<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 (FEE REQUIRED)

For the fiscal year ended     DECEMBER 31, 1997
                          ---------------------------

                                      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 33-33982
                                               --------

                         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(b) 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)

              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 stock held by non-affiliates of
the registrant.  The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, 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. 33-33982, AS AMENDED,
--------------------------------------------------------------------------------
DATED JUNE 22, 1990 - PART IV
-----------------------------
SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT DATED AS OF MAY 22,
-----------------------------------------------------------------------------
1996 -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 a "Limited Partner") of the Partnership.

Second Management LLC, formerly Second Management Company, Inc., a Delaware
limited liability corporation formed on April 4, 1996 (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.

During the continuing offering, Units are offered for sale 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 $88,989, $100,679 and $100,409 for the years
ended December 31, 1997, 1996 and 1995.

Compensation of the Trading Advisor.  Pursuant to the Management Agreement, the
-----------------------------------
Partnership pays TIC a quarterly incentive fee equal to 12% of the "Net 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 1/6 of 1% 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", "Net 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 5% 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 and foreign exchange
transactions fees (estimated at up to approximately 3% 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.
<PAGE>

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, Smith Barney Inc., Lehman
Brothers Inc., Morgan Stanley & Co. Incorporated, Morgan Stanley & Co
International Limited, Daiwa Securities America Inc., Goldman, Sachs & Co.,
Cargill Investor Services, Inc., J.P. Morgan Futures, Inc., Merrill Lynch
Futures Inc., Greenwich Capital Markets, Inc., Greenwich NatWest Futures, E.D. &
F. Man International Inc. and Salomon Brothers Inc.  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.

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.
<PAGE>

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.

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.
<PAGE>

The General Partner and TIC have a conflict of interest in managing the
Partnership because BPL receives brokerage commissions on foreign exchange
forward contracts executed for the Partnership.  There is no affiliation, and
consequently there is no conflict of interest, between the clearing brokers and
the General Partner, TIC or BPL.

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 effective date of the registration statement of the
     ----------------
Partnership (Commission file number 33-33982) was June 22, 1990.  Through
January 1, 1998, an aggregate of $19,199,091 of Units had been sold.

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

<TABLE>
<CAPTION>
                              1997             1996              1995             1994            1993
                          ----------      -----------        ----------       ----------       ----------
<S>                      <C>              <C>                <C>             <C>               <C>
Revenues                 $ 3,362,714      $ 1,417,232        $2,657,575       $1,028,281       $  532,032
Expenses                     649,909          596,480           608,851          502,809          367,647
                         -----------      -----------        ----------       ----------       ----------

Net Income               $ 2,712,805      $   820,752        $2,048,724       $  525,472       $  164,385
                         -----------      -----------        ----------       ----------       ----------

Total Assets             $17,166,451      $12,138,706        $9,323,890       $7,383,887       $9,995,662
                         -----------      -----------        ----------       ----------       ----------
Partners' Capital        $ 9,495,687      $ 8,526,366        $8,113,393       $6,711,510       $8,177,786
                         -----------      -----------        ----------       ----------       ----------

Units Outstanding          2,382.864        2,718.466         2,833.134        3,052.721        3,975.185
                         -----------      -----------        ----------       ----------       ----------

NAV Per Unit             $  3,984.99      $  3,136.46        $ 2,863.75       $ 2,198.53       $ 2,057.21
                         -----------      -----------        ----------       ----------       ----------
Change in NAV Per Unit   $    848.53      $    272.71        $   665.22       $   141.32       $    37.92
                         -----------      -----------        ----------       ----------       ----------
Net Income Per Unit      $    845.18      $    246.06        $   684.52       $   149.12       $    40.02
                         -----------      -----------        ----------       ----------       ----------
</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, 1998, the Partnership received total Limited Partner contributions of
$19,199,091.  Total Limited Partner withdrawals for the same period were
$13,752,628.  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
Partnership as of March 1, 1998 was approximately $783,000, representing
approximately 5.7% of the Partnership's equity.  At March 1, 1998, the
Partnership had a total of 109 Partners.
<PAGE>

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, 1998 of $1,167,293.  The TIC 401(k)
Plan's equity in the Partnership as of March 1, 1998 was approximately
$1,482,000, representing approximately 10.9% of the Partnership equity or
approximately 12.9% 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.  The Partnership invests in U.S. Government obligations approved by the
various contract markets to fulfill initial margin requirements.  As of December
31, 1997 and 1996, U.S. Government obligations with varying maturities through
March 1998 and December 1997, represented approximately 44% and 72% of the total
assets of the Partnership.  The percentage that U.S. Government obligations
bears to the total assets varies daily as the market value of commodity
interests contracts changes, as Government obligations are purchased or mature,
and as the Partnership receives Partner's contributions or redeems 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 own such liquid assets for margin purposes.
Interest income for the years ended December 31, 1997, 1996 and 1995 was
$571,106, $545,860 and $409,148 which represented 4.9%, 5.2% and 5.4% 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 41% and 18% of the Partnership's total assets as of
December 31, 1997 and 1996.  The cash and U.S. Government obligations held at
clearing brokers and banks satisfy the Partnership's need for cash on both a
short term and long term basis.

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.
<PAGE>

(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.
     ---------------------

As of December 31, 1997, 1996 and 1995, the Net Asset Value per Unit was
$3,984.99, $3,136.46 and $2,863.75.  This represents an increase of 27.05% or
$848.53 per Unit for the year ended December 31, 1997 compared to an increase of
9.52% or $272.71 per Unit for the year ended December 31, 1996 and an increase
of 30.26% or $665.22 per Unit for the year ended December 31, 1995.

Net trading gains and losses 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 trading gains and losses, net
of commissions and fees, for the years ended December 31, 1997, 1996 and 1995:

<TABLE>
<CAPTION>
                                                 1997           1996             1995
                                                -------        -------          -------
<S>                                             <C>            <C>              <C>
Exchange traded contracts:
Interest rate futures and option contracts-
    Domestic                                     $  982          $ 726           $  (48)
    Foreign                                         413           (450)              18

   Foreign exchange contracts                       373            591            1,077

   Equity index contracts-
    Domestic                                         (4)          (544)            (266)
    Foreign                                         173            399              865

Over-the-counter contracts:
   Forward currency contracts                       307            131              414
   Commodity swaps                                  (51)            14                -
   Equity index swaps                               (78)             -                -
   Interest rate swaps                              (64)             -                -
Non-derivative financial instruments                552           (119)              29
                                                 ------          -----           ------
       Total                                     $2,603          $ 748           $2,089
                                                 ======          =====           ======
</TABLE>
<PAGE>

Since the Partnership is a speculative trader in the commodity and futures
markets, current year results are not comparable to results generated in
previous years. The Partnership's net trading gains and losses represented a
return on average monthly net assets of 22.3%, 6.8% and 27.4% for the years
ended 1997, 1996 and 1995. Brokerage commissions and fees were 1.6%, 1.1% and
2.1% of average monthly net assets for the years end 1997, 1996 and 1995.

Incentive fees are paid quarterly based on Net Trading Profits as described in
the Limited Partnership Agreement.  For the years ended December 31, 1997, 1996
and 1995, incentive fees were 5.9%, 22.2% and 9.3% of trading gains and losses,
net of commissions and fees.  For the years ended December 31, 1996, incentive
fees were greater than 12% of Trading Profits due to the losses incurred in the
second half of 1996.  These trading losses also resulted in lower incentive fees
as a percentage of Trading Profits during the year ended December 31, 1997
because trading losses need to be recouped by the Partnership prior to the
Partnership's payment of incentive fees.

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.

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

See attached financial statements for:

     Statements of Financial Condition as of December 31, 1997 and 1996

     Statements of Income for the years ended December 31, 1997, 1996 and 1995

     Statements of Changes in Partners' Capital for the years ended December 31,
     1997, 1996 and 1995

     Notes to Financial Statements, December 31, 1997, 1996 and 1995

     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 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
<PAGE>

                                   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 sole trading advisor of Tudor Futures Fund,
a New York limited partnership which engages in the speculative trading of
commodity interest contracts and of The Raptor Global Fund L.P. ("Raptor L.P."),
a Delaware limited partnership which primarily engages in the speculative
trading of equity securities interests, and is the sole trading advisor of The
Raptor Global Fund Ltd. ("Raptor Ltd.") and The North End Value Fund Ltd.
("North End"), each of which is a Cayman Islands company which engages primarily
in the speculative trading of equity securities interests.  TIC also acts as
investment manager of Tudor Private Equity Fund L.P., a Delaware limited
partnership which makes privately negotiated investments in both private
companies and publicly traded companies based or principally operating in the
United States and Canada.  Tudor BVI Futures, Ltd. ("Tudor BVI"), a British
Virgin Islands company, is an investment fund that trades commodities and
securities under the direction of TIC.  A portion of the assets of Tudor BVI are
managed by Tudor Capital (U.K.), L.P. ("Tudor Capital"), a United Kingdom
affiliate of TIC, pursuant to a sub-advisory agreement between TIC and Tudor
Capital.  Tudor Capital is also the investment manager of The Upper Mill Capital
Appreciation Fund Ltd. (the "Upper Mill Fund"), a Cayman Islands investment fund
that trades securities and derivatives.  A portion of the assets of the Upper
Mill Fund are managed by TIC pursuant to a sub-advisory agreement between Tudor
Capital and TIC.

Paul Tudor Jones II, age 43, 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 Coffee, Sugar, and Cocoa Exchange, Inc.; the New
York Cotton Exchange; the Chicago Board of Trade and the Chicago Mercantile
Exchange.  In addition, Mr. Jones is a member of the Board of Managers of the
New York Cotton Exchange and served as Chairman of that exchange from August
1992 through June 1995.  Mr. Jones is First Vice Chairman of the Financial
Instruments Exchange, a division of the New York Cotton Exchange.  Mr. Jones is
also the Founder and a Director of The Robin Hood Foundation, a charitable
foundation.
<PAGE>

Mark F. Dalton, age 47, is President of the General Partner and President and a
Director of TIC.  Prior to joining Tudor as President in September 1988, Mr.
Dalton was employed by Kidder, Peabody & Co. Incorporated where he served in
various senior positions including Chief Financial Officer.  Mr. Dalton is also
a Director of Cathay Investment Fund Limited, an investment fund traded on the
Hong Kong Stock Exchange, and various private companies in the United States,
Europe and Asia.  Mr. Dalton does not participate in the commodity interests
trading of customer accounts for the General Partner, TIC or their affiliates.

John G. Macfarlane, age 43, is the Chief Operating Officer of the General
Partner and 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 45, is a Vice President and the General Counsel and
Secretary of the General Partner and a Vice President, the General Counsel,
Corporate Secretary and a Director of TIC.  Mr. Paul has been a Vice President,
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 42, is a Vice President and the Chief Financial Officer and a
Director of the General Partner and 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.  From January 1993 until February 1994, Mr. Pickard was Vice President and
Treasurer of TIC.  Mr. Pickard was Chief Operating Officer of Buffalo Partners
from April 1992 until December 1992 and was Chief Financial Officer of William
E. Simon & Sons from March 1989 until April 1992.  Prior thereto, Mr. Pickard
held various positions at Kidder, Peabody & Co. Incorporated, including Director
of Compliance, Internal Audit and Taxes.  Mr. Pickard does not participate in
the trading of customer accounts for the General Partner, TIC or their
affiliates.

James J. Pallotta, age 40, is a Vice President and a Director of TIC. Mr.
Pallotta was previously a principal portfolio manger at Essex Investment
Management Company, Inc. ("Essex").  He joined Essex in 1983 as a Vice
President, became a Senior Vice President and the Director of Research in 1989
and commenced actively directing the management of client funds in January 1989.
He became a member of the Board of Directors of Essex in 1990.  Mr. Pallotta
does not participate in the trading of customer accounts of the General Partner.

Robert P. Forlenza, age 42, is a Vice President and Director of TIC.  Prior to
joining TIC in January 1995, Mr. Forlenza was a Vice President of Carlisle
Capital Corporation, a private leveraged buyout firm.  Mr. Forlenza does not
participate in the trading of customer accounts of the General Partner.

David E. Allanson, age 42, is a Director of TIC and a Vice President of the
affiliates of TIC which maintain principal offices in Surrey, England.  Prior to
joining TIC, Mr. Allanson was a Senior Vice President of Nationsbank/CRT.  Mr.
Allanson does not participate in the day-to-day management of TIC.
<PAGE>

Richard L. Fisher, age 44, 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 will 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.  Mr. Jones, the Chairman, Chief
Executive Officer and controlling shareholder of the General Partner receives no
compensation from the Partnership.  TIC earned $372,809, $372,402 and $349,981
in incentive and management fees from the Partnership during 1997, 1996 and
1995.
<PAGE>

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

  (a)  Security Ownership of Certain Beneficial Owners.  As of March 1, 1998,
       -----------------------------------------------
  the only Unit holders who owned more than five percent (5%) of the total Units
  outstanding were:
<TABLE>
<CAPTION>
NAME                                  ADDRESS               NO. UNITS  PERCENT
------------------------  --------------------------------  ---------  --------
<S>                       <C>                               <C>        <C>

Tudor 401k Savings and    One Liberty Plaza                   344.527     10.9%
Profit-Sharing Plan       51st Floor
                          New York, NY 10006

Filomena DiSisto          c/o Tudor Investment Corporation    215.412      6.3%
                          600 Steamboat Road
                          Greenwich, CT 06830

Second Management LLC     600 Steamboat Road                  196.581      5.7%
                          Greenwich, CT 06830

James J. Pallotta (1)     c/o Tudor Investment Corporation    178.754      5.2%
                          600 Steamboat Road
                          Greenwich, CT 06830

Mark F. Dalton (1)        c/o Tudor Investment Corporation    175.659      5.1%
                          600 Steamboat Road
                          Greenwich, CT 06830
</TABLE>

(1) Messrs. Pallotta and Dalton are principals and Directors of TIC.  In
addition, Mr. Dalton is a principal of the General Partner.

   (b)  Security Ownership of Management.  The General Partner and the executive
        --------------------------------
        officers of the General Partner own approximately 14% of the total Units
        outstanding as of March 1, 1998. In addition to the persons identified
        in the table above, Mark Pickard and Andrew S. Paul, each of whom is a
        principal of both the General Partner and TIC, owned 81.333 Units (2.4%)
        and 25.094 Units (0.7%), respectively, as of such date.

   (c)  Changes in Control.  There have been no changes in control of the
        ------------------
        Partnership.
<PAGE>

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 $372,809, $372,402 and $349,981 for the years ended
               December 31, 1997, 1996 and 1995, which were in excess of 10% of
               the Partnership's total revenue of $3,362,714, $1,417,232 and
               $2,657,575 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, 1997 and 1996
          For the years ended December 31, 1997, 1996 and 1995:
               Statements of Income
               Statements of Changes in Partners' Capital
          Notes to Financial Statements, December 31, 1997, 1996 and 1995

     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(a)  Form of Selling Agreement among Seventh Management, Inc.,
                  Second Management Company, Inc., and the Partnership (not in
                  effect).

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

         3.01(a)  Form of Limited Partnership Agreement of the Partnership.

         3.01(b)  Form of First Amended and Restated Limited Partnership
                  Agreement of the Partnership.

         3.01(c)  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.
<PAGE>

         10.01(a)  Forms of Customer Agreement between the Partnership and each
                   of (i) Morgan Stanley & Co. Incorporated, (ii) Prudential
                   Securities Incorporated, and (iii) Shearson Lehman Brothers
                   Inc. (not in effect).

         10.01(b)  Forms of Customer Agreement between the Partnership and each
                   of (i) Daiwa Securities America, Inc. and (ii) Goldman, Sachs
                   & Co.

         10.01(c)  Forms of Customer Agreement between the Partnership and each
                   of (i) Cargill Investor Services, Inc. and (ii) J.P. Morgan
                   Futures, Inc.

         10.01(d)  Form of Customer Agreement between the Partnership and
                   Salomon Brothers Inc.

         10.01(e)  Forms of Customer Agreement between the Partnership and each
                   of (i) BZW Futures and (ii) Merrill Lynch Futures Inc.

         10.01(f)  Forms of Customer Agreement between the Partnership and each
                   of (i) Morgan Stanley & Co. International Limited, (ii) E. D.
                   & F. Man International Inc., (iii) Lehman Brothers Inc., (iv)
                   CS First Boston Corporation, and (v) Bear Stearns Securities
                   Corp.

         10.02(a)  Form of Customer Foreign Exchange Agreement between the
                   Partnership and Bellwether Partners Inc.

         10.02(b)  Form of Amendment to Customer Foreign Exchange Agreement
                   between the Partnership and Bellwether Partners Inc.

         10.02(c)  Form of Customer Foreign Exchange Agreement between the
                   Partnership and Commodities Corporation (U.S.A.) N.V. (not in
                   effect).

         10.02(d)  Form of Guarantee by the Partnership in favor of counterparty
                   of Bellwether Partners Inc. (not in effect).

         10.02(e)  Form of Contribution Agreement among the Partnership,
                   Bellwether Partners Inc., Tudor Futures Fund, The American
                   Eagle Fund I L.P., Tudor BVI Futures, Ltd., Tudor G-5 Ltd.,
                   Tudor G-5 Unit Trust, and Galloway Partners, L.P. (not in
                   effect).

         10.03(a)  Form of Management Agreement among the Partnership, Second
                   Management Company, Inc., and Tudor Investment Corporation.

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

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

         10.04(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.

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

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

         10.05(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, 1997.
<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 MANAGMENT LLC,
                              General Partner



                         By:
                             ______________________________
                              Mark F. Dalton
                              President

DATE:   March 27, 1998

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 27, 1998
     Paul T. Jones, II, Chairman and
     Chief Executive Officer


By:  ___________________________         March 27, 1998
     Mark F. Dalton, President


By:  ___________________________         March 27, 1998
     John Macfarlane,
     Chief Operating Officer


By:  ____________________________        March 27, 1998
     Mark Pickard, Vice President and
     Chief Financial Officer


By:  ____________________________        March 27, 1998
     Andrew S. Paul, Vice President,
     General Counsel and Secretary
<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 MANAGMENT LLC,
                              General Partner


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

DATE:  March 27, 1998


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:    /s/ Paul T. Jones, II             March 27, 1998
       --------------------------------
       Paul T. Jones, II, Chairman and
           Chief Executive Officer


By:    /s/ Mark F. Dalton                March 27, 1998
       --------------------------------
       Mark F. Dalton, President


By:    /s/ John Macfarlane               March 27, 1998
       --------------------------------
       John Macfarlane,
       Chief Operating Officer


By:    /s/ Mark Pickard                  March 27, 1998
       --------------------------------
       Mark Pickard, Vice President and
       Chief Financial Officer


By:    /s/ Andrew S. Paul                March 27, 1998
       --------------------------------
       Andrew S. Paul, Vice President,
       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, 1997 and
1996, and the related statements of income and changes in partners' capital for
each of the three years in the period ended December 31, 1997.  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 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
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, 1997 and 1996, and the results of its operations for each of
the three years in the period ended December 31, 1997 in conformity with
generally accepted accounting principles.



/s/ Arthur Andersen LLP


New York, New York
March 3, 1998
<PAGE>

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

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

                           DECEMBER 31, 1997 AND 1996
                           --------------------------

<TABLE>
<CAPTION>
                                  ASSETS                                             1997             1996
                                  ------                                             ----             ----
<S>                                                                          <C>              <C>
CASH                                                                             $ 7,088,210      $ 2,220,395

EQUITY IN COMMODITY TRADING ACCOUNTS:
 Due from brokers                                                                  2,264,274        1,005,276
 U.S. Government obligations                                                       7,477,448        8,773,008
 Net unrealized gain on open commodity interests                                     211,519          114,755
                                                                                 -----------      -----------
         Total equity in commodity trading accounts                                9,953,241        9,893,039
                                                                                 -----------      -----------

SUBSCRIPTION RECEIVABLE                                                              125,000           -

OTHER ASSETS                                                                          -                25,272
                                                                                 -----------      -----------
         Total assets                                                            $17,166,451      $12,138,706
                                                                                 ===========      ===========
<CAPTION>
                     LIABILITIES AND PARTNERS' CAPITAL
                     ---------------------------------
LIABILITIES:
<S>                                                                          <C>              <C>
 Pending partner additions                                                       $ 4,160,168      $ 1,218,064
 Redemptions payable                                                               3,339,382        2,327,305
 Incentive fee payable                                                                49,172             -  -
 Management fee payable                                                               56,054           17,014
 Accrued professional fees and other                                                  65,988           49,957
                                                                                 -----------      -----------
         Total liabilities                                                         7,670,764        3,612,340
                                                                                 -----------      -----------

PARTNERS' CAPITAL:
 Limited partners, 10,000 units authorized and 2,186.284
 and 2,521.886 units outstanding as of December 31, 1997 and 1996.                 8,712,315        7,909,798
 General Partner, 196.580 units outstanding as of
 December 31, 1997 and 1996.                                                         783,372          616,568
                                                                                 -----------      -----------
         Total partners' capital                                                   9,495,687        8,526,366
                                                                                 -----------      -----------
         Total liabilities and partners' capital                                 $17,166,451      $12,138,706
                                                                                 ===========      ===========
</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, 1997, 1996 AND 1995
              ----------------------------------------------------

<TABLE>
<CAPTION>
                                                                       1997              1996              1995
                                                                       ----              ----              ----
<S>                                                                 <C>               <C>              <C>
REVENUES:
 Net realized trading gain                                          $2,719,222        $  896,840       $2,134, 865
 Change in net unrealized trading gain (loss)                           72,386           (25,468)          113,562
 Interest income                                                       571,106           545,860          409, 148
                                                                    ----------        ----------       -----------
         Total revenues                                              3,362,714         1,417,232         2,657,575
                                                                    ----------        ----------       -----------

EXPENSES:
 Brokerage commissions and fees                                        188,111           123,399           158,461
 Management fee                                                        218,539           206,329           155,378
 Incentive fee                                                         154,270           166,073           194,603
 Professional fees and other                                            88,989           100,679           100,409
                                                                    ----------        ----------       -----------
         Total expenses                                                649,909           596,480           608,851
                                                                    ----------        ----------       -----------

         Net income                                                 $2,712,805        $  820,752       $ 2,048,724
                                                                    ==========        ==========       ===========


LIMITED PARTNERS' NET INCOME                                        $2,546,001        $  645,415       $ 1,621,026

GENERAL PARTNER'S NET INCOME                                           166,804           175,337           427,698
                                                                    ----------        ----------       -----------
         Net income                                                 $2,712,805        $  820,752       $ 2,048,724
                                                                    ==========        ==========       ===========

         Change in Net Asset Value Per Unit                            $848.53           $272.71           $665.22
                                                                    ----------        ----------       -----------
         Net Income Per Unit (Note 2)                                  $845.18           $246.06           $684.52
                                                                    ----------        ----------       -----------
</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, 1997, 1996, AND 1995
             -----------------------------------------------------

<TABLE>
<CAPTION>
                                                      Limited Partners               General Partner                    Net Asset
                                                  ----------------------------    ---------------------      Total       Value
                                                  Units            Capital         Units      Capital       Capital      Per Unit
                                                  ----------------------------    ---------------------   -----------   ----------
<S>                                          <C>               <C>               <C>        <C>           <C>           <C>
PARTNERS' CAPITAL, January 1, 1995                 2,409.778       $ 5,297,977    642.943   $ 1,413,533   $ 6,711,510    $2,198.53
                                                           -         1,621,026          -       427,698     2,048.724
 Net income                                            0.674                 -          -             -             -
 TIC 401(k) Plan unit adjustment (Note 3)            489.296         1,197,007          -             -     1,197,007
 Capital contributions                              (709.557)       (1,843,848)         -             -    (1,843,848)
 Redemptions
                                                  ----------       -----------   --------   -----------   -----------

PARTNERS' CAPITAL, December 31, 1995               2,190.191         6,272,162    642.943     1,841,231     8,113,393     2,863.75

 Net income                                                -           645,415          -       175,337       820,752
 TIC 401(k) Plan unit adjustment (Note 3)              5.462                 -          -             -             -
 Capital contributions                               931.637         2,926,549          -             -     2,926,549
 Redemptions                                        (605.404)       (1,934,328)  (446.363)   (1,400,000)   (3,334,328)
                                                  ----------       -----------   --------   -----------   -----------

PARTNERS' CAPITAL, December 31, 1996               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
                                                  ==========       ===========   ========   ===========   ===========

</TABLE>

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

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

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

                       DECEMBER 31, 1997, 1996, AND 1995
                       ---------------------------------




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

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

The objective of the Partnership is to realize capital appreciation through
speculative trading of commodity futures, forward and 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 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.

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 trades at
the end of the period are accrued on a round-turn basis.
<PAGE>

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

The Partnership pays TIC, an affiliate of the General Partner, as trading
advisor, an incentive fee equal to 12% of the Net Trading Profits (as defined by
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 incentive 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").

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

The Partnership also pays TIC, for the performance of its duties, a monthly
management fee equal to 1/6 of 1% (2% per annum) of the Partnership's net
assets.  Effective August 1, 1995, TIC waived its right to receive management
fees 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 income.

U.S. Government Obligations
---------------------------

The Partnership invests a varying amount of its assets in U.S. Treasury bills.
These bills are held in commodity trading accounts and are used to fulfill
initial margin requirements.  U.S. Treasury bills, with varying maturities
through March 1998, are valued in the statements of financial condition at
original cost plus accrued discount, which approximates the market value.  These
bills had a face value of $7,500,000 and $9,000,000 (cost $7,405,486 and
$8,548,403) at December 31, 1997 and 1996.

Subscriptions Receivable
-------------------------

Prospective investors are required to complete, execute and deliver a
Subscription Agreement, as defined in the Limited Partnership Agreement.
Subscriptions receivable arise when a signed Subscription Agreement has been
completed, executed and delivered but payment is received by the Partnership
subsequent to year-end.

Net Income per Unit
-------------------

Net income per unit is computed by dividing net income by the monthly average of
units outstanding at the beginning of each month.
<PAGE>

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

Certain estimates, as determined by the General Partner, were used in the
preparation of these financial statements.

Reclassifications
-----------------

Certain reclassifications have been made to prior year balances to conform with
current year presentation.

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

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 the 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 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.
<PAGE>

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, formerly
Bellwether Partners Inc., 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 20% of the
Partnership's net assets.  During 1997, 1996 and 1995, the Partnership received
$55,229, $69,856 and $45,659 in interest income for the amounts on deposit with
BPL.  At December 31, 1997 and 1996, the amounts on deposit with BPL were
$942,565 and $575,437 (including $27,933 and $16,352 in unrealized losses) as of
December 31, 1997 and 1996.

Bellwether Futures LLC ("BFL"), a Delaware limited liability company, formerly
Bellwether Futures Corporation, 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 managing the
execution of treasury bond futures by floor brokers on the Chicago Board of
Trade.

TIC, an affiliate of the General Partner, 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
  --------------------------------

The Partnership is a party to financial instruments with elements of off-balance
sheet credit and market risk in excess of the amounts recognized in the
statements of financial condition through its trading of financial futures,
forwards, swaps and exchange traded and negotiated over-the-counter options.
<PAGE>

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 executed.  The forwards are generally settled with the
counterparty two days after the trade.  At December 31, 1997 and 1996, the
Partnership held financial instruments with the following approximate aggregate
notional values (000's omitted):

                                                     1997            1996
                                                     ----            ----
Exchange traded contracts:
Interest rate futures and option contracts-
      Domestic                                      $  5,995        $   565
      Foreign
         Less than 6 months:                          40,892         28,977
         6 months to 1 year:                          43,351              -
         1 to 2 years:                                38,106              -

     Foreign exchange contracts-
      Financial futures contracts                      8,257          1,673
      Forward currency contracts
         Less than 6 months:                           8,389          3,399
         6 months to 1 year:                           3,000              -

     Equity index contracts-
      Domestic                                         3,425              -
      Foreign                                          2,333            505

Over-the-counter contracts:
     Commodity swaps                                     436              -
                                                    $154,184        $35,119
                                                    ========        =======


Notional amounts of these financial instruments are indicative only of the
volume of activity and should not be used as a measure of market and credit
risk.  The various financial instruments held at December 31, 1997 and 1996
mature through the following dates:

                                           1997              1996
                                           ----              ----
Exchange traded contracts:
     Interest rate futures and
       option contracts                 December 1999      March 1997
     Foreign exchange contracts         October 1998       June 1997
     Equity index futures               March 1998         March 1997
Over-the-counter contracts:
     Commodity swaps                    April 1998           -
<PAGE>

The following table summarizes the year-end and the average assets and
liabilities resulting from unrealized gains and losses on derivative instruments
included in the statement of financial condition based on month-end balances
(000's omitted):

                                          Assets               iabilities
                                     ---------------        ----------------
                                     1997    Average        1997     Average
                                     ----    -------        ----     -------
Exchange traded contracts:
 Interest rate contracts-
   Domestic                          $  27     $ 23          $  -      $11
   Foreign                              83       72            37       28

     Foreign exchange contracts-
   Financial futures contracts           -        3             9       30
   Forward currency contracts            -       17            30       10

     Equity index contracts-
      Domestic                         106       39             -        6
      Foreign                           57       37             -        3

Over-the-counter contracts:
 Forward currency contracts              -       14             -        6
 Commodity swaps                         -       17            24        2
 Equity Index swaps                      -       32             -        3
 Interest Rate swaps                     -        3             -        -
                                     -----     ----         -----      ---
                                     $ 273     $257         $ 100      $99
                                     =====     ====         =====      ===

<PAGE>

Net trading gains and losses from strategies that use a variety of financial
instruments are recorded in the statements of income.  The following table
summarizes the components of trading gains and losses, net of commissions and
fees, for the years ended December 31, 1997, 1996, and 1995 (000's omitted):

                                                1997         1996         1995
                                                ----         ----         ----
Exchange traded contracts:
Interest rate futures and option contracts-
        Domestic                               $  982       $ 726      $  (48)
        Foreign                                   413        (450)         18

     Foreign exchange contracts                   373         591       1,077

     Equity index futures-
        Domestic                                   (4)       (544)       (266)
        Foreign                                   173         399         865

Over-the-counter contracts:
     Forward currency contracts                   307         131         414
     Commodity swaps                              (51)         14           -
     Equity Index swaps                           (78)          -           -
     Interest Rate swaps                          (64)          -           -

Non-derivative financial instruments              552        (119)         29
                                               ------       -----      ------
                                               $2,603       $ 748      $2,089
                                               ======       =====      ======


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 insure ample customer protection in the event of an
FCM's default.  The Partnership monitors the creditworthiness of its FCMs and
counterparties and, when deemed necessary, reduces its exposure to these FCMs
and counterparties.  The Partnership's exposure to credit risk associated with
the nonperformance of these FCMs and counterparties 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 the Partnership with respect to its FCMs and
counterparties, including BPL, there always is a risk of nonperformance.

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