<PAGE> PAGE 1
000 A000000 05/31/99
000 C000000 0001052427
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 KEMPER EQUITY TRUST
001 B000000 811-08599
001 C000000 3125377000
002 A000000 222 SOUTH RIVERSIDE PLAZA
002 B000000 CHICAGO
002 C000000 IL
002 D010000 60606
002 D020000 5808
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 1
007 C010100 1
007 C020100 KEMPER DREMAN FINANCIAL SERVICES FUND
007 C030100 N
007 C010200 2
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A00AA01 SCUDDER KEMPER INVESTMENTS, INC.
008 B00AA01 A
008 C00AA01 801-44899
008 D01AA01 NEW YORK
008 D02AA01 NY
008 D03AA01 10154
008 D04AA01 0100
008 A00AA02 DREMAN VALUE MANAGEMENT, L.L.C.
008 B00AA02 S
008 C00AA02 801-54255
008 D01AA02 RED BANK
008 D02AA02 NJ
008 D03AA02 07701
010 A00AA01 KEMPER DISTRIBUTORS, INC.
010 B00AA01 8-47765
010 C01AA01 CHICAGO
<PAGE> PAGE 2
010 C02AA01 IL
010 C03AA01 60606
010 C04AA01 5808
011 A00AA01 KEMPER DISTRIBUTORS, INC.
011 B00AA01 8-47765
011 C01AA01 CHICAGO
011 C02AA01 IL
011 C03AA01 60606
011 C04AA01 5808
012 A00AA01 KEMPER SERVICE COMPANY
012 B00AA01 84-1713
012 C01AA01 KANSAS CITY
012 C02AA01 MO
012 C03AA01 64141
013 A00AA01 ERNST & YOUNG LLP
013 B01AA01 CHICAGO
013 B02AA01 IL
013 B03AA01 60606
014 A00AA01 SCUDDER INVESTOR SERVICES, INC.
014 B00AA01 8-298
014 A00AA02 KEMPER DISTRIBUTORS, INC.
014 B00AA02 8-47765
014 A00AA03 GRUNTAL & CO., INC.
014 B00AA03 8-31022
014 A00AA04 THE GMS GROUP, L.L.C. (A GRUNTAL AFFILIATE)
014 B00AA04 8-23936
014 A00AA05 ZURICH CAPITAL MARKETS
014 B00AA05 8-49827
014 A00AA06 BANK HANDLOWY
014 B00AA06 8-24613
015 A00AA01 STATE STREET BANK AND TRUST COMPANY
015 B00AA01 C
015 C01AA01 BOSTON
015 C02AA01 MA
015 C03AA01 02110
015 E01AA01 X
018 00AA00 Y
019 A00AA00 Y
019 B00AA00 72
019 C00AA00 KEMPERFNDS
020 A000001 GOLDMAN, SACHS & CO.
020 B000001 13-5108880
020 C000001 25
020 A000002 PAINEWEBBER GROUP
020 B000002 13-2638166
020 C000002 14
020 A000003 PERSHING & CO
020 B000003 13-3769702
020 C000003 6
020 A000004 DONALDSON CO.
020 B000004 58-1574040
<PAGE> PAGE 3
020 C000004 4
020 A000005 MAYFIELD SECURITIES
020 B000005 UNKNOWN
020 C000005 3
020 A000006 FAHNSTOCK & CO.
020 B000006 UNKNOWN
020 C000006 2
020 A000007 RYAN BECK
020 B000007 UNKNOWN
020 C000007 2
020 A000008 JEFFERIES & CO INC
020 B000008 95-2622900
020 C000008 1
020 A000009 WINCHESTER GROUP
020 B000009 UNKNOWN
020 C000009 1
020 A000010 BEAR, STEARNS & CO.
020 B000010 13-3299429
020 C000010 1
021 000000 60
022 A000001 STATE STREET CORP.
022 B000001 04-1867445
022 C000001 750096
022 D000001 1
022 A000002 HERZOG, HEINE, GEDULD, INC.
022 B000002 13-1955436
022 C000002 0
022 D000002 2267
022 A000003 GOLDMAN, SACHS & CO.
022 B000003 13-5108880
022 C000003 988
022 D000003 57
022 A000004 PAINEWEBBER GROUP
022 B000004 13-2638166
022 C000004 509
022 D000004 0
022 A000005 PERSHING & CO.
022 B000005 13-3769702
022 C000005 271
022 D000005 0
022 A000006 KEEFE, BRUYETTE & WOODS INC.
022 B000006 13-1964616
022 C000006 0
022 D000006 114
022 A000007 SALOMON SMITH BARNEY HOLDINGS INC.
022 B000007 22-1660266
022 C000007 21
022 D000007 65
022 A000008 BEAR, STEARNS & CO.
022 B000008 13-3299429
022 C000008 36
<PAGE> PAGE 4
022 D000008 0
022 A000009 DONALDSON, LUFTKIN & JENRETTE SECURITIES CORP
022 B000009 13-2741729
022 C000009 9
022 D000009 11
022 A000010 ADVEST, INC.
022 B000010 UNKNOWN
022 C000010 0
022 D000010 10
023 C000000 751930
023 D000000 2524
026 A000000 Y
026 B000000 Y
026 C000000 Y
026 D000000 Y
026 E000000 N
026 F000000 N
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026 H000000 N
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047 00AA00 Y
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048 A01AA00 250000
048 A02AA00 0.750
048 B01AA00 750000
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048 C01AA00 1500000
048 C02AA00 0.700
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048 E01AA00 2500000
048 E02AA00 0.650
048 F01AA00 2500000
048 F02AA00 0.640
048 G01AA00 2500000
048 G02AA00 0.630
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048 I01AA00 0
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048 J01AA00 0
048 J02AA00 0.000
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<PAGE> PAGE 5
048 K02AA00 0.620
049 00AA00 N
050 00AA00 N
051 00AA00 N
052 00AA00 N
053 A00AA00 Y
053 B00AA00 Y
054 A00AA00 Y
054 B00AA00 Y
054 C00AA00 N
054 D00AA00 N
054 E00AA00 N
054 F00AA00 N
054 G00AA00 N
054 H00AA00 Y
054 I00AA00 N
054 J00AA00 Y
054 K00AA00 N
054 L00AA00 N
054 M00AA00 Y
054 N00AA00 N
054 O00AA00 Y
058 A00AA00 N
059 00AA00 Y
060 A00AA00 Y
060 B00AA00 Y
061 00AA00 1000
066 A00AA00 Y
066 B00AA00 N
066 C00AA00 Y
066 D00AA00 N
066 E00AA00 N
066 F00AA00 N
066 G00AA00 N
067 00AA00 N
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068 B00AA00 N
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077 A000000 Y
077 B000000 N
077 C000000 Y
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
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077 J000000 N
077 K000000 N
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<PAGE> PAGE 6
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077 O000000 N
077 P000000 N
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078 000000 N
024 000100 Y
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025 B000101 13-3299429
025 C000101 E
025 D000101 1263
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025 B000102 13-5108880
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<PAGE> PAGE 7
029 000100 Y
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030 C000100 0.00
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031 B000100 0
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035 000100 248
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042 A000100 0
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042 C000100 0
042 D000100 0
042 E000100 0
042 F000100 0
042 G000100 0
042 H000100 100
043 000100 450
044 000100 981
055 A000100 N
055 B000100 N
056 000100 Y
057 000100 N
062 A000100 N
062 B000100 0.0
062 C000100 0.0
062 D000100 0.0
062 E000100 0.0
062 F000100 0.0
062 G000100 0.0
062 H000100 0.0
062 I000100 0.0
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062 L000100 0.0
062 M000100 0.0
062 N000100 0.0
062 O000100 0.0
062 P000100 0.0
062 Q000100 0.0
062 R000100 0.0
063 A000100 0
063 B000100 0.0
070 A010100 Y
070 A020100 Y
070 B010100 Y
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070 C010100 Y
<PAGE> PAGE 8
070 C020100 N
070 D010100 Y
070 D020100 N
070 E010100 Y
070 E020100 N
070 F010100 Y
070 F020100 N
070 G010100 Y
070 G020100 N
070 H010100 Y
070 H020100 N
070 I010100 N
070 I020100 N
070 J010100 Y
070 J020100 N
070 K010100 Y
070 K020100 Y
070 L010100 Y
070 L020100 Y
070 M010100 Y
070 M020100 Y
070 N010100 Y
070 N020100 N
070 O010100 N
070 O020100 N
070 P010100 N
070 P020100 N
070 Q010100 N
070 Q020100 N
070 R010100 Y
070 R020100 N
071 A000100 17384
071 B000100 30081
071 C000100 215667
071 D000100 16
072 A000100 6
072 B000100 143
072 C000100 2210
072 D000100 0
072 E000100 0
072 F000100 831
072 G000100 277
072 H000100 0
072 I000100 0
072 J000100 387
072 K000100 0
072 L000100 55
072 M000100 11
072 N000100 20
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<PAGE> PAGE 9
072 Q000100 0
072 R000100 6
072 S000100 7
072 T000100 450
072 U000100 1
072 V000100 0
072 W000100 32
072 X000100 2077
072 Y000100 81
072 Z000100 357
072AA000100 1823
072BB000100 1676
072CC010100 13578
072CC020100 0
072DD010100 323
072DD020100 0
072EE000100 458
073 A010100 0.0300
073 A020100 0.0000
073 B000100 0.0200
073 C000100 0.0000
074 A000100 1
074 B000100 2224
074 C000100 0
074 D000100 0
074 E000100 0
074 F000100 215692
074 G000100 0
074 H000100 0
074 I000100 0
074 J000100 5748
074 K000100 0
074 L000100 841
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074 N000100 224514
074 O000100 4458
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<PAGE> PAGE 10
075 A000100 0
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SIGNATURE PHILIP J. COLLORA
TITLE V.P. AND SECRETARY
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1999 SEMIANNUAL REPORT TO SHAREHOLDERS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001052427
<NAME> KEMPER EQUITY TRUST
<SERIES>
<NUMBER> 01
<NAME> KEMPER-DREMAN FINANCIAL SERVICES FUND - CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> MAY-31-1999
<INVESTMENTS-AT-COST> 209,832
<INVESTMENTS-AT-VALUE> 217,916
<RECEIVABLES> 6,589
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 8
<TOTAL-ASSETS> 224,514
<PAYABLE-FOR-SECURITIES> 4,458
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,417
<TOTAL-LIABILITIES> 5,875
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 210,894
<SHARES-COMMON-STOCK> 9,433
<SHARES-COMMON-PRIOR> 11,211
<ACCUMULATED-NII-CURRENT> 216
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (555)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,084
<NET-ASSETS> 218,639
<DIVIDEND-INCOME> 2,210
<INTEREST-INCOME> 143
<OTHER-INCOME> 0
<EXPENSES-NET> (1,996)
<NET-INVESTMENT-INCOME> 357
<REALIZED-GAINS-CURRENT> 147
<APPREC-INCREASE-CURRENT> 13,578
<NET-CHANGE-FROM-OPS> 14,082
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (323)
<DISTRIBUTIONS-OF-GAINS> (216)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,118
<NUMBER-OF-SHARES-REDEEMED> (4,949)
<SHARES-REINVESTED> 53
<NET-CHANGE-IN-ASSETS> (5,522)
<ACCUMULATED-NII-PRIOR> 186
<ACCUMULATED-GAINS-PRIOR> (248)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 831
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,077
<AVERAGE-NET-ASSETS> 221,566
<PER-SHARE-NAV-BEGIN> 9.65
<PER-SHARE-NII> .08
<PER-SHARE-GAIN-APPREC> .59
<PER-SHARE-DIVIDEND> (.03)
<PER-SHARE-DISTRIBUTIONS> (.02)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.27
<EXPENSE-RATIO> 1.32
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1999 SEMIANNUAL REPORT TO SHAREHOLDERS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001052427
<NAME> KEMPER EQUITY TRUST
<SERIES>
<NUMBER> 02
<NAME> KEMPER-DREMAN FINANCIAL SERVICES FUND - CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> MAY-31-1999
<INVESTMENTS-AT-COST> 209,832
<INVESTMENTS-AT-VALUE> 217,916
<RECEIVABLES> 6,589
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 8
<TOTAL-ASSETS> 224,514
<PAYABLE-FOR-SECURITIES> 4,458
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,417
<TOTAL-LIABILITIES> 5,875
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 210,894
<SHARES-COMMON-STOCK> 10,176
<SHARES-COMMON-PRIOR> 10,389
<ACCUMULATED-NII-CURRENT> 216
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (555)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,084
<NET-ASSETS> 218,639
<DIVIDEND-INCOME> 2,210
<INTEREST-INCOME> 143
<OTHER-INCOME> 0
<EXPENSES-NET> (1,996)
<NET-INVESTMENT-INCOME> 357
<REALIZED-GAINS-CURRENT> 147
<APPREC-INCREASE-CURRENT> 13,578
<NET-CHANGE-FROM-OPS> 14,082
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (207)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,462
<NUMBER-OF-SHARES-REDEEMED> (1,695)
<SHARES-REINVESTED> 20
<NET-CHANGE-IN-ASSETS> (5,522)
<ACCUMULATED-NII-PRIOR> 186
<ACCUMULATED-GAINS-PRIOR> (248)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 831
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,077
<AVERAGE-NET-ASSETS> 221,566
<PER-SHARE-NAV-BEGIN> 9.59
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .63
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.02)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.19
<EXPENSE-RATIO> 2.22
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1999 SEMIANNUAL REPORT TO SHAREHOLDERS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001052427
<NAME> KEMPER EQUITY TRUST
<SERIES>
<NUMBER> 03
<NAME> KEMPER-DREMAN FINANCIAL SERVICES FUND - CLASS C
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> MAY-31-1999
<INVESTMENTS-AT-COST> 209,832
<INVESTMENTS-AT-VALUE> 217,916
<RECEIVABLES> 6,589
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 8
<TOTAL-ASSETS> 224,514
<PAYABLE-FOR-SECURITIES> 4,458
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,417
<TOTAL-LIABILITIES> 5,875
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 210,894
<SHARES-COMMON-STOCK> 1,767
<SHARES-COMMON-PRIOR> 1,699
<ACCUMULATED-NII-CURRENT> 216
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (555)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,084
<NET-ASSETS> 218,639
<DIVIDEND-INCOME> 2,210
<INTEREST-INCOME> 143
<OTHER-INCOME> 0
<EXPENSES-NET> (1,996)
<NET-INVESTMENT-INCOME> 357
<REALIZED-GAINS-CURRENT> 147
<APPREC-INCREASE-CURRENT> 13,578
<NET-CHANGE-FROM-OPS> 14,082
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (35)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 463
<NUMBER-OF-SHARES-REDEEMED> (398)
<SHARES-REINVESTED> 3
<NET-CHANGE-IN-ASSETS> (5,522)
<ACCUMULATED-NII-PRIOR> 186
<ACCUMULATED-GAINS-PRIOR> (248)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 831
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,077
<AVERAGE-NET-ASSETS> 221,566
<PER-SHARE-NAV-BEGIN> 9.61
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .63
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.02)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.21
<EXPENSE-RATIO> 2.20
</TABLE>
<PAGE>
SHAREHOLDERS' MEETING
SPECIAL SHAREHOLDERS' MEETING
On December 17, 1998, a special shareholders' meeting was held and adjourned to
January 15, 1999. Kemper-Dreman Financial Services Fund shareholders were asked
to vote on three separate issues: approval of the new Investment Management
Agreement between the fund and Scudder Kemper Investments, Inc., approval of the
new Sub-Advisory Agreement between Scudder Kemper Investments, Inc. and Dreman
Value Management, L.L.C. and to modify or eliminate certain policies and to
eliminate the shareholder approval requirements as to certain other matters. The
following are the results.
1) Approval of the new Investment Management Agreement between the fund and
Scudder Kemper Investments, Inc. This item was approved.
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
15,833,431 182,115 409,663
</TABLE>
2) Approval of the new Sub-Advisory Agreement between Scudder Kemper
Investments, Inc. and Dreman Value Management, L.L.C., as applicable. This
item was approved.
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
15,683,190 161,630 580,389
</TABLE>
3) To modify or eliminate certain policies and to eliminate the shareholder
approval requirements as to certain other matters. These items were approved.
Investment objectives
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
9,256,955 571,923 1,303,569
</TABLE>
Diversification
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
9,252,514 576,160 1,303,775
</TABLE>
Lending
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
9,240,109 588,565 1,303,775
</TABLE>
18
N:\SHAREDAT\CORP_ACT\CONTRACT\KEMPER\KET\ima_s98 6
INVESTMENT MANAGEMENT AGREEMENT
Kemper Equity Trust
Two International Place
Boston, Massachusetts 02110
September 7, 1998
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Kemper-Dreman Financial Services Fund
Ladies and Gentlemen:
Kemper Equity Trust (the "Trust") has been established as a
Massachusetts business trust to engage in the business of an
investment company. Pursuant to the Trust's Declaration of
Trust, as amended from time-to-time (the "Declaration"), the
Board of Trustees is authorized to issue the Trust's shares
of beneficial interest, par value $.01 per share, (the
"Shares") in separate series, or funds. The Board of
Trustees has authorized Kemper-Dreman Financial Services
Fund (the "Fund"). Series may be abolished and dissolved,
and additional series established, from time to time by
action of the Trustees.
The Trust, on behalf of the Fund, has selected you to act as
the investment manager of the Fund and to provide certain
other services, as more fully set forth below, and you have
indicated that you are willing to act as such investment
manager and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Trust on
behalf of the Fund agrees with you as follows:
1. Delivery of Documents. The Trust engages in the business
of investing and reinvesting the assets of the Fund in the
manner and in accordance with the investment objectives,
policies and restrictions specified in the currently
effective Prospectus (the "Prospectus") and Statement of
Additional Information (the "SAI") relating to the Fund
included in the Trust's Registration Statement on Form N-1A,
as amended from time to time, (the "Registration Statement")
filed by the Trust under the Investment Company Act of 1940,
as amended, (the "1940 Act") and the Securities Act of 1933,
as amended. Copies of the documents referred to in the
preceding sentence have been furnished to you by the Trust.
The Trust has also furnished you with copies properly
certified or authenticated of each of the following
additional documents related to the Trust and the Fund:
(a) The Declaration dated January 6, 1998, as amended
to date.
(b) By-Laws of the Trust as in effect on the date
hereof (the "By-Laws").
(c) Resolutions of the Trustees of the Trust
and the shareholders of the Fund selecting you as
investment manager and approving the form of this
Agreement.
(d) Establishment and Designation of Series
of Shares of Beneficial Interest dated January 6,
1998 relating to the Fund.
The Trust will furnish you from time to time with copies,
properly certified or authenticated, of all amendments of or
supplements, if any, to the foregoing, including the
Prospectus, the SAI and the Registration Statement.
2. Portfolio Management Services. As manager of the assets
of the Fund, you shall provide continuing investment
management of the assets of the Fund in accordance with the
investment objectives, policies and restrictions set forth
in the Prospectus and SAI; the applicable provisions of the
1940 Act and the Internal Revenue Code of 1986, as amended,
(the "Code") relating to regulated investment companies and
all rules and regulations thereunder; and all other
applicable federal and state laws and regulations of which
you have knowledge; subject always to policies and
instructions adopted by the Trust's Board of Trustees. In
connection therewith, you shall use reasonable efforts to
manage the Fund so that it will qualify as a regulated
investment company under Subchapter M of the Code and
regulations issued thereunder. The Fund shall have the
benefit of the investment analysis and research, the review
of current economic conditions and trends and the
consideration of long-range investment policy generally
available to your investment advisory clients. In managing
the Fund in accordance with the requirements set forth in
this section 2, you shall be entitled to receive and act
upon advice of counsel to the Trust. You shall also make
available to the Trust promptly upon request all of the
Fund's investment records and ledgers as are necessary to
assist the Trust in complying with the requirements of the
1940 Act and other applicable laws. To the extent required
by law, you shall furnish to regulatory authorities having
the requisite authority any information or reports in
connection with the services provided pursuant to this
Agreement which may be requested in order to ascertain
whether the operations of the Trust are being conducted in a
manner consistent with applicable laws and regulations.
You shall determine the securities, instruments,
investments, currencies, repurchase agreements, futures,
options and other contracts relating to investments to be
purchased, sold or entered into by the Fund and place orders
with broker-dealers, foreign currency dealers, futures
commission merchants or others pursuant to your
determinations and all in accordance with Fund policies as
expressed in the Registration Statement. You shall determine
what portion of the Fund's portfolio shall be invested in
securities and other assets and what portion, if any, should
be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic
reports on the investment performance of the Fund and on the
performance of your obligations pursuant to this Agreement,
and you shall supply such additional reports and information
as the Trust's officers or Board of Trustees shall
reasonably request.
3. Administrative Services. In addition to the portfolio
management services specified above in section 2, you shall
furnish at your expense for the use of the Fund such office
space and facilities in the United States as the Fund may
require for its reasonable needs, and you (or one or more of
your affiliates designated by you) shall render to the Trust
administrative services on behalf of the Fund necessary for
operating as an open end investment company and not provided
by persons not parties to this Agreement including, but not
limited to, preparing reports to and meeting materials for
the Trust's Board of Trustees and reports and notices to
Fund shareholders; supervising, negotiating contractual
arrangements with, to the extent appropriate, and monitoring
the performance of, accounting agents, custodians,
depositories, transfer agents and pricing agents,
accountants, attorneys, printers, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed
to be necessary or desirable to Fund operations; preparing
and making filings with the Securities and Exchange
Commission (the "SEC") and other regulatory and
self-regulatory organizations, including, but not limited
to, preliminary and definitive proxy materials,
post-effective amendments to the Registration Statement,
semi-annual reports on Form N-SAR and notices pursuant to
Rule 24f-2 under the 1940 Act; overseeing the tabulation of
proxies by the Fund's transfer agent; assisting in the
preparation and filing of the Fund's federal, state and
local tax returns; preparing and filing the Fund's federal
excise tax return pursuant to Section 4982 of the Code;
providing assistance with investor and public relations
matters; monitoring the valuation of portfolio securities
and the calculation of net asset value; monitoring the
registration of Shares of the Fund under applicable federal
and state securities laws; maintaining or causing to be
maintained for the Fund all books, records and reports and
any other information required under the 1940 Act, to the
extent that such books, records and reports and other
information are not maintained by the Fund's custodian or
other agents of the Fund; assisting in establishing the
accounting policies of the Fund; assisting in the resolution
of accounting issues that may arise with respect to the
Fund's operations and consulting with the Fund's independent
accountants, legal counsel and the Fund's other agents as
necessary in connection therewith; establishing and
monitoring the Fund's operating expense budgets; reviewing
the Fund's bills; processing the payment of bills that have
been approved by an authorized person; assisting the Fund in
determining the amount of dividends and distributions
available to be paid by the Fund to its shareholders,
preparing and arranging for the printing of dividend notices
to shareholders, and providing the transfer and dividend
paying agent, the custodian, and the accounting agent with
such information as is required for such parties to effect
the payment of dividends and distributions; and otherwise
assisting the Trust as it may reasonably request in the
conduct of the Fund's business, subject to the direction and
control of the Trust's Board of Trustees. Nothing in this
Agreement shall be deemed to shift to you or to diminish the
obligations of any agent of the Fund or any other person not
a party to this Agreement which is obligated to provide
services to the Fund.
4. Allocation of Charges and Expenses. Except as otherwise
specifically provided in this section 4, you shall pay the
compensation and expenses of all Trustees, officers and
executive employees of the Trust (including the Fund's share
of payroll taxes) who are affiliated persons of you, and you
shall make available, without expense to the Fund, the
services of such of your directors, officers and employees
as may duly be elected officers of the Trust, subject to
their individual consent to serve and to any limitations
imposed by law. You shall provide at your expense the
portfolio management services described in section 2 hereof
and the administrative services described in section 3
hereof.
You shall not be required to pay any expenses of the Fund
other than those specifically allocated to you in this
section 4. In particular, but without limiting the
generality of the foregoing, you shall not be responsible,
except to the extent of the reasonable compensation of such
of the Fund's Trustees and officers as are directors,
officers or employees of you whose services may be involved,
for the following expenses of the Fund: organization
expenses of the Fund (including out of-pocket expenses, but
not including your overhead or employee costs); fees payable
to you and to any other Fund advisors or consultants; legal
expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the
Fund's custodian or other agents of the Trust; telephone,
telex, facsimile, postage and other communications expenses;
taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in
investment company trade organizations; fees and expenses of
the Fund's accounting agent for which the Trust is
responsible pursuant to the terms of the Fund Accounting
Services Agreement, custodians, subcustodians, transfer
agents, dividend disbursing agents and registrars; payment
for portfolio pricing or valuation services to pricing
agents, accountants, bankers and other specialists, if any;
expenses of preparing share certificates and, except as
provided below in this section 4, other expenses in
connection with the issuance, offering, distribution, sale,
redemption or repurchase of securities issued by the Fund;
expenses relating to investor and public relations; expenses
and fees of registering or qualifying Shares of the Fund for
sale; interest charges, bond premiums and other insurance
expense; freight, insurance and other charges in connection
with the shipment of the Fund's portfolio securities; the
compensation and all expenses (specifically including travel
expenses relating to Trust business) of Trustees, officers
and employees of the Trust who are not affiliated persons of
you; brokerage commissions or other costs of acquiring or
disposing of any portfolio securities of the Fund; expenses
of printing and distributing reports, notices and dividends
to shareholders; expenses of printing and mailing
Prospectuses and SAIs of the Fund and supplements thereto;
costs of stationery; any litigation expenses;
indemnification of Trustees and officers of the Trust; and
costs of shareholders' and other meetings.
You shall not be required to pay expenses of any activity
which is primarily intended to result in sales of Shares of
the Fund if and to the extent that (i) such expenses are
required to be borne by a principal underwriter which acts
as the distributor of the Fund's Shares pursuant to an
underwriting agreement which provides that the underwriter
shall assume some or all of such expenses, or (ii) the Trust
on behalf of the Fund shall have adopted a plan in
conformity with Rule 12b-1 under the 1940 Act providing that
the Fund (or some other party) shall assume some or all of
such expenses. You shall be required to pay such of the
foregoing sales expenses as are not required to be paid by
the principal underwriter pursuant to the underwriting
agreement or are not permitted to be paid by the Fund (or
some other party) pursuant to such a plan.
5. Management Fee. For all services to be rendered, payments
to be made and costs to be assumed by you as provided in
sections 2, 3, and 4 hereof, the Trust on behalf of the Fund
shall pay you in United States Dollars on the last day of
each month the unpaid balance of a fee equal to the excess
of 1/12 of 0.75 of 1 percent of the average daily net assets
as defined below of the Fund for such month; provided that,
for any calendar month during which the average of such
values exceeds $250 million, the fee payable for that month
based on the portion of the average of such values in excess
of $250 million up to and including $1.0 billion shall be
1/12 of 0.72 of 1 percent of such portion; provided further
that, for any calendar month during which the average of
such values exceeds $1.0 billion, the fee payable for that
month based on the portion of the average of such values in
excess of $1.0 billion up to and including $2.5 billion
shall be 1/12 of 0.70 of 1 percent of such portion; provided
further that, for any calendar month during which the
average of such values exceeds $2.5 billion, the fee payable
for that month based on the portion of the average of such
values in excess of $2.5 billion up to and including $5.0
billion shall be 1/12 of 0.68 of 1 percent of such portion;
provided further that, for any calendar month during which
the average of such values exceeds $5.0 billion, the fee
payable for that month based on the portion of the average
of such values in excess of $5.0 billion up to and including
$7.5 billion shall be 1/12 of 0.65 of 1 percent of such
portion; provided further that, for any calendar month
during which the average of such values exceeds $7.5
billion, the fee payable for that month based on the portion
of the average of such values in excess of $7.5 billion up
to and including $10.0 billion shall be 1/12 of 0.64 of 1
percent of such portion; provided further that, for any
calendar month during which the average of such values
exceeds $10.0 billion, the fee payable for that month based
on the portion of the average of such values in excess of
$10.0 billion up to and including $12.5 billion shall be
1/12 of 0.63 of 1 percent of such portion; and provided
that, for any calendar month during which the average of
such values exceeds $12.5 billion, the fee payable for that
month based on the portion of the average of such values in
excess of $12.5 billion shall be 1/12 of 0.62 of 1 percent
of such portion over the lowest applicable expense fully
described below or over any compensation waived by you from
time to time (as more fully described below). You shall be
entitled to receive during any month such interim payments
of your fee hereunder as you shall request, provided that no
such payment shall exceed 75 percent of the amount of your
fee then accrued on the books of the Fund and unpaid.
The "average daily net assets" of the Fund shall mean the
average of the values placed on the Fund's net assets as of
4:00 p.m. (New York time) on each day on which the net asset
value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund
lawfully determines the value of its net assets as of some
other time on each business day, as of such time. The value
of the net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Declaration and
the Registration Statement. If the determination of net
asset value does not take place for any particular day, then
for the purposes of this section 5, the value of the net
assets of the Fund as last determined shall be deemed to be
the value of its net assets as of 4:00 p.m. (New York time),
or as of such other time as the value of the net assets of
the Fund's portfolio may be lawfully determined on that day.
If the Fund determines the value of the net assets of its
portfolio more than once on any day, then the last such
determination thereof on that day shall be deemed to be the
sole determination thereof on that day for the purposes of
this section 5.
You may waive all or a portion of your fees provided for
hereunder and such waiver shall be treated as a reduction in
purchase price of your services. You shall be contractually
bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Fund's
expenses, as if such waiver or limitation were fully set
forth herein.
6. Avoidance of Inconsistent Position; Services Not
Exclusive. In connection with purchases or sales of
portfolio securities and other investments for the account
of the Fund, neither you nor any of your directors, officers
or employees shall act as a principal or agent or receive
any commission. You or your agent shall arrange for the
placing of all orders for the purchase and sale of portfolio
securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund
policies as expressed in the Registration Statement. If any
occasion should arise in which you give any advice to
clients of yours concerning the Shares of the Fund, you
shall act solely as investment counsel for such clients and
not in any way on behalf of the Fund.
Your services to the Fund pursuant to this Agreement are not
to be deemed to be exclusive and it is understood that you
may render investment advice, management and services to
others. In acting under this Agreement, you shall be an
independent contractor and not an agent of the Trust.
Whenever the Fund and one or more other accounts or
investment companies advised by you have available funds for
investment, investments suitable and appropriate for each
shall be allocated in accordance with procedures believed by
you to be equitable to each entity. Similarly, opportunities
to sell securities shall be allocated in a manner believed
by you to be equitable. The Fund recognizes that in some
cases this procedure may adversely affect the size of the
position that may be acquired or disposed of for the Fund.
7. Limitation of Liability of Manager. As an inducement to
your undertaking to render services pursuant to this
Agreement, the Trust agrees that you shall not be liable
under this Agreement for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with
the matters to which this Agreement relates, provided that
nothing in this Agreement shall be deemed to protect or
purport to protect you against any liability to the Trust,
the Fund or its shareholders to which you would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties, or by reason
of your reckless disregard of your obligations and duties
hereunder.
8. Duration and Termination of This Agreement. This
Agreement shall remain in force until
September 30, 1999 and continue in force from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually (a) by the vote of a
majority of the Trustees who are not parties to this
Agreement or interested persons of any party to this
Agreement, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Trustees
of the Trust, or by the vote of a majority of the
outstanding voting securities of the Fund. The aforesaid
requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed
in a manner consistent with the 1940 Act and the rules and
regulations thereunder and any applicable SEC exemptive
order therefrom.
This Agreement may be terminated with respect to the Fund at
any time, without the payment of any penalty, by the vote of
a majority of the outstanding voting securities of the Fund
or by the Trust's Board of Trustees on 60 days' written
notice to you, or by you on 60 days' written notice to the
Trust. This Agreement shall terminate automatically in the
event of its assignment.
This Agreement may be terminated with respect to the Fund at
any time without the payment of any penalty by the Board of
Trustees or by vote of a majority of the outstanding voting
securities of the Fund in the event that it shall have been
established by a court of competent jurisdiction that you or
any of your officers or directors has taken any action which
results in a breach of your covenants set forth herein.
9. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the
party against whom enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this
Agreement shall be effective until approved in a manner
consistent with the 1940 Act and rules and regulations
thereunder and any applicable SEC exemptive order therefrom.
10. Limitation of Liability for Claims. The Declaration, a
copy of which, together with all amendments thereto, is on
file in the Office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "Kemper Equity Trust"
refers to the Trustees under the Declaration collectively as
Trustees and not as individuals or personally, and that no
shareholder of the Fund, or Trustee, officer, employee or
agent of the Trust, shall be subject to claims against or
obligations of the Trust or of the Fund to any extent
whatsoever, but that the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of
liability as set forth in the Declaration and you agree that
the obligations assumed by the Trust on behalf of the Fund
pursuant to this Agreement shall be limited in all cases to
the Fund and its assets, and you shall not seek satisfaction
of any such obligation from the shareholders or any
shareholder of the Fund or any other series of the Trust, or
from any Trustee, officer, employee or agent of the Trust.
You understand that the rights and obligations of each Fund,
or series, under the Declaration are separate and distinct
from those of any and all other series.
11. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way
define or limit any of the provisions hereof or otherwise
affect their construction or effect. This Agreement may be
executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
In interpreting the provisions of this Agreement, the
definitions contained in Section 2(a) of the 1940 Act
(particularly the definitions of "affiliated person,"
"assignment" and "majority of the outstanding voting
securities"), as from time to time amended, shall be
applied, subject, however, to such exemptions as may be
granted by the SEC by any rule, regulation or order.
This Agreement shall be construed in accordance with the
laws of The Commonwealth of Massachusetts, provided that
nothing herein shall be construed in a manner inconsistent
with the 1940 Act, or in a manner which would cause the Fund
to fail to comply with the requirements of Subchapter M of
the Code.
This Agreement shall supersede all prior investment advisory
or management agreements entered into between you and the
Trust on behalf of the Fund.
If you are in agreement with the foregoing, please execute
the form of acceptance on the accompanying counterpart of
this letter and return such counterpart to the Trust,
whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
Kemper Equity Trust, on
behalf of
Kemper-Dreman Financial
Services Fund
By: ___________________________
President
The foregoing Agreement is hereby accepted as of the date
hereof.
SCUDDER KEMPER INVESTMENTS,
INC.
By: ___________________________
Treasurer
N:\SHAREDAT\CORP_ACT\CONTRACT\KEMPER\KET\UNDER81.DOC 1
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made this 1st day of August, 1998 between KEMPER EQUITY
TRUST, a Massachusetts business trust (the "Fund"), and KEMPER
DISTRIBUTORS, INC., a Delaware corporation ("KDI").
In consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto
as follows:
1. The Fund hereby appoints KDI to act as agent for
distribution of shares of beneficial interest (hereinafter called
"shares") of the Fund in jurisdictions wherein shares of the Fund
may legally be offered for sale; provided, however, that the Fund
in its absolute discretion may (a) issue or sell shares directly
to holders of shares of the Fund upon such terms and conditions
and for such consideration, if any, as it may determine, whether
in connection with the distribution of subscription or purchase
rights, the payment or reinvestment of dividends or
distributions, or otherwise; or (b) issue or sell shares at net
asset value to the shareholders of any other investment company,
for which KDI shall act as exclusive distributor, who wish to
exchange all or a portion of their investment in shares of such
other investment company for shares of the Fund. KDI shall
appoint various financial service firms ("Firms") to provide
distribution services to investors. The Firms shall provide such
office space and equipment, telephone facilities, personnel,
literature distribution, advertising and promotion as is
necessary or beneficial for providing information and
distribution services to existing and potential clients of the
Firms. KDI may also provide some of the above services for the
Fund.
KDI accepts such appointment as distributor and principal
underwriter and agrees to render such services and to assume the
obligations herein set forth for the compensation herein
provided. KDI shall for all purposes herein provided be deemed
to be an independent contractor and, unless expressly provided
herein or otherwise authorized, shall have no authority to act
for or represent the Fund in any way. KDI, by separate agreement
with the Fund, may also serve the Fund in other capacities. The
services of KDI to the Fund under this Agreement are not to be
deemed exclusive, and KDI shall be free to render similar
services or other services to others so long as its services
hereunder are not impaired thereby.
In carrying out its duties and responsibilities hereunder,
KDI will, pursuant to separate written contracts, appoint various
Firms to provide advertising, promotion and other distribution
services contemplated hereunder directly to or for the benefit of
existing and potential shareholders who may be clients of such
Firms. Such Firms shall at all times be deemed to be independent
contractors retained by KDI and not the Fund.
KDI shall use its best efforts with reasonable promptness to
sell such part of the authorized shares of the Fund remaining
unissued as from time to time shall be effectively registered
under the Securities Act of 1933 ("Securities Act"), at prices
determined as hereinafter provided and on terms hereinafter set
forth, all subject to applicable federal and state laws and
regulations and to the Fund's organizational documents.
2. KDI shall sell shares of the Fund to or through
qualified Firms in such manner, not inconsistent with the
provisions hereof and the then effective registration statement
(and related prospectus) of the Fund under the Securities Act, as
KDI may determine from time to time, provided that no Firm or
other person shall be appointed or authorized to act as agent of
the Fund without prior consent of the Fund. In addition to sales
made by it as agent of the Fund, KDI may, in its discretion, also
sell shares of the Fund as principal to persons with whom it does
not have selling group agreements.
Shares of any class of any series of the Fund offered for
sale or sold by KDI shall be so offered or sold at a price per
share determined in accordance with the then current prospectus.
The price the Fund shall receive for all shares purchased from it
shall be the net asset value used in determining the public
offering price applicable to the sale of such shares. Any excess
of the sales price over the net asset value of the shares of the
Fund sold by KDI as agent shall be retained by KDI as a
commission for its services hereunder. KDI may compensate Firms
for sales of shares at the commission levels provided in the
Fund's prospectus from time to time. KDI may pay other
commissions, fees or concessions to Firms, any may pay them to
others in its discretion, in such amounts as KDI shall determine
from time to time. KDI shall be entitled to receive and retain
any applicable contingent deferred sales charge as described in
the Fund's prospectus. KDI shall also receive any distribution
services fee payable by the Fund as provided in the Fund's
Amended and Restated 12b-1 Plan, as amended from time to time
(the "Plan").
KDI will require each Firm to conform to the provisions
hereof and the Registration Statement (and related prospectus) at
the time in effect under the Securities Act with respect to the
public offering price or net asset value, as applicable, of the
Fund's shares, and neither KDI nor any such Firms shall withhold
the placing of purchase orders so as to make a profit thereby.
3. The Fund will use its best efforts to keep effectively
registered under the Securities Act for sale as herein
contemplated such shares as KDI shall reasonably request and as
the Securities and Exchange Commission shall permit to be so
registered. Notwithstanding any other provision hereof, the Fund
may terminate, suspend or withdraw the offering of shares
whenever, in its sole discretion, it deems such action to be
desirable.
4. The Fund will execute any and all documents and furnish
any and all information that may be reasonably necessary in
connection with the qualification of its shares for sale
(including the qualification of the Fund as a dealer where
necessary or advisable) in such states as KDI may reasonably
request (it being understood that the Fund shall not be required
without its consent to comply with any requirement which in its
opinion is unduly burdensome). The Fund will furnish to KDI from
time to time such information with respect to the Fund and its
shares as KDI may reasonably request for use in connection with
the sale of shares of the Fund.
5. KDI shall issue and deliver or shall arrange for
various Firms to issue and deliver on behalf of the Fund such
confirmations of sales made by it pursuant to this Agreement as
may be required. At or prior to the time of issuance of shares,
KDI will pay or cause to be paid to the Fund the amount due the
Fund for the sale of such shares. Certificates shall be issued
or shares registered on the transfer books of the Fund in such
names and denominations as KDI may specify.
6. KDI shall order shares of the Fund from the Fund only
to the extent that it shall have received purchase orders
therefor. KDI will not make, or authorize Firms or others to
make (a) any short sales of shares of the Fund; or (b) any sales
of such shares to any Board member or officer of the Fund or to
any officer or Board member of KDI or of any corporation or
association furnishing investment advisory, managerial or
supervisory services to the Fund, or to any corporation or
association, unless such sales are made in accordance with the
then current prospectus relating to the sale of such shares.
KDI, as agent of and for the account of the Fund, may repurchase
the shares of the Fund at such prices and upon such terms and
conditions as shall be specified in the current prospectus of the
Fund. In selling or reacquiring shares of the Fund for the
account of the Fund, KDI will in all respects conform to the
requirements of all state and federal laws and the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.,
relating to such sale or reacquisition, as the case may be, and
will indemnify and save harmless the Fund from any damage or
expense on account of any wrongful act by KDI or any employee,
representative or agent of KDI. KDI will observe and be bound by
all the provisions of the Fund's organizational documents (and of
any fundamental policies adopted by the Fund pursuant to the
Investment Company Act of 1940 (the "Investment Company Act"),
notice of which shall have been given to KDI) which at the time
in any way require, limit, restrict, prohibit or otherwise
regulate any action on the part of KDI hereunder.
7. The Fund shall assume and pay all charges and expenses
of its operations not specifically assumed or otherwise to be
provided by KDI under this Agreement or the Plan. The Fund will
pay or cause to be paid expenses (including the fees and
disbursements of its own counsel) of any registration of the Fund
and its shares under the United States securities laws and
expenses incident to the issuance of shares of beneficial
interest, such as the cost of share certificates, issue taxes,
and fees of the transfer agent. KDI will pay all expenses (other
than expenses which one or more Firms may bear pursuant to any
agreement with KDI) incident to the sale and distribution of the
shares issued or sold hereunder, including, without limiting the
generality of the foregoing, all (a) expenses of printing and
distributing any prospectus and of preparing, printing and
distributing or disseminating any other literature, advertising
and selling aids in connection with the offering of the shares
for sale (except that such expenses need not include expenses
incurred by the Fund in connection with the preparation,
typesetting, printing and distribution of any registration
statement or prospectus, report or other communication to
shareholders in their capacity as such), (b) expenses of
advertising in connection with such offering and (c) expenses
(other than the Fund's auditing expenses) of qualifying or
continuing the qualification of the shares for sale and, in
connection therewith, of qualifying or continuing the
qualification of the Fund as a dealer or broker under the laws of
such states as may be designated by KDI under the conditions
herein specified. No transfer taxes, if any, which may be
payable in connection with the issue or delivery or shares sold
as herein contemplated or of the certificates for such shares
shall be borne by the Fund, and KDI will indemnify and hold
harmless the Fund against liability for all such transfer taxes.
8. This Agreement shall become effective on the date
hereof and shall continue until March 1, 1999; and shall continue
from year to year thereafter only so long as such continuance is
approved in the manner required by the Investment Company Act.
This Agreement shall automatically terminate in the event of
its assignment and may be terminated at any time without the
payment of any penalty by the Fund or by KDI on sixty (60) days'
written notice to the other party. The Fund may effect
termination with respect to any class of any series of the Fund
by a vote of (i) a majority of the Board members who are not
interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan, this Agreement,
or in any other agreement related to the Plan, or (ii) a majority
of the outstanding voting securities of such series or class.
Without prejudice to any other remedies of the Fund, the Fund may
terminate this Agreement at any time immediately upon KDI's
failure to fulfill any of its obligations hereunder.
All material amendments to this Agreement must be approved
by a vote of a majority of the Board, and of the Board members
who are not interested persons of the Fund and who have no direct
or indirect financial interest in the operation of the Plan, this
Agreement or in any other agreement related to the Plan, cast in
person at a meeting called for such purpose.
The terms "assignment," "interested person" and "vote of a
majority of the outstanding voting securities" shall have the
meanings set forth in the Investment Company Act and the rules
and regulations thereunder.
KDI shall receive such compensation for its distribution
services as set forth in the Plan. Termination of this Agreement
shall not affect the right of KDI to receive payments on any
unpaid balance of the compensation earned prior to such
termination, as set forth in the Plan.
9. KDI will not use or distribute, or authorize the use,
distribution or dissemination by Firms or others in connection
with the sale of Fund shares any statements other than those
contained in the Fund's current prospectus, except such
supplemental literature or advertising as shall be lawful under
federal and state securities laws and regulations. KDI will
furnish the Fund with copies of all such material.
10. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
11. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
12. All parties hereto are expressly put on notice of the
Fund's Agreement and Declaration of Trust, and all amendments
thereto, all of which are on file with the Secretary of The
Commonwealth of Massachusetts, and the limitation of shareholder
and trustee liability contained therein. This Agreement has been
executed by and on behalf of the Fund by its representatives as
such representatives and not individually, and the obligations of
the Fund hereunder are not binding upon any of the Trustees,
officers or shareholders of the Fund individually but are binding
upon only the assets and property of the Fund. With respect to
any claim by KDI for recovery of any liability of the Fund
arising hereunder allocated to a particular series or class,
whether in accordance with the express terms hereof or otherwise,
KDI shall have recourse solely against the assets of that series
or class to satisfy such claim and shall have no recourse against
the assets of any other series or class for such purpose.
13. This Agreement shall be construed in accordance with
applicable federal law and with the laws of The Commonwealth of
Massachusetts.
14. This Agreement is the entire contract between the
parties relating to the subject matter hereof and supersedes all
prior agreements between the parties relating to the subject
matter hereof.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the Fund and KDI have caused this
Agreement to be executed as of the day and year first above
written.
KEMPER EQUITY TRUST
By:
Title:
ATTEST:
Title:
KEMPER DISTRIBUTORS, INC.
By:
Title:
ATTEST:
Title:
G:\SHAREDAT\CORP_ACT\CONTRACT\KEMPER\KET\UNDER97.DOC 1
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made this 7th day of September, 1998 between KEMPER
EQUITY TRUST, a Massachusetts business trust (the "Fund"), and
KEMPER DISTRIBUTORS, INC., a Delaware corporation ("KDI").
In consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto
as follows:
1. The Fund hereby appoints KDI to act as agent for
distribution of shares of beneficial interest (hereinafter called
"shares") of the Fund in jurisdictions wherein shares of the Fund
may legally be offered for sale; provided, however, that the Fund
in its absolute discretion may (a) issue or sell shares directly
to holders of shares of the Fund upon such terms and conditions
and for such consideration, if any, as it may determine, whether
in connection with the distribution of subscription or purchase
rights, the payment or reinvestment of dividends or
distributions, or otherwise; or (b) issue or sell shares at net
asset value to the shareholders of any other investment company,
for which KDI shall act as exclusive distributor, who wish to
exchange all or a portion of their investment in shares of such
other investment company for shares of the Fund. KDI shall
appoint various financial service firms ("Firms") to provide
distribution services to investors. The Firms shall provide such
office space and equipment, telephone facilities, personnel,
literature distribution, advertising and promotion as is
necessary or beneficial for providing information and
distribution services to existing and potential clients of the
Firms. KDI may also provide some of the above services for the
Fund.
KDI accepts such appointment as distributor and principal
underwriter and agrees to render such services and to assume the
obligations herein set forth for the compensation herein
provided. KDI shall for all purposes herein provided be deemed
to be an independent contractor and, unless expressly provided
herein or otherwise authorized, shall have no authority to act
for or represent the Fund in any way. KDI, by separate agreement
with the Fund, may also serve the Fund in other capacities. The
services of KDI to the Fund under this Agreement are not to be
deemed exclusive, and KDI shall be free to render similar
services or other services to others so long as its services
hereunder are not impaired thereby.
In carrying out its duties and responsibilities hereunder,
KDI will, pursuant to separate written contracts, appoint various
Firms to provide advertising, promotion and other distribution
services contemplated hereunder directly to or for the benefit of
existing and potential shareholders who may be clients of such
Firms. Such Firms shall at all times be deemed to be independent
contractors retained by KDI and not the Fund.
KDI shall use its best efforts with reasonable promptness to
sell such part of the authorized shares of the Fund remaining
unissued as from time to time shall be effectively registered
under the Securities Act of 1933 ("Securities Act"), at prices
determined as hereinafter provided and on terms hereinafter set
forth, all subject to applicable federal and state laws and
regulations and to the Fund's organizational documents.
2. KDI shall sell shares of the Fund to or through
qualified Firms in such manner, not inconsistent with the
provisions hereof and the then effective registration statement
(and related prospectus) of the Fund under the Securities Act, as
KDI may determine from time to time, provided that no Firm or
other person shall be appointed or authorized to act as agent of
the Fund without prior consent of the Fund. In addition to sales
made by it as agent of the Fund, KDI may, in its discretion, also
sell shares of the Fund as principal to persons with whom it does
not have selling group agreements.
Shares of any class of any series of the Fund offered for
sale or sold by KDI shall be so offered or sold at a price per
share determined in accordance with the then current prospectus.
The price the Fund shall receive for all shares purchased from it
shall be the net asset value used in determining the public
offering price applicable to the sale of such shares. Any excess
of the sales price over the net asset value of the shares of the
Fund sold by KDI as agent shall be retained by KDI as a
commission for its services hereunder. KDI may compensate Firms
for sales of shares at the commission levels provided in the
Fund's prospectus from time to time. KDI may pay other
commissions, fees or concessions to Firms, any may pay them to
others in its discretion, in such amounts as KDI shall determine
from time to time. KDI shall be entitled to receive and retain
any applicable contingent deferred sales charge as described in
the Fund's prospectus. KDI shall also receive any distribution
services fee payable by the Fund as provided in the Fund's
Amended and Restated 12b-1 Plan, as amended from time to time
(the "Plan").
KDI will require each Firm to conform to the provisions
hereof and the Registration Statement (and related prospectus) at
the time in effect under the Securities Act with respect to the
public offering price or net asset value, as applicable, of the
Fund's shares, and neither KDI nor any such Firms shall withhold
the placing of purchase orders so as to make a profit thereby.
3. The Fund will use its best efforts to keep effectively
registered under the Securities Act for sale as herein
contemplated such shares as KDI shall reasonably request and as
the Securities and Exchange Commission shall permit to be so
registered. Notwithstanding any other provision hereof, the Fund
may terminate, suspend or withdraw the offering of shares
whenever, in its sole discretion, it deems such action to be
desirable.
4. The Fund will execute any and all documents and furnish
any and all information that may be reasonably necessary in
connection with the qualification of its shares for sale
(including the qualification of the Fund as a dealer where
necessary or advisable) in such states as KDI may reasonably
request (it being understood that the Fund shall not be required
without its consent to comply with any requirement which in its
opinion is unduly burdensome). The Fund will furnish to KDI from
time to time such information with respect to the Fund and its
shares as KDI may reasonably request for use in connection with
the sale of shares of the Fund.
5. KDI shall issue and deliver or shall arrange for
various Firms to issue and deliver on behalf of the Fund such
confirmations of sales made by it pursuant to this Agreement as
may be required. At or prior to the time of issuance of shares,
KDI will pay or cause to be paid to the Fund the amount due the
Fund for the sale of such shares. Certificates shall be issued
or shares registered on the transfer books of the Fund in such
names and denominations as KDI may specify.
6. KDI shall order shares of the Fund from the Fund only
to the extent that it shall have received purchase orders
therefor. KDI will not make, or authorize Firms or others to
make (a) any short sales of shares of the Fund; or (b) any sales
of such shares to any Board member or officer of the Fund or to
any officer or Board member of KDI or of any corporation or
association furnishing investment advisory, managerial or
supervisory services to the Fund, or to any corporation or
association, unless such sales are made in accordance with the
then current prospectus relating to the sale of such shares.
KDI, as agent of and for the account of the Fund, may repurchase
the shares of the Fund at such prices and upon such terms and
conditions as shall be specified in the current prospectus of the
Fund. In selling or reacquiring shares of the Fund for the
account of the Fund, KDI will in all respects conform to the
requirements of all state and federal laws and the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.,
relating to such sale or reacquisition, as the case may be, and
will indemnify and save harmless the Fund from any damage or
expense on account of any wrongful act by KDI or any employee,
representative or agent of KDI. KDI will observe and be bound by
all the provisions of the Fund's organizational documents (and of
any fundamental policies adopted by the Fund pursuant to the
Investment Company Act of 1940 (the "Investment Company Act"),
notice of which shall have been given to KDI) which at the time
in any way require, limit, restrict, prohibit or otherwise
regulate any action on the part of KDI hereunder.
7. The Fund shall assume and pay all charges and expenses
of its operations not specifically assumed or otherwise to be
provided by KDI under this Agreement or the Plan. The Fund will
pay or cause to be paid expenses (including the fees and
disbursements of its own counsel) of any registration of the Fund
and its shares under the United States securities laws and
expenses incident to the issuance of shares of beneficial
interest, such as the cost of share certificates, issue taxes,
and fees of the transfer agent. KDI will pay all expenses (other
than expenses which one or more Firms may bear pursuant to any
agreement with KDI) incident to the sale and distribution of the
shares issued or sold hereunder, including, without limiting the
generality of the foregoing, all (a) expenses of printing and
distributing any prospectus and of preparing, printing and
distributing or disseminating any other literature, advertising
and selling aids in connection with the offering of the shares
for sale (except that such expenses need not include expenses
incurred by the Fund in connection with the preparation,
typesetting, printing and distribution of any registration
statement or prospectus, report or other communication to
shareholders in their capacity as such), (b) expenses of
advertising in connection with such offering and (c) expenses
(other than the Fund's auditing expenses) of qualifying or
continuing the qualification of the shares for sale and, in
connection therewith, of qualifying or continuing the
qualification of the Fund as a dealer or broker under the laws of
such states as may be designated by KDI under the conditions
herein specified. No transfer taxes, if any, which may be
payable in connection with the issue or delivery or shares sold
as herein contemplated or of the certificates for such shares
shall be borne by the Fund, and KDI will indemnify and hold
harmless the Fund against liability for all such transfer taxes.
8. This Agreement shall become effective on the date
hereof and shall continue until March 1, 1999; and shall continue
from year to year thereafter only so long as such continuance is
approved in the manner required by the Investment Company Act.
This Agreement shall automatically terminate in the event of
its assignment and may be terminated at any time without the
payment of any penalty by the Fund or by KDI on sixty (60) days'
written notice to the other party. The Fund may effect
termination with respect to any class of any series of the Fund
by a vote of (i) a majority of the Board members who are not
interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan, this Agreement,
or in any other agreement related to the Plan, or (ii) a majority
of the outstanding voting securities of such series or class.
Without prejudice to any other remedies of the Fund, the Fund may
terminate this Agreement at any time immediately upon KDI's
failure to fulfill any of its obligations hereunder.
All material amendments to this Agreement must be approved
by a vote of a majority of the Board, and of the Board members
who are not interested persons of the Fund and who have no direct
or indirect financial interest in the operation of the Plan, this
Agreement or in any other agreement related to the Plan, cast in
person at a meeting called for such purpose.
The terms "assignment," "interested person" and "vote of a
majority of the outstanding voting securities" shall have the
meanings set forth in the Investment Company Act and the rules
and regulations thereunder.
KDI shall receive such compensation for its distribution
services as set forth in the Plan. Termination of this Agreement
shall not affect the right of KDI to receive payments on any
unpaid balance of the compensation earned prior to such
termination, as set forth in the Plan.
9. KDI will not use or distribute, or authorize the use,
distribution or dissemination by Firms or others in connection
with the sale of Fund shares any statements other than those
contained in the Fund's current prospectus, except such
supplemental literature or advertising as shall be lawful under
federal and state securities laws and regulations. KDI will
furnish the Fund with copies of all such material.
10. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
11. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
12. All parties hereto are expressly put on notice of the
Fund's Agreement and Declaration of Trust, and all amendments
thereto, all of which are on file with the Secretary of The
Commonwealth of Massachusetts, and the limitation of shareholder
and trustee liability contained therein. This Agreement has been
executed by and on behalf of the Fund by its representatives as
such representatives and not individually, and the obligations of
the Fund hereunder are not binding upon any of the Trustees,
officers or shareholders of the Fund individually but are binding
upon only the assets and property of the Fund. With respect to
any claim by KDI for recovery of any liability of the Fund
arising hereunder allocated to a particular series or class,
whether in accordance with the express terms hereof or otherwise,
KDI shall have recourse solely against the assets of that series
or class to satisfy such claim and shall have no recourse against
the assets of any other series or class for such purpose.
13. This Agreement shall be construed in accordance with
applicable federal law and with the laws of The Commonwealth of
Massachusetts.
14. This Agreement is the entire contract between the
parties relating to the subject matter hereof and supersedes all
prior agreements between the parties relating to the subject
matter hereof.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the Fund and KDI have caused this
Agreement to be executed as of the day and year first above
written.
KEMPER EQUITY TRUST
By:
Title:
ATTEST:
Title:
KEMPER DISTRIBUTORS, INC.
By:
Title:
ATTEST:
Title:
