage decline in month-end Net Assets due to
losses sustained by the Partnership during any one-month period
shown in the table.
(5) "Worst Peak to Valley Percentage Drawdown" represents the greatest
cumulative percentage decline in month-end Net Assets due to
losses sustained by the Partnership during any period shown in the
table in which Net Assets at any prior month-end are not equaled
or exceeded by subsequent Net Assets.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
15