Item 1. Business
General
Willowbridge Strategic Trust (the 'Trust') was organized under the Delaware Business Trust Statute on October 16, 1995 and commenced trading operations on May 1, 1996. The Trust will terminate on December 31, 2015 unless terminated sooner as provided in the Second Amended and Restated Declaration of Trust and Trust Agreement (the 'Trust Agreement'). The Trust was formed to engage in the speculative trading of commodity futures, forward and options contracts. The Trustee of the Trust is Wilmington Trust Company.
On May 1, 1996, the Trust completed its initial offering with gross proceeds of $12,686,200 from the sale of 125,352 limited interests and 1,510 general interests (collectively, 'Interests'). Additional Interests were being offered monthly at the then current net asset value per Interest until January 31, 1998 but in no event after $100,000,000 in limited interests were sold (the 'Continuous Offering Period'). A minimum initial contribution of $5,000 ($2,000 for an IRA account) was required for each new limited owner unless Prudential Securities Futures Management Inc. (the 'Managing Owner'), in its sole discretion, approved a contribution of a lesser amount. Existing limited owners were permitted to make additional contributions in increments of not less than $100 during the Continuous Offering Period.
Throughout the Continuous Offering Period, the Registrant accepted additional subscriptions for an aggregate of 489,150 limited interests and 3,665 general interests resulting in additional proceeds to the Registrant of $51,242,700.
All trading decisions for the Registrant are being made by Willowbridge Associates Inc. (the 'Trading Manager'), an independent commodity trading manager which manages the Registrant's assets pursuant to five trading programs developed by the Trading Manager. The Managing Owner retains the authority to override trading instructions that violate the Registrant's trading policies.
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
The Managing Owner, Prudential Securities Futures Management Inc., is a wholly owned subsidiary of Prudential Securities Incorporated ('PSI'), which, in turn, is a wholly owned subsidiary of Prudential Securities Group Inc. PSI was the principal underwriter and selling agent for the Trust's Interests and is the commodity broker ('Commodity Broker') of the Trust. The Managing Owner is required to maintain at least a 1% interest in the Trust so long as it is acting as the Managing Owner.
Competition
The Managing Owner and its affiliates have formed, and may continue to form, various entities to invest in the speculative trading of futures, forward and options contracts which have certain of the same investment policies as the Registrant.
The Registrant was an open-end fund which solicited the sale of additional Interests on a monthly basis until the Continuous Offering Period expired. As such, the Registrant may have, but no longer competes with other entities to attract new participants. However, to the extent that the Trading Manager 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.
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. See Notes A, C and D to the Registrant's annual report to limited owners for the year ended December 31, 1997 ('Registrant's 1997 Annual Report') which is filed as an exhibit hereto.
Item 2.
Item 2. Properties
The Registrant does not own or lease any property.
Item 3.
Item 3. Legal Proceedings
There are no material legal proceedings pending by or against the Registrant or the Managing Owner.
Item 4.
Item 4. Submission of Matters to a Vote of Interest Holders
None
PART II
Item 5.
Item 5. Market for the Registrant's Interests and Related Interest Holder Matters
As of March 5, 1998, there were 2,926 holders of record owning 495,953 Interests which include 5,175 general interests. 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. Redemptions are permitted monthly, on at least ten days' prior written notice. Redemptions are at the net asset value per Interest, however, Interests redeemed on or prior to the end of the first and second successive six-month periods after their effective date of purchase are subject to redemption charges of 4% and 3%, respectively, of the net asset value at which they are redeemed. These redemption charges are paid to the Managing Owner. Partial redemptions are permitted. Consequently, holders of Interests may not be able to liquidate their investments in the event of an emergency or for any other reason.
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.
Item 6.
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 1997 Annual Report which is filed as an exhibit hereto.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
This information is incorporated by reference to pages 10 and 11 of the Registrant's 1997 Annual Report which is filed as an exhibit hereto.
Item 8.
Item 8. Financial Statements and Supplementary Data
The financial statements are incorporated by reference to pages 2 through 9 of the Registrant's 1997 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.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Reference is made to the Registrant's Current Report on Form 8-K dated May 14, 1996, as filed with the Securities and Exchange Commission on May 16, 1996 regarding the change in the Registrant's certifying accountant from Deloitte & Touche LLP to Price Waterhouse LLP.
PART III
Item 10.
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 10% 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. Other than Thomas M. Lane, Jr., the executive officers and directors of the Managing Owner did not file Form 3 in a timely manner but have subsequently filed and are now current in all filings. All other filing requirements were satisfied on a timely basis. In making these disclosures, the Registrant has relied solely on written representations of the Managing Owner's directors and executive officers 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 Thomas M. Lane, Jr. President and Director Barbara J. Brooks Treasurer and Chief Financial Officer Steven Carlino Vice President and Chief Accounting Officer A. Laurence Norton, Jr. Director Guy S. Scarpaci Director
THOMAS M. LANE, JR., age 49, is the President and a Director of Prudential Securities Futures Management Inc. He is also the President and a Director of Seaport Futures Management, Inc. Mr. Lane has been a Senior Vice President of Futures Sales and Execution Services in the Futures Division since joining PSI in September 1995. Prior to joining PSI, Mr. Lane was employed by Merrill Lynch as the Vice President of Group Future Sales and Marketing from November 1983 until September 1995, and prior to that, Imperial Chemical as a Marketing Manager.
BARBARA J. BROOKS, age 49, is the Treasurer and Chief Financial Officer of Prudential Securities Futures Management Inc. She is a Senior Vice President of PSI. She is also the Treasurer and 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 34, is a Vice President of Prudential Securities Futures Management Inc. He is a First Vice President of PSI. He is also a Vice President 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.
A. LAURENCE NORTON, JR., age 59, is a Director of Prudential Securities Futures Management Inc. He is an Executive Vice President of PSI and head of its Futures Division. He is also a Director of Seaport Futures Management, Inc. Most recently, 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 51, 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.
During December 1997, Thomas M. Lane, Jr. replaced James M. Kelso as President and a Director of Prudential Securities Futures Management Inc.
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.
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 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.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 5, 1998, 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 5, 1998, no director or executive officer of the Managing Owner owns directly or beneficially any of the Interests issued by the Registrant.
As of March 5, 1998, no owners of Interests beneficially own more than five percent (5%) of the limited interests issued by the Registrant.
Item 13.
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, 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 1997 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.
PART IV
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.
Willowbridge Strategic Trust
By: Prudential Securities Futures Management Inc. A Delaware corporation, Managing Owner
By: /s/ Steven Carlino Date: March 30, 1998 ---------------------------------------- Steven Carlino Vice President and Chief Accounting Officer
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/ Thomas M. Lane, Jr. Date: March 30, 1998 ----------------------------------------- Thomas M. Lane, Jr. President and Director
By: /s/ Barbara J. Brooks Date: March 30, 1998 ----------------------------------------- Barbara J. Brooks Treasurer and Chief Financial Officer
By: /s/ Steven Carlino Date: March 30, 1998 ----------------------------------------- Steven Carlino Vice President
By: Date: March , 1998 ----------------------------------------- A. Laurence Norton, Jr. Director
By: /s/ Guy S. Scarpaci Date: March 30, 1998 ----------------------------------------- Guy S. Scarpaci Director