<PAGE>
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, 1995
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 33-80443
WILLOWBRIDGE STRATEGIC TRUST
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(Exact name of registrant as specified in its charter)
Delaware 13-7075398
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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:
Units of Limited Partnership Interest
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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 _ No CK
Pursuant to Section 15(d)(2) of the Securities Exchange Act of 1934, this
report contains only financial statements for the fiscal year ended December 31,
1995.
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Deloitte & Two World Financial Center Telephone: (212) 436-2000
Touche LLP New York, New York 10281-1414 Facsimile:(212) 436-5000
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(LOGO)
INDEPENDENT AUDITOR'S REPORT
To the Interestholders of
Willowbridge Strategic Trust:
We have audited the accompanying statement of financial condition of
Willowbridge Strategic Trust as of December 31, 1995. This financial
statement is the responsibility of the Trust's management. Our
responsibility is to express an opinion on this financial statement
based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the statement
of financial condition is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of financial condition. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
statement of financial condition presentation. We believe that
our audit of the statement of financial condition provides a
reasonable basis for our opinion.
In our opinion, such statement of financial condition presents fairly,
in all material respects, the financial position of Willowbridge
Strategic Trust as of December 31, 1995 in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
October 14, 1996
2
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Deloitte Touche
Tohmatsu
International
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WILLOWBRIDGE STRATEGIC TRUST
(a Delaware Business Trust)
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1995
ASSET
<TABLE>
<S> <C>
Cash.................................................................................... $1,000
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<CAPTION>
TRUST CAPITAL
<S> <C>
General interests--10 interests outstanding............................................. $1,000
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-------
</TABLE>
The accompanying notes are an integral part of this statement.
3
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WILLOWBRIDGE STRATEGIC TRUST
(a Delaware Business Trust)
NOTES TO STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1995
A. General
Willowbridge Strategic Trust (the ``Trust'') was organized under the Delaware
Business Trust Statute on October 16, 1995 but had not commenced operations as
of December 31, 1995. 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, options and forward
contracts. The Trustee of the Trust is Wilmington Trust Company. The managing
owner 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 principal underwriter and selling agent for the Trust's interests
(the ``Interests'') as well as the commodity broker (``Commodity Broker'') of
the Trust.
The Trust Agreement provides that at least 100,000 Interests at $100 per
Interest must be subscribed for and accepted during the Initial Offering Period
(as defined in the Trust Agreement) before Trust operations may commence.
Otherwise, all subscription proceeds, together with any interest earned thereon,
will be returned to the subscribers. The Trust is offering a maximum of
$100,000,000 of limited interests. Following the close of the Initial Offering
Period, additional Interests will be offered monthly at the then current net
asset value per Interest until no later than two years from the date of the
prospectus but in no event after $100,000,000 in limited interests are sold (the
``Continuous Offering Period''). A minimum initial contribution of $5,000
($2,000 for an IRA account) is required for each new limited owner unless the
Managing Owner, in its sole discretion, approves a contribution of a lesser
amount. Existing limited owners will be permitted to make additional
contributions in increments of not less than $100 during the Continuous Offering
Period.
Redemptions may occur monthly, on at least 10 days' prior written notice,
commencing with the end of the first full month of Trust trading activity.
Redemptions will be at 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 purchase will be subject to a redemption charge of 4% and 3%,
respectively, of the net asset value at which they are redeemed. These
redemption charges will be paid to the Managing Owner. Partial redemptions will
be permitted.
As of December 31, 1995, $1,000 had been contributed to the Trust by the
Managing Owner. 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. Therefore,
it must contribute to the Trust between $101,000 and $1,010,000 depending upon
the total number of limited interests sold during the Initial and Continuous
Offering Periods. In return, it is entitled to a proportionate number of general
interests with at least a 1% interest in the profits and losses of the Trust.
The Managing Owner, on behalf of the Trust, entered into an advisory
agreement (the ``Advisory Agreement'') with Willowbridge Associates Inc., an
independent commodity trading manager (the ``Trading Manager''). The Managing
Owner will make 100% of the Trust's assets available for trading by the Trading
Manager; however, the Managing Owner retains the authority to override trading
instructions that violate the Trust's trading policies. The Advisory Agreement
will be for an initial term of approximately one year and may be renewed
thereafter for additional successive one-year terms. The Managing Owner retains
the right to retain additional or substitute commodity trading managers at its
discretion.
B. Summary of Significant Accounting Policies
Basis of Accounting
The books and records of the Trust are maintained on the accrual basis of
accounting in accordance with generally accepted accounting principles.
4
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Income Taxes
The Trust is not required to provide for, or pay, any federal or state income
taxes. Income tax attributes that arise from its operations will be passed
directly to the individual limited owners and the Managing Owner. The Trust may
be subject to other state and local taxes in jurisdictions in which it operates.
Profit and loss allocations and distributions
The Trust intends to allocate profits and losses for both financial and tax
reporting purposes to the limited owners and the Managing Owner monthly on a
pro-rata basis based on each owner's Interests outstanding during the month.
Distributions (other than on redemptions of Interests) will be made at the sole
discretion of the Managing Owner on a pro rata basis in accordance with the
respective capital accounts of the owners.
C. Fees
Organizational, Offering, General and Administrative Costs
PSI or its affiliates will pay the costs of organizing the Trust and offering
its Interests as well as administrative costs incurred by the Managing Owner or
its affiliates for services it performs for the Trust. These costs include, but
are not limited to, those discussed in Note D below. Routine legal, audit,
postage, and other third party costs also will be paid by PSI or its affiliates.
Management and Incentive fees
The Trust will pay the Trading Manager a monthly management fee of 1/4 of 1%
(3% per annum) of the Trust's Net Asset Value as of the last day of each month
and a quarterly incentive fee of 20% of ``New High Net Trading Profits'' (as
defined in the Advisory Agreement).
Commissions
The Managing Owner, on behalf of the Trust, entered into an agreement (the
``Brokerage Agreement'') with PSI to act as Commodity Broker whereby the Trust
will pay a fixed monthly fee for brokerage services rendered. The monthly fee
will equal .64583 of 1% (7.75% per annum) of the Trust's Net Asset Value as of
the first day of each month. From this fee, PSI will pay all of the Trust's
execution (i.e., floor brokerage expenses, give-up charges and NFA, clearing and
exchange fees) and account maintenance costs, as well as compensation to
employees who sell Interests in the Trust.
D. Related Parties
The Managing Owner or its affiliates will perform services for the Trust
which will include but are not limited to: brokerage services, accounting and
financial management, registrar, transfer and assignment functions, investor
communications, printing and other administrative services.
One hundred percent of the proceeds of this offering will be received in the
Trust's name and deposited in cash in segregated trading accounts at PSI and
will remain there for as long as the Trust's Brokerage Agreement with PSI
remains in effect. PSI will credit the Trust monthly with 80% of the interest it
earns on the equity in these accounts and will retain the remaining 20%.
When the Trust engages in forward foreign currency transactions, it will
trade with PSI who will simultaneously engage in back-to-back transactions with
an affiliate who, pursuant to the Trust's prospectus, is obligated to charge a
competitive price.
E. Credit and Market Risk
Since the Trust's business will be to trade futures, forward and options
contracts, its capital will be at risk due to changes in the value of these
contracts (market risk) or the inability of counterparties to perform under the
terms of the contracts (credit risk).
Futures, forward and options contracts involve varying degrees of off-balance
sheet risk; and changes in the level of volatility of interest rates, foreign
currency exchange rates or the market values of the contracts (or commodities
underlying the contracts) will frequently result in changes in the Trust's
unrealized gain (loss) on open commodity positions reflected in the statements
of financial condition. The Trust's exposure to market risk will be influenced
by a number of factors including the relationships among the contracts to be
held by the Trust as well as the liquidity of the markets in which the contracts
are to be traded.
5
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Futures and options contracts are traded on organized exchanges and are thus
distinguished from forward contracts which are entered into privately by the
parties. The credit risks associated with futures and options contracts are
typically perceived to be less than those associated with forward contracts
because exchanges typically provide clearinghouse arrangements in which the
collective credit (subject to certain limitations) of the members of the
exchanges is pledged to support the financial integrity of the exchange. On the
other hand, the Trust must rely solely on the credit of its broker (PSI) with
respect to forward transactions.
The Managing Owner will attempt to minimize both credit and market risks by
requiring the Trust's Trading Manager to abide by various trading limitations
and policies. The Managing Owner will monitor compliance with these trading
limitations and policies which include, but are not limited to, executing and
clearing all trades with creditworthy counterparties (currently, it is intended
that PSI will be the sole counterparty or broker); limiting the amount of margin
or premium required for any one commodity or all commodities combined; and
generally limiting transactions to contracts which are traded in sufficient
volume to permit the taking and liquidating of positions. The Managing Owner may
impose additional restrictions (through modifications of such trading
limitations and policies) upon the trading activities of the Trading Manager as
it, in good faith, deems to be in the best interests of the Trust.
PSI, when acting as the Trust's futures commission merchant in accepting
orders for the purchase or sale of domestic futures and options contracts, will
be required by Commodity Futures Trading Commission (``CFTC'') regulations to
separately account for and segregate as belonging to the Trust all assets of the
Trust relating domestic futures and options trading and not to commingle such
assets with other assets of PSI. Part 30.7 of the CFTC regulations also will
require PSI to secure assets of the Trust related to foreign futures and options
trading. There are no segregation requirements for assets related to forward
trading.
F. Subsequent Event
On May 1, 1996, the Trust accepted subscriptions for 125,352 limited
interests and an additional 1,500 general interests and commenced its trading
activities. The initial proceeds to the Trust were $12,685,200.
The Trust has accepted additional subscriptions during its Continuous
Offering Period of 116,173.996 limited interests and 1,206.310 general interests
through October 1, 1996 resulting in additional proceeds to the Trust of
approximately $10,351,100.
6
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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: October 22, 1996
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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/ James M. Kelso Date: October 22, 1996
-----------------------------------------
James M. Kelso
President and Director
By: /s/ Barbara J. Brooks Date: October 22, 1996
-----------------------------------------
Barbara J. Brooks
Treasurer and Chief Financial Officer
By: /s/ Steven Carlino Date: October 22, 1996
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Steven Carlino
Vice President
By: /s/ A. Laurence Norton, Jr. Date: October 22, 1996
-----------------------------------------
A. Laurence Norton, Jr.
Director
By: /s/ Guy S. Scarpaci Date: October 22, 1996
-----------------------------------------
Guy S. Scarpaci
Director
7
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for Willowbridge Strategic Trust
and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0001005006
<NAME> Willowbridge Strategic Trust
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Oct-1-1995
<PERIOD-END> Dec-31-1995
<PERIOD-TYPE> 3-Mos
<CASH> 1,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,000
<TOTAL-LIABILITY-AND-EQUITY> 1,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
