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 597
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 JANUARY 10, 2002
10 Uncommon EuroValues(R), 2002 Portfolio
FT 597
FT 597 is a series of a unit investment trust, the FT Series. FT 597
consists of a single portfolio known as 10 Uncommon EuroValues(R), 2002
Portfolio (the "Trust"). The Trust invests in a diversified portfolio of
common stocks ("Securities") issued by 10 different European companies.
The Trust seeks to provide the potential for above-average capital
appreciation.
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 January __, 2002
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 4
Report of Independent Auditors 5
Statement of Net Assets 6
Schedule of Investments 7
The FT Series 8
Portfolio 8
Risk Factors 10
Portfolio Securities Descriptions 11
Public Offering 12
Distribution of Units 14
The Sponsor's Profits 15
The Secondary Market 15
How We Purchase Units 16
Expenses and Charges 16
Tax Status 17
Retirement Plans 18
Rights of Unit Holders 18
Income and Capital Distributions 19
Redeeming Your Units 20
Investing in a New Trust 20
Removing Securities from the Trust 21
Amending or Terminating the Indenture 22
Information on the Sponsor, Trustee and Evaluator 22
Other Information 23
Page 2
Summary of Essential Information
10 Uncommon EuroValues(R), 2002 Portfolio
FT 597
At the Opening of Business on the Initial Date of Deposit-January __, 2002
Sponsor: Nike Securities L.P.
Trustee: JPMorgan Chase Bank
Evaluator: First Trust Advisors L.P.
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $9.900
Maximum Transactional Sales Charge of 2.70% of the Public Offering Price per Unit
(2.727% of the net amount invested, exclusive of the deferred sales charge) (3) $.270
Less Deferred Sales Charge per Unit $(.170)
Public Offering Price per Unit (4) $10.000
Sponsor's Initial Repurchase Price per Unit (5) $9.730
Redemption Price per Unit (based on aggregate underlying value of Securities
less the deferred sales charge) (5) $9.730
Cash CUSIP Number
Reinvestment CUSIP Number
Fee Accounts Cash CUSIP Number
Fee Accounts Reinvestment CUSIP Number
Security Code
Ticker Symbol
First Settlement Date January __, 2002
Rollover Notification Date January 1, 2003
Special Redemption and Liquidation Period January 15, 2003 to February 28, 2003
Mandatory Termination Date (6) February 28, 2003
Income Distribution Record Date June 15, 2002 and December 15, 2002
Income Distribution Date (7) June 30, 2002 and December 31, 2002
______________
<FN>
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of the Trust so that the Public Offering
Price per Unit will equal approximately $10.00. If we make such an
adjustment, the fractional undivided interest per Unit will vary from
the amount 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. The value of foreign
Securities trading in non-U.S. currencies 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 transactional sales charge consists of an initial sales
charge and a deferred sales charge, but does not include the creation
and development fee. See "Fee Table" and "Public Offering."
(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 the Redemption Price per Unit will include the
estimated organization costs per Unit set forth under "Fee Table." After
such date, the Sponsor's Repurchase Price and Redemption Price per Unit
will not include such estimated organization costs. See "Redeeming Your
Units."
(6) See "Amending or Terminating the Indenture."
(7) At the Rollover Notification Date for Rollover Unit holders or upon
termination of the Trust for Remaining Unit holders, amounts in the
Income Account (which consist of dividends on the Securities) will be
included in amounts distributed to Unit holders. We will distribute
money from the Capital Account monthly on the last day of each month to
Unit holders of record on the fifteenth day of such month if the amount
available for distribution equals at least $1.00 per 100 Units. In any
case, we will distribute any funds in the Capital Account as part of the
final liquidation distribution.
</FN>
Page 3
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of the Trust. See "Public
Offering" and "Expenses and Charges." Although the Trust has a term of
approximately 13 months and is a unit investment trust rather than a
mutual fund, this information allows you to compare fees.
Amount
per Unit
_____
Unit Holder Sales Fees (as a percentage of public offering price)
Maximum Sales Charge
Initial sales charge 1.00%(a) $.100
Deferred sales charge 1.70%(b) $.170
Creation and development fee cap 0.25%(c) $.025
_______ _______
Maximum Sales Charges (including creation and development fee cap) (c) 2.95% $.295
======= =======
Organization Costs (as a percentage of public offering price)
Estimated organization costs .295%(d) $.0295
======= =======
Estimated Annual Trust Operating Expenses(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees % $
Trustee's fee and other operating expenses %(f) $
_______ _______
Total % $
======= =======
Example
This example is intended to help you compare the cost of investing in
the Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in the Trust for the periods
shown and then sell all your Units at the end of those periods. The
example also assumes a 5% return on your investment each year and that
the Trust's operating expenses stay the same. The example does not take
into consideration transaction fees which may be charged by certain
broker/dealers for processing redemption requests. Although your actual
costs may vary, based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
______ _______ _______ _______
$ $ $ $
The example assumes that the principal amount and distributions are
rolled annually into a New Trust, and you are subject to a reduced
transactional sales charge.
________________
<FN>
(a) The combination of the initial and deferred sales charge comprises
what we refer to as the "transactional sales charge." The initial sales
charge is actually equal to the difference between the maximum
transactional sales charge of 2.70% and any remaining deferred sales
charge.
(b) The deferred sales charge is a fixed dollar amount equal to $.170
per Unit which, as a percentage of the Public Offering Price, will vary
over time. The deferred sales charge will be deducted in three monthly
installments commencing February 20, 2002.
(c) The creation and development fee compensates the Sponsor for creating
and developing the Trust. The creation and development fee is a charge
of .25% collected at the end of the initial offering period which is
generally 90 days. The creation and development fee is computed based on
the 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 .25%. However, in no event
will we collect more than .25% 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 the
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.
(f) Other operating expenses 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. In certain
circumstances the Trust may incur additional expenses not set forth
above. See "Expenses and Charges."
</FN>
Page 4
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 597
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 597, comprising the 10 Uncommon
EuroValues(R), 2002 Portfolio (the "Trust"), as of the opening of
business on January __, 2002 (Initial Date of Deposit). This statement
of net assets is the responsibility of the Trust's Sponsor. Our
responsibility is to express an opinion on this statement of net assets
based on our audit.
We conducted our audit 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 statement of net assets is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the statement of net assets. Our procedures
included confirmation of the irrevocable letter of credit held by
JPMorgan Chase Bank, the Trustee, and deposited in the Trust for the
purchase of Securities, as shown in the statement of net assets as of
the opening of business on January __, 2002, by correspondence with the
Trustee. An audit also includes assessing the accounting principles used
and significant estimates made by the Trust's Sponsor, as well as
evaluating the overall presentation of the statement of net assets. We
believe that our audit of the statement of net assets provides a
reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of FT 597,
comprising the 10 Uncommon EuroValues(R), 2002 Portfolio, at the opening
of business on January __, 2002 (Initial Date of Deposit) in conformity
with accounting principles generally accepted in the United States of
America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
January __, 2002
Page 5
Statement of Net Assets
10 Uncommon EuroValues(R), 2002 Portfolio
FT 597
At the Opening of Business on the
Initial Date of Deposit-January __, 2002
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $
Less liability for reimbursement to Sponsor for organization costs (3) ( )
Less liability for deferred sales charge (4) ( )
________
Net assets $
========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $
Less maximum transactional sales charge (5) ( )
Less estimated reimbursement to Sponsor for organization costs (3) ( )
________
Net assets $
========
______________
<FN>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by JPMorgan Chase Bank, of
which $200,000 will be allocated to the Trust, 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 Trust. These costs have been estimated at $.0295 per
Unit for the Trust. A payment will be made as of the earlier of six
months after the Initial Date of Deposit or the end of the initial
offering period to an account maintained by the Trustee from which the
obligation of the investors to the Sponsor will be satisfied. To the
extent that actual organization costs are greater than the estimated
amount, only the estimated organization costs added to the Public
Offering Price will be reimbursed to the Sponsor and deducted from the
assets of the Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions from the Trust ($.170 per Unit), payable to the Sponsor in
three approximately equal monthly installments beginning on February 20,
2002 and on the 20th day of each month thereafter (or if such date is
not a business day, on the preceding business day) through April 19,
2002. If Unit holders redeem Units before April 19, 2002, they will have
to pay the remaining amount of the deferred sales charge applicable to
such Units when they redeem them.
(5) The aggregate cost to investors in the Trust includes a maximum
transactional sales charge (comprised of an initial and a deferred sales
charge) computed at the rate of 2.70% of the Public Offering Price per
Unit (equivalent to 2.727% of the net amount invested, exclusive of the
deferred sales charge), assuming no reduction of the transactional sales
charge as set forth under "Public Offering."
</FN>
Page 6
Schedule of Investments
10 Uncommon EuroValues(R), 2002 Portfolio
FT 597
At the Opening of Business on the
Initial Date of Deposit-January __, 2002
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
______ ____________________________________ __________ _______ _____________
% $ $
%
%
%
%
%
%
%
%
%
_______ ________
Total Investments 100% $
======= ========
______________
<FN>
(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 January __, 2002. The Trust has a mandatory
termination date of February 28, 2003.
(2) The cost of the Securities to the 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 (converted into U.S. dollars at the offer side of
the exchange rate at the Evaluation Time) on the business day preceding
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 the Trust) are $ and $ , respectively.
</FN>
Page 7
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
597, consists of a single portfolio known as 10 Uncommon EuroValues(R),
2002 Portfolio.
The 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 and First Trust Advisors L.P. as Portfolio
Supervisor and Evaluator, governs the operation of the Trust.
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 Trust.
On the Initial Date of Deposit, we deposited a portfolio of common
stocks with the Trustee and in turn, the Trustee delivered documents to
us representing our ownership of the Trust in the form of units ("Units").
After the Initial Date of Deposit, we may deposit additional Securities
in the Trust, or cash (including a letter of credit) with instructions
to buy more Securities, to create new Units for sale. If we create
additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on
the Initial Date of Deposit (as set forth in "Schedule of Investments"),
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 the 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
the Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of the Securities
will fluctuate between the time of the cash deposit and the purchase of
the Securities, and because the Trust pays the associated brokerage
fees. To reduce this dilution, the Trust will try to buy the Securities
as close to the Evaluation Time and as close to the evaluation price as
possible. However, the time it takes the Trust to buy Securities and
their variance in price from the evaluation price will generally be
greater in situations in which a large number of Units needs to be
created in a short period of time. In addition, because the Trust pays
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 the
Trust to buy Securities. If we or an affiliate of ours act as agent to
the Trust, we will be subject to the restrictions under the Investment
Company Act of 1940, as amended.
We cannot guarantee that the 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 the 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 the Trust fails, unless we can
purchase substitute Securities ("Replacement Securities"), we will
refund to you that portion of the purchase price and transactional sales
charge resulting from the failed contract on the next Income
Distribution Date. Any Replacement Security the Trust acquires will be
identical to those from the failed contract.
Portfolio
Objectives.
The objective of the Trust is to provide the potential for above average
capital appreciation by investing the Trust's portfolio in the common
stock of the 10 companies that comprise the "10 Uncommon EuroValues(R)"
portfolio for 2002.
The "10 Uncommon EuroValues(R)" consists of a compilation of the 10
European common stocks selected by the Investment Policy Committee of
Lehman Brothers Inc. ("Lehman Brothers"). The Firm's equity analysts
believe that these 10 stocks have the fundamental, sector, and technical
Page 8
attributes that best position them to outperform the FT/S&P World Actuaries
Indices-Europe Index (the "FT/S&P Europe Index") in the 12 months following
the date of recommendation.
The Process.
The selection process for the portfolio is based on an investment
methodology developed by Lehman Brothers in 1949.
Fundamental Analysis. Each Lehman analyst appears before the Firm's
Investment Policy Committee to present the best idea from their universe
for the next 12 months. The Investment Policy Committee analyzes each
research analyst's best idea in terms of the underlying fundamentals for
the company and for the industry.
Sector Analysis. The Investment Policy Committee examines the macro
factors relating to the sector in which the company does business. Each
company's sector is examined to determine where it is in the economic
cycle and its implications for the company's prospects.
Technical Analysis. Each selection's trading pattern is reviewed to
determine a technical snap shot. Prior to final selection by the
Investment Policy Committee, historical and recent price movements are
reviewed. After this intensive screening process has been completed, the
list of stocks is reviewed again to determine which companies they
believe offer the best potential for market outperformance. Finally, the
Lehman Brothers Investment Policy Committee selects what it believes to
be the 10 best ideas for the year-the "10 Uncommon EuroValues(R)".
Lehman Brothers.
Founded in 1850, Lehman Brothers is a global investment bank that has
built a reputation for providing state-of-the-art research. Lehman
Brothers actively participates in the global capital markets through a
closely integrated network of 44 offices anchored by a worldwide
headquarters in New York and regional headquarters in London and Tokyo.
Lehman Brothers has the financial strength and support required to
maintain leadership positions in all of its businesses. They are a
leading underwriter of global equity and fixed-income securities. They
are also a prominent adviser to corporations and governments around the
globe, and their research analysts are considered among the best in the
world.
The Firm's Equity Research Department, dedicated to providing insightful
analysis of global stock markets and companies, is recognized for the
quality and timeliness of its investment recommendations. The "10
Uncommon EuroValues(R)" is one measure of the Equity Research
Department's enduring success. The annual list heralds an exciting
opportunity for investors - an opportunity to benefit from the expertise
of an internationally recognized leader in securities analysis.
The Trust is not sponsored or created by Lehman Brothers. Lehman
Brothers' only relationship to us is the licensing of certain trademarks
and trade names of Lehman Brothers and of the "10 Uncommon
EuroValues(R)" and the sale to us of research which is determined,
composed and calculated by Lehman Brothers without regard to us or the
Trust. Lehman Brothers may sell Units of the Trust in its capacity as
Placement Agent. Lehman Brothers also receives fees for brokerage
services provided to this Trust and other trusts sponsored by us. Lehman
Brothers, in its general securities business, acts as agent or principal
in connection with the purchase and sale of common stocks, including the
Securities in the Trust. In addition, Lehman Brothers may have acted as
underwriter, manager or co-manager of a public offering of the
Securities during the last three years.
Based on the composition of the Trust on the Initial Date of Deposit,
the Trust is considered a ________ Trust.
The style and capitalization characteristics used to describe the Trust
are designed to help you better understand how the 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 the 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 the 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. The Trust,
however, may contain individual stocks that do not fall into its stated
style or market capitalization designation.
There is, of course, no guarantee that the objective of the Trust will
be achieved. "FT/S&P Actuaries" is a joint trademark of Financial Times
Limited and Standard & Poor's. Neither the Financial Times Limited nor
Standard & Poor's are affiliated with the Sponsor and have not
Page 9
participated in the creation of the Trust or the selection of the
Securities included therein. See "Risk Factors" for a discussion of the
risks of investing in the Trust.
Risk Factors
Price Volatility. The Trust invests in common stocks of foreign
companies. The value of the 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. As a result of the increasing popularity of the
Lehman Brothers 10 Uncommon EuroValues(R) strategy, the purchase and
sale of Securities in conjunction with the creation or termination of
the Trust may amplify normal market fluctuations in the value of the
Securities, which may negatively impact the value of your Units. In
addition, common stock prices may be particularly sensitive to rising
interest rates, as the cost of capital rises and borrowing costs increase.
Because the Trust is not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed trusts or portfolios. As with any investment, we cannot
guarantee that the performance of the Trust will be positive over any
period of time, especially the relatively short 13-month life of the
Trust, or that you won't lose money. Units of the Trust are not deposits
of any bank and are not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
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.
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 companies represented in the Trust. In
addition, litigation regarding any of the issuers of the Securities, or
the industries represented by these issuers, may negatively impact the
share prices of these Securities. We cannot predict what impact any
pending or proposed legislation or pending or threatened litigation will
have on the share prices of the Securities.
Foreign Stocks. All of the Securities in the Trust are issued by
foreign companies, which makes the Trust subject to more risks than if
it 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
Trust 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 is maintained by
Clearstream International, a global custody and clearing institution
which has entered into a sub-custodian relationship with the Trustee.
Euro Conversion. A majority of European Union ("EU") members converted
their currencies 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 what impact the implementation of the
euro throughout a majority of EU countries will have on 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 Trusts) 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. From its inception on January 1, 1999 through
January 17, 2002, the value of the euro has declined by approximately
____% as compared to 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
Page 10
by the Evaluator may not reflect the amount the Trust would receive, in
U.S. dollars, had the Trustee sold any particular currency in the market.
Portfolio Securities Descriptions
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We have obtained the foregoing descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the per Unit price 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 transactional sales charge (which combines an initial
upfront sales charge and 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 three business
days 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 the
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 the 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 the Trust.
Securities will be sold to reimburse the Sponsor for the 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 Trust). 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 the Trust
organization costs, the Trustee will sell additional Securities to allow
the Trust to fully reimburse the Sponsor. In that event, the net asset
value per Unit 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 the Trust in "Notes to Statement 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 the Trust. When Securities are sold to
reimburse the Sponsor for organization costs, the Trustee will sell such
Securities, to the extent practicable, which will maintain the same
proportionate relationship among the Securities contained in the Trust
as existed prior to such sale.
Minimum Purchase.
The minimum amount you can purchase of the Trust is $1,000 worth of
Units ($500 if you are purchasing Units for your Individual Retirement
Account or any other qualified retirement plan).
Transactional Sales Charge.
The transactional sales charge you will pay has both an initial and a
deferred component. The initial sales charge, which you will pay at the
time of purchase, is equal to the difference between the maximum
transactional sales charge of 2.70% of the Public Offering Price and the
maximum remaining deferred sales charge (initially $.170 per Unit). This
Page 11
initial sales charge is initially equal to approximately 1.00% of the
Public Offering Price of a Unit, but will vary from 1.00% depending on
the purchase price of your Units and as deferred sales charge payments
are made. When the Public Offering Price per Unit exceeds $10.00, the
initial sales charge will exceed 1.00% of the Public Offering Price.
Monthly Deferred Sales Charge. In addition, three monthly deferred sales
charges of approximately $.0567 per Unit will be deducted from the
Trust's assets on approximately the twentieth day of each month from
February 20, 2002 through April 19, 2002. If you buy Units at a price of
less than $10.00 per Unit, the dollar amount of the deferred sales
charge will not change, but the deferred sales charge on a percentage
basis will be more than 1.70% of the Public Offering Price.
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for "Fee
Accounts" as described below), the maximum transactional sales charge is
reduced, as follows:
Your maximum
If you invest transactional sales
(in thousands):* charge will be:
_______________ ____________
$50 but less than $100 2.45%
$100 but less than $150 2.20%
$150 but less than $500 1.85%
$500 but less than $1,000 1.70%
$1,000 or more 0.95%
* Breakpoint transactional sales charges are also applied on a Unit
basis utilizing a breakpoint equivalent in the above table of $10 per
Unit and will be applied on whichever basis is more favorable to the
investor. The breakpoints will be adjusted to take into consideration
purchase orders stated in dollars which cannot be completely fulfilled
due to the requirement that only whole Units be issued.
The reduced transactional sales charge for quantity purchases will apply
only to purchases made by the same person on any one day from any one
dealer. To help you reach the above levels, you can combine the Units
you purchase of the Trust with any other same day purchases of other
trusts for which we are Principal Underwriter and are currently in the
initial offering period. In addition, we will consider Units you
purchase in the name of your spouse or child under 21 years of age to be
purchases by you for determining the reduced sales charge. The reduced
transactional sales charges will also apply to a trustee or other
fiduciary purchasing Units for a single trust estate or single fiduciary
account. You must inform your dealer of any combined purchases before
the sale in order to be eligible for the reduced transactional sales
charge. Any reduced transactional sales charge is the responsibility of
the party making the sale.
You may use rollover proceeds from a previous series of the Trust,
termination proceeds from other unit investment trusts with a similar
strategy as the Trust, or your redemption or termination proceeds from
any unit investment trust we sponsor to purchase Units of the Trust
during the initial offering period at the Public Offering Price less
1.00% (for purchases of $1,000,000 or more, the deferred sales charge
will be limited to .95% of the Public Offering Price), but you will not
be eligible to receive the reduced transactional sales charge described
in the above table. Please note that if you purchase Units of the Trust
in this manner using redemption proceeds from trusts which assess the
amount of any remaining deferred sales charge at redemption, you should
be aware that any deferred sales charge remaining on these units will be
deducted from those redemption proceeds.
Investors purchasing Units through registered broker/dealers who charge
periodic fees in lieu of commissions or who charge for financial
planning, investment advisory or asset management services or provide
these or comparable services as part of an investment account where a
comprehensive "wrap fee" or similar charge is imposed ("Fee Accounts")
will not be assessed the transactional sales charge described in this
section on the purchase of Units. We reserve the right to limit or deny
purchases of Units not subject to the transactional sales charge by
investors whose frequent trading activity we determine to be detrimental
to the Trust.
Employees, officers and directors (and immediate family members) of the
Sponsor, our related companies, dealers and their affiliates, and
vendors providing services to us may purchase Units at the Public
Offering Price less the applicable dealer concession. Immediate family
members include spouses, children, grandchildren, parents, grandparents,
siblings, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law,
brothers-in-law and sisters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons.
The Sponsor and certain dealers may establish a schedule where
employees, officers and directors of such dealers can purchase Units of
the Trust at the Public Offering Price less the established schedule
amount, which is designed to compensate such dealers for activities
relating to the sale of Units (the "Employee Dealer Concession").
You will be charged the deferred sales charge per Unit regardless of any
discounts. However, if you are eligible to receive a discount such that
Page 12
the maximum transactional sales charge you must pay is less than the
applicable maximum deferred sales charge, including Fee Accounts, you
will be credited the difference between your maximum transactional sales
charge and the maximum deferred sales charge at the time you buy your
Units. If you elect to have the proceeds on your Units reinvested into
additional Units of the Trust, in addition to the reinvestment Units you
receive you will also be credited additional Units with a dollar value
at the time of reinvestment sufficient to cover the amount of any
remaining deferred sales charge to be collected on such reinvestment
Units. The dollar value of these additional credited Units (as with all
Units) will fluctuate over time, and may be less on the dates deferred
sales charges are collected than their value at the time they were issued.
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 the 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
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities 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
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.
The aggregate underlying value of the Securities 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, this value
will be 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 Trust for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
reflect a concession or agency commission of 2.15% of the Public
Offering Price per Unit. However, for Units subject to a transactional
sales charge which are purchased using redemption or termination
proceeds or on purchases by Rollover Unit holders, this amount will be
reduced to 1.15% of the sales price of these Units (.40% for purchases
of $1,000,000 or more).
Dealers and other selling agents who sell Units of the Trust during the
initial offering period in the dollar amounts shown below will be
entitled to the following additional sales concessions as a percentage
of the Public Offering Price:
Total Sales Additional
(in millions): Concession:
_________________ ___________
$1 but less than $3 .05%
$3 but less than $5 .10%
$5 or more .15%
Dealers and other selling agents will not receive a concession on the
sale of Units which are not subject to the transactional sales charge,
Page 13
but such Units will be included in determining whether the above volume
sales levels are met. Dealers and other selling agents who, during any
consecutive 12-month period, sell at least $250 million or $500 million
worth of primary market units of unit investment trusts sponsored by us
will receive a concession of $2,500 or $5,000, respectively, in the
month following the achievement of this level. We reserve the right to
change the amount of concessions or agency commissions from time to
time. Certain commercial banks may be making Units of the Trust
available to their customers on an agency basis. A portion of the
transactional 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 Trust. 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 transactional 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 the 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 the 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 the 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 included and a list of investment products
generally appropriate for pursuing those recommendations.
From time to time we may compare the estimated returns of the Trust
(which may show performance net of the expenses and charges the 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 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 the Trust differ
from other comparative investments. You should not assume that these
performance comparisons will be representative of the 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
transactional sales charge per Unit of the Trust less any reduction as
stated in "Public Offering." We will also receive the amount of any
accrued and collected creation and development fee. Also, any difference
between our cost to purchase the Securities and the price at which we
sell them to the Trust is considered a profit or loss (see Note 2 of
"Schedule of Investments"). We will pay Lehman Brothers Inc. $.005,
$.010 or $.015 per Unit if sales of the Trust reach $25,000,000,
$50,000,000 or $75,000,000, respectively. 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 Trustee costs to transfer and record the ownership of
Units. 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 TRUSTEE. If you sell or
Page 14
redeem your Units before you have paid the total deferred sales charge
on your Units, you will have to pay the remainder at that time.
How We Purchase Units
The Trustee 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 that we hold to the Trustee for redemption as any other Units. If
we elect not to purchase Units, the 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 the Trust are listed under "Fee Table."
If actual expenses exceed the estimate, the Trust will bear the excess.
The Trustee will pay operating expenses of the Trust from the Income
Account 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 Trust, and will receive brokerage fees
when the 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 Trust and will
receive the fees set forth under "Fee Table" for providing portfolio
supervisory and evaluation services to the Trust. In providing portfolio
supervisory services, the Portfolio Supervisor will purchase research
services from a number of sources, which may include Lehman Brothers
Inc. or other dealers of the Trust.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of the 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. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fees 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 the Trust for creating and
developing the Trust, including determining the 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
.25% of the 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 .25% 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 the Trust's operating expenses and those fees described
above, the Trust may also incur the following charges:
- - A license fee payable by the Trust for the use of certain trademarks
and trade names of Lehman Brothers Inc.;
- - All legal expenses of the Trustee according to its responsibilities
under the Indenture;
- - The expenses and costs incurred by the Trustee to protect the 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 the Trust;
- - Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of
the Trust;
- - Foreign custodial and transaction fees, if any; Foreign custodial and
transaction fees, if any; and/or
- - All taxes and other government charges imposed upon the Securities or
any part of the Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the 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 the Trust. If there is not
enough cash in the Income or Capital Account, the Trustee has the power
to sell Securities to make cash available to pay these charges which may
result in capital gains or losses to you. See "Tax Status."
Tax Status
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trust. This section is current as of
the date of this prospectus. Tax laws and interpretations change
Page 15
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a corporation, a non-U.S. person,
a broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state or foreign taxes. As
with any investment, you should consult your own tax professional about
your particular consequences.
Trust Status.
The Trust will not be taxed as a corporation for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities and other assets held by the Trust, and
as such you will be considered to have received a pro rata share of
income (e.g., dividends and capital gains, if any) from each Security
when such income would be considered to be received by you if you
directly owned the Trust's assets. This is true even if you elect to
have your distributions automatically reinvested into additional Units.
In addition, the income from the Trust which you must take into account
for federal income tax purposes is not reduced by amounts used to pay
Trust expenses (including the deferred sales charge, if any).
Your Tax Basis and Income or Loss upon Disposition.
If your Trust disposes of Securities, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related
Securities from your share of the total amount received in the
transaction. You can generally determine your initial tax basis in each
Security or other Trust asset by apportioning the cost of your Units
among each Security or other Trust asset ratably according to their
value on the date you purchase your Units. In certain circumstances,
however, you may have to adjust your tax basis after you purchase your
Units (for example, in the case of certain dividends that exceed a
corporation's accumulated earnings and profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the 10% and
15% tax brackets). The 20% rate is reduced to 18% and the 10% rate is
reduced to 8% for long-term gains from most property acquired after
December 31, 2000, with a holding period of more than five years.
Net capital gain equals net long-term capital gain minus net short-term
capital loss for the taxable year. Capital gain or loss is long-term if
the holding period for the asset is more than one year and is short-term
if the holding period for the asset is one year or less. You must
exclude the date you purchase your Units to determine your holding
period. The tax rates for capital gains realized from assets held for
one year or less are generally the same as for ordinary income. The
Internal Revenue Code, however, treats certain capital gains as ordinary
income in special situations.
Rollovers.
If you elect to have your proceeds from the Trust rolled over into the
next series of the Trust, it is considered a sale for federal income tax
purposes, and any gain on the sale will be treated as a capital gain,
and any loss will be treated as a capital loss. However, any loss you
incur in connection with the exchange of your Units of the Trust for
units of the next series will generally be disallowed with respect to
this deemed sale and subsequent deemed repurchase, to the extent the two
trusts have substantially identical Securities under the wash sale
provisions of the Internal Revenue Code.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of the Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by the Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the Trust as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Distributions by the Trust that are derived from dividends of Securities
of a foreign corporation and that are not effectively connected to your
conduct of a trade or business with the United States will generally not
be subject to U.S. income taxation and withholding in the case of Units
held by non-resident alien individuals, foreign corporations or other
non-U.S. persons, provided that less than 25% of the gross income of the
foreign corporation over the three-year period ending with the close of
the taxable year preceding payment was effectively connected to the
conduct of a trade or business within the United States.
Some distributions by the 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 the Trust, you may be
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
Page 16
Under the existing income tax laws of the State and City of New York,
the Trust will not be taxed as a corporation, and the income of the
Trust will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes.
Retirement Plans
You may purchase Units of the Trust for:
- - Individual Retirement Accounts;
- - Keogh Plans;
- - Pension funds; and
- - Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form. All Fee Accounts Units, however, will be held in
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. Certificates will be issued in fully registered form,
transferable only on the books of the Trustee in denominations of one
Unit or any multiple thereof. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with your
signature guaranteed by an eligible institution. In certain cases the
Trustee may require additional documentation before they will transfer
or redeem your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee 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 held in uncertificated form, the Trustee 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.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
distributed. You will also receive a quarterly statement which describes
the Trust's performance. After the end of each calendar year, the
Trustee will provide you with the following information:
- - A summary of transactions in the Trust for the year;
- - A list of any Securities sold during the year and the Securities held
at the end of that year by the Trust;
- - The Redemption Price per Unit, computed on the 31st day of December
of such year (or the last business day before); and
- - Amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on the
Page 17
Trust's Securities to the Income Account. All other receipts, such as
return of capital, are credited to the Capital Account. Dividends
received on the 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 on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." No income distribution will be paid if accrued expenses of
the Trust exceed amounts in the Income Account on the Income
Distribution Dates. Distribution amounts will vary with changes in the
Trust's fees and expenses, in dividends received and with the sale of
Securities. The Trustee will distribute amounts in the Capital Account,
net of amounts designated to meet redemptions, pay the deferred sales
charge or pay expenses on the last day of each month to Unit holders of
record on the fifteenth day of each month provided the amount equals at
least $1.00 per 100 Units. If the Trustee does not have your TIN, it is
required to withhold a certain percentage of your distribution and
deliver such amount to the Internal Revenue Service ("IRS"). You may
recover this amount by giving your TIN to the Trustee, or when you file
a tax return. However, you should check your statements to make sure the
Trustee has your TIN to avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account to
pay the deferred sales charge. If not, the Trustee may sell Securities
to meet the shortfall.
Within a reasonable time after the Trust is terminated, unless you are a
Rollover Unit holder, you will receive the pro rata share of the money
from the sale of the Securities. You will receive a pro rata share of
any other assets remaining in the Trust, after deducting any unpaid
expenses.
The Trustee may establish reserves (the "Reserve Account") within the
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of the Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of the Trust by notifying the Trustee at least 10 days before any Record
Date. Each later distribution of income and/or capital on your Units
will be reinvested by the Trustee into additional Units. There is no
transactional sales charge on Units acquired through the Distribution
Reinvestment Option, as discussed under "Public Offering." This option
may not be available in all states. PLEASE NOTE THAT EVEN IF YOU
REINVEST DISTRIBUTIONS, THEY ARE STILL CONSIDERED DISTRIBUTIONS FOR
INCOME TAX PURPOSES.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
its unit investment trust office. If your Units are uncertificated, you
need only deliver a request for redemption to the Trustee. In either
case, the certificates or the redemption request must be properly
endorsed with proper instruments of transfer and signature guarantees as
explained in "Rights of Unit Holders-Unit Ownership" (or by providing
satisfactory indemnity if the certificates were lost, stolen, or
destroyed). No redemption fee will be charged, but you are responsible
for any governmental charges that apply. Certain broker/dealers may
charge a transaction fee for processing redemption requests. Units
redeemed directly through the Trustee are not subject to such
transaction fees. Three business days 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 Trustee
receives your certificates or redemption request (if such day is a day
the NYSE is open for trading). However, if your certificates or
redemption request are 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 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. The IRS will require the Trustee to withhold a
portion of your redemption proceeds if it does not have your TIN, as
generally discussed under "Income and Capital Distributions."
The Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of the 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
Page 18
- - 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 not designated to purchase
Securities;
2. the aggregate underlying value of the Securities held in the 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 the Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of the Trust, if any;
4. cash held for distribution to Unit holders of record of the Trust as
of the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by the Trust; and
dividing
1. the result by the number of outstanding Units of the Trust.
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, 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
The Trust's portfolio has been selected on the basis of capital
appreciation potential for a limited time period. When the Trust is
about to terminate, you may have the option to roll your proceeds into
the next series of the Trust (the "New Trust") if one is available. We
intend to create the New Trust in conjunction with the termination of
the Trust and plan to use the same procedure we used to select the
portfolio for the Trust to the New Trust.
If you wish to have the proceeds from your Units rolled into the New
Trust you must notify the Trustee in writing of your election by the
Rollover Notification Date stated in the "Summary of Essential
Information." As a Rollover Unit holder, your Units will be redeemed and
the underlying Securities sold by the Trustee, in its capacity as
Distribution Agent, during the Special Redemption and Liquidation
Period. 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 the 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 to the maximum remaining deferred sales charge on such units
(currently expected to be $.170 per unit), but not the initial sales
charge. Units purchased using proceeds from Fee Accounts Units will
generally not be subject to any transactional sales charge.
We intend to create New Trust units as quickly as possible, depending on
the availability of the Securities contained in the 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 the New Trust may not be fully invested on the
next business day.
Please note that there are certain tax consequences associated with
becoming a Rollover Unit holder. See "Tax Status." If you elect not to
participate as a Rollover Unit holder ("Remaining Unit holders"), you
will not incur capital gains or losses due to the Special Redemption and
Liquidation, nor will you be charged any additional sales charge. We may
modify, amend or terminate this rollover option upon 60 days notice.
Removing Securities from the Trust
The portfolio of the Trust is 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
Page 19
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 the Trust.
Except in the limited instance in which the Trust acquires Replacement
Securities, as described in "The FT Series," the Trust may not acquire
any securities or other property other than the Securities. The Trustee,
on behalf of the 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 the Trust, at our instruction,
they will either be sold or held in the Trust. In making the
determination as to 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 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 Trust to facilitate selling
Securities, exchanged securities or property from the Trust. 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 the Trust may be
changed. To get the best price for the 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 Trust's portfolio
transactions, or when acting as agent for the Trust in acquiring or
selling Securities on behalf of the Trust.
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, the Trust will terminate on
the Mandatory Termination Date as stated in the "Summary of Essential
Information." The Trust may be terminated earlier:
- - Upon the consent of 100% of the Unit holders;
- - If the value of the Securities owned by the 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 the Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- - In the event that Units of the 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 certificates, if
any, to the Trustee. If the Trust is terminated due to this last reason,
we will refund your entire transactional sales charge; however,
termination of the Trust before the Mandatory Termination Date for any
other stated reason will result in all remaining unpaid deferred sales
charges on your Units being deducted from your termination proceeds. For
various reasons, including Unit holders' participation as Rollover Unit
holders, the 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 the 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.
Page 20
The Trustee will send you written notice prior to termination of the
Trust describing how you should tender your Units. 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 the Trust is terminated. Regardless of the distribution involved,
the Trustee will deduct from the 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 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
- - 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 Trust or to any series
of the Trust 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 Trust 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 Trust.
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 Trust, 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 for the
Trust; it only provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we 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 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.
Page 21
The Trustee, Sponsor 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 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 &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trust.
Experts.
The Trust's statement of net assets, including the schedule of
investments, as of the opening of business on the Initial Date of
Deposit included in this prospectus and elsewhere in the registration
statement has been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein and elsewhere in
the registration statement, and is 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.
Page 22
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First Trust(R)
10 Uncommon EuroValues(R), 2002 Portfolio
FT 597
Sponsor:
NIKE SECURITIES L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
JPMorgan Chase Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
________________________
When Units of the Trust 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 10 Uncommon
EuroValues(R), 2002 Portfolio, 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 Trust, including its Code 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 Trust 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
January __, 2002
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 24
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 597 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 January __, 2002. Capitalized terms
have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
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.
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 Trust 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 Trust
consist of securities of foreign issuers, an investment in the 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
Page 1
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 Trust, 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 U.S. dollar value of these securities will vary
with fluctuations in the U.S. dollar foreign exchange rates for the
various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trust 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
Trust and on the ability of the Trust to satisfy its 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 the 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 the Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trust will generally be effected only in foreign securities markets.
Although the Sponsor does not believe that the Trust 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.
Page 2
MEMORANDUM
Re: FT 597
The only difference of consequence (except as described
below) between FT 589, which is the current fund, and FT 597, 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 589 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 $2,000,000, 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 597 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 January 10, 2002.
FT 597
(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 January 10, 2002
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 597 among Nike Securities
L.P., as Depositor, JPMorgan Chase 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).
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* To be filed by amendment.
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