TUDOR FUND FOR EMPLOYEES LP, 10-K, 2000-03-30

TUDOR FUND FOR EMPLOYEES LP
10-K, 2000-03-30
INVESTORS, NEC

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<PAGE>

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 (NO FEE REQUIRED)

For the transition period from ____________to ____________

Commission file number 333-52543
---------

Tudor Fund For Employees L.P.
-----------------------------
(Exact name of registrant as specified in its charter)

Delaware 13-3543779
-------- ----------
(State or other jurisdiction (I.R.S Employer
of incorporation or organization) Identification No.)

600 Steamboat Road, Greenwich, Connecticut 06830
- ----------------------------------------------- ---------
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code (203) 863-6700
--------------------

Securities registered pursuant to Section 12(g) of the Act:

Title of each class Name of each exchange on which registered
------------------- -----------------------------------------

N/A N/A
- ---------------------- -----------------------------------------

Securities registered pursuant to Section 12(g) of the Act:

N/A
- --------------------------------------------------------------------------------
(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 X 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. ( )

(Cover page 1 of 2 pages)
<PAGE>

State the aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the common equity was sold, or the
average bid and asked prices of such common equity, as of a specified date
within 60 days prior to the date of filing. (See definition of affiliate in Rule
405.)

Not Applicable
- --------------

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

Not Applicable
- --------------

DOCUMENTS INCORPORATED BY REFERENCE.

List hereunder the following documents if incorporated by reference and the
Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) any annual report to security holders; (2) any proxy or
information statements; and (3) any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).

Partnership's Registration Statement on Form S-1, File No. 333-52543, as
- ------------------------------------------------------------------------
amended, dated June 8, 1998 - Part IV
- -------------------------------------

(cover page 2 of 2 pages)
<PAGE>

PART I

ITEM 1. BUSINESS.
--------

(a). GENERAL DEVELOPMENT OF BUSINESS. Tudor Fund For Employees
-------------------------------
L.P., a Delaware limited partnership (the "Partnership"), was formed on November
22, 1989. The business and objective of the Partnership is to generate
appreciation of its assets through speculative trading of commodity futures,
forwards and option contracts and other commodity interests ("commodity
interests"). Only employees of Tudor Investment Corporation ("TIC") or its
affiliates, and certain employee benefit plans of TIC or its affiliates, are
eligible to become limited partners (each such owner a "Limited Partner") of the
Partnership.

Second Management LLC, a Delaware limited liability company and the general
partner of the Partnership (the "General Partner" and together with the Limited
Partners, the "Partners"), is responsible for selecting and monitoring the
commodity trading advisors and commodity brokers used by the Partnership and for
performing all administrative services necessary to the Partnership's
operations. The General Partner's main business office is located at 600
Steamboat Road, Greenwich, Connecticut 06830, telephone (203) 863-6700,
facsimile (203) 863-8600.

In connection with a public offering of 10,000 units of Limited Partnership
Interest (together with units of General Partnership Interest issued to the
General Partner, the "Units"), an S-1 Registration Statement was filed with the
Securities and Exchange Commission on June 20, 1990. Beginning on June 22, 1990,
the Partnership solicited initial subscriptions for Units at an offering price
of $1,000 per Unit, with a minimum subscription of $1,000. At the initial
closing held on July 2, 1990, the Partnership sold a total of 421 Units for an
aggregate capital contribution of $421,000 and 400 units of general partnership
interest for an aggregate capital contribution of $400,000 and commenced trading
activities. The Partnership registered an additional 10,000 units of Limited
Partnership Interest pursuant to an S-1 Registration Statement (the
"Registration Statement") that became effective on June 9, 1998.

Units are offered for sale on a continuous basis (the "Continuing Offering") at
quarterly closings at a purchase price equal to 100% of the Net Asset Value per
Unit as of the opening of business on the first business day of the month in
which the General Partner accepts the subscription. The minimum subscription is
$1,000. Amounts in excess of this minimum must be contributed in increments of
$1,000.

Management. The General Partner conducts and manages the business of the
- ----------
Partnership. The General Partner is authorized to delegate complete trading
authority of all of the Partnership's Net Assets to one or more trading
advisors. The General Partner has appointed TIC as the Partnership's sole
trading advisor pursuant to a management agreement between TIC and the
Partnership (the "Management Agreement"). The Management Agreement may be
terminated at any time upon twenty-four hours written notice to the other party.

The General Partner, on behalf of the Partnership, may engage and compensate
from the funds of the Partnership, such persons as the General Partner deems
advisable, including any person or entity affiliated with the General Partner.
The General Partner is also authorized to retain commodity brokers.
<PAGE>

Other responsibilities of the General Partner include, but are not limited to,
the following: determining whether the Partnership will make distributions;
administering redemptions of Limited Partners' Units; preparing periodic and
annual reports for the Limited Partners; preparing reports, filings,
registrations and other documents required by applicable regulatory bodies,
exchanges, or boards; depositing the Partnership's assets in an account or
accounts at banks or brokers selected by the General Partner; directing the
investment of the Partnership's assets; executing various documents on behalf of
the Partnership and the Limited Partners; and supervising the liquidation of the
Partnership if an event causes the termination of the Partnership to occur.

Professional fees and other. The Partnership pays its ordinary administrative
- ---------------------------
expenses, including the ordinary and recurring legal, accounting and auditing
expenses incurred in connection with preparing and printing reports and tax
information for Limited Partners and regulatory bodies, and mailing costs and
filing fees. Such expenses were $111,279, $120,599 and $88,989 for the years
ended December 31, 1999, 1998 and 1997.

Compensation of the Trading Advisor. Pursuant to the Management Agreement, the
- -----------------------------------
Partnership pays TIC a quarterly incentive fee equal to 12% of the "Trading
Profits" (as defined in the Registration Statement) earned as of the end of each
fiscal quarter and receives a monthly management fee equal to 1/12 of 2% of the
Net Assets (a 2% annual rate). Effective August 1, 1995, TIC waived its right to
receive incentive and management fees attributable to Units held at the
beginning of each month by the Tudor Investment Corporation 401(k) Savings and
Profit-Sharing Plan (the "TIC 401(k) Plan").

For definitions of the terms "Management Agreement", "Trading Profits", "Charges
and Expenses", "Trading Managers", "Net Asset Value per Unit" and "Net Assets",
refer to the Registration Statement.

The General Partner estimates that, considering the above charges, the
Partnership may have to generate gross profits of up to approximately 2% of the
Partnership's average annual Net Assets, depending on trading volume and the
interest income it receives, simply to break even. It is contemplated that the
greatest of these charges will be brokerage commissions (estimated at up to
approximately 2% of the Partnership's average annual Net Assets) even though the
General Partner endeavors to negotiate rates that are reasonable based on
comparable commodity pools and industry standards.

Commodity Brokers. The Partnership's commodity trading accounts are carried
- -----------------
by its commodity brokers including Prudential Securities Incorporated, Bear
Stearns Securities Corp., CS First Boston Corporation, Salomon Smith Barney
Inc., Lehman Brothers Inc., Morgan Stanley & Co. Incorporated, Morgan Stanley &
Co International Limited, Goldman, Sachs & Co., Cargill Investor Services, Inc.,
J.P. Morgan Futures, Inc., Merrill Lynch Futures Inc., Greenwich Capital
Markets, Inc., and Greenwich NatWest Futures. The General Partner in its sole
discretion may at any time appoint new commodity brokers. The commodity brokers
are responsible for holding and maintaining the Partnership's funds, securities,
commodities and other property; executing and/or clearing trades for the
Partnership's accounts; and performing other record keeping and preparing and
transmitting to the Partnership daily confirmations of transactions and monthly
statements of account, calculating equity balances and margin requirements for
the Partnership's account and other similar administrative functions.
<PAGE>

Foreign Exchange Dealer. Since inception, the Partnership has engaged in the
- -----------------------
trading of foreign exchange forward and commodity forward contracts with
Bellwether Partners LLC, a Delaware limited liability company ("BPL"), or its
predecessor Bellwether Partners Inc. BPL is an affiliate of both the General
Partner and TIC.

Regulation. Congress enacted the Commodity Exchange Act as amended, (the "CE
- ----------
Act"), to regulate trading in commodity interests, the exchanges on which they
are traded, the individual brokers who are members of such exchanges and the
commodity professionals and commodity brokerage houses that trade in these
commodity interests. The Commodity Futures Trading Commission ("CFTC") is an
independent federal agency which administers the CE Act and is authorized to
promulgate rules thereunder. Under the CE Act, the CFTC is empowered, among
other things to (i) hear and adjudicate customer complaints against all
individuals and firms registered or subject to registration under the CE Act;
(ii) seek injunctions and restraining orders; (iii) issue orders to cease and
desist; and (iv) levy substantial fines. Transactions in spot or forward
contracts or on exchanges located outside the United States may not be within
the jurisdiction of the CFTC, and to the extent that the Partnership engages in
such transactions, it may be engaging in "unregulated" transactions.

Both the General Partner and TIC are registered with the CFTC as commodity pool
operators ("CPO") and commodity trading advisors ("CTA") as defined in the CE
Act. As such, each is subject to regulation by the CFTC. If the registration of
the General Partner were suspended, revoked or not renewed, the Partnership
would no longer be able to trade until a substitute general partner could be
duly elected and registered. If the registration of TIC as a CTA was suspended,
revoked or not renewed, TIC would not be permitted by the General Partner to
advise the Partnership.

The CFTC has adopted extensive regulations affecting CPOs and CTAs which, among
other things, requires distribution of disclosure documents to new customers,
requires the retention of current trading and other records, prohibits CPOs from
commingling pool assets with those of the operator or its other customers and
requires CPOs to provide their customers with monthly account statements and
annual reports.

Limited Partners are afforded certain rights for reparations under the CE Act.
Limited Partners may also be able to maintain a private right of action for
certain violations of the CE Act. The CFTC has adopted rules implementing the
reparations provision of the CE Act which provide that any person may file a
complaint for a reparation award with the CFTC for violation of the CE Act
against a floor broker, futures commission merchant, CTA, CPO or their
respective associated persons.

In order to prevent excessive speculation and attempted undue concentrated
control in certain markets ("market corners"), the CFTC and certain United
States exchanges have imposed speculative position limits on transactions in
certain commodity interest contracts. In addition, certain exchanges have set
limits on the total net positions that may be held by a commodity broker.
Position limits are subject to certain exemptions, such as bona fide hedging
transactions. While foreign exchanges do not generally impose position limits,
such limits are set by many of the member firms. The Partnership is subject to
the rules and regulations of the various exchanges on which it trades.
<PAGE>

The General Partner is a member of the National Futures Association ("NFA"), a
self-regulatory organization authorized by the CFTC. The NFA became operational
in 1982 and has assumed certain functions which were previously the
responsibility of the CFTC, (e.g., audits of registrants). Among other things,
the NFA has assumed responsibility for all CFTC registrations; has developed
training and proficiency standards for members; and has established arbitration
procedures for its members and customers of its members.

(b). FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS. The Partnership's
---------------------------------------------
business constitutes only one segment, a speculative commodity pool, for
financial reporting purposes.

(c). NARRATIVE DESCRIPTION OF BUSINESS.
---------------------------------

(1) See discussion under Item 1 (a) above.
(i) - (ix): Not applicable.

(x) Competition. The Partnership experiences and will continue
-----------
to experience competition from publicly and privately offered commodity pools
and other investment funds, such as mutual funds. The Partnership also competes
with other customers of TIC and with affiliates of the General Partner that
trade proprietary trading accounts. Under TIC's trading method, all commodity-
only accounts under management (other than proprietary accounts) are generally
traded in a parallel fashion, with substantially equivalent trades made for all
accounts on a proportional basis. When TIC trades commodity interest contracts
on behalf of an investment pool or a customer with narrower or broader
investment parameters, hedging, loss reduction, arbitrage and similar strategies
often mandate that such accounts be traded in a manner that is not parallel with
commodity-only accounts. Thus, the Partnership is in competition with such
accounts for the same or similar positions at a particular time in a particular
market. The widespread utilization of trend-based and technical computerized
trading methods by many participants in the commodities markets causes similar
trades to be made at or about the same time which increases competition for the
Partnership as described above.

The General Partner and TIC have a conflict of interest in managing the
Partnership because BPL executes on foreign exchange forward contracts for the
Partnership. This involves posting collateral with BPL in amounts of up to 5% of
the Partnership's Net Assets. Although, BPL has unrestricted use of these funds,
it does not receive a fee for its services. Many of the employee traders of the
Trading Advisor are also employees of BPL. There is no affiliation, and
consequently there is no conflict of interest, between the clearing brokers and
the General Partner, TIC or BPL.
<PAGE>

The Partnership trades in markets in competition with other traders whose assets
are greater than its assets.

(xi) - (xii): Not applicable.

(xiii): The Partnership has no employees; however, the General
Partner has arranged for TIC to fulfill its management and administrative
responsibilities.

(d). FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC CORPORATIONS AND
-----------------------------------------------------------------
EXPORT SALES. The Partnership has engaged in the trading of commodity interest
- -----------
contracts on exchanges located in foreign countries and has derived significant
revenue therefrom. See Note 7 included in the Partnership's financial statements
attached hereto.

ITEM 2. PROPERTIES.
----------

The Partnership does not utilize any physical properties in the conduct of its
business.

ITEM 3. LEGAL PROCEEDINGS.
-----------------

The Partnership is not aware of any material pending legal proceedings to which
it is a party or to which any of its assets are subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF UNIT HOLDERS.
-----------------------------------------------

To date, there have been no items which have been presented to the Unit holders.
<PAGE>

PART II.

ITEM 5. MARKET FOR REGISTRANT'S UNITS AND RELATED UNIT HOLDER MATTERS.
-------------------------------------------------------------

(a) MARKET FOR REGISTRANT'S UNITS. There is no established public trading
-----------------------------
market for the Units. There have been no general distributions by the
Partnership since its organization. Pursuant to the Partnership Agreement, the
General Partner has the sole discretion to determine what distributions, if any,
the Partnership will make to its Partners.

Limited Partners may redeem some or all of their respective Units at the end of
each calendar quarter. Redemption of Units in $1,000 increments and full
redemption by a Limited Partner of all of its Units are made at 100% of the Net
Asset Value per Unit effective as of the last business day of any quarter as
defined in the Limited Partnership Agreement. Partial redemptions of Units which
would reduce the Net Asset Value of a Limited Partner's unredeemed Units to less
than the minimum investment then required of new Limited Partners or such
Limited Partner's initial investment, whichever is less, will be honored only to
the extent of such limitation.

(b) USE OF PROCEEDS. The Partnership initially registered 10,000 Units of
---------------
Limited Partnership Interest pursuant to a registration statement (Commission
file number 33-33982) that was declared effective on June 22, 1990. The
Partnership registered an additional 10,000 Units of Limited Partnership
Interest on June 9, 1998 (commission file number 333-52543). Of the 20,000 Units
that have been registered, 10,469 Units having an aggregate value of $28,867,586
had been sold through January 1, 2000.

ITEM 6. SELECTED FINANCIAL DATA.
-----------------------

<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Revenues $ 1,976,283 $ 5,153,767 $ 3,362,714 $ 1,417,232 $ 2,657,575
Expenses 678,923 956,633 649,909 596,480 608,851
----------- ----------- ----------- ----------- -------------

Net Income $ 1,297,360 $ 4,197,134 $ 2,712,805 $ 820,752 $ 2,048,724
----------- ----------- ----------- ----------- -------------

Total Assets $22,242,164 $18,265,036 $17,166,451 $12,138,706 $ 9,332,890
----------- ----------- ----------- ----------- -------------
Partners' Capital $16,332,215 $14,891,112 $ 9,495,687 $ 8,526,366 $ 8,113,393
----------- ----------- ----------- ----------- -------------

Units Outstanding 2,846.856 2,786.401 2,382.864 2,718.466 2,833.134
----------- ----------- ----------- ----------- -------------

NAV Per Unit $ 5,736.93 $ 5,344.21 $ 3,984.99 $ 3,136.46 $ 2,863.75
----------- ----------- ----------- ----------- -------------
Change in NAV Per Unit $ 392.72 $ 1,359.22 $ 848.53 $ 272.71 $ 665.22
----------- ----------- ----------- ----------- -------------
Net Income Per Unit $ 378.91 $ 1,327.46 $ 845.18 $ 246.06 $ 684.52
----------- ----------- ----------- ----------- -------------
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS.
---------------------

The Partnership commenced operations on July 2, 1990. From inception through
March 1, 2000, the Partnership received total Limited Partner contributions of
$28,867,586. Total Limited Partner withdrawals for the same period were
$23,171,276. In addition, the General Partner has contributed $1,900,000 since
inception. The General Partner redeemed $2,000,000 on March 31, 1994 and
$1,400,000 on December 31, 1996. The General Partner's equity interest in the
<PAGE>

Partnership as of March 1, 2000 was approximately $1,176,000, representing
approximately 5.8% of the Partnership's equity. At March 1, 2000, the
Partnership had a total of 103 Partners.

As specified in the Second Amended and Restated Limited Partnership Agreement
dated May 22, 1996, the Partnership may accept investments from certain employee
benefit plans of affiliates to the extent that such investment does not exceed
25% of the aggregate value of outstanding Units, excluding Units held by the
General Partner and affiliates. On August 1, 1995, the Partnership accepted an
initial investment of $99,306 from the Tudor Investment Corporation 401(k)
Savings and Profit Sharing Plan (the "TIC 401(k) Plan"), a qualified plan
organized for the benefit of employees of TIC and certain of its affiliates. The
Partnership has received TIC 401(k) Plan contributions in the aggregate amount
from inception through March 1, 2000 of $2,736,787. The TIC 401(k) Plan's equity
in the Partnership as of March 1, 2000 was approximately $3,664,000,
representing approximately 18.1% of the Partnership equity or approximately
20.0% of the Partnership equity excluding Units held by the General Partner and
affiliates. TIC has waived its right to receive management and incentive fees
attributable to Units held by the TIC 401(k) Plan. Furthermore, on August 1,
1995, BPL ceased charging commissions for transacting the Partnership's foreign
exchange forward and commodity contracts.

(1) LIQUIDITY.
---------

The Partnership's assets are deposited and maintained with BPL, banks or in
trading accounts with clearing brokers, and are used by the Partnership as
margin and collateral to engage in futures, option, and forward contract
trading. Securities purchased under agreements to resell are collateralized
investment transactions and are carried at the amount the securities will be
subsequently resold plus accrued interest, which approximates market. At
December 31, 1999 and 1998, U.S. Government Securities purchased under
agreements to resell maturing January 3, 2000 and January 4, 1999 represented
approximately 70% and 69% of the total assets of the Partnership. The percentage
that U.S. Government Securities purchased under agreements to resell bear to
total assets varies daily and monthly, as the market value of commodity interest
contract changes, U.S. Government Securities are resold, and as the Partnership
sells or redeem Units. Since the Partnership's sole purpose is to trade in
futures, options, forward contracts and other commodity interests contracts, it
is anticipated that the Partnership will continue to maintain substantial liquid
assets for margin purposes. Interest income for the years ended December 31,
1999, 1998 and 1997 was $842,756, $655,889, and $571,106 which represented 4.9%,
4.8%, and 4.9% of average net assets.

In the context of the commodity or futures trading industry, cash and cash
equivalents are part of the Partnership's inventory. Cash deposited with banks
represented approximately 19% and 20% of the Partnership's total assets as of
December 31, 1999 and 1998. The cash and U.S. Government securities purchased
under agreements to resell satisfy the Partnership's need for cash on both a
short term and long term basis.
<PAGE>

Since futures contract 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 commodity exchanges
limit fluctuations in certain commodity contract prices during a single day by
regulations referred to as "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 daily limits. If the price for a contract or a
particular commodity has increased or decreased by an amount equal to the "daily
limit", positions in such contracts can neither be taken nor liquidated unless
traders are willing to effect trades at or within the limit. Commodity prices
have occasionally moved the daily limit for several consecutive days with little
or no trading. Such market conditions could prevent the Partnership from
promptly liquidating its commodity positions.

(2) 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 investments 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 investments which can be made
quarterly. Such investments are limited to employees of TIC and its affiliates
and certain employee benefit plans, including, but not limited to, the TIC
401(k) Plan.

(3) RESULTS OF OPERATIONS.
---------------------

The following table compares Net Asset Value per Unit for the years ended
December 31, 1999, 1998 and 1997.

Net Asset Value Increase in Net Asset Value per
Per Unit Unit For the Year Ended
------------------ --------------------------------
$ %
-------- -------
December 31, 1999 $5,736.93 $ 392.72 7.35%
December 31, 1998 $5,344.21 $1,359.22 34.11%
December 31, 1997 $3,984.99 $ 848.53 27.05%
<PAGE>

Net trading gains and losses (which includes realized and unrealized trading
gains, losses and commissions ("Net Trading Gains")) from strategies that use a
variety of derivative financial instruments are recorded in the statements of
income. The following table summarizes the components (in thousands) of Net
Trading Gains, for the years ended December 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
1999 1998 1997
----------- ---------- -----------
<S> <C> <C> <C>
Exchange traded contracts:
Interest rate futures and option contracts-
Domestic $ 103 $ 1,072 $ 982
Foreign 388 2,181 413

Foreign exchange contracts (1,370) (219) 373

Equity index contracts-
Domestic (621) 329 (4)
Foreign 363 453 173

Over-the-counter contracts:
Forward currency contracts 884 792 307
Commodity swaps 59 (350) (51)
Equity index swaps (99) 82 (78)
Interest rate swaps 236 - (64)

Non-derivative financial instruments 981 (36) 552
--------- --------- ---------
Total $ 924 $ 4,304 $ 2,603
========= ========= =========
</TABLE>

Since the Partnership is a speculative trader in the commodities markets,
current year results are not comparable to results generated in previous years.
The following table illustrates the Partnership's Net Trading Gains as a return
on average Net Assets, brokerage commissions and fees as a percentage of average
Net Assets, and incentive fees as a percentage of Net Trading Gains.

<TABLE>
<CAPTION>
For the Year Ended
-------------------------------------------------
December 31, December 31, December 31,
------------- ------------- -------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net Trading Gains as a % of average Net Assets 5.31% 31.43% 22.3%
Brokerage Commissions & Fees as a % of average Net Assets 1.2% 1.4% 1.6%
Incentive Fees as a % of Net Trading Gains 6.73% 9.34% 5.9%
</TABLE>

In general, commission rates have remained stable during the past three years.
Inflation is not expected to be a major factor in the Partnership's operations,
except that traditionally commodity markets have tended to be more active, and
thus potentially more profitable, during times of high inflation. Since the
commencement of the Partnership's trading operations in July 1990, inflation has
not been a major factor in the Partnership's operations.
<PAGE>

(4) RISK MANAGEMENT.
---------------

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
activities. These activities include the trading of financial futures, forwards,
swaps, exchange traded and negotiated over-the-counter options and other
commodity interests. These financial instruments give rise to market and credit
risk in excess of the amounts recognized in the statements of financial
condition. The Partnership is subject to market and credit risk associated with
changes in the value of underlying financial instruments, as well as the loss of
appreciation on certain instruments, if its counterparty fails to perform.

TIC takes an active role in managing and controlling the Partnership's market
and credit risks and has established formal control procedures that are reviewed
on an ongoing basis. TIC attempts to minimize credit risk exposure to trading
counterparties and brokers through formal credit policies and monitoring
procedures. TIC has a formal Credit Committee, comprised of senior managers from
different disciplines throughout the firm, that meets regularly to analyze the
credit risks associated with the Partnership's counterparties, intermediaries
and service providers. TIC establishes counterparty exposure limits and
specifically designates which product types are approved for trading.

In order to control the Partnership's market exposure, TIC applies risk
management guidelines and policies designed to protect the Partnership's
capital. These guidelines and policies include quantitative and qualitative
criteria for evaluating the appropriate risk levels for the Partnership. TIC's
Risk Management Committee, comprised of senior personnel from different
disciplines throughout the firm, regularly assesses and evaluates the
Partnership's potential exposures to the financial markets based on analysis
done by the Risk management Department. The Risk Management Department's
responsibilities include: focusing on the positions taken in various instruments
and markets globally; ascertaining that all such positions are accurately
reflected on the Partnership's position reports; and evaluating the risk
exposure associated with all of those positions.

The Partnership uses a statistical technique known as Value at Risk ("VaR") to
assist the Risk Management Department in measuring its exposure to market risk
related to its trading positions. The VaR model projects potential losses in the
portfolio and is based on a methodology which uses a one-year observation period
of hypothetical daily changes in trading portfolio value, a one-day holding
period and one standard deviation level. These figures can be scaled-up to
indicate risk exposure at the 95% or 99% confidence level.

Cash and due from brokers are due principally from high credit quality
international financial institutions.

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 they
are traded and with the futures commission merchant through which the commodity
futures and options contracts are executed. Forward contracts are generally
settled with the counterparty two days after the trade.

ensure ample customer protection in the event of an FCMs default. The
Partnership monitors the creditworthiness of its FCMs and, when deemed
necessary, reduces its exposure to these FCMs. The Partnership's credit risk
associated with the nonperformance of these FCMs in fulfilling contractual
obligations can be directly impacted by volatile financial markets. A
substantial portion of the Partnership's open financial futures positions were
transacted with major international FCMs. BPL is the Partnership's primary
forward contract counterparty (Note 6 of the attached Financial Statements).
Notwithstanding the risk monitoring and credit review performed by TIC with
respect to its FCMs and counterparties, including BPL, there is always a risk of
nonperformance.

Generally, financial contracts can be closed out at TIC's discretion. An
illiquid or closed market, however, could prevent the closeout of positions.

The following table illustrates the VaR for each component of market risk as of
December 31, 1999. The dollar values represent the VaR scaled up to a 95%
confidence level.

<TABLE>
<CAPTION>
VaR
Risk Factors (95% Confidence)
------------ ----------------------------
<S> <C>
Exchange traded contracts:
Interest rate futures and option contracts-
Domestic $ 166,815
Foreign 7,095

Foreign exchange contracts 32,505

Equity index futures-
Domestic 1,485
Foreign 116,655

Non-derivative financial instruments 60,885
----------
$ 385,440
----------
</TABLE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
-------------------------------------------

See attached financial statements for:

Statements of Financial Condition as of December 31, 1999 and 1998

Statements of Income for the years ended December 31, 1999, 1998 and 1997

Statements of Changes in Partners' Capital for the years ended December 31,
1999, 1998 and 1997

Notes to Financial Statements, December 31, 1999, 1998 and 1997

The financial statements presented have been prepared pursuant to rules and
regulations of the Securities and Exchange Commission ("SEC") and, in the
opinion of management of
<PAGE>

the General Partner, includes all adjustments necessary for a fair
statement of each year presented.

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.
--------------------------------------------------

Second Management LLC, a Delaware limited liability company (the "General
Partner"), is the general partner of the Partnership. The General Partner's
principal office is located at 600 Steamboat Road, Greenwich, Connecticut 06830;
Telephone No. 203-863-6700; and Facsimile No. 203-863-8600. The General Partner
is registered with the CFTC as a CPO and CTA and is a member of the NFA in such
capacities.

Tudor Investment Corporation, a Delaware corporation ("TIC"), is the Trading
Advisor to the Partnership. TIC's principal office is located at 600 Steamboat
Road, Greenwich, Connecticut 06830; Telephone No. 203-863-6700; and Facsimile
No. 203-863-8600. TIC is registered with the CFTC as a CPO and CTA and is a
member of the NFA in such capacities.

TIC is the sole general partner and trading advisor of Tudor Futures Fund, a New
York limited partnership that engages in the speculative trading of commodity
and securities interests. TIC is also the sole general partner and trading
advisor of The Altar Rock Fund L.P., a Delaware limited partnership that engages
in the speculative trading of securities and commodity interests.

TIC is the sole general partner and trading advisor of The Raptor Global Fund
L.P., a Delaware limited partnership, and the sole trading advisor of The Raptor
Global Fund Ltd., a Cayman Islands company, each of which invests substantially
all of its net assets in a "master-feeder" structure through The Raptor Global
Portfolio Ltd., a Cayman Islands company ("Raptor Portfolio") for which TIC acts
as the sole trading advisor. Raptor Portfolio engages in the speculative trading
of securities and commodity interests.

TIC is the sole general partner and trading advisor of The Ospraie Fund L.P., a
Delaware limited partnership, and the sole trading advisor of The Ospraie Fund
Ltd., a Cayman Islands company, each of which invests substantially all of its
net assets in a "master-feeder" structure through The Ospraie Portfolio Ltd., a
Cayman Islands company ("Ospraie Portfolio") for which TIC acts as the sole
trading advisor. Ospraie Portfolio engages in the speculative trading of
securities and commodity interests.

TIC is the sole general partner and trading advisor of Tudor Emerging Markets
Fund L.P., a Delaware limited partnership, and the sole trading advisor of Tudor
Emerging Markets Fund Ltd., a Cayman Islands company, each of which invests
substantially all of its net assets in a "master-feeder" structure through Tudor
Emerging Markets Portfolio Ltd., a Cayman Islands company ("TEM Portfolio") for
which TIC acts as the sole trading advisor. TEM Portfolio engages in the
speculative trading of securities and commodity interests.

In addition to the foregoing, TIC acts as sole trading advisor to Tudor Private
Equity Fund L.P., a Delaware limited partnership that makes privately negotiated
investments in both private and public companies in the United States and
Canada. TIC also acts as the trading advisor to Tudor BVI Futures, Ltd., a
British Virgin Islands company ("Tudor BVI"), and as sub-advisor to The Upper
Mill Capital Appreciation Fund Ltd., a Cayman Islands company ("Upper Mill") for
which Tudor Capital (U.K.), L.P. ("TCLP"), an affiliate of TIC and the General
Partner, acts as trading advisor. TCLP acts as sub-advisor to Tudor BVI. Tudor
BVI and Upper Mill engage in the speculative trading of securities and commodity
interests.

TCLP also acts as trading advisor to Tudor Hawthorn Fund Ltd., a Cayman company
that engages in the speculative trading of securities and commodity interests.
<PAGE>

Paul Tudor Jones II, age 45 is Chairman, Chief Executive Officer and the
indirect controlling equity owner of the General Partner and the Chairman, Chief
Executive Officer, the controlling Shareholder and a Director of TIC, and has
served in those capacities since the Partnership's inception. Mr. Jones has
traded commodity contracts for his own proprietary account since September 1977
and for customer accounts since January 1981. Mr. Jones is a member of the
Commodity Exchange, Inc., the New York Board of Trade, Inc., the Chicago Board
of Trade and the Chicago Mercantile Exchange. In addition, Mr. Jones is a member
of the Board of Directors of the Cantor Fitzgerald Futures Exchange. Mr. Jones
served as Chairman of the New York Cotton Exchange from August 1992 through June
1995. Mr. Jones is also the Founder and a Director of The Robin Hood Foundation,
a charitable foundation and is a Director of the National Fish and Wildlife
Foundation and The Everglades Foundation Inc.

Mark F. Dalton, age 49, is President of the General Partner and President and a
Director of TIC. Mr. Dalton is also a Director of Progenics Pharmaceuticals,
Inc., a company traded on the NASDAQ Stock Market, Cathay Investment Fund
Limited, an investment fund traded on the Dublin Stock Exchange, and various
private companies. Mr. Dalton does not participate in the commodity interests
trading of customer accounts for the General Partner, TIC or their affiliates.

John G. Macfarlane III, age 45, is a Managing Director and the Chief Operating
Officer of the General Partner and a Managing Director and the Chief Operating
Officer and a Director of TIC. Prior to joining TIC in January 1998, Mr.
Macfarlane was employed by Salomon Smith Barney, Inc., where he served in
various senior positions including Managing Director and Head of US and Asian
Fixed Income Derivatives and Treasurer of Salomon Inc and Salomon Brothers Inc.
Mr. Macfarlane does not participate in the trading of the General Partner, TIC
or their affiliates.

Andrew S. Paul, age 47, is a Managing Director and the General Counsel and
Secretary of the General Partner and TIC and a Director of TIC. Mr. Paul has
been the General Counsel and Corporate Secretary of TIC since June 1989. Mr.
Paul does not participate in the trading of customer accounts for the General
Partner, TIC or their affiliates.

Mark Pickard, age 44, is a Managing Director and the Chief Financial Officer of
the General Partner and TIC and a Director of TIC. From May 1995 until June
1996, Mr. Pickard was a Managing Director of Tudor Software, L.L.C. and was
Chief Operating Officer of Jacobson Capital Partners from February 1994 until
May 1995. Mr. Pickard does not participate in the trading of customer accounts
for the General Partner, TIC or their affiliates.

James J. Pallotta, age 42, is a Managing Director, the Director--U.S. Equities
Group and a Director of TIC. Mr. Pallotta does not participate in the trading of
customer accounts of the General Partner although he does participate in the
trading of other customer accounts advised by TIC.
<PAGE>

Robert P. Forlenza, age 44, is a Managing Director and Director of TIC. Mr.
Forlenza does not participate in the trading of customer accounts of the General
Partner although he does participate in the trading of other customer accounts
advised by TIC.

Mr. Mark V. Houghton-Berry, age 41, is a Managing Director of the affiliates of
Tudor which maintain offices in Surrey, England. Prior to joining Tudor in July
1995, Mr. Houghton-Berry was an Executive Director and Head of Proprietary
Trading in London with Goldman Sachs International. Mr. Houghton-Berry does not
participate in the day-to-day management of TIC.

Richard L. Fisher, age 46, is a director of TIC. Mr. Fisher received a B.S. with
Distinction and a Master of Science in Accounting from the University of
Virginia. Since September 1983 Mr. Fisher has been a managing director and
senior vice president of Dunavant Enterprises, Inc. Mr. Fisher has been a
director of TIC since June 1991. Mr. Fisher does not participate in the trading
or day-to-day management of the General partner, TIC or their affiliates.

There have been no material administrative, civil or criminal actions against
the General Partner, TIC or any of their executive officers or directors within
the last five years, except as follows.

On September 12, 1996, TIC settled a proceeding with the SEC related to alleged
violations of the "uptick rule" in connection with certain sales of stock over a
two-day period in March 1994. Without admitting or denying the SEC's findings,
TIC paid a civil penalty of $800,000 and agreed not to violate the uptick rule
in the future. This settlement did not have a material adverse effect on the
business, financial condition or results of operations of TIC, the General
Partner or the Partnership.

ITEM 11. EXECUTIVE COMPENSATION.
----------------------

The Partnership has no officers or directors. The General Partner administers
the business and affairs of the Partnership. Neither Mr. Jones, nor any other
executive officer of the General Partner receives compensation from the
Partnership. TIC earned $357,955, $641,936, and $372,809 in incentive and
management fees from the Partnership during 1999, 1998 and 1997.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
--------------------------------------------------------------

(a) Security Ownership of Certain Beneficial Owners. As of March 1, 2000,
-----------------------------------------------
the only Unit holders who owned more than five percent (5%) of the total Units
outstanding were:
<PAGE>

<TABLE>
<CAPTION>
NAME ADDRESS NO. UNITS PERCENT
- ---- ------- --------- -------
<S> <C> <C> <C>
Tudor 401k Savings and One Liberty Plaza 612.592 18.1%
Profit-Sharing Plan 51/st/ Floor
New York, NY 10006

John B. Helmers (1) c/o Tudor Investment Corporation 304.040 9.0%
600 Steamboat Road
Greenwich, CT 06830

Second Management LLC 600 Steamboat Road 196.580 5.8%
Greenwich, CT 06830
</TABLE>

(1) John B. Helmers is a Vice President of TIC.

(b) Security Ownership of Management. The General Partner and the
--------------------------------
executive officers of the General Partner own approximately 9.4% of
the total Units outstanding as of March 1, 2000. In addition to the
persons identified in the table above, Mark Pickard is a principal of
both the General Partner and TIC, owned 100.044 Units or 3% of the
total Units outstanding as of such date.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
----------------------------------------------

(a) Transactions with Management and Others.
---------------------------------------

See Item 1(a), GENERAL DEVELOPMENT OF BUSINESS, MANAGEMENT; Item 1(c)
------------------------------- ----------
(1)(x), NARRATIVE DESCRIPTION OF BUSINESS, COMPETITION; Item 11, EXECUTIVE
--------------------------------- ----------- ---------
COMPENSATION; and Note 6 - "Related Party Transactions" of "Notes To
------------
Financial Statements" in the accompanying Financial Statements.

(b) Certain Business Relationships.
------------------------------

(1) None.

(2) The Partnership incurred incentive and management fees
payable to TIC of $357,955, $641,936 and $372,809 for the
years ended December 31, 1999, 1998, and 1997, which were in
excess of 10% of the Partnership's total revenue of
$1,976,283, $5,153,767, and $3,362,714 for the respective
periods referred to above.

(3) None.

(4) Not applicable.

(5) Not applicable.
<PAGE>

PART IV.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
---------------------------------------------------------------

(a) 1. Financial Statements.
---------------------

The following financial statements and report of independent public
accountants are set forth in the annexed financial statements:

Report of Independent Public Accountants
Statements of Financial Condition as of December 31, 1999 and 1998
For the years ended December 31, 1999, 1998 and 1997:
Statements of Income
Statements of Changes in Partners' Capital
Notes to Financial Statements, December 31, 1999, 1998 and 1997

The Partnership meets all the provisions of SFAS No. 102, Paragraph 7,
"Statement of Cash Flows - Exemption of Certain Enterprises and
Classification of Cash Flows from Certain Securities Required for Resale."
Therefore, statements of cash flows have not been provided.

2. No financial statement schedules are required to be filed.
---------------------------------------------------------

3. Exhibits. (unless otherwise indicated, each Exhibit was previously
--------
filed and has not been amended in any material respect).

1.01 Form of Selling Agreement among Cargill Investor Services,
Inc., Second Management Company, Inc. (succeeded by Second
Management LLC), and the Partnership.

3.01 Form of Second Amended and Restated Limited Partnership
Agreement of the Partnership.

3.02(a) Certificate of Limited Partnership of the Partnership.

3.02(b) Amendment to the Certificate of Limited Partnership of the
Partnership.

10.01(a) Form of Amendment to Customer Foreign Exchange Agreement
between the Partnership and Bellwether Partners LLC.

10.02(a) Form of Management Agreement among the Partnership, Second
Management Company, Inc. (succeeded by Second Management
LLC), and Tudor Investment Corporation.

10.02(b) Form of Amendment to Management Agreement among the
Partnership, Second Management Company, Inc., and Tudor
Investment Corporation.

10.03(a) Form of Subscription Agreement and Power of Attorney to be
executed by purchasers of Units who are individuals.
<PAGE>

10.03(b) Form of Subscription Agreement and Power of Attorney to be
executed by a Trustee of the Tudor Investment Corporation
401(k) Savings and Profit-Sharing Plan.

10.03(c) Form of Representations to be made by participants in the
Tudor Investment Corporation 401(k) Savings and Profit
Sharing Plan.

10.03(d) Form of Subscription Agreement for use in making additions
to existing accounts.

10.04(a) Form of Escrow Agreement among the Partnership, Seventh
Management, Inc., and United States Trust Company of New
York.

10.04(b) Form of Amendment to Escrow Agreement among the Partnership,
Cargill Investor Services, Inc., and United States Trust
Company of New York.

(b) Reports on Form 8-K.

No reports on Form 8-K were filed during the year ended December 31, 1999.
<PAGE>

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.

TUDOR FUND FOR EMPLOYEES L.P.

By: SECOND MANAGEMENT LLC,
General Partner

By:______________________________
Mark F. Dalton
President

DATE: March 30, 2000

Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

SECOND MANAGEMENT LLC

By: ________________________________ March 30, 2000
Paul T. Jones, II, Chairman and
Chief Executive Officer

By: ___________________________ March 30, 2000
Mark F. Dalton, President

By: ___________________________ March 30, 2000
John Macfarlane, Managing Director and
Chief Operating Officer

By: ____________________________ March 30, 2000
Mark Pickard, Managing Director and
Chief Financial Officer

By: ____________________________ March 30, 2000
Andrew S. Paul, Managing Director,
General Counsel and Secretary
<PAGE>

SIGNATURES

TUDOR FUND FOR EMPLOYEES L.P.

By: SECOND MANAGEMENT LLC,
General Partner

By: /s/ Mark F. Dalton
------------------------
Mark F. Dalton
President

DATE: March 30, 2000

SECOND MANAGEMENT LLC

By: /s/ Paul T. Jones, II March 30, 2000
-------------------------------
Paul T. Jones, II, Chairman and
Chief Executive Officer

By: /s/ Mark F. Dalton March 30, 2000
-------------------------------
Mark F. Dalton, President

By: /s/ John Macfarlane March 30, 2000
--------------------------------
John Macfarlane, Managing Director and
Chief Operating Officer

By: /s/ Mark Pickard March 30, 2000
--------------------------------
Mark Pickard, Managing Director and
Chief Financial Officer

By: /s/ Andrew S. Paul March 30, 2000
--------------------------------
Andrew S. Paul, Managing Director,
General Counsel and Secretary
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of Tudor Fund For Employees L.P.:

We have audited the accompanying statements of financial condition of Tudor Fund
For Employees L.P. (a Delaware limited partnership) as of December 31, 1999 and
1998, and the related statements of income and changes in partners' capital for
each of the three years in the period ended December 31, 1999. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tudor Fund For Employees L.P.
as of December 31, 1999 and 1998, and the results of its operations for each of
the three years in the period ended December 31, 1999 in conformity with
accounting principles generally accepted in the United States.

/s/ Arthur Andersen LLP

New York, New York
March 10, 2000
<PAGE>

TUDOR FUND FOR EMPLOYEES L.P.
-----------------------------

STATEMENTS OF FINANCIAL CONDITION
---------------------------------

DECEMBER 31, 1999 AND 1998
--------------------------

<TABLE>
<CAPTION>
ASSETS 1999 1998
------ -------------- --------------
<S> <C> <C>
CASH $ 4,225,187 $ 3,672,689

US GOVERNMENT SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL 15,600,000 12,600,000

EQUITY IN COMMODITY TRADING ACCOUNTS:
Due from brokers 1,622,633 1,281,103
Net unrealized gain on open commodity interests 794,344 711,244
---------- ----------
Total equity in commodity trading accounts 2,416,977 1,992,347
---------- ----------
Total assets 22,242,164 18,265,036
========== ==========

LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Pending partner additions $ 3,067,980 $ 2,989,786
Redemptions payable 2,654,830 238,091
Incentive fee payable 62,184 29,507
Management fee payable 51,617 40,370
Accrued professional fees and other 73,338 76,170
---------- ----------
Total liabilities 5,909,949 3,373,924
---------- ----------

PARTNERS' CAPITAL:
Limited partners, 20,000 units authorized and 2,650.276
and 2,589.821 units outstanding as of December 31, 1999 and 1998. 15,204,445 13,840,543
General Partner, 196.580 units outstanding as of
December 31, 1999 and 1998. 1,127,770 1,050,569
---------- ----------
Total partners' capital 16,332,215 14,891,112
---------- ----------
Total liabilities and partners' capital $ 22,242,164 $ 18,265,036
=========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.
<PAGE>

TUDOR FUND FOR EMPLOYEES L.P.
-----------------------------

STATEMENTS OF INCOME
--------------------

FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
----------------------------------------------------

<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------- ------------
<S> <C> <C> <C>
REVENUES:
Net realized trading gain $ 1,048,971 $ 3,978,084 $ 2,719,222
Change in net unrealized trading gain 84,556 519,794 72,386
Interest income 842,756 655,889 571,106
------------- ------------- ------------
Total revenues 1,976,283 5,153,767 3,362,714
------------- ------------- ------------

EXPENSES:
Brokerage commissions and fees 209,689 194,098 188,111
Management fee 295,771 239,867 218,539
Incentive fee 62,184 402,069 154,270
Professional fees and other 111,279 120,599 88,989
------------- ------------- ------------
Total expenses 678,923 956,633 649,909
------------- ------------- ------------

Net income $ 1,297,360 $ 4,197,134 $ 2,712,805
============= ============= ============

LIMITED PARTNERS' NET INCOME $ 1,220,159 $ 3,929,937 $ 2,546,001

GENERAL PARTNER'S NET INCOME 77,201 267,197 166,804
------------- ------------- ------------
Net income $ 1,297,360 $ 4,197,134 $ 2,712,805
============= ============= ============

Change in Net Asset Value Per Unit $ 392.72 $ 1,359.22 $ 848.53
------------- ------------- -------------
Net Income Per Unit $ 378.91 $ 1,327.46 $ 845.18
------------- ------------- -------------
</TABLE>

The accompanying notes are an integral part of these statements.
<PAGE>

TUDOR FUND FOR EMPLOYEES L.P.
-----------------------------

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
------------------------------------------

FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
----------------------------------------------------

<TABLE>
<CAPTION>
Net Asset
Limited Partners General Partner Total Value
------------------------- -----------------------
Units Capital Units Capital Capital Per Unit
---------- ----------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
PARTNERS' CAPITAL, January 1, 1997 2,521.886 7,909,798 196.580 616,568 8,526,366 3,136.46

Net income - 2,546,001 - 166,804 2,712,805
TIC 401(k) Plan unit adjustment (Note 3) - - - -
9.772
Capital contributions 746.608 2,546,367 - - 2,546,367
Redemptions (1,091.982) (4,289,851) - - (4,289,851)
----------- ------------ ---------- ----------- -----------

PARTNERS' CAPITAL, December 31, 1997 2,186.284 $ 8,712,315 196.580 $ 783,372 $ 9,495,687 3,984.99
----------- ------------ ---------- ----------- -----------

Net income - 3,929,937 - 267,197 4,197,134
TIC 401(k) Plan unit adjustment (Note 3) 24.416 - - - -
Capital contributions 1,303.556 5,270,917 - - 5,270,917
Redemptions (924.435) (4,072,626) - - (4,072,626)
----------- ------------ --------- ----------- -----------

PARTNERS' CAPITAL, December 31, 1998 $2,589.821 $ 13,840,543 $ 196.580 $ 1,050,569 $14,891,112 $5,344.21

Net income - 1,220,159 77,201 1,297,360
TIC 401(k) Plan unit adjustment (Note 3) 14.141 - - - -
Capital contributions 1,051.500 5,489,765 - - 5,489,765
Redemptions (1,005.186) (5,346,022) - - (5,346,022)
----------- ------------ --------- ----------- -----------

PARTNERS' CAPITAL, December 31, 1999 2,650.276 $ 15,204,445 196.580 $ 1,127,770 $16,332,215 $5,736.93
=========== ============ ========= =========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.
<PAGE>

TUDOR FUND FOR EMPLOYEES L.P.
-----------------------------

NOTES TO FINANCIAL STATEMENTS
-----------------------------

DECEMBER 31, 1999, 1998, AND 1997
---------------------------------

1. ORGANIZATION AND BUSINESS
-------------------------

Tudor Fund For Employees L.P. (the "Partnership") was organized under the
Delaware Revised Uniform Limited Partnership Act (the "Act") on November 22,
1989, and commenced trading operations on July 2, 1990. Second Management LLC
(the "General Partner") is the general partner of the Partnership. Tudor
Investment Corporation ("TIC"), an affiliate of the General Partner, acts as the
trading advisor of the Partnership. Ownership of limited partnership units is
restricted to either employees of TIC and its principals or its affiliates.

The objective of the Partnership is to realize capital appreciation through
speculative trading of commodity futures, forwards, option contracts and other
commodity interests ("commodity interests"). The Partnership will terminate on
December 31, 2010 or at an earlier date if certain conditions occur as outlined
in the Second Amended and Restated Partnership Agreement dated as of May 22,
1996 ("the Limited Partnership Agreement").

Duties of the General Partner
- -----------------------------

The General Partner acts as the commodity pool operator of the Partnership and
is responsible for the selection and monitoring of the commodity trading
advisors and the commodity brokers used by the Partnership. The General Partner
is also responsible for the performance of all administrative services necessary
to the Partnership's operations.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------

Revenue Recognition
- -------------------

Commodity interests are recorded on the trade date at the transacted contract
price and are valued at market or fair value.

Brokerage Commissions and Fees
- ------------------------------

These expenses represent all brokerage commissions, exchange, National Futures
Association and other fees incurred in connection with the execution of
commodity interests trades. Commissions and fees associated with open commodity
interests at the end of the period are accrued.
<PAGE>

Incentive Fee
- -------------

The Partnership pays TIC, as trading advisor, an incentive fee equal to 12% of
the Net Trading Profits (as defined in the Limited Partnership Agreement),
earned as of the end of each fiscal quarter of the Partnership. Effective August
1, 1995, TIC has waived its right to receive an incentive fee attributable to
units held at the beginning of each month by the TIC 401(k) Savings and
Profit-Sharing Plan (the "TIC 401(k) Plan").

Management Fee
- --------------

The Partnership also pays TIC, for the performance of its duties, a monthly
management fee equal to 1/12 of 2% (2% per annum) of the Partnership's net
assets (as defined in the Limited Partnership Agreement). Effective August 1,
1995, TIC waived its right to receive a management fee attributable to units
held at the beginning of each month by the TIC 401(k) Plan.

Foreign Currency Translation
- ----------------------------

Assets and liabilities denominated in foreign currencies are translated at
year-end exchange rates. Gains and losses resulting from foreign currency
transactions are calculated using daily exchange rates and are included in the
accompanying statements of operations.

U.S. Government Securities Purchased Under Agreements to Resell
- ---------------------------------------------------------------

Securities purchased under agreements to resell are collateralized investment
transactions and are carried at the amounts at which the securities will be
subsequently resold plus accrued interest, which approximates market value.
These transactions are part of the Partnership's operating activities, and it is
the policy of the Partnership to take possession or control of all underlying
assets and to use such assets as collateral in connection with its trading.

Due from Brokers
- ----------------

Due from brokers includes forward contracts pending settlement as well as cash,
foreign currencies and margin balances.

Pending Partner Additions
- -------------------------

Pending partner additions is comprised of cash received prior to year-end for
which shares were issued on January 1 of the subsequent year. Pending partner
additions did not participate in the earnings of the Partnership until the
related shares were issued.

Use of Estimates
- ----------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Management believes that the
<PAGE>

estimates utilized in preparing the financial statements are reasonable and
prudent, however, actual results could differ from these estimates.

3. CAPITAL ACCOUNTS
----------------

The minimum subscription amount is $1,000 for new Limited Partners. Additional
contributions may be made in increments of $1,000. Both subscriptions and
contributions may be made quarterly, at the beginning of the respective month.

Each partner, including the General Partner, has a capital account with an
initial balance equal to the amount such partner paid for its units. The
Partnership's net assets are determined monthly, and any increase or decrease
from the end of the preceding month is added to or subtracted from the capital
accounts of the partners based on the ratio that the balance of each capital
account bears in relation to the balance of all capital accounts as of the
beginning of the month. The number of units held by the TIC 401(k) Plan will be
restated as necessary for management and incentive fees attributable to units
held at the beginning of each month by the TIC 401(k) Plan to equate the per
unit value of the TIC 401(k) Plan's capital account with the Partnership's per
unit value.

4. REDEMPTION OF UNITS
-------------------

At each quarter-end, units are redeemable at the discretion of each Limited
Partner. Redemption of units in $1,000 increments and full redemption of all
units are made at 100% of the net asset value per unit effective as of the last
business day of any quarter as defined in the Limited Partnership Agreement.
Partial redemptions of units which would reduce the net asset value of a Limited
Partner's unredeemed units to less than the minimum investment then required of
new Limited Partners or such Limited Partner's initial investment, whichever is
less, will be honored only to the extent of such limitation.

5. INCOME TAXES
------------

No provision for income taxes has been made in the accompanying financial
statements. Partners are responsible for reporting income or loss based upon
their respective share of revenue and expenses of the Partnership.

6. RELATED PARTY TRANSACTIONS
--------------------------

The General Partner, due to its relationship with its affiliates and certain
other parties, may enter into certain related party transactions.

Bellwether Partners LLC ("BPL"), a Delaware limited liability company and an
affiliate of the General Partner, is the Partnership's primary forward contract
counterparty. Effective August 1, 1995, BPL ceased charging commissions for
transacting the Partnership's foreign exchange and commodity forward contracts.
The Partnership typically has on deposit with BPL, as collateral for forward
contracts, up to 5% of the Partnership's net assets. During 1999, 1998, and 1997
the Partnership received $30,518, $60,264 and $55,229 in interest income for the
amounts on deposit
<PAGE>

with BPL. At December 31, 1999 and 1998, the amounts on deposit with BPL were
$540,796 and $657,501 (including $74,335 and $82,643 in unrealized gains) as of
December 31, 1999 and 1998.

Bellwether Futures LLC ("BFL"), a Delaware limited liability company, is an
affiliate of the General Partner and is qualified to do business in Illinois.
Effective January 1, 1996, BFL ceased collecting give-up fees from the
Partnership as compensation for assisting in the execution of treasury bond
futures by floor brokers on the Chicago Board of Trade.

TIC receives incentive and management fees as compensation for acting as trading
advisor (Note 2).

7. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET MARKET RISK AND CONCENTRATION
--------------------------------------------------------------------------
OF CREDIT RISK
--------------

During June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities". The statement requires the Partnership to
recognize all derivatives in the statements of financial condition at fair value
with adjustments to fair value recorded through income. SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of
Effective Date of SFAS No. 133," amended SFAS No. 133 to be effective for fiscal
years beginning after June 15, 2000 (January 1, 2001, for all companies with
calendar-year fiscal years). The Partnership has elected early adoption of SFAS
No. 133 and, accordingly, its standards are applied in the accompanying
financial statements. The Partnership has always maintained a policy of valuing
its commodity interests at market values or estimated fair values and of
including any unrealized gains and losses in results of operations. Accordingly,
the adoption of SFAS No. 133 has not resulted in a valuation or an accounting
change in the accompanying financial statements.

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
activities. These activities include the trading of financial futures, forwards,
swaps, exchange-traded and negotiated over-the-counter options and other
commodity interests. These financial instruments give rise to market and credit
risk in excess of the amounts recognized in the statements of financial
condition. The Partnership is subject to market and credit risk associated with
changes in the value of underlying financial instruments, as well as the loss of
appreciation on certain instruments, if its counterparties fail to perform.

In order to control the Partnerships market exposure, TIC applies risk
management guidelines and policies designed to protect the Partnership's
capital. These guidelines and policies include
<PAGE>

quantitative and qualitative criteria for evaluating the appropriate risk levels
for the Partnership. TIC's Risk Management Committee, comprised of principals
from different disciplines throughout the firm, regularly assesses and evaluates
the Partnership's potential exposures to the financial markets based on analysis
provided by the Risk Management Department. The Risk Management Department's
responsibilities include focusing on the positions taken in various instruments
and markets globally; ascertaining that all such positions are accurately
reflected on the Partnership's position reports; and evaluating the risk
exposure associated with all of those positions.

Cash and due from brokers are due principally from high credit quality
international financial institutions.

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 they
are traded and with the futures commission merchant through which the commodity
futures and options are cleared. Forwards are generally settled with the
counterparties two days after the trade date.

In general, exchange traded futures and option contracts possess low credit risk
as most exchanges act as principal to a Futures Commission Merchant ("FCM") on
all commodity transactions. Furthermore, most global exchanges require FCMs to
segregate client funds to ensure ample customer protection in the event of an
FCMs default. The Partnership monitors the creditworthiness of its FCMs and,
when deemed necessary, reduces its exposure to these FCMs. The Partnership's
credit risk associated with the nonperformance of these FCMs in fulfilling
contractual obligations can be directly impacted by volatile financial markets.
A substantial portion of the Partnership's open financial futures positions were
transacted with major international FCMs. BPL is the Partnership's primary
forward contract counterparty (Note 6). Notwithstanding the risk monitoring and
credit review performed by TIC with respect to its FCMs and counterparties,
including BPL, there is always a risk of nonperformance.

Generally, financial contracts can be closed out at TIC's discretion. An
illiquid or closed market, however, could prevent the closeout of positions.

TIC has a formal Credit Committee, comprised of senior managers from different
disciplines throughout the firm, that meets approximately once per month to
analyze the credit risk associated with the Partnership's counterparties,
intermediaries and service providers. A significant portion of the Partnership's
positions are invested with or held at institutions with high credit standing.
TIC establishes counterparty exposure limits and specifically designates which
product types are approved for trading.
<PAGE>

The following table summarizes the year-end assets and liabilities at December
31, 1999 and 1998, resulting from unrealized gains and losses on derivative
instruments included in the statements of financial condition (000's omitted):

<TABLE>
<CAPTION>
1999 1998
------------------------ ------------------------
Assets Liabilities Assets Liabilities
------ ----------- ------ -----------
<S> <C> <C> <C> <C>
Exchange traded contracts:
Interest rate contracts-
Domestic $ 230 $ 12 $ 21 $ 3
Foreign 14 - 521 -

Foreign exchange contracts-
Financial futures contracts - - 2 -
Forward currency contracts 64 - 75 -

Equity index contracts-
Domestic - - 27 17
Foreign 56 3 24 -

Over-the-counter contracts:
Commodity swaps 27 - - -
Equity swaps - 1 - -
Interest rate swaps 236 - - -

Non-financial instruments 183 - 61 -
--------- -------- --------- --------
$ 810 $ 16 $ 731 $ 20
========= ======== ========= ========

</TABLE>

<PAGE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 4,225,187
<SECURITIES> 15,600,000
<RECEIVABLES> 2,416,977
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,242,164
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 22,242,164
<CURRENT-LIABILITIES> 5,909,949
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 16,332,215
<TOTAL-LIABILITY-AND-EQUITY> 22,242,164
<SALES> 1,976,283
<TOTAL-REVENUES> 1,976,283
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 678,923
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,297,360
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,297,360
<EPS-BASIC> 392.72
<EPS-DILUTED> 0

</TABLE>