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 651
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 JUNE 12, 2002
10 Uncommon Values(R) 2002 Qualified Portfolio
FT 651
FT 651 is a series of a unit investment trust, the FT Series. FT 651
consists of a single portfolio known as 10 Uncommon Values(R) 2002
Qualified Portfolio (the "Trust"). The Trust invests in a diversified
portfolio of common stocks ("Securities") issued by 10 different
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 June __, 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 9
Risk Factors 10
Portfolio Securities Descriptions 10
Public Offering 11
Distribution of Units 12
The Sponsor's Profits 13
The Secondary Market 13
How We Purchase Units 13
Expenses and Charges 13
Tax Status 14
Rights of Unit Holders 14
Income and Capital Distributions 15
Redeeming Your Units 15
Investing in a New Trust 16
Removing Securities from the Trust 16
Amending or Terminating the Indenture 17
Information on the Sponsor, Trustee,
Shareholder Servicing Agent and Evaluator 17
Other Information 18
Page 2
Summary of Essential Information
10 Uncommon Values (R) 2002 Qualified Portfolio
FT 651
At the Opening of Business on the
Initial Date of Deposit-June __, 2002
Sponsor: Nike Securities L.P.
Trustee: JPMorgan Chase Bank
Shareholder Servicing Agent: BISYS Fund Services Ohio, Inc.
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) $
Deferred Sales Charge of % of the Public Offering Price per Unit
( % of the net amount invested) (3) $
Less Deferred Sales Charge per Unit $ ( )
Public Offering Price per Unit (4) $
Sponsor's Initial Repurchase Price per Unit (5) $
Redemption Price per Unit (based on aggregate underlying value of Securities) (5) $
CUSIP Number 30266Y 721
Security Code
Ticker Symbol
First Settlement Date June __, 2002
Mandatory Termination Date (6) July 1, 2003
_____________
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of the Trust. If we make such an adjustment,
the fractional undivided interest per Unit will vary from the amounts
indicated above.
(2) Each listed Security is valued at its last closing sale price. If a
Security is not listed, or if no closing sale price exists, it is valued
at its closing ask price. Evaluations for purposes of determining the
purchase, sale or redemption price of Units are made as of the close of
trading on the New York Stock Exchange ("NYSE") (generally 4:00 p.m.
Eastern time) on each day on which it is open (the "Evaluation Time").
(3) The maximum sales charge you will pay includes the deferred sales
charge and the creation and development fee which are collected as
described in "Fee Table" and "Public Offering." If you redeem or sell
Units, you will not be assessed any remaining unaccrued deferred sales
charge payments or creation and development fee at the time of sale or
redemption.
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the
date you purchase your Units. On the Initial Date of Deposit, the Public
Offering Price per Unit will not include any accumulated dividends on
the Securities. After this date, a pro rata share of any accumulated
dividends on the Securities will be included.
(5) Until the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period the Sponsor's Initial Repurchase
Price per Unit and Redemption Price per Unit will include the estimated
organization costs per Unit set forth under "Fee Table." After such
date, the Sponsor's Initial Repurchase Price per Unit and Redemption
Price per Unit will not include such estimated organization costs. See
"Redeeming Your Units."
(6) See "Amending or Terminating the Indenture."
</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 one year and is a unit investment trust rather than a
mutual fund, this information allows you to compare fees.
Amount
per Unit
_______
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Maximum sales charge
Initial sales charge 0.00%(a) $.0000
Deferred sales charge %(b) $
Creation and development fee cap %(c) $
_______ _______
Maximum Sales Charge (including creation and development fee cap) % $
======= =======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs %(d) $
====== =======
Estimated Annual Trust Operating Expenses(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees % $
Trustee's fee, Shareholder Servicing Agent's fee and other operating expenses %(f) $
_______ _______
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 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. 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 the maximum
sales charge.
________________
<FN>
(a) There is no initial sales charge on Trust Units.
(b) The deferred sales charge is a fixed dollar amount equal to $ per
Unit which will be accrued on a daily basis and deducted monthly
commencing July 19, 2002 over the life of the Trust and at the Trust's
termination. The deferred sales charge, as a percentage of the Public
Offering Price, will vary over time. When you purchase Units you will
only be subject to deferred sales charge payments not yet accrued.
(c) The creation and development fee compensates the Sponsor for creating
and developing the Trust. The creation and development fee is a charge
of % per Trust collected at the end of the initial offering period
which is generally 365 days. The creation and development fee is
computed based on a Trust's average daily net asset value through the
date of collection. If the value of your Units decreases over the
initial offering period, the creation and development fee as a
percentage of your initial investment will be less than %. However, in
no event will we collect more than % 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. The Sponsor will bear annual Trust Operating Expenses in
excess of the amounts set forth above (if applicable) for the Trust.
(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 651
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 651, comprising the 10 Uncommon Values(R)
2002 Qualified Portfolio (the "Trust"), as of the opening of business on
June __, 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 cash held by The Chase Manhattan 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
June __, 2002, by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant
estimates made by the 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 651,
comprising the 10 Uncommon Values(R) 2002 Qualified Portfolio, at the
opening of business on June __, 2002 (Initial Date of Deposit) in
conformity with accounting principles generally accepted in the United
States of America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
June __, 2002
Page 5
Statement of Net Assets
10 Uncommon Values (R) 2002 Qualified Portfolio
FT 651
At the Opening of Business on the
Initial Date of Deposit-June __, 2002
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $
Less liability for reimbursement to Sponsor for organization costs (3) ( )
________
Net assets $
========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (4) $
Less sales charge (4) (0)
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) Cash totaling ________ 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 $ 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) No initial sales charge will be assessed on Trust Units. A deferred
sales charge, which accrues on a daily basis and which will total $
per Unit over the life of the Trust, will be paid to the Sponsor in
monthly installments beginning on July 19, 2002 and on the twentieth day
of each month thereafter (or if such date is not a business day, on the
preceding business day) over the life of the Trust and at the Trust's
termination. If Unit holders redeem Units, they will not have to pay the
unaccrued amount of the deferred sales charge applicable to such Units
when they redeem them.
</FN>
Page 6
Schedule of Investments
10 Uncommon Values 2002 Qualified Portfolio
FT 651
At the Opening of Business on the
Initial Date of Deposit-June __, 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 cash deposited with the Trustee. The
Sponsor entered into purchase contracts for the Securities on June __,
2002. The Trust has a mandatory termination date of July 1, 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 listed Securities and the
ask prices of the over-the-counter traded Securities 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
651, consists of a single portfolio known as 10 Uncommon Values (R) 2002
Qualified Portfolio.
Units of the Trust are only available to employee benefit plans
established pursuant to Sections 401(a) or 457 of the Internal Revenue
Code of 1986, as amended ("Eligible Plans"). Eligible Plans will invest
in Units of the Trust in accordance with allocation instructions
received from employees pursuant to their respective terms. Accordingly,
the interests of an employee in the Units of the Trust are subject to
the terms of their respective Eligible Plan and the terms on which Units
of the Trust are offered as an investment alternative under such
Eligible Plan. As used herein, Unit holder shall refer to an Eligible
Plan.
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, BISYS Fund Services Ohio, Inc. as Shareholder
Servicing Agent and First Trust Advisors L.P. as Portfolio Supervisor
and Evaluator, governs the operation of the 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, additional Securities, or cash
(including a letter of credit) with instructions to buy more Securities,
may be deposited in the Trust to create new Units for sale. Additional
Units will be created, to the extent practicable, according to the
percentage relationship established among the Securities on the Initial
Date of Deposit (as set forth in "Schedule of Investments"), and not the
actual percentage relationship existing on the day new Units are
created, 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 cash is deposited, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because 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 the 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 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 deferred 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.
Page 8
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 companies that comprise the 10 Uncommon Values(R) portfolio for
2002. The 10 Uncommon Values(R) is an annual compilation of the 10
common stocks selected by the Investment Policy Committee of Lehman
Brothers Inc. ("Lehman Brothers") with the assistance of the Research
Department of Lehman Brothers which, in the opinion of Lehman Brothers,
have the greatest potential for capital appreciation during the next
year. This selection was based upon a determination by Lehman Brothers
that the selected stocks are deemed to have an above-average capital
appreciation potential against the Standard & Poor's 500 Composite Stock
Price Index (the "S&P 500 Index") over the 12 months following the
selection of the portfolio.
Since 1949, the process to pick the 10 Uncommon Values(R) has been
consistent. Each year, the equity research organization at Lehman
Brothers has selected 10 stocks that they believe have the fundamental,
sector and technical attributes that position them to outperform the S&P
500 Index. These 10 stocks are made available to you in one simple
investment, the 10 Uncommon Values(R) Portfolio.
The announcement of the 10 Uncommon Values(R) Portfolio heralds an
exciting opportunity for private investors-an opportunity to participate
in a portfolio that has been professionally selected by an
internationally recognized leader in securities analysis.
These stocks were selected based on an examination of fundamental,
sector and technical attributes for each company.
Fundamental Analysis. Each Lehman analyst appears before the firm's
Investment Policy Committee to present the best ideas from their
universe of companies 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 Lehman believes
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 Values(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 offices anchored by a worldwide
headquarters in New York and regional headquarters in London and Tokyo.
Lehman Brothers is a prominent adviser to corporations and governments
around the globe, and their research analysts are considered among the
best in the world. Continually named in the prestigious rankings of
equity analysts compiled annually by The Wall Street Journal, Reuters,
Institutional Investor, Greenwich Associates and others, the Equities
Research team in 2001 alone, lead-managed 66 equity deals totaling more
than $18 billion. Lehman Brothers jumped to fifth place in the 2001
Institutional Investor "All-America Research Team" survey for equity
analysts. The team was chosen after surveying more than 3,200 major
money managers and key investors in the United States and abroad. Equity
analysts from 24 firms were included in this year's issue.
Recognized for the quality and timeliness of its investment
recommendations, the Equity Research Group has expanded to approximately
600 professionals and globally covers 80 industries and 1800 companies,
including over 90% of the S&P 500 Index.
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 Values(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,
Page 9
manager or co-manager of a public offering of the Securities during the
last three years.
There is, of course, no guarantee that the objective of the Trust will
be achieved. See "Risk Factors" for a discussion of the risks of
investing in the Trust.
Risk Factors
Price Volatility. The Trust invests in common stocks. 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 Values(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. As a result, the price of these Securities may
decline after the Trust's purchase activity is completed as the volume
of purchases subsides. 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 investments. As with any investment, we cannot guarantee that
the performance of the Trust will be positive over any period of time 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
of 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.
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 price per Unit of
which is comprised of the following:
- - The aggregate underlying value of the Securities;
- - The amount of any cash in the Income and Capital Accounts; and
- - Dividends receivable on Securities.
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 and changes in
the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until the business
day following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for 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
Page 10
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. During the period
ending with the earlier of six months after the Initial Date of Deposit
or the end of the initial offering period, there may be a decrease in
the value of the Securities. To the extent the proceeds from the sale of
these Securities are insufficient to repay the Sponsor for Trust
organization costs, the Trustee will sell additional Securities to allow
the Trust to fully reimburse the Sponsor. In that event, the net asset
value per Unit of the Trust will be reduced by the amount of additional
Securities sold. Although the dollar amount of the reimbursement due to
the Sponsor will remain fixed and will never exceed the per Unit amount
set forth for 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
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.
Maximum Sales Charge.
The maximum sales charge you will pay is comprised of the following:
Deferred Sales Charge. The deferred sales charge is a fixed dollar
amount equal to approximately $ per Unit, which accrues on a daily
basis, and will be deducted from the Trust's assets on the twentieth day
of each month over the life of the Trust and at the Trust's termination.
You will only be subject to the deferred sales charge that accrues while
you own your Units. At the Public Offering Price per Unit set forth in
"Summary of Essential Information," the deferred sales charge equals
% of the Public Offering Price. The deferred sales charge will vary from
% with changes in the Public Offering Price but in no case will it
exceed % of the Public Offering Price (equivalent to % of the
net amount invested, exclusive of the deferred sales charge).
Creation and Development Fee. As Sponsor, we will also receive, and 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 in the Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, their value will
generally be based on the current ask prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for valuation). If current ask prices are unavailable, the
valuation is generally determined:
a) On the basis of current ask prices for comparable securities;
b) By appraising the value of the Securities on the ask side of the
market; or
c) By any combination of the above.
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.
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 others can purchase Units at prices which represent a
concession or agency commission of up to $_____ per Unit.
We reserve the right to change the amount of concessions or agency
commissions from time to time. If we reacquire, or the Trustee redeems,
Page 11
Units from brokers, dealers or other selling agents while a market is
being maintained for such Units, such entities agree to immediately
repay to us any concession or agency commission relating to the
reacquired Units. Certain commercial banks may be making Units of the
Trust available to their customers on an agency basis. A portion of the
sales charge paid by these customers is kept by or given to the banks in
the amounts shown above.
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 the amount of any accrued and collected deferred sales
charge and creation and development fee as stated in "Public Offering."
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"). 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 Units, any difference between the price at
which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees and costs to transfer and record the ownership of Units,
if any. We may discontinue purchases of Units at any time. IF YOU WISH
TO DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET
PRICES BEFORE MAKING A TENDER FOR REDEMPTION TO THE SHAREHOLDER
SERVICING AGENT.
How We Purchase Units
The Shareholder Servicing Agent will notify us of any tender of Units
for redemption. If our bid is equal to or greater than the Redemption
Price per Unit, we may purchase the Units. You will receive your
proceeds from the sale no later than if they were redeemed by the
Trustee. We may tender Units we hold to the Trustee for redemption as
any other Units. If we elect not to purchase Units, the Shareholder
Servicing Agent or Trustee may sell tendered Units in the over-the-
counter market, if any. However, the amount you will receive is the same
as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of 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 of the Trust if funds are available, and then from the Capital
Account. The Income and Capital Accounts are noninterest-bearing to Unit
Page 12
holders, so the Trustee may earn interest on these funds, thus
benefiting from their use.
First Trust Advisors L.P., an affiliate of ours, will be compensated for
providing bookkeeping and other administrative services to the Trust
and, as Sponsor, we will receive brokerage fees when the Trust uses us
(or an affiliate of ours) as agent in buying or selling Securities. In
addition, First Trust Advisors L.P. 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 may purchase research services from a number of sources,
which may include underwriters or dealers of the Trust.
The fees payable to 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
for our fees and First Trust Advisors' fees, in which case these fees
are calculated based on the largest number of Units outstanding during
the period for which compensation is paid. The fees payable to the
Shareholder Servicing Agent are a fixed dollar amount for the Trust.
Each of these fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fee paid to us or our
affiliates for providing services to all unit investment trusts be more
than the actual cost of providing such service 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
% 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 % 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 the 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;
- - 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; 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. Any
compensation or other consideration we or our affiliates receive on
Units held in Eligible Plans offered to employees of ours or our
affiliates will be remitted to such Eligible Plans to the extent the
receipt of such compensation or other consideration by us or our
affiliates is not permitted by ERISA.
Tax Status
The Trust is not an association taxable as a corporation for federal
income tax purposes. Because the Eligible Plans are exempt from tax
under Sections 501(a) or 457 of the Internal Revenue Code of 1986, as
amended, while Units are held by Eligible Plans, neither such Eligible
Plans nor any participating employee will be taxed on income from the
Trust.
Under the existing income tax laws of the State and City of New York,
the Trust is not an association taxable as a corporation.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat the Shareholder Servicing Agent as sole Record
Owner of Units on its books. The Shareholder Servicing Agent will keep a
record of all individual Unit holders on its books. It is your
responsibility to notify the Shareholder Servicing Agent when you become
Record Owner. All Units will be held in uncertificated (book-entry) form.
The Shareholder Servicing Agent will establish an account for you and
credit your account with the number of Units you purchase. Within two
Page 13
business days of the issuance or transfer of Units, the Shareholder
Servicing Agent will send you:
- - A written initial transaction statement containing a description of
the Trust;
- - A list of the number of Units issued or transferred;
- - Your name, address and Taxpayer Identification Number ("TIN");
- - A notation of any liens or restrictions of the issuer and any adverse
claims; and
- - The date the transfer was registered.
Unit Holder Reports.
In connection with each distribution, the Shareholder Servicing Agent
will provide you with a statement detailing the per Unit amount of
income (if any) distributed. After the end of each calendar year, the
Shareholder Servicing Agent will provide Eligible Plans with the
following information:
- - A summary of transactions in 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 Shareholder Servicing Agent copies of the
evaluations of the Securities as prepared by the Evaluator.
Income and Capital Distributions
You will be eligible to receive distributions on your Units only after
you become a Record Owner. The Trustee will credit dividends received on
the Trust's Securities to the Income Account. All other receipts, such
as return of capital, are credited to the Capital Account.
The Trustee will distribute any net income in the Income Account as well
as amounts in the Capital Account as part of the final liquidation
distribution in the case of Rollover Unit holders and others. No income
distribution will be paid if accrued expenses of the Trust exceed
amounts in the Income Account. Distribution amounts will vary with
changes in the Trust's fees and expenses, in dividends received and with
the sale of Securities. For purposes of distributions, the Record Date
shall be the Mandatory Termination Date and Unit holders on the Record
Date shall receive distributions as part of the final liquidation
distribution (the "Distribution Date").
We anticipate that there will be enough money in the Capital Account to
pay the deferred sales charge. If not, the Trustee may sell Securities
to meet the shortfall.
The Trustee may establish reserves (the "Reserve Account") within the
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of the Trust.
Redeeming Your Units
Each Eligible Plan may redeem all or a portion of its Units at any time
by sending a request for redemption to the Shareholder Servicing Agent,
who will forward such information to the Trustee. The redemption request
must be properly endorsed with proper instruments of transfer and
signature guaranteed by an eligible institution. No redemption fee will
be charged, but you are responsible for any governmental charges that
apply. One business day after the day you tender your Units (the "Date
of Tender") you will receive cash in an amount for each Unit equal to
the Redemption Price per Unit calculated at the Evaluation Time on the
Date of Tender.
The Date of Tender is considered to be the date on which the Shareholder
Servicing Agent receives your redemption request (if such day is a day
the NYSE is open for trading). However, if your redemption request is
received after 4:00 p.m. Eastern time (or after any earlier closing time
on a day on which the NYSE is scheduled in advance to close at such
earlier time), the Date of Tender is the next day the NYSE is open for
trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account 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 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
- - For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
Page 14
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.
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 apply the same strategy we used to select the
portfolio for the Trust to the New Trust.
If your Eligible Plan assets are invested in Units of the Trust on the
Mandatory Termination Date set forth under "Summary of Essential
Information" (a "Rollover Unit holder"), the Trustee, acting in its
capacity as Distribution Agent, will redeem such Units and reinvest the
proceeds into the New Trust, provided such New Trust is offered and
Units are available. If you no longer wish to have your Eligible Plan
assets invested in the Trust you can change your Eligible Plan
allocation instructions at any time as permitted by your Eligible Plan.
As a Rollover Unit holder, your Units will be redeemed and the
underlying Securities sold by the Distribution Agent on the Mandatory
Termination Date. The Distribution Agent may engage us or other brokers
as its agent to sell the Securities.
Once all of the Securities are sold, your proceeds, less any brokerage
fees, governmental charges or other expenses involved in the sales, will
be used to buy units of 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 sales charge on such units.
We intend to create New Trust units as quickly as possible, depending on
the availability of the Securities contained in 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.
If you elect not to participate as a Rollover Unit holder ("Remaining
Unit holders"), you will not be charged any additional sales charge due
to the Special Redemption and Liquidation Period. We may modify, amend
or terminate this rollover option upon 60 days notice.
Removing Securities from 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
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
Page 15
- - 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. The Trust may be terminated prior to the
Mandatory Termination Date:
- - 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 Units. If the
Trust is terminated due to this last reason, we will refund your entire
deferred sales charge; however, termination of the Trust before the
Mandatory Termination Date for any other stated reason will result only
in the waiver of any remaining unaccrued sales charges on your Units at
the time of termination. For various reasons, including Unit holders'
participation as Rollover Unit holders, 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 16
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, Shareholder Servicing
Agent and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- - The First Trust Combined Series
- - 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 $40 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, 2001, the total partners' capital of
Nike Securities L.P. was $17,560,001 (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 Chase MetroTech Center, 3rd Floor,
Brooklyn, New York 11245. 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; it only
provides administrative services.
The Shareholder Servicing Agent.
The Shareholder Servicing Agent is BISYS Fund Services Ohio, Inc. with
its principal place of business at 3435 Stelzer Road, Columbus, Ohio
43219. If you have questions regarding the Trust, you may call the
Shareholder Servicing Agent at (800) 266-5240. The Shareholder Servicing
Agent has not participated in selecting the Securities; it only provides
administrative services.
Limitations of Liabilities of Sponsor, Shareholder Servicing Agent and
Trustee.
Neither we, the Shareholder Servicing Agent nor the Trustee will be
liable for taking any action or for not taking any action in good faith
according to the Indenture. We will also not be accountable for errors
in judgment. We will only be liable for our own willful misfeasance, bad
faith, gross negligence (ordinary negligence in the Shareholder
Servicing Agent's and Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
Page 17
- - Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- - Terminate the Indenture and liquidate the Trust; or
- - Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor, Shareholder Servicing Agent and Unit holders may
rely on the accuracy of any evaluation prepared by the Evaluator. The
Evaluator will make determinations in good faith based upon the best
available information, but will not be liable to the Trustee, Sponsor,
Shareholder Servicing Agent or Unit holders for errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
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.
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Page 19
First Trust(R)
10 Uncommon Values (R) 2002 Qualified Portfolio
FT 651
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Shareholder Servicing Agent: Trustee:
BISYS Fund Services Ohio, Inc. JPMorgan Chase Bank
3435 Stelzer Road 4 Chase MetroTech Center, 3rd floor
Columbus, Ohio 43219 Brooklyn, New York 11245
1-800-266-5240 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 Values (R)
2002 Qualified 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
June __, 2002
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 20
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 651 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 June __, 2002. Capitalized terms
have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 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. 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.
Page 1
MEMORANDUM
Re: FT 651
The only difference of consequence (except as described
below) between FT 642, which is the current fund, and FT 651, 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 642 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 651 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 June 12, 2002.
FT 651
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
David J. Allen Director )
of Nike Securities )
Corporation, the ) June 12, 2002
General Partner of )
Nike Securities L.P.)
Judith M. Van Kampen Director )
of Nike Securities ) Robert M. Porcellino
Corporation, the ) Attorney-in-Fact**
General Partner of )
Nike Securities L.P.)
Karla M. Van Kampen-Pierre Director )
of Nike Securities )
Corporation, the )
General Partner of )
Nike Securities L.P.)
David G. Wisen Director )
of Nike Securities )
Corporation, the )
General Partner of )
Nike Securities L.P.)
* The title of the person named herein represents his
capacity in and relationship to Nike Securities L.P.,
Depositor.
** An executed copy of the related power of attorney
was filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of FT 597
(File No. 333-76518) and the same is hereby incorporated
herein by this reference.
S-3
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-4
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 651 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-5
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 Directors listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
333-76518] filed on behalf of FT 597).
___________________________________
* To be filed by amendment.
S-6