UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1997
Commission File Number 0-21584
F-1000 FUTURES FUND L.P., SERIES VIII
(Exact name of registrant as specified in its charter)
New York 13-3653624
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Smith Barney Futures Management Inc.
390 Greenwich St. - 1st Fl.
New York, New York 10013
(Address and Zip Code of principal executive offices)
(212) 723-5424
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
----
Securities registered pursuant to Section 12(g) of the Act: 100,000 Units
of Limited
Partnership
Interest
(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 [ ]
<PAGE>
PART I
Item 1. Business.
(a) General development of business. F-1000 Futures Fund L.P., Series VIII
(the "Partnership") is a limited partnership organized on January 16, 1992 under
the Partnership Law of the State of New York to engage in speculative trading of
a diversified portfolio of commodity interests, including futures contracts,
options and forward contracts. The commodity interests that are traded by the
Partnership are volatile and involve a high degree of market risk. The
Partnership maintains a portion of its assets in interest payments stripped from
U.S. Treasury Bonds under the Treasury's STRIPS program ("Zero Coupons") which
payments are due November 15, 1998. The Partnership uses the Zero Coupons and
its other assets to margin its commodities account.
A total of 100,000 Units of Limited Partnership Interest in the
Partnership (the "Units") were offered to the public. A Registration Statement
on Form S-1 relating to the public offering of 100,000 Units became effective on
April 29, 1992. Between April 29, 1992 and August 17, 1992, 35,615 Units were
sold to the public at $1,000 per Unit. Proceeds of the offering along with the
General Partner's contribution of $383,000 were held in escrow until August 18,
1992 at which time an aggregate of $35,998,000 was turned over to the
Partnership and the Partnership commenced trading operations. Redemptions of
Units for the year ended December 31, 1997 are reported in the Statement of
Partners' Capital on page F-5 under "Item 8. Financial Statements and
2
<PAGE>
Supplementary Data." The General Partner has agreed to make additional capital
contributions, if necessary, so that its general partnership interest will be
the greater of (i) 1% of the limited partner's contributions to the Partnership
or (ii) $25,000. The Partnership will be liquidated at the end of the month in
which the Zero Coupons purchased by the Partnership come due, or upon the
earlier occurrence of certain other circumstances set forth in the Limited
Partnership Agreement.
Smith Barney Futures Management Inc. acts as the general partner (the
"General Partner") of the Partnership and is a wholly owned subsidiary of Smith
Barney Inc. ("SB"). SB acts as commodity broker for the Partnership. On November
28, 1997, Smith Barney Holdings Inc. was merged with Salomon Inc to form Salomon
Smith Barney Holdings Inc. ("SSBH"), a wholly owned subsidiary of Travelers
Group Inc. SB is a wholly owned subsidiary of SSBH.
The Partnership's trading of futures contracts on commodities is done on
United States commodities exchanges and foreign commodity exchanges. It engages
in such trading through a commodity brokerage account maintained with SB.
Under the Limited Partnership Agreement, the General Partner administers
the business and affairs of the Partnership. At December 31, 1997, the General
Partner, on behalf of the Partnership, has entered into Management Agreements
(the "Management Agreements") with TrendLogic Associates, Inc. and Willowbridge
Associates Inc. (collectively, the "Advisors"), who make all commodity trading
decisions for the Partnership. Two of
3
<PAGE>
the principals of TrendLogic Associates, Inc., Mr. Paul E. Dean and Mr. Richard
Semels, are employees of SB. The Advisors are not affiliated with the General
Partner nor SB and are not responsible for the organization or operation of the
Partnership. Chesapeake Capital Corporation was terminated as an Advisor
effective July 31, 1997.
Pursuant to the terms of the Management Agreements, the Partnership is
obligated to pay each Advisor: (i) a monthly management fee equal to 1/6 of 1%
of the Net Assets of the Partnership allocated to each Advisor as of the end of
each month (2% per year); and (ii) an incentive fee payable quarterly, equal to
20% of the New Trading Profits (as defined in the Management Agreements) earned
by each Advisor for the Partnership.
The Customer Agreement (the "Customer Agreement") provides that the
Partnership pays SB a monthly brokerage fee equal to .71% of month-end Net
Assets allocated to the Advisors (8.5% per year) in lieu of brokerage
commissions on a per trade basis. The Partnership pays for National Futures
Association fees, exchange and clearing fees, give-up and user fees and floor
brokerage fees. Brokerage fees will be paid for the life of the Partnership,
although the rate at which such fees are paid may be changed. The Customer
Agreement between the Partnership and SB gives the Partnership the legal right
to net unrealized gains and losses.
All of the Partnership's assets are deposited in the Partnership's account
at SB. The Partnership maintains a portion of these assets in Zero Coupons and a
portion in cash. The
4
<PAGE>
Partnership's cash is deposited by SB in segregated bank accounts as required by
Commodity Futures Trading Commission regulations.
In addition, SB will pay the Partnership interest on 75% of the average
daily equity maintained in cash in its accounts during each month at the rate
equal to the average noncompetitive yield of 13-week U.S. Treasury Bills as
determined at the weekly auctions thereof during the month. The Customer
Agreement may be terminated upon notice by either party.
SSBH has agreed to contribute up to $100,000,000 to the Partnership's
capital without recourse to the Partnership, the General Partner or SB to enable
the Partnership to meet its margin obligations to SB. As a result of the
agreement, the Partnership should not have to liquidate its Zero Coupons prior
to their due date except to fund redemptions, and investors who remain limited
partners until dissolution of the Partnership should receive an amount at least
equal to their initial investment. The General Partner will provide a copy of
SSBH's annual report as filed with the SEC to any limited partner requesting it.
(b) Financial information about industry segments. The Partnership's
business consists of only one segment, speculative trading of commodity
interests. The Partnership does not engage in sales of goods or services. The
Partnership's net income (loss) from operations for the years ended December 31,
1997, 1996, 1995, 1994 and 1993 are set forth under "Item 6. Select Financial
Data." The Partnership capital as of December 31, 1997 was $8,451,528.
5
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(c) Narrative description of business.
See Paragraphs (a) and (b) above.
(i) through (x) - Not applicable.
(xi) through (xii) - Not applicable.
(xiii) - The Partnership has no employees.
(d) Financial Information About Foreign and Domestic Operations and Export
Sales. The Partnership does not engage in sales of goods or services, and
therefore this item is not applicable.
Item 2. Properties.
The Partnership does not own or lease any properties. The General Partner
operates out of facilities provided by its affiliate, SB.
Item 3. Legal Proceedings.
There are no pending legal proceedings to which the Partnership is a party
or to which any of its assets is subject. No material legal proceedings
affecting the Partnership were terminated during the fiscal year. Item 4.
Submission of Matters to a Vote of Security Holders.
There were no matters submitted to the security holders for a vote during
the last fiscal year covered by this report.
6
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Security
Holder Matters.
(a) Market Information. The Partnership has issued no stock. There
is no established public trading market for the Units of
Limited Partnership Interest.
(b) Holders. The number of holders of Units of Partnership
Interest as of December 31, 1997 was
599.
(c) Distribution. The Partnership did not declare a distribution
in 1997 or 1996.
7
<PAGE>
Item 6. Select Financial Data. Realized and unrealized trading gains (losses),
realized and unrealized appreciation (depreciation) on Zero Coupons, interest
income, net income (loss) and increase (decrease) in net asset value per Unit
for the years ended December 31, 1997, 1996, 1995, 1994 and 1993 and total
assets as of December 31, 1997, 1996, 1995, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
----------- ------------ ------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Net realized and unrealized trading
gains (losses) net of brokerage
commissions and clearing fees of
$404,479, $504,970, $635,930,
$967,483, and $1,498,948,
respectively $ 210,868 $ 122,595 $ 372,021 $(2,090,228) $ 4,409,607
Realized and unrealized
appreciation (depreciation)
on Zero Coupons (7,230) (270,687) 1,312,676 (2,197,474) (1,570,090)
Interest income 719,743 925,854 1,153,752 1,434,878 1,819,249
----------- ------------ ------------ ------------ -----------
$ 923,381 $ 777,762 $ 2,838,449 $(2,852,824) $ 7,798,946
========== ============ ============ ============ ===========
Net Income (loss) $ 685,882 $ 577,126 $ 2,463,121 $(3,421,065) $ 6,587,537
========== ============ ============ ============ ===========
Increase (decrease) in net
asset value per Unit $38.61 $46.33 $132.21 $(121.03) $184.88
======= ======= ======== ========= =======
Total assets $8,921,443 $16,599,151 $20,175,279 $23,495,014 $39,585,000
=========== ============ ============ ============ ===========
</TABLE>
8
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
(a) Liquidity. The Partnership does not engage in sales of goods or
services. Its only assets are its equity in its commodity futures trading
account, consisting of cash and cash equivalents, Zero Coupons, net unrealized
appreciation (depreciation) on open futures contracts, commodity options and
interest receivable. Because of the low margin deposits normally required in
commodity futures trading, relatively small price movements may result in
substantial losses to the Partnership. Such substantial losses could lead to a
material decrease in liquidity. To minimize this risk, the Partnership follows
certain policies including:
(1) Partnership funds are invested only in commodity contracts which
are traded in sufficient volume to permit, in the opinion of the Advisors, ease
of taking and liquidating positions.
(2) The Partnership diversifies its positions among various
commodities.
(3) No Advisor initiates additional positions in any commodity if such
additional positions would result in aggregate positions for all commodities
requiring a margin of more than 66-2/3% of the Partnership's net assets
allocated to the Advisor.
(4) The Partnership may occasionally accept delivery of a commodity.
Unless such delivery is disposed of promptly by retendering the warehouse
receipt representing the delivery to the appropriate
9
<PAGE>
clearing house, the physical commodity position is fully hedged.
(5) The Partnership does not employ the trading technique commonly
known as "pyramiding", in which the speculator uses unrealized profits on
existing positions in the same or related commodities.
(6) The Partnership does not utilize borrowings except short-term
borrowings if the Partnership takes delivery of any cash commodities.
(7) The Advisors may, from time to time, employ trading strategies such
as spreads or straddles on behalf of the Partnership. The term "spread" or
"straddle" describes a commodity futures trading strategy involving the
simultaneous buying and selling of futures contracts on the same commodity but
involving different delivery dates or markets and in which the trader expects to
earn a profit from a widening or narrowing of the difference between the prices
of the two contracts.
The Partnership is party to financial instruments with off- balance sheet
risk, including derivative financial instruments and derivative commodity
instruments, in the normal course of its business. These financial instruments
include forwards, futures and options, whose value is based upon an underlying
asset, index, or reference rate, and generally represent future commitments to
exchange currencies or cash flows, or to purchase or sell other financial
instruments at specified terms at specified future dates. Each of these
instruments is subject to various risks similar to those
10
<PAGE>
relating to the underlying financial instruments including market and credit
risk. The General Partner monitors and controls the Partnership's risk exposure
on a daily basis through financial, credit and risk management monitoring
systems and, accordingly believes that it has effective procedures for
evaluating and limiting the credit and market risks to which the Partnership is
subject. (See also Item 8. Financial Statements and Supplementary Data., for
further information on financial instrument risk included in the notes to
financial statements.)
Other than the risks inherent in commodity futures trading, the
Partnership knows of no trends, demands, commitments, events or uncertainties
which will result in or which are reasonably likely to result in the
Partnership's liquidity increasing or decreasing in any material way. The
Partnership will be liquidated at the end of the month in which the Zero Coupons
purchased by the Partnership come due (November, 1998), or upon the earlier
occurrence of certain other circumstances set forth in the Limited Partnership
Agreement.
(b) Capital resources. (i) The Partnership has made no material
commitments for capital expenditures.
(ii) The Partnership's capital consists of the capital contributions of
the partners as increased or decreased by gains or losses on commodity futures
trading and by expenses, interest income, redemptions of Units and distributions
of profits, if any. Gains or losses on commodity futures trading cannot be
predicted. Market moves in commodities are dependent upon fundamental and
technical factors which the Partnership's Advisors may or may not be able to
identify.
11
<PAGE>
Partnership expenses consist of, among other things, commissions, management
fees and incentive fees. The level of these expenses is dependent upon the level
of trading and the ability of the Advisors to identify and take advantage of
price movements in the commodity markets, in addition to the level of Net Assets
maintained. Furthermore, the Partnership will receive no payment on its Zero
Coupons until their due date. However, the Partnership will accrue interest on
the Zero Coupons and Limited Partners will be required to report as interest
income on their U.S. tax returns in each year their pro rata share of the
accrued interest on the Zero Coupons even though no interest will be paid prior
to their due date. In addition, the amount of interest income payable by SB is
dependent upon interest rates over which the Partnership has no control.
No forecast can be made as to the level of redemptions in any given
period. Beginning with the fiscal quarter ending at least six months after
trading commenced, a Limited Partner may cause all of his Units to be redeemed
by the Partnership at the Net Asset Value thereof as of the last day of a fiscal
quarter (the "redemption date") on fifteen days' written notice to the General
Partner.
A redemption fee equal to 4% of Net Asset Value per Unit was charged to
each Limited Partner requesting redemption on March 31, 1993, the first possible
redemption date; a redemption fee equal to 3% of Net Asset Value per Unit was
charged to each Limited Partner requesting redemption on June 30, 1993, the
second possible redemption date; a redemption fee equal to 2% of Net Asset Value
per Unit was charged to each Limited Partner requesting redemption on September
30,
12
<PAGE>
1993, the third possible redemption date; and a redemption fee equal to 1% of
Net Asset Value per Unit was charged to each Limited Partner requesting
redemption on December 31, 1993, the fourth possible redemption date. Redemption
fees no longer apply.
There were 6,344 Units of Limited Partnership Interest redeemed in the
year ended December 31, 1997 at a value of $8,160,166. For the year ended
December 31, 1996, 2,603 Units of Limited Partnership Interest were redeemed
totaling $3,024,424. For the year ended December 31, 1995 4,489 Units of Limited
Partnership Interest were redeemed at a value of $5,035,074 and the General
Partner redeemed 209 Unit equivalents totaling $245,101.
For each Unit redeemed the Partnership liquidates $1,000 (principal
amount) of Zero Coupons and will continue to liquidate $1,000 (principal amount)
of Zero Coupons per Unit redeemed. These liquidations will be at market value
which will be less than the amount payable on their due date. Moreover, it is
possible that the market value of the Zero Coupons could be less than their
purchase price plus the original issue discount amortized to date.
(c) Results of operations. For the year ended December 31, 1997, the Net
Asset Value per Unit increased 3.2% from $1,219.06 to $1,257.67. For the year
ended December 31, 1996, the net asset value per unit increased 4.0% from
$1,172.73 to $1,219.06. For the year ended December 31, 1995, the net asset
value per unit increased 12.7% from $1,040.52 to $1,172.73.
The Partnership experienced net trading gains of $615,347 before
commissions and expenses for the year ended December 31, 1997. These
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<PAGE>
gains were recognized in the trading of currencies, grains, metals, softs and
indices, and were partially offset by losses in energy products, U.S. and non
U.S. interest rates and livestock. The Partnership experienced a realized gain
of $28,844 on Zero Coupons liquidated in conjunction with the redemption of
Units for the year ended December 31, 1997 and unrealized depreciation on Zero
Coupons of $36,074 during 1997.
The Partnership experienced net trading gains of $627,565 before
commissions and expenses for the period ended December 31, 1996. These gains
were recognized in the trading of currencies, energy, precious metals and
interest rate commodity futures. These gains were partially offset in losses
incurred while trading indices and agricultural futures contracts. The
Partnership experienced a realized gain of $7,582 on Zero Coupons liquidated in
conjunction with the redemption of Units for the year ended December 31, 1996
and unrealized depreciation on Zero Coupons of $278,629 during 1996.
The Partnership experienced net trading gains of $1,007,951 before
commissions and expenses for the year ended December 31, 1995. Realized trading
gains of $1,554,665 were recognized in the trading of currencies, energy,
indices and interest rate commodity futures. These gains were partially offset
in losses incurred while trading precious metals and agricultural futures
contracts. The Partnership experienced a realized loss of $13,019 on Zero
Coupons liquidated in conjunction with the redemption of Units for the year
ended December 31, 1995 and unrealized appreciation on Zero Coupons of
$1,325,695 during 1995.
14
<PAGE>
Commodity futures markets are highly volatile. Broad price fluctuations
and rapid inflation increase the risks involved in commodity trading, but also
increase the possibility of profit. The profitability of the Partnership depends
on the existence of major price trends and the ability of the Advisors to
identify those price trends correctly. Price trends are influenced by, among
other things, changing supply and demand relationships, weather, governmental,
agricultural, commercial and trade programs and policies, national and
international political and economic events and changes in interest rates. To
the extent that market trends exist and the Advisors are able to identify them,
the Partnership expects to increase capital through operations.
15
<PAGE>
Item 8. Financial Statements and Supplementary Data.
F-1000 FUTURES FUND L.P., SERIES VIII
INDEX TO FINANCIAL STATEMENTS
Page
Number
Report of Independent Accountants. F-2
Financial Statements:
Statement of Financial Condition at
December 31, 1997 and 1996. F-3
Statement of Income and Expenses for
the years ended December 31, 1997,
1996 and 1995. F-4
Statement of Partners' Capital for
the years ended December 31, 1997,
1996 and 1995. F-5
Notes to Financial Statements. F-6 - F-11
F-1
Continued
<PAGE>
financial statements are the responsibility of the management of the General
Partner. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 the
management of the General Partner, 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 F-1000 Futures Fund L.P.,
Series VIII as of December 31, 1997 and 1996, and the results of its operations
for the years ended December 31, 1997, 1996 and 1995, in conformity with
generally accepted accounting principles.
Coopers & Lybrand L.L.P.
New York, New York
March 6, 1998
F-2
<PAGE>
F-1000 Futures Fund L.P., Series VIII
Statement of Financial Condition
December 31, 1997 and 1996
Assets: 1997 1996
Equity in commodity futures
trading account:
Cash and cash equivalents
(Note 3c) $ 2,088,122 $ 4,303,482
Net unrealized appreciation
on open futures contracts 105,253 118,727
Zero Coupons, $6,720,000 and
$13,064,000 principal
amount, in 1997 and 1996,
respectively, due November
15, 1998, at market
value (amortized cost
$6,373,685 and $11,657,073
in 1997 and 1996, respectively) 6,404,564 11,724,026
Commodity options owned, at
market value (cost $39,587
in 1996) -- 31,136
----------- -----------
8,597,939 16,177,371
Receivable from SB on sale
of Zero Coupons 316,203 407,583
Interest receivable 7,301 14,197
----------- -----------
$ 8,921,443 $16,599,151
----------- -----------
Liabilities and Partners'
Capital:
Liabilities:
Accrued expenses:
Commissions $ 20,452 $ 40,458
Management fees 4,777 9,450
Incentive fees -- 25,715
Other 27,140 42,022
Commodity options written, at
market value (premiums
received $5,140 in 1996) -- 2,241
Redemptions payable 417,546 553,453
----------- -----------
469,915 673,339
Partners' capital (Notes 1, 5 and 6):
General Partner, 175 Unit
equivalents outstanding in
1997 and 1996 220,092 213,336
Limited Partners, 6,545 and 12,889
Units of Limited Partnership
Interest outstanding in 1997
and 1996, respectively 8,231,436 15,712,476
----------- -----------
8,451,528 15,925,812
----------- -----------
$ 8,921,443 $16,599,151
----------- -----------
See notes to financial statements.
F-3
<PAGE>
F-1000 Futures Fund L.P., Series VIII
Statement of Income and Expenses
for the years ended
December 31, 1997, 1996 and 1995
1997 1996 1995
Income:
Net gains (losses) on
trading of commodity
interests:
Realized gains on
closed positions $ 623,269 $ 1,063,328 $ 1,554,665
Change in unrealized
gains/ losses on
open positions (7,922 (435,763) (546,714)
----------- ----------- -----------
615,347 627,565 1,007,951
Less, Brokerage
commissions and
clearing fees
($7,745, $12,918 and
$18,795, respectively)
(Note 3c) (404,479) (504,970) (635,930)
----------- ----------- -----------
Net realized and
unrealized gains 210,868 122,595 372,021
Unrealized
appreciation
(depreciation) on
Zero Coupons (36,074) (278,269) 1,325,695
Gain (loss) on sale
of Zero Coupons 28,844 7,582 (13,019)
Interest income
(Notes 2c and 3c) 719,743 925,854 1,153,752
----------- ----------- -----------
923,381 777,762 2,838,449
----------- ----------- -----------
Expenses:
Management fees (Note 3b) 89,488 109,682 135,502
Incentive fees (Note 3b) 103,698 31,791 172,726
Other expenses 44,313 59,163 67,100
----------- ----------- -----------
237,499 200,636 375,328
----------- ----------- -----------
Net income $685,882 $577,126 $ 2,463,121
----------- ----------- -----------
Net income per Unit of
Limited Partnership
Interest and General
Partner Unit equivalent
(Notes 1 and 6) $ 38.61 $ 46.33 $ 132.21
----------- ----------- -----------
See notes to financial statements.
F-4
<PAGE>
F-1000 Futures Fund L.P., Series VIII
Statement of Partners' Capital
for the years ended
December 31, 1997, 1996 and 1995
Limited General
Partners Partner Total
Partners' capital at
December 31, 1994 $ 20,790,604 $ 399,560 $ 21,190,164
Net income 2,412,352 50,769 2,463,121
Redemption of 4,489 Units of
Limited Partnership Interest
and General Partner
redemption representing
209 Unit equivalents (5,035,074) (245,101) (5,280,175)
------------ ------------ ------------
Partners' capital at
December 31, 1995 18,167,882 205,228 18,373,110
Net income 569,018 8,108 577,126
Redemption of 2,603 Units of
Limited Partnership Interest (3,024,424) -- (3,024,424)
------------ ------------ ------------
Partners' capital at
December 31, 1996 15,712,476 213,336 15,925,812
Net income 679,126 6,756 685,882
Redemption of 6,344 Units of
Limited Partnership Interest (8,160,166) -- (8,160,166)
------------ ------------ ------------
Partners' capital at
December 31, 1997 $ 8,231,436 $ 220,092 $ 8,451,528
------------ ------------ ------------
See notes to financial statements.
F-5
<PAGE>
F-1000 Futures Fund L.P.,
Series VIII
Notes to Financial Statements
1. Partnership Organization:
F-1000 Futures Fund L.P., Series VIII (the "Partnership") is a limited
partnership which was organized on January 16, 1992 under the partnership
laws of the State of New York to engage in the speculative trading of a
diversified portfolio of commodity interests, including futures contracts,
options and forward contracts. The commodity interests that are traded by
the Partnership are volatile and involve a high degree of market risk. The
Partnership maintains a portion of its assets in interest payments stripped
from U.S. Treasury Bonds under the Treasury's STRIPS program which payments
are due approximately six years from the date trading commenced ("Zero
Coupons"). The Partnership was authorized to sell 100,000 Units during the
public offering period.
SmithBarney Futures Management Inc. acts as the general partner (the
"General Partner") of the Partnership and is a wholly owned subsidiary of
Smith Barney Inc. ("SB"). SB acts as commodity broker for the Partnership
(see Note 3c). On November 28, 1997, Smith Barney Holdings Inc. was merged
with Salomon Inc to form Salomon Smith Barney Holdings Inc. ("SSBH"), a
wholly owned subsidiary of Travelers Group Inc. SB is a wholly owned
subsidiary of SSBH.
The General Partner and each limited partner share in the profits and losses
of the Partnership in proportion to the amount of partnership interest owned
by each except that no limited partner shall be liable for obligations of
the Partnership in excess of his initial capital contribution and profits,
if any, net of distributions.
The Partnership will be liquidated at the end of the month in which the Zero
Coupons purchased by the Partnership come due (November, 1998), or upon the
earlier occurrence of certain other circumstances set forth in the Limited
Partnership Agreement.
2. Accounting Policies
a. All commodity interests (including derivative financial instruments and
derivative commodity instruments) are used for trading purposes. The
commodity interests are recorded on trade date and open contracts are
recorded in the statement of financial condition at market value for
those commodity interests for which market quotations are readily
available or at fair value on the last business day of the year.
Investments in commodity interests denominated in foreign currency are
translated into U.S. dollars at the exchange rates prevailing on the last
business day of the year. Realized gain (loss) and changes in unrealized
values on commodity interests are recognized in the period in which the
contract is closed or the changes occur and are included in net gains
(losses) on trading of commodity interests.
F-6
<PAGE>
b. Income taxes have not been provided as each partner is individually
liable for the taxes, if any, on his share of the Partnership's income
and expenses.
c. The original issue discount on the Zero Coupons is being amortized over
their life using the interest method and is included in interest income.
d. Zero Coupons are recorded in the statement of financial condition at
market value. Realized gain (loss) on the sale of Zero Coupons is
determined on the amortized cost basis at the time of sale.
e. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from these estimates.
3. Agreements
a. Limited Partnership Agreement:
The Limited Partnership Agreement provides that the General Partner shall
manage the business of the Partnership and may select one or more trading
advisors to direct all trading for the Partnership.
b. Management Agreements:
The General Partner, on behalf of the Partnership, has entered into
Management Agreements with Trendlogic Associates, Inc. and Willowbridge
Associates Inc. (collectively, as the "Advisors"). The Advisors are not
affiliated with the General Partner or SB and are not responsible for the
organization or operation of the Partnership. The Partnership will pay
each Advisor a monthly management fee equal to 1/6 of 1 % (2% per year)
of the Net Assets allocated to the Advisor as of the end of the month. In
addition, the Partnership will pay each Advisor an incentive fee, payable
quarterly, equal to 20% of the New Trading Profits earned by each Advisor
for the Partnership. Chesapeake Capital Corporation was terminated as an
Advisor effective July 31, 1997.
F-7
<PAGE>
c. Customer Agreement:
The Partnership has entered into a Customer Agreement, which was assigned
to SB, which provides that the Partnership will pay SB a monthly
brokerage fee equal to .71% (8.5% per year) of month-end Net Assets
allocated to the Advisors, as defined, in lieu of brokerage commissions
on a per trade basis. The Partnership will pay for National Futures
Association ("NFA") fees, exchange and clearing fees, user, give-up and
floor brokerage fees. SB will pay a portion of its brokerage fees to its
Financial Consultants who have sold Units. All of the Partnership's
assets are deposited in the Partnership's account at SB. The Partnership
maintains a portion of these assets in Zero Coupons and a portion in
cash. The Partnership's cash is deposited by SB in segregated bank
accounts as required by Commodity Futures Trading Commission regulations.
At December 31, 1997 and 1996, the amount of cash held for margin
requirements was $449,764 and $470,341, respectively. SB has agreed to
pay the Partnership interest on 75% of the average daily equity
maintained in cash in its account during each month at the rate of the
average noncompetitive yield of 13-week U.S. Treasury Bills as determined
at the weekly auctions thereof during the month. The Customer Agreement
between the Partnership and SB gives the Partnership the legal right to
net unrealized gains and losses. The Customer Agreement may be terminated
upon notice by either party.
4. Trading Activities:
The Partnership was formed for the purpose of trading contracts in a variety
of commodity interests, including derivative financial instruments and
derivative commodity instruments. The results of the Partnership's trading
activity are shown in the statement of income and expenses.
All of the commodity interests owned by the Partnership are held for trading
purposes. The fair value of these commodity interests, including options
thereon, at December 31, 1997 and 1996 was $105,253 and $147,622,
respectively, and the average fair value during the years then ended, based
on monthly calculation, was $244,769 and $342,399, respectively.
5. Distributions and Redemptions:
Distributions of profits, if any, will be made at the sole discretion of the
General Partner; however, beginning with the fiscal quarter ended at least
six months after trading commenced, a limited partner may cause all of his
Units to be redeemed by the Partnership at the Net Asset Value thereof as of
the last day of any calendar quarter (the "redemption date") on 15 days
written notice to the General Partner. Redemptions of partial Units or of
less than all the Units owned by a limited partner are not permitted except
at the sole discretion of the General Partner.
F-8
<PAGE>
6. Net Asset Value Per Unit:
Changes in the net asset value per Unit of Partnership interest for the
years ended December 31, 1997, 1996 and 1995 were as follows:
1997 1996 1995
Net realized and
unrealized gains (losses) $ (9.45) $ 13.17 $ 20.83
Net realized and
unrealized gains
(losses) on (1.26) (16.97) 69.45
Zero Coupons
Interest income 69.23 64.14 62.25
Expenses (19.91) (14.01) (20.32)
--------- --------- ---------
Increase for year 38.61 46.33 132.21
Net asset value per
Unit, beginning of year 1,219.06 1,172.73 1,040.52
--------- --------- ---------
Net asset value per
Unit, end of year $1,257.67 $1,219.06 $1,172.73
--------- --------- ---------
7. Guarantee:
SSBH has agreed to contribute up to $100,000,000 to the Partnership's
capital without recourse to the Partnership, the General Partner or SB to
enable the Partnership to meet its margin obligations to SB. As a result of
the agreement, the Partnership should not have to liquidate its Zero Coupons
prior to their due date except to fund redemptions, and investors who remain
limited partners until dissolution of the Partnership should receive an
amount at least equal to their initial investment.
8. Financial Instrument Risk:
The Partnership is party to financial instruments with off-balance sheet
risk, including derivative financial instruments and derivative commodity
instruments, in the normal course of its business. These financial
instruments include forwards, futures and options, whose value is based upon
an underlying asset, index, or reference rate, and generally represent
future commitments to exchange currencies or cash flows, to purchase or sell
other financial instruments at specific terms at specified future dates, or,
in the case of derivative commodity instruments, to have a reasonable
possibility to be settled in cash or with another financial instrument.
These instruments may be traded on an exchange or over-the-counter ("OTC").
Exchange traded instruments are standardized and include futures and certain
option contracts. OTC contracts are negotiated between contracting parties
and include forwards and certain options. Each of these instruments is
subject to various risks similar to those related to the underlying
financial instruments including market and credit risk. In general, the
risks associated with OTC contracts are greater than those associated with
exchange traded instruments because of the greater risk of default by the
counterparty to an OTC contract.
F-9
<PAGE>
Market risk is the potential for changes in the value of the financial
instruments traded by the Partnership due to market changes, including
interest and foreign exchange rate movements and fluctuations in commodity
or security prices. Market risk is directly impacted by the volatility and
liquidity in the markets in which the related underlying assets are traded.
Credit risk is the possibility that a loss may occur due to the failure of a
counterparty to perform according to the terms of a contract. Credit risk
with respect to exchange traded instruments is reduced to the extent that an
exchange or clearing organization acts as a counterparty to the
transactions. The Partnership's risk of loss in the event of counterparty
default is typically limited to the amounts recognized in the statement of
financial condition and not represented by the contract or notional amounts
of the instruments. The Partnership has concentration risk because the sole
counterparty or broker with respect to the Partnership's assets is SB.
The General Partner monitors and controls the Partnership's risk exposure on
a daily basis through financial, credit and risk management monitoring
systems, and accordingly believes that it has effective procedures for
evaluating and limiting the credit and market risks to which the Partnership
is subject. These monitoring systems allow the General Partner to
statistically analyze actual trading results with risk adjusted performance
indicators and correlation statistics. In addition, on-line monitoring
systems provide account analysis of futures, forwards and options positions
by sector, margin requirements, gain and loss transactions and collateral
positions.
The notional or contractual amounts of these instruments, while not recorded
in the financial statements, reflect the extent of the Partnership's
involvement in these instruments. At December 31, 1997, the notional or
contractual amounts of the Partnership's commitment to purchase and sell
these instruments was $21,529,467 and $8,858,310, respectively, as detailed
below. All of these instruments mature within one year of December 31, 1997.
However, due to the nature of the Partnership's business, these instruments
may not be held to maturity. At December 31, 1997, the fair value of the
Partnership's derivatives, including options thereon, was $105,253, as
detailed below.
F-10
<PAGE>
December 31, 1997
---------------------------------------------
Notional or Contractual
Amount of Commitments
---------------------------------------------
To Purchase To Sell Fair Value
Currencies
-Exchange Traded
Contracts $ 202,585 $ 1,829,465 $ 17,345
-OTC Contracts 3,702,679 4,624,068 1,395
Energy -- 182,630 17,385
Grains 577,300 121,450 (18,332)
Interest Rate U.S. 6,535,568 353,531 11,956
Interest Rate
Non-U.S 9,072,755 760,257 42,805
Livestock -- 96,120 3,800
Metals 447,114 444,880 55,902
Softs 690,870 264,150 (33,857)
Indices 300,596 181,759 6,854
----------- ----------- -----------
$21,529,467 $ 8,858,310 $ 105,253
----------- ----------- -----------
At December 31, 1996, the notional or contractual amounts of the
Partnership's commitment to purchase and sell these instruments was
$31,716,400 and $12,438,693, respectively, and the fair value of the
Partnership's derivatives, including options thereon, was $147,622 as
detailed below.
December 31, 1996
---------------------------------------------
Notional or Contractual
Amount of Commitments
---------------------------------------------
To Purchase To Sell Fair Value
Currencies
-Exchange
Traded Contracts $ 2,659,500 $ 5,111,758 $ 86,059
-OTC Contracts 1,736,161 2,093,094 11,633
Energy 1,081,235 0 13,738
Grains 240,475 218,264 (5,192)
Interest Rate U.S 7,336,247 15,670 (24,966)
Interest Rate Non-U.S 15,450,762 3,172,168 13,701
Livestock 304,310 0 4,900
Metals 818,207 1,499,254 32,072
Softs 979,987 154,051 6,860
Indices 1,109,516 174,434 8,817
----------- ----------- -----------
$31,716,400 $12,438,693 $ 147,622
----------- ----------- -----------
F-11
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
During the last two fiscal years and any subsequent interim period, no
independent accountant who was engaged as the principal accountant to audit the
Partnership's financial statements has resigned or was dismissed.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Partnership has no officers or directors and its affairs are
managed by its General Partner, Smith Barney Futures Management Inc. Investment
decisions are made by TrendLogic Associates, Inc. and Willowbridge Associates
Inc. (collectively, the "Advisors").
Item 11. Executive Compensation.
The Partnership has no directors or officers. Its affairs are managed
by Smith Barney Futures Management Inc., its General Partner, which receives
compensation for its services, as set forth under "Item 1. Business." SB, an
affiliate of the General Partner, is the commodity broker for the Partnership
and receives brokerage commissions for such services, as described under "Item
1. Business." For the year ended December 31, 1997, SB earned $404,479 in
brokerage commissions and clearing fees. The Advisors earned $89,488 in
management fees and $103,698 in incentive fees during 1997.
16
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
(a). Security ownership of certain beneficial owners. The Partnership
knows of no person who beneficially owns more than 5% of the Units outstanding.
(b). Security ownership of management. Under the terms of the
Limited Partnership Agreement, the Partnership's affairs are managed by the
General Partner. The General Partner owns Units of General partnership interest
equivalent to 175 Units (2.6%) of Limited Partnership Interest as of December
31, 1997.
(c). Changes in control. None.
Item 13. Certain Relationship and Related Transactions.
Smith Barney Inc. and Smith Barney Futures Management Inc. would be
considered promoters for purposes of Item 404(d) of Regulation S-K. The nature
and the amounts of compensation each promoter will receive from the Partnership
are set forth under "Item 1. Business." and "Item 11. Executive Compensation."
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) (1) Financial Statements:
Statement of Financial Condition at December 31, 1997 and
1996. Statement of Income and Expenses for the years ended
December 31, 1997, 1996 and 1995.
Statement of Partners' Capital for the years ended
December 31, 1997, 1996 and 1995.
17
<PAGE>
(2) Financial Statement Schedules: Financial Data
Schedule for the year ended December 31, 1997.
(3) Exhibits:
3.1 - Limited Partnership Agreement (filed as
Exhibit 3.1 to the Registration Statement on
Form S-1 (File No. 33-45422) and incorporated
herein by reference).
3.2 - Certificate of Limited Partnership of the
Partnership as filed in the office of the
County Clerk of New York County on January 16,
1992 (filed as Exhibit 3.2 to the Registration
Statement on Form S-1 (File No. 33-45422) and
incorporated herein by reference).
10.1 - Customer Agreement between the Partnership and
Lehman Brothers Capital Management Corp.
(filed as Exhibit 10.1 to the Registration
Statement on Form S-1 (File No. 33-45422) and
incorporated herein by reference.
10.3 - Escrow Instructions relating to escrow of
subscription funds (filed as Exhibit 10.3 to
the Registration Statement on Form S-1 (File
No. 33-45422) and incorporated herein by
reference).
10.5 - Management Agreement among the Partnership,
the General Partner and Chesapeake Capital
18
<PAGE>
Corporation (filed as Exhibit 10.5 to the
Registration Statement on Form S-1 (File No.
33-45422) and incorporated herein by reference).
10.6 - Management Agreement among the Partnership,
the General Partner and EMC Capital
Management, Inc. (filed as Exhibit 10.6 to the
Registration Statement on Form S-1 (File No.
33-45422) and incorporated herein by
reference).
10.7 - Management Agreement among the Partnership,
the General Partner and LaSalle Portfolio
Management, Inc. (filed as Exhibit 10.7 to the
Registration Statement on Form S-1 (File No.
33-45422 and incorporated herein by
reference).
10.8 - Management Agreement among the Partnership,
the General Partner and PRAGMA, Inc. (filed as
Exhibit 10.8 to the Registration Statement on
form S-1 (Filed No. 33-45422) and incorporated
herein by reference).
10.9 - Letter dated July 31, 1993 from General
Partner to LaSalle Portfolio Management
extending Management Agreement (filed as
Exhibit 10.9 to Form 10-K for the fiscal year
ended December 31, 1993 and incorporated
herein by reference).
19
<PAGE>
10.10 - Letter dated July 31, 1993 from General
Partner to EMC Capital Management extending
Management Agreement (filed as Exhibit 10.10
to Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by
reference).
10.11 - Letter dated July 31, 1993 from General
Partner to Chesapeake Capital Corporation
extending Management Agreement (filed as
Exhibit 10.11 to Form 10-K for the fiscal
year ended December 31, 1993 and incorporated
herein by reference).
10.12 - Letter dated July 31, 1993 from General
Partner to PRAGMA, Inc. extending Management
Agreement (filed as Exhibit 10.12 to Form 10-
K for the fiscal year ended December 31, 1993
and incorporated herein by reference).
10.13 - Letter dated July 29, 1994 from the General
Partner to PRAGMA, Inc. terminating Management
Agreement (previously filed).
10.14 - Management Agreement among the Partnership, the
General Partner and ELM Financial (previously
filed).
10.15 - Management Agreement among the Partnership,
the General Partner and Gill Capital
Management (previously filed).
20
<PAGE>
10.16 - Letter dated March 29, 1994 from General
Partner to LaSalle Portfolio Management
terminating Management Agreement (previously
filed).
10.17 - Letters dated February 26, 1995 from General
Partner to Chesapeake Capital Corporation,
EMC Capital Management, Inc. and Gill Capital
Management extending Management Agreements to
June 30, 1995 (previously filed).
10.18 - Letter Dated January 27, 1995 from General Partner
to ELM Financial terminating Management Agreement
(previously filed).
10.19 - Letter dated June 27, 1995 from General
Partner to Gill Capital Management
terminating Management Agreement (previously
filed).
10.20 - Management Agreement among the Partnership,
the General Partner and Willowbridge
Associates Inc. (previously filed).
10.21 - Letter dated June 30, 1996 from General Partner to
EMC Capital Management terminating Management
Agreement (previously filed).
10.22 - Management Agreement among the Partnership, the
General Partner and TrendLogic Associates Inc.
(previously filed).
21
<PAGE>
10.23 - Letters extending Management Agreements with
TrendLogic Associates Inc. and Willowbridge
Associates Inc. (filed herein).
10.24 - Letter dated July 31, 1997 from General
Partner to Chesapeake Capital Corporation
terminating Management Agreement. (filed
herein).
(b) Reports on 8-K: None Filed.
22
<PAGE>
Supplemental Information To Be Furnished With Reports Filed Pursuant To
Section 15(d) Of The Act by Registrants Which Have Not Registered Securities
Pursuant To Section 12 Of the Act.
Annual Report to Limited Partners
23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York on the 24th day of March 1998.
F-1000 FUTURES FUND L.P., SERIES VIII
By: Smith Barney Futures Management Inc.
(General Partner)
By /s/ David J. Vogel
David J. Vogel, President & Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
/s/ David J. Vogel /s/ Jack H. Lehman III
David J. Vogel, Jack H. Lehman III
Director, Principal Executive Chairman and Director
Officer and President
/s/ Michael Schaefer /s/ Daniel A. Dantuono
Michael Schaefer Daniel A. Dantuono
Director Treasurer, Chief Financial
Officer and Director
/s/ Daniel R. McAuliffe, Jr. /s/ Steve J. Keltz
Daniel R. McAuliffe, Jr. Steve J. Keltz
Director Secretary and Director
/s/ Shelley Ullman
Shelley Ullman
Director
24
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000883573
<NAME> F-1000 Futures Fund L.P., Series VIII
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,088,122
<SECURITIES> 6,509,817
<RECEIVABLES> 323,504
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,921,443
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,921,443
<CURRENT-LIABILITIES> 469,915
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 8,451,528
<TOTAL-LIABILITY-AND-EQUITY> 8,921,443
<SALES> 0
<TOTAL-REVENUES> 923,381
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 237,499
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 685,882
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 685,882
<EPS-PRIMARY> 38.61
<EPS-DILUTED> 0
</TABLE>
May 31, 1996
TrendLogic Associates
1 Fawcett Place - 2nd Place
Greenwich, Ct. 06830
Attention: Mr. Mark Dean
Re: Management Agreement Renewal
F-1000 Futures Fund L.P., Series VIII
Dear Mr. Mark Dean:
We are writing with respect to your management agreement concerning the
commodity pool to which reference is made above (the "Management Agreement"). We
would like to extend the term of the Management Agreement through June 30, 1997.
All other provisions of the Management Agreement will remain unchanged.
Please indicate your agreement to and acceptance of this modification by signing
one copy of this letter and returning it to the attention of Mr. Daniel Dantuono
at the address above.
Very truly yours,
SMITH BARNEY FUTURES MANAGEMENT INC.
By:
Chief Financial Officer,
Director & Treasurer
AGREED AND ACCEPTED
TRENDLOGIC ASSOCIATES
By:
Print Name:
DAD/sr
rw/1
May 31, 1996
Willowbridge Associates Inc.
101 Morgan Lane - Suite 180
Plainsboro, N.J. 07036
San Deigo, California 93208-3105
Attention: Ms. Theresa Morris
Re: Management Agreement Renewal
F-1000 Futures Fund L.P., Series VIII
Dear Ms. Morris:
We are writing with respect to your management agreement concerning the
commodity pool to which reference is made above (the "Management Agreement"). We
would like to extend the term of the Management Agreement through June 30, 1997.
All other provisions of the Management Agreement will remain unchanged.
Please indicate your agreement to and acceptance of this modification by signing
one copy of this letter and returning it to the attention of Mr. Daniel Dantuono
at the address above.
Very truly yours,
SMITH BARNEY FUTURES MANAGEMENT INC.
By:
Chief Financial Officer,
Director & Treasurer
AGREED AND ACCEPTED
WILLOWBRIDGE ASSOCIATES INC.
By:
Print Name:
DAD/sr
rw/1
June 24, 1997
TrendLogic Associates
1 Fawcett Place - 2nd Place
Greenwich, Ct. 06830
Attention: Mr. Mark Dean
Re: Management Agreement Renewal
F-1000 Futures Fund L.P., Series VIII
Dear Mr. Mark Dean:
We are writing with respect to your management agreement concerning the
commodity pool to which reference is made above (the "Management Agreement"). We
would like to extend the term of the Management Agreement through June 30, 1998.
All other provisions of the Management Agreement will remain unchanged.
Please indicate your agreement to and acceptance of this modification by signing
one copy of this letter and returning it to the attention of Mr. Daniel Dantuono
at the address above.
Very truly yours,
SMITH BARNEY FUTURES MANAGEMENT INC.
By:
Chief Financial Officer,
Director & Treasurer
AGREED AND ACCEPTED
TRENDLOGIC ASSOCIATES
By:
Print Name:
DAD/sr
rw/1
June 24, 1997
Willowbridge Associates Inc.
101 Morgan Lane - Suite 180
Plainsboro, N.J. 07036
San Deigo, California 93208-3105
Attention: Ms. Theresa Morris
Re: Management Agreement Renewal
F-1000 Futures Fund L.P., Series VIII
Dear Ms. Morris:
We are writing with respect to your management agreement concerning the
commodity pool to which reference is made above (the "Management Agreement"). We
would like to extend the term of the Management Agreement through June 30, 1998.
All other provisions of the Management Agreement will remain unchanged.
Please indicate your agreement to and acceptance of this modification by signing
one copy of this letter and returning it to the attention of Mr. Daniel Dantuono
at the address above.
Very truly yours,
SMITH BARNEY FUTURES MANAGEMENT INC.
By:
Chief Financial Officer,
Director & Treasurer
AGREED AND ACCEPTED
WILLOWBRIDGE ASSOCIATES INC.
By:
Print Name:
DAD/sr
rw/1
August 20, 1997
Chesapeake Capital Corp.
500 Forest Avenue
Richmond, Va. 23229
Attention: Mr. John Hoade
Re: F-1000 Futures Fund L.P., Series VIII
Dear Mr. Hoade:
Per our conversation effective immediately, all assets have been
reallocated away from your trading account 258-31100. This effectively
terminates your management agreement with the F-1000 Futures Fund L.P., Series
VIII. Please liquidate all of your positions in an orderly fashion and
acknowledge by signing at the bottom and returning to me by fax.
If you have any questions, please call me.
Very truly yours,
SMITH BARNEY FUTURES MANAGEMENT INC.
Daniel A. Dantuono
Chief Financial Officer
DAD/sr
Acknowledge on this day of August 1997
----------
CHESAPEAKE CAPITAL CORP.
By:
Print Name:
cc: Dave Vogel
