-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IWFs8tmmbmKCgKKFQnMFAy5VyNVqrLZ+ypfBAB1c+6thQqEZu7k9jjwE1RbXMrTG Bn3DGrfKZEW+x53Jq4heSA== 0000873799-01-000002.txt : 20010228 0000873799-01-000002.hdr.sgml : 20010228 ACCESSION NUMBER: 0000873799-01-000002 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20010227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY DEAN WITTER SPECTRUM SELECT LP CENTRAL INDEX KEY: 0000873799 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 133619290 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-47829 FILM NUMBER: 1554955 BUSINESS ADDRESS: STREET 1: TWO WORLD TRADE CNTR - 62ND FLR STREET 2: C/O DEMETER MANAGEMENT CORP CITY: NEW YORK STATE: NY ZIP: 10048 BUSINESS PHONE: 2123928899 MAIL ADDRESS: STREET 1: C/O DEMETER MANAGEMENT CORP STREET 2: TWO WORLD TRADE CENTER CITY: NEW YORK STATE: NY ZIP: 10048 FORMER COMPANY: FORMER CONFORMED NAME: DEAN WITTER SPECTRUM SELECT LP DATE OF NAME CHANGE: 19980507 FORMER COMPANY: FORMER CONFORMED NAME: WITTER DEAN SELECT FUTURES FUND LP DATE OF NAME CHANGE: 19930328 424B3 1 0001.txt Morgan Stanley Dean Witter Spectrum Series Monthly Report January 2001 Dear Limited Partner: The Net Asset Value per Unit for each of the six Morgan Stanley Dean Witter Spectrum Funds as of January 31, 2001 was as follows: Funds N.A.V. % change for month Spectrum Commodity $ 7.52 -4.14% Spectrum Currency $11.05 -1.06% Spectrum Global Balanced $16.35 0.57% Spectrum Select $23.89 1.34% Spectrum Strategic $10.51 -0.96% Spectrum Technical $15.96 -0.83% Spectrum Commodity Spectrum Commodity decreased in value during January primarily due to losses recorded in the energy markets from long positions in natural gas futures as prices reversed their sharp upward trend amid bearish inventory data and moderate weather. In the agricultural markets, losses were experienced from long corn and soybean meal futures positions as prices moved lower due to favorable South American weather. A portion of these losses was offset by gains recorded in the soft commodities markets from long positions in cocoa futures as prices increased to a nine-month high supported by continuing concerns over falling production from Africa's Ivory Coast region. In the metals markets, profits were recorded from long aluminum futures positions as prices moved higher amid technically based buying. Spectrum Currency Spectrum Currency decreased in value during January primarily due to losses recorded early in the month from long positions in the South African rand, euro and Swiss franc versus the U.S. dollar as the value of these currencies weakened and the dollar gained support as several officials of the world's major central banks soothed fears of a hard economic landing in the U.S. A portion of these losses was offset by gains recorded from short positions in the Japanese yen as the value of the yen declined to a 17- month low versus the U.S. dollar on continuing concerns for the Japanese economy. Additional profits were recorded from short positions in the Singapore dollar as its value weakened relative to the U.S. dollar on the heels of the declining Japanese yen. Spectrum Global Balanced Spectrum Global Balanced increased in value during January primarily due to gains recorded in the global interest rate futures markets from long eurodollar futures positions. The upward move during January was largely attributed to a surprise interest rate cut by the U.S. Federal Reserve on January 3 and the subsequent anticipation of an additional rate cut by the Fed later in the month. Gains were also recorded from long positions in Australian, European and Japanese interest rate futures. In the global stock index futures markets, gains were recorded from long positions in DAX Index futures as the major stock markets in Europe moved higher after stronger-than-expected earnings reported in the U.S. boosted prices. A portion of these gains was offset by losses recorded early in the month in the currency markets from long positions in the South African rand as the value of the rand weakened versus the U.S. dollar primarily due to the weakness in the euro. In the metals markets, losses were incurred from short positions in copper and nickel futures as prices moved higher amid technically based factors. In the energy markets, losses were experienced from long positions in natural gas futures as prices reversed their sharp upward trend amid bearish inventory data and moderate weather. Spectrum Select Spectrum Select increased in value during January primarily due to gains recorded in the global interest rate futures markets from long eurodollar futures positions. The upward move during January was largely attributed to a surprise interest rate cut by the U.S. Federal Reserve on January 3 and the subsequent anticipation of an additional rate cut by the Fed later in the month. Gains were also recorded from long positions in Japanese government bond futures as prices moved higher on concerns regarding that country's economy. Additional profits were recorded from long positions in Australian and European interest rate futures. A portion of these gains was offset by losses recorded in the energy markets from long positions in natural gas futures as prices reversed their sharp upward trend amid bearish inventory data and moderate weather. Additional losses were recorded from short futures positions in crude oil and its related products as prices increased largely because of an announcement by OPEC that it would cut production. In the agricultural markets, losses were experienced from long corn futures positions as prices moved lower due to favorable South American weather. Spectrum Strategic Spectrum Strategic decreased in value during January primarily due to losses recorded early in the month in the energy markets from short futures positions in crude oil and its related products as prices increased largely because of an announcement by OPEC that it would cut production. Additional losses were recorded from long natural gas futures positions as prices reversed their sharp upward trend amid bearish inventory data and moderate weather. In the global stock index futures markets, losses were incurred early in the month from long NASDAQ and S&P 500 Index futures positions as prices moved lower as earnings warnings and lingering economic jitters took the luster off the Federal Reserve interest rate-cut rally on January 3. A portion of the Fund's overall losses for the month was offset by gains recorded in global interest rate futures markets from long positions in U.S. eurodollar futures. The upward move during January was largely attributed to a surprise interest rate cut by the U.S. Federal Reserve on January 3 and the subsequent anticipation of an additional rate cut by the Fed later in the month. Gains were also recorded from long positions in Japanese government bond futures as prices moved higher on concerns regarding that country's economy. Spectrum Technical Spectrum Technical decreased in value during January primarily due to losses recorded in the energy markets from short futures positions in crude oil and its related products as prices increased largely because of an announcement by OPEC that it would cut production. Additional losses were recorded from long natural gas futures positions as prices reversed their sharp upward trend amid bearish inventory data and moderate weather. In the agricultural markets, losses were experienced from long corn and soybean meal futures positions as prices moved lower due to favorable South American weather. In the currency markets, losses were experienced from long positions in the euro and Swiss franc versus the U.S. dollar as the value of these European currencies weakened and the dollar gained support as several officials of the world's major central banks soothed fears of a hard economic landing in the U.S. Offsetting currency gains were recorded from short positions in the Japanese yen as the value of the yen declined to a 17-month low versus the U.S. dollar. Gains were recorded in the global interest rate futures markets from long positions in Japanese government bond futures as prices moved higher on concerns regarding that country's economy. Additional profits were recorded from long positions in U.S. eurodollar futures. Should you have any questions concerning this report, please feel free to contact Demeter Management Corporation at Two World Trade Center, 62nd Floor New York , NY 10048, or your Morgan Stanley Dean Witter Financial Advisor. I hereby affirm, that to the best of my knowledge and belief, the information contained in this report is accurate and complete. Past performance is not a guarantee of future results. Sincerely, Robert E. Murray Chairman Demeter Management Corporation General Partner Historical Fund Performance Presented below is the percentage change in Net Asset Value per Unit from the start of each calendar each the Fund has traded. Also provided is the inception-to-date return and the annualized return since inception for each Fund. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
Funds Year Return Spectrum Commodity 1998 -34.3% 1998 15.8% 2000 3.2% 2001 (1 month) -4.2% Inception-to-Date Return: -24.8% Annualized Return: -8.8% ___________________________________________________________________________ __________ Spectrum Currency 2000 (6 months) 11.7% 2001 (1 month) -1.1% Inception-to-Date Return: 10.5% ___________________________________________________________________________ ___________ Spectrum Global Balanced 1994 (2 months) -1.7% 1995 22.8% 1996 -3.6% 1997 18.2% 1999 16.4% 1999 0.8% 2000 0.9% 2001 (1 month) 0.6% Inception-to-Date Return: 63.5% Annualized Return: 8.2% ___________________________________________________________________________ __________ Spectrum Select 1991 (5 months) 31.2% 1992 -14.4% 1993 41.6% 1994 -5.1% 1995 23.6% 1996 5.3% 1997 6.2% 1998 14.2% 1999 - -7.6% 2000 7.1% 2001 ( 1 month) 1.4% Inception-to-Date Return: 138.9% Annualized Return 9.6% ___________________________________________________________________________ __________
Spectrum Strategic 1994 (2 months) 0.1% 1995 10.5% 1996 -3.5% 1997 0.4% 1998 7.8% 1999 37.2% 2000 -33.1% 2001 (1 month) -0.9% Inception-to-Date Return: 5.1% Annualized Return: 0.8% ___________________________________________________________________________ ________________________________ Spectrum Technical 1994 (2 months) -2.2% 1995 17.6% 1996 18.3% 1997 7.5% 1998 10.2% 1999 - -7.5% 2000 7.8% 2001 (1 month) -0.8% Inception-to-Date Return: 59.5% Annualized Return: 7.8%
Morgan Stanley Dean Witter Spectrum Series Statements of Operations For the Month Ended January 31, 2001 (Unaudited)
Morgan Stanley Dean Witter Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Commodity Spectrum Currency _ Spectrum Global Balanced Percentage of Percentage of Percentage of January 1, 2001 January 1, 2001 January 1, 2001 Beginning Beginning Beginning Amount Net Asset Value Amount Net Asset Value Amount Net Asset Value $ % $ % $ % REVENUES Trading profit (loss): Realized 48,435 0.24 (6,493) (0.04) 997,430 1.78 Net change in unrealized (865,590) (4.29) (129,662) (0.83) (703,659) (1.26) Total Trading Results (817,155) (4.05) (136,155) (0.87) 293,771 0.52 Interest Income (DWR) 84,376 0.42 60,484 0.39 294,436 0.53 Total Revenues (732,779) (3.63) (75,671) (0.48) 588,207 1.05 EXPENSES Brokerage fees (DWR, MS & Co., MSIL) 61,442 0.30 60,211 0.38 214,204 0.38 Management fees (Note 2) 42,083 0.21 26,179 0.17 58,208 0.10 Incentive fees - - 4,839 0.03 - - . Total Expenses 103,525 0.51 91,229 0.58 272,412 0.48 NET INCOME (LOSS) (836,304) (4.14) (166,900) (1.06) 315,795 0.57 Morgan Stanley Dean Witter Spectrum Series Statements of Changes in Net Asset Value For the Month Ended January 31, 2001 (Unaudited) Morgan Stanley Dean Witter Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Commodity Spectrum Currency Spectrum Global Balanced . Units Amount Per Unit Units Amount Per Unit Units Amount Per Unit $ $ $ $ $ $ Net Asset Value, January 1, 2001 2,573,788.319 20,199,981 7.85 1,406,451.233 15,707,232 11.17 3,437,465.006 55,879,750 16.26 Net Income (Loss) - (836,304) (0.33) - (166,900) (0.12) - 315,795 0.09 Redemptions (72,526.562) (545,400) 7.52 (720.000) (7,956) 11.05 (35,761.831) (584,706) 16.35 Subscriptions 22,534.309 169,458 7.52 194,367.715 2,147,763 11.05 54,940.741 898,281 16.35 Net Asset Value, January 31, 2001 2,523,796.066 18,987,735 7.52 1,600,098.948 17,680,139 11.05 3,456,643.916 56,509,120 16.35 The accompanying notes are an integral part of these financial statements.
Morgan Stanley Dean Witter Spectrum Series Statements of Operations For the Month Ended January 31, 2001 (Unaudited) Morgan Stanley Dean Witter Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Select Spectrum Strategic _ Spectrum Technical Percentage of Percentage of Percentage of January 1, 2001 January 1, 2001 January 1, 2001 Beginning Beginning Beginning Amount Net Asset Value Amount Net Asset Value Amount Net Asset Value $ % $ % $ % REVENUES Trading profit (loss): Realized (3,974) (0.01) 506,090 0.68 4,213,914 1.57 Net change in unrealized 3,897,040 1.77 (880,288) (1.19) (5,330,940) (1.99) Total Trading Results 3,893,066 1.76 (374,198) (0.51) (1,117,026) (0.42) Interest Income (DWR) 939,351 0.43 312,058 0.42 1,141,085 0.43 Total Revenues 4,832,417 2.19 (62,140) (0.09) 24,059 0.01 EXPENSES Brokerage fees (DWR, MS & Co., MSIL) 1,333,577 0.60 448,500 0.60 1,619,971 0.61 Management fees (Note 2) 551,825 0.25 204,732 0.27 620,792 0.23 Total Expenses 1,885,402 0.85 653,232 0.87 2,240,763 0.84 NET INCOME (LOSS) 2,947,015 1.34 (715,372) (0.96) (2,216,704) (0.83) Morgan Stanley Dean Witter Spectrum Series Statements of Changes in Net Asset Value For the Month Ended January 31, 2001 (Unaudited) Morgan Stanley Dean Witter Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Select Spectrum Strategic Spectrum Technical . Units Amount Per Unit Units Amount Per Unit Units Amount Per Unit $ $ $ $ $ $ Net Asset Value, January 1, 2001 9,363,087.227 220,729,969 23.57 6,994,953.429 74,234,449 10.61 16,670,218.496 268,133,092 16.08 Net Income (Loss) - 2,947,015 0.32 - (715,372) (0.10) - (2,216,704) (0.13) Redemptions (70,772.298) (1,690,750) 23.89 (131,757.716) (1,384,774) 10.51 (161,391.528) (2,574,195) 15.95 Subscriptions 120,291.460 2,873,763 23.89 91,347.410 960,061 10.51 208,121.893 3,319,544 15.95 Net Asset Value, January 31, 2001 9,412,606.389 224,859,997 23.89 6,954,543.123 73,094,364 10.51 16,716,948.861 266,661,737 15.95 The accompanying notes are an integral part of these financial statements. Morgan Stanley Dean Witter Spectrum Series Notes to Financial Statements (Unaudited) 1. Summary of Significant Accounting Policies Organization - Morgan Stanley Dean Witter Spectrum Commodity L.P. ("Spectrum Commodity," formerly Morgan Stanley Tangible Asset Fund L.P.), Morgan Stanley Dean Witter Spectrum Currency L.P. ("Spectrum Currency"), Morgan Stanley Dean Witter Spectrum Global Balanced L.P. ("Spectrum Global Balanced"), Morgan Stanley Dean Witter Spectrum Select L.P. ("Spectrum Select"), Morgan Stanley Dean Witter Spectrum Strategic L.P. ("Spectrum Strategic") and Morgan Stanley Dean Witter Spectrum Technical L.P. ("Spectrum Technical"), (individually, a "Partnership", or collectively, the "Partnerships"), are limited partnerships organized to engage primarily in the speculative trading of futures, forwards, and options contracts on physical commodities and other commodity interests, including, but not limited to foreign currencies, financial instruments, metals, energy and agricultural products (collectively, "futures interests"). The general partner for each Partnership is Demeter Management Corporation ("Demeter"). The non-clearing commodity broker for the Partnerships is Dean Witter Reynolds, Inc. ("DWR"). The clearing commodity brokers for the Partnerships are Morgan Stanley & Co. Incorporated ("MS & Co.") and Morgan Stanley & Co. International ("MSIL") which provide clearing and execution services. Morgan Stanley Dean Witter Commodities Management, Inc. ("MSCM") is the trading advisor to Spectrum Commodity. Demeter, DWR, MS & Co., MSCM and MSIL are wholly-owned subsidiaries of Morgan Stanley Dean Witter & Co. Demeter is required to maintain a 1% minimum interest in the equity of each Partnership and income (losses) are shared by Demeter and the Limited Partners based upon their proportional ownership interests. Use of Estimates - The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the reported amounts in the financial statements and related disclosures. Management believes that the estimates utilized in the preparation of the financial statements are prudent and reasonable. Actual results could differ from those estimates. Revenue Recognition - Futures interests are open commitments until settlement date. They are valued at market on a daily basis and the resulting net change in unrealized gains and losses is reflected in the changes in unrealized profits (losses) on open contracts from one period to the next in the statements of operations. Monthly, DWR pays interest income on 80% of the month's average daily "Net Assets" (as defined in the limited partnership agreements) of Spectrum Commodity, Spectrum Currency, Spectrum Select, Spectrum Strategic and Spectrum Technical, and 100% in the case of Spectrum Global Balanced. The interest rates used are equal to a prevailing rate on U.S. Treasury bills. For purposes of such interest payments, Net Assets do not include monies due the Partnerships on futures interests, but not actually received. Net Income (Loss) per Unit - Net income (loss) per unit of limited partnership interest ("Unit(s)") is computed using the weighted average number of Units outstanding during the period. Brokerage and Related Transaction Fees and Costs - The brokerage fees for Spectrum Commodity, Spectrum Currency, and Spectrum Global Balanced are accrued at a flat monthly rate of 1/12 of 4.6% (a 4.6% annual rate) of Net Assets as of the first day of each month. Morgan Stanley Dean Witter Spectrum Series Notes to Financial Statements (Continued) Brokerage fees for Spectrum Select, Spectrum Strategic and Spectrum Technical are accrued at a flat monthly rate of 1/12 of 7.25% (a 7.25% annual rate) of Net Assets as of the first day of each month. Such fees currently cover all brokerage commissions, transaction fees and costs and ordinary administrative and continuing offering expenses. Operating Expenses - The Partnerships incur monthly management fees and may incur incentive fees. All common administrative and continuing offering expenses including legal, auditing, accounting, filing fees and other related expenses are borne by DWR through the brokerage fees paid by each Partnership. Income Taxes - No provision for income taxes has been made in the accompanying financial statements, as partners are individually responsible for reporting income or loss based upon their respective share of each Partnership's revenues and expenses for income tax purposes. Distributions - Distributions, other than redemptions of Units, are made on a pro-rata basis at the sole discretion of Demeter. No distributions have been made to date. Continuing Offering - Units of each Partnership are offered at a price equal to 100% of the Net Asset Value per Unit as of the close of business on the last day of the month. No selling commissions or charges related to the continuing offering of Units are borne by the Limited Partners or the Partnership. DWR will pays all such costs. Redemptions - Limited Partners may redeem some or all of their Units at 100% of the Net Asset Value Per Unit as of the end of the last day of any month that is at least six months after the closing at which a person becomes a Limited Partner, upon five business days advance notice by redemption form to Demeter. Thereafter, Units redeemed on or prior to the last day of the twelfth month after such Units were purchased will be subject to a redemption charge equal to 2% of the Net Asset Value of a Unit on the date of such redemption. Units redeemed after the last day of the twelfth month and on or prior to the last day of the twenty-fourth month after which such Units were purchased will be subject to a redemption charge equal to 1% of the Net Asset Value of a Unit on the date of such redemption. Units redeemed after the last day of the twenty-fourth month after which such Units were purchased will not be subject to a redemption charge. The foregoing redemptions charges will be paid to DWR. Redemptions must be made in whole Units, in a minimum amount of 50 Units, unless a Limited Partner is redeeming his entire interest in a Partnership. Exchanges - On the last day of the first month which occurs more than six months after a person first becomes a Limited Partner in any of the Partnerships, and at the end of each month thereafter, Limited Partners may exchange their investment among the Partnerships (subject to certain restrictions outlined in the Limited Partnership Agreements) without paying additional charges. Dissolution of the Partnership - Spectrum Commodity will terminate on December 31, 2027, Spectrum Currency, Spectrum Global Balanced, Spectrum Strategic and Spectrum Technical will terminate on December 31, 2035 and Spectrum Select will terminate on December 31, 2025 regardless of financial condition at such time, or at an earlier date under certain conditions as defined in each Partnership's Limited Partnership Agreement. Morgan Stanley Dean Witter Spectrum Series Notes to Financial Statements (Continued) 2. Related Party Transactions Spectrum Commodity and Spectrum Currency pay brokerage fees to MS & Co. and MSIL. Spectrum Global Balanced, Spectrum Select, Spectrum Strategic and Spectrum Technical each pay brokerage fees to DWR as described in Note 1. Spectrum Commodity pays management fees and incentive fees (if applicable) to MSCM. The Partnerships' cash is on deposit with DWR, MS & Co. and MSIL in futures interests trading accounts to meet margin requirements as needed. DWR and MS & Co. pay interest on these funds as described in Note 1. 3. Trading Advisors Demeter, on behalf of each Partnership, retains certain commodity trading advisors to make all trading decisions for the Partnerships. The trading advisors for each Partnership are as follows: Morgan Stanley Dean Witter Spectrum Commodity L.P. Morgan Stanley Dean Witter Commodities Management Inc. Morgan Stanley Dean Witter Spectrum Currency L.P. John W. Henry & Company, Inc. ("JWH") Sunrise Capital Partners, LLC ("Sunrise") Morgan Stanley Dean Witter Spectrum Global Balanced L.P. RXR, Inc. Morgan Stanley Dean Witter Spectrum Select L.P. EMC Capital Management, Inc. Rabar Market Research, Inc. Sunrise Capital Management, Inc. Morgan Stanley Dean Witter Spectrum Strategic L.P. Allied Irish Capital Management, Ltd. ("AICM") Blenheim Investments, Inc. ("Blenheim") Eclipse Capital Management, Inc. ("Eclipse") Morgan Stanley Dean Witter Spectrum Technical L.P. Campbell & Company, Inc.) ("Campbell") Chesapeake Capital Corporation ("Chesapeake") John W. Henry & Company, Inc. ("JWH") Compensation to the trading advisors by the Partnerships consists of a management fee and an incentive fee as follows: Management Fee - The management fee for Spectrum Commodity is accrued at a rate of 5/24 of 1% of Net Assets on the first day of each month (a 2.5% annual rate). The management fee for Spectrum Currency is accrued at a rate of 1/12 of 2% of Net Assets on the first day of each month (a 2% annual rate). The management fee for Spectrum Global Balanced is accrued at a rate of 5/48 of 1% of Net Assets on the first day of each month (a 1.25% annual rate). Morgan Stanley Dean Witter Spectrum Series Notes to Financial Statements (Concluded) The management fee for Spectrum Select is accrued at a rate of 1/4 of 1% of Net Assets on the first day of each month (a 3% annual rate). The management fees for Spectrum Strategic are accrued at a rate of 1/12 of 4% of Net Assets allocated to Blenheim on the first day of each month, and 1/12 of 3% of Net Assets allocated to AICM and Eclipse on the first day of each month (annual rates of 4% and 3%, respectively). The management fees for Spectrum Technical are accrued at a rate of 1/12 of 2% of Net Assets allocated to JWH on the first day of each month, 1/12 of 3% of Net Assets allocated to Campbell on the first day of each month and 1/12 of 4% of Net Assets allocated to Chesapeake on the first day of each month (annual rates of 2%, 3% and 4% respectively). Incentive Fee - Spectrum Commodity pays an annual incentive fee equal to 17.5% of the trading profits as of the end of each calendar year. Spectrum Currency, Spectrum Global Balanced, Spectrum Select and Spectrum Strategic each pay a monthly incentive fee equal to 20% of the trading profits experienced with respect to each trading advisor's allocated Net Assets as of the end of each calendar month. Spectrum Technical pays a monthly incentive fee equal to 20% of the trading profits experienced with respect to the Net Assets allocated to Campbell and JWH and 19% of the trading profits experienced with respect to the Net Assets allocated to Chesapeake as of the end of each calendar month. Trading profits for the Partnership's represent the amount by which profits from futures, forward and options trading exceed losses after brokerage and management fees are deducted. For all Partnerships, when trading losses are incurred, no incentive fees will be paid in subsequent months until all such losses are received. Cumulative trading losses are adjusted on a pro-rata basis for the net amount of each months subscriptions and redemptions. -----END PRIVACY-ENHANCED MESSAGE-----