SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
A. Exact Name of Trust: FT 583
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
CHAPMAN & CUTLER
Attention: Eric F. Fess
111 West Monroe Street
Chicago, Illinois 60603
E. Title of Securities
Being Registered: An indefinite number of
Units pursuant to Rule
24f-2 promulgated under
the Investment Company Act
of 1940, as amended.
F. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION, DATED NOVEMBER 16, 2001
The Dow(sm) Dividend And Repurchase Target 5 Portfolio, Qualified 2002
Series
The Dow(sm) Dividend And Repurchase Target 10 Portfolio, Qualified 2002
Series
European Target 20 Portfolio, Qualified 2002 Series
The Nasdaq(R) Target 15 Portfolio, Qualified, 2002 Series
The S&P Target 24 Portfolio, Qualified 2002 Series
Value Line(R) Target 25 Portfolio, Qualified 2002 Series
FT 583
FT 583 is a series of a unit investment trust, the FT Series. Each of
the six portfolios listed above (each, a "Trust," and collectively, the
"Trusts") is a separate portfolio, or series, of FT 583 consisting of a
portfolio of common stocks ("Securities") selected by applying a
specialized strategy. The objective of each Trust is to provide the
potential for an above-average total return.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
FIRST TRUST (R)
1-800-621-9533
The date of this prospectus is December __, 2001
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 5
Report of Independent Auditors 7
Statements of Net Assets 8
Schedules of Investments 10
The FT Series 17
Portfolios 18
Risk Factors 21
Hypothetical Performance Information 23
Public Offering 26
Distribution of Units 27
The Sponsor's Profits 28
The Secondary Market 28
How We Purchase Units 28
Expenses and Charges 28
Tax Status 29
Rights of Unit Holders 29
Income and Capital Distributions 30
Redeeming Your Units 30
Investing in a New Trust 31
Removing Securities from a Trust 31
Amending or Terminating the Indenture 32
Information on the Sponsor, Trustee,
Shareholder Servicing Agent and Evaluator 33
Other Information 34
Page 2
Summary of Essential Information
FT 583
At the Opening of Business on the
Initial Date of Deposit-December __, 2001
Sponsor: Nike Securities L.P.
Trustee: JPMorgan Chase Bank
Shareholder Servicing Agent: BISYS Fund Services Ohio, Inc.
Evaluator: First Trust Advisors L.P.
The Dow(sm) The Dow(sm) European Target 20
DART 5 Portfolio DART 10 Portfolio Portfolio
Qualified 2002 Qualified 2002 Qualified 2002
Series Series Series
____________ ____________ ____________
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ $ $
Maximum Sales Charge of .7% of the Public Offering
Price per Unit (.7% of the net amount invested) (3) $ $ $
Less Deferred Sales Charge per Unit $ ( ) $ ( ) $ ( )
Public Offering Price per Unit (4) $ $ $
Sponsor's Initial Repurchase Price per Unit (5) $ $ $
Redemption Price per Unit (based on aggregate underlying
value of Securities) (5) $ $ $
Estimated Net Annual Distribution per Unit (6) $ $ $
CUSIP Number
Security Code
Ticker Symbol
First Settlement Date January __, 2002
Mandatory Termination Date (7) December 31, 2002
_____________
<FN>
See "Notes to Summary of Essential Information" on page 4.
</FN>
Page 3
Summary of Essential Information
FT 583
At the Opening of Business on the
Initial Date of Deposit-December __, 2001
Sponsor: Nike Securities L.P.
Trustee: JPMorgan Chase Bank
Shareholder Servicing Agent: BISYS Fund Services Ohio, Inc.
Evaluator: First Trust Advisors L.P.
The Nasdaq(R) The S&P Value Line(R)
Target 15 Target 24 Target 25
Portfolio, Portfolio, Portfolio,
Qualified Qualified Qualified
2002 Series 2002 Series 2002 Series
____________ ____________ ____________
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ $ $
Maximum Sales Charge of .7% of the Public
Offering Price per Unit (.7% of the net amount invested) (3) $ $ $
Less Deferred Sales Charge per Unit $ ( ) $ ( ) $ ( )
Public Offering Price per Unit (4) $ $ $
Sponsor's Initial Repurchase Price per Unit (5) $ $ $
Redemption Price per Unit (based on aggregate underlying
value of Securities) (5) $ $ $
Estimated Net Annual Distribution per Unit (6) N.A. N.A. N.A.
CUSIP Number
Security Code
Ticker Symbol
First Settlement Date January __, 2002
Mandatory Termination Date (7) December 31, 2002
_____________
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of the Trusts. If we make such an adjustment,
the fractional undivided interest per Unit will vary from the amounts
indicated above.
(2) Each listed Security is valued at its last closing sale price on the
relevant stock exchange on the business day prior to the Initial Date of
Deposit. If a Security is not listed, or if no closing sale price
exists, it is valued at its closing ask price on such date. The value of
foreign Securities trading in non-U.S. dollars is determined by
converting the value of such Securities to their U.S. dollar equivalent
based on the offering side of the currency exchange rate for the
currency in which a Security is generally denominated at the Evaluation
Time on the business day prior to the Initial Date of Deposit.
Evaluations for purposes of determining the purchase, sale or redemption
price of Units are made as of the close of trading on the New York Stock
Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day on
which it is open (the "Evaluation Time").
(3) The maximum sales charge consists entirely of a deferred sales
charge. See "Fee Table" and "Public Offering." If you redeem or sell
Units, you will not be assessed any remaining unaccrued deferred sales
charge payments at the time of sale or redemption.
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the
date you purchase your Units. On the Initial Date of Deposit, the Public
Offering Price per Unit will not include any accumulated dividends on
the Securities. After this date, a pro rata share of any accumulated
dividends on the Securities will be included.
(5) Until the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period the Sponsor's Initial Repurchase
Price per Unit and Redemption Price per Unit will include the estimated
organization costs per Unit set forth under "Fee Table." After such
date, the Sponsor's Initial Repurchase Price per Unit and Redemption
Price per Unit will not include such estimated organization costs. See
"Redeeming Your Units."
(6) The actual net annual distribution per Unit you receive will vary
from that set forth above with changes in a Trust's fees and expenses,
dividends received, currency exchange rates, foreign withholding and
with the sale of Securities. See "Fee Table" and "Expenses and Charges."
Dividend yield was not a selection criterion for The S&P Target 24
Portfolio, The Nasdaq(R) Target 15 Portfolio or the Value Line(R) Target
25 Portfolio.
(7) See "Amending or Terminating the Indenture."
</FN>
Page 4
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of a Trust. See "Public
Offering" and "Expenses and Charges." Although each Trust has a term of
approximately one year and is a unit investment trust rather than a
mutual fund, this information allows you to compare fees.
THE DOW(SM) THE DOW(SM) EUROPEAN TARGET 20
DART 5 PORTFOLIO DART 10 PORTFOLIO PORTFOLIO
QUALIFIED 2002 SERIES QUALIFIED 2002 SERIES QUALIFIED 2002 SERIES
_____________________ _____________________ _____________________
Amount Amount Amount
per Unit per Unit per Unit
________ ________ ________
Unit Holder Sales Fees (as a percentage of
public offering price)
Maximum Sales Charge
Initial sales charge 0.00%(a) $.000 0.00%(a) $.000 0.00%(a) $.000
Deferred sales charge 0.70%(b) $ 0.70%(b) $ 0.70%(b) $
Creation and development fee cap 0.30%(c) $ 0.30%(c) $ 0.30%(c) $
_____ _____ _____ _____ _____ _____
Maximum Sales Charges
(including creation and development fee cap)(c) 1.00% $ 1.00% $ 1.00% $
===== ===== ===== ===== ===== =====
Organization Costs (as a percentage of
public offering price)
Estimated organization costs %(d) $ %(d) $ %(d) $
===== ===== ===== ====== ===== ======
Estimated Annual Trust Operating Expenses(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees % $ % $ % $
Trustee's fee, Shareholder Servicing Agent's fee
and other operating expenses %(f) $ %(f) $ %(f) $
_____ ______ _____ ______ _____ ______
Total % $ % $ % $
===== ====== ===== ====== ===== ======
THE NASDAQ(R) THE S&P TARGET VALUE LINE(R)
TARGET 15 PORTFOLIO 24 PORTFOLIO TARGET 25 PORTFOLIO
QUALIFIED 2002 SERIES QUALIFIED 2002 SERIES QUALIFIED 2002 SERIES
_____________________ _____________________ _____________________
Amount Amount Amount
per Unit per Unit per Unit
________ ________ ________
Unit Holder Sales Fees (as a percentage of
public offering price)
Maximum Sales Charge
Initial sales charge 0.00%(a) $.000 0.00%(a) $.000 0.00%(a) $.000
Deferred sales charge 0.70%(b) $ 0.70%(b) $ 0.70%(b) $
Creation and development fee cap 0.30%(c) $ 0.30%(c) $ 0.30%(c) $
_____ _____ _____ _____ _____ _____
Maximum Sales Charges
(including creation and development fee cap)(c) 1.00% $ 1.00% $ 1.00% $
===== ===== ===== ===== ===== =====
Organization Costs (as a percentage of
public offering price)
Estimated organization costs %(d) $ %(d) $ %(d) $
===== ===== ===== ====== ===== ======
Estimated Annual Trust Operating Expenses(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees % $ % $ % $
Trustee's fee, Shareholder Servicing Agent's fee
and other operating expenses %(f) $ %(f) $ %(f) $
_____ ______ _____ ______ _____ ______
Total % $ % $ % $
===== ====== ===== ====== ===== ======
Page 5
Example
This example is intended to help you compare the cost of investing in a
Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in a Trust for the periods shown
and sell all your Units at the end of those periods. The example also
assumes a 5% return on your investment each year and that a Trust's
operating expenses stay the same. Although your actual costs may vary,
based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
_____ _____ _____ _____
The Dow(sm) Dividend And Repurchase Target 5 Portfolio, Qualified 2002 Series $ $ $ $
The Dow(sm) Dividend And Repurchase Target 10 Portfolio, Qualified 2002 Series
European Target 20 Portfolio, Qualified 2002 Series
The Nasdaq(R) Target 15 Portfolio, Qualified 2002 Series
The S&P Target 24 Portfolio, Qualified 2002 Series
Value Line(R) Target 25 Portfolio, Qualified 2002 Series
The examples assume that the principal amount and distributions are
rolled annually into a New Trust, and you pay the deferred sales charge.
________________
<FN>
(a) There is no initial sales charge on Trust Units.
(b) The deferred sales charge for each Trust is a fixed dollar amount
equal to $ , $ , $ , $ , $ and $ per Unit for The
Dow(sm) DART 5 Portfolio, The Dow(sm) DART 10 Portfolio, the European
Target 20 Portfolio, The Nasdaq(R) Target 15 Portfolio, The S&P Target
24 Portfolio and the Value Line(R) Target 25 Portfolio, respectively,
which will be accrued on a daily basis and deducted monthly, commencing
January 18, 2002, over the life of a Trust and at a Trust's termination.
The deferred sales charge, as a percentage of the Public Offering Price,
will vary over time. When you purchase Units you will only be subject to
deferred sales charge payments not yet accrued.
(c) The creation and development fee compensates the Sponsor for creating
and developing the Trusts. The creation and development fee is a charge
of .30% per Trust collected at the end of the initial offering period
which is generally ___ days. The creation and development fee is
computed based on a Trust's average daily net asset value through the
date of collection. If the value of your Units decreases over the
initial offering period, the creation and development fee as a
percentage of your initial investment will be less than .30%. However,
in no event will we collect more than .30% of your initial investment if
the value of your Units increases over the initial offering period.
(d) Estimated organization costs will be deducted from the assets of a
Trust at the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period.
(e) Each of the fees listed herein is assessed on a fixed dollar amount
per Unit basis which, as a percentage of average net assets, will vary
over time. The Sponsor will bear annual Trust Operating Expenses in
excess of the amounts set forth above (if applicable) for each Trust.
(f) Other operating expenses for certain Trusts include estimated per
Unit costs associated with a license fee as described in "Expenses and
Charges," but do not include brokerage costs and other portfolio
transaction fees for any of the Trusts. In certain circumstances the
Trusts may incur additional expenses not set forth above. See "Expenses
and Charges."
</FN>
Page 6
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 583
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 583, comprising The Dow(sm) Dividend And
Repurchase Target 5 Portfolio, Qualified 2002 Series; The Dow(sm)
Dividend And Repurchase Target 10 Portfolio, Qualified 2002 Series;
European Target 20 Portfolio, Qualified 2002 Series; The Nasdaq(R)
Target 15 Portfolio, Qualified 2002 Series; The S&P Target 24 Portfolio,
Qualified 2002 Series; and Value Line(R) Target 25 Portfolio, Qualified
2002 Series (the "Trusts"), as of the opening of business on December
__, 2001 (Initial Date of Deposit). These statements of net assets are
the responsibility of the Trusts' Sponsor. Our responsibility is to
express an opinion on these statements of net assets based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the statements of net assets are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the statements of net assets. Our procedures
included confirmation of the cash held by JPMorgan Chase Bank, the
Trustee, and allocated among the Trusts for the purchase of Securities,
as shown in the statements of net assets, as of the opening of business
on December __, 2001, by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant
estimates made by the Trusts' Sponsor, as well as evaluating the overall
presentation of the statements of net assets. We believe that our audits
of the statements of net assets provide a reasonable basis for our
opinion.
In our opinion, the statements of net assets referred to above present
fairly, in all material respects, the financial position of FT 583,
comprising The Dow(sm) Dividend And Repurchase Target 5 Portfolio,
Qualified 2002 Series; The Dow(sm) Dividend And Repurchase Target 10
Portfolio, Qualified 2002 Series; European Target 20 Portfolio,
Qualified 2002 Series; The Nasdaq(R) Target 15 Portfolio, Qualified 2002
Series; The S&P Target 24 Portfolio, Qualified 2002 Series; and Value
Line(R) Target 25 Portfolio, Qualified 2002 Series, at the opening of
business on December __, 2001 (Initial Date of Deposit) in conformity
with accounting principles generally accepted in the United States of
America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
December __, 2001
Page 7
Statements of Net Assets
FT 583
At the Opening of Business on the
Initial Date of Deposit-December __, 2001
The Dow(sm) The Dow(sm) European Target 20
DART 5 Portfolio DART 10 Portfolio Portfolio
Qualified 2002 Qualified 2002 Qualified 2002
Series Series Series
____________ ____________ ____________
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (4) $ $ $
Less sales charge (4) (0) (0) (0)
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
__________
<FN>
See "Notes to Statements of Net Assets" on page 9.
</FN>
Page 8
Statements of Net Assets
FT 583
At the Opening of Business on the
Initial Date of Deposit-December __, 2001
The Nasdaq(R) The S&P Value Line(R)
Target 15 Target 24 Portfolio, Target 25
Portfolio, Qualified Qualified Portfolio, Qualified
2002 Series 2002 Series 2002 Series
____________ ____________ ____________
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (4) $ $ $
Less sales charge (4) (0) (0) (0)
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
______________
<FN>
NOTES TO STATEMENTS OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) Cash totaling $_______ which will be allocated among each of the six
Trusts in FT 583, has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Securities
according to their purchase contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trusts. These costs have been estimated at $ per
Unit for The S&P Target 24 Portfolio and $ per Unit for each of the
other five Trusts. A payment will be made as of the earlier of six
months after the Initial Date of Deposit or the end of the initial
offering period to an account maintained by the Trustee from which the
obligation of the investors to the Sponsor will be satisfied. To the
extent that actual organization costs of a Trust are greater than the
estimated amount, only the estimated organization costs added to the
Public Offering Price will be reimbursed to the Sponsor and deducted
from the assets of such Trust.
(4) No initial sales charge will be assessed on Trust Units. A deferred
sales charge, which accrues on a daily basis and which will total $ ,
$ , $ , $ , $ and $ per Unit for The Dow DART 5
Portfolio, The Dow sm DART 10 Portfolio, European Target 20 Portfolio,
The Nasdaq(R) Target 15 Portfolio, The S&P Target 24 Portfolio and the
Value Line(R) Target 25 Portfolio, respectively, will be paid to the
Sponsor in monthly installments beginning on January 18, 2002 and on the
20th day of each month thereafter (or the preceding business day if the
20th day is not a business day) over the life of a Trust and at each
Trust's termination. If Unit holders redeem Units they will not have to
pay the unaccrued amount of the deferred sales charge applicable to such
Units when they redeem them.
</FN>
Page 9
Schedule of Investments
THE DOW(sm) Dividend And Repurchase Target 5 Portfolio
Qualified 2002 Series
FT 583
At the Opening of Business on the
Initial Date of Deposit-December __, 2001
Percentage
Number of Aggregate Market Cost of Current
of Ticker Symbol and Offering Value per Securities to Dividend
Shares Name of Issuer of Securities (1) Price Share the Trust (2) Yield (3)
______ _______________________________________ ___________ ________ _____________ _____________
% $ $ %
% %
% %
% %
% %
______ ________
Total Investments 100% $
===== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 16.
</FN>
Page 10
Schedule of Investments
THE DOW(sm) Dividend And Repurchase Target 10 Portfolio
Qualified 2002 Series
FT 583
At the Opening of Business on the
Initial Date of Deposit-December __, 2001
Percentage
Number of Aggregate Market Cost of Current
of Ticker Symbol and Offering Value per Securities to Dividend
Shares Name of Issuer of Securities (1) Price Share the Trust (2) Yield (3)
______ _______________________________________ ___________ ________ __________ ____________
% $ $ %
% %
% %
% %
% %
% %
% %
% %
% %
% %
______ ________
Total Investments 100% $
===== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 16.
</FN>
Page 11
Schedule of Investments
European Target 20 Portfolio, Qualified 2002 Series
FT 583
At the Opening of Business on the
Initial Date of Deposit-December __, 2001
Percentage
Number of Aggregate Market Cost of Current
of Ticker Symbol and Offering Value Securities to Dividend
Shares Name of Issuer of Securities (1) Price per Share the Trust (2) Yield (3)
______ _______________________________________ _________ _________ _________ _________
% $ $ %
% %
% %
% %
% %
% %
% %
% %
% %
% %
% %
% %
% %
% %
% %
% %
% %
% %
% %
% %
_______ ________
Total Investments 100% $
======= ========
___________
<FN>
See "Notes to Schedules of Investments" on page 16.
</FN>
Page 12
Schedule of Investments
The Nasdaq(R) Target 15 Portfolio, Qualified 2002 Series
FT 583
At the Opening of Business on the
Initial Date of Deposit-December __, 2001
Percentage
Number of Aggregate Market Cost of
of Ticker Symbol and Offering Value per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
______ _______________________________________ ___________ ________ _____________
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ ________
Total Investments 100.00% $
===== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 16.
</FN>
Page 13
Schedule of Investments
The S&P Target 24 Portfolio, Qualified 2002 Series
FT 583
At the Opening of Business on the
Initial Date of Deposit-December __, 2001
\
Percentage
Number of Aggregate Market Cost of
of Ticker Symbol and Offering Value per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
______ _______________________ _________ ______ _________
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _______
Total Investments 100.00% $
====== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 16.
</FN>
Page 14
Schedule of Investments
Value Line(R) Target 25 Portfolio, Qualified 2002 Series
FT 583
At the Opening of Business on the
Initial Date of Deposit-December __, 2001
Percentage
Number of Aggregate Market Cost of
of Ticker Symbol and Offering Value per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
______ _______________________________________ _________ _________ _________
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
________ ________
Total Investments 100.00% $
======= =======
___________
<FN>
See "Notes to Schedules of Investments" on page 16.
Page 15
NOTES TO SCHEDULES OF INVESTMENTS
(1) All Securities are represented by regular way contracts to purchase
such Securities which are backed by an irrevocable letter of credit
deposited with the Trustee. The Sponsor entered into purchase contracts
for the Securities on December __, 2001. Each Trust has a Mandatory
Termination Date of December 31, 2002.
(2) The cost of the Securities to a Trust represents the aggregate
underlying value with respect to the Securities acquired-generally
determined by the closing sale prices of the Securities on the
applicable exchange (where applicable, converted into U.S. dollars at
the offer side of the exchange rate at the Evaluation Time) at the
Evaluation Time on December __, 2001, the business day prior to the
Initial Date of Deposit. The valuation of the Securities has been
determined by the Evaluator, an affiliate of the Sponsor. The cost of
the Securities to the Sponsor and the Sponsor's profit or loss (which is
the difference between the cost of the Securities to the Sponsor and the
cost of the Securities to a Trust) are set forth below:
Cost of Securities Profit
to Sponsor (Loss)
___________ _______
The Dow(sm) Dividend And Repurchase Target 5 Portfolio, Qualified 2002 Series $ $
The Dow(sm) Dividend And Repurchase Target 10 Portfolio, Qualified 2002 Series
European Target 20 Portfolio, Qualified 2002 Series
The Nasdaq(R) Target 15 Portfolio, Qualified 2002 Series
The S&P Target 24 Portfolio, Qualified 2002 Series
Value Line(R) Target 25 Portfolio, Qualified 2002 Series
(3) Current Dividend Yield for each Security was calculated by dividing
the most recent annualized ordinary dividend paid on a Security by that
Security's closing sale price at the Evaluation Time on the business day
prior to the Initial Date of Deposit.
</FN>
Page 16
The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created hundreds of
similar yet separate series of a unit investment trust which we have
named the FT Series. The series to which this prospectus relates, FT
583, consists of six separate portfolios set forth below:
- - The Dow(sm) Dividend And Repurchase Target 5 Portfolio
- - The Dow(sm) Dividend And Repurchase Target 10 Portfolio
- - European Target 20 Portfolio
- - The Nasdaq(R) Target 15 Portfolio
- - The S&P Target 24 Portfolio
- - Value Line(R) Target 25 Portfolio
Units of the Trusts are only available to employee benefit plans
established pursuant to Sections 401(a) or 457 of the Internal Revenue
Code of 1986, as amended ("Eligible Plans"). Eligible Plans will invest
in Units of the Trusts in accordance with allocation instructions
received from employees pursuant to their respective terms. Accordingly,
the interests of an employee in the Units of a Trust is subject to the
terms of their respective Eligible Plan and the terms on which Units of
the Trusts are offered as an investment alternative under such Eligible
Plan. As used herein, Unit holder shall refer to an Eligible Plan.
Each Trust was created under the laws of the State of New York by a
Trust Agreement (the "Indenture") dated the Initial Date of Deposit.
This agreement, entered into among Nike Securities L.P., as Sponsor,
JPMorgan Chase Bank as Trustee, BISYS Fund Services Ohio, Inc. as
Shareholder Servicing Agent and First Trust Advisors L.P. as Portfolio
Supervisor and Evaluator, governs the operation of the Trusts.
YOU MAY GET MORE SPECIFIC DETAILS CONCERNING THE NATURE, STRUCTURE AND
RISKS OF THIS PRODUCT IN AN "INFORMATION SUPPLEMENT" BY CALLING THE
TRUSTEE AT 1-800-682-7520.
How We Created the Trusts.
On the Initial Date of Deposit, we deposited the portfolios of common
stocks with the Trustee and in turn, the Trustee delivered documents to
us representing our ownership of the Trusts in the form of units
("Units").
After the Initial Date of Deposit, additional Securities, or cash
(including a letter of credit) with instructions to buy more Securities,
may be deposited in a Trust to create new Units for sale. Additional
Units will be created to the extent practicable, according to the
percentage relationship established among the Securities in a Trust on
the Initial Date of Deposit (as set forth in "Schedule of Investments"
for each Trust), and not the percentage relationship existing on the day
we are creating new Units, since the two may differ. This difference may
be due to the sale, redemption or liquidation of any of the Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in a Trust, on a market value basis, will also change daily.
The portion of Securities represented by each Unit will not change as a
result of the deposit of additional Securities or cash in a Trust. If
cash is deposited, you and new investors may experience a dilution of
your investment. This is because prices of Securities will fluctuate
between the time of the cash deposit and the purchase of the Securities,
and because each Trust pays the associated brokerage fees. To reduce
this dilution, the Trusts will try to buy the Securities as close to the
Evaluation Time and as close to the evaluation price as possible. In
addition, because the Trusts pay the brokerage fees associated with the
creation of new Units and with the sale of Securities to meet redemption
and exchange requests, frequent redemption and exchange activity will
likely result in higher brokerage expenses.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may retain and pay us (or our affiliate) to act as agent for a
Trust to buy Securities. If we or an affiliate of ours act as agent to a
Trust we will be subject to the restrictions under the Investment
Company Act of 1940, as amended.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. However, Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if they no longer meet the criteria by
which they were selected. You will not be able to dispose of or vote any
of the Securities in a Trust. As the holder of the Securities, the
Trustee will vote all of the Securities and will do so based on our
instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in a Trust fails, unless we can purchase
substitute Securities ("Replacement Securities") we will refund to you
that portion of the purchase price and sales charge resulting from the
failed contract on the next Income Distribution Date. Any Replacement
Security a Trust acquires will be identical to those from the failed
contract.
Page 17
Portfolios
Objectives.
When you invest in a Trust you are purchasing a quality portfolio of
attractive common stocks in one convenient purchase. The objective of
each Trust is to provide an above-average total return. To achieve this
objective, each Trust will invest in the common stocks of companies
which are selected by applying a unique specialized strategy. While the
Trusts all seek to provide above-average total return, each follows a
different investment strategy. We cannot guarantee that a Trust will
achieve its objective or that a Trust will make money once expenses are
deducted.
The Dow (sm) Dividend and Repurchase Target Portfolio Strategies.
Both The Dow (sm) Dividend and Repurchase Target ("DART") 5 Portfolio
Strategy and The Dow (sm) DART 10 Portfolio Strategy each select a
portfolio of Dow Jones Industrial Average ("DJIA") stocks with high
dividend yields and/or high buyback ratios, and, for the Dow (sm) DART 5
Portfolio Strategy, high return on assets, as a means to achieving each
Trust's investment objective. By analyzing dividend yields, the
Strategies seek to uncover stocks that may be out of favor or
undervalued. More recently, many companies have turned to stock
reduction programs as a tax efficient way to bolster their stock prices
and reward shareholders. Companies which have reduced their shares
through a share buyback programs may indicate a company with a strong
cash flow position and high quality earnings. Buyback ratio is the ratio
of a company's shares of common stock outstanding 12 months prior to the
date of this prospectus divided by a company's shares outstanding as of
the business day prior to the date of this prospectus, minus "1."
The Dow sm (sm) DART 5 Strategy.
The Dow (sm) DART 5 Portfolio is determined as follows:
Step 1: We rank all 30 stocks contained in the DJIA by the sum of their
dividend yield and buyback ratio as of the business day prior to the
date of this prospectus.
Step 2: We then select the ten stocks with the highest combined dividend
yields and buyback ratios.
Step 3: From the ten stocks selected in Step 2, we select the five
stocks with the greatest increase in the percentage change in return on
assets in the most recent year as compared to the previous year for The
Dow(sm) DART 5 Portfolio.
Based on the composition of the portfolio on the Initial Date of
Deposit, The Dow(sm) DART 5 Portfolio is considered a ________ Trust.
The Dow(sm) DART 10 Strategy.
The Dow(sm) DART 10 Portfolio is determined as follows:
Step 1: We rank all 30 stocks contained in the DJIA by the sum of their
dividend yield and buyback ratio as of the business day prior to the
date of this prospectus.
Step 2: We then select the ten stocks with the highest combined dividend
yields and buyback ratios for The Dow(sm) DART 10 Portfolio.
Based on the composition of the portfolio on the Initial Date of
Deposit, The Dow(sm) DART 10 Portfolio is considered a ________ Trust.
European Target 20 Portfolio Strategy.
The European Target 20 Portfolio invests in stocks with high dividend
yields as a means to achieving the Trust's investment objective.
Investing in stocks with high dividend yields may be effective in
achieving the Trust's investment objective, because regular dividends
are common for established companies, and dividends have historically
accounted for a large portion of the total return on stocks. The
European Target 20 Portfolio is determined as follows:
Step 1:We rank the 120 largest companies based on market capitalization
which are headquartered in Austria, Belgium, Denmark, Finland, Germany,
Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland or the United Kingdom by dividend yield as of four
business days prior to the date of this prospectus.
Step 2:We select the 20 highest dividend-yielding stocks for the
European Target 20 Portfolio.
Based on the composition of the portfolio on the Initial Date of
Deposit, the European Target 20 Portfolio is considered a ________ Trust.
The Nasdaq(R) Target 15 Portfolio Strategy.
The Nasdaq(R) Target 15 Portfolio invests in a portfolio of 15 Nasdaq-
100 Index(R) stocks with the best overall ranking on both 12- and 6-
month price appreciation, return on assets and price to cashflow as a
means to achieving the Trust's investment objective. The Nasdaq(R)
Target 15 Portfolio is determined as follows:
Step 1: We select stocks which are components of the Nasdaq-100 Index(R)
as of two business days prior to the date of this prospectus and
numerically rank them by 12-month price appreciation (best (1) to worst
(100)).
Page 18
Step 2: We then numerically rank the stocks by six-month price
appreciation.
Step 3: The stocks are then numerically ranked by return on assets ratio.
Step 4: We then numerically rank the stocks by the ratio of cash flow
per share to stock price.
Step 5: We add up the numerical ranks achieved by each company in the
above steps and select the 15 stocks with the lowest sums for The
Nasdaq(R) Target 15 Portfolio.
The stocks which comprise The Nasdaq(R) Target 15 Portfolio are weighted
by market capitalization subject to the restriction that no stock will
comprise less than 1% or 25% or more of the portfolio on the date of
this prospectus. The Securities will be adjusted on a proportionate
basis to accommodate this constraint.
Based on the composition of the portfolio on the Initial Date of
Deposit, The Nasdaq(R) Target 15 Portfolio is considered a ________ Trust.
The S&P Target 24 Portfolio Strategy.
The S&P Target 24 Strategy selects a portfolio of 24 common stocks from
the S&P 500 Index which are based on the following steps:
Step 1:All of the economic sectors in the S&P 500 Index are ranked by
market capitalization as of two business days prior to the date of this
prospectus and the eight largest sectors are selected.
Step 2:The stocks in each of those eight sectors are then ranked among
their peers based on three distinct factors:
Factor 1: Trailing four quarters' return on assets, which is net
income divided by average assets. Those stocks with high return on
assets achieve better rankings.
Factor 2: Buyback yield, which measures the percentage decrease in
common stock outstanding versus one year earlier. Those stocks with
greater percentage decreases receive better rankings.
Factor 3: Bullish interest indicator, which compares the number of
shares traded in months in which the stock price rose to the number of
shares traded in months in which the stock price declined. Those stocks
with a high bullish interest indicator achieve better rankings.
Step 3:The three stocks from each of the eight sectors with the highest
combined ranking on these three factors are selected for The S&P Target
24 Strategy. In the event of a tie within a sector, the stock with the
higher market capitalization is selected.
Each stock receives a weighting equivalent to its relative market value
among the three stocks from the individual sector. The combined weight
of the three stocks for a sector is equal to the sector's equivalent
weighting among the eight sectors being selected from.
Based on the composition of the portfolio on the Initial Date of
Deposit, The S&P Target 24 Portfolio is considered a ________ Trust.
Value Line(R) Target 25 Portfolio Strategy.
The Value Line(R) Target 25 Portfolio invests in 25 of the 100 stocks
that Value Line(R) gives a #1 ranking for Timeliness(TM) which have
recently exhibited certain positive financial attributes as a means to
achieving the Trust's investment objective. Value Line(R) ranks 1,700
stocks which represent approximately 94% of the trading volume on all
U.S. stock exchanges. Of these 1,700 stocks, only 100 are given their #1
ranking for Timeliness(TM), which measures Value Line's view of their
probable price performance during the next six to 12 months relative to
the others. Value Line(R) bases their rankings on a long-term trend of
earnings, prices, recent earnings, price momentum, and earnings
surprise. The Value Line Target 25 Portfolio is determined as follows:
Step 1:We start with the 100 stocks which Value Line(R) at the initial
date of deposit gives their #1 ranking for Timeliness(TM), remove the
stocks of companies considered to be securities related issuers and the
stocks of companies whose shares are not listed on a U.S. securities
exchange, and apply the following screens as of two business days prior
to the date of this prospectus.
Step 2:We screen for consistent growth by ranking these remaining stocks
based on 12-month and 6-month price appreciation (best [1] to worst
[100]).
Step 3:We then screen for profitability by ranking the stocks by their
return on assets.
Step 4:Finally, we screen for value by ranking the stocks based on their
price to cash flow.
Step 5:We add up the numerical ranks achieved by each company in the
above steps and select the 25 stocks with the lowest sums for the Value
Line(R) Target 25 Portfolio.
The stocks which comprise the Value Line(R) Target 25 Portfolio are
weighted by market capitalization subject to the restriction that no
stock will comprise less than approximately 1% or 25% or more of the
portfolio on the date of this prospectus. The Securities will be
adjusted on a proportionate basis to accommodate this constraint.
Page 19
Based on the composition of the portfolio on the Initial Date of
Deposit, the Value Line(R) Target 25 Portfolio is considered a ________
Trust.
Please note that we applied the strategies which make up the portfolio
for each Trust at a particular time. If we create additional Units of a
Trust after the Initial Date of Deposit we will deposit the Securities
originally selected by applying the strategy at such time. This is true
even if a later application of a strategy would have resulted in the
selection of different securities. In addition, companies which, based
on publicly available information as of two business days prior to the
date of this prospectus, are the subject of an announced business
combination which we expect will happen within six months of the date of
this prospectus have been excluded from the universe of securities from
which each Trust's Securities are selected.
The style and capitalization characteristics used to describe each Trust
are designed to help you better understand how a Trust fits into your
overall investment plan. These characteristics are determined by the
Sponsor as of the Initial Date of Deposit and, due to changes in the
value of the Securities, may vary thereafter. In addition, from time to
time, analysts and research professionals may apply different criteria
to determine a Security's style and capitalization characteristics,
which may result in designations which differ from those arrived at by
the Sponsor. In general, growth portfolios include stocks with high
relative price-to-book ratios while value portfolios include stocks with
low relative price-to-book ratios. At least 65% of the stocks in a Trust
on the Initial Date of Deposit must fall into either the growth or value
category to receive the designation. Trusts that do not meet this
criteria are designated as blend Trusts. Both the weighted average
market capitalization of a Trust and at least half of the Securities in
the Trust must fall into the following ranges to determine its market
capitalization designation: Small-Cap-less than $1.5 billion; Mid-Cap-
$1.5 billion to $8 billion; Large-Cap-over $8 billion. A Trust, however,
may contain individual stocks that do not fall into its stated style or
market capitalization designation.
"Dow Jones Industrial Average(sm) ," "Dow(sm)" and "DJIA(sm)" are
service marks of Dow Jones & Company, Inc. ("Dow Jones") and have been
licensed for use for certain purposes by First Trust Advisors L.P., an
affiliate of ours. Dow Jones does not endorse, sell or promote any of
the Trusts, in particular, The Dow (sm) DART 5 Portfolio or The Dow(sm)
DART 10 Portfolio. Dow Jones makes no representation regarding the
advisability of investing in such products.
The "Nasdaq 100(R)," "Nasdaq 100 Index(R)," and "Nasdaq(R)" are trade or
service marks of The Nasdaq Stock Market, Inc. (which with its
affiliates are the "Corporations") and are licensed for use by us. The
Nasdaq(R) Target 15 Portfolio has not been passed on by the Corporations
as to its legality or suitability. The Nasdaq(R) Target 15 Portfolio is
not issued, endorsed, sold, or promoted by the Corporations. The
Corporations make no warranties and bear no liability with respect to
The Nasdaq(R) Target 15 Portfolio.
"S&P," "S&P 500," and "Standard & Poor's" are trademarks of The McGraw-
Hill Companies, Inc. and have been licensed for use by us. The S&P
Target 24 Portfolio is not sponsored, endorsed, sold or promoted by
Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in such Trust. Please see the
Information Supplement which sets forth certain additional disclaimers
and limitations of liabilities on behalf of Standard & Poor's.
"Value Line(R)," "The Value Line Investment Survey," and "Value Line
Timeliness(TM) Ranking System" are registered trademarks of Value Line
Securities, Inc. or Value Line Publishing, Inc. that have been licensed
to Nike Securities L.P. The Value Line(R) Target 25 Portfolio is not
sponsored, recommended, sold or promoted by Value Line Publishing, Inc.
Value Line, Inc. or Value Line Securities, Inc. ("Value Line"). Value
Line makes no representation regarding the advisability of investing in
the Trust.
Dow Jones, Standard & Poor's, The Nasdaq Stock Market, Inc. and Value
Line are not affiliated with us and have not participated in creating
the Trusts or selecting the Securities for the Trusts. Except as noted
above, none of the index publishers have given us a license to use their
index nor have they approved of any of the information in this prospectus.
Of course, as with any similar investments, there can be no assurance
that the objective of a Trust will be achieved. See "Risk Factors" for a
discussion of the risks of investing in a Trust.
Risk Factors
Price Volatility. The Trusts invest in common stocks. The value of a
Trust's Units will fluctuate with changes in the value of these common
stocks. Common stock prices fluctuate for several reasons including
changes in investors' perceptions of the financial condition of an
issuer or the general condition of the relevant stock market, or when
political or economic events affecting the issuers occur. In addition,
common stock prices may be particularly sensitive to rising interest
rates, as the cost of capital rises and borrowing costs increase.
Page 20
Certain of the Securities in certain of the Trusts are issued by
companies with market capitalizations of less than $1.5 billion. The
share prices of these small-cap companies are often more volatile than
those of larger companies as a result of several factors common to many
such issuers, including limited trading volumes, products or financial
resources, management inexperience and less publicly available
information.
Because the Trusts are not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that
the performance of any Trust will be positive over any period of time,
especially the relatively short one-year life of the Trusts, or that you
won't lose money. Units of the Trusts are not deposits of any bank and
are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Trusts which use dividend yield as a selection criterion employ a
contrarian strategy in which the Securities selected share qualities
that have caused them to have lower share prices or higher dividend
yields than other common stocks in their peer group. There is no
assurance that negative factors affecting the share price or dividend
yield of these Securities will be overcome over the life of the Trusts
or that these Securities will increase in value.
_____ of the Securities in The Nasdaq(R) Target 15 Portfolio represent
approximately ___% of the value of such Trust. If these stocks decline
in value you may lose a substantial portion of your investment.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Strategy. Please note that we applied the strategies which make up the
portfolio for each Trust at a particular time. If we create additional
Units of a Trust after the Initial Date of Deposit we will deposit the
Securities originally selected by applying the strategy at such time.
This is true even if a later application of a strategy would have
resulted in the selection of different securities. There is no guarantee
that the strategy or the investment objective of a Trust will be
achieved. The actual performance of the Trusts will be different than
the hypothetical returns of each Trust's comparative index. Because the
Trusts are unmanaged and follow a strategy, the Trustee will not buy or
sell Securities in the event a strategy is not achieving the desired
results.
Financial Services Industry. Because more than 25% of the European
Target 20 Portfolio is invested in financial services companies, the
Trust is considered to be concentrated in the financial services
industry, which includes banks and thrifts, financial services and
insurance companies, and investment firms. A portfolio concentrated in a
single industry may present more risks than a portfolio broadly
diversified over several industries. Banks, thrifts and their holding
companies are especially subject to the adverse effects of economic
recession; volatile interest rates; portfolio concentrations in
geographic markets and in commercial and residential real estate loans;
and competition from new entrants in their fields of business. Although
recently-enacted legislation repealed most of the barriers which
separated the banking, insurance and securities industries, these
industries are still extensively regulated at both the federal and state
level and may be adversely affected by increased regulations.
Banks and thrifts face increased competition from nontraditional lending
sources as regulatory changes, such as the recently enacted financial-
services overhaul legislation, permit new entrants to offer various
financial products. Technological advances such as the Internet allow
these nontraditional lending sources to cut overhead and permit the more
efficient use of customer data.
Brokerage firms, broker/dealers, investment banks, finance companies and
mutual fund companies are also financial services providers. These
companies compete with banks and thrifts to provide traditional
financial service products, in addition to their traditional services,
such as brokerage and investment advice. In addition, all financial
service companies face shrinking profit margins due to new competitors,
the cost of new technology and the pressure to compete globally.
Companies involved in the insurance industry are engaged in
underwriting, selling, distributing or placing of property and casualty,
life or health insurance. Insurance company profits are affected by many
factors, including interest rate movements, the imposition of premium
rate caps, competition and pressure to compete globally. Property and
casualty insurance profits may also be affected by weather catastrophes
and other disasters. Life and health insurance profits may be affected
by mortality rates. Already extensively regulated, insurance companies'
profits may also be adversely affected by increased government
regulations or tax law changes.
Technology Industry. The Nasdaq(R) Target 15 Portfolio is considered to
be concentrated in technology stocks. Technology companies are generally
subject to the risks of rapidly changing technologies; short product
life cycles; fierce competition; aggressive pricing and reduced profit
margins; the loss of patent, copyright and trademark protections;
Page 21
cyclical market patterns; evolving industry standards; and frequent new
product introductions. Technology companies may be smaller and less
experienced companies, with limited product lines, markets or financial
resources and fewer experienced management or marketing personnel.
Technology company stocks, especially those which are Internet-related,
have experienced extreme price and volume fluctuations that are often
unrelated to their operating performance. Also, the stocks of many
Internet companies have exceptionally high price-to-earnings ratios with
little or no earnings histories.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on certain of the companies represented in the Trusts.
In addition, litigation regarding any of the issuers of the Securities,
or of the industries represented by these issuers, may negatively impact
the share prices of these Securities. We cannot predict what impact any
pending or threatened litigation will have on the share prices of the
Securities.
Foreign Stocks. Certain of the Securities in certain Trusts and all of
the Securities in the European Target 20 Portfolio are issued by foreign
companies, which makes these Trusts subject to more risks than if they
invested solely in domestic common stocks. Risks of foreign common
stocks include higher brokerage costs; different accounting standards;
expropriation, nationalization or other adverse political or economic
developments; currency devaluations, blockages or transfer restrictions;
restrictions on foreign investments and exchange of securities;
inadequate financial information; lack of liquidity of certain foreign
markets; and less government supervision and regulation of exchanges,
brokers, and issuers in foreign countries.
The purchase and sale of the foreign Securities will generally occur
only in foreign securities markets. Although we do not believe that the
Trusts will have problems buying and selling these Securities, certain
of the factors stated above may make it impossible to buy or sell them
in a timely manner. Custody of certain of the Securities in the European
Target 20 Portfolio is maintained by Clearstream Banking, a global
custody and clearing institution which has entered into a sub-custodian
relationship with the Trustee.
United Kingdom. The European Target 20 Portfolio is considered to be
concentrated in common stocks of U.K. issuers. The United Kingdom is one
of 15 members of the European Union ("EU") which was formed by the
Maastricht Treaty on European Union. It is expected that the Treaty will
have the effect of eliminating most remaining trade barriers between the
member nations and make Europe one of the largest common markets in the
world. However, the uncertain implementation of the Treaty provisions
and recent rapid political and social change throughout Europe make the
extent and nature of future economic development in the United Kingdom
and Europe and their effect on Securities issued by U.K. issuers
impossible to predict.
Unlike a majority of EU members, the United Kingdom did not convert its
currency to the new common European currency, the euro, on January 1,
1999. All companies with significant markets or operations in Europe
face strategic challenges as these entities adapt to a single currency.
The euro conversion may materially impact revenues, expenses or income;
increase competition; affect issuers' currency exchange rate risk and
derivatives exposure; cause issuers to increase spending on information
technology updates; and result in potentially adverse tax consequences.
We cannot predict when or if the United Kingdom will convert to the euro
or what impact the implementation of the euro throughout a majority of
EU countries will have on U.K. or European issuers.
Exchange Rates. Because securities of foreign issuers generally pay
dividends and trade in foreign currencies, the U.S. dollar value of
these Securities (and therefore Units of the European Target 20
Portfolio) will vary with fluctuations in foreign exchange rates. Most
foreign currencies have fluctuated widely in value against the U.S.
dollar for various economic and political reasons. The recent conversion
by 11 of the 15 EU members of their national currencies to the euro
could negatively impact the market rate of exchange between such
currencies (or the newly created euro) and the U.S. dollar.
To determine the value of foreign Securities or their dividends, the
Evaluator will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
However, these markets can be quite volatile, depending on the activity
of the large international commercial banks, various central banks,
large multi-national corporations, speculators and other buyers and
sellers of foreign currencies. Since actual foreign currency
transactions may not be instantly reported, the exchange rates estimated
by the Evaluator may not reflect the amount the European Target 20
Portfolio would receive, in U.S. dollars, had the Trustee sold any
particular currency in the market.
Page 22
Hypothetical Performance Information
The following table compares hypothetical performance information for
the strategies employed by each Trust and the actual performance of the
DJIA, S&P 500 Index, Nasdaq-100 Index(R) and MSCI Europe Index in each
of the full years listed below (and as of the most recent quarter).
These hypothetical returns should not be used to predict future
performance of the Trusts. Returns from a Trust will differ from its
strategy for several reasons, including the following:
- - Total Return figures shown do not reflect brokerage commissions paid
by a Trust on the purchase of Securities or taxes incurred by you.
- - Strategy returns are for calendar years (and through the most recent
quarter), while the Trusts begin and end on various dates.
- - Trusts may not be fully invested at all times or equally weighted in
all stocks comprising a strategy.
- - Securities are often purchased or sold at prices different from the
closing prices used in buying and selling Units.
- - For Trusts investing in foreign Securities, currency exchange rates
may differ.
You should note that the Trusts are not designed to parallel movements
in any index, and it is not expected that they will do so. In fact, each
Trust's strategy underperformed its comparative index in certain years
and we cannot guarantee that a Trust will outperform its comparative
index over the life of a Trust or over consecutive rollover periods, if
available. Each index differs widely in size and focus, as described
below.
DJIA. The DJIA consists of 30 U.S. stocks chosen by the editors of The
Wall Street Journal as being representative of the broad market and of
American industry. Changes in the component stocks of the DJIA are made
entirely by the editors of The Wall Street Journal without consulting
the companies, the stock exchange or any official agency. For the sake
of continuity, changes are made rarely.
S&P 500 Index. The S&P 500 Index consists of 500 stocks chosen by
Standard and Poor's to be representative of the leaders of various
industries.
Nasdaq-100 Index(R). The Nasdaq-100 Index(R) consists of the 100 largest
non-financial companies listed on the Nasdaq National Market System.
MSCI Europe Index. The MSCI Europe Index is an equity market
capitalization weighted index consisting of over 500 companies from all
of the developed markets in Europe.
Page 23
COMPARISON OF TOTAL RETURN(2)
(Strategy figures reflect the deduction of sales charges and expenses but not brokerage commissions or taxes.)
Hypothetical Strategy Total Returns(1) Index Total Returns
___________________________________________________________________________ _______________________________________
The Dow(sm) The Dow(sm) European The S&P The Nasdaq(R) Value Line(r) MSCI
DART 5 DART 10 Target 20 Target 24 Target 15 Target Europe S&P 500 Nasdaq-
Year Strategy Strategy Strategy Strategy Strategy Strategy DJIA Index Index 100 Index(R)
____ ________ ________ ________ ________ ________ ________ ____ ______ _______ ____________
1972 16.62% 22.27% 18.38% 18.89%
1973 9.34% -3.60% -13.20% -14.57%
1974 0.78% -8.42% -23.64% -26.33%
1975 46.03% 56.11% 44.46% 36.84%
1976 28.49% 33.62% 22.80% 23.64%
1977 1.92% -3.28% -12.91% -7.25%
1978 9.51% -3.28% 2.66% 6.49%
1979 16.10% 11.58% 10.60% 18.22%
1980 42.32% 23.31% 21.90% 32.11%
1981 -7.40% 0.66% -3.61% -4.92%
1982 20.51% 25.95% 26.85% 21.14%
1983 35.36% 38.85% 25.82% 22.28%
1984 11.89% 4.84% 1.29% 1.26% 6.22%
1985 41.55% 37.73% 77.61% 34.37% 33.28% 79.79% 31.77%
1986 47.76% 40.36% 40.81% 20.42% 21.35% 21.02% 27.00% 44.46% 18.31% 6.89%
1987 4.57% 3.86% 13.31% 2.62% 12.56% 17.78% 5.66% 4.10% 5.33% 10.49%
1988 16.86% 17.56% 15.20% 5.48% -2.04% -8.41% 16.03% 16.35% 16.64% 13.54%
1989 38.48% 26.98% 31.43% 23.56% 35.65% 47.37% 32.09% 29.06% 31.35% 26.17%
1990 4.32% -0.08% -1.94% 7.67% -6.81% 4.09% -0.73% -3.37% -3.30% -10.41%
1991 40.90% 42.24% 15.03% 41.50% 107.19% 84.89% 24.19% 13.66% 30.40% 64.99%
1992 11.40% 7.13% -5.45% -0.49% -1.60% -1.53% 7.39% -4.25% 7.62% 8.86%
1993 18.34% 19.67% 35.69% 9.29% 26.92% 26.29% 16.87% 29.79% 9.95% 11.67%
1994 -7.12% -1.18% -1.96% 6.15% 8.98% 14.40% 5.03% 2.66% 1.34% 1.74%
1995 44.87% 36.57% 33.04% 40.44% 52.02% 53.73% 36.67% 22.13% 37.22% 43.01%
1996 33.81% 33.38% 22.74% 32.60% 58.21% 55.95% 28.71% 21.57% 22.82% 42.74%
1997 20.12% 24.14% 27.28% 31.49% 33.48% 35.50% 24.82% 24.20% 33.21% 20.76%
1998 25.83% 18.49% 34.09% 41.11% 120.95% 92.67% 18.03% 28.80% 28.57% 85.43%
1999 18.26% 17.01% 27.54% 42.10% 98.51% 113.65% 27.06% 14.12% 20.94% 102.08%
2000 -10.84% 9.24% 6.35% 4.86% -16.06% -9.90% -4.70% -9.66% -9.08% -36.82%
2001 -4.32% -9.08% -13.51% -19.01% -36.39% -20.69% -16.75% -26.98% -20.26% -50.07%
(thru
9/30)
_______________
<FN>
(1) The Strategy stocks for each Strategy for a given year consist of the
common stocks selected by applying the respective Strategy as of the
beginning of the period (and not the date the Trusts actually sell Units.)
(2) Total Return represents the sum of the change in market value of each
group of stocks between the first and last trading day of a period plus
the total dividends paid on each group of stocks during such period
divided by the opening market value of each group of stocks as of the
first trading day of a period. Total Return figures assume that all
dividends are reinvested semi-annually and all returns are stated in
terms of U.S. dollars. Strategy figures reflect the deduction of sales
charges and expenses but have not been reduced by estimated brokerage
commissions paid by Trusts in acquiring Securities or any taxes incurred
by investors. Based on the year-by-year returns contained in the table,
over the full years listed above, The Dow(sm) DART 5 Strategy, The
Dow(sm) DART 10 Strategy, European Target 20 Strategy, The S&P Target 24
Strategy, The Nasdaq(R) Target 15 Strategy and Value Line(R) Target 25
Strategy achieved an average annual total return of 18.80%, 17.16%,
20.93%, 16.73%, 30.84% and 32.03%, respectively. In addition, over each
stated period, each individual strategy achieved a greater average
annual total return than that of its corresponding index, the DJIA; the
MSCI Europe Index; the S&P 500 Index; and the Nasdaq-100 Index(R) which
were 13.21%, 18.16%, 13.07% and 21.27%, respectively.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</FN>
Page 24
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the price per Unit of
which is comprised of the following:
- - The aggregate underlying value of the Securities;
- - The amount of any cash in the Income and Capital Accounts;
- - Dividends receivable on Securities; and
- - The maximum sales charge (which consists solely of a deferred sales
charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities, changes in the
relevant currency exchange rates, changes in the applicable commissions,
stamp taxes, custodial fees and other costs associated with foreign
trading, and changes in the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until the business
day following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for a
Trust's organization costs (including costs of preparing the
registration statement, the Indenture and other closing documents,
registering Units with the Securities and Exchange Commission ("SEC")
and states, the initial audit of each Trust portfolio, legal fees and
the initial fees and expenses of the Trustee) will be purchased in the
same proportionate relationship as all the Securities contained in a
Trust. Securities will be sold to reimburse the Sponsor for a Trust's
organization costs at the earlier of six months after the Initial Date
of Deposit or the end of the initial offering period (a significantly
shorter time period than the life of the Trusts). During the period
ending with the earlier of six months after the Initial Date of Deposit
or the end of the initial offering period, there may be a decrease in
the value of the Securities. To the extent the proceeds from the sale of
these Securities are insufficient to repay the Sponsor for Trust
organization costs, the Trustee will sell additional Securities to allow
a Trust to fully reimburse the Sponsor. In that event, the net asset
value per Unit of a Trust will be reduced by the amount of additional
Securities sold. Although the dollar amount of the reimbursement due to
the Sponsor will remain fixed and will never exceed the per Unit amount
set forth for a Trust in "Notes to Statements of Net Assets," this will
result in a greater effective cost per Unit to Unit holders for the
reimbursement to the Sponsor. To the extent actual organization costs
are less than the estimated amount, only the actual organization costs
will be deducted from the assets of a Trust. When Securities are sold to
reimburse the Sponsor for organization costs, the Trustee will sell
Securities, to the extent practicable, which will maintain the same
proportionate relationship among the Securities contained in a Trust as
existed prior to such sale.
Sales Charges.
The maximum sales charge is entirely deferred. The deferred sales charge
for each Trust is a fixed dollar amount equal to approximately $ , $
, $ , $ , $ and $ per Unit for The Dow(sm) DART 5
Portfolio, The Dow(sm) DART 10 Portfolio, European Target 20 Portfolio,
The Nasdaq(R) Target 15 Portfolio, The S&P Target 24 Portfolio and the
Value Line(R) Target 25 Portfolio, respectively, which accrues on a
daily basis and will be deducted from a Trust's assets on approximately
the twentieth day of each month over the life of a Trust and at a
Trust's termination. You will only be subject to the deferred sales
charge that accrues while you own your Units. At the Public Offering
Price per Unit for each Trust set forth in "Summary of Essential
Information," the maximum sales charge equals 1.0% of the Public
Offering Price. The maximum sales charge will vary from 1.0% with
changes in the Public Offering Price but in no case will it exceed ____%
of the Public Offering Price (equivalent to ____% of the net amount
invested, exclusive of the deferred sales charge).
As Sponsor, we will also receive, and the Unit holders will pay, a
creation and development fee. See "Expenses and Charges" for a
description of the services provided for this fee.
The Value of the Securities.
The Evaluator will determine the aggregate underlying value of the
Securities in a Trust as of the Evaluation Time on each business day and
will adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
Page 25
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities in a Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, their value will
generally be based on the current ask prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for valuation). If current ask prices are unavailable, the
valuation is generally determined:
a) On the basis of current ask prices for comparable securities;
b) By appraising the value of the Securities on the ask side of the
market; or
c) By any combination of the above.
The total value of the Securities in the European Target 20 Portfolio
during the initial offering period is computed on the basis of the
offering side value of the relevant currency exchange rate expressed in
U.S. dollars as of the Evaluation Time.
After the initial offering period is over, the aggregate underlying
value of the Securities will be determined as set forth above, except
that bid prices are used instead of ask prices when necessary. In
addition, during this period the aggregate underlying value of non-U.S.
listed Securities is computed on the basis of the bid side value of the
relevant currency exchange rate expressed in U.S. dollars as of the
Evaluation Time.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
Dealers and others can purchase Units at prices which represent a
concession or agency commission of up to $_____, $_____, $_____, $_____,
$_____ and $_____ per Unit for The Dow sm DART 5 Portfolio, The Dow sm
DART 10 Portfolio, European Target 20 Portfolio, The Nasdaq(R) Target 15
Portfolio, The S&P Target 24 Portfolio and the Value Line(R) Target 25
Portfolio respectively.
We reserve the right to change the amount of concessions or agency
commissions from time to time. If we reacquire, or the Trustee redeems,
Units from brokers, dealers or other selling agents while a market is
being maintained for such Units, such entities agree to immediately
repay to us any concession or agency commission relating to the
reacquired Units. Certain commercial banks may be making Units of the
Trusts available to their customers on an agency basis. A portion of the
sales charge paid by these customers is kept by or given to the banks in
the amounts shown above.
Award Programs.
From time to time we may sponsor programs which provide awards to a
dealer's registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trusts. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable sales charge on Units sold by such persons during such
programs. We make these payments out of our own assets and not out of
Trust assets. These programs will not change the price you pay for your
Units.
Advertising and Investment Comparisons.
Advertising materials regarding a Trust may discuss several topics,
including: developing a long-term financial plan; working with your
financial professional; the nature and risks of various investment
strategies and unit investment trusts that could help you reach your
financial goals; the importance of discipline; how a Trust operates; how
securities are selected; various unit investment trust features such as
convenience and costs; and options available for certain types of unit
investment trusts. These materials may include descriptions of the
principal businesses of the companies represented in each Trust,
research analysis of why they were selected and information relating to
the qualifications of the persons or entities providing the research
analysis. In addition, they may include research opinions on the economy
and industry sectors and included a list of investment products
generally appropriate for pursuing those recommendations.
From time to time we may compare the estimated returns of a Trust (which
may show performance net of the expenses and charges a Trust would have
incurred) and returns over specified periods of other similar trusts we
sponsor in our advertising and sales materials, with (1) returns on
other taxable investments such as the common stocks comprising various
Page 26
market indexes, corporate or U.S. Government bonds, bank CDs and money
market accounts or funds, (2) performance data from Morningstar
Publications, Inc. or (3) information from publications such as Money,
The New York Times, U.S. News and World Report, BusinessWeek, Forbes or
Fortune. The investment characteristics of each Trust differ from other
comparative investments. You should not assume that these performance
comparisons will be representative of a Trust's future performance. We
may also, from time to time, use advertising which classifies trusts
according to capitalization and/or investment style.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit for each Trust as stated in "Public Offering." Also, any
difference between our cost to purchase the Securities and the price at
which we sell them to a Trust is considered a profit or loss (see Note 2
of "Notes to Schedules of Investments"). During the initial offering
period, dealers and others may also realize profits or sustain losses as
a result of fluctuations in the Public Offering Price they receive when
they sell the Units.
In maintaining a market for the Units, any difference between the price
at which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees and costs to transfer and record the ownership of Units,
if any. We may discontinue purchases of Units at any time. IF YOU WISH
TO DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET
PRICES BEFORE MAKING A TENDER FOR REDEMPTION TO THE SHAREHOLDER
SERVICING AGENT.
How We Purchase Units
The Shareholder Servicing Agent will notify us of any tender of Units
for redemption. If our bid at that time is equal to or greater than the
Redemption Price per Unit, we may purchase the Units. You will receive
your proceeds from the sale no later than if they were redeemed by the
Trustee. We may tender Units we hold to the Trustee for redemption as
any other Units. If we elect not to purchase Units, the Shareholder
Servicing Agent or Trustee may sell tendered Units in the over-the-
counter market, if any. However, the amount you will receive is the same
as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of each Trust are listed under "Fee
Table." If actual expenses of such Trust exceed the estimate, that Trust
will bear the excess. The Trustee will pay operating expenses of the
Trusts from the Income Account of a Trust if funds are available, and
then from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee may earn interest on
these funds, thus benefiting from their use.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of ours,
acts as both Portfolio Supervisor and Evaluator to the Trusts and will
receive the fees set forth under "Fee Table" for providing portfolio
supervisory and evaluation services to the Trusts. In providing
portfolio supervisory services, the Portfolio Supervisor may purchase
research services from a number of sources, which may include
underwriters or dealers of the Trusts.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of a Trust outstanding at
any time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. The fees payable to the Shareholder Servicing Agent are a fixed
dollar amount assessed on a per Trust basis. These fees may be adjusted
for inflation without Unit holders' approval, but in no case will the
annual fee paid to us or our affiliates for providing a given service to
all unit investment trusts for which we provide such services be more
than the actual cost of providing such services in such year.
As Sponsor, we will receive a fee from each Trust for creating and
developing the Trusts, including determining each Trust's objectives,
policies, composition and size, selecting service providers and
information services and for providing other similar administrative and
ministerial functions. The "creation and development fee" is a charge of
Page 27
.30% of a Trust's average daily net asset value through the date of
collection. In connection with the creation and development fee, in no
event will the Sponsor collect more than .30% of a Unit holder's initial
investment. We do not use this fee to pay distribution expenses or as
compensation for sales efforts.
In addition to a Trust's operating expenses, and the fees described
above, the Trusts may also incur the following charges:
- - A quarterly license fee (which will fluctuate with a Trust's net asset
value) payable by certain of the Trusts for the use of certain
trademarks and trade names of Dow Jones, Standard & Poor's or The Nasdaq
Stock Market, Inc. and/or Value Line;
- - All legal expenses of the Trustee according to its responsibilities
under the Indenture;
- - The expenses and costs incurred by the Trustee to protect a Trust and
your rights and interests;
- - Fees for any extraordinary services the Trustee performed under the
Indenture;
- - Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of a Trust;
- - Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of a
Trust;
- - Foreign custodial and transaction fees, if any; and/or
- - All taxes and other government charges imposed upon the Securities or
any part of a Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
a Trust. Since the Securities are all common stocks and dividend income
is unpredictable, we cannot guarantee that dividends will be sufficient
to meet any or all expenses of a Trust. If there is not enough cash in
the Income or Capital Accounts of a Trust, the Trustee has the power to
sell Securities in a Trust to make cash available to pay these charges.
Any compensation or other consideration we or our affiliates receive on
Units held in Eligible Plans offered to employees of ours or our
affiliates will be remitted to such Eligible Plans to the extent the
receipt of such compensation or other consideration by us or our
affiliates is not permitted by ERISA.
Tax Status
Each Trust is not an association taxable as a corporation for federal
income tax purposes. Because the Eligible Plans are exempt from tax
under Sections 501(a) or 457 of the Internal Revenue Code of 1986, as
amended, while Units are held by Eligible Plans, neither such Eligible
Plans nor any participating employee will be taxed on income from a Trust.
Some distributions by a Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
you. However, because you are deemed to have paid directly your share of
foreign taxes that have been paid or accrued by a Trust, you may be
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
Under the existing income tax laws of the State and City of New York,
the Trusts are not associations taxable as corporations.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat the Shareholder Servicing Agent as sole Record
Owner of Units on its books. The Shareholder Servicing Agent will keep a
record of all individual Unit holders on its books. It is your
responsibility to notify the Shareholder Servicing Agent when you become
Record Owner. All Units will be held in uncertificated (book-entry) form.
The Shareholder Servicing Agent will establish an account for you and
credit your account with the number of Units you purchase. Within two
business days of the issuance or transfer of Units, the Shareholder
Servicing Agent will send you:
- - A written initial transaction statement containing a description of
your Trust;
- - A list of the number of Units issued or transferred;
- - Your name, address and Taxpayer Identification Number ("TIN");
- - A notation of any liens or restrictions of the issuer and any adverse
claims; and
- - The date the transfer was registered.
Unit Holder Reports.
In connection with each distribution, the Shareholder Servicing Agent
will provide you with a statement detailing the per Unit amount of
income (if any) distributed. After the end of each calendar year, the
Shareholder Servicing Agent will provide Eligible Plans with the
following information:
- - A summary of transactions in your Trust for the year;
- - A list of any Securities sold during the year and the Securities held
at the end of that year by your Trust;
- - The Redemption Price per Unit, computed on the 31st day of December of
such year (or the last business day before); and
Page 28
- - Amounts of income and capital distributed during the year.
You may request from the Shareholder Servicing Agent copies of the
evaluations of the Securities as prepared by the Evaluator.
Income and Capital Distributions
You will be eligible to receive distributions on your Units only after
you become a Record Owner. The Trustee will credit dividends received on
a Trust's Securities to the Income Account of such Trust. All other
receipts, such as return of capital, are credited to the Capital Account
of such Trust. Dividends received on foreign Securities, if any, are
converted into U.S. dollars at the applicable exchange rate.
The Trustee will distribute any net income in the Income Account, as
well as amounts in the Capital Account, as part of the final liquidation
distribution in the case of Rollover Unit holders and others. No income
distribution will be paid if accrued expenses of a Trust exceed amounts
in the Income Account. Distribution amounts will vary with changes in a
Trust's fees and expenses, in dividends received and with the sale of
Securities. For purposes of distributions, the Record Date shall be the
Mandatory Termination Date and Unit holders on the Record Date shall
receive distributions as part of the final liquidation distribution (the
"Distribution Date").
We anticipate that there will be enough money in the Capital Account of
a Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
The Trustee may establish reserves (the "Reserve Account") within a
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of that Trust.
Redeeming Your Units
Each Eligible Plan may redeem all or a portion of its Units at any time
by sending a request for redemption to the Shareholder Servicing Agent,
who will forward such information to the Trustee. The redemption request
must be properly endorsed with proper instruments of transfer and
signature guaranteed by an eligible institution. No redemption fee will
be charged, but you are responsible for any governmental charges that
apply. One business day after the day you tender your Units (the "Date
of Tender") you will receive cash in an amount for each Unit equal to
the Redemption Price per Unit calculated at the Evaluation Time on the
Date of Tender.
The Date of Tender is considered to be the date on which the Shareholder
Servicing Agent receives your redemption request (if such day is a day
the NYSE is open for trading). However, if your redemption request is
received after 4:00 p.m. Eastern time (or after any earlier closing time
on a day on which the NYSE is scheduled in advance to close at such
earlier time), the Date of Tender is the next day the NYSE is open for
trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account of a Trust if funds are available for that
purpose, or from the Capital Account. All other amounts paid on
redemption will be taken from the Capital Account of a Trust.
The Trustee may sell Securities of a Trust to make funds available for
redemption. If Securities are sold, the size and diversification of a
Trust will be reduced. These sales may result in lower prices than if
the Securities were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- - If the NYSE is closed (other than customary weekend and holiday
closings);
- - If the SEC determines that trading on the NYSE is restricted or that
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- - For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate underlying value of the Securities held in that Trust;
and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of such Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of such Trust, if any;
4. cash held for distribution to Unit holders of record of such Trust as
of the business day before the evaluation being made;
Page 29
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by such Trust; and
dividing
1. the result by the number of outstanding Units of such Trust.
Until the earlier of six months after the Initial Date of Deposit or the
end of the initial offering period, the Redemption Price per Unit will
include estimated organization costs as set forth under "Fee Table."
Investing in a New Trust
Each Trust's portfolio has been selected on the basis of capital
appreciation potential for a limited time period. When each Trust is
about to terminate, you may have the option to roll your proceeds into
the next series of a Trust (the "New Trusts") if one is available. We
intend to create the New Trusts in conjunction with the termination of
the Trusts and plan to apply the same strategy we used to select the
portfolio for the Trusts to the New Trusts.
If your Eligible Plan assets are invested in Units of a Trust on the
Mandatory Termination Date set forth under "Summary of Essential
Information" (a "Rollover Unit holder"), the Trustee, acting in its
capacity as Distribution Agent, will redeem such Units and reinvest the
proceeds into a New Trust, provided such New Trust is offered and Units
are available. If you no longer wish to have your Eligible Plan assets
invested in a Trust you can change your Eligible Plan allocation
instructions at any time as permitted by your Eligible Plan. As a
Rollover Unit holder, your Units will be redeemed and the underlying
Securities sold by the Distribution Agent on the Mandatory Termination
Date. The Distribution Agent may engage us or other brokers as its agent
to sell the Securities.
Once all of the Securities are sold, your proceeds, less any brokerage
fees, governmental charges or other expenses involved in the sales, will
be used to buy units of a New Trust or trust with a similar investment
strategy that you have selected, provided such trusts are registered and
being offered. Accordingly, proceeds may be uninvested for up to several
days. Units purchased with rollover proceeds will generally be purchased
subject only to the maximum remaining deferred sales charge on such units.
We intend to create New Trust units as quickly as possible, depending on
the availability of the Securities contained in a New Trust's portfolio.
Rollover Unit holders will be given first priority to purchase New Trust
units. We cannot, however, assure the exact timing of the creation of
New Trust units or the total number of New Trust units we will create.
Any proceeds not invested on behalf of Rollover Unit holders in New
Trust units will be distributed within a reasonable time after such
occurrence. Although we believe that enough New Trust units can be
created, monies in a New Trust may not be fully invested on the next
business day.
If you elect not to participate as a Rollover Unit holder ("Remaining
Unit holders"), you will not be charged any additional transactional
sales charge due to the Special Redemption and Liquidation Period. We
may modify, amend or terminate this rollover option upon 60 days notice.
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- - The issuer of the Security defaults in the payment of a declared
dividend;
- - Any action or proceeding prevents the payment of dividends;
- - There is any legal question or impediment affecting the Security;
- - The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- - The issuer has defaulted on the payment of any other of its
outstanding obligations;
- - There has been a public tender offer made for a Security or a merger
or acquisition is announced affecting a Security, and that in our
opinion the sale or tender of the Security is in the best interest of
Unit holders; or
- - The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to a Trust.
Except in the limited instance in which a Trust acquires Replacement
Securities, as described in "The FT Series," a Trust may not acquire any
securities or other property other than the Securities. The Trustee, on
behalf of a Trust, will reject any offer for new or exchanged securities
or property in exchange for a Security, such as those acquired in a
merger or other transaction. If such exchanged securities or property
are nevertheless acquired by a Trust, at our instruction they will
either be sold or held in such Trust. In making the determination as to
Page 30
whether to sell or hold the exchanged securities or property we may get
advice from the Portfolio Supervisor. Any proceeds received from the
sale of Securities, exchanged securities or property will be credited to
the Capital Account of a Trust for distribution to Unit holders or to
meet redemption requests. The Trustee may retain and pay us or an
affiliate of ours to act as agent for the Trusts to facilitate selling
Securities, exchanged securities or property from the Trusts. If we or
our affiliate act in this capacity, we will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may sell Securities designated by us, or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of a Trust may be
changed. To get the best price for a Trust we may specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be
sold. We may consider sales of units of unit investment trusts which we
sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute the Trusts' portfolio
transactions, or when acting as agent for the Trusts in acquiring or
selling Securities on behalf of the Trusts.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- - To cure ambiguities;
- - To correct or supplement any defective or inconsistent provision;
- - To make any amendment required by any governmental agency; or
- - To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, each Trust will terminate on
the Mandatory Termination Date as stated in the "Summary of Essential
Information." A Trust may be terminated earlier:
- - Upon the consent of 100% of the Unit holders;
- - If the value of the Securities owned by such Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- - In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to all Unit
holders which will specify how you should tender your Units. If a Trust
is terminated due to this last reason, we will refund your entire sales
charge; however, termination of a Trust before the Mandatory Termination
Date for any other stated reason will result only in the waiver of any
remaining unaccrued sales charges on your Units at the time of
termination. For various reasons, including Unit holders' participation
as Rollover Unit holders, a Trust may be reduced below the Discretionary
Liquidation Amount and could therefore be terminated before the
Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of a Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner and timing of the sale of
Securities. Because the Trustee must sell the Securities within a
relatively short period of time, the sale of Securities as part of the
termination process may result in a lower sales price than might
otherwise be realized if such sale were not required at this time.
If you do not elect to participate in the Rollover Option, you will
receive a cash distribution from the sale of the remaining Securities,
along with your interest in the Income and Capital Accounts, within a
reasonable time after your Trust is terminated. Regardless of the
distribution involved, the Trustee will deduct from a Trust any accrued
costs, expenses, advances or indemnities provided for by the Indenture,
including estimated compensation of the Trustee and costs of liquidation
and any amounts required as a reserve to pay any taxes or other
governmental charges.
Information on the Sponsor, Trustee, Shareholder
Servicing Agent
and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- - The First Trust Combined Series
Page 31
- - FT Series (formerly known as The First Trust Special Situations Trust)
- - The First Trust Insured Corporate Trust
- - The First Trust of Insured Municipal Bonds
- - The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $35 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 2000, the total partners' capital of
Nike Securities L.P. was $21,676,108 (audited).
This information refers only to us and not to the Trusts or to any
series of the Trusts or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trusts have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trusts.
The Trustee.
The Trustee is JPMorgan Chase Bank, with its principal executive office
located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
The Shareholder Servicing Agent.
The Shareholder Servicing Agent is BISYS Fund Services Ohio, Inc. with
its principal place of business at 3435 Stelzer Road, Columbus, Ohio
43219. If you have questions regarding the Trusts, you may call the
Shareholder Servicing Agent at (800) 266-5240. The Shareholder Servicing
Agent has not participated in selecting the Securities; it only provides
administrative services.
Limitations of Liabilities of Sponsor, Shareholder Servicing Agent and
Trustee.
Neither we, the Shareholder Servicing Agent nor the Trustee will be
liable for taking any action or for not taking any action in good faith
according to the Indenture. We will also not be accountable for errors
in judgment. We will only be liable for our own willful misfeasance, bad
faith, gross negligence (ordinary negligence in the Shareholder
Servicing Agent's and Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- - Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- - Terminate the Indenture and liquidate the Trust; or
- - Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor, Shareholder Servicing Agent and Unit holders may
rely on the accuracy of any evaluation prepared by the Evaluator. The
Evaluator will make determinations in good faith based upon the best
available information, but will not be liable to the Trustee, Sponsor,
Shareholder Servicing Agent or Unit holders for errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
Page 32
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trusts.
Experts.
The Trusts' statements of net assets, including the schedules of
investments, as of the opening of business on the Initial Date of
Deposit included in this prospectus and elsewhere in the registration
statement have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein and elsewhere in
the registration statement, and are included in reliance upon the report
of such firm given upon their authority as experts in accounting and
auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
The Nasdaq Stock Market, Inc.
The Nasdaq(R) Target 15 Portfolio is not sponsored, endorsed, sold or
promoted by The Nasdaq Stock Market, Inc. (including its affiliates)
(Nasdaq, with its affiliates, are referred to as the "Corporations").
The Corporations have not passed on the legality or suitability of, or
the accuracy or adequacy of descriptions and disclosures relating to The
Nasdaq(R) Target 15 Portfolio. The Corporations make no representation
or warranty, express or implied, to the owners of Units of The Nasdaq(R)
Target 15 Portfolioor any member of the public regarding the
advisability of investing in securities generally or in The Nasdaq(R)
Target 15 Portfolio particularly, or the ability of the Nasdaq-100
Index(R) to track general stock market performance. The Corporations'
only relationship to the Sponsor ("Licensee") is in the licensing of the
Nasdaq 100(R), Nasdaq-100 Index(R) and Nasdaq(R) trademarks or service
marks, and certain trade names of the Corporations and the use of the
Nasdaq-100 Index(R) which is determined, composed and calculated by
Nasdaq without regard to Licensee or The Nasdaq(R) Target 15 Portfolio.
Nasdaq has no obligation to take the needs of the Licensee or the owners
of Units of The Nasdaq(R) Target 15 Portfolio into consideration in
determining, composing or calculating the Nasdaq-100 Index(R). The
Corporations are not responsible for and have not participated in the
determination of the timing of, prices at or quantities of The Nasdaq(R)
Target 15 Portfolio to be issued or in the determination or calculation
of the equation by which The Nasdaq(R) Target 15 Portfolio is to be
converted into cash. The Corporations have no liability in connection
with the administration, marketing or trading of The Nasdaq(R) Target 15
Portfolio.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE NASDAQ-100 INDEX(R) OR ANY DATA INCLUDED THEREIN. THE
CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE
OBTAINED BY THE LICENSEE, OWNERS OF THE TARGET VIP PORTFOLIO OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE NASDAQ-100 INDEX(R) OR ANY
DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED
WARRANTIES AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100
INDEX(R) OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY
LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL
DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
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Page 35
First Trust(R)
The Dow(sm) Dividend And Repurchase Target 5 Portfolio, Qualified 2002 Series
The Dow(sm) Dividend And Repurchase Target 10 Portfolio, Qualified 2002 Series
European Target 20 Portfolio, Qualified 2002 Series
The Nasdaq(R) Target 15 Portfolio, Qualified, 2002 Series
The S&P Target 24 Portfolio, Qualified 2002 Series
Value Line(R) Target 25 Portfolio, Qualified 2002 Series
FT 583
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Shareholder Servicing Agent: Trustee:
BISYS Fund Services Ohio, Inc. JPMorgan Chase Bank
3435 Stelzer Road 4 New York Plaza, 6th floor
Columbus, Ohio 43219 New York, New York 10004-2413
1-800-266-5240 1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
________________________
When Units of the Trusts are no longer available, this prospectus may be
used as a preliminary prospectus for a future series, in which case you
should note the following:
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL, OR ACCEPT OFFERS TO BUY, SECURITIES OF A FUTURE SERIES
UNTIL THAT SERIES HAS BECOME EFFECTIVE WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO SECURITIES CAN BE SOLD IN ANY STATE WHERE A SALE WOULD BE
ILLEGAL.
________________________
This prospectus contains information relating to the above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the Securities and Exchange
Commission in Washington, D.C. under the:
- - Securities Act of 1933 (file no. 333-_____) and
- - Investment Company Act of 1940 (file no. 811-05903)
Information about the Trusts, including their Codes of Ethics, can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington D.C. Information regarding the operation of
the Commission's Public Reference Room may be obtained by calling the
Commission at 1-202-942-8090.
Information about the Trusts is available on the EDGAR Database on the
Commission's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0102
e-mail address: publicinfo@sec.gov
December __, 2001
Page 36
First Trust(R)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of the unit investment trust
contained in FT 583 not found in the prospectus for the Trust. This
Information Supplement is not a prospectus and does not include all of
the information you should consider before investing in the Trust. This
Information Supplement should be read in conjunction with the prospectus
for the Trust in which you are considering investing.
This Information Supplement is dated December __, 2001. Capitalized
terms have been defined in the prospectus.
Table of Contents
Dow Jones & Company, Inc. 1
The Nasdaq Stock Market, Inc. 2
Standard & Poor's 2
Value Line Publishing, Inc. 3
Risk Factors
Securities 3
Dividends 3
Foreign Issuers 3
United Kingdom 4
Exchange Rate 5
Concentrations
Financial Services 8
Technology Companies 11
Portfolios
Equity Securities Selected for The Dow(sm) DART 5 Portfolio, Qualified 2002 Series 12
Equity Securities Selected for The Dow(sm) DART 10 Portfolio, Qualified 2002 Series 12
Equity Securities Selected for European Target 20 Portfolio, Qualified 2002 Series 12
Equity Securities Selected for The Nasdaq(R) Target 15 Portfolio, Qualified 2002 Series 12
Equity Securities Selected for The S&P Target 24 Portfolio, Qualified 2002 Series 13
Equity Securities Selected for Value Line(R) Target 25 Portfolio, Qualified 2002 Series 13
Dow Jones & Company, Inc.
The Trusts are not sponsored, endorsed, sold or promoted by Dow Jones &
Company, Inc. ("Dow Jones"). Dow Jones makes no representation or
warranty, express or implied, to the owners of the Trusts or any member
of the public regarding the advisability of investing in securities
generally or in the Trusts particularly. Dow Jones' only relationship to
the Sponsor is the licensing of certain trademarks, trade names and
service marks of Dow Jones and of the Dow Jones Industrial Average(sm),
which is determined, composed and calculated by Dow Jones without regard
to the Sponsor or the Trusts. Dow Jones has no obligation to take the
needs of the Sponsor or the owners of the Trusts into consideration in
determining, composing or calculating the Dow Jones Industrial
Average(sm). Dow Jones is not responsible for and has not participated
in the determination of the timing of, prices at, or quantities of the
Trusts to be issued or in the determination or calculation of the
equation by which the Trusts are to be converted into cash. Dow Jones
has no obligation or liability in connection with the administration,
marketing or trading of the Trusts.
DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
DOW JONES INDUSTRIAL AVERAGE(SM) OR ANY DATA INCLUDED THEREIN AND DOW
JONES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR
INTERRUPTIONS THEREIN. DOW JONES MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY THE SPONSOR, OWNERS OF THE TRUSTS, OR
ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DOW JONES INDUSTRIAL
Page 1
AVERAGE(SM) OR ANY DATA INCLUDED THEREIN. DOW JONES MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT
TO THE DOW JONES INDUSTRIAL AVERAGE(SM) OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES HAVE
ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR
CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
The Nasdaq Stock Market, Inc.
The "Nasdaq 100(R)," "Nasdaq-100 Index(R)," and "Nasdaq(R)" are trade or
service marks of The Nasdaq Stock Market, Inc. (which with its
affiliates are the "Corporations") and are licensed for use by us. The
Nasdaq(R) Target 15 Portfolio has not been passed on by the Corporations
as to its legality or suitability. The Nasdaq(R) Target 15 Portfolio is
not issued, endorsed, sold, or promoted by the Corporations. The
Corporations make no warranties and bear no liability with respect to
The Nasdaq(R) Target 15 Portfolio.
Standard & Poor's
The Trusts are not sponsored, endorsed, sold or promoted by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"). S&P makes
no representation or warranty, express or implied, to the owners of the
Trusts or any member of the public regarding the advisability of
investing in securities generally or in the Trusts particularly or the
ability of the S&P 500 Index to track general stock market performance.
S&P's only relationship to the licensee is the licensing of certain
trademarks and trade names of S&P and of the S&P 500 Index, which is
determined, composed and calculated by S&P without regard to the
licensee or the Trusts. S&P has no obligation to take the needs of the
licensee or the owners of the Trusts into consideration in determining,
composing or calculating the S&P 500 Index. S&P is not responsible for
and has not participated in the determination of the prices and amount
of the Trusts or the timing of the issuance or sale of the Trusts or in
the determination or calculation of the equation by which the Trusts are
to be converted into cash. S&P has no obligation or liability in
connection with the administration, marketing or trading of the Trusts.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY
FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE
LICENSEE, OWNERS OF THE TRUSTS, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES,
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY
FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING
LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
Value Line Publishing, Inc.
Value Line Publishing, Inc.'s ("VLPI") only relationship to Nike is
VLPI's licensing to Nike of certain VLPI trademarks and trade names and
the Value Line(R) Timeliness(TM) Ranking System (the "System"), which is
composed by VLPI without regard to Nike, this Product or any investor.
VLPI has no obligation to take the needs of Nike or any investor in the
Product into consideration in composing the System. The Product results
may differ from the hypothetical or published results of the Value
Line(R) Timeliness(TM) Ranking System. VLPI is not responsible for and
has not participated in the determination of the prices and composition
of the Product or the timing of the issuance for sale of the Product or
in the calculation of the equations by which the Product is to be
converted into cash.
VLPI MAKES NO WARRANTY CONCERNING THE SYSTEM, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTIES ARISING
FROM USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, AND
VLPI MAKES NO WARRANTY AS TO THE POTENTIAL PROFITS OR ANY OTHER BENEFITS
THAT MAY BE ACHIEVED BY USING THE SYSTEM OR ANY INFORMATION OR MATERIALS
GENERATED THEREFROM. VLPI DOES NOT WARRANT THAT THE SYSTEM WILL MEET ANY
REQUIREMENTS OR THAT IT WILL BE ACCURATE OR ERROR-FREE. VLPI ALSO DOES
NOT GUARANTEE ANY USES, INFORMATION, DATA OR OTHER RESULTS GENERATED
FROM THE SYSTEM. VLPI HAS NO OBLIGATION OR LIABILITY (I) IN CONNECTION
Page 2
WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE PRODUCT; OR (II)
FOR ANY LOSS, DAMAGE, COST OR EXPENSE SUFFERED OR INCURRED BY ANY
INVESTOR OR OTHER PERSON OR ENTITY IN CONNECTION WITH THIS PRODUCT, AND
IN NO EVENT SHALL VLPI BE LIABLE FOR ANY LOST PROFITS OR OTHER
CONSEQUENTIAL, SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR EXEMPLARY
DAMAGES IN CONNECTION WITH THE PRODUCT.
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors. From September
30, 1997 through October 30, 1997, amid record trading volume, the S&P
500 Index and DJIA declined 4.60% and 7.09%, respectively. In addition,
against a backdrop of continued uncertainty regarding the current global
currency crisis and falling commodity prices, during the period between
July 31, 1998 and September 30, 1998, the S&P 500 and DJIA declined by
8.97% and 11.32%, respectively.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Shareholders of common stocks of the type held
by the Trusts have a right to receive dividends only when and if, and in
the amounts, declared by the issuer's board of directors and have a
right to participate in amounts available for distribution by the issuer
only after all other claims on the issuer have been paid or provided
for. Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same
degree of protection of capital as do debt securities. The issuance of
additional debt securities or preferred stock will create prior claims
for payment of principal, interest and dividends which could adversely
affect the ability and inclination of the issuer to declare or pay
dividends on its common stock or the rights of holders of common stock
with respect to assets of the issuer upon liquidation or bankruptcy.
Cumulative preferred stock dividends must be paid before common stock
dividends, and any cumulative preferred stock dividend omitted is added
to future dividends payable to the holders of cumulative preferred
stock. Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Foreign Issuers. Since all of the Securities included in the European
Target 20 Portfolio consist of securities of foreign issuers, an
investment in such a Trust involves certain investment risks that are
different in some respects from an investment in a trust which invests
entirely in the securities of domestic issuers. These investment risks
include future political or governmental restrictions which might
adversely affect the payment or receipt of payment of dividends on the
relevant Securities, the possibility that the financial condition of the
issuers of the Securities may become impaired or that the general
condition of the relevant stock market may worsen (both of which would
contribute directly to a decrease in the value of the Securities and
thus in the value of the Units), the limited liquidity and relatively
small market capitalization of the relevant securities market,
expropriation or confiscatory taxation, economic uncertainties and
foreign currency devaluations and fluctuations. In addition, for foreign
issuers that are not subject to the reporting requirements of the
Securities Exchange Act of 1934, there may be less publicly available
information than is available from a domestic issuer. Also, foreign
issuers are not necessarily subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to
those applicable to domestic issuers. The securities of many foreign
issuers are less liquid and their prices more volatile than securities
of comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the European
Target 20 Portfolio, the Sponsor believes that adequate information will
be available to allow the Supervisor to provide portfolio surveillance
for the Trust.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the United States dollar value of these securities
Page 3
will vary with fluctuations in the U.S. dollar foreign exchange rates
for the various Securities. See "Exchange Rate" below.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the European Target 20 Portfolio
are subject to exchange control restrictions under existing law which
would materially interfere with payment to the Trust of dividends due
on, or proceeds from the sale of, the Securities. However, there can be
no assurance that exchange control regulations might not be adopted in
the future which might adversely affect payment to the Trust. The
adoption of exchange control regulations and other legal restrictions
could have an adverse impact on the marketability of international
securities in the European Target 20 Portfolio and on the ability of the
Trust to satisfy their obligation to redeem Units tendered to the
Trustee for redemption. In addition, restrictions on the settlement of
transactions on either the purchase or sale side, or both, could cause
delays or increase the costs associated with the purchase and sale of
the foreign Securities and correspondingly could affect the price of the
Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to a Trust relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by a
Trust will generally be effected only in foreign securities markets.
Although the Sponsor does not believe that the European Target 20
Portfolio will encounter obstacles in disposing of the Securities,
investors should realize that the Securities may be traded in foreign
countries where the securities markets are not as developed or efficient
and may not be as liquid as those in the United States. The value of the
Securities will be adversely affected if trading markets for the
Securities are limited or absent.
United Kingdom. The emphasis of the United Kingdom's economy is in the
private services sector, which includes the wholesale and retail sector,
banking, finance, insurance and tourism. Services as a whole account for
a majority of the United Kingdom's gross national product and makes a
significant contribution to the country's balance of payments. The
portfolios of the International Trusts may contain common stocks of
British companies engaged in such industries as banking, chemicals,
building and construction, transportation, telecommunications and
insurance. Many of these industries may be subject to government
regulation, which may have a materially adverse effect on the
performance of their stock. In the first quarter of 1998, gross domestic
product (GDP) of the United Kingdom grew to a level 3.0% higher than in
the first quarter of 1997, however the overall rate of GDP growth has
slowed since the third quarter of 1997. The slow down largely reflects a
deteriorating trade position and higher indirect taxes. The average
quarterly rate of GDP growth in the United Kingdom (as well as in Europe
generally) has been decelerating since 1994. The United Kingdom is a
member of the European Union (the "EU") which was created through the
formation of the Maastricht Treaty on European Union in late 1993. It is
expected that the Treaty will have the effect of eliminating most
remaining trade barriers between the 15 member nations and make Europe
one of the largest common markets in the world. However, the effective
implementation of the Treaty provisions and the rate at which trade
barriers are eliminated is uncertain at this time. Furthermore, the
recent rapid political and social change throughout Europe make the
extent and nature of future economic development in the United Kingdom
and Europe and the impact of such development upon the value of
Securities issued by United Kingdom companies impossible to predict.
A majority of the EU members converted their existing sovereign
currencies to a common currency (the "euro") on January 1, 1999. The
United Kingdom did not participate in this conversion on January 1, 1999
and the Sponsor is unable to predict if or when the United Kingdom will
convert to the euro. Moreover, it is not possible to accurately predict
the effect of the current political and economic situation upon long-
term inflation and balance of trade cycles and how these changes, as
well as the implementation of a common currency throughout a majority of
EU countries, would affect the currency exchange rate between the U.S.
dollar and the British pound sterling. In addition, United Kingdom
companies with significant markets or operations in other European
countries (whether or not such countries are participating) face
strategic challenges as these entities adapt to a single trans-national
currency. The euro conversion may have a material impact on revenues,
expenses or income from operations; increase competition due to the
increased price transparency of EU markets; affect issuers' currency
exchange rate risk and derivatives exposure; disrupt current contracts;
cause issuers to increase spending on information technology updates
required for the conversion; and result in potential adverse tax
consequences. The Sponsor is unable to predict what impact, if any, the
euro conversion will have on any of the Securities issued by United
Kingdom companies in the European Target 20 Portfolio.
Exchange Rate. The European Target 20 Portfolio is comprised totally of
Securities that are principally traded in foreign currencies and as
such, involve investment risks that are substantially different from an
investment in a fund which invests in securities that are principally
traded in United States dollars. The United States dollar value of the
portfolio (and hence of the Units) and of the distributions from the
portfolio will vary with fluctuations in the United States dollar
foreign exchange rates for the relevant currencies. Most foreign
currencies have fluctuated widely in value against the United States
dollar for many reasons, including supply and demand of the respective
currency, the rate of inflation in the respective economies compared to
the United States, the impact of interest rate differentials between
different currencies on the movement of foreign currency rates, the
balance of imports and exports goods and services, the soundness of the
world economy and the strength of the respective economy as compared to
the economies of the United States and other countries.
The post-World War II international monetary system was, until 1973,
dominated by the Bretton Woods Treaty which established a system of
fixed exchange rates and the convertibility of the United States dollar
into gold through foreign central banks. Starting in 1971, growing
volatility in the foreign exchange markets caused the United States to
abandon gold convertibility and to effect a small devaluation of the
United States dollar. In 1973, the system of fixed exchange rates
between a number of the most important industrial countries of the
world, among them the United States and most Western European countries,
was completely abandoned. Subsequently, major industrialized countries
have adopted "floating" exchange rates, under which daily currency
valuations depend on supply and demand in a freely fluctuating
international market. Many smaller or developing countries have
continued to "peg" their currencies to the United States dollar although
there has been some interest in recent years in "pegging" currencies to
"baskets" of other currencies or to a Special Drawing Right administered
by the International Monetary Fund. In Europe, the euro has been
developed. Currencies are generally traded by leading international
commercial banks and institutional investors (including corporate
treasurers, money managers, pension funds and insurance companies). From
time to time, central banks in a number of countries also are major
buyers and sellers of foreign currencies, mostly for the purpose of
preventing or reducing substantial exchange rate fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of
actual and proposed government policies on the value of currencies,
interest rate differentials between the currencies and the balance of
imports and exports of goods and services and transfers of income and
capital from one country to another. These economic factors are
influenced primarily by a particular country's monetary and fiscal
policies (although the perceived political situation in a particular
country may have an influence as well-particularly with respect to
transfers of capital). Investor psychology may also be an important
determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative
strength or weakness of a particular currency may sometimes exercise
considerable speculative influence on currency exchange rates by
purchasing or selling large amounts of the same currency or currencies.
However, over the long term, the currency of a country with a low rate
of inflation and a favorable balance of trade should increase in value
relative to the currency of a country with a high rate of inflation and
deficits in the balance of trade.
The following tables set forth, for the periods indicated, the range of
fluctuation concerning the equivalent U.S. dollar rates of exchange and
end of month equivalent U.S. dollar rates of exchange for the United
Kingdom pound sterling and the euro:
Page 5
Foreign Exchange Rates
Range of Fluctuations
in Foreign Currencies
United Kingdom
Annual Pound Sterling/
Period U.S. Dollar
_____ ____________
1983 0.616-0.707
1984 0.670-0.864
1985 0.672-0.951
1986 0.643-0.726
1987 0.530-0.680
1988 0.525-0.601
1989 0.548-0.661
1990 0.504-0.627
1991 0.499-0.624
1992 0.499-0.667
1993 0.630-0.705
1994 0.610-0.684
1995 0.610-0.653
1996 0.583-0.670
1997 0.584-0.633
1998 0.584-0.620
1999 0.597-0.646
2000 0.605-0.715
Source: Bloomberg L.P.
Page 6
End of Month Exchange Rates End of Month Exchange Rates
for Foreign Currencies for Foreign Currencies (continued)
United Kingdom United Kingdom
Pound Sterling/ Euro/ Pound Sterling/ Euro/
Monthly Period U.S. Dollar U.S. Dollar Monthly Period U.S. Dollar U.S. Dollar
___________ ____________ ________ ____________ ____________ ________
1994: 1998:
January .664 N.A. January .613 N.A.
February .673 N.A. February .609 N.A.
March .674 N.A. March .598 N.A.
April .659 N.A. April .598 N.A.
May .662 N.A. May .613 N.A.
June .648 N.A. June .600 N.A.
July .648 N.A. July .613 N.A.
August .652 N.A. August .595 N.A.
September .634 N.A. September .589 N.A.
October .611 N.A. October .596 N.A.
November .639 N.A. November .607 N.A.
December .639 N.A. December .602 N.A.
1995: 1999:
January .633 N.A. January .608 .880
February .631 N.A. February .624 .907
March .617 N.A. March .621 .929
April .620 N.A. April .621 .946
May .630 N.A. May .624 .960
June .627 N.A. June .634 .966
July .626 N.A. July .617 .934
August .645 N.A. August .623 .947
September .631 N.A. September .607 .936
October .633 N.A. October .608 .948
November .652 N.A. November .626 .991
December .645 N.A. December .618 .994
1996: 2000:
January .661 N.A. January .619 1.030
February .653 N.A. February .633 1.037
March .655 N.A. March .628 1.047
April .664 N.A. April .645 1.096
May .645 N.A. May .666 1.066
June .644 N.A. June .661 1.050
July .642 N.A. July .667 1.079
August .639 N.A. August .691 1.126
September .639 N.A. September .678 1.132
October .615 N.A. October .698 1.178
November .595 N.A. November .702 1.145
December .583 N.A. December .670 1.060
1997: 2001:
January .624 N.A. January .683 1.067
February .614 N.A. February .692 1.082
March .611 N.A. March .706 1.140
April .616 N.A. April .699 1.127
May .610 N.A. May .705 1.182
June .600 N.A. June .707 1.178
July .609 N.A. July .702 1.141
August .622 N.A. August .688 1.096
September .619 N.A. September .678 1.097
October .598 N.A. October .688 1.110
November .592 N.A. November
December .607 N.A. December
Source: Bloomberg L.P.
Page 7
The Evaluator will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
However, since these markets are volatile and are constantly changing,
depending on the activity at any particular time of the large
international commercial banks, various central banks, large multi-
national corporations, speculators and other buyers and sellers of
foreign currencies, and since actual foreign currency transactions may
not be instantly reported, the exchange rates estimated by the Evaluator
may not be indicative of the amount in United States dollars the
International Trusts would receive had the Trustee sold any particular
currency in the market. The foreign exchange transactions of the
International Trusts will be conducted by the Trustee with foreign
exchange dealers acting as principals on a spot (i.e., cash) buying
basis. Although foreign exchange dealers trade on a net basis, they do
realize a profit based upon the difference between the price at which
they are willing to buy a particular currency (bid price) and the price
at which they are willing to sell the currency (offer price).
Concentrations
Financial Services. An investment in Units of the European Target 20
Portfolio should be made with an understanding of the problems and risks
inherent in the bank and financial services sector in general.
Banks, thrifts and their holding companies are especially subject to the
adverse effects of economic recession, volatile interest rates,
portfolio concentrations in geographic markets and in commercial and
residential real estate loans, and competition from new entrants in
their fields of business. Banks and thrifts are highly dependent on net
interest margin. Recently, bank profits have come under pressure as net
interest margins have contracted, but volume gains have been strong in
both commercial and consumer products. There is no certainty that such
conditions will continue. Bank and thrift institutions had received
significant consumer mortgage fee income as a result of activity in
mortgage and refinance markets. As initial home purchasing and
refinancing activity subsided, this income diminished. Economic
conditions in the real estate markets, which have been weak in the past,
can have a substantial effect upon banks and thrifts because they
generally have a portion of their assets invested in loans secured by
real estate. Banks, thrifts and their holding companies are subject to
extensive federal regulation and, when such institutions are state-
chartered, to state regulation as well. Such regulations impose strict
capital requirements and limitations on the nature and extent of
business activities that banks and thrifts may pursue. Furthermore, bank
regulators have a wide range of discretion in connection with their
supervisory and enforcement authority and may substantially restrict the
permissible activities of a particular institution if deemed to pose
significant risks to the soundness of such institution or the safety of
the federal deposit insurance fund. Regulatory actions, such as
increases in the minimum capital requirements applicable to banks and
thrifts and increases in deposit insurance premiums required to be paid
by banks and thrifts to the Federal Deposit Insurance Corporation
("FDIC"), can negatively impact earnings and the ability of a company to
pay dividends. Neither federal insurance of deposits nor governmental
regulations, however, insures the solvency or profitability of banks or
their holding companies, or insures against any risk of investment in
the securities issued by such institutions.
The statutory requirements applicable to and regulatory supervision of
banks, thrifts and their holding companies have increased significantly
and have undergone substantial change in recent years. To a great
extent, these changes are embodied in the Financial Institutions Reform,
Recovery and Enforcement Act; enacted in August 1989, the Federal
Deposit Insurance Corporation Improvement Act of 1991, the Resolution
Trust Corporation Refinancing, Restructuring, and Improvement Act of
1991 and the regulations promulgated under these laws. Many of the
regulations promulgated pursuant to these laws have only recently been
finalized and their impact on the business, financial condition and
prospects of the Securities in a Trust's portfolio cannot be predicted
with certainty. The recently enacted Gramm-Leach-Bliley Act repealed
most of the barriers set up by the 1933 Glass-Steagall Act which
separated the banking, insurance and securities industries. Now banks,
insurance companies and securities firms can merge to form one-stop
financial conglomerates marketing a wide range of financial service
products to investors. This legislation will likely result in increased
merger activity and heightened competition among existing and new
participants in the field. Efforts to expand the ability of federal
thrifts to branch on an interstate basis have been initially successful
through promulgation of regulations, and legislation to liberalize
interstate banking has recently been signed into law. Under the
legislation, banks will be able to purchase or establish subsidiary
banks in any state, one year after the legislation's enactment. Since
mid-1997, banks have been allowed to turn existing banks into branches.
Consolidation is likely to continue. The Securities and Exchange
Commission and the Financial Accounting Standards Board require the
expanded use of market value accounting by banks and have imposed rules
requiring market accounting for investment securities held in trading
accounts or available for sale. Adoption of additional such rules may
Page 8
result in increased volatility in the reported health of the industry,
and mandated regulatory intervention to correct such problems.
Additional legislative and regulatory changes may be forthcoming. For
example, the bank regulatory authorities have proposed substantial
changes to the Community Reinvestment Act and fair lending laws, rules
and regulations, and there can be no certainty as to the effect, if any,
that such changes would have on the Securities in a Trust's portfolio.
In addition, from time to time the deposit insurance system is reviewed
by Congress and federal regulators, and proposed reforms of that system
could, among other things, further restrict the ways in which deposited
moneys can be used by banks or reduce the dollar amount or number of
deposits insured for any depositor. Such reforms could reduce
profitability as investment opportunities available to bank institutions
become more limited and as consumers look for savings vehicles other
than bank deposits. Banks and thrifts face significant competition from
other financial institutions such as mutual funds, credit unions,
mortgage banking companies and insurance companies, and increased
competition may result from legislative broadening of regional and
national interstate banking powers as has been recently enacted. Among
other benefits, the legislation allows banks and bank holding companies
to acquire across previously prohibited state lines and to consolidate
their various bank subsidiaries into one unit. The Sponsor makes no
prediction as to what, if any, manner of bank and thrift regulatory
actions might ultimately be adopted or what ultimate effect such actions
might have on a Trust's portfolio.
The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than 5%
of the outstanding shares of any class of voting securities of a bank or
bank holding company, (2) acquiring control of a bank or another bank
holding company, (3) acquiring all or substantially all the assets of a
bank, or (4) merging or consolidating with another bank holding company,
without first obtaining Federal Reserve Board ("FRB") approval. In
considering an application with respect to any such transaction, the FRB
is required to consider a variety of factors, including the potential
anti-competitive effects of the transaction, the financial condition and
future prospects of the combining and resulting institutions, the
managerial resources of the resulting institution, the convenience and
needs of the communities the combined organization would serve, the
record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the
prospective availability to the FRB of information appropriate to
determine ongoing regulatory compliance with applicable banking laws. In
addition, the federal Change In Bank Control Act and various state laws
impose limitations on the ability of one or more individuals or other
entities to acquire control of banks or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends which exceed its net income or which could
only be funded in ways that would weaken its financial health, such as
by borrowing. The FRB also may impose limitations on the payment of
dividends as a condition to its approval of certain applications,
including applications for approval of mergers and acquisitions. The
Sponsor makes no prediction as to the effect, if any, such laws will
have on the Securities or whether such approvals, if necessary, will be
obtained.
Companies involved in the insurance industry are engaged in
underwriting, reinsuring, selling, distributing or placing of property
and casualty, life or health insurance. Other growth areas within the
insurance industry include brokerage, reciprocals, claims processors and
multiline insurance companies. Insurance company profits are affected by
interest rate levels, general economic conditions, and price and
marketing competition. Property and casualty insurance profits may also
be affected by weather catastrophes and other disasters. Life and health
insurance profits may be affected by mortality and morbidity rates.
Individual companies may be exposed to material risks including reserve
inadequacy and the inability to collect from reinsurance carriers.
Insurance companies are subject to extensive governmental regulation,
including the imposition of maximum rate levels, which may not be
adequate for some lines of business. Proposed or potential tax law
changes may also adversely affect insurance companies' policy sales, tax
obligations, and profitability. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization
of traditional businesses, new competitors, capital expenditures on new
technology and the pressures to compete globally.
In addition to the normal risks of business, companies involved in the
insurance industry are subject to significant risk factors, including
those applicable to regulated insurance companies, such as: (i) the
inherent uncertainty in the process of establishing property-liability
loss reserves, particularly reserves for the cost of environmental,
asbestos and mass tort claims, and the fact that ultimate losses could
materially exceed established loss reserves which could have a material
adverse effect on results of operations and financial condition; (ii)
the fact that insurance companies have experienced, and can be expected
Page 9
in the future to experience, catastrophe losses which could have a
material adverse impact on their financial condition, results of
operations and cash flow; (iii) the inherent uncertainty in the process
of establishing property-liability loss reserves due to changes in loss
payment patterns caused by new claims settlement practices; (iv) the
need for insurance companies and their subsidiaries to maintain
appropriate levels of statutory capital and surplus, particularly in
light of continuing scrutiny by rating organizations and state insurance
regulatory authorities, and in order to maintain acceptable financial
strength or claims-paying ability rating; (v) the extensive regulation
and supervision to which insurance companies' subsidiaries are subject,
various regulatory initiatives that may affect insurance companies, and
regulatory and other legal actions; (vi) the adverse impact that
increases in interest rates could have on the value of an insurance
company's investment portfolio and on the attractiveness of certain of
its products; (vii) the need to adjust the effective duration of the
assets and liabilities of life insurance operations in order to meet the
anticipated cash flow requirements of its policyholder obligations; and
(viii) the uncertainty involved in estimating the availability of
reinsurance and the collectibility of reinsurance recoverables.
The state insurance regulatory framework has, during recent years, come
under increased federal scrutiny, and certain state legislatures have
considered or enacted laws that alter and, in many cases, increase state
authority to regulate insurance companies and insurance holding company
systems. Further, the National Association of Insurance Commissioners
("NAIC") and state insurance regulators are re-examining existing laws
and regulations, specifically focusing on insurance companies,
interpretations of existing laws and the development of new laws. In
addition, Congress and certain federal agencies have investigated the
condition of the insurance industry in the United States to determine
whether to promulgate additional federal regulation. The Sponsor is
unable to predict whether any state or federal legislation will be
enacted to change the nature or scope of regulation of the insurance
industry, or what effect, if any, such legislation would have on the
industry.
All insurance companies are subject to state laws and regulations that
require diversification of their investment portfolios and limit the
amount of investments in certain investment categories. Failure to
comply with these laws and regulations would cause non-conforming
investments to be treated as non-admitted assets for purposes of
measuring statutory surplus and, in some instances, would require
divestiture.
Environmental pollution clean-up is the subject of both federal and
state regulation. By some estimates, there are thousands of potential
waste sites subject to clean up. The insurance industry is involved in
extensive litigation regarding coverage issues. The Comprehensive
Environmental Response Compensation and Liability Act of 1980
("Superfund") and comparable state statutes ("mini-Superfund") govern
the clean-up and restoration by "Potentially Responsible Parties"
("PRP's"). Superfund and the mini-Superfunds ("Environmental Clean-up
Laws or "ECLs") establish a mechanism to pay for clean-up of waste sites
if PRP's fail to do so, and to assign liability to PRP's. The extent of
liability to be allocated to a PRP is dependent on a variety of factors.
The extent of clean-up necessary and the assignment of liability has not
been fully established. The insurance industry is disputing many such
claims. Key coverage issues include whether Superfund response costs are
considered damages under the policies, when and how coverage is
triggered, applicability of pollution exclusions, the potential for
joint and several liability and definition of an occurrence. Similar
coverage issues exist for clean up and waste sites not covered under
Superfund. To date, courts have been inconsistent in their rulings on
these issues. An insurer's exposure to liability with regard to its
insureds which have been, or may be, named as PRPs is uncertain.
Superfund reform proposals have been introduced in Congress, but none
have been enacted. There can be no assurance that any Superfund reform
legislation will be enacted or that any such legislation will provide
for a fair, effective and cost-efficient system for settlement of
Superfund related claims.
While current federal income tax law permits the tax-deferred
accumulation of earnings on the premiums paid by an annuity owner and
holders of certain savings-oriented life insurance products, no
assurance can be given that future tax law will continue to allow such
tax deferrals. If such deferrals were not allowed, consumer demand for
the affected products would be substantially reduced. In addition,
proposals to lower the federal income tax rates through a form of flat
tax or otherwise could have, if enacted, a negative impact on the demand
for such products.
Companies engaged in investment banking/brokerage and investment
management include brokerage firms, broker/dealers, investment banks,
finance companies and mutual fund companies. Earnings and share prices
of companies in this industry are quite volatile, and often exceed the
volatility levels of the market as a whole. Recently, ongoing
consolidation in the industry and the strong stock market has benefited
stocks which investors believe will benefit from greater investor and
issuer activity. Major determinants of future earnings of these
Page 10
companies are the direction of the stock market, investor confidence,
equity transaction volume, the level and direction of long-term and
short-term interest rates, and the outlook for emerging markets.
Negative trends in any of these earnings determinants could have a
serious adverse effect on the financial stability, as well as the stock
prices, of these companies. Furthermore, there can be no assurance that
the issuers of the Securities included in the European Target 20
Portfolio will be able to respond in a timely manner to compete in the
rapidly developing marketplace. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization
of traditional businesses, new competitors, capital expenditures on new
technology and the pressures to compete globally.
Technology Companies. The Nasdaq(R) Target 15 Portfolio is considered to
be concentrated in common stocks of technology companies. See "Risk
Factors" in the prospectus which will indicate, if applicable, the
Trust's concentration in this industry.
Technology companies generally include companies involved in the
development, design, manufacture and sale of computers and peripherals,
software and services, data networking/communications equipment,
internet access/information providers, semiconductors and semiconductor
equipment and other related products, systems and services. The market
for these products, especially those specifically related to the
Internet, is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Securities depends in substantial part on the timely and successful
introduction of new products. An unexpected change in one or more of the
technologies affecting an issuer's products or in the market for
products based on a particular technology could have a material adverse
affect on an issuer's operating results. Furthermore, there can be no
assurance that the issuers of the Securities will be able to respond in
a timely manner to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general
conditions of the industry have caused and are likely to cause the
market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the Securities and therefore the
ability of a Unit holder to redeem Units at a price equal to or greater
than the original price paid for such Units.
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
product vendors to comply with rigorous industry standards. Any failure
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Securities will obtain orders of similar magnitude as past orders from
other customers. Similarly, the success of certain technology companies
is tied to a relatively small concentration of products or technologies.
Accordingly, a decline in demand of such products, technologies or from
such customers could have a material adverse impact on issuers of the
Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. The
adoption of any such laws could have a material adverse impact on the
Securities in a Trust.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
Page 11
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
Portfolios
Equity Securities Selected for The Dow(sm) DART 5 Portfolio
, headquartered in
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Equity Securities Selected for The Dow(sm) DART 10 Portfolio
, headquartered in
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, headquartered in
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Equity Securities Selected for European Target 20 Portfolio
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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, headquartered in
Equity Securities Selected for The Nasdaq(R) Target 15 Portfolio
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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Page 12
, headquartered in
, headquartered in
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Equity Securities Selected for The S&P Target 24 Portfolio
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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Equity Securities Selected for Value Line(R) Target 25 Portfolio
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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Page 13
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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We have obtained the foregoing company descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Page 14
MEMORANDUM
Re: FT 583
The only difference of consequence (except as described
below) between FT 570, which is the current fund, and FT 583, the
filing of which this memorandum accompanies, is the change in the
series number. The list of securities comprising the Fund, the
evaluation, record and distribution dates and other changes
pertaining specifically to the new series, such as size and
number of Units in the Fund and the statement of condition of the
new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 570 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the securities deposited in the
Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 583 has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Lisle and State of
Illinois on November 16, 2001.
FT 583
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
David J. Allen Sole Director of
Nike Securities November 16, 2001
Corporation, the
General Partner of
Nike Securities L.P. Robert M. Porcellino
Attorney-in-Fact**
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF DELOITTE & TOUCHE LLP
The consent of Deloitte & Touche LLP to the use of its name
and to the reference to such firm in the Prospectus included in
this Registration Statement will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement is
filed as Exhibit 4.1 to the Registration Statement.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22).
1.1.1* Form of Trust Agreement for FT 583 among Nike Securities
L.P., as Depositor, JPMorgan Bank, as Trustee and First
Trust Advisors L.P., as Evaluator and Portfolio
Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
33-42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities L.P.,
Depositor (incorporated by reference to Amendment No. 1
to Form S-6 [File No. 33-42683] filed on behalf of The
First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by reference).
2.2 Copy of Code of Ethics (incorporated by reference to
Amendment No. 1 to form S-6 [File No. 333-31176] filed on behalf
of FT 415).
3.1* Opinion of counsel as to legality of Securities being
registered.
S-4
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
3.3* Opinion of counsel as to New York income tax status of
Securities being registered.
3.4* Opinion of counsel as to advancement of funds by Trustee.
4.1* Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on page
S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
33-63483] filed on behalf of The First Trust Combined
Series 258).
___________________________________
* To be filed by amendment.
S-5