<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 15, 1995.
1933 ACT REGISTRATION NO. 2-51992
1940 ACT REGISTRATION NO. 811-2527
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM N-1A
<TABLE>
<CAPTION>
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [_]
<S> <C>
Pre-Effective Amendment No. [_]
Post-Effective Amendment No. 41 [X]
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [_]
Amendment No. 41 [X]
</TABLE>
(Check appropriate box or boxes)
----------------
KEMPER MONEY MARKET FUND
(Exact name of Registrant as Specified in Charter)
120 South LaSalle Street, Chicago, 60603
Illinois
(Address of Principal Executive (Zip Code)
Office)
Registrant's Telephone Number, including Area Code: (312) 781-1121
With a copy to:
Philip J. Collora, Vice President and Charles F. Custer
Secretary
Kemper Money Market Fund Vedder, Price, Kaufman & Kammholz
120 South LaSalle Street 222 North LaSalle Street
Chicago, Illinois 60603 Chicago, Illinois 60601
(Name and Address of Agent for Service)
Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940. The Rule 24f-2 Notice for Registrant's fiscal year ended July 31,
1995 was filed on or about September 26, 1995.
It is proposed that this filing will become effective (check appropriate
box)
[_] immediately upon filing pursuant to paragraph (b)
[X] on November 20, 1995 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[_] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES BEING AMOUNT BEING OFFERING AGGREGATE REGISTRATION
REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE FEE*
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of beneficial interest,
without
par value:
Money Market Portfolio (MMP)..... 124,191,729 $1.00 $500,000 $100.00
Government Securities Portfolio 104,267,039 $1.00 $500,000 $100.00
(GSP)
Tax-Exempt Portfolio (TEP)....... 32,488,521 $1.00 $500,000 $100.00
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
*The fee is calculated in accordance with Rule 24e-2
(b)(2) 5,758,910,739 (MMP); (b)(3) 5,635,219,010 (MMP); (b)(4) 123,691,729
(MMP).
(b)(2) 941,531,664 (GSP); (b)(3) 837,764,625 (GSP); (b)(4) 103,767,039.
(b)(2) 874,113,285 (TEP); (b)(3) 842,124,764 (TEP); (b)(4) 31,988,521.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
KEMPER MONEY MARKET FUND
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART A
OF FORM N-1A AND PROSPECTUS
<TABLE>
<CAPTION>
ITEM NUMBER OF FORM N-1A LOCATION IN PROSPECTUS
- ------------------------ ----------------------
<S> <C>
1.Cover Page................................. Cover Page
2.Synopsis................................... Summary; Summary of Expenses
3.Condensed Financial Information............ Financial Highlights; Performance
4.General Description of Registrant.......... Summary; Capital Structure; How the Fund
Works; Investment Objectives, Policies and
Risk Factors
5.Management of the Fund..................... Summary; Investment Manager; How to Buy
Shares
5A.Management's Discussion of Fund Perfor-
mance....................................... Inapplicable
6.Capital Stock and Other Securities......... Summary; Capital Structure; Dividends and
Taxes;
How to Buy Shares; Investment Objectives,
Policies and Risk Factors
7.Purchase of Securities Being Offered....... Summary; How to Buy Shares; Net Asset
Value;
Investment Manager; Special Features;
Account
Services Directory
8.Redemption or Repurchase................... Summary; How to Redeem Shares; Special
Features;
Account Services Directory
9.Pending Legal Proceedings.................. Inapplicable
</TABLE>
<PAGE>
Kemper Money Market Fund
PROSPECTUS
November 20, 1995
KEMPER MONEY MARKET FUND
120 SOUTH LASALLE STREET, CHICAGO, ILLINOIS 60603
1-800-537-6001.
The Fund offers a choice of investment portfolios and is designed for investors
who seek maximum current income to the extent consistent with stability of
principal. The Fund currently offers three portfolios. Each Portfolio invests
exclusively in high quality money market instruments.
.MONEY MARKET PORTFOLIO
.GOVERNMENT SECURITIES PORTFOLIO
.TAX-EXEMPT PORTFOLIO
This prospectus contains information about the Fund that a prospective investor
should know before investing and should be retained for future reference. A
Statement of Additional Information dated November 20, 1995, has been filed
with the Securities and Exchange Commission and is incorporated herein by ref-
erence. It is available upon request without charge from the Fund at the ad-
dress above or by calling 1-800-537-6001.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERN-
MENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY, AND IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR EN-
DORSED BY, ANY BANK. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
Table of Contents
<TABLE>
<S> <C>
Summary..................................................................... 2
Summary of Fund Expenses.................................................... 3
Financial Highlights........................................................ 4
How the Fund Works.......................................................... 5
Investment Objectives, Policies and Risk Factors............................ 5
Net Asset Value--Determining Share Price.................................... 10
How To Buy Shares........................................................... 11
How To Sell Shares.......................................................... 12
Exchanging Shares........................................................... 15
Special Features............................................................ 17
Dividends and Taxes......................................................... 18
Investment Manager.......................................................... 20
Performance................................................................. 21
Capital Structure........................................................... 22
Account Services Directory.................................................. 23
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
SUMMARY
INVESTMENT OBJECTIVES
Kemper Money Market Fund (the "Fund") is an open-end, diversified, management
investment company offering a choice of three investment portfolios
("Portfolios"). The Fund is designed to provide you with professional
management of your short-term investment dollars; the dollars that you want to
be very liquid and accessible when special opportunities arise or that you want
to know are in high quality investments.
Each Portfolio invests in high quality short-term money market instruments
consistent with its specific objective.
.THE MONEY MARKET PORTFOLIO seeks maximum current income to the extent
consistent with stability of principal from a portfolio primarily of commercial
paper and bank obligations.
.THE GOVERNMENT SECURITIES PORTFOLIO seeks maximum current income to the extent
consistent with stability of principal from a portfolio of obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities.
.THE TAX-EXEMPT PORTFOLIO seeks maximum current income that is exempt from
federal income taxes to the extent consistent with stability of principal from
a portfolio of municipal securities.
Each Portfolio may use a variety of investment techniques in seeking its
objective including the purchase of repurchase agreements and variable rate
securities. Each Portfolio seeks to maintain a net asset value of $1.00 per
share; however, there is no assurance that the objective of any Portfolio will
be achieved or that any Portfolio will be able to maintain a net asset value of
$1.00 per share. See "How the Fund Works" and "Investment Objectives, Policies
and Risk Factors."
INVESTMENT MANAGER
Kemper Financial Services, Inc. ("KFS") is the investment manager for the
Fund and provides the Fund with continuous professional investment supervision.
KFS is paid an annual investment management fee, payable monthly, on a
graduated basis ranging from .50% of the first $215 million of average daily
net assets of the Fund to .25% of average daily net assets of the Fund over
$800 million. See "Investment Manager."
BUYING AND SELLING SHARES
You may buy and sell shares of each Portfolio at net asset value with no
sales charge. The minimum initial investment is $1,000 and the minimum subse-
quent investment is $100. Accounts may be opened using the Account Application
available from the Fund. Shares may be purchased by mailing a check, by wire
transfer or in person in downtown Chicago and Kansas City. Please see "How To
Buy Shares" for more information on how easy it is to invest. Shares may be
sold or redeemed by written request or by using one of the Fund's expedited re-
demption procedures. See "How To Sell Shares" for specific details.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested in additional shares of the same Portfolio, unless you elect to be
paid by check. See "Dividends and Taxes."
SPECIAL FEATURES
A number of features are available to account holders, including: the Kemper
Money-PLUSSM Account, a cash management program offering a combination of fea-
tures including a no minimum checking account and a VISA(R) check card and
Electronic Funds Transfer Programs. See "Special Features" and "Account Serv-
ices Directory" for a description of these and other features.
2
<PAGE>
SUMMARY OF FUND EXPENSES
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES*
Sales Load on Purchases.................................................... None
Sales Load on Reinvested Dividends......................................... None
Deferred Sales Load........................................................ None
Redemption Fees............................................................ None
Exchange Fee............................................................... None
</TABLE>
<TABLE>
<CAPTION>
MONEY GOVERNMENT
MARKET SECURITIES TAX-EXEMPT
ANNUAL FUND OPERATING EXPENSES PORTFOLIO PORTFOLIO PORTFOLIO
(as a percentage of average net assets) --------- ---------- ----------
<S> <C> <C> <C>
Management Fees................................. .27% .27% .27%
12b-1 Fees...................................... None None None
Other Expenses.................................. .25% .19% .13%
---- ---- ----
Total Operating Expenses........................ .52% .46% .40%
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
EXAMPLE --------- ------ ------- ------- --------
<C> <S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 Money Market............ $ 5 $17 $29 $65
investment, assuming a 5% annual return and Government Securities... $ 5 $15 $26 $58
redemption at the end of each time period: Tax-Exempt.............. $ 4 $13 $22 $51
</TABLE>
- --------
*Table does not include $3.00 monthly small account fee. See "How to Sell
Shares."
The purpose of the table above is to assist you in understanding the various
costs and expenses that an investor in the Fund will bear directly or
indirectly. Investment dealers and other firms may independently charge
shareholders additional fees. The Example assumes a 5% annual rate of return
pursuant to requirements of the Securities and Exchange Commission. This
hypothetical rate of return is not intended to be representative of past or
future performance of any Portfolio of the Fund. The Example should not be
considered to be a representation of past or future expenses. Actual expenses
may be greater or less than those shown.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below show financial information for each Portfolio, expressed in
terms of one share outstanding throughout the period. The information in the
tables is covered by the report of the Fund's independent auditors. The report
is contained in the Fund's Registration Statement and is available from the
Fund. The financial statements contained in the Fund's 1995 Annual Report to
Shareholders are incorporated herein by reference and may be obtained by writ-
ing or calling the Fund.
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE
OPERATING
PERFORMANCE:
Net asset value,
beginning of
period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------
Net investment
income and
dividends
declared .05 .03 .03 .04 .07 .08 .09 .07 .06 .07
- -----------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%): 5.34 3.20 2.96 4.45 7.19 8.50 9.03 7.03 6.02 7.51
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE
NET ASSETS (%):
Expenses .52 .52 .52 .49 .46 .45 .49 .50 .52 .53
- -----------------------------------------------------------------------------------------------------------------------
Net investment
income 5.19 3.14 2.92 4.42 6.94 8.16 8.71 6.79 5.84 7.24
- -----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL
DATA:
Net assets at end
of period
(in thousands) $4,025,098 4,148,789 4,499,930 5,664,194 7,553,950 7,603,418 6,638,489 4,893,284 4,235,907 4,733,314
- -----------------------------------------------------------------------------------------------------------------------
GOVERNMENT SECURITIES PORTFOLIO
<CAPTION>
YEAR ENDED JULY 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE
OPERATING
PERFORMANCE:
Net asset value,
beginning of
period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------
Net investment
income and
dividends
declared .05 .03 .03 .04 .07 .08 .09 .07 .06 .07
- -----------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%): 5.36 3.20 2.97 4.50 6.95 8.45 8.96 6.88 5.79 6.84
- -----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE
NET ASSETS (%):
Expenses .46 .47 .45 .43 .43 .43 .49 .51 .67 .88
- -----------------------------------------------------------------------------------------------------------------------
Net investment
income 5.21 3.15 2.94 4.44 6.65 8.08 8.79 6.66 5.64 6.60
- -----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL
DATA:
Net assets at end
of period
(in thousands) $603,601 707,368 694,303 926,328 1,126,417 845,347 514,303 177,812 110,366 103,550
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
TAX-EXEMPT PORTFOLIO
<TABLE>
<CAPTION>
SEPTEMBER 10, 1987
YEAR ENDED JULY 31, TO JULY 31,
1995 1994 1993 1992 1991 1990 1989 1988
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
- ----------------------------------------------------------------------------------------------------
Net investment income
and dividends declared .03 .02 .02 .04 .05 .06 .06 .04
- ----------------------------------------------------------------------------------------------------
Net asset value, end of
period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
- ----------------------------------------------------------------------------------------------------
TOTAL RETURN (%): 3.53 2.33 2.39 3.57 5.07 5.81 6.21 4.33
- ----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS (%):
Expenses .40 .41 .39 .39 .38 .40 .39 .45
- ----------------------------------------------------------------------------------------------------
Net investment income 3.46 2.30 2.36 3.49 4.92 5.64 6.12 4.68
- ----------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of
period (in thousands) $760,143 792,131 758,630 796,272 788,253 693,307 529,670 190,933
- ----------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Ratios have been determined on an annualized basis. Total return is not
annualized. The Money Market Portfolio's total return for the year ended July
31, 1995 includes the effect of a capital contribution from the investment
manager. Without the capital contribution, the total return would have been
4.62%.
4
<PAGE>
HOW THE FUND WORKS
Kemper Money Market Fund is designed to provide you with professional man-
agement of short-term investment dollars. It is designed for investors who
seek maximum current income consistent with stability of principal plus li-
quidity. To help meet these objectives, the Fund provides you with a choice of
separate investment portfolios ("Portfolios"): the Money Market Portfolio, the
Government Securities Portfolio and the Tax-Exempt Portfolio. Because each
Portfolio combines its shareholders' money, it can buy and sell large blocks
of securities, which reduces transaction costs and maximizes yields. The Fund
is managed by investment professionals who analyze market trends to take ad-
vantage of changing conditions and who seek to minimize risk by diversifying
each Portfolio's investments.
Each Portfolio seeks to maintain a net asset value of $1.00 per share. Thus,
the Fund is designed for investors who want to avoid the fluctuations of prin-
cipal commonly associated with equity and long-term bond investments. The
fluctuations of these other types of investments are often represented by the
movement of various unmanaged market indexes, such as the Dow Jones Industrial
Average. In addition, although there can be no guarantee that a Portfolio will
achieve its objective or that it will maintain a net asset value of $1.00 per
share, each Portfolio has maintained a $1.00 net asset value since its incep-
tion.
INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS
.MONEY MARKET PORTFOLIO
THE MONEY MARKET PORTFOLIO SEEKS MAXIMUM CURRENT INCOME TO THE EXTENT CON-
SISTENT WITH STABILITY OF PRINCIPAL. The Portfolio pursues its objective by
investing exclusively in the following types of U.S. Dollar denominated money
market instruments that mature in 12 months or less:
.OBLIGATIONS OF, OR GUARANTEED BY, THE U.S. GOVERNMENT, ITS AGENCIES OR IN-
STRUMENTALITIES.
.BANK CERTIFICATES OF DEPOSIT (INCLUDING TIME DEPOSITS) OR BANKERS' ACCEPT-
ANCES LIMITED TO DOMESTIC BANKS (INCLUDING THEIR FOREIGN BRANCHES) AND CANA-
DIAN CHARTERED BANKS HAVING TOTAL ASSETS IN EXCESS OF $1 BILLION.
.Commercial paper obligations rated A-1 or A-2 by Standard & Poor's Corpora-
tion ("S&P") or Prime-1 or Prime-2 by Moody's Investors Service, Inc.
("Moody's") or issued by companies with an unsecured debt issue outstanding
currently rated Aa by Moody's or AA by S&P or higher and invest
ments in other corporate obligations such as publicly traded bonds, debentures
and notes rated Aa by Moody's or AA by S&P or higher. For a description of
these ratings, see "Appendix--Ratings of Investments" in the Statement of Ad-
ditional Information.
.REPURCHASE AGREEMENTS OF OBLIGATIONS THAT ARE SUITABLE FOR INVESTMENT UNDER
THE CATEGORIES SET FORTH ABOVE. REPURCHASE AGREEMENTS ARE DISCUSSED BELOW.
To the extent the Money Market Portfolio purchases Eurodollar certificates
of deposit issued by London branches of U.S. banks, or commercial paper issued
by foreign entities, consideration will be given to their marketability, to
possible restrictions on international currency transactions and to regula-
tions imposed by the domicile country of the foreign issuer. Eurodollar cer-
tificates of deposit are not subject to the same regulatory requirements as
certificates issued by U.S. banks and associated income may be subject to the
imposition of foreign taxes.
5
<PAGE>
Investment Objectives and Policies--continued
The Money Market Portfolio may invest in commercial paper which is issued by
major corporations without registration under the Securities Act of 1933 in
reliance on the exemption from registration afforded by Section 3(a)(3) there-
of. Such commercial paper may be issued only to finance current transactions
and must mature in nine months or less. Trading of such commercial paper is
conducted primarily by institutional investors through investment dealers, and
individual investor participation in the commercial paper market is very lim-
ited.
The Portfolio may also invest in commercial paper issued in reliance on the
so-called "private placement" exemption from registration afforded by Section
4(2) of the Securities Act of 1933 ("Section 4(2) paper"). Section 4(2) paper
is restricted as to disposition under the federal securities laws, and gener-
ally is sold to institutional investors such as the Portfolio who agree that
they are purchasing the paper for investment and not with a view to public
distribution. Any resale by the purchaser must be in an exempt transaction.
Section 4(2) paper normally is resold to other institutional investors like
the Portfolio through or with the assistance of the issuer or investment deal-
ers who make a market in the Section 4(2) paper, thus providing liquidity. The
Fund's investment adviser considers the legally restricted but readily sale-
able Section 4(2) paper to be liquid; however, pursuant to procedures approved
by the Board of Trustees of the Fund, if a particular investment in Section
4(2) paper is not determined to be liquid, that investment will be included
within the 10% limitation on illiquid securities discussed under "The Fund"
below. The Fund's investment adviser monitors the liquidity of the Portfolio's
investments in Section 4(2) paper on a continuous basis.
.GOVERNMENT SECURITIES PORTFOLIO
THE GOVERNMENT SECURITIES PORTFOLIO SEEKS MAXIMUM CURRENT INCOME TO THE EX-
TENT CONSISTENT WITH STABILITY OF PRINCIPAL. The Portfolio pursues its objec-
tive by investing exclusively in the following securities that mature within
12 months or less.
.U.S. TREASURY BILLS, NOTES, BONDS AND OTHER OBLIGATIONS ISSUED OR GUARANTEED
BY THE U.S. GOVERNMENT, ITS AGENCIES OR INSTRUMENTALITIES.
.REPURCHASE AGREEMENTS OF THE OBLIGATIONS DESCRIBED ABOVE.
Some securities issued by U.S. Government agencies or instrumentalities are
supported only by the credit of the agency or instrumentality, such as those
issued by the Federal Home Loan Bank, and others have an additional line of
credit with the U.S. Treasury, such as those issued by the Federal National
Mortgage Association, Farm Credit System and Student Loan Marketing Associa-
tion. Short-term U.S. Government obligations generally are considered to be
the safest short-term investment. The U.S. Government guarantee of the securi-
ties owned by the Portfolio, however, does not guarantee the net asset value
of its shares, which the Fund seeks to maintain at $1.00 per share. Also, with
respect to securities supported only by the credit of the issuing agency or
instrumentality or by an additional line of credit with the U.S. Treasury,
there is no guarantee that the U.S. Government will provide support to such
agencies or instrumentalities and such securities may involve risk of loss of
principal and interest.
.TAX-EXEMPT PORTFOLIO
THE TAX-EXEMPT PORTFOLIO SEEKS MAXIMUM CURRENT INCOME THAT IS EXEMPT FROM
FEDERAL INCOME TAXES TO THE EXTENT CONSISTENT WITH STABILITY OF PRINCIPAL. The
Portfolio pursues its objective primarily through a professionally managed,
diversified portfolio of short-term high quality tax-exempt municipal obliga-
tions.
Under normal market conditions at least 80% of the Portfolio's total assets
will, as a fundamental policy, be invested in obligations issued by or on be-
half of states, territories and possessions of the United States and the Dis-
trict of Columbia and their political subdivisions, agencies and instrumental-
ities, the income from which is exempt from federal income tax ("Municipal Se-
curities"). In compliance with the position of the staff of the Securities and
Exchange Com-
6
<PAGE>
Investment Objectives and Policies--continued
mission, the Fund does not consider "private activity" bonds as described in
"Dividends and Taxes--Tax-Exempt Portfolio" as Municipal Securities for pur-
poses of the 80% limitation. This is a fundamental policy so long as the staff
maintains its position, after which it would become non-fundamental.
Dividends representing net interest income received by the Tax-Exempt Port-
folio on Municipal Securities will be exempt from federal income tax when dis-
tributed to the Portfolio's shareholders. Such dividend income may be subject
to state and local taxes. See "Dividends and Taxes--Tax-Exempt Portfolio." The
Portfolio's assets will consist of Municipal Securities, temporary investments
as described below and cash. The Portfolio considers short-term Municipal Se-
curities to be those that mature in one year or less.
The Tax-Exempt Portfolio will invest only in Municipal Securities which at
the time of purchase:
. are rated within the two highest ratings for Municipal Securities (Aaa OR Aa)
Assigned by Moody's or (AAA or AA) assigned by S&P;
. are guaranteed or insured by the U.S. Government as to the payment of princi-
pal and interest;
. are fully collateralized by an escrow of U.S. Government securities accept-
able to the Fund's investment manager;
. have at the time of purchase a Moody's short-term municipal securities rating
of MIG-2 or higher or a municipal commercial paper rating of P-2 or higher, or
S&P's municipal commercial paper rating of A-2 or higher;
. are unrated, if longer term Municipal Securities of that issuer are rated
within the two highest rating categories by Moody's or S&P; or
. are determined to be at least equal in quality to one or more of the above
ratings in the discretion of the Fund's investment manager.
Municipal Securities generally are classified as "general obligation" or
"revenue" issues. General obligation bonds are secured by the issuer's pledge
of its full credit and taxing power for the payment of principal and interest.
Revenue bonds are payable only from the revenues derived from a particular fa-
cility or class of facilities or, in some cases, from the proceeds of a spe-
cial excise tax or other specific revenue source such as the user of the fa-
cility being financed. Industrial development bonds held by the Fund are in
most cases revenue bonds and are not payable from the unrestricted revenues of
the issuer. Among other types of instruments, the Portfolio may purchase tax-
exempt commercial paper, warrants and short-term municipal notes such as tax
anticipation notes, bond anticipation notes, revenue anticipation notes, con-
struction loan notes and other forms of short-term loans. Such notes are is-
sued with a short-term maturity in anticipation of the receipt of tax pay-
ments, the proceeds of bond placements or other revenues. A more detailed dis-
cussion of Municipal Securities and the Moody's and S&P ratings outlined above
is contained in the Statement of Additional Information. As indicated above
and under "Dividends and Taxes--Tax-Exempt Portfolio," the Portfolio may in-
vest in "private activity" bonds.
The Tax-Exempt Portfolio may purchase securities which provide for the right
to resell them to an issuer, bank or dealer at an agreed upon price or yield
within a specified period prior to the maturity date of such securities. Such
a right to resell is referred to as a "Standby Commitment." Securities may
cost more with Standby Commitments than without them. Standby Commitments will
be entered into solely to facilitate portfolio liquidity. A Standby Commitment
may be exercised before the maturity date of the related Municipal Security if
the Fund's investment manager revises its evaluation of the creditworthiness
of the underlying security or of the entity issuing the Standby Commitment.
The Portfolio's policy is to enter into Standby Commitments only with issuers,
banks or dealers that are determined by the Fund's investment manager to pres-
ent minimal credit risks. If an issuer, bank or dealer should default on its
obligation to repurchase an underlying security, the Portfolio might be unable
to recover all or
7
<PAGE>
Investment Objectives and Policies--continued
a portion of any loss sustained from having to sell the security elsewhere.
For purposes of valuing the Portfolio's securities at amortized cost, the
stated maturity of Municipal Securities subject to Standby Commitments is not
changed.
The Tax-Exempt Portfolio may purchase high quality Certificates of Partici-
pation in trusts that hold Municipal Securities. A Certificate of Participa-
tion gives the Portfolio an undivided interest in the Municipal Security in
the proportion that the Portfolio's interest bears to the total principal
amount of the Municipal Security. These Certificates of Participation may be
variable rate or fixed rate with remaining maturities of one year or less. A
Certificate of Participation may be backed by an irrevocable letter of credit
or guarantee of a financial institution that satisfies rating agencies as to
the credit quality of the Municipal Security supporting the payment of princi-
pal and interest on the Certificate of Participation. Payments of principal
and interest would be dependent upon the underlying Municipal Security and may
be guaranteed under a letter of credit to the extent of such credit. The qual-
ity rating by a rating service of an issue of Certificates of Participation is
based primarily upon the rating of the Municipal Security held by the trust
and the credit rating of the issuer of any letter of credit and of any other
guarantor providing credit support to the issue. The Fund's investment manager
considers these factors as well as others, such as any quality ratings issued
by the rating services identified above, in reviewing the credit risk pre-
sented by a Certificate of Participation and in determining whether the Cer-
tificate of Participation is appropriate for investment by the Portfolio. It
is anticipated by the Fund's investment manager that, for most publicly of-
fered Certificates of Participation, there will be a liquid secondary market
or there may be demand features enabling the Portfolio to readily sell its
Certificates of Participation prior to maturity to the issuer or a third par-
ty. As to those instruments with demand features, the Portfolio intends to ex-
ercise its right to demand payment from the issuer of the demand feature only
upon a default under the terms of the Municipal Security, as needed to provide
liquidity to meet redemptions, or to maintain a high quality investment port-
folio.
The Tax-Exempt Portfolio may purchase and sell Municipal Securities on a
when-issued or delayed delivery basis. A when-issued or delayed delivery
transaction arises when securities are bought or sold for future payment and
delivery to secure what is considered to be an advantageous price and yield to
the Portfolio at the time it enters into the transaction. In determining the
maturity of portfolio securities purchased on a when-issued or delayed deliv-
ery basis, the Portfolio will consider them to have been purchased on the date
when it committed itself to the purchase.
A security purchased on a when-issued basis, like all securities held by the
Tax-Exempt Portfolio, is subject to changes in market value based upon changes
in the level of interest rates and investors' perceptions of the creditworthi-
ness of the issuer. Generally such securities will appreciate in value when
interest rates decline and decrease in value when interest rates rise. There-
fore if, in order to achieve higher interest income, the Portfolio remains
substantially fully invested at the same time that it has purchased securities
on a when-issued basis, there will be a greater possibility that the market
value of the Portfolio's assets will vary from $1.00 per share, since the
value of a when-issued security is subject to market fluctuation and no inter-
est accrues to the purchaser prior to settlement of the transaction. See "Net
Asset Value--Determining Share Price."
The Portfolio will only make commitments to purchase Municipal Securities on
a when-issued or delayed delivery basis with the intention of actually acquir-
ing the securities, but the Portfolio reserves the right to sell these securi-
ties before the settlement date if deemed advisable. The sale of these securi-
ties may result in the realization of gains that are not exempt from federal
income tax.
In seeking to achieve its investment objective, the Tax-Exempt Portfolio may
invest all or any part
8
<PAGE>
Investment Objectives and Policies--continued
of its assets in Municipal Securities that are industrial development bonds.
Moreover, although the Portfolio does not currently intend to do so on a regu-
lar basis, it may invest more than 25% of its assets in Municipal Securities
that are repayable out of revenue streams generated from economically related
projects or facilities, if such investment is deemed necessary or appropriate
by the Portfolio's investment manager. To the extent that the Portfolio's as-
sets are concentrated in Municipal Securities payable from revenues on economi-
cally related projects and facilities, the Portfolio will be subject to the
risks presented by such projects to a greater extent than it would be if the
Portfolio's assets were not so concentrated.
From time to time, as a defensive measure or when acceptable short-term Mu-
nicipal Securities are not available, the Tax-Exempt Portfolio may invest in
taxable "temporary investments" which include:
. obligations of the U.S. Government, its agencies or instrumentalities;
. debt securities rated within the two highest grades by Moody's or S&P;
. commercial paper rated in the two highest grades by either of such rating
services;
. certificates of deposit of domestic banks with assets of $1 billion or more;
and
. any of the foregoing temporary investments subject to repurchase agreements
(Repurchase agreements are discussed below).
Interest income from temporary investments is taxable to shareholders as or-
dinary income. Although the Portfolio is permitted to invest in taxable securi-
ties, it is the Portfolio's primary intention to generate income dividends that
are not subject to federal income taxes. See "Dividends and Taxes." For a de-
scription of the ratings, see "Appendix--Ratings of Investments" in the State-
ment of Additional Information.
THE FUND
In addition to the specific investment objective and policies listed above,
each Portfolio limits its investments to securities that meet the requirements
of Rule 2a-7 under the Investment Company Act of 1940 (the "1940 Act"). See
"Net Asset Value--Determining Share Price."
Each Portfolio may invest in instruments that have interest rates that adjust
periodically or that "float" continuously according to formulae intended to
minimize fluctuation in values of the instruments ("Variable Rate Securities").
The interest rate on a Variable Rate Security is ordinarily determined by ref-
erence to or is a percentage of an objective standard such as a bank's prime
rate, the 90-day U.S. Treasury bill rate, or the rate of return on commercial
paper or bank certificates of deposit. Generally, the changes in the interest
rate on Variable Rate Securities reduce the fluctuation in the market value of
such securities. Accordingly, as interest rates decrease or increase, the po-
tential for capital appreciation or depreciation is less than for fixed-rate
obligations. Some Variable Rate Securities ("Variable Rate Demand Securities")
have a demand feature entitling the purchaser to resell the securities at an
amount approximately equal to amortized cost or the principal amount thereof
plus accrued interest. As is the case for other Variable Rate Securities, the
interest rate on Variable Rate Demand Securities varies according to some ob-
jective standard intended to minimize fluctuation in the values of the instru-
ments. Each Portfolio determines the maturity of Variable Rate Securities in
accordance with Securities and Exchange Commission rules which allow the Port-
folio to consider certain of such instruments as having maturities shorter than
the maturity date on the face of the instrument.
Each Portfolio may invest in repurchase agreements, which are instruments un-
der which a Portfolio acquires ownership of a security from a broker-dealer or
bank that agrees to repurchase the security at a mutually agreed upon time and
price (which price is higher than the purchase price), thereby determining the
yield during the Portfolio's holding period. Maturity of the securities subject
to repurchase may exceed one year. In the event of a bankruptcy or other de-
fault of a seller of a repurchase agreement, a
9
<PAGE>
Investment Objectives and Policies--continued
Portfolio might incur expenses in enforcing its rights, and could experience
losses, including a decline in the value of the underlying securities and loss
of income. A Portfolio will not purchase illiquid securities, including time
deposits and repurchase agreements maturing in more than seven days, if, as a
result thereof, more than 10% of such Portfolio's net assets valued at the
time of the transaction would be invested in such securities.
A Portfolio may not borrow money except as a temporary measure for extraor-
dinary or emergency purposes, and then only in an amount up to one-third of
the value of its total assets, in order to meet redemption requests without
immediately selling any portfolio securities. Any such borrowings under this
provision will not be collateralized. If for any reason the current value of
the Portfolio's total assets falls below an amount equal to three times the
amount of its indebtedness from money borrowed, the Portfolio will, within
three business days, reduce its indebtedness to the extent necessary. No Port-
folio will borrow for leverage purposes.
The Fund has adopted for each Portfolio certain investment restrictions that
are presented in the Statement of Additional Information and that, together
with the investment objective and policies of such Portfolio cannot be changed
without approval by holders of a majority of its outstanding voting shares. As
defined in the 1940 Act, this means the lesser of the vote of (a) 67% of the
shares of such Portfolio present at a meeting where more than 50% of the out-
standing shares are present in person or by proxy; or (b) more than 50% of the
outstanding shares of the Portfolio.
NET ASSET VALUE--DETERMINING SHARE PRICE
The price you pay when you buy shares in a Portfolio and the price you re-
ceive if you redeem is the net asset value computed after we receive your or-
der to buy or redeem in proper form (as described under "How To Buy Shares").
The net asset value per share of each Portfolio is calculated by dividing the
total value of the assets of the Portfolio, minus its liabilities, by the to-
tal number of its shares outstanding.
The net asset value per share of each Portfolio is determined on each day
the New York Stock Exchange is open for trading, at 11:00 a.m., 1:00 p.m. and
3:00 p.m. Central time for the Money Market and Government Securities Portfo-
lios and at 11:00 a.m. and 3:00 p.m. Central time for the Tax-Exempt Portfo-
lio. Each Portfolio seeks to maintain a net asset value of $1.00 per share.
Each Portfolio values its portfolio instruments at amortized cost in accor-
dance with Rule 2a-7 under the 1940 Act, which means that they are valued at
their acquisition cost (as adjusted for amortization of premium or discount)
rather than at current market value. Calculations are made to compare the
value of each Portfolio's investments valued at amortized cost with market-
based value. Market-based valuations are obtained by using actual quotations
provided by market makers, estimates of market value, or values obtained from
yield data relating to classes of money market instruments published by repu-
table sources at the mean between the bid and asked prices for the instru-
ments. If a deviation of 1/2of 1% or more were to occur between a Portfolio's
net asset value per share calculated by reference to market-based values and a
Portfolio's $1.00 per share net asset value, or if there were any other devia-
tion that the Board of Trustees believed would result in a material dilution
to shareholders or purchasers, the Board of Trustees would promptly consider
what action, if any, should be initiated. In order to value its investments at
amor-
10
<PAGE>
Net Asset Value--Determining Share Price--continued
tized cost, the Portfolios purchase only securities with a maturity of one year
or less and maintain a dollar-weighted average portfolio maturity of 90 days or
less. In addition, the Portfolios limit their portfolio investments to securi-
ties that meet the quality and diversification requirements of Rule 2a-7. Under
the quality requirements of Rule 2a-7, the Portfolios may only purchase U.S.
Dollar denominated instruments that are determined to present minimal credit
risks and that are at the time of acquisition "Eligible Securities" as defined
in Rule 2a-7. "Eligible Securities" under Rule 2a-7 include only securities
that are rated in the top two rating categories by the required number of na-
tionally recognized statistical rating organizations (at least two or, if only
one such organization has rated the security, that one organization) or, if
unrated, are deemed comparable in quality. The diversification requirements of
Rule 2a-7 provide generally that a Portfolio may not at the time of acquisition
invest more than 5% of its assets in securities of any one issuer or invest
more than 5% of its assets in securities that are Eligible Securities that have
not been rated in the highest category by the required number of rating organi-
zations or, if unrated, have not been deemed comparable, except U.S. Government
securities and repurchase agreements of such securities. Although the Rule 2a-7
diversification requirements do not currently apply to the Tax-Exempt Portfo-
lio, pursuant to the Portfolio's investment restrictions, the Portfolio will
not invest more than 5% of its assets (measured at the time of acquisition) in
securities of any one issuer (except U.S. Government securities). See "Invest-
ment Restrictions" in the Statement of Additional Information.
HOW TO BUY SHARES
Whether you're opening an account or adding to it, we hope that you'll find
that we've made your shareholder transactions easy. Shares of each Portfolio
are sold at their net asset value with no sales charge. To open an account you
should use the Account Application available from the Fund and choose one of
the methods outlined below. Call 1-800-537-6001 if you have questions or need
assistance.
. INVESTMENT AMOUNTS
The minimum initial investment for each Portfolio is $1,000 and the minimum
subsequent investment is $100. For an Individual Retirement Account ("IRA"),
the minimum initial investment is $250 and the minimum subsequent investment is
$50. Under an automatic investment plan, such as Bank Direct Deposit, Payroll
Direct Deposit and Government Direct Deposit, the minimum periodic investment
is $50. These minimum amounts may be changed at any time in management's
discretion.
. BY MAIL
Complete the Account Application and mail it with your check (payable to KMMF
followed by the Portfolio name) to the Fund's Shareholder Service Agent to:
Kemper Service Company
Transfer Agency Division
P.O. Box 419356
Kansas City, Missouri 64141-6356.
Subsequent purchase orders should be sent to:
Kemper Service Company
Transfer Agency Division P.O. Box 419154 Kansas City, Missouri 64141-
6154.
Orders for purchase accompanied by a check or other negotiable bank draft
will be accepted and effected as of 3:00 p.m. Central time on the next business
day after receipt and such shares will receive the dividend for the next day
following the day that the
11
<PAGE>
How To Buy Shares--continued
purchase is effected. If an order is accompanied by a check drawn on a foreign
bank, the check must normally clear before shares will be purchased. See "Pur-
chase and Redemption of Shares" in the Statement of Additional Information.
. BY WIRE
If you open your account by wire, your money is invested faster than if you
mail a check, so you'll start earning dividends sooner. To open an account
through wire transfer, call a Kemper Money Fund Specialist, toll free at 1-
800-537-6001 to obtain an account number. Then have your bank or broker wire
Federal Funds (monies credited to a bank's account with its regional Federal
Reserve Bank), together with your account number, the names of the Fund and
the Portfolio and the name in which your account is registered, to State
Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, the sub-custodian for the Fund. Your account will then be opened and
the order for purchase of Fund shares will be effected at the next determined
net asset value. Shares purchased by wire will receive that day's dividend if
effected at or prior to the 1:00 p.m. Central time net asset value determina-
tion for the Money Market and the Government Securities Portfolios, and at or
prior to the 11:00 a.m. Central time net asset value determination for the
Tax-Exempt Portfolio. The Fund accepts wires at no charge, although your bank
may charge you for this service.
. BY ELECTRONIC FUNDS TRANSFER
Please see "Special Features" for more information on buying shares using
electronics funds transfer such as:
EXPRESS-TRANSFER
BANK DIRECT DEPOSIT
PAYROLL DIRECT DEPOSIT
GOVERNMENT DIRECT DEPOSIT
via the Automated Clearing House ("ACH") System.
. IN PERSON
In downtown Chicago, you can make a direct investment at the Customer Serv-
ice Center at 120 South LaSalle Street, 15th Floor, with the assistance of
customer service representatives. In Kansas City, you can make a direct in-
vestment at 811 Main Street, 7th Floor.
OTHER INFORMATION
The Fund reserves the right to withdraw all or any part of the offering made
by this prospectus or to reject purchase orders. The Fund also reserves the
right at any time to waive or increase the minimum investment requirements.
All orders to purchase shares are subject to acceptance by the Fund and are
not binding until confirmed or accepted in writing. Any purchase that would
result in total account balances for a single shareholder in excess of $3 mil-
lion is subject to prior approval by the Fund. Share certificates are issued
only on request to the Fund. Investments may also be made in the Fund through
broker-dealers and others, who may charge a commission or other fee for their
services. A $10 service fee will be charged when a check for the purchase of
shares is returned because of insufficient or uncollected funds or a stop pay-
ment order.
You should direct inquiries to Kemper Service Company, the Fund's Share-
holder Service Agent at 811 Main Street, Kansas City, Missouri 64105-2005 or
1-800-621-1048.
HOW TO SELL SHARES
You can access all or part of your account by selling your shares. Your
shares will be redeemed at the next determined net asset value after your re-
quest has been received in proper form. If processed at 3:00 p.m. Central
time, you will receive that day's dividend on the shares you sold. You may use
either the
12
<PAGE>
How To Sell Shares--continued
regular or expedited redemption procedures described in this section to sell
your shares. If you redeem all your shares of a Portfolio, you will receive
the net asset value of such shares and all declared but unpaid dividends on
such shares.
.BY MAIL
Send a written request signed by all account owners stating the amount to be
redeemed and specifying the account number and Portfolio from which shares are
to be redeemed to:
Kemper Service Company
Transfer Agency Division
P.O. Box 419557
Kansas City, Missouri 64141-6557.
The request must be signed exactly as the account is registered, including any
special capacity of the registered owner, and signature(s) must be guaranteed
(except as noted under "By Telephone" below) by a commercial bank, trust com-
pany, savings and loan association, federal savings bank, member firm of a na-
tional securities exchange or other eligible financial institution. If any
share certificates were issued, they must also be signed with signature(s)
guaranteed. Additional documentation may be requested, and a signature guaran-
tee is normally required, from institutional and fiduciary account holders
such as corporations, custodians (e.g. under the Uniform Transfers to Minors
Act), executors, administrators, trustees or guardians.
.BY TELEPHONE
If the proceeds of the redemption are $50,000 or less and the proceeds are
payable to the shareholder of record at the address of record, normally a tel-
ephone request or a written request by any one account holder without a signa-
ture guarantee is sufficient for redemptions by individual or joint account
holders, and trust, executor and guardian account holders (excluding custodial
accounts for gifts and transfers to minors), provided the trustee, executor or
guardian is named in the account registration. Other institutional account
holders and guardian account holders of custodial accounts for gifts and
transfers to minors may exercise this special privilege of redeeming shares by
telephone request or written request without signature guarantee subject to
the same conditions as individual account holders and subject to the limita-
tions on liability described under "General" below, provided that this privi-
lege has been pre-authorized by the institutional account holder or guardian
account holder by written instruction to the Shareholder Service Agent with
signatures guaranteed. Telephone requests may be made by calling 1-800-621-
1048. Shares purchased by check or through an ACH transaction may not be re-
deemed under this privilege of redeeming shares by telephone request until
such shares have been owned for at least 15 days. This privilege of redeeming
shares by telephone request or by written request without a signature guaran-
tee may not be used to redeem shares held in certificated form and may not be
used if the shareholder's account has had an address change within 30 days of
the redemption request. During periods when it is difficult to contact the
Shareholder Service Agent by telephone, it may be difficult to use the tele-
phone redemption privilege, although you can still redeem by mail. The Fund
reserves the right to terminate or modify this privilege at any time.
.BY WIRE
If you wish to have the proceeds of a redemption "wire transferred" to your
brokerage or bank account you need to have signed up for the privilege and
have the form on file with the Shareholder Service Agent. Once the form is on
file, the Shareholder Service Agent will honor redemption requests ($1,000
minimum) by telephone at 1-800-621-1048 or in writing, subject to the limita-
tions on liability described under "General" below. However, the proceeds will
be sent only to the single bank or trust company you have designated on the
Account Application. This privilege will be terminated if the Shareholder
Service Agent receives written notice from any account holder of revocation of
this authority.
Requests for wire transfer redemptions received by the Shareholder Service
Agent prior to 11:00 a.m.
13
<PAGE>
How To Sell Shares--continued
Central time will result in shares being redeemed that day and normally a wire
transfer will be sent to the designated account that day. Dividends for that
day will not be earned. The Fund is not responsible for the efficiency of the
federal wire system or the account holder's financial services firm or bank.
The Fund currently does not charge you for wire transfers. You are responsible
for any charges your firm or bank makes for sending or receiving wire trans-
fers. There is a $1,000 wire redemption minimum. To change the designated ac-
count to receive wire redemption proceeds, send a written request to the
Shareholder Service Agent with signatures guaranteed as described above.
Shares purchased by check or through an ACH transaction may not be redeemed
by wire transfer until the shares have been owned for at least 15 days. You
may not use this privilege to redeem shares held in certificated form. During
periods when it is difficult to contact the Shareholder Service Agent by tele-
phone, it may be difficult to use the expedited wire redemption privilege. The
Fund reserves the right to terminate or modify this privilege at any time.
.BY REDEMPTION CHECK
If you select this method of redemption on your Account Application, you
will normally receive drafts ("Redemption Checks") within 2 weeks of opening
your account which you may use to draw on your Fund account, but not to close
it. When a Redemption Check is presented for payment, a sufficient number of
full and fractional shares in your account will be redeemed at the next deter-
mined net asset value to cover the amount of the Redemption Check. This will
enable you to continue earning daily dividends until the Fund receives the Re-
demption Check.
You may write Redemption Checks payable to the order of any person in any
amount not more than $5 million. Shareholders should not write Redemption
Checks in an amount less than $500 since a $10 service fee will be charged as
described below. In addition, Redemption Checks should not be used to close an
account since the account normally includes accrued but unpaid dividends.
Unless one signer is authorized on the Account Application, Redemption
Checks must be signed by all account holders. If the Shareholder Service Agent
receives written notice by any owner revoking the authorization to sign indi-
vidually, all account owners will be required to sign. Redemption Checks must
be signed exactly as the account is registered. Shares purchased by check or
through an ACH transaction may not be redeemed by Redemption Check until the
shares have been on the Fund's books for at least 15 days. You may not use
this privilege to redeem shares held in certificated form. The Fund reserves
the right to terminate or modify this privilege at any time.
The Fund may refuse to honor Redemption Checks whenever the right of redemp-
tion has been suspended or postponed, or whenever the account is otherwise im-
paired. A $10 service fee will be charged when a Redemption Check is presented
to redeem Fund shares in excess of the value of your Fund account or in an
amount less than $500; when a Redemption Check is presented that would require
redemption of shares that were purchased by check or ACH transaction within 15
days; or when you request "stop payment" of a Redemption Check by telephone or
in writing. A "stop payment" request may be made by calling 1-800-621-1048.
.GENERAL
If shares of a Portfolio to be redeemed were purchased by check or through
an ACH transaction (see "Special Features--Electronic Funds Transfer Pro-
grams") the Fund may delay transmittal of redemption proceeds until it has de-
termined that collected funds have been received for the purchase of such
shares, which will be up to 15 days from receipt by the Fund of the purchase
amount. Shareholders may not use expedited redemption procedures (wire trans-
fer or Redemption Check) until the shares being redeemed have been owned for
at least 15 days and shareholders may not use such procedures to redeem
14
<PAGE>
How To Sell Shares--continued
shares held in certificated form. There is no such delay when the shares being
redeemed were originally purchased by wiring Federal Funds.
If shares being redeemed were acquired from an exchange of shares of a mu-
tual fund that were offered subject to a contingent deferred sales charge as
described in the prospectus for that other fund, the redemption of such shares
by the Fund may be subject to a contingent deferred sales charge as explained
in such prospectus.
Shareholders can request the following telephone privileges: expedited wire
transfer redemptions, ACH transactions and exchange transactions for individ-
ual and institutional accounts and pre-authorized telephone redemption trans-
actions for certain institutional accounts. Shareholders may choose these
privileges on the account application or by contacting the Shareholder Service
Agent for appropriate instructions. Please note that the telephone exchange
privilege is automatic unless the shareholder refuses it on the account appli-
cation. The Fund or its agents may be liable for losses, expenses or costs
arising out of fraudulent or unauthorized telephone requests pursuant to these
privileges, unless the Fund or its agent reasonably believe, based upon rea-
sonable verification procedures, that the telephonic instructions are genuine.
The SHAREHOLDER WILL BEAR THE RISK OF LOSS, including loss resulting from
fraudulent or unauthorized transactions, as long as the reasonable verifica-
tion procedures are followed. The verification procedures include recording
instructions, requiring certain identifying information before acting upon in-
structions and sending written confirmations.
Because of the high cost of maintaining small accounts, THE FUND MAY ASSESS
A MONTHLY FEE OF $3 ON ANY ACCOUNT WITH A BALANCE BELOW $1,000 FOR 30
CONSECUTIVE DAYS. The fee will not apply to accounts enrolled in an automatic
investment program or to IRAs. See "How To Buy Shares".
EXCHANGING SHARES
Diversification is at the heart of most effective investment planning.
That's why we make it easy for you to exchange your shares of Kemper Money
Market Fund for shares of the Kemper Funds. Please remember that money market
shares you acquire by dividend reinvestment may be exchanged into a Kemper Mu-
tual Fund with no sales charge; though shares you purchase are subject to the
applicable sales charge.
The total value of shares being exchanged must at least equal the minimum
investment requirement of the fund into which they are being exchanged. Ex-
changes are made based on relative dollar values of the shares involved in the
exchange. We don't charge you a service fee for an exchange; however, dealers
or other firms may charge for their services. To exchange shares, call us or
contact your financial adviser to obtain prospectuses of the Kemper Funds in
which you are interested. You may make an exchange by mail or by telephone:
. BY TELEPHONE
Once you've completed the authorization section on the account application
and we have it on file, the Shareholder Service Agent will honor requests by
telephone at 1-800-621-1048 or in writing, subject to the limitations on lia-
bility described under "How To Sell Shares--General." During periods when it
is difficult to contact the Shareholder Service Agent by telephone, it may be
difficult to use the telephone exchange privilege.
. BY MAIL
Send your request to:
Kemper Money Market Fund
P.O. Box 419557
Attention: Exchange Department
Kansas City, Missouri 64141-6557
15
<PAGE>
Exchanging Shares--continued
Exchanges will be effected by redemption of shares of the fund held and pur-
chase of shares of the other fund. For federal income tax purposes, any such
exchange constitutes a sale upon which a gain or loss may be realized, depend-
ing upon whether the value of the shares being exchanged is more or less than
the shareholder's adjusted cost basis. Any certificates for shares must be de-
posited prior to any exchange of such shares. The exchange privilege is not a
right and may be suspended, terminated or modified at any time. Except as
otherwise permitted by applicable regulation, 60 days prior written notice of
any termination or material change will be provided.
SYSTEMATIC EXCHANGE PRIVILEGE
The owner of $1,000 or more of the shares of a Kemper Fund may authorize the
automatic exchange of a specified amount ($100 minimum) of such shares for
shares of another such Kemper Fund. If selected, exchanges will be made auto-
matically until the privilege is terminated by the shareholder or the Kemper
Fund. Exchanges are subject to the terms and conditions described above under
"Exchange Privilege," except that there is no minimum investment requirement
for the Kemper Fund acquired on exchange. This privilege may not be used for
the exchange of shares held in certificated form.
Subject to the limitations described in this section, Class A Shares (or the
equivalent) of the following Kemper Mutual Funds may be exchanged for each
other at their relative net asset values: Kemper Technology Fund, Kemper Total
Return Fund, Kemper Growth Fund, Kemper Small Capitalization Equity Fund, Kem-
per Income and Capital Preservation Fund, Kemper Municipal Bond Fund, Kemper
Diversified Income Fund, Kemper High Yield Fund, Kemper U.S. Government Secu-
rities Fund, Kemper International Fund, Kemper State Tax-Free Income Series,
Kemper Adjustable Rate U.S. Government Fund, Kemper Blue Chip Fund, Kemper
Global Income Fund, Kemper Target Equity Fund (series are subject to a limited
offering period), Kemper Intermediate Municipal Bond Fund, Kemper Cash Re-
serves Fund, Kemper U.S. Mortgage Fund, Kemper Short-Intermediate Government
Fund, Kemper Value+Growth Fund and Kemper-Dreman Fund, Inc. ("Kemper Mutual
Funds") and certain "Money Market Funds" (Kemper Money Market Fund, Cash
Equivalent Fund, Tax-Exempt California Money Market Fund, Cash Account Trust,
Tax-Exempt New York Money Market Fund and Investors Cash Trust). Shares of
Money Market Funds and Kemper Cash Reserves Fund that were acquired by pur-
chase (not including shares acquired by dividend reinvestment) are subject to
the applicable sales charge on exchange. Shares purchased by check or through
an ACH transaction may not be exchanged until they have been owned for at
least 15 days. In addition, shares of Kemper Funds, other than a Money Market
Fund and Kemper Cash Reserves Fund, acquired by exchange from another fund may
not be exchanged thereafter until they have been owned for 15 days. Series of
Kemper Target Equity Fund will be available on exchange only during the Offer-
ing Period for such series as described in the prospectus for such series.
Cash Equivalent Fund, Tax-Exempt California Money Market Fund, Cash Account
Trust, Tax-Exempt New York Money Market Fund and Investors Cash Trust are
available on exchange but only through a financial services firm having a
services agreement with Kemper Distributors, Inc. with respect to such funds.
Exchanges may only be made for funds that are available for sale in the share-
holder's state of residence. Currently, Tax-Exempt California Money Market
Fund is available for sale only in California; and Tax-Exempt New York Money
Market Fund is available for sale only in New York, Connecticut, New Jersey
and Pennsylvania.
SPECIAL RETIREMENT PLANS
Shareholders of the Money Market Portfolio who have purchased shares because
they are participants in tax-exempt retirement plans of KFS and its affiliates
may exchange their shares for Class I shares of any "Kemper Mutual Fund"
listed above to the extent that they are available through their plan. Con-
versely, shareholders of Class I shares may exchange their shares for shares
of the Money Market Portfolio if the shareholders of Class I shares have pur-
chased shares because they are participants in tax-exempt retire
16
<PAGE>
Exchanging Shares--continued
ment plans of KFS and its affiliates. Exchanges will be made at the shares'
relative net asset values through their plan. Exchanges are subject to the lim-
itations set forth above.
SPECIAL FEATURES
. KEMPER MONEY-PLUSSM ACCOUNT
The Kemper Money-PLUSSM Account is a cash management program offering a com-
bination of features and benefits. The program includes checkwriting (no mini-
mum dollar amount) and a VISA(R) Gold Check Card (a debit card). The INVESTORS
MONEYCARDSM VISA(R) is issued by Investors Fiduciary Trust Company ("IFTC").
Currently, the fee for this service is $65 a year with charges for additional
checks. There is a fee of $1.00 per transaction for use of Automated Teller Ma-
chines. The minimum initial account balance required to be eligible for this
privilege is $5,000. You may use only the Redemption Checks provided through
the Kemper Money-PLUSSM Account. Any check for an amount in excess of the funds
available for redemption from the shareholder's account will be returned and
will subject the account to additional service fees. If you have the INVESTORS
MONEYCARDSM VISA(R) and request an expedited wire transfer redemption, the wire
will be sent on the next business day following the request. Fees and features
of the Kemper Money-PLUSSM Account are subject to modification. This program is
available only to those who are residents of the United States. Shareholders
should contact the Shareholder Service Agent at 1-800-537-6001 for more
information.
. ELECTRONIC FUNDS TRANSFER PROGRAMS
For your convenience, the Fund has established several investment and redemp-
tion programs using electronic funds transfer via the ACH System which are de-
scribed below. There is currently no charge by the Fund for these programs.
Shareholders should contact the Shareholder Service Agent at 1-800-621-1048 for
more information.
. EXPRESS-TRANSFER With just one easy phone call, EXPRESS-Transfer quickly and
conveniently transfers money (maximum $50,000) from your bank, savings and loan
or credit union account to purchase shares in the Fund. You can also redeem
shares (minimum $500 and maximum $50,000) from your Fund account and transfer
the proceeds to your bank, savings and loan or credit union checking account.
When you choose to participate in the EXPRESS-Transfer program, you designate
the bank, savings and loan or credit union account which will be debited or
credited under the program. After you have received a notice confirming that
this service has been added to your Fund account, please allow a minimum of 20
days for bank notification and processing. By choosing to participate in this
program, you authorize the Shareholder Service Agent to rely upon telephone in-
structions from any person to transfer the specified amounts between your Fund
account and your predesignated bank, savings and loan or credit union account,
subject to the limitations on liability under "How To Sell Shares--General."
The Shareholder Service Agent will then purchase or redeem sufficient full and
fractional shares in your account to satisfy the request. Once you are enrolled
in EXPRESS-Transfer, you can initiate a transaction by simply calling Kemper
Shareholder Services toll free at 1-800-621-1048 Monday through Friday, 8:00
a.m. to 3:00 p.m. Central time. See "How To Sell Shares--General" for informa-
tion on our 15 day hold policy. Any account holder may terminate this privilege
by sending written notice to Kemper Money Market Fund, P.O. Box 419415, Kansas
City, Missouri 64141-6415. Termination will become effective as soon as the
Shareholder Service Agent has had a reasonable time to act upon the request.
EXPRESS-Transfer cannot be used with passbook savings accounts. This program
may not be used for tax-deferred plans such as Individual Retirement Accounts
(IRAs).
17
<PAGE>
Special Features--continued
. BANK DIRECT DEPOSIT You may establish an automatic investment program with
your Fund account. With Bank Direct Deposit, monthly investments (maximum
$50,000) are made automatically from your account at a bank, savings and loan,
or credit union into your Fund account. By signing up for this privilege, you
authorize the Fund and its agents to take money out of your predesignated bank,
savings and loan or credit union account and invest that money in your Fund ac-
count. Any account owner may terminate this privilege simply by sending written
notice to Kemper Money Market Fund, P.O. Box 419415, Kansas City, Missouri
64141-6415. Termination will become effective as soon as the Shareholder Serv-
ice Agent has had a reasonable time to act upon the request. This privilege may
not be used with passbook savings accounts.
. PAYROLL DIRECT DEPOSIT AND GOVERNMENT DIRECT DEPOSIT You may conveniently in-
vest in the Fund through Payroll Direct Deposit or Government Direct Deposit.
You can arrange to have all or a portion of your net pay or government check
automatically invested in your Fund account each payment period. You may termi-
nate your participation in these programs by giving written notice to your em-
ployer or the government agency, as appropriate. (A reasonable time to act is
required.) The Fund is not responsible for the efficiency of your employer or
the government agency making the payment or any financial institution transmit-
ting payment.
To use these features, your financial institution must be affiliated with the
ACH System. This ACH affiliation permits the Shareholder Service Agent to elec-
tronically transfer money between your bank account or employer's payroll bank
in the case of Payroll Direct Deposit or the U.S. Government in the case of
Government Direct Deposit, and your Fund account. Your financial institution's
crediting policies for these transferred funds may vary. These features may be
amended or terminated at any time by the Fund.
OTHER SPECIAL FEATURES
Information about the following special features is contained in the State-
ment of Additional Information. Additional information may also be obtained by
contacting Kemper Shareholder Services at 1-800-621-1048.
--Systematic Withdrawal Programs
--Tax Sheltered Retirement Programs
DIVIDENDS AND TAXES
. DIVIDEND PAYMENT
To help keep your account growing, dividends from any Portfolio are automati-
cally reinvested in additional shares of that Portfolio, unless you request
payment by check on your account application or make such a request later. Div-
idends are declared daily and paid monthly.
Dividends are normally reinvested on the 25th of each month if a business
day, otherwise on the prior business day. If you've chosen to receive dividends
in cash, checks will be mailed monthly to you or any person you designate.
Shareholders may request this option by contacting the Shareholder Service
Agent (see "How To Buy Shares").
. DIVIDEND EXCHANGE PRIVILEGE
Upon written request to the Shareholder Service Agent, a shareholder may
elect to have Fund dividends invested without sales charge in shares of another
Kemper Fund offering this privilege at the net asset value of the other fund.
See "Exchanging Shares" for a list of these Kemper Funds. To use this privilege
of investing Fund dividends in shares of another Kemper Fund, shareholders must
maintain either a minimum account value of $1,000 in this
18
<PAGE>
Dividends and Taxes--continued
Fund and a minimum account value of $1,000 in the fund in which dividends are
reinvested. Share certificates will only be issued on request.
.TAXABLE PORTFOLIOS
The Money Market Portfolio and the Government Securities Portfolio each in-
tend to continue to qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code (the "Code") and if so qualified will not be
subject to federal income taxes to the extent its earnings are distributed.
Dividends derived from interest and short-term capital gains are taxable as or-
dinary income whether received in cash or reinvested in additional shares. Div-
idends from these Portfolios do not qualify for the dividends received deduc-
tion available to corporate shareholders.
.TAX-EXEMPT PORTFOLIO
The Tax-Exempt Portfolio intends to continue to qualify under the Code as a
regulated investment company and, if so qualified, will not be liable for fed-
eral income taxes to the extent its earnings are distributed. This Portfolio
also intends to meet the requirements of the Code applicable to regulated in-
vestment companies distributing tax-exempt interest dividends and, accordingly,
dividends representing net interest received on Municipal Securities will not
be includable by shareholders in their gross income for federal income tax pur-
poses, except to the extent such interest is subject to the alternative minimum
tax as discussed below. Dividends representing taxable net investment income
(such as net interest income from temporary investments in obligations of the
U.S. Government) and net short-term capital gains, if any, are taxable to
shareholders as ordinary income. All taxpayers will be required to disclose on
their federal income tax returns the amount of tax-exempt interest earned dur-
ing the year, including exempt-interest dividends from the Tax-Exempt
Portfolio.
Net interest on certain "private activity bonds" issued on or after August 8,
1986 is treated as an item of tax preference and may, therefore, be subject to
both the individual and corporate alternative minimum tax. To the extent pro-
vided by regulations to be issued by the Secretary of the Treasury, exempt-in-
terest dividends from the Tax-Exempt Portfolio are to be treated as interest on
private activity bonds in proportion to the interest income the Portfolio re-
ceives from private activity bonds, reduced by allowable deductions. For the
1994 calendar year, 10% of the net interest income of the Tax-Exempt Portfolio
was derived from "private activity bonds."
Exempt-interest dividends, except to the extent of interest from "private ac-
tivity bonds," are not treated as a tax preference item. For a corporate share-
holder, however, such dividends will be included in determining such corporate
shareholder's "adjusted current earnings." Seventy-five percent of the excess,
if any, of "adjusted current earnings" over the corporate shareholder's other
alternative minimum taxable income with certain adjustments will be a tax pref-
erence item. Corporate shareholders are advised to consult their tax advisers
with respect to alternative minimum tax consequences.
Individuals whose modified income exceeds a base amount will be subject to
federal income tax on up to 85% of their Social Security benefits. Modified in-
come includes adjusted gross income, tax-exempt interest, including exempt-in-
terest dividends from the Tax-Exempt Portfolio, and 50% of Social Security
benefits.
The tax exemption of dividends from the Tax-Exempt Portfolio for federal in-
come tax purposes does not necessarily result in exemption under the income or
other tax laws of any state or local taxing authority. The laws of the several
states and local taxing authorities vary with respect to the taxation of such
income and shareholders of the Portfolio are advised to consult their own tax
adviser as to the status of their accounts under state and local tax laws.
.THE FUND
Dividends declared in October, November or December to shareholders of record
as of a date in one of
19
<PAGE>
Dividends and Taxes--continued
those months and paid during the following January are treated as paid on De-
cember 31 of the calendar year in which declared for federal income tax pur-
poses. The Fund may adjust its schedule for dividend reinvestment for the
month of December to assist it in complying with reporting and minimum distri-
bution requirements contained in the Code.
Each Portfolio is required by law to withhold 31% of taxable dividends paid
to certain shareholders who do not furnish a correct taxpayer identification
number (in the case of individuals, a social security number) and in certain
other circumstances. Trustees of qualified retirement plans and 403(b)(7) ac-
counts are required by law to withhold 20% of the taxable portion of any dis-
tribution that is eligible to be "rolled over." The 20% withholding require-
ment does not apply to distributions from IRAs or any part of a distribution
that is transferred directly to another qualified retirement plan, 403(b)(7)
account, or IRA. Shareholders should consult their tax advisers regarding the
20% withholding requirement.
After each transaction, shareholders will receive a confirmation statement
giving complete details of the transaction, except that statements will be
sent quarterly for dividend reinvestment and periodic investment and redemp-
tion programs. Tax information will be provided annually. Shareholders are en-
couraged to retain copies of their account confirmation statements or year-end
statements for tax reporting purposes. However, those who have incomplete rec-
ords may obtain historical account transaction information at a reasonable
fee.
INVESTMENT MANAGER
Kemper Financial Services, Inc. ("KFS"), 120 South LaSalle Street, Chicago,
Illinois 60603, is the investment manager of the Fund and provides the Fund
with continuous professional investment supervision. KFS has been engaged in
the management of investment funds for more than forty-five years and is one
of the largest investment managers in the country. KFS and its affiliates pro-
vide investment advice and manage investment portfolios for the Kemper Funds,
the Kemper insurance companies, Kemper Corporation and other corporate, pen-
sion, profit-sharing and individual accounts representing approximately $63
billion under management, including $13 billion in money market fund assets.
KFS acts as investment manager for 26 open-end and seven closed-end investment
companies, with 64 separate investment portfolios, representing more than 3
million shareholder accounts. KFS is a wholly-owned subsidiary of Kemper
Financial Companies, Inc., which is a financial services holding company that
is more than 99% owned by Kemper Corporation ("Kemper"), a diversified insur-
ance and financial services holding company.
Kemper has entered into a definitive agreement with an investor group led by
Zurich Insurance Company ("Zurich") pursuant to which Kemper would be acquired
by the investor group in a merger transaction. As part of the transaction, Zu-
rich or an affiliate would purchase KFS. The Kemper and Zurich boards have ap-
proved the transaction. In addition, because the transaction would constitute
an assignment of the Fund's investment management agreement with KFS under the
Investment Company Act of 1940, and therefore a termination of such agreement,
KFS has received approval of a new agreement from the Fund's board and share-
holders. Consummation of the transaction is subject to remaining contingen-
cies, including state insurance department regulatory approvals. The investor
group has informed Kemper that it expects the transaction to close early in
1996.
20
<PAGE>
Investment Manager--continued
Responsibility for overall management of the Fund rests with its Board of
Trustees and officers. Professional investment supervision is provided by KFS.
The investment management agreement provides that KFS shall act as the Fund's
investment adviser, manage its investments and provide it with various serv-
ices and facilities.
For the services and facilities furnished, the Fund pays an annual invest-
ment management fee, payable monthly, on a graduated basis ranging from .50 of
1% of the first $215 million of average daily net assets of the Fund, to .25
of 1% of average daily net assets of the Fund over $800 million.
Kemper Distributors, Inc. ("KDI"), 120 South LaSalle Street, Chicago, Illi-
nois 60603, an affiliate of KFS, is the principal underwriter of the Fund and
acts as agent of the Fund in the sale of its shares.
Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street, Kansas
City, Missouri 64105, as custodian, and State Street Bank and Trust Company,
225 Franklin Street, Boston, Massachusetts 02110, as sub-custodian, have cus-
tody of all securities and cash of the Fund. They attend to the collection of
principal and income, and payment for and collection of proceeds of securities
bought and sold by the Fund. IFTC is also the Fund's transfer and dividend-
paying agent. Pursuant to a services agreement with IFTC, Kemper Service Com-
pany, 811 Main Street, Kansas City, Missouri 64105, an affiliate of KFS,
serves as Shareholder Service Agent of the Fund.
PERFORMANCE
The Fund may advertise several types of performance information for a Port-
folio, including "yield," "effective yield," "total return," "average annual
total return" and, for the Tax-Exempt Portfolio only, "tax equivalent yield."
Please remember that performance information is based upon historical earnings
and is not representative of future performance. The yield of a Portfolio re-
fers to the net investment income generated by a hypothetical investment in
the Portfolio over a specific seven-day period. This net investment income is
then annualized, which means that the net investment income generated during
the seven-day period is assumed to be generated each week over an annual pe-
riod and is shown as a percentage of the investment. The effective yield is
calculated similarly, but the net investment income earned by the investment
is assumed to be compounded weekly when annualized. The effective yield will
be slightly higher than the yield due to this compounding effect. Average an-
nual total return and total return measure both net investment income and any
realized or unrealized appreciation or depreciation of, a Portfolio's invest-
ments, assuming reinvestment of all dividends. Average annual total return
represents the average annual percentage change over the period and total re-
turn represents the aggregate percentage or dollar value change over the peri-
od. Tax equivalent yield is the yield that a taxable investment must generate
in order to equal the Tax-Exempt Portfolio's yield for an investor in a stated
federal income tax bracket (normally assumed to be the maximum tax rate). Tax
equivalent yield is based upon, and will be higher than, the portion of the
Tax-Exempt Portfolio's yield that is tax-exempt.
The performance of a Portfolio may be compared to that of other money market
mutual funds or mutual fund indexes as reported by independent mutual fund re-
porting services such as Lipper Analytical Services, Inc. ("Lipper"). A Port-
folio's performance and its relative size may be compared to other money mar-
ket mutual funds as reported by IBC/Donoghue's Money Fund Report(R) or Money
Market Insight(R), reporting services on money market funds. Investors may
want to compare a Portfolio's performance to that of various bank products as
reported by BANK RATE MON
21
<PAGE>
Performance--continued
ITOR(TM), a financial reporting service that weekly publishes average rates of
bank and thrift institution money market deposit accounts and interest bearing
checking accounts or various certificate of deposit indexes. The performance
of a Portfolio also may be compared to that of U.S. Treasury bills and notes.
Certain of these alternative investments may offer fixed rates of return and
guaranteed principal and may be insured. In addition, investors may want to
compare a Portfolio's performance to the Consumer Price Index either directly
or by calculating its "real rate of return," which adjusts its return for the
effects of inflation.
Information may be quoted from publications such as Morningstar, Inc., The
Wall Street Journal, Money Magazine, Forbes, Barron's, Fortune, The Chicago
Tribune, USA Today, Institutional Investor and Registered Representative. The
Fund may depict the historical performance of the securities in which a Port-
folio may invest over periods reflecting a variety of market or economic con-
ditions either alone or in comparison with alternative investments, perfor-
mance indexes of those investments or economic indicators. The Fund may also
describe its portfolio holdings and depict its size or relative size compared
to other mutual funds, the number and make-up of its shareholder base and
other descriptive factors concerning the Fund.
Each Portfolio's returns will fluctuate. Shares of the Fund are not insured.
Additional information concerning a Portfolio's performance appears in the
Statement of Additional Information.
CAPITAL STRUCTURE
The Fund is an open-end, diversified, management investment company, orga-
nized as a business trust under the laws of Massachusetts on August 9, 1985.
Effective November 29, 1985, the Money Market Portfolio, pursuant to a reorga-
nization, succeeded to the assets and liabilities of Kemper Money Market Fund,
Inc., a Maryland corporation organized on September 19, 1974. Effective Novem-
ber 14, 1986, the Government Securities Portfolio succeeded to the assets and
liabilities of Kemper Government Money Market Fund, a business trust organized
under the laws of Massachusetts on August 9, 1985. Effective November 29,
1985, Kemper Government Money Market Fund succeeded to the assets and liabili-
ties of Kemper Government Money Market Fund, Inc., a Maryland corporation or-
ganized November 3, 1981. The Tax-Exempt Portfolio commenced public offering
of its shares on September 10, 1987. The Fund may issue an unlimited number of
shares of beneficial interest, all having no par value. While only shares of
the three previously described Portfolios are presently being offered, the
Board of Trustees may authorize the issuance of additional Portfolios if
deemed desirable, each with its own investment objective, policies and re-
strictions. Since the Fund may offer multiple Portfolios, it is known as a
"series company." Shares of a Portfolio have equal noncumulative voting rights
and equal rights with respect to dividends, assets and liquidation of such
Portfolio. Shares are fully paid and nonassessable when issued, are transfer-
able without restriction and have no preemptive or conversion rights. The Fund
is not required to hold annual shareholders' meetings and does not intend to
do so. However, it will hold special meetings as required or deemed desirable
for such purposes as electing trustees, changing fundamental policies or ap-
proving an investment management agreement. Subject to the Agreement and Dec-
laration of Trust of the Fund, shareholders may remove trustees. Shareholders
will vote by Portfolio and not in the aggregate except when voting in the ag-
gregate is required under the 1940 Act, such as for the election of trustees.
22
<PAGE>
ACCOUNT SERVICES DIRECTORY
To avoid delays in the future, it is a good idea to sign up
for account services
and features at the time an account is opened.
TO OPEN A NEW ACCOUNT
If you would like to open a new account or need a question answered, call a
Kemper Money Fund Specialist between 8 a.m. and 6 p.m. Central time at 1-800-
537-6001.
CURRENT ACCOUNT ASSISTANCE
If you have a question about a current account, call a Shareholder Services
Representative between 7 a.m. and 6 p.m. Central time, Monday through Friday,
and between 9 a.m. and 2 p.m. Central time on Saturday at 1-800-621-1048.
For better service, please have your account number and your most recent
statement at hand. For a special phone line for hearing impaired shareholders
with a TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD), call 1-800-972-3006.
24-HOUR ACCOUNT INFORMATION
From a touch-tone phone, you can use KemperACCESS, our automated account in-
formation service, to obtain the following information 24 hours a day (1-800-
972-3060):
. account balance
. last dividend paid
. current yield
. transaction confirmation
. pre-authorized transfers to and from a bank account
CHECKWRITING
You can write any number of checks for $500 or more against your available
account balance. See MoneyPlusSM Account for a no-minimum checking option.
AUTOMATIC CHECK DEPOSIT
You can save time by signing up for direct deposit of Payroll or Government
checks into your Kemper Money Market Fund account. Ask your employer about how
to arrange this with all or part of your paycheck. Government Direct Deposit
forms are available by calling 1-800-621-1048.
AUTOMATIC INVESTING
If you already directly deposit your paycheck into a bank account, you may
want to consider using Bank
Direct Deposit to help set aside some money for the future. You specify the
frequency and amount of your investment, and Kemper will automatically have
money from your personal checking or savings account transferred to your Kem-
per Money Market Fund account. And this service may be changed at any
time . . . even deferred for a few months if you need to.
MONEY-BY-PHONE
You can make transfers from your money market account to your bank account
with just a phone call if you sign up for EXPRESS-Transfer. This feature also
allows you to transfer money to your Kemper Money Market account over-the-
phone. These transfers generally take 1-2 days, depending on the time of day
that you call Shareholder Services.
You can also request an expedited (same day) wire transfer from your money
market account to your bank if you call before 11 a.m. Central time ($1,000
minimum redemption).
AUTOMATIC BILL-PAYING
The Systematic Withdrawal feature can be used to pay a regular, important bill
such as a mortgage or car payment. You designate when and how much, and Kemper
will make the payment directly from your money market account.
MONEYPLUSSM ACCOUNT
A powerful money management feature that makes it easy and economical to use
your Kemper Money Market Fund for day-to-day transactions. For a $65 annual
fee, you get unlimited checkwriting and a VISA Gold Check Card to use for
debit and ATM transactions. For special forms to sign-up for this add-on fea-
ture, call 1-800-537-6001. For customer service on the VISA card, call 1-800-
346-8904.
EXCHANGES WITH KEMPER MUTUAL FUNDS
You can exchange between Kemper Funds with just a phone call to Shareholder
Services between 8 a.m. and 3 p.m. Central time, Monday through Friday. To ex-
change between the Kemper Funds, call Kemper Shareholder Services at 1-800-
621-1048.
23
<PAGE>
[LOGO OF KEMPER MUTUAL FUNDS]
We're Building Tomorrows Today/SM/
Investment Manager
KEMPER FINANCIAL SERVICES, INC.
Principal Underwriter:
KEMPER DISTRIBUTORS, INC.
120 South LaSalle Street
Chicago, Illinois 60603
PROSPECTUS
--------------
Kemper Money
Market Fund
November 20, 1995
----------------------
Money Market Portfolio
Government Securities Portfolio
Tax-Exempt Portfolio
----------------------
Kemper
[LOGO OF KEMPER MUTUAL FUNDS]
<PAGE>
KEMPER MONEY MARKET FUND
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART B
OF FORM N-1A AND STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
LOCATION IN STATEMENT OF
ITEM NUMBER OF FORM N-1A ADDITIONAL INFORMATION
------------------------ ------------------------
<C> <S>
10. Cover Page............................... Cover Page
11. Table of Contents........................ Table of Contents
12. General Information and History.......... Inapplicable
13. Investment Objectives and Policies....... Investment Restrictions;
Municipal Securities;
Appendix
14. Management of the Fund................... Investment Manager; Officers
and Trustees
15. Control Persons and Principal Holders of
Securities............................... Officers and Trustees
16. Investment Advisory and Other Services... Investment Manager; Officers
and Trustees
17. Brokerage Allocation and Other Practices. Portfolio Transactions
18. Capital Stock and Other Securities....... Shareholder Rights
19. Purchase, Redemption and Pricing of Secu-
rities Purchase and Redemption of
Being Offered............................ Shares;
Dividends, Net Asset Value and
Taxes
20. Tax Status............................... Dividends, Net Asset Value and
Taxes
21. Underwriters............................. Investment Manager
22. Calculations of Performance Data......... Performance
23. Financial Statements..................... Financial Statements
</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 20, 1995
KEMPER MONEY MARKET FUND
120 SOUTH LASALLE STREET, CHICAGO, ILLINOIS 60603
(800) 621-1048
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the prospectus of Kemper Money Market Fund (the
"Fund") dated November 20, 1995. The prospectus may be obtained without charge
by calling or writing the Fund.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Restrictions............................................. B-1
Municipal Securities................................................ B-4
Investment Manager.................................................. B-5
Portfolio Transactions.............................................. B-6
Purchase and Redemption of Shares................................... B-7
Dividends, Net Asset Value and Taxes................................ B-8
Performance......................................................... B-9
Officers and Trustees............................................... B-14
Special Features.................................................... B-16
Shareholder Rights.................................................. B-16
Appendix--Ratings of Investments.................................... B-18
</TABLE>
The financial statements appearing in the Fund's 1995 Annual Report to
Shareholders are incorporated herein by reference. The Fund's Annual Report
accompanies this Statement of Additional Information.
KMMF-13 11/95
LOGO
printed on recycled paper
<PAGE>
INVESTMENT RESTRICTIONS
The Fund has adopted for its Money Market Portfolio, Government Securities
Portfolio and Tax-Exempt Portfolio certain investment restrictions which,
together with the investment objective and policies of each Portfolio, cannot
be changed for a Portfolio without approval by holders of a majority of such
Portfolio's outstanding voting shares. As defined in the Investment Company
Act of 1940, this means the lesser of the vote of (a) 67% of the shares of the
Portfolio present at a meeting where more than 50% of the outstanding shares
of the Portfolio are present in person or by proxy; or (b) more than 50% of
the outstanding shares of the Portfolio.
THE MONEY MARKET PORTFOLIO may not:
(1) Purchase common stocks, preferred stocks, warrants, other equity
securities, state bonds, municipal bonds or industrial revenue bonds (except
through the purchase of debt obligations in accordance with its investment
objective and policies).
(2) Purchase securities of any issuer (other than obligations of, or
guaranteed by, the United States Government, its agencies or
instrumentalities) if, as a result, more than 5% of the value of the
Portfolio's assets would be invested in securities of that issuer.
(3) Purchase more than 10% of any class of securities of any issuer. All debt
securities and all preferred stocks are each considered as one class.
(4) Invest more than 5% of the Portfolio's total assets in securities of
issuers which with their predecessors have a record of less than three years
continuous operation, and equity securities of issuers which are not readily
marketable.
(5) Enter into repurchase agreements if, as a result thereof, more than 10% of
the Portfolio's total assets valued at the time of the transaction would be
subject to repurchase agreements maturing in more than seven days.
(6) Make loans to others (except through the purchase of debt obligations or
repurchase agreements in accordance with its investment objective and
policies).
(7) Borrow money except as a temporary measure for extraordinary or emergency
purposes and then only in an amount up to one-third of the value of its total
assets, in order to meet redemption requests without immediately selling any
money market instruments (any such borrowings under this section will not be
collateralized). If, for any reason, the current value of the Portfolio's
total assets falls below an amount equal to three times the amount of its
indebtedness from money borrowed, the Portfolio will, within three business
days, reduce its indebtedness to the extent necessary. The Portfolio will not
borrow for leverage purposes.
(8) Make short sales of securities, or purchase any securities on margin
except to obtain such short-term credits as may be necessary for the clearance
of transactions.
(9) Write, purchase or sell puts, calls or combinations thereof.
(10) Concentrate more than 25% of the value of its assets in any one industry;
provided, however, that the Portfolio reserves freedom of action to invest up
to 100% of its assets in certificates of deposit or bankers' acceptances when
management considers it to be in the best interests of the Portfolio in
attaining its investment objective.
(11) Purchase or retain the securities of any issuer if any of the officers,
trustees or directors of the Fund or its investment adviser owns beneficially
more than 1/2 of 1% of the securities of such issuer and together own more
than 5% of the securities of such issuer.
B-1
<PAGE>
(12) Invest more than 5% of the Portfolio's total assets in securities
restricted as to disposition under the federal securities laws (except
commercial paper issued under Section 4(2) of the Securities Act of 1933).
(13) Invest for the purpose of exercising control or management of another
issuer.
(14) Invest in commodities or commodity futures contracts or in real estate,
although it may invest in securities which are secured by real estate and
securities of issuers which invest or deal in real estate.
(15) Invest in interests in oil, gas or other mineral exploration or
development programs, although it may invest in the securities of issuers
which invest in or sponsor such programs.
(16) Purchase securities of other investment companies, except in connection
with a merger, consolidation, reorganization or acquisition of assets.
(17) Underwrite securities issued by others except to the extent the Portfolio
may be deemed to be an underwriter, under the federal securities laws, in
connection with the disposition of portfolio securities.
(18) Issue senior securities as defined in the Investment Company Act of 1940.
THE GOVERNMENT SECURITIES PORTFOLIO may not:
(1) Purchase securities or make investments other than in accordance with its
investment objective and policies.
(2) Enter into repurchase agreements if, as a result thereof, more than 10% of
the Portfolio's total assets valued at the time of the transaction would be
subject to repurchase agreements maturing in more than seven days.
(3) Make loans to others (except through the purchase of debt obligations or
repurchase agreements in accordance with its investment objective and
policies).
(4) Borrow money except as a temporary measure for extraordinary or emergency
purposes and then only in an amount up to one-third of the value of its total
assets, in order to meet redemption requests without immediately selling any
instruments (any such borrowings under this section will not be
collateralized). If, for any reason, the current value of the Portfolio's
total assets falls below an amount equal to three times the amount of its
indebtedness from money borrowed, the Portfolio will, within three business
days, reduce its indebtedness to the extent necessary. The Portfolio will not
borrow for leverage purposes.
(5) Make short sales of securities, or purchase any securities on margin
except to obtain such short-term credits as may be necessary for the clearance
of transactions.
(6) Underwrite securities issued by others except to the extent the Portfolio
may be deemed to be an underwriter, under the federal securities laws, in
connection with the disposition of portfolio securities.
(7) Issue senior securities as defined in the Investment Company Act of 1940.
THE TAX-EXEMPT PORTFOLIO may not:
(1) Purchase securities if as a result of such purchase 25% or more of the
Portfolio's total assets would be invested in any one industry or in any one
state. Municipal Securities and obligations of, or guaranteed by, the U.S.
Government, its agencies or instrumentalities are not considered an industry
for purposes of this restriction.
(2) Purchase securities of any issuer (other than obligations of, or
guaranteed by, the U.S. Government, its agencies or instrumentalities) if as a
result more than 5% of the value of the Portfolio's assets would be invested
in the
B-2
<PAGE>
securities of such issuer. For purposes of this limitation, the Portfolio will
regard the entity which has the primary responsibility for the payment of
interest and principal as the issuer.
(3) Invest more than 5% of the Portfolio's total assets in industrial
development bonds sponsored by companies which with their predecessors have
less than three years' continuous operation.
(4) Make loans to others (except through the purchase of debt obligations or
repurchase agreements in accordance with its investment objective and
policies).
(5) Borrow money except as a temporary measure for extraordinary or emergency
purposes and then only in an amount up to one-third of the value of its total
assets, in order to meet redemption requests without immediately selling any
money market instruments (any such borrowings under this section will not be
collateralized). If, for any reason, the current value of the Portfolio's
total assets falls below an amount equal to three times the amount of its
indebtedness from money borrowed, the Portfolio will, within three business
days, reduce its indebtedness to the extent necessary. The Portfolio will not
borrow for leverage purposes.
(6) Make short sales of securities or purchase securities on margin, except to
obtain such short-term credits as may be necessary for the clearance of
transactions.
(7) Write, purchase or sell puts, calls or combinations thereof, although the
Portfolio may purchase Municipal Securities subject to Standby Commitments in
accordance with its investment objective and policies.
(8) Purchase or retain the securities of any issuer if any of the officers,
trustees or directors of the Fund or its investment adviser owns beneficially
more than 1/2 of 1% of the securities of such issuer and together own more
than 5% of the securities of such issuer.
(9) Invest more than 5% of the Portfolio's total assets in securities
restricted as to disposition under the federal securities laws (except
commercial paper issued under Section 4(2) of the Securities Act of 1933).
(10) Invest for the purpose of exercising control or management of another
issuer.
(11) Invest in commodities or commodity futures contracts or in real estate
except that the Portfolio may invest in Municipal Securities secured by real
estate or interests therein.
(12) Invest in interests in oil, gas or other mineral exploration or
development programs, although it may invest in Municipal Securities of
issuers which invest in or sponsor such programs.
(13) Purchase securities of other investment companies, except in connection
with a merger, consolidation, reorganization or acquisition of assets.
(14) Underwrite securities issued by others except to the extent the Portfolio
may be deemed to be an underwriter, under the federal securities laws, in
connection with the disposition of portfolio securities.
(15) Issue senior securities as defined in the Investment Company Act of 1940.
If a Portfolio adheres to a percentage restriction at the time of investment,
a later increase or decrease in percentage beyond the specified limit
resulting from a change in values or net assets will not be considered a
violation. The Portfolios did not borrow money, as permitted by investment
restrictions number 7 (Money Market Portfolio), number 4 (Government
Securities Portfolio) and number 5 (Tax-Exempt Portfolio), in the latest
fiscal year; and they have no present intention of borrowing during the coming
year. In any event, borrowings would only be as permitted by such
restrictions. The Tax-Exempt Portfolio may invest more than 25% of its total
assets in industrial development bonds.
B-3
<PAGE>
MUNICIPAL SECURITIES
Municipal Securities which the Tax-Exempt Portfolio may purchase include,
without limitation, debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities such
as airports, bridges, highways, housing, hospitals, mass transportation,
public utilities, schools, streets, and water and sewer works. Other public
purposes for which Municipal Securities may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses and
obtaining funds to loan to other public institutions and facilities.
Municipal Securities, such as industrial development bonds, are issued by or
on behalf of public authorities to obtain funds for purposes including
privately operated airports, housing, conventions, trade shows, ports, sports,
parking or pollution control facilities or for facilities for water, gas,
electricity or sewage and solid waste disposal. Such obligations, which may
include lease arrangements, are included within the term Municipal Securities
if the interest paid thereon qualifies as exempt from federal income tax.
Other types of industrial development bonds, the proceeds of which are used
for the construction, equipment, repair or improvement of privately operated
industrial or commercial facilities, may constitute Municipal Securities,
although current federal tax laws place substantial limitations on the size of
such issues.
Municipal Securities generally are classified as "general obligation" or
"revenue." General obligation notes are secured by the issuer's pledge of its
full credit and taxing power for the payment of principal and interest.
Revenue notes are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise or other specific revenue source. Industrial development bonds
which are Municipal Securities are in most cases revenue bonds and generally
do not constitute the pledge of the credit of the issuer of such bonds.
Examples of Municipal Securities that are issued with original maturities of
one year or less are short-term tax anticipation notes, bond anticipation
notes, revenue anticipation notes, construction loan notes, pre-refunded
municipal bonds, warrants and tax-free commercial paper.
Tax anticipation notes typically are sold to finance working capital needs of
municipalities in anticipation of receiving property taxes on a future date.
Bond anticipation notes are sold on an interim basis in anticipation of a
municipality issuing a longer term bond in the future. Revenue anticipation
notes are issued in expectation of receipt of other types of revenue such as
those available under the Federal Revenue Sharing Program. Construction loan
notes are instruments insured by the Federal Housing Administration with
permanent financing by "Fannie Mae" (the Federal National Mortgage
Association) or "Ginnie Mae" (the Government National Mortgage Association) at
the end of the project construction period. Pre-refunded municipal bonds are
bonds which are not yet refundable, but for which securities have been placed
in escrow to refund an original municipal bond issue when it becomes
refundable. Tax-free commercial paper is an unsecured promissory obligation
issued or guaranteed by a municipal issuer. The Tax-Exempt Portfolio may
purchase other Municipal Securities similar to the foregoing, which are or may
become available, including securities issued to pre-refund other outstanding
obligations of municipal issuers.
The federal bankruptcy statutes relating to the adjustments of debts of
political subdivisions and authorities of states of the United States provide
that, in certain circumstances, such subdivisions or authorities may be
authorized to initiate bankruptcy proceedings without prior notice to or
consent of creditors, which proceedings could result in material adverse
changes in the rights of holders of obligations issued by such subdivisions or
authorities.
B-4
<PAGE>
Litigation challenging the validity under state constitutions of present
systems of financing public education has been initiated or adjudicated in a
number of states, and legislation has been introduced to effect changes in
public school finances in some states. In other instances there has been
litigation challenging the issuance of pollution control revenue bonds or the
validity of their issuance under state or federal law which ultimately could
affect the validity of those Municipal Securities or the tax-free nature of
the interest thereon.
INVESTMENT MANAGER
INVESTMENT MANAGER. Kemper Financial Services, Inc. ("KFS") is the Fund's
investment manager. Pursuant to an investment management agreement, KFS acts
as the Fund's investment adviser, manages its investments, administers its
business affairs, furnishes office facilities and equipment, provides
clerical, bookkeeping and administrative services, provides shareholder and
information services and permits any of its officers or employees to serve
without compensation as trustees or officers of the Fund if elected to such
positions. The Fund pays the expenses of its operations, including the fees
and expenses of independent auditors, counsel, custodian and transfer agent
and the cost of share certificates, reports and notices to shareholders, costs
of calculating net asset value, brokerage commissions or transaction costs,
taxes, registration fees, the fees and expenses of qualifying the Fund and its
shares for distribution under federal and state securities laws and membership
dues in the Investment Company Institute or any similar organization. The
Fund's expenses generally are allocated among the Portfolios on the basis of
relative net assets at the time of allocation, except that expenses directly
attributable to a particular Portfolio are charged to that Portfolio.
The investment management agreement continues in effect from year to year for
each Portfolio so long as its continuation is approved at least annually (a)
by a majority of the trustees who are not parties to such agreement or
interested persons of any such party except in their capacity as trustees of
the Fund and (b) by the shareholders of each Portfolio or the Board of
Trustees. If continuation is not approved for a Portfolio, the investment
management agreement nevertheless may continue in effect for the Portfolios
for which it is approved and KFS may continue to serve as investment manager
for the Portfolio for which it is not approved to the extent permitted by the
Investment Company Act of 1940. The agreement may be terminated at any time
upon 60 days notice by either party, or by a majority vote of the outstanding
shares of a Portfolio with respect to that Portfolio, and will terminate
automatically upon assignment. Shareholders of each Portfolio will vote
separately upon continuation of the investment management agreement and upon
other matters affecting only an individual Portfolio. Additional Portfolios
may be subject to a different agreement. The agreement provides that KFS shall
not be liable for any error of judgment or of law, or for any loss suffered by
the Fund in connection with the matters to which the agreement relates, except
a loss resulting from willful misfeasance, bad faith or gross negligence on
the part of KFS in the performance of its obligations and duties, or by reason
of its reckless disregard of its obligations and duties under the agreement.
For the services and facilities furnished, the Fund pays an annual investment
management fee, payable monthly, on a graduated basis of .50% of the first
$215 million of average daily net assets of the Fund, .375% on the next $335
million, .30% on the next $250 million and .25% of average daily net assets of
the Fund over $800 million. KFS has agreed to reimburse the Fund should all
operating expenses of the Fund, including the investment management fee of KFS
but excluding taxes, interest, extraordinary expenses and brokerage
commissions or transaction costs, exceed 1 1/2% of the first $30 million of
average net assets of the Fund and 1% of average net assets over $30 million
on an annual basis. The investment management fee and the expense limitation
are computed based upon the average daily net assets of all Portfolios of the
Fund managed by KFS and are allocated among such Portfolios based upon the
relative net assets of each Portfolio.
B-5
<PAGE>
For its services as investment adviser and manager and for facilities
furnished during the fiscal years ended July 31 indicated, the Fund incurred
investment management fees for the Portfolios as shown.
<TABLE>
<CAPTION>
PORTFOLIO 1995 1994 1993
- --------- ----------- ----------- -----------
<S> <C> <C> <C>
Money Market................................ $10,924,000 $11,439,000 $13,397,000
Government Securities....................... $ 1,637,000 $ 1,840,000 $ 2,169,000
Tax Exempt.................................. $ 2,072,000 $ 2,100,000 $ 2,088,000
</TABLE>
PRINCIPAL UNDERWRITER. Kemper Distributors, Inc. ("KDI"), an affiliate of KFS,
is the principal underwriter for shares of the Fund and acts as agent of the
Fund in the sale of its shares. The Fund pays the cost for the prospectus and
shareholder reports to be set in type and printed for existing shareholders,
and KDI pays for the printing and distribution of copies thereof used in
connection with the offering of shares to prospective investors. KDI also pays
for supplementary sales literature and advertising costs. Terms of
continuation, termination and assignment under the underwriting agreement are
identical to those described above with regard to the investment management
agreement, except that termination other than upon assignment requires six
months notice and shares are voted in the aggregate and not by Portfolio
whenever shareholders vote with respect to such agreement.
Certain officers or trustees of the Fund are also directors or officers of KFS
and KDI as indicated under "Officers and Trustees."
CUSTODIAN AND SHAREHOLDER SERVICE AGENT. Investors Fiduciary Trust Company
("IFTC"), 127 West 10th Street, Kansas City, Missouri 64105, as custodian, and
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, as sub-custodian, have custody of all securities and cash
of the Fund. They attend to the collection of principal and income, and
payment for and collection of proceeds of securities bought and sold by the
Fund. IFTC is also the Fund's transfer and dividend-paying agent. Pursuant to
a services agreement with IFTC, Kemper Service Company ("KSvC"), an affiliate
of KFS, serves as "Shareholder Service Agent." IFTC receives, as transfer
agent, and pays to KSvC, annual account fees of a maximum of $8 per account
plus account set-up, transaction, maintenance and out-of-pocket expense
reimbursement. For the fiscal year ended July 31, 1995, IFTC remitted
shareholder service fees in the amount of $7,656,000 to KSvC as Shareholder
Service Agent.
INDEPENDENT AUDITORS AND REPORTS TO SHAREHOLDERS. The Fund's independent
auditors, Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois 60606,
audit and report on the Fund's annual financial statements, review certain
regulatory reports and the Fund's federal income tax return, and perform other
professional accounting, auditing, tax and advisory services when engaged to
do so by the Fund. Shareholders will receive annual audited financial
statements and semi-annual unaudited financial statements.
PORTFOLIO TRANSACTIONS
Portfolio transactions are undertaken principally to pursue the objective of
each Portfolio in relation to movements in the general level of interest
rates, to invest money obtained from the sale of Portfolio shares, to reinvest
proceeds from maturing portfolio securities and to meet redemptions of
Portfolio shares. This may increase or decrease the yield of a Portfolio
depending upon management's ability to correctly time and execute such
transactions. Since a Portfolio's assets are invested in securities with short
maturities, its portfolio will turn over several times a year. Securities with
maturities of less than one year are excluded from required portfolio turnover
rate calculations, so each Portfolio's portfolio turnover rate for reporting
purposes is zero.
B-6
<PAGE>
KFS is the investment manager for the Kemper Funds and KFS and its affiliates
also furnish investment management services to other clients including Kemper
Corporation and the Kemper insurance companies. KFS is the sole shareholder of
Kemper Asset Management Company and Kemper Investment Management Company
Limited. These three entities share some common research and trading
facilities. Dreman Value Advisors, Inc. ("DVA"), a subsidiary of KFS, is
investment manager for Kemper-Dreman Fund, Inc. and sub-adviser for another
Kemper Fund. At times investment decisions may be made to purchase or sell the
same investment security for a Portfolio and for one or more of the other
clients of KFS or its affiliates. When two or more of such clients are
simultaneously engaged in the purchase or sale of the same security through
the same trading facility, the transactions are allocated as to amount and
price in a manner considered equitable to each.
KFS, in effecting purchases and sales of portfolio securities for the account
of each Portfolio, will implement the Fund's policy of seeking the best
execution of orders, which includes best net prices. Consistent with this
policy, orders for portfolio transactions are placed with broker-dealer firms
giving consideration to the quality, quantity and nature of the firm's
professional services which include execution, clearance procedures,
reliability and other factors. In selecting among the firms believed to meet
the criteria for handling a particular transaction, KFS may give consideration
to those firms that provide market, statistical and other research information
to the Fund and KFS, although KFS is not authorized to pay higher prices to
firms that provide such services. Any research benefits derived are available
for all clients, including clients of affiliated companies. Since it is only
supplementary to KFS's own research efforts and must be analyzed and reviewed
by KFS' staff, the receipt of research information is not expected to
materially reduce expenses. The Fund expects that purchases and sales of
portfolio securities usually will be principal transactions. Portfolio
securities will normally be purchased directly from the issuer or from an
underwriter or market maker for the securities. There are normally no
brokerage commissions paid by the Fund for such purchases and none were paid
by any Portfolio during the Fund's last three fiscal years. Purchases from
underwriters include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers serving as market makers include the
spread between the bid and asked prices.
PURCHASE AND REDEMPTION OF SHARES
Shares of each Portfolio are sold at their net asset value next determined
after an order and payment are received in the form described in the Fund's
prospectus. There is no sales charge. The minimum initial investment in any
Portfolio is $1,000 and the minimum subsequent investment is $100 but such
minimum amounts may be changed at any time. See the prospectus for certain
exceptions to these minimums. The Fund may waive the minimum for purchases by
trustees, directors, officers or employees of the Fund or KFS and its
affiliates and the $3 monthly fee assessed on accounts below $1,000. An
investor wishing to open an account should use the Account Application Form
available from the Fund and choose one of the methods of purchase described in
the Fund's prospectus. An order for the purchase of shares that is accompanied
by a check drawn on a foreign bank (other than a check drawn on a Canadian
bank in U.S. Dollars) will not be considered in proper form and will not be
processed unless and until the Fund determines that it has received payment of
the proceeds of the check. The time required for such a determination will
vary and cannot be determined in advance.
Upon receipt by the Shareholder Service Agent, of a request for redemption in
proper form, shares will be redeemed by the Fund at the applicable net asset
value as described in the Fund's prospectus. A shareholder may elect to use
either the regular or expedited redemption procedures.
The Fund may suspend the right of redemption or delay payment more than seven
days (a) during any period when the New York Stock Exchange ("Exchange") is
closed other than customary weekend and holiday closings
B-7
<PAGE>
or during any period in which trading on the Exchange is restricted, (b)
during any period when an emergency exists as a result of which (i) disposal
of a Portfolio's investments is not reasonably practicable, or (ii) it is not
reasonably practicable for the Portfolio to determine the value of its net
assets, or (c) for such other periods as the Securities and Exchange
Commission may by order permit for the protection of the Fund's shareholders.
Although it is the Fund's present policy to redeem in cash, if the Board of
Trustees determines that a material adverse effect would be experienced by the
remaining shareholders if payment were made wholly in cash, the Fund will pay
the redemption price in whole or in part by a distribution of portfolio
securities in lieu of cash, in conformity with the applicable rules of the
Securities and Exchange Commission, taking such securities at the same value
used to determine net asset value, and selecting the securities in such manner
as the Board of Trustees may deem fair and equitable. If such a distribution
occurs, shareholders receiving securities and selling them could receive less
than the redemption value of such securities and in addition could incur
certain transaction costs. Such a redemption would not be as liquid as a
redemption entirely in cash. The Fund has elected to be governed by Rule 18f-1
under the Investment Company Act of 1940 pursuant to which the Fund is
obligated to redeem shares of a Portfolio solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Portfolio during any 90-day period for
any one shareholder of record.
DIVIDENDS, NET ASSET VALUE AND TAXES
DIVIDENDS. Dividends are declared daily and paid monthly. Shareholders will
receive dividends in additional shares of the same Portfolio unless they elect
to receive cash. Dividends will be reinvested monthly at the net asset value
normally on the 25th of each month if a business day, otherwise on the prior
business day. The Fund will pay shareholders who redeem their entire accounts
all unpaid dividends at the time of redemption not later than the next
dividend payment date.
Each Portfolio calculates its dividends based on its daily net investment
income. For this purpose, the net investment income of a Portfolio consists of
(a) accrued interest income plus or minus amortized discount or premium
(excluding market discount for the Tax-Exempt Portfolio), (b) plus or minus
all short-term realized gains and losses on portfolio assets and (c) minus
accrued expenses allocated to the Portfolio. Expenses of the Fund are accrued
each day. While each Portfolio's investments are valued at amortized cost,
there will be no unrealized gains or losses on portfolio securities. However,
should the net asset value of a Portfolio deviate significantly from market
value, the Board of Trustees could decide to value the portfolio securities at
market value and then unrealized gains and losses would be included in net
investment income above.
NET ASSET VALUE. As described in the prospectus, each Portfolio values its
portfolio instruments at amortized cost, which does not take into account
unrealized capital gains or losses. This involves initially valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. While this method
provides certainty in valuation, it may result in periods during which value,
as determined by amortized cost, is higher or lower than the price the
Portfolio would receive if it sold the instrument. Calculations are made to
compare the value of a Portfolio's investments valued at amortized cost with
market values. Market valuations are obtained by using actual quotations
provided by market makers, estimates of market value, or values obtained from
yield data relating to classes of money market instruments published by
reputable sources at the mean between the bid and asked prices for the
instruments. If a deviation of 1/2 of 1% or more were to occur between the net
asset value per share calculated by reference to market values and a
Portfolio's $1.00 per share net asset value, or if there were any other
B-8
<PAGE>
deviation that the Board of Trustees of the Fund believed would result in a
material dilution to shareholders or purchasers, the Board of Trustees would
promptly consider what action, if any, should be initiated. If a Portfolio's
net asset value per share (computed using market values) declined, or were
expected to decline, below $1.00 (computed using amortized cost), the Board of
Trustees of the Fund might temporarily reduce or suspend dividend payments in
an effort to maintain the net asset value at $1.00 per share. As a result of
such reduction or suspension of dividends or other action by the Board of
Trustees, an investor would receive less income during a given period than if
such a reduction or suspension had not taken place. Such action could result
in investors receiving no dividends for the period during which they held
shares and receiving, upon redemption, a price per share lower than that which
they paid. On the other hand, if a Portfolio's net asset value per share
(computed using market values) were to increase, or were anticipated to
increase, above $1.00 (computed using amortized cost), the Board of Trustees
of the Fund might supplement dividends in an effort to maintain the net asset
value at $1.00 per share.
TAXES. Interest on indebtedness which is incurred to purchase or carry shares
of a mutual fund portfolio which distributes exempt-interest dividends during
the year is not deductible for federal income tax purposes. Further, the Tax-
Exempt Portfolio may not be an appropriate investment for persons who are
"substantial users' of facilities financed by industrial development bonds
held by the Tax-Exempt Portfolio or are "related persons' to such users; such
persons should consult their tax advisers before investing in the Tax-Exempt
Portfolio.
The "Superfund Act of 1986" (the "Superfund Act") imposes a separate tax on
corporations at a rate of 0.12 percent of the excess of such corporation's
"modified alternative minimum taxable income" over $2 million. A portion of
tax-exempt interest, including exempt-interest dividends from the Tax-Exempt
Portfolio, may be includible in modified alternative minimum taxable income.
Corporate shareholders are advised to consult their tax advisers with respect
to the consequences of the Superfund Act.
PERFORMANCE
As reflected in the prospectus, the historical performance calculation for a
Portfolio may be shown in the form of "yield," "effective yield," "total
return," "average annual total return" and, for the Tax-Exempt Portfolio only,
"tax equivalent yield." These various measures of performance are described
below.
Each Portfolio's yield is computed in accordance with a standardized method
prescribed by rules of the Securities and Exchange Commission. Under that
method, the current yield quotation is based on a seven-day period and is
computed for each Portfolio as follows. The first calculation is net
investment income per share, which is accrued interest on portfolio
securities, plus or minus amortized discount or premium (excluding market
discount for the Tax-Exempt Portfolio), less accrued expenses. This number is
then divided by the price per share (expected to remain constant at $1.00) at
the beginning of the period ("base period return"). The result is then divided
by 7 and multiplied by 365 and the resulting yield figure is carried to the
nearest one-hundredth of one percent. Realized capital gains or losses and
unrealized appreciation or depreciation of investments are not included in the
calculation.
Each Portfolio's effective yield is determined by taking the base period
return (computed as described above) and calculating the effect of assumed
compounding. The formula for the effective yield is: (base period return +
1)/365/7/ - 1.
Average annual total return ("AATR") is found for a specific period by first
taking a hypothetical $1,000 investment ("initial investment") on the first
day of the period and computing the "redeemable value" of that investment at
the end of the period. The redeemable value is then divided by the initial
investment, and this quotient is taken to
B-9
<PAGE>
the Nth root (N representing the number of years in the period) and 1 is
subtracted from the result, which is then expressed as a percentage. The
calculation assumes that all dividends have been reinvested at net asset value
on the reinvestment dates.
Total return is not calculated according to a standard formula, except when
calculated for the "Financial Highlights" table in the financial statements.
Total return is calculated similarly to AATR but is not annualized. It may be
shown as a percentage or the increased dollar value of the hypothetical
investment over the period.
All performance information shown below is for periods ended July 31, 1995.
<TABLE>
<CAPTION>
*TAX- AATR TOTAL TOTAL TOTAL
YIELD EFFECTIVE YIELD EQUIVALENT YIELD AATR 5 AATR RETURN RETURN RETURN
PORTFOLIO 7 DAYS 7 DAYS 7 DAYS 1 YR. YRS. 10 YRS. 1 YR. 5 YRS. 10 YRS.
- --------- ------ --------------- ---------------- ----- ---- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market............ 5.5% 5.7% -- 5.2% 4.7% 6.1% 5.3% 25.3% 80.8%
Government Securities... 5.5 5.7 -- 5.2 4.6 6.0 5.4 25.1 78.6
Tax-Exempt.............. 3.7 3.8 5.9% 3.4 3.4 4.2** 3.5 18.1 38.1**
</TABLE>
- -------
* Based upon a marginal federal income tax rate of 37.1%.
**Since 9/10/87.
The tax equivalent yield of the Tax-Exempt Portfolio is computed by dividing
that portion of the Portfolio's yield (computed as described above) which is
tax-exempt by (one minus the stated federal income tax rate) and adding the
result to that portion, if any, of the yield of the Portfolio that is not tax-
exempt. For additional information concerning tax-exempt yields, see "Tax-
Exempt versus Taxable Yield" below.
Each Portfolio's yield fluctuates, and the publication of an annualized yield
quotation is not a representation as to what an investment in a Portfolio will
actually yield for any given future period. Actual yields will depend not only
on changes in interest rates on money market instruments during the period in
which the investment in a Portfolio is held, but also on such matters as
Portfolio expenses.
Money market mutual funds allow smaller investors to participate in the money
market and to receive money market yields that previously were available only
to those investors with large sums of money. Prior to the introduction of the
first money market mutual funds, small investors wanting to manage their cash
reserves had a limited choice of bank products available with a predetermined
set of interest rates such as passbook savings accounts and checking accounts.
Currently, there are hundreds of money market funds managing billions of
dollars for millions of investors. Kemper Money Market Fund is one of the
largest money market funds.
Investors have an extensive choice of money market funds and money market
deposit accounts and the information below may be useful to investors who wish
to compare the past performance of the Money Market Portfolio, the Government
Securities Portfolio and the Tax-Exempt Portfolio with that of their
competitors. Past performance cannot be a guarantee of future results.
As indicated in the prospectus (see "Performance"), the performance of the
Fund's Portfolios may be compared to that of other mutual funds tracked by
Lipper Analytical Services, Inc. ("Lipper"). Lipper performance calculations
include the reinvestment of all capital gain and income dividends for the
periods covered by the calculations. A Portfolio's performance also may be
compared to other money market funds reported by IBC/Donoghue's Money Fund
Report(R), or Money Market Insight(R), reporting services on money market
funds. As reported by IBC/Donoghue's, all investment results represent total
return (annualized results for the period net of management fees and expenses)
and one year investment results are effective annual yields assuming
reinvestment of dividends.
Lipper and IBC/Donoghue's reported the following results for the Money Market
Portfolio and the Government Securities Portfolio.
B-10
<PAGE>
LIPPER ANALYTICAL SERVICES, INC. IBC/DONOGHUE'S
<TABLE>
<CAPTION>
MONEY MARKET
PORTFOLIO'S
RANKING VS
MONEY MARKET
PERIOD ENDED 8/31/95 INSTRUMENT FUNDS
- -------------------- ----------------------
<S> <C>
1 Year............... 34 out of 256
3 Months............. 30 out of 283
1 Month.............. 38 out of 285
<CAPTION>
GOVERNMENT
SECURITIES
PORTFOLIO'S RANKING VS
U.S. GOVERNMENT
PERIOD ENDED 8/31/95 MONEY MARKET FUNDS
- -------------------- ----------------------
<S> <C>
1 Year............... 5 out of 107
3 Months............. 11 out of 114
1 Month.............. 11 out of 114
</TABLE>
<TABLE>
<CAPTION>
MONEY AVERAGE YIELD
MARKET ALL TAXABLE
PERIOD ENDED PORTFOLIO'S MONEY MARKET
8/31/95 YIELD FUNDS
- ------------ ----------- -------------
<S> <C> <C>
1 Year........... 5.45% 5.25%
1 Month.......... 5.43 5.27
7 Days**......... 5.43 5.25
<CAPTION>
GOVERNMENT AVERAGE YIELD
SECURITIES ALL TAXABLE
PERIOD ENDED PORTFOLIO'S GOVERNMENT
8/31/95 YIELD MONEY FUNDS
- ------------ ----------- -------------
<S> <C> <C>
1 Year........... 5.48% 5.05%
1 Month.......... 5.46 5.09
7 Days**......... 5.47 5.07
</TABLE>
According to IBC/Donoghue's, for the one-year period ended August 31, 1995,
the Money Market Portfolio ranked by yield #20 among 217 General Purpose Money
Funds (this category does not include money market funds whose shares are
marketed primarily to institutional investors). According to IBC/Donoghue's,
for the one-year period ended August 31, 1995, the Government Securities
Portfolio ranked by yield #5 among 195 Taxable Government Money Funds (this
category does not include taxable government money funds whose shares are
marketed primarily to institutional investors). For the one year period ended
August 31, 1995, the Tax-Exempt Portfolio ranked by yield #7 among 123 Tax-
Free Money Funds (this category does not include tax-free money funds whose
shares are marketed primarily to institutional investors or state specific
tax-free money funds). The Money Market Portfolio ranked #2 among 83 General
Purpose Money Funds with a ten-year history according to IBC/Donoghue's as of
December 31, 1994. The Government Securities Portfolio ranked #3 among 54
Government Money Funds with a ten-year history according to IBC/Donoghue's as
of December 31, 1994. The number of shareholder accounts in the Fund was
approximately 285,000 at September 29, 1995, including 237,000 in the Money
Market Portfolio, 28,000 in the Government Securities Portfolio, and 19,000 in
the Tax-Exempt Portfolio. The value of shares in the Fund as of August 31,
1995 was approximately $5.5 billion, including $4.1 billion in the Money
Market Portfolio, $616 million in the Government Securities Portfolio and $762
million in the Tax-Exempt Portfolio. The Money Market Portfolio was the 24th
largest in total assets of 659 Taxable Money Market Funds reported by
IBC/Donoghue's as of August 31, 1995.
The following investment comparisons are based upon information reported by
Lipper and IBC/Donoghue's. In the comparison of the Tax-Exempt Portfolio's
performance versus the comparison yields, the performance of that Portfolio
has been adjusted on a taxable equivalent basis assuming a marginal federal
tax rate of 37.1% (see "Tax-Exempt versus Taxable Yield" below for more
information concerning taxable equivalent performance).
LIPPER ANALYTICAL SERVICES, INC. IBC/DONOGHUE'S
<TABLE>
<CAPTION>
TAX-EXEMPT
PORTFOLIO'S
RANKING VS TAX-
EXEMPT
PERIOD ENDED 8/31/95 MONEY MARKET FUNDS
- -------------------- ------------------
<S> <C>
1 Year.................. 5 out of 122
3 Months................ 5 out of 129
1 Month................. 4 out of 130
</TABLE>
<TABLE>
<CAPTION>
AVERAGE YIELD
TAX- ALL TAX-FREE
PERIOD ENDED EXEMPT MONEY MARKET
8/31/95 PORTFOLIO FUNDS
- ------------ --------- -------------
<S> <C> <C>
1 Year............. 3.62% 3.25%
1 Month............ 3.66 3.22
7 Days***.......... 3.66 3.21
</TABLE>
B-11
<PAGE>
<TABLE>
<CAPTION>
LIPPER LIPPER
TAX-EXEMPT TAX-EXEMPT MONEY
MONEY PORTFOLIO MARKET
TAX- MARKET TAXABLE INSTRUMENT
EXEMPT FUND EQUIVALENT FUNDS
PERIOD PORTFOLIO AVERAGE BASIS* AVERAGE
- ------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
1 Year Ended
8/31/95 3.62% 3.19% 5.76% 5.17%
</TABLE>
<TABLE>
<CAPTION>
TAX-
EXEMPT AVERAGE
PORTFOLIO YIELD ALL
TAXABLE TAXABLE
PERIOD ENDED EQUIVALENT MONEY MARKET
8/31/95 BASIS* FUNDS
- ------------ ---------- ------------
<S> <C> <C>
1 Year............. 5.76% 3.25%
1 Month............ 5.82 3.22
7 Days***.......... 5.82 3.21
</TABLE>
- -------
*Source: Kemper Financial Services, Inc. (not reported by IBC/Donoghue's).
**For Period Ended 8/30/94.
***For Period Ended 8/29/94.
For the ten, five and one year periods ended September 29, 1995, Lipper ranked
the Money Market Portfolio #5 of 107, #19 of 172 and #32 of 251, respectively,
among Money Market Instrument Funds. Lipper also ranked the Money Market
Portfolio #1 in such category for the periods shown below.
<TABLE>
<CAPTION>
NUMBER
OF
FUNDS
IN PERIOD
ATEGORYC PERIOD ENDING
- -------- -------- --------
<S> <C> <C>
41......................................................... 3 Years 12/31/80
23......................................................... 5 Years 12/31/80
50......................................................... 3 Years 12/31/81
34......................................................... 5 Years 12/31/81
110......................................................... 3 Years 12/31/84
81......................................................... 4 Years 12/31/84
66......................................................... 5 Years 12/31/84
109......................................................... 4 Years 12/31/85
80......................................................... 5 Years 12/31/85
142......................................................... 5 Years 12/31/88
39......................................................... 10 Years 12/31/88
54......................................................... 10 Years 12/31/89
33......................................................... 12 Years 12/31/89
64......................................................... 10 Years 12/31/90
79......................................................... 10 Years 12/31/91
31......................................................... 15 Years 12/31/92
36......................................................... 15 Years 12/31/93
</TABLE>
As indicated in the prospectus, a Portfolio's performance also may be compared
on a before or after-tax basis to various bank products, including the average
rate of bank and thrift institution money market deposit accounts, interest
bearing checking accounts and 6-month maturity certificates of deposit as
reported in the BANK RATE MONITOR National Index(TM) of 100 leading bank and
thrift institutions as published by the BANK RATE MONITOR(TM), N. Palm Beach,
Florida 33408. The rates published by the BANK RATE MONITOR National Index(TM)
are averages of the personal account rates offered on the Wednesday prior to
the date of publication by 100 large banks and thrifts in the top ten
Consolidated Standard Metropolitan Statistical Areas.
With respect to money market deposit accounts and interest bearing checking
accounts, account minimums range upward from $2,000 in each institution and
compounding methods vary. Interest bearing checking accounts generally offer
unlimited check writing while money market deposit accounts generally restrict
the number of checks that may be written. If more than one rate is offered,
the lowest rate is used. Rates are determined by the financial institution and
are subject to change at any time specified by the institution. Generally, the
rates offered for these products take market conditions and competitive
product yields into consideration when set. Bank
B-12
<PAGE>
products represent a taxable alternative income producing product. Bank and
thrift institution deposit accounts may be insured. Shareholder accounts in
the Fund are not insured. Bank passbook savings accounts compete with money
market mutual fund products with respect to certain liquidity features but may
not offer all of the features available from a money market mutual fund, such
as check writing. Bank passbook savings accounts normally offer a fixed rate
of interest while the yield of the Fund fluctuates. Bank checking accounts
normally do not pay interest but compete with money market mutual fund
products with respect to certain liquidity features (e.g., the ability to
write checks against the account). Bank certificates of deposit may offer
fixed or variable rates for a set term. (Normally, a variety of terms are
available.) Withdrawal of these deposits prior to maturity will normally be
subject to a penalty. In contrast, shares of the Fund are redeemable at the
net asset value (normally, $1.00 per share) next determined after a request is
received, without charge.
The table below compares the seven day average yields of the Money Market
Portfolio and the Government Securities Portfolio at August 31, 1995 with the
rates for money market deposit accounts, interest bearing checking accounts
and 6-month maturity certificates of deposit reported for August 31, 1995 for
the BANK RATE MONITOR National Index(TM) for each of the ten Consolidated
Standard Metropolitan Statistical Areas that are covered by that index and for
all areas combined. The information provided below is historical and is not
necessarily representative of future performance of any type of bank product
or of any Portfolio of the Fund. The rates reported by the BANK RATE
MONITOR(TM) are not necessarily representative of the rates offered by banks
outside of the scope of report. Furthermore, rate information for one area of
the country is not necessarily representative of rates in other areas. The
rates provided for the bank accounts assume no compounding and are for the
lowest minimum deposit required to open an account. Higher rates may be
available for large deposits.
<TABLE>
<CAPTION>
GOVERNMENT
MONEY MARKET INTEREST 6-MONTH MONEY MARKET SECURITIES
DEPOSIT ACCOUNTS CHECKING CERTIFICATES OF PORTFOLIO PORTFOLIO
AREA STATED RATE STATED RATE DEPOSIT RATE YIELD YIELD
- ---- ---------------- ----------- --------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
New York................ 3.01% 1.49% 4.88% 5.43% 5.47%
Los Angeles............. 2.32 1.03 4.99 5.43 5.47
Chicago................. 3.15 1.75 5.40 5.43 5.47
San Francisco........... 2.35 1.01 4.90 5.43 5.47
Philadelphia............ 2.41 1.21 4.16 5.43 5.47
Detroit................. 2.92 1.85 4.81 5.43 5.47
Boston.................. 3.01 1.40 5.09 5.43 5.47
Houston................. 3.13 1.58 4.78 5.43 5.47
Dallas.................. 3.09 1.51 4.77 5.43 5.47
Washington.............. 3.01 2.32 5.11 5.43 5.47
NATIONAL INDEX.......... 2.84 1.52 4.89 5.43 5.47
</TABLE>
Since January, 1984, the Money Market Portfolio has had a higher yield than
the BANK RATE MONITOR National Index(TM) for both money market deposit
accounts and for interest bearing checking accounts for 604 out of 604 weeks
through August 31, 1995
Investors may also want to compare a Portfolio's performance to that of U.S.
Treasury bills or notes because such instruments represent alternative income
producing products. Treasury obligations are issued in selected denominations.
Rates of U.S. Treasury obligations are fixed at the time of issuance and
payment of principal and interest is backed by the full faith and credit of
the U.S. Treasury. The market value of such instruments will generally
fluctuate inversely with interest rates prior to maturity and will equal par
value at maturity. Generally, the values of obligations with shorter
maturities will fluctuate less than those with longer maturities. Each
Portfolio's yield will fluctuate. Also, while each Portfolio seeks to maintain
a net asset value per share of $1.00, there is no assurance that it will be
able to do so.
B-13
<PAGE>
TAX-EXEMPT VERSUS TAXABLE YIELD. You may want to determine which investment--
tax-exempt or taxable--will provide you with a higher after-tax return. To
determine the taxable equivalent yield, simply divide the yield from the tax-
exempt investment by the sum of [1 minus your marginal tax rate]. The tables
below are provided for your convenience in making this calculation for
selected tax-exempt yields and taxable income levels. These yields are
presented for purposes of illustration only and are not representative of any
yield that the Tax-Exempt Portfolio may generate. Both tables are based upon
current law as to the 1995 federal tax rate schedules.
TAXABLE EQUIVALENT YIELD TABLE FOR PERSONS WHOSE ADJUSTED GROSS INCOME IS
UNDER $114,700
<TABLE>
<CAPTION>
YOUR A TAX-EXEMPT YIELD OF:
TAXABLE INCOME MARGINAL 2% 3% 4% 5% 6% 7%
FEDERAL TAX IS EQUIVALENT TO A TAXABLE
SINGLE JOINT RATE YIELD OF:
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$23,350-$56,550 $39,000-$94,250 28.0% 2.78 4.17 5.56 6.94 8.33 9.72
- ---------------------------------------------------------------------------
Over $56,550 Over $94,250 31.0 2.90 4.35 5.80 7.25 8.70 10.14
- ---------------------------------------------------------------------------
</TABLE>
TAXABLE EQUIVALENT YIELD TABLE FOR PERSONS WHOSE ADJUSTED GROSS INCOME IS OVER
$114,700*
<TABLE>
<CAPTION>
YOUR A TAX-EXEMPT YIELD OF:
TAXABLE INCOME MARGINAL 2% 3% 4% 5% 6% 7%
FEDERAL TAX IS EQUIVALENT TO A TAXABLE
SINGLE JOINT RATE YIELD OF:
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$56,550-$117,950 $94,250-$143,600 31.9% 2.94 4.41 5.87 7.34 8.81 10.28
- --------------------------------------------------------------------------------
$117,950-$256,500 $143,600-$256,500 37.1 3.18 4.77 6.36 7.95 9.54 11.13
- --------------------------------------------------------------------------------
Over $256,500 Over $256,500 40.8 3.38 5.07 6.76 8.45 10.14 11.82
- --------------------------------------------------------------------------------
</TABLE>
*This table assumes at least $3.75 of itemized deductions for each $100 of
adjusted gross income over $114,700. For a married couple with adjusted gross
income between $172,050 and $294,550 (single between $114,700 and $237,200),
add 0.7% to the tax rate for each personal and dependency exemption. The
taxable equivalent yield is the tax-exempt yield divided by: 100% minus the
adjusted tax rate. For example, if the table tax rate is 37.1% and you are
married with no dependents, the adjusted tax rate is 38.5% (37.1% + 0.7% +
0.7%). For a tax-exempt yield of 6%, the taxable equivalent yield is about
9.76% (6% / (100% - 38.5%)).
OFFICERS AND TRUSTEES
The officers and trustees of the Funds, their birthdates, their principal
occupations and their affiliations, if any, with KFS and KDI are as follows
(The number following each person's title is the number of investment
companies managed by KFS and its affiliates for which he or she holds similar
positions):
DAVID W. BELIN (6/20/28), Trustee (22), 2000 Financial Center, 7th and Walnut,
Des Moines, Iowa; Member, Belin Harris Lamson McCormick, P.C. (attorneys).
LEWIS A. BURNHAM (1/8/33), Trustee (22), 16410 Avila Boulevard, Tampa,
Florida; Director, Management Consulting Services, McNulty & Company;
formerly, Executive Vice President, Anchor Glass Container Corporation.
DONALD L. DUNAWAY (3/8/37), Trustee (22), 235A Elm Grove Road, Brookfield,
Wisconsin; Retired; formerly, Executive Vice President, A. O. Smith
Corporation (diversified manufacturer).
B-14
<PAGE>
ROBERT B. HOFFMAN (12/11/36), Trustee (22), 800 North Lindbergh Boulevard, St.
Louis, Missouri; Senior Vice President and Chief Financial Officer, Monsanto
Company (chemical products); prior thereto, Vice President, FMC Corporation
(manufacturer of machinery and chemicals); prior thereto, Director, Executive
Vice President and Chief Financial Officer, Staley Continental, Inc. (food
products).
DONALD R. JONES (1/17/30), Trustee (22), 1776 Beaver Pond Road, Inverness,
Illinois; Retired; Director, Motorola, Inc. (manufacturer of electronic
equipment and components); formerly, Executive Vice President and Chief
Financial Officer, Motorola, Inc.
DAVID B. MATHIS (4/13/38), Trustee* (33), Kemper Center, Long Grove, Illinois;
Chairman, Chief Executive Officer and Director, Kemper Corporation; Director,
KFS, Kemper Financial Companies, Inc., and IMC Global Inc.; Chairman of the
Board, Lumbermens Mutual Casualty Company.
SHIRLEY D. PETERSON, (9/3/41), Trustee (22), 401 Rosemont Avenue, Frederick,
Maryland; President, Hood College; prior thereto, partner, Steptoe & Johnson
(attorneys); prior thereto, Commissioner, Internal Revenue Service; prior
thereto, Assistant Attorney General, U.S. Department of Justice.
WILLIAM P. SOMMERS (7/22/33), Trustee (22), 333 Ravenswood Avenue, Menlo Park,
California; President and Chief Executive Officer, SRI International (research
and development); prior thereto, Executive Vice President, Iameter (medical
information and educational service provider), prior thereto, Senior Vice
President and Director, Booz, Allen & Hamilton, Inc. (management consulting
firm) (retired); Director, Rohr, Inc., Therapeutic Discovery Corp. and Litton
Industries.
STEPHEN B. TIMBERS (8/8/44), President and Trustee* (33), 120 South LaSalle
Street, Chicago, Illinois; President, Chief Operating Officer and Director,
Kemper Corporation; Chairman, Chief Executive Officer, Chief Investment
Officer and Director, KFS; Director, KDI, Kemper Financial Companies, Inc.,
Dreman Value Advisors, Inc. and LTV Corporation.
JOHN E. PETERS (11/4/47), Vice President* (33), 120 South LaSalle Street,
Chicago, Illinois; Senior Executive Vice President, KFS; President and
Director, KDI; Director, Dreman Value Advisors, Inc.
CHARLES F. CUSTER (8/19/28), Vice President and Assistant Secretary* (33), 222
North LaSalle Street, Chicago, Illinois; Partner, Vedder, Price, Kaufman &
Kammholz (attorneys), Legal Counsel to the Fund.
JEROME L. DUFFY (6/29/36), Treasurer* (33), 120 South LaSalle Street, Chicago,
Illinois; Senior Vice President, KFS.
PHILIP J. COLLORA (11/15/45), Vice President and Secretary* (33), 120 South
LaSalle Street, Chicago, Illinois; Attorney, Senior Vice President and
Assistant Secretary, KFS.
ELIZABETH C. WERTH (10/1/47), Assistant Secretary* (25), 120 South LaSalle
Street, Chicago, Illinois; Vice President, KFS; Vice President and Director of
State Registrations, KDI.
J. PATRICK BEIMFORD, Jr. (5/25/50), Vice President* (24), 120 South LaSalle
Street, Chicago, Illinois; Executive Vice President and Chief Investment
Officer--Fixed Income, KFS.
FRANK RACHWALSKI, Jr. (3/26/45), Vice President* (9), 120 South LaSalle
Street, Chicago, Illinois; Senior Vice President, KFS.
*Interested persons of the Fund as defined in the Investment Company Act of
1940.
The trustees and officers who are "interested persons" as designated above
receive no compensation from the Fund, except that Mr. Custer's law firm
receives fees from the Fund as counsel to the Fund. The table below shows
B-15
<PAGE>
amounts paid or accrued to those trustees who are not designated "interested
persons" during the Fund's 1995 fiscal year except that the information in the
last column is for calendar year 1994.
<TABLE>
<CAPTION>
PENSION OR TOTAL COMPENSATION
RETIREMENT BENEFITS FROM FUND AND
AGGREGATE COMPENSATION ACCRUED AS PART OF KEMPER FUND COMPLEX
NAME OF TRUSTEE FROM FUND FUND EXPENSES PAID TO TRUSTEES**
- --------------- ----------------------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
David W. Belin*......... $14,400 $0 $112,200
Lewis A. Burnham........ $ 9,400 $0 $ 90,100
Donald L. Dunaway*...... $13,900 $0 $115,400
Robert B. Hoffman....... $ 9,200 $0 $ 87,400
Donald R. Jones......... $ 9,700 $0 $ 94,300
Shirley D. Peterson***.. $ 0 $ 0 $ 0
William P. Sommers...... $ 8,200 $ 0 $ 84,100
</TABLE>
- -------
* Includes current fees deferred and interest pursuant to deferred
compensation agreements with the Fund. Deferred amounts accrue interest
monthly at a rate equal to the yield of Kemper Money Market Fund--Money
Market Portfolio. Total deferred amounts and interest accrued through July
31, 1995 are $107,000 for Mr. Belin and $79,000 for Mr. Dunaway.
** Includes compensation for service on twenty-three Kemper funds (including
two funds no longer in existence). Also includes amounts for new funds
estimated as if they had existed at the beginning of the year.
*** Elected to board in September, 1995.
As of October 16, 1995, the officers and trustees of the Fund, as a group,
owned less than 1% of the outstanding shares of each Portfolio and no person
owned of record 5% or more of the outstanding shares of any Portfolio.
SPECIAL FEATURES
SYSTEMATIC WITHDRAWAL PROGRAM. If you own $5,000 or more of a Portfolio's
shares you may provide for the payment from your account of any requested
dollar amount to be paid to you or your designated payee monthly, quarterly,
semi-annually or annually. The $5,000 minimum account size is not applicable
to Individual Retirement Accounts. Dividend distributions will be
automatically reinvested at net asset value. A sufficient number of full and
fractional shares will be redeemed to make the designated payment. Depending
upon the size of the payments requested, redemptions for the purpose of making
such payments may reduce or even exhaust the account. The program may be
amended on thirty days notice by the Fund and may be terminated at any time by
the shareholder or the Fund.
TAX-SHELTERED RETIREMENT PROGRAMS. The Shareholder Service Agent provides
retirement plan services and documents and can establish your account in any
of the following types of retirement plans:
. Individual Retirement Accounts (IRAs) trusteed by IFTC. This includes
Simplified Employee Pension Plan (SEP) IRA accounts and prototype documents.
. 403(b) Custodial Accounts also trusteed by IFTC. This type of plan is
available to employees of most non-profit organizations.
. Prototype money purchase pension and profit-sharing plans may be adopted by
employers. The maximum contribution per participant is the lesser of 25% of
compensation or $30,000.
Brochures describing the above plans as well as providing model defined
benefit plans, target benefit plans, 457 plans, 401(k) plans and materials for
establishing them are available from the Shareholder Service Agent upon
request. The brochures for plans trusteed by IFTC describe the current fees
payable to IFTC for its services as trustee. Investors should consult with
their own tax advisers before establishing a retirement plan.
SHAREHOLDER RIGHTS
The Fund generally is not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Fund ("Declaration of Trust"),
however, shareholder meetings will be held in connection with the following
matters: (a) the election or removal of trustees, if a meeting is called for
such purpose; (b) the adoption
B-16
<PAGE>
of any contract for which shareholder approval is required by the Investment
Company Act of 1940 ("1940 Act"); (c) any termination of the Fund to the
extent and as provided in the Declaration of Trust; (d) any amendment of the
Declaration of Trust (other than amendments changing the name of the Fund or
any Portfolio, establishing a Portfolio, supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or inconsistent
provision thereof); (e) as to whether a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class
action on behalf of the Fund or the shareholders, to the same extent as the
stockholders of a Massachusetts business corporation; and (f) such additional
matters as may be required by law, the Declaration of Trust, the By-laws of
the Fund, or any registration of the Fund with the Securities and Exchange
Commission or any state, or as the trustees may consider necessary or
desirable. The shareholders also would vote upon changes in fundamental
investment objectives, policies or restrictions.
Each trustee serves until the next meeting of shareholders, if any, called for
the purpose of electing trustees and until the election and qualification of
his successor or until such trustee sooner dies, resigns, retires or is
removed by a majority vote of the shares entitled to vote (as described below)
or a majority of the trustees. In accordance with the 1940 Act (a) the Fund
will hold a shareholder meeting for the election of trustees at such time as
less than a majority of the trustees have been elected by shareholders, and
(b) if, as a result of a vacancy in the Board of Trustees, less than two-
thirds of the trustees have been elected by the shareholders, that vacancy
will be filled only by a vote of the shareholders.
Trustees may be removed from office by a vote of the holders of a majority of
the outstanding shares at a meeting called for that purpose, which meeting
shall be held upon the written request of the holders of not less than 10% of
the outstanding shares. Upon the written request of ten or more shareholders
who have been such for at least six months and who hold shares constituting at
least 1% of the outstanding shares of the Fund stating that such shareholders
wish to communicate with the other shareholders for the purpose of obtaining
the signatures necessary to demand a meeting to consider removal of a trustee,
the Fund has undertaken to disseminate appropriate materials at the expense of
the requesting shareholders.
The Declaration of Trust provides that the presence at a shareholder meeting
in person or by proxy of at least 30% of the shares entitled to vote on a
matter shall constitute a quorum. Thus, a meeting of shareholders of the Fund
could take place even if less than a majority of the shareholders were
represented on its scheduled date. Shareholders would in such a case be
permitted to take action which does not require a larger vote than a majority
of a quorum, such as the election of trustees and ratification of the
selection of auditors. Some matters requiring a larger vote under the
Declaration of Trust, such as termination or reorganization of the Fund and
certain amendments of the Declaration of Trust, would not be affected by this
provision; nor would matters which under the 1940 Act require the vote of a
"majority of the outstanding voting securities" as defined in the 1940 Act.
The Declaration of Trust specifically authorizes the Board of Trustees to
terminate the Fund (or any Portfolio) by notice to the shareholders without
shareholder approval.
Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of the
Fund. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Fund or the trustees. Moreover, the Declaration of Trust provides for
indemnification out of Fund property for all losses and expenses of any
shareholder held personally liable for the obligations of the Fund and the
Fund will be covered by insurance which the Trustees consider adequate to
cover foreseeable tort claims. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is considered by KFS remote
and not material since it is limited to circumstances in which a disclaimer is
inoperative and the Fund itself is unable to meet its obligations.
B-17
<PAGE>
APPENDIX--RATINGS OF INVESTMENTS
COMMERCIAL PAPER RATINGS
A-1, A-2 AND PRIME-1, PRIME-2 COMMERCIAL PAPER RATINGS
Commercial paper rated by Standard & Poor's Corporation has the following
characteristics: Liquidity ratios are adequate to meet cash requirements.
Long-term senior debt is rated "A" or better. The issuer has access to at
least two additional channels of borrowing. Basic earnings and cash flow have
an upward trend with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong position
within the industry. The reliability and quality of management are
unquestioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is rated A-1, A-2 or A-3.
The ratings Prime-1 and Prime-2 are the two highest commercial paper ratings
assigned by Moody's Investors Service, Inc. Among the factors considered by it
in assigning ratings are the following: (1) evaluation of the management of
the issuer; (2) economic evaluation of the issuer's industry or industries and
an appraisal of speculative-type risks which may be inherent in certain areas;
(3) evaluation of the issuer's products in relation to competition and
customer acceptance; (4) liquidity; (5) amount and quality of long-term debt;
(6) trend of earnings over a period of ten years; (7) financial strength of a
parent company and the relationships which exist with the issuer; and (8)
recognition by the management of obligations which may be present or may arise
as a result of public interest questions and preparations to meet such
obligations. Relative strength or weakness of the above factors determines
whether the issuer's commercial paper is rated Prime-1, 2 or 3.
MIG-1 AND MIG-2 MUNICIPAL NOTES
Moody's ratings for state and municipal notes and other short-term loans will
be designated Moody's Investment Grade (MIG). This distinction is in
recognition of the differences between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower are uppermost in
importance in short-term borrowing, while various factors of the first
importance in bond risk are of lesser importance in the short run. Loans
designated MIG-1 are of the best quality, enjoying strong protection from
established cash flows of funds for their servicing or from established and
broad-based access to the market for refinancing, or both. Loans designated
MIG-2 are of high quality, with margins of protection ample although not so
large as in the preceding group.
STANDARD & POOR'S CORPORATION BOND RATINGS
AAA. This is the highest rating assigned by Standard & Poor's Corporation to a
debt obligation and indicates an extremely strong capacity to pay principal
and interest.
AA. Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A. Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
MOODY'S INVESTORS SERVICE, INC. BOND RATINGS
AAA. Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
B-18
<PAGE>
AA. Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long term risks appear somewhat larger than in Aaa
securities.
A. Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
B-19
<PAGE>
KEMPER MONEY MARKET FUND
ANNUAL REPORT TO SHAREHOLDERS
FOR THE YEAR ENDED JULY 31, 1995
"The rising interest rate environment
allowed each portfolio's yield to quickly
increase due to the reinvestment of its
short maturity investments at current
higher rate levels."
[KEMPER MUTUAL FUNDS LOGO]
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
MONEY MARKET PORTFOLIO
Investments at July 31, 1995
(Value in thousands)
<TABLE>
<CAPTION>
CORPORATE OBLIGATIONS VALUE
================================================================================
<S> <C>
BANKING -- 4.4%
Commonwealth Bank of Australia
5.89%, 9/22/95 $ 49,581
(a) Keycorp
5.88%, 8/22/95 15,000
Nordbanken North America, Inc.
5.79%, 10/13/95 49,422
Postipankki U.S. Inc.
5.97%, 8/16/95 49,877
Skandinaviska Enskilda Banken
Funding Inc.
5.73%, 10/11/95 14,833
=======================================================================
178,713
- --------------------------------------------------------------------------------
CAPITAL AND MORTGAGE LENDING -- 2.3%
Countrywide Funding Corporation
5.81%-5.83%, 8/21/95-8/28/95 39,843
(b) GMAC Mortgage Corporation of
Pennsylvania
6.16%, 8/31/95 54,719
=======================================================================
94,562
- --------------------------------------------------------------------------------
CAPTIVE BUSINESS FINANCE -- 12%
(a) American Honda Finance
Corporation
6.19%, 8/7/95 44,995
Asset Securitization Cooperative
Corporation
5.76%, 10/3/95 49,501
Budget Funding Corporation
5.78%, 9/22/95 39,669
Chrysler Financial Corporation
6.04%, 8/30/95 49,760
(a) Deere (John) Capital Corporation
5.88%, 8/16/95 25,000
(a) Emprise I Corporation
6.23%, 9/22/95 45,989
Enterprise Capital Funding
Corporation
6.09%, 8/14/95 19,957
(a) Finova Capital Corporation
6.16%, 9/15/95 50,000
Ford Motor Credit Company
5.90%-6.00%, 8/29/95-9/22/95 39,759
Hanson Finance (UK) PLC
5.86%, 10/12/95 24,711
National Fleet Funding
6.03%, 8/4/95 49,975
Orix America Inc.
5.81%-5.99%, 8/30/95-9/7/95 19,893
USL Capital Corporation
6.01%, 8/11/95 24,959
=======================================================================
484,168
- --------------------------------------------------------------------------------
CONSUMER FINANCING -- 9.7%
American Express Credit Corporation
5.75%-5.94%, 8/17/95-10/17/95 49,631
American General Finance
Corporation
5.78%, 9/20/95 24,801
Associates Corporation of
North America
5.73%, 10/5/95 49,490
Beneficial Corporation
5.96%, 9/15/95 39,706
General Electric Capital Corporation
5.97%, 9/1/95 49,746
Household Finance Corporation
5.75%-5.89%, 9/12/95-10/12/95 54,513
JTB Finance Americas
5.86%, 9/27/95 24,770
Sears Roebuck Acceptance Corp.
6.01%, 8/7/95 49,950
Sierra Funding Corporation
5.85%-5.88%, 10/25/95-10/31/95 49,294
=======================================================================
391,901
CONSUMER PRODUCTS AND SERVICES -- 5.3%
American Home Products Corporation
5.82%-6.01%, 8/28/95-10/23/95 49,558
Coca-Cola Enterprises Inc.
6.01%, 8/11/95-8/18/95 49,888
(a) PepsiCo, Inc.
5.76%, 8/16/95 49,993
Quaker Oats Company
5.99%-6.01%, 8/22/95-9/13/95 64,721
=======================================================================
214,160
CORPORATE FINANCING -- 10.2%
(a) Beta Finance Corporation
5.70%, 8/1/95 45,000
Broadway Capital Corporation
5.76%, 10/16/95 24,700
Clipper Receivables Corporation
5.82%-6.02%, 8/21/95-8/25/95 64,754
GTE Finance Corporation
5.83%, 8/23/95 24,911
Ranger Funding Corporation
5.78%, 10/16/95 24,699
Receivables Capital Corporation
5.76%-5.79%, 8/28/95-10/12/95 49,608
(a) Sanwa Business Credit Corporation
6.06%-6.15%, 8/7/95-8/9/95 124,997
Windmill Funding Corporation
5.79%, 9/6/95 49,713
=======================================================================
408,382
</TABLE>
7
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
VALUE
================================================================================
<S> <C>
ENERGY AND UTILIITIES -- 1.9%
Brazos River Authority, Texas
5.76%, 10/18/95 $ 50,000
New Hampshire Industrial
Development Authority
5.80%, 10/26/95 25,000
=======================================================================
75,000
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 11.2%
(a) Bear Stearns Companies Inc.
6.00%-6.15%, 8/8/95-8/21/95 105,000
(a) CS First Boston, Inc.
5.93%, 8/9/95 50,000
(a) Goldman, Sachs & Co.
5.95%, 8/25/95 75,000
(a)(b) Lehman Brothers Holdings Inc.
6.00%, 8/16/95 50,000
(a) Morgan Stanley Group Inc.
5.98%-6.06%, 8/16/95-8/23/95 35,003
Nomura Holding America Inc.
5.80%-5.92%, 9/20/95-11/1/95 44,473
(a) Salomon Inc.
6.42%, 8/1/95 90,000
=======================================================================
449,476
- --------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS -- 1.7%
(a) Kingdom of Sweden
5.63%, 10/11/95 44,986
Province of Quebec
5.85%, 10/4/95 24,744
=======================================================================
69,730
- --------------------------------------------------------------------------------
INFORMATION SERVICES -- 1.2%
GTE Corporation
5.86%, 8/29/95 14,932
Nynex Corporation
5.81%-6.01%, 8/29/95-10/24/95 34,751
=======================================================================
49,683
- --------------------------------------------------------------------------------
MANUFACTURING AND INDUSTRIAL PRODUCTS -- 1.4%
Bridgestone/Firestone, Inc.
5.81%, 8/18/95 29,919
Cooper Industries, Inc.
5.81%, 8/21/95 24,920
=======================================================================
54,839
- --------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS -- 2.5%
(a)(b)(c) Orange County, California
7.02%, 6/30/96 (maturity),
$100,000,000 (cost and par) 76,000
Letter of Credit from The Bank of
New York 24,000
=======================================================================
100,000
- --------------------------------------------------------------------------------
RECEIVABLES FINANCING -- 10.5%
Cooperative Receivables Corporation
5.76%, 9/19/95 39,690
Dynamic Funding Corporation
5.85%-5.97%, 10/2/95-10/31/95 49,383
ESC Securitization, Inc.
5.96%, 9/20/95-9/21/95 49,588
Heller Financial, Inc.
6.04%, 9/27/95 24,765
Heller International Corporation
6.11%, 8/7/95 24,975
Jet Funding Corporation
5.85%, 10/31/95 49,272
Monte Rosa Capital Corporation
5.80%, 9/8/95 24,848
SFC (USA) Inc.
6.04%, 8/31/95 49,752
STRAIT Capital Corporation
5.84%-6.05%, 8/31/95-10/31/95 59,346
Strategic Asset Funding Corporation
6.04%, 8/31/95 24,876
Working Capital Management Co. L.P.
5.84%, 9/25/95 24,779
=======================================================================
421,274
=======================================================================
TOTAL CORPORATE
OBLIGATIONS -- 74.3%
(average maturity: 36 days) 2,991,888
=======================================================================
================================================================================
BANK OBLIGATIONS
CERTIFICATES OF DEPOSIT --
U.S. BANKS -- 10.3
Bank of America Illinois
5.75%, 10/19/95 40,001
Bank of New York Company Inc.
6.07%, 8/8/95 25,000
(a) Boatmen's Credit Card Bank
6.06%, 9/5/95 25,000
(a) First Bank (S.D.)
5.88%, 8/16/95 14,999
(a) First Chicago Corporation
5.74%-6.35%, 8/1/95-3/4/96 40,002
(a) First National Bank of Boston
6.00%-6.22%, 8/3/95-10/2/95 50,000
MBNA America Bank N.A.
6.18%-6.25%, 8/10/95-8/31/95 40,000
Mellon Bank Corporation
5.84%, 5/31/96 15,016
(a) Old Kent Bank & Trust Co.
5.87%, 8/30/95 25,000
(a) PNC Bank Corporation
5.68%, 8/1/95 50,000
(a) Shawmut Bank Connecticut, N.A.
5.74%-6.03%, 8/1/95-9/25/95 50,004
Wachovia Corporation
6.00%-6.81%, 8/7/95-8/18/95 39,994
=======================================================================
415,016
</TABLE>
8
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
VALUE
- --------------------------------------------------------------------------------
<S> <C>
CERTIFICATES OF DEPOSIT --
FOREIGN BANKS -- 4.4%
Canadian Imperial Bank of Commerce
5.75%, 10/17/95 $ 50,000
Chemical Bank of Canada
5.75%, 9/18/95 25,000
Citibank Canada
5.76%-5.78%, 9/21/95-9/26/95 50,000
(a) Kansallis Osake Pankki
6.01%, 8/1/95 49,953
=======================================================================
174,953
- --------------------------------------------------------------------------------
TIME DEPOSITS --
(b) CANADIAN BANKS -- 3.7%
Bank of Montreal
5.75%, 10/6/95 50,000
Bank of Nova Scotia
5.94%, 8/14/95 50,000
Toronto Dominion Bank
5.75%, 9/18/95 50,000
=======================================================================
150,000
=======================================================================
TOTAL BANK OBLIGATIONS -- 18.4%
(average maturity: 41 days) 739,969
=======================================================================
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
(Dated 7/95, collateralized by Federal
Home Loan Mortgage Corporation,
Federal National Mortgage Association
and U.S. Treasury Securities)
Donaldson, Lufkin, & Jenrette
Securities Corporation
(held at Chemical Bank)
5.85%, 8/18/95 30,000
Goldman, Sachs & Co.
(held at The Bank of New York)
5.74%-5.75%, 9/11/95-10/24/95 225,000
Lehman Government Securities, Inc.
(held at Chemical Bank)
5.99%, 8/7/95 31,000
=======================================================================
TOTAL REPURCHASE AGREEMENTS --
7.1%
(average maturity: 49 days) 286,000
=======================================================================
TOTAL INVESTMENTS -- 99.8%
(average maturity: 38 days) 4,017,857
=======================================================================
CASH AND OTHER ASSETS,
LESS LIABILITIES -- .2% 7,241
=======================================================================
NET ASSETS -- 100% 4,025,098
=======================================================================
</TABLE>
See accompanying Notes to Portfolios of Investments.
9
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
GOVERNMENT SECURITIES PORTFOLIO
Investments at July 31, 1995
(Value in thousands)
<TABLE>
<CAPTION>
VALUE
================================================================================
<S> <C>
U.S. TREASURY NOTES -- .7%
(AVERAGE MATURITY: 288 DAYS)
5.75%, 5/15/96 $ 4,048
SHORT-TERM NOTES (ISSUED OR
GUARANTEED BY U.S. GOVERNMENT
AGENCIES OR INSTRUMENTALITIES)
(a) Agency for International
Development
Government of Israel
5.75%, 8/1/95 7,071
(a) Export-Import Bank of the
United States
Cathay Pacific Airways Limited
5.81%, 8/15/95 8,268
KA Leasing, LTD.
5.81%, 8/15/95 8,699
Kuwait Investment Authority
5.65%, 8/15/95 19,260
VARIG Brazilian Airlines
5.81%, 10/16/95 12,255
(a) Federal Farm Credit Banks
5.81%, 8/25/95 1,049
Federal Home Loan Bank
(a) 6.00%-6.14%, 8/1/95-8/2/95 10,898
5.88%, 5/15/96 24,216
Federal Home Loan Bank
Downey Savings & Loan
5.66%, 3/8/96 4,833
Fidelity Federal Bank
5.88%-5.96%, 8/30/95-9/26/95 15,694
(a) Federal Home Loan Mortgage
Corporation
5.95%, 8/15/95 12,496
Federal National Mortgage
Association
(a) 6.24%, 8/1/95 34,501
5.75%-6.01%, 8/4/95-6/21/96 108,194
(a) Overseas Private
Investment Corporation
International Paper Company
5.76%, 10/16/95 6,000
(a) Student Loan Marketing Association
5.83%-6.08%, 8/1/95-12/30/95 61,993
=======================================================================
TOTAL SHORT-TERM NOTES -- 55.6%
(average maturity: 54 days) 335,427
=======================================================================
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
(Dated 5/95-7/95, collateralized
by Federal Home Loan Mortgage
Corporation, Federal National
Mortgage Association and
Government National Mortgage
Association Securities)
Bear, Stearns & Co. Inc.
5.83%, 8/2/95 51,000
Chase Manhattan Corporation
(held at Chemical Bank)
6.00%, 8/1/95 28,000
Donaldson, Lufkin & Jenrette
Securities Corporation
(held at Chemical Bank)
5.85%, 8/21/95 25,000
Goldman, Sachs & Co.
(held at The Bank of New York)
5.88%, 9/20/95 40,000
Lehman Government Securities Inc.
(held at Chemical Bank)
5.99%, 8/7/95 24,000
Nomura Securities International, Inc.
5.85%, 9/1/95 4,000
Nomura Securities International, Inc.
(held at The Bank of New York)
5.85%, 9/1/95-9/14/95 77,000
Smith Barney Shearson Inc.
5.80%, 8/24/95 11,000
=======================================================================
TOTAL REPURCHASE
AGREEMENTS -- 43.0%
(average maturity: 24 days) 260,000
=======================================================================
TOTAL INVESTMENTS -- 99.3%
(average maturity: 43 days) 599,475
=======================================================================
CASH AND OTHER ASSETS,
LESS LIABILITIES -- .7% 4,126
=======================================================================
NET ASSETS -- 100% $603,601
=======================================================================
</TABLE>
See accompanying Notes to Portfolios of Investments.
10
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT PORTFOLIO
Investments at July 31, 1995
(Value in thousands)
<TABLE>
<CAPTION>
(a) VARIABLE RATE DEMAND SECURITIES VALUE
- --------------------------------------------------------------------------------
<S> <C>
ALABAMA
Birmingham
Medical Clinic Revenue
3.90% $ 6,680
ARIZONA
Apache County
Industrial Development Authority
3.85% 10,000
CALIFORNIA
Alameda
Revenue
5.80% 7,500
Costa Mesa
Performing Arts Center
4.00% 4,650
Educational Facilities Authority
4.25% 1,300
Los Angeles
Harbor Improvement Corporation
3.95% 8,000
Regional Airports Improvement Corporation
4.70% 5,000
DISTRICT OF COLUMBIA
General Obligation
4.35% 10,400
FLORIDA
Dade County
Aviation Facilities Revenue
3.90% 8,400
Housing Finance Agency
3.80% 9,750
Naples
Hospital Revenue
3.90% 8,000
GEORGIA
Fulton County
Development Authority
3.90% 10,445
Wayne County
Solid Waste Management Authority
4.45% 3,000
ILLINOIS
Chicago
O'Hare International Airport
Special Facility Revenue
4.80% 9,000
Development Finance Authority
4.17% 9,395
Educational Facilities Authority
3.85% 11,900
Mundelein
Industrial Development Revenue
4.05% 6,500
Richmond
Industrial Development Revenue
4.25% 4,000
INDIANA
Health Facility Financing Authority
3.95% 7,235
Rockport
Pollution Control Revenue
3.90% 13,745
IOWA
Louisa County
Pollution Control Revenue
3.85% 6,300
KENTUCKY
Development Finance Authority
3.90% 8,160
Higher Education Student Loan Corporation
4.10% 5,000
Lexington-Fayette Urban County Government
4.30% 5,300
Todd County
Industrial Development Revenue
4.00% 2,900
LOUISIANA
Caddo Parish
Industrial Development Board
4.30% 2,800
Iberville
Pollution Control Revenue
3.95% 3,200
Jefferson Parish
Hospital Revenue
4.05% 7,200
</TABLE>
11
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
VALUE
- --------------------------------------------------------------------------------
<S> <C>
MARYLAND
Baltimore County
Multi-Family Housing Revenue
4.10% $3,900
Department of Housing and Community Development
Mutli-Family Development Revenue
4.00% 5,510
MICHIGAN
Dearborn
Economic Development Corporation
3.80% 7,800
MINNESOTA
Minneapolis
Community Development Agency
3.95% 4,455
MISSOURI
Kirksville
Industrial Development Agency
4.30% 4,200
NEVADA
Clark County
Industrial Development Revenue
4.00% 4,000
Community Industrial
Development Revenue
4.00% 4,650
NORTH CAROLINA
Lenoir County
Pollution Control Financing Authority
3.90% 5,000
OHIO
Pollution Control Revenue
4.00% 2,500
PENNSYLVANIA
Berks County
Redevelopment Authority
4.20% 8,000
Delaware Valley
Regional Finance Authority
3.95% 21,500
Philadelphia
Industrial Development Authority
3.90% 5,400
Redevelopment Authority
3.95% 4,000
TENNESSEE
Clarksville
Public Building Authority
3.90% 5,000
Maury County
Water Facility Revenue
4.25% 2,500
Nashville and Davidson County
Multi-Family Housing Revenue
3.90% 4,000
TEXAS
Calhoun County
Industrial Development Authority
4.20% 12,000
Gulf Coast
Industrial Development Authority
3.95% 1,800
Trinity River Authority
4.10% 9,200
VIRGINIA
Louisa County
Industrial Development Authority
3.90% 5,000
------------------------------------------------------------------------
TOTAL VARIABLE RATE
DEMAND SECURITIES -- 41.6%
(average maturity: 6 days) 316,175
------------------------------------------------------------------------
OTHER SECURITIES
ALABAMA
Mobile
Port City Medical Clinic Board
3.95%,11/14/95 11,850
ALASKA
Valdez
Marine Terminal Revenue Refunding
3.85%-4.15%, 9/13/95-9/22/95 16,875
CALIFORNIA
Pollution Control Revenue
4.15%, 9/11/95 5,000
COLORADO
Arapahoe County
Capital Improvement Revenue
4.45%, 8/31/95 15,000
Denver City and County
Airport System Revenue
3.80%-4.30%, 8/21/95-9/27/95 22,900
Platte River Power Authority
3.75%, 11/14/95 4,000
</TABLE>
12
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
VALUE
- --------------------------------------------------------------------------------
<S> <C>
DISTRICT OF COLUMBIA
Student Loan Revenue
4.10%, 7/01/96 $ 6,000
FLORIDA
First Municipal Loan Council
4.20%, 9/15/95 4,800
Hillsborough County
Aviation Authority
4.25%, 9/15/95 10,000
Pinellas County
Educational Facilities Authority
4.15%, 8/09/95 5,000
Sunshine State Government Financing Commission
4.15%, 9/15/95-9/19/95 13,300
GEORGIA
Municipal Electric Authority
3.95%-4.25%, 8/22/95-11/09/95 27,135
Municipal Gas Authority
3.90%, 9/20/95 1,975
ILLINOIS
Chicago
General Obligation
4.30%, 9/21/95 5,000
Development Finance Authority
4.85%, 12/01/95 2,000
INDIANA
Mt. Vernon
Pollution Control and Solid Waste Disposal Revenue
3.85%, 9/22/95 4,500
Sullivan
Pollution Control Revenue
3.85%-4.20%, 9/18/95-9/22/95 10,745
KANSAS
Burlington
Pollution Control Refunding and Improvement Revenue
4.20%-4.25%, 9/13/95-9/19/95 3,200
Pollution Control Revenue
3.85%, 9/22/95 1,000
KENTUCKY
Danville
Multi-City Lease Revenue
4.30%, 9/19/95 11,000
Pendleton County
Multi-County Lease Revenue
3.95%-4.20%, 9/14/95-9/20/95 11,700
LOUISANA
Public Facilities Authority
4.20%, 9/13/95 8,000
MARYLAND
Anne Arundel County
Port Facilities Revenue
4.20%, 9/12/95-9/19/95 18,000
MASSACHUSETTS
Pollution Control Revenue Refunding
4.10%-4.20%, 8/17/95-9/12/95 15,900
MISSISSIPPI
Claiborne County
Pollution Control Revenue
4.20%, 9/19/95 7,400
MISSOURI
Health Facilities Revenue
4.20%, 9/14/95 4,000
NEBRASKA
Public Power District
3.90%-4.15%, 8/17/95-9/15/95 10,000
NEW HAMPSHIRE
Business Finance Authority
4.30%, 8/22/95 2,400
NEW YORK
Dormitory Authority
3.80%, 11/13/95 6,000
Nassau County
Revenue Anticipation Notes
3.75%, 3/15/96 3,009
Tax Anticipation Notes
5.10%, 9/28/95 7,804
New York City
General Obligation
4.90%, 8/01/95 7,000
NORTH CAROLINA
Eastern Municipal Power Agency
3.95%-4.10%, 8/14/95-8/23/95 14,000
OHIO
Air Quality Development Authority
4.15%-4.20%, 9/13/95-9/19/95 18,875
Water Development Authority
4.20%, 9/19/95 2,800
</TABLE>
13
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
VALUE
- --------------------------------------------------------------------------------
<S> <C>
PENNSYLVANIA
Montgomery County
Industrial Development Authority
3.95%, 8/23/95 $ 8,000
Tax Anticipation Notes
3.95%, 6/28/96 6,531
TEXAS
Austin
Combined Utility Systems
3.93%, 9/14/95 9,100
Brazoria County
Brazos River Harbor Navigation
4.30%, 8/08/95 5,400
Department of Housing and Community Affairs
4.15%, 8/22/95 5,000
Harris County
Health Facilities Development Corporation
4.00%, 9/19/95 6,300
Port Development Corporation
4.00%, 8/21/95 7,250
Public Finance Authority
4.20%, 9/07/95 10,000
San Antonio
Electric and Gas Systems
4.15%-4.20%, 9/11/95-9/14/95 28,500
Tax & Revenue Anticipation Notes
4.20%, 8/31/95 8,605
UTAH
Tooele County
Waste Treatment Revenue
4.35%, 10/18/95 6,000
VIRGINIA
Norfolk
Industrial Development Authority
3.80%, 9/22/95 5,885
Prince William County
Industrial Development Authority
4.10%, 8/22/95 4,700
York County
Industrial Development Authority
4.20%, 9/12/95 12,800
WYOMING
Sweetwater County
Pacific Central Revenue
4.15%-4.20%, 8/17/95-9/14/95 4,800
========================================================================
TOTAL OTHER SECURITIES--58.8%
(average maturity: 47 days) 447,039
========================================================================
TOTAL INVESTMENTS--100.4%
(average maturity: 34 days) 763,214
========================================================================
LIABILITIES, LESS CASH AND
OTHER ASSETS--.4% (3,071)
========================================================================
NET ASSETS--100% $760,143
========================================================================
</TABLE>
See accompanying Notes to Portfolios of Investments.
14
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
NOTES TO PORTFOLIOS OF INVESTMENTS
Interest rates represent annualized yield to date of maturity, except for
variable rate securities described in Note (a). For each security, except as
described in Note (c), cost (for financial reporting and federal income
tax purposes) and carrying value are the same. Likewise, carrying value
approximates principal amount.
(a) Variable rate securities. The rates shown are the current rates at
July 31, 1995. The dates shown represent the demand date or next
interest rate change date. Securities in the Tax-Exempt Portfolio shown
without a date are payable within five business days and are backed by
credit support agreements from banks or insurance institutions.
(b) Illiquid securities. At July 31, 1995, the aggregate value of
illiquid securities was $354,719,000 in the Money Market Portfolio,
which represented 8.8% of net assets.
(c) See Note (3) of the Notes to Financial Statements.
See accompanying Notes to Financial Statements.
15
<PAGE>
================================================================================
REPORT OF INDEPENDENT AUDITORS
BOARD OF TRUSTEES AND SHAREHOLDERS KEMPER MONEY MARKET FUND
We have audited the accompanying statement of assets and liabilities,
including the portfolios of investments, of the Money Market, Government
Securities and Tax-Exempt Portfolios, comprising Kemper Money Market Fund, as of
July 31, 1995, and the related statements of operations for the year then ended
and changes in net assets for each of the two years in the period then ended,
and the financial highlights for each of the fiscal periods since 1991. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of July
31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Portfolios comprising Kemper Money Market Fund at July 31, 1995, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended and the financial
highlights for each of the fiscal periods since 1991, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
September 15, 1995
16
<PAGE>
================================================================================
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1995
(in thousands)
<TABLE>
<CAPTION>
MONEY GOVERNMENT
MARKET SECURITIES TAX-EXEMPT
PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at amortized cost:
Short-term securities $ 3,731,857 339,475 763,214
- --------------------------------------------------------------------------------------------------------------------
Repurchase agreements 286,000 260,000 --
- --------------------------------------------------------------------------------------------------------------------
Cash 5,905 2,420 --
- --------------------------------------------------------------------------------------------------------------------
Receivable for:
Interest 11,980 3,293 5,626
- --------------------------------------------------------------------------------------------------------------------
Shares of the portfolio sold 11,288 1,196 932
- --------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 4,047,030 606,384 769,772
====================================================================================================================
LIABILITIES AND NET ASSETS
Cash overdraft -- -- 1,801
- --------------------------------------------------------------------------------------------------------------------
Payable for:
Dividends 4,229 547 467
- --------------------------------------------------------------------------------------------------------------------
Shares of the portfolio redeemed 15,273 1,928 2,298
- --------------------------------------------------------------------------------------------------------------------
Securities purchased -- -- 4,651
- --------------------------------------------------------------------------------------------------------------------
Management fee 902 135 172
- --------------------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 1,086 111 127
- --------------------------------------------------------------------------------------------------------------------
Other 442 62 113
- --------------------------------------------------------------------------------------------------------------------
Total liabilities 21,932 2,783 9,629
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 4,025,098 603,601 760,143
====================================================================================================================
ANALYSIS OF NET ASSETS
Paid in capital $ 4,053,426 603,601 760,143
- --------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on investments (28,328) -- --
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $4,025,098 603,601 760,143
====================================================================================================================
THE PRICING OF SHARES
Shares outstanding, no par value 4,025,098 603,601 760,143
- --------------------------------------------------------------------------------------------------------------------
Net asset value and redemption price per share $1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
17
<PAGE>
===============================================================================
FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
Year ended July 31, 1995
(in thousands)
<TABLE>
<CAPTION>
MONEY GOVERNMENT
MARKET SECURITIES TAX-EXEMPT
PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET INVESTMENT INCOME
Interest income $231,048 34,371 29,687
- --------------------------------------------------------------------------------------------------------------------
Expenses:
Management fee 10,924 1,637 2,072
- --------------------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 9,098 954 806
- --------------------------------------------------------------------------------------------------------------------
Reports to shareholders 575 90 99
- --------------------------------------------------------------------------------------------------------------------
Registration costs 81 68 56
- --------------------------------------------------------------------------------------------------------------------
Professional fees 133 16 19
- --------------------------------------------------------------------------------------------------------------------
Trustees' fees and other 138 16 44
- --------------------------------------------------------------------------------------------------------------------
Total expenses 20,949 2,781 3,096
- --------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 210,099 31,590 26,591
- --------------------------------------------------------------------------------------------------------------------
Change in unrealized depreciation on investments (28,328) -- --
- --------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $181,771 31,590 26,591
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
Years ended July 31, 1995 and 1994
(in thousands)
<TABLE>
<CAPTION>
MONEY GOVERNMENT
MARKET SECURITIES TAX-EXEMPT
PORTFOLIO PORTFOLIO PORTFOLIO
----------------- -------------- ---------------
1995 1994 1995 1994 1995 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS, DIVIDENDS AND CAPITAL ACTIVITY
Net investment income $ 210,099 133,554 31,590 21,561 26,591 17,957
- --------------------------------------------------------------------------------------------------------------------
Change in unrealized depreciation (28,328) -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------
Capital contribution from investment
manager 28,328 -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from
net investment income (210,099) (133,554) (31,590) (21,561) (26,591) (17,957)
- --------------------------------------------------------------------------------------------------------------------
Capital share transactions
(dollar amounts and number of
shares are the same):
Shares sold 5,434,790 5,726,409 808,318 975,931 816,602 853,432
- --------------------------------------------------------------------------------------------------------------------
Shares issued in reinvestment of dividends 200,429 128,319 29,447 19,778 25,523 17,299
- --------------------------------------------------------------------------------------------------------------------
5,635,219 5,854,728 837,765 995,709 842,125 870,731
- --------------------------------------------------------------------------------------------------------------------
Less shares redeemed 5,758,910 6,205,869 941,532 982,644 874,113 837,230
- --------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) FROM CAPITAL
SHARE TRANSACTIONS AND
TOTAL INCREASE (DECREASE) IN NET ASSETS (123,691) (351,141) (103,767) 13,065 (31,988) 33,501
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 4,148,789 4,499,930 707,368 694,303 792,131 758,630
- --------------------------------------------------------------------------------------------------------------------
END OF YEAR $4,025,098 4,148,789 603,601 707,368 760,143 792,131
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
===============================================================================
- -------------------------------------------------------------------------------
1 DESCRIPTION OF THE FUND The Fund currently offers three series of shares
(Portfolios) -- the Money Portfolio, the
Government Securities Portfolio and the Tax-Exempt
Portfolio. The Money Market Portfolio invests
primarily in short-term high quality obligations
of major banks and corporations. The Government
Securities Portfolio invests exclusively in
obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and
repurchase agreements thereon. The Tax-Exempt
Portfolio invests in short-term high quality
municipal securities.30
- -------------------------------------------------------------------------------
2 SIGNIFICANT INVESTMENT VALUATION. Investments are stated at
ACCOUNTING POLICIES amortized cost, which approximates market value.
In the event that a deviation of 1/2 of 1% or more
exists between a Portfolio's $1.00 per share net
asset value, calculated at amortized cost, and the
net asset value calculated by reference to
market-based values, or if there is any other
deviation that the Board of Trustees believes
would result in a material dilution to
shareholders or purchasers, the Board of Trustees
will promptly consider what action should be
initiated.
INVESTMENT TRANSACTIONS AND INTEREST INCOME.
Investment transactions are accounted for on the
trade date (date the order to buy or sell is
executed). Interest income is recorded on the
accrual basis and includes amortization of premium
and discount on investments.
REPURCHASE AGREEMENTS. Repurchase agreements are
fully collateralized by U.S. Treasury or
Government agency securities. All collateral is
held at the Fund's custodian bank, unless
otherwise indicated, and is monitored daily by the
Fund so that its market value exceeds the carrying
value of the repurchase agreement.
EXPENSES. Expenses arising in connection with a
Portfolio are allocated to that Portfolio.
Other Fund expenses are allocated among the
Portfolios in proportion to their relative net
assets.
FUND SHARE VALUATION AND DIVIDENDS TO
SHAREHOLDERS. Fund shares are sold and redeemed on
a continuous basis at net asset value. On each day
that the New York Stock Exchange is open for
trading, each Portfolio determines its net asset
value per share (NAV) by dividing the total value
of the Portfolio's investments and other assets,
less liabilities, by the number of Portfolio
shares outstanding. The NAV is determined at
11:00 a.m., 1:00 p.m. and 3:00 p.m. Chicago time
for the Money Market and Government Securities
Portfolios and at 11:00 a.m. and 3:00 p.m. Chicago
time for the Tax-Exempt Portfolio. Each Portfolio
declares a daily dividend, equal to its net
investment income for that day, payable monthly.
Net investment income consists of all interest
income plus (minus) all realized gains (losses) on
portfolio securities, minus all expenses of the
Portfolio.
FEDERAL INCOME TAXES. Each Portfolio has complied
with the special provisions of the Internal
Revenue Code available to investment companies and
therefore no federal income tax provision is
required.
19
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3 TRANSACTIONS MANAGEMENT AGREEMENT. The Fund has a management
WITH AFFILIATES agreement with Kemper Financial Services, Inc.
(KFS) and pays a management fee at an annual rate
of .50% of the first $215 million of average daily
net assets declining gradually to .25% of average
daily net assets in excess of $800 million. The
Fund incurred a management fee of $14,633,000 for
the year ended July 31, 1995.
Kemper Asset Holdings, Inc. (KAHI), a subsidiary
of Kemper Corporation, the parent company of
Kemper Financial Services, Inc., has arranged for
the issuance of a $107,081,000 irrevocable letter
of credit from The Bank of New York for the
benefit of the Fund. The letter of credit supports
the payment of principal and interest on the
Orange County, California obligation held in the
Money Market Portfolio. The Fund and KAHI are
parties to an agreement related to the letter of
credit which provides, among other things, that,
in connection with a payment of principal or
interest under the letter of credit, the Fund will
transfer to KAHI any proceeds received under the
Orange County obligation.
CUSTODIAN AND TRANSFER AGENT AGREEMENTS. The Fund
has a custodian agreement and a transfer agent
agreement with Investors Fiduciary Trust Company
(IFTC), which was 50% owned by KFS until
January 31, 1995, when KFS completed the sale of
IFTC to a third party. For the year ended July 31,
1995, the Fund incurred custodian and transfer
agent fees of $8,086,000 (excluding related
expenses). Pursuant to a services agreement with
IFTC, Kemper Service Company (KSvC), an affiliate
of KFS, is the Shareholder Service Agent of the
Fund. For the year ended July 31, 1995, IFTC
remitted shareholder service fees of $7,656,000 to
KSVC.
OFFICERS AND TRUSTEES. Certain officers or
trustees of the Fund are also officers or
directors of KFS. During the year ended July 31,
1995, the Fund made no payments to its officers
and incurred trustees' fees of $72,000 to
independent trustees.
20
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
YEAR ENDED JULY 31,
------------------------------------------------------------------
1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income and dividends
declared .05 .03 .03 .04 .07
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.34% 3.20 2.96 4.45 7.19
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
Expenses .52% .52 .52 .49 .46
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income 5.19 3.14 2.92 4.42 6.94
- ---------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets at end of year
(in thousands) $4,025,098 4,148,789 4,499,930 5,664,194 7,553,950
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT SECURITIES PORTFOLIO
YEAR ENDED JULY 31,
-------------------------------------------------------------------
1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year $ 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income and dividends
declared .05 .03 .03 .04 .07
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.36% 3.20 2.97 4.50 6.95
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
Expenses .46% .47 .45 .43 .43
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income 5.21 3.15 2.94 4.44 6.65
- ---------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets at end of year
(in thousands) $603,601 707,368 694,303 926,328 1,126,417
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: The Money Market Portfolio's total return for the year ended July 31, 1995
includes the effect of a capital contribution from the investment manager.
Without the capital contribution, the total return would have been 4.62%.
21
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
TAX-EXEMPT PORTFOLIO
YEAR ENDED JULY 31,
------------------------------------------------------------------
1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year $ 1.00 1.00 1.00 1.00 1.00
- ----------------------------------------------------------------------------------------------------------------
Net investment income and dividends
declared .03 .02 .02 .04 .05
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 1.00 1.00 1.00 1.00
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN 3.53% 2.33 2.39 3.57 5.07
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
Expenses .40% .41 .39 .39 .38
- ----------------------------------------------------------------------------------------------------------------
Net investment income 3.46 2.30 2.36 3.49 4.92
- ----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets at end of year
(in thousands) $760,143 792,131 758,630 796,272 788,253
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
================================================================================
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS
OF 1995 DIVIDENDS
All of the dividends from the Money Market and Government Securities Portfolios
are taxable as ordinary income. All of the dividends from the Tax-Exempt
Portfolio constitute tax-exempt interest which is not taxable for federal income
tax purposes; however, a portion of the dividends paid may be includable in the
alternative minimum tax calculation.
These dividends, whether received in cash or reinvested in shares, must be
included in your federal income tax return and must be reported by the Fund to
the Internal Revenue Service in accordance with U.S. Treasury Department
Regulations.
<PAGE>
KEMPER MONEY MARKET FUND
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(i) Financial statements included in Part A of the Registration
Statement: Financial Highlights.
(ii) Financial statements included in Part B of the Registration
Statement:
Statements of assets and liabilities--July 31, 1995.
Statements of operations for the year ended July 31, 1995.
Statements of changes in net assets for each of the two years in
the period ended July 31, 1995.
Portfolios of investments--July 31, 1995.
Notes to financial statements.
Schedules II, III, IV and V are omitted as the required information is
not present.
Schedule I has been omitted as the required information is presented in
the portfolios of investments at
July 31, 1995.
(b) Exhibits
<TABLE>
<C> <S>
99.B1(a) Amended and Restated Agreement and Declaration of Trust.
Written Instrument Amending the Agreement and Declaration of
99.B1(b) Trust.
Written Instrument Amending the Agreement and Declaration of
99.B1(c) Trust.
99.B2 By-Laws.
99.B3 Inapplicable.
99.B4 Text of Share Certificate.
99.B5(a) Investment Management Agreement.
Notification of Additional Portfolio (Government Securities
99.B5(b) Portfolio).
99.B5(c) Notification of Additional Portfolio (Tax-Exempt Portfolio).
99.B6(a) Underwriting Agreement.
99.B6(b) Assignment and Assumption Agreement.
99.B6(c) Selling Group Agreement.
99.B7 Inapplicable.
99.B8(a) Custody Agreement.
99.B9(a) Agency Agreement.
99.B9(b) Supplement to Agency Agreement.
99.B10 Legal Opinion and Consent
99.B11 Report and Consent of Independent Auditors.
99.B12 Inapplicable.
99.B13 Inapplicable.
99.B14(a) Kemper Retirement Plan Prototype.
99.B14(b) Model Individual Retirement Account.
99.B15 Inapplicable.
99.B16 Performance Calculations.(1)
99.B18 Inapplicable.
99.B24 Powers of Attorney.
27.1 Financial Data Schedule for Money Market Portfolio
27.2 Financial Data Schedule for Government Securities Portfolio
27.3 Financial Data Schedule for Tax-Exempt Portfolio
99.485(b) Representation of Counsel (Rule 485 (b)).
</TABLE>
--------
(1) Incorporated herein by reference to Amendment No. 40 on Form N-1A
filed on or about October 31, 1994.
C-1
<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Inapplicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of September 29, 1995, there were 237,519 holders of record of the Money
Market Portfolio, 28,506 holders of record of the Government Securities
Portfolio and 19,368 holders of record of the Tax-Exempt Portfolio.
ITEM 27. INDEMNIFICATION
Article VIII of the Registrant's Agreement and Declaration of Trust (Exhibit
1 hereto, which is incorporated herein by reference) provides in effect that
the Registrant will indemnify its officers and trustees under certain
circumstances. However, in accordance with Section 17(h) and 17(i) of the
Investment Company Act of 1940 and its own terms, said Article of the
Agreement and Declaration of Trust does not protect any person against any
liability to the Registrant or its shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such trustee, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question as to
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
ITEM 28. (A) BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Information pertaining to business and other connections of the Registrant's
investment adviser is hereby incorporated by reference to the section of the
Prospectus captioned "Investment Manager," and to the section of the Statement
of Additional Information captioned "Investment Manager."
C-2
<PAGE>
Kemper Financial Services, Inc., investment adviser of the Registrant, is
investment adviser of the following:
Kemper Mutual Funds: Kemper Closed-End Funds:
Kemper Technology Fund Kemper High Income Trust
Kemper Total Return Fund Kemper Intermediate Government Trust
Kemper Growth Fund Kemper Municipal Income Trust
Kemper Small Capitalization Equity FundKemper Multi-Market Income Trust
Kemper Income and Capital Preservation Fund
Kemper Strategic Municipal Income
Kemper Money Market Fund Trust
The Growth Fund of Spain, Inc.
Kemper National Tax-Free Income Series
Kemper Diversified Income Fund Kemper Strategic Income Fund
Kemper High Yield Fund
Cash Equivalent Fund
Kemper U.S. Government Securities Fund
Kemper International Fund
Kemper Portfolios
Kemper State Tax-Free Income Series
Tax-Exempt California Money Market Fund
Kemper Adjustable Rate U.S. Government Fund
Kemper Blue Chip Fund
Kemper Global Income Fund
Kemper Target Equity Fund
Cash Account Trust
Investors Cash Trust
Tax-Exempt New York Money Market Fund
Kemper Value Plus Growth Fund
Kemper Quantitative Equity Fund
Kemper Horizon Fund
Kemper Financial Services, Inc. also furnishes investment advice to and
manages investment portfolios for other clients including Kemper Investors
Fund, Sterling Funds and Kemper International Bond Fund.
C-3
<PAGE>
Item 28(b)(i) Business and Other Connections of Officers
and Directors of Kemper Financial Services Inc.,
the Investment Advisor
MATHIS, DAVID B.
Director, Kemper Financial Services, Inc.
Director, Federal Kemper Life Assurance Company
Director, Fidelity Life Association
Director, Chairman and Chief Executive Officer, Kemper Corporation
Director, Kemper Financial Companies, Inc.
Director, Kemper Investors Life Insurance Company
Director, IMC Global, Inc.
Trustee, Kemper Funds
Chairman of the Board, Lumbermen's Mutual Casualty Company
TIMBERS, STEPHEN B.
Director, Chairman, Chief Executive Officer and Chief Investment Officer,
Kemper Financial Services, Inc.
Director, Vice President, Kemper Asset Holdings, Inc.
Director, Kemper Distributors, Inc.
Director, Chairman, Kemper Asset Management Company
Director, Chairman, Kemper Service Company
Director, Federal Kemper Life Assurance Company
Director, Dreman Value Advisors, Inc.
Director, Vice President, FKLA Loire Court, Inc.
Vice President, FKLA Realty Corporation
Director, President, Galaxy Offshore, Inc.
Director, Vice President, FLA First Nationwide, Inc.
Director, Vice President, FLA Plate Building, Inc.
Vice President, FLA Realty Corp.
Director, President and Chief Operating Officer, Kemper
Corporation
Director, Chairman, President and Chief Executive Officer, Kemper Financial
Companies, Inc.
Director, President, Kemper International Management, Inc.
Director, Kemper Investors Life Insurance Company
Trustee and President, Kemper Funds
Vice President, Kemper Portfolio Corp.
Director, Vice President, Kemper Real Estate, Inc.
C-4
<PAGE>
Director, Vice President, Kemper/Cymrot Management, Inc.
Director, Vice President, Kemper/Cymrot, Inc.
Vice President, KFC Portfolio Corp.
Director, Vice President, KI Arnold Industrial, Inc.
Director, Vice President, KI Canyon Park, Inc.
Director, Vice President, KI Centreville, Inc.
Director, Vice President, KI Colorado Boulevard, Inc.
Director, Vice President, KI Dublin Boulevard, Inc.
Director, Vice President, KI LaFiesta Square, Inc.
Director, Vice President, KI Lewinsville, Inc.
Director, Vice President, KI Monterey Research, Inc.
Director, Vice President, KI Olive Street, Inc.
Director, Vice President, KI Sutter Street, Inc.
Director, Vice President, KI Thornton Boulevard, Inc.
Vice President, KILICO Realty Corporation
Director, Vice President, KR 77 Fitness Center, Inc.
Director, Vice President, KR Avondale Redmond, Inc.
Director, Vice President, KR Black Mountain, Inc.
Director, Vice President, KR Brannan Resources, Inc.
Director, Vice President, KR Clay Capital, Inc.
Director, Vice President, KR Cranbury, Inc.
Director, Vice President, KR Delta Wetlands, Inc.
Director, Vice President, KR Gainesville, Inc.
Director, Vice President, KR Hotels, Inc.
Director, Vice President, KR Lafayette Apartments, Inc.
Director, Vice President, KR Lafayette BART, Inc.
Director, Vice President, KR Palm Plaza, Inc.
Director, Vice President, KR Red Hill Associates, Inc.
Director, Vice President, KR Seagate/Gateway North, Inc.
Director, Vice President, KR Venture Way, Inc.
Director, Vice President, KR Walnut Creek, Inc.
Director, The LTV Corporation
Director, Investment Analysts Society of Chicago
NEAL, JOHN E.
Director, President and Chief Operating Officer, Kemper Financial Services,
Inc.,
Senior Vice President, Kemper Corporation
Director, President, Kemper Service Company
Director, Kemper Distributors, Inc.
Director, Kemper Asset Management Company
Director, Dreman Value Advisors, Inc.
Director, Ardenwood Financial Corporation
Director, Avondale Redmond, Inc.
Director, Black Mountain, Inc.
Director, Brannan Resources, Inc.
Director, Butterfield Financial Corporation
Director, Camelot Financial Corporation
Director, Clay Capital, Inc.
Director, Coast Broadcasting Company
C-5
<PAGE>
Director, Crow Canyon, Inc.
Director, Hawaii Kai Development Company
Director, Kacor Gateway, Inc.
Director, Kailua Associates, Inc.
Director, Kacor Trust Deed Company
Director, Community Investment Corporation
Director, Continental Community Development Corporation
Director, President, Kemper Real Estate, Inc.
Director, President, Kemper Cymrot, Inc.
Director, President, Cymrot Management, Inc.
Director, President, FKLA Loire Court, Inc.
Director, Vice President, FKLA Realty Corporation
Director, President, FLA First Nationwide, Inc.
Director, President, FLA Plate Building, Inc.
Director, Vice President, FLA Realty Corporation
Director, Kemper/Lumbermens Properties, Inc.
Director, Senior Vice President, Kemper Real Estate Management Company
Director, KRDC, Inc.
Director, Lafayette Apartments, Inc.
Director, Lafayette Hills, Inc.
Director, Margarita Village Retirement Community, Inc.
Director, Mesa Homes
Director, Mesa Homes Brokerage Company
Director, Mount Doloroes Corporation
Director, Montgomery Gallery, Inc.
Director, Monterey Research Park, Inc.
Director, One Corporate Centre, Inc.
Director, Pacific Homes, Inc.
Director, Palomar Triad, Inc.
Director, Pine/Battery Properties, Inc.
Director, Rancho and Industrial Property Brokerage, Inc.
Director, Rancho California, Inc.
Director, Rancho Regional Shopping Center, Inc.
Director, Red Hill Associates, Inc.
Director, Seagate Associates, Inc.
Director, Seattle Gateway, Inc.
Director, Sutter Street, Inc.
Director, Technology Way, Inc.
Director, Time DC, Inc.
Director, Tourelle Corporation
Director, Two Corporate Centre, Inc.
Director, Venture Way, Inc.
Director, Vice President, Kemper Portfolio Corporation
Director, Vice President, KFC Portfolio Corporation
Director, Vice President, KILICO Realty Corporation
Director, President, KI Arnold Industrial, Inc.
Director, President, KI Canyon Park, Inc.
Director, President, KI Centreville, Inc.
Director, President, KI Colorado Boulevard, Inc.
Director, President, KI Dublin Boulevard, Inc.
Director, President, KI LaFiesta Square, Inc.
C-6
<PAGE>
Director, President, KI Lewinsville, Inc.
Director, President, KI Monterey Research, Inc.
Director, President, KI Olive Street, Inc.
Director, President, KI Thornton Boulevard, Inc.
Director, President, KI Sutter Street, Inc.
Director, President, KR 77 Fitness Center, Inc.
Director, President, KR Avondale Redmond, Inc.
Director, President, KR Black Mountain, Inc.
Director, President, KR Brannan Resources, Inc.
Director, President, KR Clay Capital, Inc.
Director, President, KR Cranbury, Inc.
Director, President, KR Delta Wetlands, Inc.
Director, President, KR Gainesville, Inc.
Director, President, KR Hotels, Inc.
Director, President, KR Lafayette Apartments, Inc.
Director, President, KR Lafayette BART, Inc.
Director, President, KR Palm Plaza, Inc.
Director, President, KR Red Hill Associates, Inc.
Director, President, KR Seagate/Gateway North, Inc.
Director, President, KR Venture Way, Inc.
Director, President, KR Walnut Creek, Inc.
Director, K-P Greenway, Inc.
Director, K-P Plaza Dallas, Inc.
Director, Kemper/Prime Acquisition Fund, Inc.
Director, KRDC, Inc.
Director, RespiteCare
Director, President, SMS Realty Corp.
Director, Urban Shopping Centers, Inc.
Vice President, Kemper-Dreman Fund, Inc.
Vice President, Kemper Value Plus Growth Fund
Vice President, Kemper Quantitative Equity Fund
Vice President, Kemper Horizon Fund
PETERS, JOHN E.
Director, Senior Executive Vice President, Kemper Financial
Services, Inc.
Director, Dreman Value Advisors, Inc.
Director, President, Kemper Distributors, Inc.
Vice President, Kemper Asset Management Company
Vice President, Kemper Funds
Director, Kemper Service Company
FITZPATRICK, JOHN H.
Director, Chief Financial Officer, Kemper Financial Services, Inc.
Director, Ardenwood Financial Corporation
Director, Camelot Financial Corporation
Director, Crow Canyon, Inc.
Director, Hawaii Kai Development Company
Director, Kacor Gateway, Inc.
Director, Kacor Trust Deed Company
Director, Senior Vice President and Chief Financial Officer,
C-7
<PAGE>
Federal Kemper Life Assurance Company
Senior Vice President, Chief Financial Officer, Fidelity Life
Association
Director, Vice President, FKLA Loire Court, Inc.
Director, Vice President, FLA First Nationwide, Inc.
Director, Vice President, FLA Plate Building, Inc.
Director, Executive Vice President and Chief Financial Officer,
Kemper Corporation
Director, Executive Vice President and Chief Financial
Officer, Kemper Financial Companies, Inc.
Senior Vice President, Kemper Investors Life Insurance Company
Director, Vice President, Kemper/Cymrot Management, Inc.
Director, Vice President, Kemper/Cymrot, Inc.
Director, Vice President, Kemper/Lumbermens Properties, Inc.
Director, Senior Vice President, Kemper Real Estate Management
Company
Director, KRDC, Inc.
Director, Margarita Village Retirement Community, Inc.
Director, Mesa Homes
Director, Mesa Homes Brokerage Company
Director, Montgomery Gallery, Inc.
Director, One Corporate Centre, Inc.
Director, Pacific Homes, Inc.
Director, Palomar Triad, Inc.
Director, Pine/Battery Properties, Inc.
Director, Rancho and Industrial Property Brokerage, Inc.
Director, Rancho California, Inc.
Director, Rancho Regional Shopping Center, Inc.
Director, Seattle Gateway, Inc.
Director, SMS Realty Corporation
Director, Sutter Street, Inc.
Director, Time DC, Inc.
Director, Two Corporate Centre, Inc.
Director, Vice President, KFC Portfolio Corp.
Director, Vice President, KI Arnold Industrial, Inc.
Director, Vice President, KI Canyon Park, Inc.
Director, Vice President, KI Centreville, Inc.
Director, Vice President, KI Colorado Boulevard, Inc.
Director, Vice President, KI Dublin Boulevard, Inc.
Director, Vice President, KI LaFiesta Square, Inc.
Director, Vice President, KI Lewinsville, Inc.
Director, Vice President, KI Monterey Research, Inc.
Director, Vice President, KI Olive Street, Inc.
Director, Vice President, KI Sutter Street, Inc.
Director, Vice President, KI Thornton Boulevard, Inc.
Director, Vice President, KILICO Realty Corporation
Director, Vice President, KR 77 Fitness Center, Inc.
Director, Vice President, KR Avondale Redmond, Inc.
Director, Vice President, KR Black Mountain, Inc.
Director, Vice President, KR Brannan Resources, Inc.
Director, Vice President, KR Clay Capital, Inc.
Director, Vice President, KR Cranbury, Inc.
Director, Vice President, KR Delta Wetlands, Inc.
Director, Vice President, KR Gainesville, Inc.
C-8
<PAGE>
Director, Vice President, KR Hotels, Inc.
Director, Vice President, KR Lafayette Apartments, Inc.
Director, Vice President, KR Lafayette BART, Inc.
Director, Vice President, KR Palm Plaza, Inc.
Director, Vice President, KR Red Hill Associates, Inc.
Director, Vice President, KR Seagate/Gateway North, Inc.
Director, Vice President, KR Venture Way, Inc.
Director, Vice President, KR Walnut Creek, Inc.
BEIMFORD, JR., JOSEPH P.
Executive Vice President, Kemper Financial Services, Inc.
Vice President, Cash Account Trust
Vice President, Cash Equivalent Fund
Vice President, Galaxy Offshore, Inc.
Vice President, Investors Cash Trust
Vice President, Kemper Adjustable Rate U.S. Government Fund
Vice President, Kemper Diversified Income Fund
Vice President, Kemper Global Income Fund
Vice President, Kemper High Income Trust
Vice President, Kemper High Yield Fund
Vice President, Kemper Income and Capital Preservation Fund
Vice President, Kemper Intermediate Government Trust
Vice President, Kemper International Bond Fund
Vice President, Kemper Investors Fund
Vice President, Kemper Money Market Fund
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Municipal Income Trust
Vice President, Kemper National Tax-Free Income Series
Vice President, Kemper Portfolios
Vice President, Kemper State Tax-Free Income Series
Vice President, Kemper Strategic Income Fund
Vice President, Kemper Strategic Municipal Income Trust
Vice President, Kemper U.S. Government Securities Fund
Vice President, Sterling Funds
Vice President, Tax-Exempt California Money Market Fund
Vice President, Tax-Exempt New York Money Market Fund
CHAPMAN II, WILLIAM E.
Executive Vice President, Kemper Financial Services, Inc.
Director, Executive Vice President, Kemper Distributors, Inc.
COXON, JAMES H.
Executive Vice President, Kemper Financial Services, Inc.
Director, Vice President, Galaxy Offshore, Inc.
Executive Vice President, Kemper Asset Management Company
FERRO, DENNIS H.
Executive Vice President, Kemper Financial Services, Inc.
Vice President, Kemper International Fund
Director, Managing Director-Equities, Kemper Investment Management
Company Limited
Vice President, Kemper Investors Fund
Vice President, Kemper Target Equity Fund
C-9
<PAGE>
Vice President, The Growth Fund of Spain, Inc.
GREENAWALT, JAMES L.
Executive Vice President, Kemper Financial Services, Inc.
Director, Executive Vice President, Kemper Distributors, Inc.
JOHNS, GORDON K.
Executive Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Global Income Fund
Vice President, Kemper Diversified Income Fund
Vice President, Kemper International Bond Fund
Vice President, Kemper International Management, Inc.
Managing Director and Joint Secretary, Kemper Investment
Management Company Limited
Vice President, Kemper Multi-Market Income Trust
Director, Thames Heritage Parade Limited
LANGBAUM, GARY A.
Executive Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Total Return Fund
Vice President, Kemper Investors Fund
REYNOLDS, STEVEN H.
Executive Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Technology Fund
Vice President, Kemper Total Return Fund
Vice President, Kemper Growth Fund
Vice President, Kemper Small Capitalization Equity Fund
Vice President, Kemper International Fund
Vice President, Kemper Blue Chip Fund
Vice President, Kemper Value Plus Growth Fund
Vice President, Kemper Quantitative Equity Fund
SILIGMUELLER, DALE S.
Executive Vice President, Kemper Financial Services, Inc.
Director, Executive Vice President, Kemper Service Company
BUKOWSKI, DANIEL J.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Quantitative Equity Fund
Vice President, Kemper Value Plus Growth Fund
BUTLER, DAVID H.
Senior Vice President, Kemper Financial Services, Inc.
CERVONE, DAVID M.
Senior Vice President, Kemper Financial Services, Inc.
CESSINE, ROBERT S.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Income and Capital Preservation Fund
Vice President, Kemper Diversified Income Fund
Vice President, Kemper Multi-Market Income Trust
CHESTER, TRACY McCORMICK
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Blue Chip Fund
Vice President, Kemper Target Equity Fund
CIARLELLI, ROBERT W.
Senior Vice President, Kemper Financial Services, Inc.
Executive Vice President, Kemper Service Company
C-10
<PAGE>
COLLECCHIA, FRANK E.
Senior Vice President, Kemper Financial Services, Inc.
Senior Investment Officer, Federal Kemper Life Assurance
Company
Senior Investment Officer, Fidelity Life Association
Vice President, FKLA Loire Court, Inc.
Vice President, FLA First Nationwide, Inc.
Vice President, FLA Plate Building, Inc.
Vice President, Galaxy Offshore, Inc.
Senior Investment Officer, Kemper Investors Life Insurance
Company
Vice President, KI Arnold Industrial, Inc.
Vice President, KI Canyon Park, Inc.
Vice President, KI Centreville, Inc.
Vice President, KI Colorado Boulevard, Inc.
Vice President, KI Dublin Boulevard, Inc.
Vice President, KI LaFiesta Square, Inc.
Vice President, KI Lewinsville, Inc.
Vice President, KI Monterey Research, Inc.
Vice President, KI Olive Street, Inc.
Vice President, KI Sutter Street, Inc.
Vice President, KI Thornton Boulevard, Inc.
Vice President, KR 77 Fitness Center, Inc.
Vice President, KR Avondale Redmond, Inc.
Vice President, KR Black Mountain, Inc.
Vice President, KR Brannan Resources, Inc.
Vice President, KR Clay Capital, Inc.
Vice President, KR Cranbury, Inc.
Vice President, KR Delta Wetlands, Inc.
Vice President, KR Gainesville, Inc.
Vice President, KR Halawa Associates, Inc.
Vice President, KR Hotels, Inc.
Vice President, KR Lafayette Apartments, Inc.
Vice President, KR Lafayette BART, Inc.
Vice President, KR Palm Plaza, Inc.
Vice President, KR Red Hill Associates, Inc.
Vice President, KR Seagate/Gateway North, Inc.
Vice President, KR Venture Way, Inc.
Vice President, KR Walnut Creek, Inc.
COLLORA, PHILIP J.
Senior Vice President and Assistant Secretary, Kemper Financial
Services, Inc.
Vice President and Secretary, Kemper Funds
DIERENFELDT, DAVID F.
Senior Vice President, Associate General Counsel,
Assistant Secretary, Kemper Financial Services, Inc.
Vice President and Secretary, Kemper Distributors, Inc.
Secretary, Dreman Value Advisors, Inc.
Assistant Secretary, Galaxy Offshore, Inc.
C-11
<PAGE>
Director, Secretary, INVEST Financial Corporation
Secretary, INVEST Financial Corporation Holding Company
Assistant Secretary, Investors Brokerage Services
Insurance Agency, Inc.
Assistant Secretary, Investors Brokerage Services, Inc.
Secretary, Kemper Asset Management Company
Assistant Secretary, Kemper International Management, Inc.
Assistant Secretary, Kemper Investment Management Company
Limited
Vice President and Assistant Secretary, Kemper Investors Fund
Secretary, Kemper Service Company
DUDASIK, PATRICK H.
Senior Vice President, Kemper Financial Services, Inc.
Executive Vice President, Chief Financial Officer and Treasurer,
Dreman Value Advisors, Inc.
Vice President and Treasurer, Kemper Asset Management Company
Treasurer and Chief Financial Officer, Kemper Distributors, Inc.
Treasurer and Chief Financial Officer, Kemper Service Company
Director and Treasurer, Kemper Investment Management Company
Limited
DUFFY, JEROME L.
Senior Vice President, Kemper Financial Services, Inc.
Treasurer, Kemper Funds
GALLAGHER, MICHAEL L.
Senior Vice President, Kemper Financial Services, Inc.
Senior Vice President, Kemper Service Company
GLASSMAN, HARVEY
Senior Vice President, Kemper Financial Services, Inc.
GOERS, RICHARD A.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Technology Fund
GUENTHER, HAROLD E.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Galaxy Offshore, Inc.
HUSSEY, KAREN A.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Investors Fund
Vice President, Kemper Small Capitalization Equity Fund
INNES, BRUCE D.
Senior Vice President, Kemper Financial Services, Inc.
Co-President, International Association of Corporate and
Professional Recruiters
C-12
<PAGE>
KLEIN, GEORGE
Senior Vice President, Kemper Financial Services, Inc.
Director, Executive Vice President, Kemper Asset Management
Company
KORTH, FRANK D.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Technology Fund
McNAMARA, MICHAEL A.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Diversified Income Fund
Vice President, Kemper High Income Trust
Vice President, Kemper High Yield Fund
Vice President, Kemper Investors Fund
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Strategic Income Fund
MIER, CHRISTOPHER J.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper National Tax-Free Income Series
Vice President, Kemper Municipal Income Trust
Vice President, Kemper State Tax-Free Income Series
Vice President, Kemper Strategic Municipal Income Trust
Vice President, Sterling Funds
MURRIHY, MAURA J.
Senior Vice President, Kemper Financial Services, Inc.
NATHANSON, IRA
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Corporation
RABIEGA, CRAIG F.
Senior Vice President, Kemper Financial Services, Inc.
First Vice President, Kemper Service Company
RACHWALSKI, JR. FRANK J.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Cash Account Trust
Vice President, Cash Equivalent Fund
Vice President, Investors Cash Trust
Vice President, Kemper Investors Fund
Vice President, Kemper Money Market Fund
Vice President, Kemper Portfolios
C-13
<PAGE>
Vice President, Sterling Funds
Vice President, Tax-Exempt California Money Market Fund
Vice President, Tax-Exempt New York Money Market Fund
REGNER, THOMAS M.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Horizon Fund
RESIS, JR., HARRY E.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Diversified Income Fund
Vice President, Kemper High Income Trust
Vice President, Kemper High Yield Fund
Vice President, Kemper Investors Fund
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Strategic Income Fund
SCHUMACHER, ROBERT T.
Senior Vice President, Kemper Financial Services, Inc.
SLOAN, PAUL F.
Senior Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Investors Fund
Vice President, Kemper Intermediate Government Trust
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Strategic Income Fund
Vice President, Kemper Diversified Income Fund
Vice President, Kemper Portfolios
Vice President, Kemper U.S. Government Securities Fund
Vice President, Kemper Adjustable Rate U.S. Government Fund
SMITH, JR., EDWARD BYRON
Senior Vice President, Kemper Financial Services, Inc.
VINCENT, CHRISTOPHER T.
Senior Vice President, Kemper Financial Services, Inc.
First Vice President, Kemper Asset Management Company
BAZAN, KENNETH M.
First Vice President, Kemper Financial Services, Inc.
Director, K-P Greenway, Inc.
Director, K-P Plaza Dallas, Inc.
Director, Kemper/Prime Acquisition Fund, Inc.
BOEHM, JONATHAN J.
First Vice President, Kemper Financial Services, Inc.
Senior Vice President, Kemper Service Company
BURROW, DALE R.
First Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Strategic Municipal Income Trust
BYRNES, ELIZABETH A.
First Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Adjustable Rate U.S. Government Fund
Vice President, Kemper Intermediate Government Trust
C-14
<PAGE>
CHIEN, CHRISTINE
First Vice President, Kemper Financial Services, Inc.
DeMAIO, CHRIS C.
First Vice President, Kemper Financial Services, Inc.
Vice President and Chief Accounting Officer, Kemper Service
Company
DEXTER, STEPHEN P.
First Vice President, Kemper Financial Services, Inc.
DOYLE, DANIEL J.
First Vice President, Kemper Financial Services, Inc.
FENGER, JAMES E.
First Vice President, Kemper Financial Services, Inc.
HALE, DAVID D.
First Vice President, Kemper Financial Services, Inc.
HARRINGTON, MICHAEL E.
First Vice President, Kemper Financial Services, Inc.
HORTON, ROBERT J.
First Vice President, Kemper Financial Services, Inc.
JACOBS, PETER M.
First Vice President, Kemper Financial Services, Inc.
KEELEY, MICHELLE M.
First Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Intermediate Government Trust
Vice President, Kemper Portfolios
KIEL, CAROL L.
First Vice President, Kemper Financial Services, Inc.
LAUGHLIN, ANN M.
First Vice President, Kemper Financial Services, Inc.
LENTZ, MAUREEN P.
First Vice President, Kemper Financial Services, Inc.
McCRINDLE-PETRARCA, SUSAN
First Vice President, Kemper Financial Services, Inc.
MINER, EDWARD
First Vice President, Kemper Financial Services, Inc.
MURRAY, SCOTT S.
First Vice President, Kemper Financial Services, Inc.
C-15
<PAGE>
Vice President, Kemper Service Company
PAYNE, III, ROBERT D.
First Vice President, Kemper Financial Services, Inc.
PANOZZO, ROBERTA L.
First Vice President, Kemper Financial Services, Inc.
RADIS, STEVE A.
First Vice President, Kemper Financial Services, Inc.
RATEKIN, DIANE E.
First Vice President, Assistant General Counsel and Assistant
Secretary, Kemper Financial Services, Inc.
Assistant Secretary, Kemper Distributors, Inc.
SILVIA, JOHN E.
First Vice President, Kemper Financial Services, Inc.
STUEBE, JOHN W.
First Vice President, Kemper Financial Services, Inc.
Vice President, Cash Account Trust
Vice President, Cash Equivalent Fund
THOUIN-LEERKAMP, EDITH A.
First Vice President, Kemper Financial Services, Inc.
Director-European Equities, Kemper Investment Management Company Limited
TRUTTER, JONATHAN W.
First Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Diversified Income Fund
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Strategic Income Fund
WETHERALD, ROBERT F.
First Vice President, Kemper Financial Services, Inc.
WILLSON, STEPHEN R.
First Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Strategic Municipal Income Trust
WITTNEBEL, MARK E.
First Vice President, Kemper Financial Services, Inc.
BARRY, JOANN M.
Vice President, Kemper Financial Services, Inc.
BODEM, RICHARD A.
Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Service Company
C-16
<PAGE>
CARNEY, ANNE T.
Vice President, Kemper Financial Services, Inc.
CARTER, PAUL J.
Vice President, Kemper Financial Services, Inc.
CHRISTIANSEN, HERBERT A.
Vice President, Kemper Financial Services, Inc.
First Vice President, Kemper Service Company
COHEN, JERRI I.
Vice President, Kemper Financial Services, Inc.
ESOLA, CHARLES J.
Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Service Company
FRIHART, THORA A.
Vice President, Kemper Financial Services, Inc.
GERACI, AUGUST L.
Vice President, Kemper Financial Services, Inc.
GERICKE, KATHLEEN E.
Vice President, Kemper Financial Services, Inc.
GOLAN, JAMES S.
Vice President, Kemper Financial Services, Inc.
HESS, THOMAS L.
Vice President, Kemper Financial Services, Inc.
HUOT, LISA L.
Vice President, Kemper Financial Services, Inc.
KARWOWSKI, KENNETH F.
Vice President, Kemper Financial Services, Inc.
KNAPP, WILLIAM M.
Vice President, Kemper Financial Services, Inc.
KOCH, DEBORAH L.
Vice President, Kemper Financial Services, Inc.
KOURY, KATHRYN E.
Vice President, Kemper Financial Services, Inc.
KRANZ, KATHY J.
Vice President, Kemper Financial Services, Inc.
KRUEGER, PAMELA D.
Vice President, Kemper Financial Services, Inc.
C-17
<PAGE>
KYCE, JOYCE
Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Service Company
LeFEBVRE, THOMAS J.
Vice President, Kemper Financial Services, Inc.
MANGIPUDI, V. RAO
Vice President, Kemper Financial Services, Inc.
McGOVERN, KAREN B.
Vice President, Kemper Financial Services, Inc.
MILLER, MAUREEN A.
Vice President, Kemper Financial Services, Inc.
MITCHELL, KATHERINE H.
Vice President, Kemper Financial Services, Inc.
MURPHY, THOMAS M.
Vice President, Kemper Financial Services, Inc.
NEVILLE, BRIAN P.
Vice President, Kemper Financial Services, Inc.
PANOZZO, ALBERT R.
Vice President, Kemper Financial Services, Inc.
PONTECORE, SUSAN E.
Vice President, Kemper Financial Services, Inc.
QUADRINI, LISA L.
Vice President, Kemper Financial Services, Inc.
ROKOSZ, PAUL A.
Vice President, Kemper Financial Services, Inc.
ROSE, KATIE M.
Vice President, Kemper Financial Services, Inc.
SHULTZ, KAREN D.
Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Service Company
SMITH, ROBERT G.
Vice President, Kemper Financial Services, Inc.
SOPHER, EDWARD O.
Vice President, Kemper Financial Services, Inc.
STROMM, LAWRENCE D.
Vice President, Kemper Financial Services, Inc.
C-18
<PAGE>
TEPPER, SHARYN A.
Vice President, Kemper Financial Services, Inc.
VANDEMERKT, RICHARD J.
Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Service Company
WATKINS, JAMES K.
Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Service Company
WERTH, ELIZABETH C.
Vice President, Kemper Financial Services, Inc.
Vice President, Kemper Distributors, Inc.
Assistant Secretary, Kemper Mutual Funds
Assistant Secretary, Kemper International Bond Fund
Assistant Secretary, Kemper Target Equity Fund
Assistant Secretary, Sterling Funds
Assistant Secretary, Kemper-Dreman Fund, Inc.
Assistant Secretary, Kemper Horizon Fund
WIZER, BARBARA K.
Vice President, Kemper Financial Services, Inc.
ZURAWSKI, CATHERINE N.
Vice President, Kemper Financial Services, Inc.
C-19
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Kemper Distributors, Inc. acts as principal underwriter and distributor
of the Registrant's shares and acts as principal underwriter of the Kemper
Mutual Funds, Kemper Investors Fund, Sterling Funds, Kemper International Bond
Fund and Kemper-Dreman Fund, Inc.
(b) Information on the officers and directors of Kemper Distributors, Inc.,
principal underwriter for the Registrant is set forth below. The principal
business address is 120 South LaSalle Street, Chicago, Illinois 60603.
<TABLE>
<CAPTION>
POSITIONS AND
POSITIONS AND OFFICES OFFICES WITH
NAME WITH UNDERWRITER REGISTRANT
---- --------------------- -------------
<S> <C> <C>
John E. Peters........... Principal, Director, President Vice President
William E. Chapman, II... Director, Executive Vice President None
James L. Greenawalt...... Director, Executive Vice President None
John E. Neal............. Director None
Stephen B. Timbers....... Director President, Trustee
Patrick H. Dudasik....... Financial Principal, Treasurer
and Chief Financial Officer None
Linda A. Bercher......... Senior Vice President None
Thomas V. Bruns.......... Senior Vice President None
Terry Cunningham......... Senior Vice President None
Daniel T. O'Lear......... Senior Vice President None
John H. Robison, Jr...... Senior Vice President None
Henry J. Schulthesz...... Senior Vice President None
David F. Dierenfeldt..... Vice President, Secretary None
Carlene D. Merold........ Vice President None
Elizabeth C. Werth....... Vice President Assistant Secretary
Kathleen A. Gallichio.... Assistant Secretary None
Diane E. Ratekin......... Assistant Secretary None
</TABLE>
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other documents are maintained at the offices of the
Registrant, the offices of Registrant's investment adviser, Kemper Financial
Services, Inc. and the Registrant's principal underwriter, Kemper
Distributors, Inc., 120 South LaSalle Street, Chicago, Illinois 60603 or, in
the case of records concerning custodial functions, at the offices of the
custodian, Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street,
Kansas City, Missouri 64105 or, in the case of records concerning transfer
agency functions, at the offices of IFTC and of the shareholder service agent,
Kemper Service Company, 811 Main Street, Kansas City, Missouri 64105.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
Not applicable.
C-20
<PAGE>
S I G N A T U R E S
-------------------
Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant
certifies that it meets all of the requirements for
effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of
Chicago and State of Illinois, on the 10th day of November,
1995.
KEMPER MONEY MARKET FUND
By /s/ Stephen B. Timbers
-----------------------------
Stephen B. Timbers, President
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below on
November 10, 1995 on behalf of the following persons in the
capacities indicated.
Signature Title
--------- -----
/s/ Stephen B. Timbers President
-------------------------------------- (Principal
Stephen B. Timbers Executive Officer)
and Trustee
/s/David W. Belin* Trustee
--------------------------------------
/s/Lewis A. Burnham* Trustee
--------------------------------------
/s/Donald L. Dunaway* Trustee
--------------------------------------
/s/Robert B. Hoffman* Trustee
--------------------------------------
/s/Donald R. Jones* Trustee
--------------------------------------
/s/David B. Mathis* Trustee
--------------------------------------
/s/Shirley D. Peterson* Trustee
--------------------------------------
/s/William P. Sommers* Trustee
--------------------------------------
/s/ Jerome L. Duffy
-------------------------------------- Treasurer
Jerome L. Duffy (Principal
Financial and
Accounting Officer)
*Philip J. Collora signs this document pursuant to powers of
attorney filed herewith.
/s/ Philip J. Collora
-----------------------------
Philip J. Collora
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
REFERENCE
---------
<C> <S> <C>
99.B1(a) Amended and Restated Agreement and Declaration of Trust.
99.B1(b) Written Instrument Amending the Agreement and Declaration of
Trust.
99.B1(c) Written Instrument Amending the Agreement and Declaration of
Trust.
99.B2 By-Laws.
99.B3 Inapplicable.
99.B4 Text of Share Certificate.
99.B5(a) Investment Management Agreement.
99.B5(b) Notification of Additional Portfolio (Government Securities
Portfolio).
99.B5(c) Notification of Additional Portfolio (Tax-Exempt Portfolio).
99.B6(a) Underwriting Agreement.
99.B6(b) Assignment and Assumption Agreement.
99.B6(c) Selling Group Agreement.
99.B7 Inapplicable.
99.B8(a) Custody Agreement.
99.B9(a) Agency Agreement.
99.B9(b) Supplement to Agency Agreement.
99.B10 Legal Opinion and Consent.
99.B11 Report and Consent of Independent Auditors.
99.B12 Inapplicable.
99.B13 Inapplicable.
99.B14(a) Kemper Retirement Plan Prototype.
99.B14(b) Model Individual Retirement Account.
99.B15 Inapplicable.
99.B16 Performance Calculations.(1)
99.B18 Inapplicable.
99.B24 Powers of Attorney.
27.1 Financial Data Schedule for Money Market Portfolio.
27.2 Financial Data Schedule for Government Securities Portfolio.
27.3 Financial Data Schedule for Tax-Exempt Portfolio.
99.485(b) Representation of Counsel (Rule 485 (b)).
</TABLE>
- --------
(1) Incorporated herein by reference to Amendment No. 40 on Form N-1A filed on
or about October 31, 1994.
<PAGE>
KEMPER MONEY MARKET FUND
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
----------------------------------
WHEREAS, Article IX, Section 4 of the Agreement and
Declaration of Trust of Kemper Money Market Fund dated August
9, 1985 provides that the Agreement and Declaration of Trust
may be amended at any time by an instrument in writing signed
by a majority of the then Trustees when authorized so to do
by vote of Shareholders holding a majority of the Shares
entitled to vote;
WHEREAS, the holders of a majority of the Shares
entitled to vote have authorized this Amendment and
Restatement of said Agreement and Declaration of Trust;
NOW, THEREFORE, said Agreement and Declaration of Trust
is amended and restated to read in its entirety as follows:
WITNESSETH
WHEREAS, this Trust has been formed for the purposes of
carrying on the business of a management investment company;
and
WHEREAS, in furtherance of such purposes, the Trustees
have acquired and may hereafter acquire assets and
properties, to hold and manage as trustees of a Massachusetts
voluntary association with transferable shares in accordance
with the provisions hereinafter set forth,
NOW, THEREFORE, the Trustees hereby declare that they
will hold all cash, securities and other assets and
properties, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose
of the same upon the following terms and conditions for the
pro rata benefit of the holders from time to time of shares
in this Trust as hereinafter set forth.
<PAGE>
ARTICLE I
---------
Name and Definitions
--------------------
Name and Registered Agent
-------------------------
Section 1. This Trust shall be known as "KEMPER MONEY
MARKET FUND" and the Trustees shall conduct the business of
the Trust under that name or any other name as they may from
time to time determine. The registered agent for the Trust
in Massachusetts shall be CT Corporation System whose address
is 2 Oliver Street, Boston, Massachusetts or such other
person as the Trustees may from time to time designate.
Definitions
-----------
Section 2. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "Trust" refers to the Massachusetts
voluntary association established by this Agreement and
Declaration of Trust, as amended from time to time,
pursuant to Massachusetts General Laws, Chapter 182;
(b) "Trustees" refers to the Trustees of the Trust
named herein or elected in accordance with Article IV and
then in office;
(c) "Shares" mean the equal proportionate
transferable units of interest into which the beneficial
interest in the Trust shall be divided from time to time
or, if more than one series is authorized under or
pursuant to Article III, the equal proportionate
transferable units of interest into which each such
series shall be divided from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company
Act of 1940 (and any successor statute) and the Rules and
Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person", "Assignment",
"Commission", "Interested Person", "Principal
Underwriter" and "vote of a majority of the outstanding
voting securities" shall have the meanings given them in
the 1940 Act;
2
<PAGE>
(g) "Declaration of Trust" shall mean this
Agreement and Declaration of Trust as amended or restated
from time to time;
(h) "By-Laws" shall mean the By-Laws of the Trust
as amended from time to time;
(i) "Net asset value" shall have the meaning set
forth in Section 6 of Article VI hereof.
ARTICLE II
Nature and Purpose
------------------
The Trust is a voluntary association (commonly known as
a business trust) of the type referred to in Chapter 182 of
the General Laws of the Commonwealth of Massachusetts. The
Trust is not intended to be, shall not be deemed to be, and
shall not be treated as, a general or a limited partnership,
joint venture, corporation or joint stock company, nor shall
the Trustees or Shareholders or any of them for any purpose
be deemed to be, or be treated in any way whatsoever as
though they were, liable or responsible hereunder as partners
or joint venturers. The purpose of the Trust is to engage
in, operate and carry on the business of an open-end
management investment company and to do any and all acts or
things as are necessary, convenient, appropriate, incidental
or customary in connection therewith.
ARTICLE III
Shares
------
Division of Beneficial Interest
-------------------------------
Section 1. The Shares of the Trust shall be issued in
one or more series as the Trustees may, without Shareholder
approval, authorize from time to time. Each series shall be
preferred over all other series in respect of the assets
allocated to that series as hereinafter provided. The
beneficial interest in each series shall at all times be
divided into Shares (without par value) of such series, each
of which shall represent an equal proportionate interest in
such series with each other Share of the same series, none
having priority or preference over another Share of the same
series. The number of Shares authorized shall be unlimited,
and the Shares so authorized may be represented in part by
fractional Shares. The Trustees may from time to time divide
or combine the shares of any series into a greater or lesser
3
<PAGE>
number without thereby changing the proportionate beneficial
interests in the series. Without limiting the authority of
the Trustees set forth in this Section 1 to establish and
designate any further series, the Trustees hereby establish
and designate one series of Shares to be known as the "Money
Market Portfolio". The establishment and designation of any
series of Shares in addition to the foregoing shall be
effective upon the execution by a majority of the then
Trustees of an instrument setting forth such establishment
and designation and the relative rights and preferences of
such series. As provided in Article IX, Section 1 hereof,
any series of Shares (whether or not there shall then be
Shares outstanding of said series) may be terminated by the
Trustees by written notice to the Shareholders of such series
or by the vote of the Shareholders of such series entitled to
vote more than fifty percent (50%) of the votes entitled to
be cast on the matter. In the event of any such termination,
a majority of the then Trustees shall execute an instrument
setting forth the termination of such series.
Ownership of Shares
-------------------
Section 2. The ownership and transfer of Shares shall
be recorded on the books of the Trust or its transfer or
similar agent. No certificates certifying the ownership of
Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such
rules as they consider appropriate for the issuance of Share
certificates, the transfer of Shares and similar matters.
The record books of the Trust as kept by the Trust or any
transfer or similar agent of the Trust, as the case may be,
shall be conclusive as to who are the Shareholders of each
series and as to the number of Shares of each series held
from time to time by each Shareholder.
Investment in the Trust; Assets of a Series
-------------------------------------------
Section 3. The Trustees may issue Shares of the Trust
to such persons and on such terms and, subject to any
requirements of law, for such consideration, which may
consist of cash or tangible or intangible property or a
combination thereof, as they may from time to time authorize.
All consideration received by the Trust for the issue or
sale of Shares of a particular series, together with all
income, earnings, profits, and proceeds thereof, including
any proceeds derived from the sale, exchange or liquidation
thereof, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may
be, shall, irrevocably belong to such series of Shares for
4
<PAGE>
all purposes, subject only to the rights of creditors, and
shall be so handled upon the books of account of the Trust
and are herein referred to as "assets of" such series.
Right to Refuse Orders
----------------------
Section 4. The Trust by action of its Trustees shall
have the right to refuse to accept any subscription for its
Shares at any time without any cause or reason therefore
whatsoever. Without limiting the foregoing, the Trust shall
have the right not to accept subscriptions under
circumstances or in amounts as the Trustees in their sole
discretion consider to be disadvantageous to existing
Shareholders and the Trust may from time to time set minimum
and/or maximum amounts which may be invested in Shares by a
subscriber.
Order in Proper Form
--------------------
Section 5. The criteria for determining what
constitutes an order in proper form and the time of receipt
of such an order by the Trust shall be prescribed by
resolution of the Trustees.
When Shares Become Outstanding
------------------------------
Section 6. Shares subscribed for and for which an order
in proper form has been received shall be deemed to be
outstanding as of the time of acceptance of the order
therefor and the determination of the net price thereof,
which price shall be then deemed to be an asset of the Trust.
Merger or Consolidation
-----------------------
Section 7. In connection with the acquisition of all or
substantially all the assets or stock of another investment
company, investment trust, or of a company classified as a
personal holding company under Federal Income Tax laws, the
Trustees may issue or cause to be issued Shares of a series
and accept in payment therefor, in lieu of cash, such assets
at their market value, or such stock at the market value of
the assets held by such investment company or investment
trust, either with or without adjustment for contingent costs
or liabilities.
5
<PAGE>
No Preemptive Rights, Etc.
--------------------------
Section 8. Shareholders shall have no preemptive or
other right to receive, purchase or subscribe for any
additional Shares or other securities issued by the Trust.
The Shareholders shall have no appraisal rights with respect
to their Shares and, except as otherwise determined by the
Trustees in their sole discretion, shall have no exchange or
conversion rights with respect to their Shares.
Status of Shares and Limitation of Personal Liability
-----------------------------------------------------
Section 9. Shares shall be deemed to be personal
property giving only the rights provided in this instrument.
Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the
terms of the Declaration of Trust and to have become a party
thereto. The death of a Shareholder during the continuance
of the Trust shall not operate to terminate the same nor
entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but only to the rights of
said decedent under this Trust. Ownership of Shares shall
not entitle the Shareholder to any title in or to the whole
or any part of the Trust property or right to call for a
partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any
officer, employee or agent of the Trust shall have any power
to bind personally any Shareholder, nor except as
specifically provided herein to call upon any Shareholder for
the payment of any sum of money or assessment whatsoever
other than such as the Shareholder may at any time personally
agree to pay.
Shareholder Inspection Rights
-----------------------------
Section 10. Any Shareholder or his agent may inspect
and copy during normal business hours any of the following
documents of the Trust: By-Laws, minutes of the proceedings
of the Shareholders and annual financial statements of the
Trust, including a balance sheet and financial statements of
operations. The foregoing rights of inspection of
Shareholders of the Trust are the exclusive and sole rights
of the Shareholders with respect thereto and no Shareholder
of the Trust shall have, as a Shareholder, the right to
inspect or copy any of the books, records or other documents
of the Trust except as specifically provided in this Section
6
<PAGE>
10 of this Article III or except as otherwise determined by
the Trustees.
ARTICLE IV
The Trustees
------------
Number, Designation, Election, Term, Etc.
-----------------------------------------
Section 1.
----------
(a) Initial Trustee. Upon his execution of this
Declaration of Trust or a counterpart hereof or some
other writing in which he accepts such Trusteeship and
agrees to the provisions hereof, Charles M. Kierscht
shall become a Trustee hereof.
(b) Number. The Trustees serving as such, whether
named above or hereafter becoming Trustees, may increase
or decrease the number of Trustees to a number other than
the number theretofore determined which number shall not
be less than three nor more than fifteen except during
the period that the initial Trustee named above is sole
Trustee. No decrease in the number of Trustees shall
have the effect of removing any Trustee from office prior
to the expiration of his term, but the number of Trustees
may be decreased in conjunction with the removal of a
Trustee pursuant to subsection (e) of this Section 1.
(c) Term and Election. Each Trustee, whether named
above or hereafter becoming a Trustee, shall serve as a
Trustee until the next meeting of Shareholders, if any,
called for the purpose of considering the election or
re-election of such Trustee or of a successor to such
Trustee, and until the election and qualification of his
successor, if any, elected at such meeting, or until such
Trustee sooner dies, resigns, retires or is removed.
Upon the election and qualification of a new Trustee, the
Trust estate shall vest in the new Trustee (together with
the continuing or other new Trustees) without any further
act or conveyance. Prior to any sale of Shares pursuant
to any public offering, the initial Trustee named above
shall have the right to appoint other persons as Trustees
each to serve with such initial Trustee as aforesaid
until the first meeting of Shareholders called for the
purpose of the election or re-election of such Trustee or
of a successor to such Trustee.
7
<PAGE>
(d) Resignation and Retirement. Any Trustee may
resign his trust or retire as a Trustee, by written
instrument signed by him and delivered to the other
Trustees or to the Chairman of the Board, if any, the
President or the Secretary of the Trust, and such
resignation or retirement shall take effect upon such
delivery or upon such later date as is specified in such
instrument.
(e) Removal. Any Trustee may be removed for cause
at any time by written instrument, signed by at least a
majority of the number of Trustees prior to such removal,
specifying the date upon which such removal shall become
effective. Any Trustee may be removed with or without
cause (i) by the vote of the Shareholders entitled to
vote more than fifty percent (50%) of the votes entitled
to be cast on the matter voting together without regard
to series at any meeting called for such purpose, or (ii)
by a written consent filed with the custodian of the
Trust's portfolio securities and executed by the
Shareholders entitled to vote more than fifty percent
(50%) of the votes entitled to be cast on the matter
voting together without regard to series.
Whenever ten or more Shareholders of record who have
been such for at least six months preceding the date of
application, and who hold in the aggregate Shares
constituting at least one percent of the outstanding
Shares of the Trust, shall apply to the Trustees in
writing, stating that they wish to communicate with other
Shareholders with a view to obtaining signatures to a
request for a meeting to consider removal of a Trustee
and accompanied by a form of communication and request
that they wish to transmit, the Trustees shall within
five business days after receipt of such application
inform such applicants as to the approximate cost of
mailing to the Shareholders of record the proposed
communication and form of request. Upon the written
request of such applicants, accompanied by a tender of
the material to be mailed and of the reasonable expenses
of mailing, the Trustees shall, within reasonable
promptness, mail such material to all Shareholders of
record at their addresses as recorded on the books of the
Trust. Notwithstanding the foregoing, the Trustees may
refuse to mail such material on the basis and in
accordance with the procedures set forth in the last two
paragraphs of Section 16(c) of the Investment Company Act
of 1940 as amended.
(f) Vacancies. Any vacancy or anticipated vacancy
resulting from any reason, including without limitation
the death, resignation, retirement, removal or incapacity
8
<PAGE>
of any of the Trustees, or resulting from an increase in
the number of Trustees by the other Trustees may (but so
long as there are at least three remaining Trustees, need
not unless required by the 1940 Act) be filled either by
a majority of the remaining Trustees, even if less than a
quorum, through the appointment in writing of such other
person as such remaining Trustees in their discretion
shall determine or, whenever deemed appropriate by the
remaining Trustees, by the election by the Shareholders,
at a meeting called for such purpose, of a person to fill
such vacancy. Upon the appointment or election and
qualification of a new Trustee as aforesaid, the Trust
estate shall vest in the new Trustee, together with the
continuing Trustees, without any further act or
conveyance, except that any such appointment or election
in anticipation of a vacancy to occur by reason of
retirement, resignation, or increase in number of
Trustees to be effective at a later date shall become
effective only at or after the effective date of said
retirement, resignation, or increase in number of
Trustees.
(g) Mandatory Election by Shareholders.
Notwithstanding the foregoing provisions of this Section
1, the Trustees shall call a meeting of the Shareholders
for the election of one or more Trustees at such time or
times as may be required in order that the provisions of
the 1940 Act may be complied with, and the authority
hereinabove provided for the Trustees to appoint any
successor Trustee or Trustees shall be restricted if such
appointment would result in failure of the Trust to
comply with any provision of the 1940 Act.
(h) Effect of Death, Resignation, Etc. The death,
resignation, retirement, removal or incapacity of the
Trustees, or any one of them, shall not operate to annul
or terminate the Trust or to revoke or terminate any
existing agency or contract created or entered into
pursuant to the terms of this Declaration of Trust.
(i) No Accounting. Except under circumstances
which would justify his removal for cause, no person
ceasing to be a Trustee as a result of his death,
resignation, retirement, removal or incapacity (nor the
estate of any such person) shall be required to make an
accounting to the Shareholders or remaining Trustees upon
such cessation.
9
<PAGE>
Powers
------
Section 2. The Trustees, subject only to the specific
limitations contained in this Declaration of Trust or
otherwise imposed by the 1940 Act or other applicable law,
shall have, without further or other authorization and free
from any power or control of the Shareholders, full, absolute
and exclusive power, control and authority over the Trust
assets and the business and affairs of the Trust to the same
extent as if the Trustees were the sole and absolute owners
thereof in their own right and to do all such acts and things
as in their sole judgment and discretion are necessary and
incidental to, or desirable for the carrying out of any of
the purposes of the Trust or conducting the business of the
Trust. Any determination made in good faith by the Trustees
of the purposes of the Trust or the existence of any power or
authority hereunder shall be conclusive. In construing the
provisions of this Declaration of Trust, there shall be a
presumption in favor of the grant of power and authority to
the Trustees. Without limiting the foregoing, the Trustees
may adopt By-Laws not inconsistent with this Declaration of
Trust containing provisions relating to the business of the
Trust, the conduct of its affairs, its rights or powers and
the rights or powers of its Shareholders, Trustees, officers,
employees and other agents and may amend and repeal them to
the extent that such By-Laws do not reserve that right to the
Shareholders; fill vacancies in their number, including
vacancies resulting from increases in their number, unless a
vote of the Trust's Shareholders is required to fill such
vacancies pursuant to the 1940 Act; elect and remove such
officers and appoint and terminate such agents as they
consider appropriate; appoint from their own number, and
terminate, any one or more committees consisting of two or
more Trustees, including an executive committee which may,
when the Trustees are not in session, exercise some or all of
the powers and authority of the Trustees as the Trustees may
determine; appoint an advisory board, the members of which
shall not be Trustees and need not be Shareholders; employ
one or more investment advisers or managers as provided in
Section 6 of this Article IV; employ one or more custodians
of the assets of the Trust and authorize such custodians to
employ subcustodians and to deposit all or any part of such
assets in a system or systems for the central handling of
securities; retain a transfer agent or a Shareholder services
agent, or both; provide for the distribution of Shares by the
Trust, through one or more principal underwriters or
otherwise; set record dates for the determination of
Shareholders with respect to various matters; and in general
delegate such authority as they consider desirable to any
officer of the Trust, to any committee of the Trustees and to
10
<PAGE>
any agent or employee of the Trust or to any such custodian
or underwriter.
In furtherance of and not in limitation of the
foregoing, the Trustees shall have power and authority:
(a) To invest and reinvest in, to buy or otherwise
acquire, to hold, for investment or otherwise, to sell or
otherwise dispose of, to lend or to pledge, to trade in
or deal in securities or interests of all kinds, however
evidenced, or obligations of all kinds, however
evidenced, or rights, warrants, or contracts to acquire
such securities, interests, or obligations, of any
private or public company, corporation, association,
general or limited partnership, trust or other enterprise
or organization, foreign or domestic, or issued or
guaranteed by any national or state government, foreign
or domestic, or their agencies, instrumentalities or
subdivisions (including but not limited to, bonds,
debentures, bills, time notes and all other evidences of
indebtedness); negotiable or non-negotiable instruments;
any and all futures contracts; government securities and
money market instruments (including but not limited to,
bank certificates of deposit, finance paper, commercial
paper, bankers acceptances, and all kinds of repurchase
agreements);
(b) To invest and reinvest in, to buy or otherwise
acquire, to hold, for investment or otherwise, to sell or
otherwise dispose of foreign currencies, and funds and
exchanges, and make deposits in banks, savings banks,
trust companies, and savings and loan associations,
foreign or domestic;
(c) To acquire (by purchase, lease or otherwise)
and to hold, use, maintain, develop, and dispose of (by
sale or otherwise) any property, real or personal, and
any interest therein;
(d) To sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease any or all of the
assets of the Trust;
(e) To vote or give assent, or exercise any rights
of ownership, with respect to stock or other securities
or property; and to execute and deliver proxies or powers
of attorney to such person or persons as the Trustees
shall deem proper, granting to such person or persons
such power and discretion with relation to securities or
property as the Trustees shall deem proper;
11
<PAGE>
(f) To exercise powers and rights of subscription
or otherwise which in any manner arise out of ownership
of securities;
(g) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or
other negotiable form, or in the name of the Trustees or
of the Trust or in the name of a custodian, subcustodian
or other depositary or a nominee or nominees or
otherwise;
(h) To allocate assets, liabilities and expenses of
the Trust to a particular series of Shares or to
apportion the same among two or more series, provided
that any liabilities or expenses incurred by a particular
series shall be payable solely out of the assets of that
series;
(i) To consent to or participate in any plan for
the reorganization, consolidation or merger of any
corporation or issuer, any security or property of which
is or was held in the Trust; to consent to any contract,
lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions
with respect to any security held in the Trust;
(j) To join with other security holders in acting
through a committee, depositary, voting trustee or
otherwise, and in that connection to deposit any security
with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power
and authority with relation to any security (whether or
not so deposited or transferred) as the Trustees shall
deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such
committee, depositary or trustee as the Trustees shall
deem proper;
(k) To compromise, arbitrate or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy, including but not limited to claims for
taxes;
(l) To enter into joint ventures, general or
limited partnerships and any other combinations or
associations;
(m) To borrow funds;
(n) To endorse or guarantee the payment of any
notes or other obligations of any person; to make
contracts of guaranty or suretyship, or otherwise assume
12
<PAGE>
liability for payment thereof; and to mortgage and pledge
the Trust property or any part thereof to secure any of
or all such obligations;
(o) To purchase and pay for entirely out of Trust
property such insurance as they may deem necessary or
appropriate for the conduct of the business, including,
without limitation, insurance policies insuring the
assets of the Trust and payment of distribution and
principal on its portfolio investments, and insurance
policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers or managers,
principal underwriters, or independent contractors of the
Trust individually against all claims and liabilities of
every nature arising by reason of holding, being or
having held any such office or position, or by reason of
any action alleged to have been taken or omitted by any
such person as Shareholder, Trustee, officer, employee,
agent, investment adviser or manager, principal
underwriter, or independent contractor, including any
action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would
have the power to indemnify such person against such
liability; and
(p) To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and
carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive
and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits,
for any or all of the Trustees, officers, employees and
agents of the Trust.
The Trustees shall not in any way be bound or limited by
any present or future law or custom in regard to investments
by trustees of common law trusts. Except as otherwise
provided herein or from time to time in the By-Laws, any
action to be taken by the Trustees may be taken by a majority
of the Trustees present at a meeting of Trustees (if a quorum
by present), within or without Massachusetts, including any
meeting held by means of a conference telephone or other
communications equipment by means of which all persons
participating in the meeting can communicate with each other
simultaneously and participation by such means shall
constitute presence in person at a meeting, or by written
consents of a majority of the Trustees then in office.
13
<PAGE>
Payment of Expenses, Allocation of Liabilities
----------------------------------------------
Section 3. The Trustees are authorized to pay or to
cause to be paid out of the principal or income of the Trust,
or partly out of principal and partly out of income, as they
deem fair, all expenses, fees, charges, taxes and liabilities
incurred or arising in connection with the Trust, or in
connection with the management thereof, including, but not
limited to, the Trustees' compensation and such expenses and
charges for the services of the Trust's officers, employees,
investment adviser or manager, principal underwriter,
auditor, counsel, custodian, transfer agent, shareholder
servicing agent, and such other agents or independent
contractors and such other expenses and charges as the
Trustees may deem necessary or proper to incur.
The assets of a particular series of Shares shall be
charged with the liabilities (including, in the discretion of
the Trustees or their delegate, accrued expenses and
reserves) incurred in respect of such series (but not with
liabilities incurred in respect of any other series) and such
series shall also be charged with its share of any other
liabilities. The determination of the Trustees shall be
final and conclusive as to the amount of liabilities to be
charged to one or more particular series. The Trustees may
delegate from time to time the power to make such allocation
to one or more Trustees or to an agent of the Trust appointed
for such purpose. The liabilities with which a series is so
charged are herein referred to as the "liabilities of" such
series.
Section 4. The Trustees shall have the power, as
frequently as they may determine, to cause each Shareholder
to pay directly, in advance or arrears, for charges for the
Trust's custodian or transfer or shareholder service or
similar agent, an amount fixed from time to time by the
Trustees, by setting off such charges due from such
Shareholder from declared but unpaid dividends owed such
Shareholder and/or by reducing the number of Shares in the
account of such Shareholder by that number of full and/or
fractional shares which represents the outstanding amount of
such charges due from such Shareholder.
Ownership of Assets of the Trust
--------------------------------
Section 5. Title to all of the assets of each series of
the Trust and of the Trust shall at all times be considered
as vested in the Trustees.
14
<PAGE>
Advisory, Management and Distribution
-------------------------------------
Section 6. Subject to a favorable vote of a majority of
the outstanding voting securities of a series of the Trust,
the Trustees may on behalf of such series, at any time and
from time to time, contract for exclusive or nonexclusive
advisory and/or management services for such series with a
corporation, trust, association or other organization, every
such contract to comply with such requirements and
restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in
addition to said requirements and restrictions as the
Trustees may determine, including, without limitation,
authority to determine from time to time what investments
shall be purchased, held, sold or exchanged and what portion,
if any, of the assets of such series shall be held uninvested
and to make changes in such series' investments. The
Trustees may also, at any time and from time to time,
contract with a corporation, trust, association or other
organization, appointing it exclusive or nonexclusive
distributor or principal underwriter for the Shares, every
such contract to comply with such requirements and
restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in
addition to said requirements and restrictions as the
Trustees may determine.
The fact that:
(a) any of the Shareholders, Trustees or officers
of the Trust is a shareholder, director, officer,
partner, trustee, employee, manager, advisor, principal
underwriter, or distributor or agent of or for any
corporation, trust, association, or other organization,
or of or for any parent or affiliate of any
organization, with which an advisory or management or
principal underwriter's or distributor's contract, or
transfer, shareholder services or other agency
contract may have been or may hereafter be made, or that
any such organization, or any parent or affiliate
thereof, is a Shareholder or has an interest in the
Trust, or that
(b) any corporation, trust, association or other
organization with which an advisory or management or
principal underwriter's or distributor's contract, or
transfer, shareholder services or other agency contract
may have been or may hereafter be made also has an
advisory or management contract, or principal
underwriter's or distributor's contract, or transfer,
shareholder services or other agency contract with one
15
<PAGE>
or more other corporations, trusts, associations, or
other organizations, or has other businesses or
interests
shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust
from voting upon or executing the same or create any
liability or accountability to the Trust or its Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
----------------------------------------
Voting Powers
-------------
Section 1. The Shareholders shall have power to vote
only: (a) for the election or removal of Trustees as provided
in Article IV, Section 1; (b) with respect to any investment
advisor or manager as provided in Article IV, Section 6; (c)
with respect to any termination or reorganization of the
Trust or any series thereof to the extent and as provided in
Article IX, Section 1; (d) with respect to any amendment of
this Declaration of Trust to the extent and as provided in
Article IX, Section 4; (e) to the same extent as the
stockholders of a Massachusetts business corporation as to
whether or not a court action, proceeding or claim should or
should not be brought or maintained derivatively or as a
class action on behalf of the Trust or the Shareholders; and
(f) with respect to such additional matters relating to the
Trust as may be required by law, the 1940 Act, this
Declaration of Trust, the By-Laws or any registration of the
Trust with the Securities and Exchange Commission (or any
successor agency) or any state, or as the Trustees may
consider necessary or desirable.
Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional
Share shall be entitled to a proportionate fractional vote.
Notwithstanding any other provision of the Declaration of
Trust, on any matter submitted to a vote of Shareholders all
Shares of the Trust then entitled to vote shall be voted by
individual series and not in the aggregate, except (a) when
required by the 1940 Act, Shares shall be voted in the
aggregate and not by individual series; and (b) when the
Trustees have determined that the matter affects only the
interests of one or more series, then only Shareholders of
such series shall be entitled to vote thereon. There shall
be no cumulative voting in the election of Trustees. Shares
may be voted in person or by proxy.
16
<PAGE>
A proxy with respect to Shares held in the name of two
or more persons shall be valid if executed by any one of them
unless at or prior to the exercise of the proxy the Trust
receives a specific written notice to the contrary from any
one of them. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger.
Until Shares are issued, the Trustees may exercise all
rights of Shareholders and may take any action required by
law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.
Shareholder Meetings
--------------------
Section 2. Meetings of Shareholders (including meetings
involving only one or more but less than all series) may be
called and held from time to time for the purpose of taking
action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Such
meetings shall be held at the principal office of the Trust
as set forth in the By-Laws of the Trust or at any such other
place within the United States as may be designated in the
call thereof, which call shall be made by the Trustees or the
President of the Trust. Meetings of Shareholders may be
called by the Trustees or such other person or persons as may
be specified in the By-Laws upon written application by
Shareholders holding at least twenty-five percent (25%) (or
ten percent (10%)) if the purpose of the meeting is to
determine if a Trustee is to be removed from office) of the
Shares then outstanding requesting a meeting be called for a
purpose requiring action by the Shareholders as provided
herein or in the By-Laws which purpose shall be specified in
any such written application.
Shareholders shall be entitled to at least seven days'
written notice of any meeting of the Shareholders.
Quorum and Required Vote
------------------------
Section 3. The presence at a meeting of Shareholders in
person or by proxy of Shareholders entitled to vote at least
thirty percent (30%) of all votes entitled to be cast at the
meeting of each series entitled to vote as a series shall be
a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this
Declaration of Trust permits or requires that the holders of
Shares shall vote in the aggregate and not as a series, then
17
<PAGE>
the presence in person or by proxy of Shareholders entitled
to vote at least thirty percent (30%) of all votes entitled
to be cast at the meeting (without regard to series) shall
constitute a quorum. Any lesser number, however, shall be
sufficient for adjournments. Any adjourned session or
sessions may be held within a reasonable time after the date
set for the original meeting without the necessity of further
notice.
Except when a larger vote is required by any provisions
of the 1940 Act, this Declaration of Trust or the By-Laws, a
majority of the Shares of each series voted on the matter
shall decide that matter insofar as that series is concerned,
provided that where any provision of law or of this
Declaration of Trust permits or requires that the holders of
Shares vote in the aggregate and not as a series, then a
majority of the Shares voted on any matter (without regard to
series) shall decide such matter and a plurality shall elect
a Trustee.
Action by Written Consent
-------------------------
Section 4. Any action taken by Shareholders may be
taken without a meeting if Shareholders entitled to vote more
than fifty percent (50%) of the votes entitled to be cast on
the matter of each series or, where any provision of law,
this Declaration of Trust permits or requires that the
holders of Shares vote in the aggregate and not as a series,
if Shareholders entitled to vote more than fifty percent
(50%) of the votes entitled to be cast thereon (without
regard to series) (or in either case such larger vote as
shall be required by any provision of this Declaration of
Trust or the By-Laws) consent to the action in writing and
such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for
all purposes as a vote taken at a meeting of Shareholders.
Additional Provisions
---------------------
Section 5. The By-Laws may include further provisions
for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
18
<PAGE>
ARTICLE VI
Distributions, Redemptions and Repurchases,
and Determination of Net Asset Value
------------------------------------
Distributions
-------------
Section 1. The Trustees may in their sole discretion
from time to time distribute to the Shareholders of any
series such income and gains, accrued or realized, as the
Trustees may determine, after providing for actual and
accrued expenses and liabilities of such series (including
such reserves as the Trustees may establish) determined in
accordance with this Declaration of Trust and good accounting
practices. The Trustees shall have full discretion to
determine which items shall be treated as income and which
items as capital and their determination shall be binding
upon the Shareholders. Distributions to any series, if any
be made, shall be in Shares of such series, in cash or
otherwise and on a date or dates determined by the Trustees.
At any time and from time to time in their discretion, the
Trustees may distribute to the Shareholders of any series as
of a record date or dates determined by the Trustees, in
Shares of such series, in cash or otherwise, all or part of
any gains realized on the sale or disposition of property of
the series or otherwise, or all or part of any other
principal of the Trust attributable to the series. Each
distribution pursuant to this Section 1 shall be made ratably
according to the number of Shares of the series held by the
several Shareholders on the applicable record date thereof,
provided that distributions from assets of a series may only
be made to the holders of the Shares of such series and
provided that no distributions need be made on Shares
purchased pursuant to orders received, or for which payment
is made, after such time or times as the Trustees may
determine. Any distribution paid in Shares will be paid at
the net asset value thereof as determined in accordance with
this Declaration of Trust. The Trustees have the power, in
their discretion, to distribute for any year amounts
sufficient to enable the Trust to qualify as a "regulated
investment company" under the Internal Revenue Code of 1954
as amended (or any successor thereto) to avoid any liability
for federal income tax in respect of that year.
Redemptions and Repurchases
---------------------------
Section 2. Any holder of Shares of the Trust may by
presentation of a request in proper form, together with his
certificates, if any, for such Shares, in proper form for
19
<PAGE>
transfer to the Trust or duly authorized agent of the Trust,
request redemption of his shares for the net asset value
thereof determined and computed in accordance with the
provisions of this Section 2 and the provisions of Section 6
of this Article VI.
Upon receipt by the Trust or its duly authorized agent,
as the case may be, of such a request for redemption of
Shares in proper form, such Shares shall be redeemed at the
net asset value per share of the particular series next
determined after such request is received or determined as of
such other time fixed by the Trustees as may be permitted or
required by the 1940 Act. The criteria for determining what
constitutes a request for redemption in proper form and the
time of receipt of such request shall be fixed by the
Trustees.
The obligation of the Trust to redeem its Shares of each
series as set forth above in this Section 2 shall be subject
to the condition that such obligation may be suspended by the
Trust by or under authority of the Trustees during any period
or periods when and to the extent permissible under the 1940
Act. If there is such a suspension, any Shareholder may
withdraw any request for redemption which has been received
by the Trust during any such period and the applicable net
asset value with respect to which would but for such
suspension be calculated as of a time during such period.
Upon such withdrawal, the Trust shall return to the
Shareholder the certificates therefor, if any.
The Trust may also purchase, repurchase or redeem Shares
in accordance with such other methods, upon such other terms
and subject to such other conditions as the Trustee may from
time to time authorize at a price not exceeding the net asset
value of such Shares in effect when the purchase or
repurchase or any contract to purchase or repurchase is made.
Shares of any series redeemed or repurchased by the Trust
hereunder shall be canceled upon such redemption or
repurchase without further action by the Trust or the
Trustees and the number of issued and outstanding Shares of
the relevant series shall thereupon by reduced by such
amount.
Payment for Shares Redeemed
---------------------------
Section 3. Payment of the redemption price for Shares
redeemed pursuant to this Article VI shall be made by the
Trust or its duly authorized agent after receipt by the Trust
or its duly authorized agent of a request for redemption in
proper form (together with any certificates for such Shares
as provided in Section 2 above) in accordance with
20
<PAGE>
procedures and subject to conditions prescribed by the
Trustees; provided, however, that payment may be postponed
during the period in which the redemption of Shares is
suspended under Section 2 above. Subject to any generally
applicable limitation imposed by the Trustees, any payment on
redemption, purchase or repurchase by the Trust of Shares
may, if authorized by the Trustees, be made wholly or partly
in kind, instead of in cash. Such payment in kind shall be
made by distributing securities or other property,
constituting, in the opinion of the Trustees, a fair
representation of the various types of securities and other
property then held by the series of Shares being redeemed,
purchased or repurchased (but not necessarily involving a
portion of each of the series' holdings) and taken at their
value used in determining the net asset value of the Shares
in respect of which payment is made.
Redemptions at the Option of the Trust
--------------------------------------
Section 4. The Trust shall have the right at its option
and at any time and from time to time to redeem Shares of any
Shareholder at the net asset value thereof as determined in
accordance with Section 6 of this Article VI, if at such time
such Shareholder owns fewer shares of a series than, or
Shares of a series having an aggregate net asset value of
less than, an amount determined from time to time by the
Trustees. Any such redemption at the option of the Trust
shall be made in accordance with such other criteria and
procedures for determining the Shares to be redeemed, the
redemption date and the means of effecting such redemption as
the Trustees may from time to time authorize.
Additional Provisions Relating to Dividends, Redemptions and
------------------------------------------------------------
Repurchases
-----------
Section 5. The completion of redemption, purchase or
repurchase of Shares shall constitute a full discharge of the
Trust and the Trustees with respect to such Shares. No
dividend or distribution (including, without limitation, any
distribution paid upon termination of the Trust or of any
series) with respect to, nor any redemption or repurchase of,
the Shares of any series shall be effected by the Trust other
than from the assets of such series.
Determination of Net Asset Value
--------------------------------
Section 6. The term "net asset value" of each Share of
a series as of any particular time shall be the quotient
21
<PAGE>
obtained by dividing the value, as at such time, of the net
assets of such series (i.e., the value of the assets of such
series less the liabilities of such series, exclusive of
liabilities represented by the Shares of such series) by the
total number of Shares of such series outstanding at such
time, all determined and computed in accordance with the
Trust's current prospectus.
The Trustees, or any officer, or officers or agent of
the Trust designated for the purpose by the Trustees shall
determine the net asset value of the Shares of each series,
and the Trustees shall fix the time or times as of which the
net asset value of the Shares of each series shall be
determined and shall fix the periods during which any such
net asset value shall be effective as to sales, redemptions
and repurchases of, and other transactions in, the Shares of
such series, except as such times and periods for any such
transaction may be fixed by other provisions of this
Declaration of Trust or by the By-Laws.
Determinations in accordance with this Section 6 made in
good faith shall be binding on all parties concerned.
How Long Shares are Outstanding
-------------------------------
Section 7. Shares of the Trust surrendered to the Trust
for redemption by it pursuant to the provisions of Section 2
of this Article VI shall be deemed to be outstanding until
the redemption price thereof is determined pursuant to this
Article VI and, thereupon and until paid, the redemption
price thereof shall be deemed to be a liability of the Trust.
Shares of the Trust purchased by the Trust in the open market
shall be deemed to be outstanding until confirmation of
purchase thereof by the Trust and, thereupon and until paid,
the purchase price thereof shall be deemed to be a liability
of the Trust. Shares of the Trust redeemed by the Trust
pursuant to Section 4 of this Article VI shall be deemed to
be outstanding until said Shares are deemed to be redeemed in
accordance with procedures adopted by the Trustees pursuant
to said Section 4.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
----------------------------------------------------
Compensation
------------
Section 1. The Trustees as such shall be entitled to
reasonable compensation from the Trust if the rate thereof is
prescribed by such Trustees. Nothing herein shall in any way
22
<PAGE>
prevent the employment of any Trustee for advisory,
management, legal, accounting, investment banking or other
services and payment for the same by the Trust, it being
recognized that such employment may result in such Trustee
being considered an Affiliated Person or an Interested
Person.
Limitation of Liability
-----------------------
Section 2. The Trustees shall not be responsible or
liable in any event for any neglect or wrongdoing of any
officer, agent, employee, investment advisor or manager,
principal underwriter or custodian, nor shall any Trustee be
responsible for the act or omission of any other Trustee.
Nothing in this Declaration of Trust shall protect any
Trustee against any liability to which such Trustee would
otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate,
Share or undertaking and every other act or thing whatsoever
executed or done by or on behalf of the Trust or the Trustees
or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or
with respect to their or his capacity as Trustees or Trustee
and neither such Trustees or Trustee nor the Shareholders
shall be personally liable thereon.
Every note, bond, contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officers
or officer shall give notice that this Declaration of Trust
is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite that the same was executed or
made by or on behalf of the Trust by them as Trustees or
Trustee or as officers or officer and not individually and
that the obligations of such instrument are not binding upon
any of them or the Shareholders individually but are binding
only upon the assets and property of the Trust or a
particular series of Shares, and may contain such further
recital as he or they may deem appropriate, but the omission
thereof shall not operate to bind any Trustees or Trustee or
officers or officer or Shareholders or Shareholder
individually.
All persons extending credit to, contracting with or
having any claim against the Trust or a particular series of
Shares shall look only to the assets of the Trust or the
assets of that particular series of Shares, as the case may
be, for payment under such credit, contract or claim; and
neither the Shareholders nor the Trustees, nor any of the
23
<PAGE>
Trust's officers, employees or agents, whether past, present
or future, shall be personally liable therefor.
Trustees' Good Faith Action, Expert Advice, No Bond or Surety
-------------------------------------------------------------
Section 3. The exercise by the Trustees of their powers
and discretions hereunder shall be binding upon everyone
interested. A Trustee shall be liable only for his own
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office
of Trustee, and for nothing else, and shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees
may take advice of counsel or other experts with respect to
the meaning and operation of this Declaration of Trust and
their duties as Trustees hereunder, and shall be under no
liability for any act or omission in accordance with such
advice or for failing to follow such advice. In discharging
their duties, the Trustees, when acting in good faith, shall
be entitled to rely upon the books of account of the Trust
and upon written reports made to the Trustees by any officer
appointed by them, any independent public accountant and
(with respect to the subject matter of the contract involved)
any officer, partner or responsible employee of any other
party to any contract entered into pursuant to Section 2 of
Article IV. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing With Trustees
------------------------------------------------
Section 4. No person dealing with the Trustees shall be
bound to make any inquiry concerning the validity of any
transaction made or to be made by the Trustees or to see to
the application of any payments made or property transferred
to the Trust or upon its order.
ARTICLE VIII
Indemnification
---------------
Subject to the exceptions and limitations contained in
this Article, every person who is, or has been, a Trustee or
officer of the Trust (including persons who serve at the
request of the Trust as directors, officers or trustees of
another organization in which the Trust has an interest as a
shareholder, creditor or otherwise and also including persons
who served as directors and officers of Kemper Money Market
Fund, Inc.) hereinafter referred to as a "Covered Person",
shall be indemnified by the Trust to the fullest extent
permitted by law against liability and against all expenses
24
<PAGE>
reasonably incurred or paid by him in connection with any
claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or
having been such a Trustee, director or officer and against
amounts paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a
Covered Person:
(a) against any liability to the Trust or its
Shareholders by reason of a final adjudication by the
court or other body before which the proceeding was
brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office;
(b) with respect to any matter as to which he
shall have been finally adjudicated not to have acted in
good faith in the reasonable belief that his action was
in the best interest of the Trust; or
(c) in the event of a settlement or other
disposition not involving a final adjudication (as
provided in paragraph (a) or (b)) and resulting in a
payment by a Covered Person, unless there has been
either a determination that such Covered Person did not
engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved
in the conduct of his office by the court or other body
approving the settlement or other disposition or a
reasonable determination, based on a review of readily
available facts (as opposed to a full trial-type
inquiry) that he did not engage in such conduct:
(i) by a vote of a majority of the
Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested
Trustees then in office act on the matter); or
(ii) by written opinion of independent legal
counsel.
The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall be
severable, shall not affect any other rights to which any
Covered Person may now or hereafter be entitled, shall
continue as to a person who has ceased to be such a Covered
Person and shall inure to the benefit of the heirs, executors
and administrators of such a person. Nothing contained
herein shall affect any rights to indemnification to which
Trust personnel other than Covered Persons may be entitled by
contract or otherwise under law.
25
<PAGE>
Expenses of preparation and presentation of a defense to
any claim, action, suit or proceeding subject to a claim for
indemnification under this Article shall be advanced by the
Trust prior to final disposition thereof upon receipt of an
undertaking by or on behalf of the recipient to repay such
amount if it is ultimately determined that he is not entitled
to indemnification under this Article, provided that either:
(a) such undertaking is secured by a surety bond
or some other appropriate security or the Trust shall be
insured against losses arising out of any such advances;
or
(b) a majority of the Disinterested Trustees
acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter)
or independent legal counsel in a written opinion shall
determine, based upon a review of the readily available
facts (as opposed to a full trial-type inquiry), that
there is reason to believe that the recipient ultimately
will be found entitled to indemnification.
As used in this Article, a "Disinterested Trustee" is
one (a) who is not an "interested person" of the Trust, as
defined in the 1940 Act (including anyone who has been
exempted from being an "interested person" by any rule,
regulation or order of the Commission), and (b) against whom
none of such actions, suits or other proceedings or another
action, suit or other proceeding on the same or similar
grounds is then or has been pending.
As used in this Article, the words "claim", "action",
"suit" or "proceeding" shall apply to all claims, actions,
suits or proceedings (civil, criminal or other, including
appeals), actual or threatened; and the words "liability" and
"expenses" shall include without limitation, attorneys' fees,
cost, judgments, amounts paid in settlement, fines, penalties
and other liabilities.
In case any Shareholder or former Shareholder shall be
held to be personally liable solely by reason of his or her
being or having been a Shareholder and not because of his or
her acts or omissions or for some other reason, the
Shareholder or former Shareholder (or his or her heirs,
executors, administrators or other legal representatives or
in the case of a corporation or other entity, its corporate
or other general successor) shall be entitled to be held
harmless from and indemnified against all loss and expense
arising from such liability but only out of the assets of the
particular series of Shares of which he or she is or was a
Shareholder; provided, however, there shall be no liability
or obligation of the Trust arising hereunder to reimburse any
26
<PAGE>
Shareholder for taxes paid by reason of such Shareholder's
ownership of Shares or for losses suffered by reason of any
changes in value of any Trust assets.
ARTICLE IX
Miscellaneous
-------------
Duration, Termination and Reorganization of Trust
-------------------------------------------------
Section 1. Unless terminated as provided herein, the
Trust shall continue without limitation of time. The Trust
may be terminated at any time by the Trustees by written
notice to the Shareholders without a vote of the Shareholders
of the Trust or by the vote of the Shareholders entitled to
vote more than fifty percent (50%) of the votes of each
series entitled to be cast on the matter. Any series of
Shares may be terminated at any time by the Trustees by
written notice to the Shareholders of such series without a
vote of the Shareholders of such series or by the vote of the
Shareholders of such series entitled to vote more than fifty
percent (50%) of the votes entitled to be cast on the matter.
Upon termination of the Trust or of any one or more
series of Shares, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or
accrued or anticipated, of the particular series as may be
determined by the Trustees, the Trust shall in accordance
with such procedures as the Trustees consider appropriate
reduce to the extent necessary the remaining assets of the
particular series to distributable form in cash or other
securities, or any combination thereof, and distribute the
proceeds to the Shareholders of the series involved, ratably
according the number of Shares of such series held by the
several Shareholders of such series on the date of
termination.
At any time by the affirmative vote of the Shareholders
of the affected series entitled to vote more than fifty
percent (50%) of the votes entitled to be cast on the matter,
the Trustees may sell, convey and transfer the assets of the
Trust, or the assets belonging to any one or more series, to
another trust, partnership, association or corporation
organized under the laws of any state of the United States,
or to the Trust to be held as assets belonging to another
series of the Trust, in exchange for cash, shares or other
securities (including, in the case of a transfer to another
series of the Trust, Shares of such other series) with such
transfer being made subject to or with the assumption by the
transferee of, the liabilities belonging to each series the
27
<PAGE>
assets of which are so distributed. Following such transfer,
the Trustees shall distribute such cash, shares or other
securities (giving due effect to the assets and liabilities
belonging to and any other differences among the various
series the assets belonging to which have so been
transferred) among the Shareholders of the series the assets
belonging to which have been so transferred; and if all the
assets of the Trust have been so distributed, the Trust shall
be terminated.
Filing of Copies, References, Headings
--------------------------------------
Section 2. The original or a copy of this instrument
and of each amendment hereto shall be kept at the office of
the Trust where it may be inspected by any Shareholder. A
copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of The Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to
time be required. Anyone dealing with the Trust may rely on
a certificate by any officer of the Trust as to whether or
not any such amendments have been made and as to any matters
in connection with the Trust hereunder; and, with the same
effect as if it were the original, may rely on a copy
certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and
in any such amendment, references to this instrument, and all
expressions like "herein", "hereof", and "hereunder", shall
be deemed to refer to this instrument as amended from time to
time. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this
instrument. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
Applicable Law
--------------
Section 3. This Declaration of Trust is made in The
Commonwealth of Massachusetts, and it is created under and is
to be governed by and construed and administered according to
the laws of said Commonwealth. The Trust shall be of the
type commonly called a Massachusetts business trust, and
without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a
trust.
28
<PAGE>
Amendments
----------
Section 4. This Declaration of Trust may be amended at
any time by an instrument in writing signed by a majority of
the then Trustees when authorized so to do by vote of
Shareholders holding more than fifty percent (50%) of the
Shares of each series entitled to vote, except that an
amendment which shall affect the holders of one or more
series of Shares but not the holders of all outstanding
series shall be authorized by of the Shareholders holding
more than fifty percent (50%) of the Shares entitled to vote
of each series affected and not vote of Shareholders of a
series not affected shall be required. Amendments having the
purpose of changing the name of the Trust or of supplying any
omission, curing any ambiguity or curing, correcting or
supplementing any provision which is defective or
inconsistent with the 1940 Act or with the requirements of
the Internal Revenue Code and the regulations thereunder for
the Trust's obtaining the most favorable treatment thereunder
available to regulated investment companies shall not require
authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned has hereunto set his
hand and seal for himself and his assigns, as of this 27th
day of September, 1985.
/s/ Charles M. Kierscht
----------------------------
(SEAL) Charles M. Kierscht, Trustee
29
<PAGE>
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
Then personally appeared the above-named Charles M.
Kierscht, known to me to be the sole trustee of the Money
Market Portfolios Trust, who acknowledged the foregoing
instrument to be his free act and deed, before me this 27th
day of September, 1985.
/s/ Gail J. Kiriazis
------------------------------
Notary Public
My Commission Expires: 9-8-86
--------
<PAGE>
KEMPER MONEY MARKET FUND
WRITTEN INSTRUMENT AMENDING THE
AGREEMENT AND DECLARATION OF TRUST
----------------------------------
The undersigned, being a majority of the trustees of Kemper
Money Market Fund (the "Trust"), a business trust organized
pursuant to an Agreement and Declaration of Trust dated August 9,
1985, as amended and restated September 27, 1985 (the
"Declaration of Trust"), pursuant to Section 1 of Article III of
the Declaration of Trust, do hereby establish and designate a
second series of Shares of the Trust to be known as the
"Government Securities Portfolio." The relative rights and
preferences of such series shall be as set forth in the
Declaration of Trust. This instrument shall constitute an
amendment to the Declaration of Trust.
IN WITNESS WHEREOF, the undersigned have this 6th day of
August, 1986 signed these presents.
/s/ Charles M. Kierscht
-----------------------------------
Charles M. Kierscht, Trustee
(signatures continue)
<PAGE>
/s/ Thomas R. Anderson
-------------------------------
Thomas R. Anderson,
Trustee
/s/ David W. Belin
--------------------------------
David W. Belin,
Trustee
/s/ Lewis A. Burnham
--------------------------------
Lewis A. Burnham,
Trustee
/s/ Harry C. DeMuth
--------------------------------
Harry C. DeMuth,
Trustee
/s/ Donald L. Dunaway
--------------------------------
Donald L. Dunaway,
Trustee
/s/ James W. Harding
--------------------------------
James W. Harding,
Trustee
/s/ Robert B. Hoffman
--------------------------------
Robert B. Hoffman,
Trustee
/s/ Thomas L. Martin, Jr.
--------------------------------
Thomas L. Martin, Jr.,
Trustee
/s/ William P. Sommers
--------------------------------
William P. Sommers,
Trustee
<PAGE>
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
Then personally appeared the above-named persons known to me
to be at least a majority of the trustees of Kemper Money Market
Fund, who acknowledged the foregoing to be their free act and
deed, before me this 6th day of August.
/s/ Gail J. Kiriazis
-----------------------------------
Notary Public
My Commission Expires: 9-8-86
-------------
<PAGE>
KEMPER MONEY MARKET FUND
WRITTEN INSTRUMENT AMENDING THE
AGREEMENT AND DECLARATION OF TRUST
----------------------------------
The undersigned, being a majority of the trustees of Kemper
Money Market Fund (the "Fund"), a business trust organized
pursuant to an Agreement and Declaration of Trust dated August 9,
1985, as amended and restated September 27, 1985, and as amended
August 6, 1986 (the "Declaration of Trust"), pursuant to Section
1 of Article III of the Declaration of Trust, do hereby establish
and designate a third series of Shares of the Trust to be known
as the "Tax-Exempt Portfolio." The relative rights and
preferences of such series shall be as set forth in the
Declaration of Trust. This instrument shall constitute an
amendment to the Declaration of Trust.
IN WITNESS WHEREOF, the undersigned have this 26th day of
June, 1987 signed these presents.
/s/ Charles M. Kierscht
-----------------------------------
Charles M. Kierscht, Trustee
(signatures continue)
<PAGE>
/s/ Thomas R. Anderson
-------------------------------
Thomas R. Anderson,
Trustee
/s/ David W. Belin
--------------------------------
David W. Belin,
Trustee
/s/ Lewis A. Burnham
--------------------------------
Lewis A. Burnham,
Trustee
/s/ Harry C. DeMuth
--------------------------------
Harry C. DeMuth,
Trustee
/s/ Donald L. Dunaway
--------------------------------
Donald L. Dunaway,
Trustee
/s/ James W. Harding
--------------------------------
James W. Harding,
Trustee
/s/ Robert B. Hoffman
--------------------------------
Robert B. Hoffman,
Trustee
/s/ Thomas L. Martin, Jr.
--------------------------------
Thomas L. Martin, Jr.,
Trustee
/s/ William P. Sommers
--------------------------------
William P. Sommers,
Trustee
<PAGE>
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
Then personally appeared the above-named persons known to me
to be at least a majority of the trustees of Kemper Money Market
Fund, who acknowledged the foregoing to be their free act and
deed, before me this 26th day of June.
/s/ Lyn G. Stephen
-------------------------------
Notary Public
My Commission Expires: 4-22-90
----------
<PAGE>
BY-LAWS OF
KEMPER MONEY MARKET FUND
Section 1. Agreement and Declaration of
Trust and Principal Office
----------------------------------------
1.1 Agreement and Declaration of Trust. These By-Laws shall be
subject to the Agreement and Declaration of Trust, as from time
to time in effect (the "Declaration of Trust"), of KEMPER MONEY
MARKET FUND, the Massachusetts business trust established by the
Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust; Resident Agent. The
principal office of the Trust shall be located in Chicago,
Illinois. Its resident agent in Massachusetts shall be CT
Corporation System, 2 Oliver Street, Boston, Massachusetts or
such other person as the Trustees may from time to time select.
Section 2. Shareholders
------------------------
2.1 Shareholder Meetings. Meetings of the shareholders may be
called at any time by the Trustees, by the President or, if the
Trustees and the President shall fail to call any meeting of
shareholders for a period of 30 days after written application of
one or more shareholders who hold at least 25% of all shares
issued and outstanding and entitled to vote at the meeting (or
10% if the purpose of the meeting is to determine if a Trustee
shall be removed from office), then such shareholders may call
such meeting. Each call of a meeting shall state the place,
date, hour and purposes of the meeting.
2.2 Place of Meetings. All meetings of the shareholders shall
be held at the principal office of the Trust, or, to the extent
permitted by the Declaration of Trust, at such other place within
the United States as shall be designated by the Trustees or the
President of the Trust.
2.3 Notice of Meetings. A written notice of each meeting of
shareholders, stating the place, date and hour and the purposes
of the meeting, shall be given at least seven days before the
meeting to each shareholder entitled to vote thereat by leaving
such notice with him or at his residence or usual place of
business or by mailing it, postage prepaid, and addressed to such
shareholder at his address as it appears in the records of the
Trust. Such notice shall be given by the Secretary or an
Assistant Secretary or by an officer designated by the Trustees.
<PAGE>
No notice of any meeting of shareholders need be given to a
shareholder if a written waiver of notice, executed before or
after the meeting by such shareholder or his attorney thereunto
duly authorized, is filed with the records of the meeting.
2.4 Ballots. No ballot shall be required for any election
unless requested by a shareholder present or represented at the
meeting and entitled to vote in the election.
2.5 Proxies and Voting. Shareholders entitled to vote may vote
either in person or by proxy in writing dated not more than six
months before the meeting named therein, which proxies shall be
filed with the Secretary or other person responsible to record
the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall
entitle the holders thereof to vote at any adjournment of such
meeting but shall not be valid after the final adjournment of
such meeting. At all meetings of shareholders, unless the voting
is conducted by inspectors, all questions relating to the
qualification of voters, the validity of proxies and the
acceptance or rejection of votes shall be decided by the chairman
of the meeting.
Section 3. Trustees
--------------------
3.1 Committees and Advisory Board. The Trustees may appoint
from their number an executive committee and other committees.
Any such committee may be abolished and reconstituted at any time
and from time to time by the Trustees. Except as the Trustees
may otherwise determine, any such committee may make rules for
the conduct of its business. The Trustees may appoint an
advisory board to consist of not less than two nor more than five
members. The members of the advisory board shall be compensated
in such manner as the Trustees may determine and shall confer
with and advise the Trustees regarding the investments and other
affairs of the Trust. Each member of the advisory board shall
hold office until the first meeting of the Trustees following the
meeting of the shareholders, if any, next following his
appointment and until his successor is appointed and qualified,
or until he sooner dies, resigns, is removed, or becomes
disqualified, or until the advisory board is sooner abolished by
the Trustees.
3.2 Regular Meetings. Regular meetings of the Trustees may be
held without call or notice at such places and at such times as
the Trustees may from time to time determine, provided that
notice of the first regular meeting following any such
determination shall be given to absent Trustees. A regular
meeting of the Trustees may be held without call or notice
2
<PAGE>
immediately after and at the same place as any meeting of the
shareholders.
3.3 Special Meetings. Special meetings of the Trustees may be
held at any time and at any place designated in the call of the
meeting, when called by the Chairman of the Board or by two or
more Trustees, sufficient notice thereof being given to each
Trustee by the Secretary or an Assistant Secretary or by the
officer or one of the Trustees calling the meeting.
3.4 Notice. It shall be sufficient notice to a Trustee to send
notice by mail at least three days or by telegram at least
twenty-four hours before the meeting addressed to the Trustee at
his or her usual or last known business or residence address or
to give notice to him or her in person or by telephone at least
twenty-four hours before the meeting. Notice of a meeting need
not be given to any Trustee if a written waiver of notice,
executed by him or her before or after the meeting, is filed with
the records of the meeting, or to any Trustee who attends the
meeting without protesting prior thereto or at its commencement
the lack of notice to him or her. Neither notice of a meeting
nor a waiver of a notice need specify the purposes of the
meeting.
3.5 Quorum. At any meeting of the Trustees, one-third of the
Trustees then in office shall constitute a quorum; provided,
however, a quorum (unless the Board of Trustees consists of two
or fewer persons) shall not be less than two. Any meeting may be
adjourned from time to time by a majority of the votes cast upon
the question, whether or not a quorum is present, and the meeting
may be held as adjourned without further notice.
Section 4. Officers and Agents
-------------------------------
4.1 Enumeration; Qualification. The officers of the Trust shall
be a President, a Treasurer, a Secretary and such other officers,
if any, as the Trustees from time to time may in their discretion
elect or appoint. The Trust may also have such agents, if any,
as the Trustees from time to time may in their discretion
appoint. Any officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same
person.
4.2 Powers. Subject to the other provisions of these By-Laws,
each officer shall have, in addition to the duties and powers
herein and in the Declaration of Trust set forth, such duties and
powers as are commonly incident to his or her office as if the
Trust were organized as a Massachusetts business corporation and
such other duties and powers as the Trustees may from time to
time designate.
3
<PAGE>
4.3 Election. The President, the Treasurer and the Secretary
shall be elected annually by the Trustees at their first meeting
in each calendar year or at such later meeting in such year as
the Trustees shall determine. Other officers or agents, if any,
may be elected or appointed by the Trustees at said meeting or at
any other time.
4.4 Tenure. The President, Treasurer and Secretary shall hold
office until the first meeting of Trustees in each calendar year
and until their respective successors are chosen and qualified,
or in each case until he or she sooner dies, resigns, is removed
or becomes disqualified. Each other officer shall hold office
and each agent shall retain his or her authority at the pleasure
of the Trustees.
4.5 Chairman of the Board. The Chairman of the Board of
Trustees, if one is so appointed, shall be chosen from among the
Trustees and may hold office only so long as he continues to be a
Trustee. The Chairman of the Board, if any is so appointed,
shall preside at all meetings of the shareholders and of the
Trustees at which he is present; and shall have such other duties
and powers as specified herein and as may be assigned to him by
the Trustee.
4.6 President and Vice Presidents. The President shall be the
chief executive officer of the Trust. The President shall,
subject to the control of the Trustees, have general charge and
supervision of the Trust and shall perform such other duties and
have such other powers as the Trustees shall prescribe from time
to time. Any Vice President shall at the request or in the
absence or disability of the President exercise the powers of the
President and perform such other duties and have such other
powers as shall be designated from time to time by the Trustees.
4.7 Treasurer and Controller. The Treasurer shall be the chief
financial officer of the Trust and, subject to any arrangement
made by the Trustees with a bank or trust company or other
organization as custodian or transfer or shareholder services
agent, shall be in charge of its valuable papers and shall have
such other duties and powers as may be designated from time to
time by the Trustees or by the President. If at any time there
shall be no Controller, the Treasurer shall also be the chief
accounting officer of the Trust and shall have the duties and
power prescribed herein for the Controller. Any Assistant
Treasurer shall have such duties and powers as shall be
designated from time to time by the Trustees.
The Controller, if any be elected, shall be the chief accounting
officer of the Trust and shall be in charge of its books of
account and accounting records. The Controller shall be
responsible for preparation of financial statements of the Trust
4
<PAGE>
and shall have such other duties and powers as may be designated
from time to time by the Trustees or the President.
4.8 Secretary and Assistant Secretaries. The Secretary shall
record all proceedings of the shareholders and the Trustees in
books to be kept therefor, which books shall be kept at the
principal office of the Trust. In the absence of the Secretary
from any meeting of shareholders or Trustees, an Assistant
Secretary, or if there be none or if he or she is absent, a
temporary clerk chosen at the meeting shall record the
proceedings thereof in the aforesaid books.
Section 5. Resignations and Removals
-------------------------------------
Any Trustee may resign his trust or retire as a Trustee in
accordance with procedures set forth in the Declaration of Trust.
Any officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of
the Board, the President or the Secretary or to a meeting of the
Trustees. The Trustees may remove any officer or advisory board
member elected or appointed by them with or without cause by the
vote of a majority of the Trustees then in office. Except to the
extent expressly provided in a written agreement with the Trust,
no Trustee, officer, or advisory board member resigning, and no
officer or advisory board member removed, shall have any right to
any compensation for any period following his or her resignation
or removal, or any right to damages on account of such removal.
Section 6. Vacancies
---------------------
A vacancy in the office of Trustee shall be filed in accordance
with the Declaration of Trust. Vacancies resulting from the
death, resignation, incapacity or removal of any officer may be
filled by the Trustees. Each successor of any such officer shall
hold office for the unexpired term, and in the case of the
President, the Treasurer and the Secretary, until his or her
successor is chosen and qualified, or in each case until he or
she sooner dies, resigns, is removed or becomes disqualified.
Section 7. Shares of Beneficial Interest
-----------------------------------------
7.1 Share Certificates. No certificates certifying the
ownership of shares shall be issued except as the Trustees may
otherwise authorize. In the event that the Trustees authorize
the issuance of share certificates, subject to the provisions of
Section 7.3, each shareholder shall be entitled to a certificate
5
<PAGE>
stating the number of shares owned by him or her, in such form as
shall be prescribed from time to time by the Trustees. Such
certificate shall be signed by the President or a Vice President
and by the Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary. Such signatures may be facsimiles if the certificate
is signed by a transfer or shareholder services agent or by a
registrar, other than a Trustee, officer or employee of the
Trust. In case any officer who has signed or whose facsimile
signature has been placed on such certificate shall have ceased
to be such officer before such certificate is issued, it may be
issued by the Trust with the same effect as if he or she were
such officer at the time of its issue.
In lieu of issuing certificates for shares, the Trustees or the
transfer or shareholder services agent may either issue receipts
therefor or may keep accounts upon the books of the Trust for the
record holders of such shares, who shall in either case be
deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such
certificates and shall be held to have expressly assented and
agreed to the terms hereof.
7.2 Loss of Certificates. In the case of the alleged loss or
destruction or the mutilation of a share certificate, a duplicate
certificate may be issued in place thereof, upon such terms as
the Trustees may prescribe.
7.3 Discontinuance of Issuance of Certificates. The Trustees
may at any time discontinue the issuance of share certificates
and may, by written notice to each shareholder, require the
surrender of share certificates to the Trust for cancellation.
Such surrender and cancellation shall not affect the ownership of
shares in the Trust.
Section 8. Record Date
-----------------------
The Trustees may fix in advance a time, which shall not be more
than 60 days before the date of any meeting of shareholders or
the date for the payment of any dividend or making of any other
distribution to shareholders, as the record date for determining
the shareholders having the right to notice and to vote at such
meeting and any adjournment thereof or the right to receive such
dividend or distribution, and in such case only shareholders of
record on such record date shall have such right, notwithstanding
any transfer of shares on the books of the Trust after the record
date.
6
<PAGE>
Section 9. Seal
----------------
The seal of the Trust shall, subject to alteration by the
Trustees, consist of a flat-faced circular die with the word
"Massachusetts" together with the name of the Trust and the year
of its organization, cut or engraved thereon; but, unless
otherwise required by the Trustees, the seal shall not be
necessary to be placed on, and its absence shall not impair the
validity of, any document, instrument, or other paper executed
and delivered by or on behalf of the Trust.
Section 10. Execution of Papers
--------------------------------
Except as the Trustees may generally or in particular cases
authorize the execution thereof in some other manner, all deeds,
leases, transfers, contracts, bonds, notes, checks, drafts and
other obligations made, accepted or endorsed by the Trust shall
be signed, and any transfers of securities standing in the name
of the Trust shall be executed, by the President or by one of the
Vice Presidents or by the Treasurer or by whomsoever else shall
be designated for that purpose by the vote of the Trustees and
need not bear the seal of the Trust.
Section 11. Fiscal Year
------------------------
The fiscal year of the Trust shall end on such date in each year
as the Trustees shall from time to time determine.
Section 12. Amendments
-----------------------
These By-Laws may be amended or repealed, in whole or in part, by
a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such majority.
7
<PAGE>
[Name]
is the owner of [number] shares
of beneficial interest in the above noted Fund (the "FUND"), of
the series and class, if any, specified, fully paid and
nonassessable, the said shares being issued and held subject to
the provisions of the Agreement and Declaration of Trust of the
Fund, and all amendments thereto, copies of which are on file
with the Secretary of The Commonwealth of Massachusetts. The
said owner by accepting this certificate agrees to and is bound
by all of the said provisions. The shares represented hereby are
transferable in writing by the owner thereof in person or by
attorney upon surrender of this certificate to the Fund properly
endorsed for transfer. This certificate is executed on behalf of
the Trustees of the Fund as Trustees and not individually and the
obligations hereof are not binding upon any of the Trustees,
officers or shareholders individually but are binding only upon
the assets and property of the Fund or, if applicable, the
specified series of the Fund. The shares may be subject to a
contingent deferred sales charge. This certificate is not valid
unless countersigned by the Transfer Agent.
<PAGE>
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 29th day of November, 1985 by and between
KEMPER MONEY MARKET FUND, a Massachusetts business trust (the
"Fund"), and KEMPER FINANCIAL SERVICES, INC., a Delaware
corporation (the "Adviser").
WHEREAS, the Fund is an open-end, diversified management
investment company registered under the Investment Company
Act of 1940, the shares of beneficial interest ("Shares") of
which are registered under the Securities Act of 1933; and
WHEREAS, the Fund is authorized to issue Shares in separate
series with each such series representing the interests in a
separate portfolio of securities and other assets; and
WHEREAS, the Fund intends initially to offer Shares in one
portfolio, the Money Market Securities Portfolio, such
portfolio (the "Initial Portfolio"), together with any other
Fund portfolios which may be established later and served by
the Adviser hereunder, being herein referred to collectively
as the "Portfolios" and individually referred to as a
"Portfolio"; and
WHEREAS, the Fund desires at this time to retain the Adviser
to render investment advisory and management services to the
Initial Portfolio, and the Adviser is willing to render such
services;
In consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties
hereto as follows:
1. The Fund hereby employs the Adviser to act as the
investment adviser for the Initial Portfolio and other
Portfolios hereunder and to manage the investment and
reinvestment of the assets of each such Portfolio in
accordance with the applicable investment objectives and
policies and limitations, and to administer their affairs to
the extent requested by and subject to the supervision of the
Board of Trustees of the Fund for the period and upon the
terms herein set forth. The investment of funds shall be
subject to all applicable restrictions of the Agreement and
Declaration of Trust and By-Laws of the Fund as may from time
to time be in force.
The Adviser accepts such employment and agrees during such
period to render such services, to furnish office facilities
and equipment and clerical, bookkeeping and administrative
<PAGE>
services for the Fund, to permit any of its officers or
employees to serve without compensation as trustees or
officers of the Fund if elected to such positions and to
assume the obligations herein set forth for the compensation
herein provided. The Adviser shall for all purposes herein
provided be deemed to be an independent contractor and,
unless otherwise expressly provided or authorized, shall have
no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund. It is understood
and agreed that the Adviser, by separate agreements with the
Fund, may also serve the Fund in other capacities.
2. In the event that the Fund establishes one or more
portfolios other than the Initial Portfolio with respect to
which it desires to retain the Adviser to render investment
advisory and management services hereunder, it shall notify
the Adviser in writing. If the Adviser is willing to render
such services, it shall notify the Fund in writing whereupon
such portfolio or portfolios shall become a Portfolio or
Portfolios hereunder.
3. For the services and facilities described in Section 1,
the Fund will pay to the Adviser at the end of each calendar
month, an investment management fee computed by applying the
following annual rate to the combined average daily net
assets of the Portfolio:
<TABLE>
<CAPTION>
Annual Rate Average Daily Net Assets
----------- ------------------------
<S> <C>
.50 of 1% on the first $215 million
.375 of 1% on the next $335 million
.30 of 1% on the next $250 million
.25 of 1% on average net assets
over $800 million
</TABLE>
The fee as computed above shall be allocated to each
Portfolio based upon the relative average daily net assets of
each Portfolio managed by the Adviser.
If expenses borne by the Portfolio which the Adviser manages
in any fiscal year (including the Adviser's fee, but
excluding interest, taxes, fees incurred in acquiring and
disposing of portfolio securities and, to the extent
permitted, extraordinary expenses), exceed 1 1/2% of average
daily net assets of the Portfolio sup to $30,000,000 and 1%
of average daily net assets of the Portfolios over
$30,000,000, the Adviser will reduce its fee or reimburse the
Fund for any excess. The expense limitation guarantee shall
2
<PAGE>
be allocated to each Portfolio upon a fee reduction or
reimbursement based upon the relative average daily net
assets of each Portfolio. If for any month the expenses of
the Portfolios properly chargeable to the income account
shall exceed 1/12 of the percentage of daily net assets
allowable as expenses, the payment to the Adviser for that
month shall be reduced, and, if necessary, the Adviser shall
make a refund payment to the Fund so that the total net
expense will not exceed such percentage. As of the end of
the Fund's fiscal year, however, the foregoing computations
and payments shall be readjusted so that the aggregate
compensation payable to the Adviser for the year is equal to
the percentage set forth herein of the average daily net
assets as determined as described herein throughout the
fiscal year, diminished to the extent necessary so that the
total of said expense item shall not exceed the expense
limitation. The aggregate of repayments, if any, by the
Adviser to the Fund for the year shall be the amount
necessary to limit the said net expense to said percentage.
The net asset value of each Portfolio shall be calculated in
accordance with the provisions of the Fund's prospectus or at
such other time or times as the trustees may determine in
accordance with the provisions of the Investment Company Act
of 1940. On each day when net asset value is not calculated
the net asset value of a Share of a Portfolio shall be deemed
to be the net asset value of such a Share as of the close of
business on the last day on which such calculation was made
for the purpose of the foregoing computation.
For the month and year in which this Agreement becomes
effective or terminates, there shall be an appropriate
proration on the basis of the number of days that the
Agreement is in effect during the month and year,
respectively. The services of the Adviser to the Fund under
this Agreement are not to be deemed exclusive, and the
Adviser shall be free to render similar services or other
services to others so long as its services hereunder are not
impaired thereby.
4. In addition to the fee of the Adviser, the Fund shall
assume and pay any expenses for services rendered by a
custodian for the safekeeping of the Fund's securities or
other property, for keeping its books of account, for any
other charges of the custodian and for calculating the net
asset value of the Fund as provided in the Prospectus of the
Fund. The Adviser shall not be required to pay and the Fund
shall assume and pay the charges and expenses of its
operations, including compensation of the trustees (other
than those affiliated with the Adviser), charges and expenses
of independent auditors, of legal counsel, of any transfer or
dividend disbursing agent or any registrar of the Fund, costs
3
<PAGE>
of acquiring and disposing of portfolio securities, interest,
if any, on obligations incurred by the Fund, costs of share
certificates and of reports, membership dues in the
Investment Company Institute or any similar organization,
costs of reports and notices to shareholders, other like
miscellaneous expenses and all taxes and fees payable to
federal, state or other governmental agencies on account of
the registration of securities issued by the Fund, filing of
corporate documents or otherwise. The Fund shall not pay or
incur any obligation for any management or administrative
expenses for which the Fund intends to seek reimbursement
from the Adviser as herein provided without first obtaining
the written approval of the Adviser. The Adviser shall
arrange, if desired by the Fund, for officers or employees of
the Adviser to serve, without compensation from the Fund, as
trustees, officers or agents of the Fund if duly elected or
appointed to such positions and subject to their individual
consent and to any limitations imposed by law.
5. Subject to applicable statutes and regulations, it is
understood that trustees, officers or agents of the Fund are
or may be interested in the Adviser as officers, directors,
agents, shareholders or otherwise, and that the officers,
directors, shareholders and agents of the Adviser may be
interested in the Fund otherwise than as a trustee, officer
or agent.
6. The Adviser shall not be liable for any error of
judgment or of law, or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates,
except loss resulting from willful misfeasance, bad faith or
gross negligence on the part of the Adviser in the
performance of its obligations and duties, or by reason of
its reckless disregard of its obligations and duties under
this Agreement.
7. This Agreement shall become effective on the date hereof
and shall remain in full force until December 1, 1986, unless
sooner terminated as hereinafter provided. This Agreement
shall continue in force from year to year thereafter, but
only as long as such continuance is specifically approved at
least annually for each Portfolio in the manner required by
the Investment Company Act of 1940; provided, however, that
if the continuation of this Agreement is not approved for a
Portfolio, the Adviser may continue to serve in such capacity
for such Portfolio in the manner and to the extent permitted
by the Investment Company Act of 1940 and the rules and
regulations thereunder.
This Agreement shall automatically terminate in the event of
its assignment and may be terminated at any time without the
payment of any penalty with respect to any or all Portfolios
4
<PAGE>
by the Fund or by the Adviser on sixty (60) days written
notice to the other party. The Fund may effect termination
with respect to any Portfolio by action of the Board of
Trustees or by vote of a majority of the outstanding shares
such Portfolio, accompanied by appropriate notice.
This Agreement may be terminated with respect to any
Portfolio at any time without the payment of any penalty by
the Board of Trustees or by vote of a majority of the
outstanding Shares of such Portfolio in the event that it
shall have been established by a court of competent
jurisdiction that the Adviser or any officer or director of
the Adviser has taken any action which results in a breach of
the covenants of the Adviser set forth herein.
Termination of this Agreement shall not affect the right of
the Adviser to receive payments on any unpaid balance of the
compensation described in Section 3 earned prior to such
termination.
8. 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.
9. 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.
10. All parties hereto are expressly put on notice of the
Kemper Money Market Fund Agreement and Declaration of Trust
dated August 9, 1985 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 the
Adviser for recovery of that portion of the investment
management fee (or any other liability of the Fund arising
hereunder) allocated to a particular Portfolio, whether in
accordance with the express terms hereof or otherwise, the
Adviser shall have recourse solely against the assets of that
Portfolio to satisfy such claim and shall have no recourse
against the assets of any other Portfolio for such purpose.
11. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 10 hereof
which shall be construed in accordance with the laws of The
5
<PAGE>
Commonwealth of Massachusetts) the laws of the State of
Illinois.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this
Agreement to be executed as of the day and year first above
written.
KEMPER MONEY MARKET FUND
By /s/ Charles M. Kierscht
-----------------------------
President
Attest: /s/ Gordon P. Wilson
---------------------------
Vice President
KEMPER FINANCIAL SERVICES, INC.
By /s/ Robert J. Engling
------------------------------
Senior Vice President
Attest: /s/ David F. Dierenfeldt
---------------------------
Assistant Secretary
6
<PAGE>
NOTIFICATION OF ADDITIONAL PORTFOLIO
------------------------------------
Kemper Money Market Fund, a Massachusetts business trust
(the "Fund"), pursuant to Paragraph 2 of the Investment
Management Agreement ("Management Agreement") dated November 29,
1985 between the Fund and Kemper Financial Services, Inc. (the
"Adviser") hereby notifies the Adviser that it desires to retain
the Adviser to render investment advisory and management services
under the Management Agreement for the Government Securities
Portfolio of the Fund.
Dated: November 14, 1986
Kemper Money Market Fund
By: /s/ Charles M. Kierscht
---------------------------
Title: President
Attest: /s/ Philip J. Collora
-------------------------
Title: Assistant Secretary
Adviser, pursuant to said Paragraph 2 of the Management
Agreement, hereby notifies the Fund that it is willing to render
the aforesaid services for the Government Securities Portfolio
and acknowledges that such Government Securities Portfolio shall
hereby become a Portfolio under the Management Agreement.
Dated: November 14, 1986
Kemper Financial Services, Inc.
By: /s/ Robert J. Engling
------------------------------
Title: Senior Vice President
Attest: /s/ David F. Dierenfeldt
--------------------------
Title: Assistant Secretary
<PAGE>
KEMPER MONEY MARKET FUND
NOTIFICATION OF ADDITIONAL PORTFOLIO
------------------------------------
Kemper Money Market Fund, a Massachusetts business trust
(the "Fund"), pursuant to Paragraph 2 of the Investment
Management Agreement ("Management Agreement") dated November 29,
1985 between the Fund and Kemper Financial Services, Inc. (the
"Adviser") hereby notifies the Adviser that it desires to retain
the Adviser to render investment advisory and management services
under the Management Agreement for the Tax-Exempt Portfolio of
the Fund.
Dated: September 9, 1987
Kemper Money Market Fund
By: /s/ Charles M. Kierscht
---------------------------
Title: President
Attest: /s/ Philip J. Collora
-------------------------
Title: Assistant Secretary
Adviser, pursuant to said Paragraph 2 of the Management
Agreement, hereby notifies the Fund that it is willing to render
the aforesaid services for the Tax-Exempt Portfolio and
acknowledges that such Tax-Exempt Portfolio shall hereby become a
Portfolio under the Management Agreement.
Dated: September 9, 1987
Kemper Financial Services, Inc.
By: /s/ Robert J. Engling
------------------------------
Title: Senior Vice President
Attest: /s/ Edward J. Wiles, Jr.
--------------------------
Title: Assistant Secretary
<PAGE>
UNDERWRITING AGREEMENT
AGREEMENT made as of this 24th day of November, 1985 between
KEMPER MONEY MARKET FUND a Massachusetts business trust
(hereinafter called the "Fund"), and KEMPER FINANCIAL SERVICES,
INC., a Delaware corporation (hereinafter called the
"Underwriter");
WITNESSETH:
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 the Underwriter its agent for
the 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 the Underwriter 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.
2. The Underwriter hereby accepts appointment as agent for
the distribution of the shares of the Fund and agrees that it
will 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 Agreement and Declaration of Trust of the Fund.
3. The Fund agrees that it will use its best efforts to
keep effectively registered under the Securities Act for sale as
herein contemplated such shares as the Underwriter shall
reasonably request and as the Securities and Exchange Commission
shall permit to be so registered.
<PAGE>
4. 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.
5. The Underwriter shall sell shares of the Fund to or
through qualified dealers or others in such manner, not
inconsistent with the provisions hereof and the then effective
registration statement of the Fund under the Securities Act (and
related prospectus), as the Underwriter may determine from time
to time, provided that no dealer or other person shall be
appointed or authorized to act as agent of the Fund without the
prior consent of the Fund. It is mutually agreed that, in
addition to sales made by it as agent of the Fund, the
Underwriter may, in its discretion, also sell shares of the Fund
as principal to persons with whom it does not have dealer selling
group agreements.
6. Shares of the Fund offered for sale or sold by the
Underwriter shall be so offered or sold at a price per share
determined in accordance with the then current prospectus
relating to the sale of such shares except as departure from such
prices shall be permitted by the rules and regulations of the
Securities and Exchange Commission; provided, however, that any
public offering price for shares of the Fund shall be the net
value per share. The net asset value per share shall be
determined in the manner and at the times set forth in the then
current prospectus of the Fund relating to such shares.
7. The price the Fund shall receive for all shares
purchased from the Fund shall be the net asset value used in
determining the public offering price applicable to the sale of
such shares.
8. The Underwriter shall issue and deliver on behalf of the
Fund such confirmations of sales made by it as agent pursuant to
this agreement as may be required. At or prior to the time of
issuance of shares, the Underwriter 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 the
Underwriter may specify.
9. The Fund will execute any and all documents and furnish
any and all information which 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 the Underwriter 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).
2
<PAGE>
10. The Fund will furnish to the Underwriter from time to
time such information with respect to the Fund and its shares as
the Underwriter may reasonably request for use in connection with
the sale of shares of the Fund. The Underwriter agrees that it
will not use or distribute or authorize the use, distribution or
dissemination by its dealers or others in connection with the
sale of such 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 law and regulations, and that it will furnish
the Fund with copies of all such material.
11. The Underwriter shall order shares of the Fund from the
Fund only to the extent that it shall have received purchase
orders therefor. The Underwriter will not make, or authorize any
dealers or others to make any short sales of shares of the Fund.
12. The Underwriter, 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.
13. In selling or reacquiring shares of the Fund for the
account of the Fund, the Underwriter 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 the
Underwriter or any employee, representative or agent of the
Underwriter. The Underwriter will observe and be bound by all
the provisions of the Agreement and Declaration of Trust of the
Fund (and of any fundamental policies adopted by the Fund
pursuant to the Investment Company Act of 1940, notice of which
shall have been given to the Underwriter) which at the time in
any way require, limit, restrict or prohibit or otherwise
regulate any action on the part of the Underwriter.
14. The Underwriter will require each dealer 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 of the Fund's shares, and
neither the Underwriter nor any such dealers shall withhold the
placing of purchases orders so as to make a profit thereby.
15. The Fund will pay or cause to the paid expenses
(including the fees and disbursements of its own counsel) and all
taxes and fees payable to the Federal, state or other
governmental agencies on account of the registration or
qualifications of securities issued by the Fund or otherwise.
The Fund will also pay or cause to be paid expenses incident to
the issuance of shares of beneficial interest, such as the cost
3
<PAGE>
of share certificates, issue taxes, and fees for the transfer
agent. The Underwriter will pay all expenses (other than
expenses which one or more dealers may bear pursuant to any
agreement with the Underwriter) incident to the sale and
distribution of the shares issued or sold hereunder, including,
without limiting the generality of the foregoing, all 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 report or other communication to stockholders in
their capacity as such) and expenses of advertising in connection
with such offering.
16. The agreement shall become effective on the date hereof
and shall continue in effect until December 1, 1986 and from year
to year thereafter, but only so long as such continuance is
approved in the manner required by the Investment Company Act of
1940. Either party hereto may terminate this agreement on any
date by giving the other party at least six months prior written
notice of such termination specifying the date fixed therefor.
Without prejudice to any other remedies of the Fund in any such
event the Fund may terminate this agreement at any time
immediately upon any failure of fulfillment of any of the
obligations of the Underwriter hereunder.
17. This agreement shall automatically terminate in the
event of its assignment.
18. Any notice under this agreement shall be in writing,
addressed and delivered or mailed, postage postpaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
19. All parties hereto are expressly put on notice of the
Fund's Agreement and Declaration of Trust dated August 5, 1985
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 Underwriter
for recovery of any liability of the Fund arising hereunder
allocated to a particular series or portfolio ("Portfolio") of
the Fund if there be more than one, whether in accordance with
the express terms hereof or otherwise, the Underwriter shall have
recourse solely against the assets of that Portfolio to satisfy
4
<PAGE>
such claim and shall have no recourse against the assets of any
other Portfolio for such purpose.
IN WITNESS WHEREOF, the Fund and the Underwriter have each
caused this agreement to be executed on its behalf by an officer
thereunto duly authorized and its seal to be affixed on the day
and year first above written.
KEMPER MONEY MARKET FUND
By /s/ Charles M. Kierscht
-------------------------------
Title: President
Attest: /s/ Gordon P. Wilson
----------------------------
Title: Vice President
KEMPER FINANCIAL SERVICES, INC.
By /s/ Robert J. Engling
---------------------------------
Title: Sr. VP & Secy
Attest: /s/ David F. Dierenfeldt
----------------------------
Title: Assistant Secretary
5
<PAGE>
ASSIGNMENT AND ASSUMPTION
ASSIGNMENT AND ASSUMPTION ("Assignment and Assumption") made
and entered into as of February 1, 1995 by and between Kemper
Financial Services, Inc., a Delaware corporation ("Assignor"),
and Kemper Distributors, Inc., a Delaware corporation
("Assignee").
WHEREAS, Assignor serves as principal underwriter for Kemper
Money Market Fund, a Massachusetts business trust (the "Fund"),
pursuant to that certain Underwriting Agreement dated November
29, 1985 by and between Assignor and the Fund (the "Agreement");
WHEREAS, Assignee is a wholly-owned subsidiary of Assignor;
WHEREAS, It has been proposed that the rights, duties and
responsibilities of Assignor under the Agreement be transferred
to and assumed by Assignee;
WHEREAS, The Fund has determined that such transfer of
rights, duties and responsibilities is reasonable and in the best
interests of the Fund and the Fund's shareholders; and
NOW, THEREFORE, in consideration of the covenants
hereinafter contained, it is hereby agreed by and between the
parties hereto as follows:
1. Assignment and Assumption. Assignor assigns and
transfers to Assignee all of Assignor's rights, interests,
liabilities, duties and obligations under the Agreement
("Assigned Rights and Obligations"). Assignee accepts the
foregoing assignment and transfer of the Assigned Rights and
Obligations and agrees to assume, pay, perform and otherwise be
fully responsible for the same.
2. Further Assurances. From time to time, at the request
of either party, the other party will execute and deliver such
further instruments of assignment, transfer and assumption and
take such further action as may be required to assign, transfer
and assume the Assigned Rights and Obligations.
3. Applicable Law. This Assignment and Assumption shall be
governed by the laws of the State of Illinois.
4. Amendments. This Assignment and Assumption may only be
amended by the written agreement of the parties.
<PAGE>
IN WITNESS WHEREOF, the parties have each caused this
Assignment and Assumption to be executed on its behalf by a duly
authorized officer as of the date first written above.
KEMPER FINANCIAL SERVICES, INC.
By: /s/ Patrick H. Dudasik
----------------------------
Its: Senior Vice President
KEMPER DISTRIBUTORS, INC.
By: /s/ James L. Greenawalt
----------------------------
Its: Executive Vice President
The undersigned hereby acknowledges and consents to the foregoing
Assignment and Assumption as of February 1, 1995.
KEMPER MONEY MARKET FUND
By: /s/ John E. Peters
------------------------------
Its: Vice President
2
<PAGE>
SELLING GROUP AGREEMENT KEMPER DISTRIBUTORS, INC.
120 South LaSalle Street, Chicago, Illinois 60603
Dear Financial Services Firm:
As principal underwriter and distributor, we invite you to
join a Selling Group for the distribution of shares of the Kemper
Mutual Funds (herein called "Funds"), but only in those states in
which the shares of the respective Funds may legally be offered
for sale. As exclusive agent of each of the Funds, we offer to
sell to you shares of the Funds on the following terms:
1. In all sales of these shares to the public you shall act
as dealer for your own account, and in no transaction shall you
have any authority to act as agent for the issuer, for us, or
for any other member of the Selling Group.
2. Orders received from you will be accepted by us only at
the public offering price applicable to each order, as
established by the Prospectus of each Fund, subject to the
discount, commission or other concession, if any, as provided in
such Prospectus. Upon receipt from you of any order to purchase
shares of a Fund, we shall confirm to you in writing or by wire
to be followed by a confirmation in writing. Additional
instructions may be forwarded to you from time to time. All
orders are subject to acceptance or rejection by us in our sole
discretion.
3. You may offer and sell shares to your customers only at
the public offering price determined in the manner described in
the applicable Prospectus. The public offering price is the net
asset value per share as provided in the applicable Prospectus
plus, with respect to certain Funds, a sales charge from which
you shall receive a discount equal to a percentage of the
applicable offering price as provided in the applicable
Prospectus. You shall receive a sales commission, with respect to
certain Funds, equal to a percentage of the amount invested as
provided in the applicable Prospectus. You shall receive a
distribution service fee, for certain Funds for which such fees
are available, as provided in the applicable Prospectus which fee
shall be payable with respect to such assets, for such periods
and at such intervals as are from time to tome specified by us.
The discounts or other concessions to which you may be entitled
in connection with sales to your customers pursuant to any
special features of a Fund (such as cumulative discounts, letters
of intent, etc., the terms of which shall be as described in the
applicable Prospectus and related forms) shall be in accordance
with the terms of such features. You may receive an
administrative service fee, with respect to certain Funds for
which such fees are available, as provided in the applicable
Prospectus, which fee shall be payable with respect to such
<PAGE>
assets, for such periods and at such intervals as are from time
to time specified by us.
4. By accepting this agreement, you agree:
(a) To purchase shares only from us or from your
customers.
(b) That you will purchase shares from us only to cover
purchase orders already received from your customers, or for your
own bona fide investments.
(c) That you will not purchase shares from your
customers at a price lower than the bid price then quoted by or
for the Fund involved. You may, however, sell shares for the
account of your customer to the Fund, or to us as agent for the
Fund, at the bid price currently quoted by or for the Fund and
charge your customer a fair commission for handling the
transaction.
(d) That you will not withhold placing with us orders
received from your customers so as to profit yourself as a result
of such withholding.
5. We will not accept from you any conditional orders for
shares.
6. If any shares confirmed to you under the terms of this
agreement are repurchased by the issuing Fund or by us as agent
for the Fund, or are tendered for repurchase, within seven
business days after the date of our confirmation of the original
purchase order, you shall forthwith refund to us the full
discount, commission, finder's fee or other concession, if any,
allowed or paid to you on such shares.
7. Payment for shares ordered from us shall be in New York
clearing house funds and must be received by the appropriate
Fund's shareholder service agent within seven days after our
acceptance of your order (or such shorter time period as may be
required by applicable regulations). If such payment is not
received, we reserve the right, without notice, forthwith to
cancel the sale or, at our option, to sell the shares ordered
back to the Fund, in which case we may hold you responsible for
any loss, including loss of profit suffered by us as a result of
your failure to make such payment.
8. Shares sold to you hereunder shall be available in
negotiable form for delivery at the appropriate Fund's
shareholder services agent, against payment, unless other
instructions have been given.
9. All sales will be made subject to our receipt of shares
from the Fund. We reserve the right, in our discretion, without
notice, to suspend sales or withdraw the offering of shares
entirely. We reserve the right to modify, cancel or change the
terms of this agreement, upon 15 days prior written notice to
you. Also, the sales charges, discounts, commissions or other
concessions, service fees of any kind provided for hereunder are
subject to change at any time by the Funds and us.
10. All communications to us should be sent to the address
in the heading above. Any notice to you shall be duly given if
mailed or telegraphed to you at the address specified by you
below.
<PAGE>
11. This agreement shall be construed in accordance with the
laws of Illinois. This agreement is subject to the Prospectuses
of the Funds from time to time in effect, and, in the event of a
conflict, the terms of the Prospectuses shall control. References
herein to the "Prospectus" of a Fund shall mean the prospectus
and statement of additional information of such Fund as from time
to time in effect. Any changes, modifications or additions
reflected in any such Prospectus shall be effective on the date
of such Prospectus (or supplement thereto) unless specified
otherwise.
12. This agreement is subject to the Additional Stipulations
and Conditions on the reverse side hereof, all of which are a
part of this agreement.
Kemper Distributors, Inc.
By
----------------------------
Authorized Signature
Title
-------------------------
We have read the foregoing agreement and accept and agree to the
terms and conditions thereof.
Firm
-------------------------
Witness
------------------------ By
----------------------------
Authorized Representative
Dated Title
------------------------- -------------------------
<PAGE>
ADDITIONAL STIPULATIONS AND CONDITIONS
13. No person is authorized to make any representations
concerning shares of any Fund except those contained in the
Prospectus of such Fund and in printed information subsequently
issued by the Fund or by us as information supplemental to such
Prospectus. If you wish to use your own advertising with respect
to a Fund, all such advertising must be approved by us or by the
Fund prior to use. You shall be responsible for any required
filing of such advertising.
14. Your acceptance of this agreement constitutes a
representation (i) that you are a registered security dealer and
a member in good standing of the National Association of
Securities Dealers, Inc. and that you agree to comply with all
state and federal laws, rules and regulations applicable to
transactions hereunder and to the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., including
specifically Section 26, Article III thereof, or (ii) if you are
offering and selling shares of the Funds only in jurisdictions
outside of the several states, territories and possessions of the
United States and are not otherwise required to be a member of
the National Association of Securities Dealers, Inc., that you
nevertheless agree to conduct your business in accordance with
the spirit of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and to observe the laws
and regulations of the applicable jurisdiction. You likewise
agree that you will not offer to sell shares of any Fund in any
state or other jurisdiction in which they may not lawfully be
offered for sale.
15. You shall make available an investment management
account for your customers through the Funds and shall provide
such office space and equipment, telephone facilities, personnel
and literature distribution as is necessary or appropriate for
providing information and services to your customer. Such
services and assistance may include, but not be limited to,
establishment and maintenance of shareholder accounts and
records, processing purchase and redemption transactions,
answering routine inquiries regarding the Funds, and such other
services as may be agreed upon from time to time and as may be
permitted by applicable statute, rule, or regulation. You agree
to release, indemnify and hold harmless the Funds, us and our
respective representatives and agents from any and all direct or
indirect liabilities or losses resulting from requests,
directions, actions or inactions of or by you, your officers,
employees or agents regarding the purchase, redemption or
transfer of registration of shares of the Funds for accounts of
you, your customers and other shareholders or from any
unauthorized or improper use of any on-line computer facilities.
You shall prepare such periodic reports for us as shall
reasonably be requested by us. You shall immediately inform the
Funds or us of all written complaints received by you from Fund
shareholders relating to the maintenance of their accounts and
shall promptly answer all such complaints and other similar
correspondence. You shall provide the Funds and us on a timely
<PAGE>
basis with such information as may be required to complete
various regulatory forms.
16. As a result of the necessity to compute the amount of
any contingent deferred sales charge due with respect to the
redemption of shares, you may not hold shares of a Fund imposing
such a charge in an account registered in your name or in the
name of your nominee for the benefit of certain of your customers
except with our prior written consent. Except as otherwise
permitted by us, shares of such a Fund owned by a shareholder
must be in a separate identifiable account for such shareholder.
17. Shares of certain Funds have been divided into separate
classes: Class A Shares, Class B Shares and Class C Shares.
Class A shares are offered at net asset value plus an initial
sales charge. Class B Shares are offered at net asset value
without an initial sales charge but are subject to a contingent
deferred sales charge and a Rule 12b-1 fee and have a conversion
feature. Class C Shares are offered at net asset value without an
initial sales charge or contingent deferred sales charge but are
subject to a Rule 12b-1 fee and have no conversion feature.
Please see the appropriate Prospectuses for a more complete
description of the distinctions between the classes of shares.
It is important to investors not only to choose Funds
appropriate for their investment objectives, but also to choose
the appropriate distribution arrangement, based on the amount
invested and the expected duration of the investment. To assist
investors in these decisions, we have instituted the following
policies with respect to orders for shares of the Funds. The
following policies and procedures with respect to sales of
classes of shares of the Funds apply to each broker/dealer that
distributes shares of the Funds.
1. All purchase orders for $500,000 or more (not including
street name or omnibus accounts) should be for class A Shares.
2. Any purchase order of less than $500,000 may be for
either Class A, Class B or Class C Shares in light of the
relevant facts and circumstances, including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold the
shares; and
c. any other relevant circumstances such as the
availability of purchases under a Letter of Intent, Combined
Purchases or Cumulative Discount Privilege.
There are instances when one pricing structure may be more
appropriate than another. For example, investors who would
qualify for a reduced sales charge on Class A Shares may
determine that payment of a reduced front-end sales charge is
preferable to payment of an ongoing Rule 12b-1 fee. On the other
hand, investors whose orders would not qualify for such a
discount and who plan to hold their investment for more than six
years may wish to defer the sales charge and would consider Class
B Shares. Investors who prefer not to pay an initial sales charge
and who plan to redeem their shares within six years might
consider Class C Shares.
Appropriate supervisory personnel within your organization
must ensure that all employees receiving investor inquiries about
<PAGE>
the purchase of shares of the Funds advise the investor of the
available pricing structures offered by the Funds and the impact
of choosing one method over another, including breakpoints and
the availability of Letters of Intent, Combined Purchases and
Cumulative Discounts. In some instances it may be appropriate
for a supervisory person to discuss a purchase with the investor.
18. This agreement shall be in substitution of any prior
selling group agreement between you and us regarding these
shares. This agreement shall not be applicable to the provision
of services for Cash Equivalent Fund, Tax-Exempt California Money
Market Fund, Tax Exempt New York Money Market Fund, Investors
Cash Trust and similar wholesale money market funds. The payment
of related distribution and services fees, shall be subject to
separate services agreements.
<PAGE>
CUSTODY AGREEMENT
AGREEMENT, made the 1st day of March, 1995 by and between
Kemper Money Market Fund, a Massachusetts business trust having
its principal place of business at 120 South LaSalle Street,
Chicago, Illinois 60603 ("Fund") and Investors Fiduciary Trust
Company, a trust company organized and existing under the laws of
Missouri, having its principal place of business at Kansas City,
Missouri ("Custodian").
WHEREAS, Fund wants to appoint Investors Fiduciary Trust
Company as Custodian to have custody of the Fund's portfolio
securities and monies pursuant to this Agreement; and
WHEREAS, Investors Fiduciary Trust Company wants to accept
such appointment;
NOW, THEREFORE, for and in consideration of the mutual
promises contained herein, the parties hereto, intending to be
legally bound, mutually covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN.
Fund hereby constitutes and appoints Investors Fiduciary
Trust Company as Custodian of Fund which is to include:
A. Custody of the securities and monies at any time
owned by Fund; and
B. Performing certain accounting and record keeping
functions relating to its function as Custodian for Fund and
each of its Portfolios.
2. DELIVERY OF CORPORATE DOCUMENTS.
Fund has delivered or will deliver to Custodian prior to the
effective date of this Agreement, copies of the following
documents and all amendments or supplements thereto,
properly certified or authenticated:
A. Resolutions of the Board of Trustees of Fund
appointing Investors Fiduciary Trust Company as Custodian
hereunder and approving the form of this Agreement; and
B. Resolutions of the Board of Trustees of Fund
authorizing certain persons to give instructions on behalf
of Fund to Custodian and authorizing Custodian to rely upon
written instructions over their signatures.
<PAGE>
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. Delivery of Assets
Fund will deliver or cause to be delivered to Custodian
on the effective date of this Agreement, or as soon
thereafter as practicable, and from time to time thereafter,
all portfolio securities acquired by it and monies then
owned by it except as permitted by the Investment Company
Act of 1940 ("1940 Act") or from time to time coming into
its possession during the time this Agreement shall continue
in effect. Custodian shall have no responsibility or
liability whatsoever for or on account of securities or
monies not so delivered. All securities so delivered to
Custodian (other than bearer securities) shall be registered
in the name of Fund or its nominee, or of a nominee of
Custodian, or shall be properly endorsed and in form for
transfer satisfactory to Custodian.
B. Safekeeping
Custodian will receive delivery of and keep safely the
assets of Fund delivered to it from time to time. Custodian
will not deliver any such assets to any person except as
permitted by the provisions of this Agreement or any
agreement executed by it according to the terms of this
Agreement. Custodian shall be responsible only for the
monies and securities of Fund held directly by it or its
nominees or sub-custodian under this Agreement; provided
that Custodian's responsibility for any sub-custodian
appointed at the Fund's direction for purposes of (i)
effecting third-party repurchase transactions with banks,
brokers, dealers, or other entities through the use of a
common custodian or sub-custodian; or (ii) providing
depository and clearing agency services with respect to
certain variable rate demand note securities ("special
sub-custodian") shall be further limited as set forth in
this Agreement. Custodian may participate directly or
indirectly through a sub-custodian in the Depository Trust
Company, the Treasury/Federal Reserve Book Entry System, the
Participants Trust Company and any other securities
depository approved by the Board of Trustees of the Fund,
subject to compliance with the provisions of Rule 17f-4
under the 1940 Act including, without limitation, the
specific provisions of subsections (a) (1) through (d) (4)
thereof.
C. Registration of Securities
Custodian will hold stocks and other registerable
portfolio securities of Fund registered in the name of Fund
or in the name of any nominee of Custodian for whose
2
<PAGE>
fidelity and liabilities Custodian shall be fully
responsible, or in street certificate form, so-called, with
or without any indication of fiduciary capacity. Unless
otherwise instructed, Custodian will register all such
portfolio securities in the name of its authorized nominee.
D. Exchange of Securities
Upon receipt of instructions, Custodian will exchange,
or cause to be exchanged, portfolio securities held by it
for the account of Fund for other securities or cash issued
or paid in connection with any reorganization,
recapitalization, merger, consolidation, split-up of shares,
change of par value, conversion or otherwise, and will
deposit any such securities in accordance with the terms of
any reorganization or protective plan. Without
instructions, Custodian is authorized to exchange securities
held by it in temporary form for securities in definitive
form, to effect an exchange of shares when the par value of
the stock is changed, and, upon receiving payment therefore,
to surrender bonds or other securities held by it at
maturity or when advised of earlier call for redemption,
except that Custodian shall receive instructions prior to
surrendering any convertible security.
E. Purchases or Sales of Investments of Fund
Fund shall, on each business day on which a purchase or
sale of a portfolio security shall be made by it, deliver to
Custodian instructions which shall specify with respect to
each such transaction:
(1) The name of the issuer and description of the security;
(2) The number of shares or the principal amount purchased
or sold, and accrued interest, if any;
(3) The trade date;
(4) The settlement date;
(5) The date when the securities sold were purchased by
Fund or other information identifying the securities
sold and to be delivered;
(6) The price per unit and the brokerage commission, taxes
and other expenses in connection with the transaction;
(7) The total amount payable or receivable upon such
transaction; and
3
<PAGE>
(8) The name of the person from whom or the broker or
dealer through whom the transaction was made.
In accordance with such purchase instructions, Custodian
shall pay for out of monies held for the account of Fund,
but only insofar as monies are available therein for such
purpose, and receive the portfolio securities so purchased
by or for the account of Fund. Such payment shall be made
only upon receipt by Custodian of the securities so
purchased in form for transfer satisfactory to Custodian.
In accordance with such sales instructions, Custodian will
deliver or cause to be delivered the securities thus
designated as sold for the account of Fund to the broker or
other person specified in the instructions relating to such
sale, such delivery to be made only upon receipt of payment
therefor in such form as shall be satisfactory to Custodian,
with the understanding that Custodian may deliver or cause
to be delivered securities for payment in accordance with
the customs prevailing among dealers in securities.
F. Purchases or Sales of Options and Futures
Transactions
Fund will, on each business day on which a purchase or
sale of the following options and/or futures shall be made
by it, deliver to Custodian instructions which shall specify
with respect to each such purchase or sale:
(1) Securities Options
(a) The underlying security;
(b) The price at which purchased or sold;
(c) The expiration date;
(d) The number of contracts;
(e) The exercise price;
(f) Whether opening, exercising, expiring or closing
the transaction;
(g) Whether the transaction involves a put or call;
(h) Whether the option is written or purchased;
(i) Market on which option traded; and
(j) Name and address of the broker or dealer through
whom the sale or purchase was made.
(2) Options on Indices
(a) The index;
(b) The price at which purchased or sold;
(c) The exercise price;
(d) The premium;
(e) The multiple;
(f) The expiration date;
4
<PAGE>
(g) Whether the transaction is an opening, exercising,
expiring or closing transaction;
(h) Whether the transaction involves a put or call;
(i) Whether the option is written or purchased; and
(j) Name and address of the broker or dealer through
whom the sale or purchase was made.
(3) Securities Index Futures Transactions
(a) The last trading date specified in the contract
and, when available, the closing level, thereof;
(b) The index level on the date the contract is
entered into;
(c) The multiple;
(d) Any margin requirements;
(e) The need for a segregated margin account (in
addition to instructions; and, if not already in
the possession of Custodian, Fund shall deliver a
substantially complete and executed custodial
safekeeping account and procedural agreement which
shall be incorporated into this Custody
Agreement); and
(f) The name and address of the futures commission
merchant through whom the sale or purchase was
made.
(4) Options on Index Futures Contracts
(a) The underlying index futures contract;
(b) The premium;
(c) The expiration date;
(d) The number of options;
(e) The exercise price;
(f) Whether the transaction involves an opening,
exercising, expiring or closing transaction;
(g) Whether the transaction involves a put or call;
(h) Whether the option is written or purchased; and
(i) The market on which the option is traded.
G. Securities Pledged to Secure Loans
(1) Upon receipt of instructions, Custodian will
release or cause to be released securities held in custody
to the pledgee designated in such instructions by way of
pledge or hypothecation to secure any loan incurred by Fund;
provided, however, that the securities shall be released
only upon payment to Custodian of the monies borrowed,
except that in cases where additional collateral is required
to secure a borrowing already made, further securities may
be released or caused to be released for that purpose upon
receipt of instructions. Upon receipt of instructions,
Custodian will pay, but only from funds available for such
5
<PAGE>
purpose, any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon
surrender of the note or notes evidencing such loan.
(2) Upon receipt of instructions, Custodian will
release securities held in custody to the borrower
designated in such instructions; provided, however, that the
securities shall be released only upon deposit with
Custodian of full cash collateral as specified in such
instructions, and that Fund will retain the right to any
dividends, interest or distribution on such loaned
securities. Upon receipt of instructions and the loaned
securities, Custodian will release the cash collateral to
the borrower.
H. Routine Matters
Custodian will, in general, attend to all routine and
mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with
securities or other property of Fund except as may be
otherwise provided in this Agreement or directed from time
to time by the Board of Trustees of Fund.
I. Demand Deposit Account
Custodian will open and maintain a demand deposit
account or accounts in the name of Custodian, subject only
to draft or order by Custodian upon receipt of instructions.
All monies received by Custodian from or for the account of
Fund shall be deposited in said account or accounts.
When properly authorized by a resolution of the Board
of Trustees of Fund, Custodian may open and maintain an
additional demand deposit account or accounts in such other
banks or trust companies as may be designated in such
resolution, such accounts, however, to be in the name of
Custodian and subject only to its draft or order.
J. Income and Other Payments to Fund
Custodian will:
(1) collect, claim and receive and deposit for the
account of Fund all income and other payments which become
due and payable on or after the effective date of this
Agreement with respect to the securities deposited under
this Agreement, and credit the account of Fund with such
income on the payable date;
6
<PAGE>
(2) execute ownership and other certificates and
affidavits for all federal, state and local tax purposes in
connection with the collection of bond and note coupons; and
(3) take such other action as may be necessary or
proper in connection with:
(a) the collection, receipt and deposit of such income
and other payments, including but not limited to the
presentation for payment of:
(1) all coupons and other income items requiring
presentation;
(2) all other securities which may mature or be
called, redeemed, retired or otherwise become
payable and regarding which the Custodian has
actual knowledge, or notice of which is contained
in publications of the type to which it normally
subscribes for such purpose; and
(b) the endorsement for collection, in the name of
Fund, of all checks, drafts or other negotiable
instruments.
Custodian, however, shall not be required to institute
suit or take other extraordinary action to enforce
collection except upon receipt of instructions and upon
being indemnified to its satisfaction against the costs and
expenses of such suit or other actions. Custodian will
receive, claim and collect all stock dividends, rights and
other similar items and deal with the same pursuant to
instructions. Unless prior instructions have been received
to the contrary, Custodian will, without further
instructions, sell any rights held for the account of Fund
on the last trade date prior to the date of expiration of
such rights.
K. Payment of Dividends and Other Distributions
On the declaration of any dividend or other
distribution on the shares of beneficial interest of any
Portfolio ("Portfolio Shares") by the Board of Trustees of
Fund, Fund shall deliver to Custodian instructions with
respect thereto, including a copy of the Resolution of said
Board of Trustees certified by the Secretary or an Assistant
Secretary of Fund wherein there shall be set forth the
record date as of which shareholders are entitled to receive
such dividend or distribution, and the amount payable per
share on such dividend or distribution.
7
<PAGE>
On the date specified in such Resolution for the
payment of such dividend or other distribution, Custodian
shall pay out of the monies held for the account of Fund,
insofar as the same shall be available for such purposes,
and credit to the account of the Dividend Disbursing Agent
for Fund, such amount as may be necessary to pay the amount
per share payable in cash on Portfolio Shares issued and
outstanding on the record date established by such
Resolution.
L. Portfolio Shares Purchased by Fund
Whenever any Portfolio Shares are purchased by Fund,
Fund or its agent shall advise Custodian of the aggregate
dollar amount to be paid for such shares and shall confirm
such advice in writing. Upon receipt of such advice,
Custodian shall charge such aggregate dollar amount to the
custody account of Fund and either deposit the same in the
account maintained for the purpose of paying for the
purchase of Portfolio Shares or deliver the same in
accordance with such advice.
M. Portfolio Shares Purchased from Fund
Whenever Portfolio Shares are purchased from Fund, Fund
will deposit or cause to be deposited with Custodian the
amount received for such shares. Custodian shall not have
any duty or responsibility to determine that Fund Shares
purchased from Fund have been added to the proper
shareholder account or accounts or that the proper number of
such shares have been added to the shareholder records.
N. Proxies and Notices
Custodian will promptly deliver or mail to Fund all
proxies properly signed, all notices of meetings, all proxy
statements and other notices, requests or announcements
affecting or relating to securities held by Custodian for
Fund and will, upon receipt of instructions, execute and
deliver or cause its nominee to execute and deliver such
proxies or other authorizations as may be required. Except
as provided by this Agreement or pursuant to instructions
hereafter received by Custodian, neither it nor its nominee
shall exercise any power inherent in any such securities,
including any power to vote the same, or execute any proxy,
power of attorney, or other similar instrument voting any of
such securities, or give any consent, approval or waiver
with respect thereto, or take any other similar action.
8
<PAGE>
O. Disbursements
Custodian will pay or cause to be paid insofar as funds
are available for the purpose, bills, statements and other
obligations of Fund (including but not limited to
obligations in connection with the conversion, exchange or
surrender of securities owned by Fund, interest charges,
variation margin, dividend disbursements, taxes, management
fees, administration-distribution fees, custodian fees,
legal fees, auditors' fees, transfer agents' fees, brokerage
commissions, compensation to personnel, and other operating
expenses of Fund) pursuant to instructions of Fund setting
forth the name of the person to whom payment is to be made,
the amount of the payment, and the purpose of the payment.
P. Books, Records and Accounts
Custodian acknowledges that all the records it shall
prepare and maintain pursuant to this Agreement shall be the
property of Fund and that upon request of Fund it shall make
Fund's records available to it, along with such other
information and data as are reasonably requested by Fund,
for inspection, audit or copying, or turn said records over
to Fund.
Custodian shall, within a reasonable time, render to
Fund as of the close of business on each day, a detailed
statement of the amounts received or paid and of securities
received or delivered for the account of Fund during said
day. Custodian shall, from time to time, upon request by
Fund, render a detailed statement of the securities and
monies held for Fund under this Agreement, and Custodian
shall maintain such books and records as are necessary to
enable it do so and shall permit such persons as are
authorized by Fund, including Fund's independent public
accountants, to examine such records or to confirm the
contents of such records; and, if demanded, shall permit
federal and state regulatory agencies to examine said
securities, books and records. Upon the written
instructions of Fund or as demanded by federal or state
regulatory agencies, Custodian shall instruct any
sub-custodian to permit such persons as are authorized by
Fund to examine the books, records and securities held by
such sub-custodian which relate to Fund.
Q. Appointment of Sub-Custodian
Notwithstanding any other provisions of this Agreement,
all or any of the monies or securities of Fund may be held
in Custodian's own custody or in the custody of one or more
other banks or trust companies acting as sub-custodians as
may be approved by resolutions of Fund's Board of Trustees,
9
<PAGE>
evidenced by a copy thereof certified by the Secretary or
Assistant Secretary of Fund. Any sub-custodian must have
the qualifications required for custodians under the 1940
Act unless exempted therefrom. Any sub-custodian may
participate directly or indirectly in the Depository Trust
Company, the Treasury/Reserve Book Entry System, the
Participants Trust Company and any other securities
depository approved by the Board of Trustees of the Fund to
the same extent and subject to the same conditions as
provided hereunder. Neither Custodian nor sub-custodian
shall be entitled to reimbursement by Fund for any fees or
expenses of any sub-custodian; provided that Custodian shall
not be liable for, and Fund shall hold Custodian harmless
from, the expenses of any special sub-custodian. The
appointment of a sub-custodian shall not relieve Custodian
of any of its obligations hereunder; provided that Custodian
shall be responsible to Fund for any loss, damage, or
expense suffered or incurred by Fund resulting from the
actions or omissions of a special sub-custodian only to the
extent the special sub-custodian is liable to Custodian.
R. Multiple Portfolios
If Fund shall issue shares of more than one Portfolio
during the term hereof, Custodian agrees that all securities
and other assets of Fund shall be segregated by Portfolio
and all books and records, account values or actions shall
be maintained, held, made or taken, as the case may be,
separately for each Portfolio.
4. INSTRUCTIONS.
A. The term "instructions", as used herein, means
written or oral instructions to Custodian from an authorized
person of Fund. Certified copies of resolutions of the
Board of Trustees of Fund naming one or more persons
authorized to give instructions in the name and on behalf of
Fund may be received and accepted by Custodian as conclusive
evidence of the authority of any person so to act and may be
considered to be in full force and effect (and Custodian
shall be fully protected in acting in reliance thereon)
until receipt by Custodian of notice to the contrary.
Unless the resolution authorizing any person to give
instructions specifically requires that the approval of
anyone else shall first have been obtained, Custodian shall
be under no obligation to inquire into the right of the
person giving such instructions to do so. Notwithstanding
any of the foregoing provisions of this Section 4, no
authorizations or instructions received by Custodian from
Fund shall be deemed to authorize or permit any trustee,
officer, employee, or agent of Fund to withdraw any of the
10
<PAGE>
securities or monies of Fund upon the mere receipt of
instructions from such trustee, officer, employee or agent.
B. No later than the next business day immediately
following each oral instruction referred to herein, Fund
shall give Custodian written confirmation of each such oral
instruction. Either party may electronically record any
oral instruction whether given in person or via telephone.
5. LIMITATION OF LIABILITY OF CUSTODIAN
A. Custodian shall hold harmless and indemnify Fund
from and against any loss or liability arising out of
Custodian's failure to comply with the terms of this
Agreement or arising out of Custodian's negligence, willful
misconduct, or bad faith. Custodian may request and obtain
the advice and opinion of counsel for Fund or of its own
counsel with respect to questions or matters of law, and it
shall be without liability to Fund for any action taken or
omitted by it in good faith, in conformity with such advice
or opinion.
B. If Fund requires Custodian in any capacity to
take, with respect to any securities, any action which
involves the payment of money by it, or which in Custodian's
opinion might make it or its nominee liable for payment of
monies or in any other way, Custodian shall be and be kept
indemnified by Fund in an amount and form satisfactory to
Custodian against any liability on account of such action.
C. Custodian shall be entitled to receive, and Fund
agrees to pay to Custodian, on demand, reimbursement for
such cash disbursements, costs and expenses as may be agreed
upon from time to time by Custodian and Fund.
D. Custodian shall be protected in acting as
custodian hereunder upon any instructions, advice, notice,
request, consent, certificate or other instrument or paper
reasonably appearing to it to be genuine and to have been
properly executed and shall, unless otherwise specifically
provided herein, be entitled to receive as conclusive proof
of any fact or matter required to be ascertained from Fund
hereunder, a certificate signed by Fund's President, or
other officer specifically authorized for such purpose.
E. Without limiting the generality of the foregoing,
Custodian shall be under no duty or obligation to inquire
into, and shall not be liable for:
(1) The validity of the issue of any securities
purchased by or for Fund, the legality of the purchase
thereof or evidence of ownership required by Fund to be
11
<PAGE>
received by Custodian, or the propriety of the decision
to purchase or amount paid therefor;
(2) The legality of the sales of any securities
by or for Fund, or the propriety of the amount paid
therefor;
(3) The legality of the issue or sale of any
shares of Fund, or the sufficiency of the amount to be
received therefor;
(4) The legality of the purchase of any shares of
Fund, or the propriety of the amount to be paid
therefor; or
(5) The legality of the declaration of any
dividend by Fund, or the legality of the issue of any
shares of Fund in payment of any share dividend.
F. Custodian shall not be liable for, or considered
to be the custodian of, any money represented by any check,
draft, wire transfer, clearing house funds, uncollected
funds, or instrument for the payment of money received by it
on behalf of Fund, until Custodian actually receives such
money, provided only that it shall advise Fund promptly if
it fails to receive any such money in the ordinary course of
business, and use its best efforts and cooperate with Fund
toward the end that such money shall be received.
G. Subject to the obligations of Custodian under
Section 3.B. hereof, Custodian shall not be responsible for
loss occasioned by the acts, neglects, defaults or
insolvency of any broker, bank, trust company, or any other
person with whom Custodian may deal in the absence of negli-
gence, misconduct or bad faith on the part of Custodian.
H. Custodian or any sub-custodian shall provide Fund
for its approval by its Board of Trustees agreements with
banks or trust companies which will act as sub-custodian for
Fund pursuant to this Agreement; and, as set forth in
Section 3.B hereof, Custodian shall be responsible for the
monies and securities of the Fund held by it or its nominees
or sub-custodians under this Agreement, but not for monies
and securities of the Fund held by any special sub-custodian
except to the extent the special sub-custodian is liable to
Custodian.
6. COMPENSATION.
Fund shall pay to Custodian such compensation at such times
as may from time to time be agreed upon in writing by Custodian
and Fund. Custodian may charge such compensation against monies
12
<PAGE>
held by it for the account of Fund. Custodian shall also be
entitled, notwithstanding the provisions of Sections 5B or 5C
hereof, to charge against any monies held by it for the account
of Fund the amount of any loss, damage, liability or expense for
which it shall be entitled to reimbursement under the provisions
of this Agreement. Custodian shall not be entitled to
reimbursement by Fund for any loss or expenses of any
sub-custodian; provided that Custodian shall not be liable for,
and Fund shall hold Custodian harmless from, the expenses of any
special sub-custodian.
7. TERMINATION.
Either party to this Agreement may terminate the same by
notice in writing, delivered or mailed, postage prepaid, to the
other party hereto and received not less than sixty (60) days
prior to the date upon which such termination shall take effect.
Upon termination of this Agreement, Fund shall pay to Custodian
such compensation for its reimbursable disbursements, costs and
expenses paid or incurred to such date and Fund shall use its
best efforts to obtain a successor custodian. Unless the holders
of a majority of the outstanding shares of Fund vote to have the
securities, funds and other properties held under this Agreement
delivered and paid over to some other person, firm or corporation
specified in the vote, having not less than Two Million Dollars
($2,000,000) aggregate capital, surplus and undivided profits, as
shown by its last published report, and meeting such other
qualifications for custodian as set forth in the Bylaws of Fund,
the Board of Trustees of Fund shall, forthwith upon giving or
receiving notice of termination of this Agreement, appoint as
successor custodian a bank or trust company having such
qualifications. Custodian shall, upon termination of this
Agreement, deliver to the successor custodian so specified or
appointed, at custodian's office, all securities then held by
Custodian hereunder, duly endorsed and in form for transfer, and
all funds and other properties of Fund deposited with or held by
Custodian hereunder, and shall cooperate in effecting changes in
book-entries at the Depository Trust Company, the
Treasury/Federal Reserve Book-Entry System, the Participants
Trust Company and any other securities depository holding assets
of the Fund. In the event no such vote has been adopted by the
shareholders of Fund and no written order designating a successor
custodian shall have been delivered to Custodian on or before the
date when such termination shall become effective, then Custodian
shall deliver the securities, funds and properties of Fund to a
bank or trust company at the selection of Custodian and meeting
the qualifications for custodian, if any, set forth in the Bylaws
of Fund and having not less than Two Million Dollars ($2,000,000)
aggregate capital, surplus and undivided profits, as shown by its
last published report. Upon either such delivery to a successor
custodian, Custodian shall have no further obligations or
liabilities under this Agreement. Thereafter such bank or trust
13
<PAGE>
company shall be the successor custodian under this Agreement and
shall be entitled to reasonable compensation for its services.
In the event that no such successor custodian can be found, Fund
will submit to its shareholders, before permitting delivery of
the cash and securities owned by Fund to anyone other than a
successor custodian, the question of whether Fund shall be
liquidated or shall function without a custodian. Not-
withstanding the foregoing requirement as to delivery upon
termination of this Agreement, Custodian may make any other
delivery of the securities, funds and property of Fund which
shall be permitted by the 1940 Act and Fund's Agreement and
Declaration of Trust and Bylaws then in effect. Except as
otherwise provided herein, neither this Agreement nor any portion
thereof may be assigned by Custodian without the consent of Fund,
authorized or approved by a resolution of its Board of Trustees.
8. NOTICES.
Notices, requests, instructions and other writings received
by Fund at 120 South LaSalle Street, Chicago, Illinois 60603 or
at such other address as Fund may have designated by certified
resolution of the Board of Trustees to Custodian and notices,
requests, instructions and other writings received by Custodian
at its offices at 21 West 10th Street, Kansas City, Missouri
64105, or to such other address as it may have designated to Fund
in writing, shall be deemed to have been properly given
hereunder.
9. MISCELLANEOUS.
A. This Agreement is executed and delivered in the
State of Missouri and shall be governed by the laws of the
State of Missouri (except as to Section 9.H. hereof which
shall be governed in accordance with the laws of The
Commonwealth of Massachusetts).
B. All the terms and provisions of this Agreement
shall be binding upon, inure to the benefit of, and be
enforceable by the respective successors and assigns of the
parties hereto.
C. No provisions of the Agreement may be amended or
modified in any manner except by a written agreement
properly authorized and executed by both parties hereto.
D. The captions in this Agreement are included for
convenience of reference only, and in no way define or
delimit any of the provisions hereof or otherwise affect
their construction or effect.
E. This Agreement shall become effective at the close
of business on the date hereof.
14
<PAGE>
F. 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.
G. If any part, term or provision of this Agreement
is by the courts held to be illegal, in conflict with any
law or otherwise invalid, the remaining portion or portions
shall be considered severable and not be affected, and the
rights and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular
part, term or provision held to be illegal or invalid.
H. All parties hereto are expressly put on notice of
Fund's Agreement and Declaration of Trust, which is 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 Fund by its representatives as such
representatives and not individually, and the obligations of
Fund hereunder are not binding upon any of the Trustees,
officers or shareholders of Fund individually but are
binding upon only the assets and property of Fund. With
respect to any claim by Custodian for recovery of that
portion of the compensation (or any other liability of Fund
arising hereunder) allocated to a particular Portfolio,
whether in accordance with the express terms hereof or
otherwise, Custodian shall have recourse solely against the
assets of that Portfolio to satisfy such claim and shall
have no recourse against the assets of any other Portfolio
for such purpose.
15
<PAGE>
I. This Agreement, together with the Fee Schedule, is
the entire contract between the parties relating to the
subject matter hereof and supersedes all prior agreements.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their respective authorized officers.
KEMPER MONEY MARKET FUND
By: /s/ John E. Peters
------------------------------
Title: Vice President
---------------------------
Attest: /s/ Philip J. Collora
-----------------------
Title: Secretary
------------------------
INVESTORS FIDUCIARY TRUST COMPANY
By: /s/ Joseph F. Smith
------------------------------
Title: E. V. P.
---------------------------
Attest: /s/ Marvin Rau
-----------------------
Title: Secretary
------------------------
16
<PAGE>
AGENCY AGREEMENT
AGREEMENT dated the 1st day of January, 1989, by and between
KEMPER MONEY MARKET FUND, a Massachusetts business trust having
its principal place of business at 120 South LaSalle Street,
Chicago, IL 60603 ("Fund"), and INVESTORS FIDUCIARY TRUST
COMPANY, a state chartered trust company organized and existing
under the laws of the State of Missouri having its principal
place of business at 127 West 10th Street, Kansas City, Missouri
64105 ("IFTC").
WHEREAS, Fund wants to appoint IFTC as Transfer Agent and
Dividend Disbursing Agent, and IFTC wants to accept such
appointment;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
1. Documents to be Filed with Appointment.
--------------------------------------
In connection with the appointment of IFTC as Transfer
Agent and Dividend Disbursing Agent for Fund, there will
be filed with IFTC the following documents:
A. A certified copy of the resolutions of the Board of
Trustees of Fund appointing IFTC as Transfer Agent
and Dividend Disbursing Agent, approving the form of
this Agreement, and designating certain persons to
give written instructions and requests on behalf of
Fund.
B. A certified copy of the Agreement and Declaration of
Trust of Fund and any amendments thereto.
C. A certified copy of the Bylaws of Fund.
D. Copies of Registration Statements filed with the
Securities and Exchange Commission.
E. Specimens of all forms of outstanding share
certificates as approved by the Board of Trustees of
Fund, with a certificate of the Secretary of Fund as
to such approval.
<PAGE>
F. Specimens of the signatures of the officers of the
Fund authorized to sign share certificates and
individuals authorized to sign written instructions
and requests on behalf of the Fund.
G. An opinion of counsel for Fund:
(1) With respect to Fund's organization and
existence under the laws of The Commonwealth of
Massachusetts.
(2) With respect to the status of all shares of Fund
covered by this appointment under the Securities
Act of 1933, and any other applicable federal or
state statute.
(3) To the effect that all issued shares are, and
all unissued shares will be when issued, validly
issued, fully paid and non-assessable.
2. Certain Representations and Warranties of IFTC. IFTC
represents and warrants to Fund that:
A. It is a trust company duly organized and existing
and in good standing under the laws of the State of
Missouri.
B. It is duly qualified to carry on its business in the
State of Missouri.
C. It is empowered under applicable laws and by its
Articles of Incorporation and Bylaws to enter into
and perform the services contemplated in this
Agreement.
D. All requisite corporate proceedings have been taken
to authorize it to enter into and perform this
Agreement.
E. It has and will continue to have and maintain the
necessary facilities, equipment and personnel to
perform its duties and obligations under this
Agreement.
F. It is, and will continue to be, registered as a
transfer agent under the Securities Exchange Act of
1934.
3. Certain Representations and Warranties of Fund. Fund
represents and warrants to IFTC that:
2
<PAGE>
A. It is a business trust duly organized and existing
and in good standing under the laws of The
Commonwealth of Massachusetts.
B. It is an investment company registered under the
Investment Company Act of 1940.
C. A registration statement under the Securities Act of
1933 has been filed and will be effective with
respect to all shares of Fund being offered for sale
at any time and from time to time.
D. All requisite steps have been or will be taken to
register Fund's shares for sale in all applicable
states, including the District of Columbia.
E. Fund and its Trustees are empowered under applicable
laws and by the Fund's Agreement and Declaration of
Trust and Bylaws to enter into and perform this
Agreement.
4. Scope of Appointment.
--------------------
A. Subject to the conditions set forth in this
Agreement, Fund hereby employs and appoints IFTC as
Transfer Agent and Dividend Disbursing Agent
effective the date hereof.
B. IFTC hereby accepts such employment and appointment
and agrees that it will act as Fund's Transfer Agent
and Dividend Disbursing Agent. IFTC agrees that it
will also act as agent in connection with Fund's
periodic withdrawal payment accounts and other
open-account or similar plans for shareholders, if
any.
C. IFTC agrees to provide the necessary facilities,
equipment and personnel to perform its duties and
obligations hereunder in accordance with industry
practice.
D. Fund agrees to use all reasonable efforts to deliver
to IFTC in Kansas City, Missouri, as soon as they
are available, all its shareholder account records.
E. Subject to the provisions of Sections 20 and 21
hereof, IFTC agrees that it will perform all the
usual and ordinary services of Transfer Agent and
Dividend Disbursing Agent and as agent for the
various shareholder accounts, including, without
limitation, the following: issuing, transferring and
cancelling share certificates, maintaining all
3
<PAGE>
shareholder accounts, preparing shareholder meeting
lists, mailing proxies, receiving and tabulating
proxies, mailing shareholder reports and
prospectuses, withholding federal income taxes,
preparing and mailing checks for disbursement of
income and capital gains dividends, preparing and
filing all required U.S. Treasury Department
information returns for all shareholders, preparing
and mailing confirmation forms to shareholders and
dealers with respect to all purchases and
liquidations of Fund shares and other transactions
in shareholder accounts for which confirmations are
required, recording reinvestments of dividends and
distributions in Fund shares, recording redemptions
of Fund shares and preparing and mailing checks for
payments upon redemption and for disbursements to
systematic withdrawal plan shareholders.
5. Compensation and Expenses.
-------------------------
A. In consideration for the services provided hereunder
by IFTC as Transfer Agent and Dividend Disbursing
Agent, Fund will pay to IFTC from time to time
compensation as agreed upon for all services
rendered as Agent, and also, all its reasonable
out-of-pocket expenses and other disbursements
incurred in connection with the agency. Such
compensation will be set forth in a separate
schedule to be agreed to by Fund and IFTC. The
initial agreement regarding compensation is attached
as Exhibit A.
B. Fund agrees to promptly reimburse IFTC for all
reasonable out-of-pocket expenses or advances
incurred by IFTC in connection with the performance
of services under this Agreement including, but not
limited to, postage (and first class mail insurance
in connection with mailing share certificates),
envelopes, check forms, continuous forms, forms for
reports and statements, stationery, and other
similar items, telephone and telegraph charges
incurred in answering inquiries from dealers or
shareholders, microfilm used each year to record the
previous year's transactions in shareholder accounts
and computer tapes used for permanent storage of
records and cost of insertion of materials in
mailing envelopes by outside firms. IFTC may, at
its option, arrange to have various service
providers submit invoices directly to the Fund for
payment of out-of-pocket expenses reimbursable
hereunder.
4
<PAGE>
6. Efficient Operation of IFTC System.
----------------------------------
A. In connection with the performance of its services
under this Agreement, IFTC is responsible for the
accurate and efficient functioning of its system at
all times, including:
(1) The accuracy of the entries in IFTC's records
reflecting purchase and redemption orders and
other instructions received by IFTC from
dealers, shareholders, Fund or its principal
underwriter.
(2) The timely availability and the accuracy of
shareholder lists, shareholder account
verifications, confirmations and other
shareholder account information to be produced
from IFTC's records or data.
(3) The accurate and timely issuance of dividend and
distribution checks in accordance with
instructions received from Fund.
(4) The accuracy of redemption transactions and
payments in accordance with redemption
instructions received from dealers, shareholders
or Fund or other authorized persons.
(5) The deposit daily in Fund's appropriate special
bank account of all checks and payments received
from dealers or shareholders for investment in
shares.
(6) The requiring of proper forms of instructions,
signatures and signature guarantees and any
necessary documents supporting the rightfulness
of transfers, redemptions and other shareholder
account transactions, all in conformance with
IFTC's present procedures with such changes as
may be deemed reasonably appropriate by IFTC or
as may be reasonably approved by or on behalf of
Fund.
(7) The maintenance of a current duplicate set of
Fund's essential or required records, as agreed
upon from time to time by Fund and IFTC, at a
secure distant location, in form available and
usable forthwith in the event of any breakdown
or disaster disrupting its main operation.
5
<PAGE>
7. Indemnification.
---------------
A. Fund shall indemnify and hold IFTC harmless from and
against any and all claims, actions, suits, losses,
damages, costs, charges, counsel fees, payments,
expenses and liabilities arising out of or
attributable to any action or omission by IFTC
pursuant to this Agreement or in connection with the
agency relationship created by this Agreement,
provided that IFTC has acted in good faith, without
negligence and without willful misconduct.
B. IFTC shall indemnify and hold Fund harmless from and
against any and all claims, actions, suits, losses,
damages, costs, charges, counsel fees, payments,
expenses and liabilities arising out of or
attributable to any action or omission by IFTC
pursuant to this Agreement or in connection with the
agency relationship created by this Agreement,
provided that IFTC has not acted in good faith,
without negligence and without willful misconduct.
C. In order that the indemnification provisions
contained in this Section 7 shall apply, upon the
assertion of a claim for which either party (the
"Indemnifying Party") may be required to provide
indemnification hereunder, the party seeking
indemnification (the "Indemnitee") shall promptly
notify the Indemnifying Party of such assertion, and
shall keep such party advised with respect to all
developments concerning such claim. The
Indemnifying Party shall be entitled to assume
control of the defense and the negotiations,
if any, regarding settlement of the claim. If the
Indemnifying Party assumes control, the Indemnitee
shall have the option to participate in the defense
and negotiations of such claim at its own expense.
The Indemnitee shall in no event confess, admit to,
compromise, or settle any claim for which the
Indemnifying Party may be required to indemnify it
except with the prior written consent of the
Indemnifying Party, which shall not be unreasonably
withheld.
8. Certain Covenants of IFTC and Fund.
----------------------------------
A. All requisite steps will be taken by Fund from time
to time when and as necessary to register the Fund's
shares for sale in all states in which Fund's shares
shall at the time be offered for sale and require
registration. If at any time Fund receives notice
of any stop order or other proceeding in any such
6
<PAGE>
state affecting such registration or the sale of
Fund's shares, or of any stop order or other
proceeding under the Federal securities laws
affecting the sale of Fund's shares, Fund will give
prompt notice thereof to IFTC.
B. IFTC hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to
Fund for safekeeping of share certificates, check
forms, and facsimile signature imprinting devices,
if any; and for the preparation or use, and for
keeping account of, such certificates, forms and
devices. Further, IFTC agrees to carry insurance,
as specified in Exhibit B hereto, with insurers
reasonably acceptable to Fund and in minimum amounts
that are reasonably acceptable to Fund, which will
not be changed without the consent of Fund, which
consent shall not be unreasonably withheld, and
which will be expanded in coverage or increased in
amounts from time to time if and when reasonably
requested by Fund. If IFTC determines that it is
unable to obtain any such insurance upon
commercially reasonable terms, it shall promptly so
advise Fund in writing. In such event, Fund shall
have the right to terminate this Agreement upon 30
days notice.
C. To the extent required by Section 31 of the
Investment Company Act of 1940 and Rules thereunder,
IFTC agrees that all records maintained by IFTC
relating to the services to be performed by IFTC
under this Agreement are the property of Fund and
will be preserved and will be surrendered promptly
to Fund on request.
D. IFTC agrees to furnish Fund semi-annual reports of
its financial condition, consisting of a balance
sheet, earnings statement and any other reasonably
available financial information reasonably requested
by Fund. The annual financial statements will be
certified by IFTC's certified public accountants.
E. IFTC represents and agrees that it will use all
reasonable efforts to keep current on the trends of
the investment company industry relating to
shareholder services and will use all reasonable
efforts to continue to modernize and improve its
system without additional cost to Fund.
7
<PAGE>
F. IFTC will permit Fund and its authorized
representatives to make periodic inspections of its
operations at reasonable times during business
hours.
G. If IFTC is prevented from complying, either totally
or in part, with any of the terms or provisions of
this Agreement, by reason of fire, flood, storm,
strike, lockout or other labor trouble, riot, war,
rebellion, accidents, acts of God, equipment,
utility or transmission failure or damage, and/or
any other cause or casualty beyond the reasonable
control of IFTC, whether similar to the foregoing
matters or not, then upon written notice to Fund,
the requirements of this Agreement that are affected
by such disability, to the extent so affected, shall
be suspended during the period of such disability;
provided, however, that IFTC shall make reasonable
effort to remove such disability as soon as
possible. During such period, Fund may seek
alternate sources of service without liability
hereunder; and IFTC will use all reasonable
efforts to assist Fund to obtain alternate sources
of service. IFTC shall have no liability to Fund
for nonperformance because of the reasons set forth
in this Section 8.G; but if a disability that, in
Fund's reasonable belief, materially affects IFTC's
ability to perform its obligations under this
Agreement continues for a period of 30 days, then
Fund shall have the right to terminate this
Agreement upon 10 days written notice to IFTC.
9. Adjustment.
----------
In case of any recapitalization, readjustment or other
change in the structure of Fund requiring a change in
the form of share certificates, IFTC will issue or
register certificates in the new form in exchange for,
or in transfer of, the outstanding certificates in the
old form, upon receiving the following:
A. Written instructions from an officer of Fund.
B. Certified copy of any amendment to the Agreement and
Declaration of Trust or other document effecting the
change.
8
<PAGE>
C. Certified copy of any order or consent of each
governmental or regulatory authority required by law
for the issuance of the shares in the new form, and
an opinion of counsel that no order or consent of
any other government or regulatory authority is
required.
D. Specimens of the new certificates in the form
approved by the Board of Trustees of Fund, with a
certificate of the Secretary of Fund as to such
approval.
E. Opinion of counsel for Fund:
(1) With respect to the status of the shares of Fund
in the new form under the Securities Act of
1933, and any other applicable federal or state
laws.
(2) To the effect that the issued shares in the new
form are, and all unissued shares will be when
issued, validly issued, fully paid and
non-assessable.
10. Share Certificates.
------------------
Fund will furnish IFTC with a sufficient supply of blank
share certificates and from time to time will renew such
supply upon the request of IFTC. Such certificates will
be signed manually or by facsimile signatures of the
officers of Fund authorized by law and Fund's Bylaws to
sign share certificates and, if required, will bear the
trust seal or facsimile thereof.
11. Death, Resignation or Removal of Signing Officer.
------------------------------------------------
Fund will file promptly with IFTC written notice of any
change in the officers authorized to sign share
certificates, written instructions or requests, together
with two signature cards bearing the specimen signature
of each newly authorized officer, all as certified by an
appropriate officer of the Fund. In case any officer of
Fund who will have signed manually or whose facsimile
signature will have been affixed to blank share
certificates will die, resign, or be removed prior to
the issuance of such certificates, IFTC may issue or
register such share certificates as the share
certificates of Fund notwithstanding such death,
resignation, or removal, until specifically directed to
the contrary by Fund in writing. In the absence of such
direction, Fund will file promptly with IFTC such
9
<PAGE>
approval, adoption, or ratification as may be required
by law.
12. Future Amendments of Agreement and Declaration of Trust
-------------------------------------------------------
and Bylaws.
----------
Fund will promptly file with IFTC copies of all material
amendments to its Agreement and Declaration of Trust and
Bylaws and Registration Statement made after the date of
this Agreement.
13. Instructions, Opinion of Counsel and Signatures.
-----------------------------------------------
At any time IFTC may apply to any officer of Fund for
instructions, and may consult with legal counsel for
Fund at the expense of Fund, or with its own legal
counsel at its own expense, with respect to any matter
arising in connection with the agency; and it will not
be liable for any action taken or omitted by it in good
faith in reliance upon such instructions or upon the
opinion of such counsel. IFTC is authorized to act on
the orders, directions or instructions of such persons
as the Board of Trustees of Fund shall from time to time
designate by resolution. IFTC will be protected in
acting upon any paper or document, including any orders,
directions or instructions, reasonably believed by it to
be genuine and to have been signed by the proper person
or persons; and IFTC will not be held to have notice of
any change of authority of any person so authorized by
Fund until receipt of written notice thereof from Fund.
IFTC will also be protected in recognizing share
certificates that it reasonably believes to bear the
proper manual or facsimile signatures of the officers of
Fund, and the proper countersignature of any former
Transfer Agent or Registrar, or of a Co-Transfer Agent
or Co-Registrar.
14. Papers Subject to Approval of Counsel.
-------------------------------------
The acceptance by IFTC of its appointment as Transfer
Agent and Dividend Disbursing Agent, and all documents
filed in connection with such appointment and thereafter
in connection with the agencies, will be subject to the
approval of legal counsel for IFTC, which approval will
not be unreasonably withheld.
15. Certification of Documents.
--------------------------
The required copy of the Agreement and Declaration of
Trust of Fund and copies of all amendments thereto will
be certified by the appropriate official of The
10
<PAGE>
Commonwealth of Massachusetts; and if such Agreement and
Declaration of Trust and amendments are required by law
to be also filed with a county, city or other officer or
official body, a certificate of such filing will appear
on the certified copy submitted to IFTC. A copy of the
order or consent of each governmental or regulatory
authority required by law for the issuance of Fund
shares will be certified by the Secretary or Clerk of
such governmental or regulatory authority, under proper
seal of such authority. The copy of the Bylaws and
copies of all amendments thereto and copies of
resolutions of the Board of Trustees of Fund will be
certified by the Secretary or an Assistant Secretary of
Fund.
16. Records.
-------
IFTC will maintain customary records in connection with
its agency, and particularly will maintain those records
required to be maintained pursuant to sub-paragraph
(2)(iv) of paragraph (b) of Rule 31a-1 under the
Investment Company Act of 1940, if any.
17. Disposition of Books, Records and Cancelled
-------------------------------------------
Certificates.
------------
IFTC will send periodically to Fund, or to where
designated by the Secretary or an Assistant Secretary of
Fund, all books, documents, and all records no longer
deemed needed for current purposes and share
certificates which have been cancelled in transfer or in
exchange, upon the understanding that such books,
documents, records, and share certificates will not be
destroyed by Fund without the consent of IFTC (which
consent will not be unreasonably withheld), but will be
safely stored for possible future reference.
18. Provisions Relating to IFTC as Transfer Agent.
---------------------------------------------
A. IFTC will make original issues of share certificates
upon written request of an officer of Fund and upon
being furnished with a certified copy of a
resolution of the Board of Trustees authorizing such
original issue, an opinion of counsel as outlined in
Section 1.G or 9.E of this Agreement, the
certificates required by Section 10 of this
Agreement and any other documents required by
Section 1 or 9 of this Agreement.
B. Before making any original issue of certificates,
Fund will furnish IFTC with sufficient funds to pay
11
<PAGE>
any taxes required on the original issue of the
shares. Fund will furnish IFTC such evidence as may
be required by IFTC to show the actual value of the
shares. If no taxes are payable, IFTC will upon
request be furnished with an opinion of outside
counsel to that effect.
C. Shares will be transferred and new certificates
issued in transfer, or shares accepted for
redemption and funds remitted therefor, upon
surrender of the old certificates in form deemed by
IFTC properly endorsed for transfer or redemption
accompanied by such documents as IFTC may deem
necessary to evidence the authority of the person
making the transfer or redemption, and bearing
satisfactory evidence of the payment of any
applicable share transfer taxes. IFTC reserves the
right to refuse to transfer or redeem shares until
it is satisfied that the endorsement or signature on
the certificate or any other document is valid and
genuine, and for that purpose it may require a
guarantee of signature by such persons as may from
time to time be specified in the prospectus related
to such shares or otherwise authorized by Fund.
IFTC also reserves the right to refuse to transfer
or redeem shares until it is satisfied that the
requested transfer or redemption is legally
authorized, and it will incur no liability for the
refusal in good faith to make transfers or
redemptions which, in its judgment, are improper,
unauthorized, or otherwise not rightful. IFTC may,
in effecting transfers or redemptions, rely upon
Simplification Acts or other statutes which protect
it and Fund in not requiring complete fiduciary
documentation.
D. When mail is used for delivery of share
certificates, IFTC will forward share certificates
in "nonnegotiable" form as provided by Fund by first
class mail, all such mail deliveries to be covered
while in transit to the addressee by insurance
arranged for by IFTC.
E. IFTC will issue and mail subscription warrants and
certificates provided by Fund and representing share
dividends, exchanges or split-ups, or act as
Conversion Agent upon receiving written instructions
from any officer of Fund and such other documents as
IFTC deems necessary.
12
<PAGE>
F. IFTC will issue, transfer, and split-up certificates
upon receiving written instructions from an officer
of Fund and such other documents as IFTC may deem
necessary.
G. IFTC may issue new certificates in place of
certificates represented to have been lost,
destroyed, stolen or otherwise wrongfully taken,
upon receiving indemnity satisfactory to IFTC, and
may issue new certificates in exchange for, and upon
surrender of, mutilated certificates. Any such
issuance shall be in accordance with the provisions
of law governing such matter and any procedures
adopted by the Board of Trustees of the Fund of
which IFTC has notice.
H. IFTC will supply a shareholder's list to Fund
properly certified by an officer of IFTC for any
shareholder meeting upon receiving a request from an
officer of Fund. It will also supply lists at such
other times as may be reasonably requested by an
officer of Fund.
I. Upon receipt of written instructions of an officer
of Fund, IFTC will address and mail notices to
shareholders.
J. In case of any request or demand for the inspection
of the share books of Fund or any other books of
Fund in the possession of IFTC, IFTC will endeavor
to notify Fund and to secure instructions as to
permitting or refusing such inspection. IFTC
reserves the right, however, to exhibit the share
books or other books to any person in case it is
advised by its counsel that it may be held
responsible for the failure to exhibit the share
books or other books to such person.
19. Provisions Relating to Dividend Disbursing Agency.
-------------------------------------------------
A. IFTC will, at the expense of Fund, provide a special
form of check containing the imprint of any device
or other matter desired by Fund. Said checks must,
however, be of a form and size convenient for use by
IFTC.
B. If Fund wants to include additional printed matter,
financial statements, etc., with the dividend
checks, the same will be furnished to IFTC within a
reasonable time prior to the date of mailing of the
dividend checks, at the expense of Fund.
13
<PAGE>
C. If Fund wants its distributions mailed in any
special form of envelopes, sufficient supply of the
same will be furnished to IFTC but the size and form
of said envelopes will be subject to the approval of
IFTC. If stamped envelopes are used, they must be
furnished by Fund; or, if postage stamps are to be
affixed to the envelopes, the stamps or the cash
necessary for such stamps must be furnished by Fund.
D. IFTC will maintain one or more deposit accounts as
Agent for Fund, into which the funds for payment of
dividends, distributions, distributions, redemptions
or other disbursements provided for hereunder will
be deposited, and against which checks will be
drawn.
20. Termination of Agreement.
------------------------
A. This Agreement may be terminated by either party
upon sixty (60) days prior written notice to the
other party.
B. Fund, in addition to any other rights and remedies,
shall have the right to terminate this Agreement
forthwith upon the occurrence at any time of any of
the following events:
(1) Any interruption or cessation of operations by
IFTC or its assigns which materially interferes
with the business operation of Fund.
(2) The bankruptcy of IFTC or its assigns or the
appointment of a receiver for IFTC or its
assigns.
(3) Any merger, consolidation or sale of
substantially all the assets of IFTC or its
assigns.
(4) The acquisition of a controlling interest in
IFTC or its assigns, by any broker, dealer,
investment adviser or investment company except
as may presently exist.
(5) Failure by IFTC or its assigns to perform its
duties in accordance with this Agreement, which
failure materially adversely affects the
business operations of Fund and which failure
continues for thirty (30) days after written
notice from Fund.
14
<PAGE>
(6) The registration of IFTC or its assigns as a
transfer agent under the Securities Exchange Act
of 1934 is revoked, terminated or suspended for
any reason.
C. In the event of termination, Fund will promptly pay
IFTC all amounts due to IFTC hereunder. Upon
termination of this Agreement, IFTC shall deliver
all shareholder and account records pertaining to
Fund either to Fund or as directed in writing by
Fund.
21. Assignment.
----------
A. Except for the assignment of responsibilities
pursuant to the Services Agreement ("Services
Agreement") between IFTC and Kemper Service Company
("KSVC"), which Fund has approved, neither this
Agreement nor any rights or obligations hereunder
may be assigned by IFTC without the written consent
of Fund; provided, however, no assignment will
relieve IFTC of any of its obligations hereunder.
B. This Agreement including, without limitation, the
provisions of Section 7 will inure to the benefit of
and be binding upon the parties and their respective
successors and assigns including KSVC pursuant to
the aforesaid Services Agreement.
C. KSVC is authorized by Fund to use the system
services of DST Systems, Inc.
22. Confidentiality.
---------------
A. Except as provided in the last sentence of Section
18.J hereof, or as otherwise required by law, IFTC
will keep confidential all records of and
information in its possession relating to Fund or
its shareholders or shareholder accounts and will
not disclose the same to any person except at the
request or with the consent of Fund.
B. Except as otherwise required by law, Fund will keep
confidential all financial statements and other
financial records (other than statements and records
relating solely to Fund's business dealings with
IFTC) and all manuals, systems and other technical
information and data, not publicly disclosed,
relating to IFTC's operations and programs furnished
to it by IFTC pursuant to this Agreement and will
not disclose the same to any person except at the
request or with the consent of IFTC.
15
<PAGE>
Notwithstanding anything to the contrary in this
Section 22.B, if an attempt is made pursuant to
subpoena or other legal process to require Fund to
disclose or produce any of the aforementioned
manuals, systems or other technical information and
data, Fund shall give IFTC prompt notice thereof
prior to disclosure or production so that IFTC may,
at its expense, resist such attempt.
23. Survival of Representations and Warranties.
------------------------------------------
All representations and warranties by either party
herein contained will survive the execution and delivery
of this Agreement.
24. Miscellaneous.
-------------
A. This Agreement is executed and delivered in the
State of Illinois and shall be governed by the laws
of said state (except as to Section 24.G hereof
which shall be governed by the laws of The
Commonwealth of Massachusetts).
B. No provisions of this Agreement may be amended or
modified in any manner except by a written agreement
properly authorized and executed by both parties
hereto.
C. 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.
D. This Agreement shall become effective as of the date
hereof.
E. 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.
F. In any part, term or provision of this Agreement is
held by the courts to be illegal, in conflict with
any law or otherwise invalid, the remaining portion
or portions shall be considered severable and not be
affected, and the rights and obligations of the
parties shall be construed and enforced as if the
Agreement did not contain the particular part, term
or provision held to be illegal or invalid.
16
<PAGE>
G. All parties hereto are expressly put on notice of
Fund's Agreement and Declaration of Trust which is
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 Fund by its
representatives as such representatives and not
individually, and the obligations of 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 Fund.
With respect to any claim by IFTC for recovery of
that portion of the compensation and expenses (or
any other liability of Fund arising hereunder)
allocated to a particular Portfolio, whether in
accordance with the express terms hereof or
otherwise, IFTC shall have recourse solely against
the assets of that Portfolio to satisfy such claim
and shall have no recourse against the assets of any
other Portfolio for such purpose.
H. This Agreement, together with the Fee Schedule, is
the entire contract between the parties relating to
the subject matter hereof and supersedes all prior
agreements between the parties.
17
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officer as of the
day and year first set forth above.
KEMPER MONEY MARKET FUND
By /s/ Charles M. Kierscht
---------------------------------
Title: President
ATTEST:
/s/ Robert J. Engling
- -------------------------------
Title: Secretary
INVESTORS FIDUCIARY TRUST COMPANY
By /s/ Larry W. Rinne
---------------------------------
Title: President
ATTEST:
/s/ Cheryl J. Naegler
- -------------------------------
Title: Assistant Secretary
18
<PAGE>
EXHIBIT A
---------
FEE SCHEDULE
------------
<TABLE>
<CAPTION>
Transfer Agency Function Fee Payable by Fund
- ------------------------ -------------------
<S> <C>
1. Maintenance of open shareholder $8.00 per year per
account account.
2. Maintenance of closed shareholder $6.00 per year per
account account.
3. Establishment of new shareholder $4.00 per new account
account.
4. Payment of dividend. $.25 per dividend payment
per account
5. Process purchase or redemption of $.55 per transaction
shares transaction (not highly
automated).
6. Process purchase or redemption of $.15 per transaction
shares transaction (highly
automated).
7. All other shareholder account $1.00 per transaction
transactions.
</TABLE>
The out-of-pocket expenses of IFTC will be reimbursed by Fund in
accordance with the provisions of paragraph 5 of the Agency
Agreement.
<PAGE>
EXHIBIT B
---------
IFTC INSURANCE COVERAGE
-----------------------
DESCRIPTION OF POLICY:
Brokers Blanket Bond, Standard Form 14
Covering losses caused by dishonesty of employees,
physical loss of securities on or outside of premises
while in possession of authorized person, loss caused
by forgery or alteration of checks or similar
instruments.
Errors and Omissions Insurance
Covering replacement of destroyed records and computer
errors and omissions.
Special Forgery Bond
Covering losses through forgery or alteration of checks
or drafts of customers processed by insured but drawn
on or against them.
Mail Insurance (applies to all full service operations)
Provides indemnity for the following types of
securities lost in the mails:
Non-negotiable securities mailed to domestic
locations via registered mail.
Non-negotiable securities mailed to domestic
locations via first-class or certified mail.
Non-negotiable securities mailed to foreign
locations via registered mail.
Negotiable securities mailed to all locations via
registered mail.
<PAGE>
Supplement to Agency Agreement
------------------------------
Supplement to Agency Agreement ("Supplement") made as of
April 1, 1993 by and between the registered investment company
executing this document (the "Fund") and Investors Fiduciary
Trust Company ("Agent").
WHEREAS, the Fund and Agent are parties to an Agency
Agreement ("Agency Agreement") dated January 1, 1989, as
supplemented from time to time;
WHEREAS, Section 5.A. of the Agency Agreement provides that
the fees payable by the Fund to Agent thereunder shall be as set
forth in a separate schedule to be agreed to by the Fund and
Agent; and
WHEREAS, the parties desire to reflect in this Supplement
the revised fee schedule for the Agency Agreement as in effect as
of the date hereof;
NOW THEREFORE, in consideration of the premises and the
mutual covenants herein provided, the parties agree as follows:
1. The revised fee schedule for services provided by Agent
to the Fund under the Agency Agreement as in effect as of the
date hereof is set forth in Exhibit A attached hereto.
2. This Supplement shall become a part of the Agency
Agreement and subject to its terms and shall supersede all
previous fee schedules under such agreement as of the date
hereof.
IN WITNESS WHEREOF, the Fund and Agent have duly executed
this Supplement as of the day and year first set forth above.
KEMPER MONEY MARKET FUND
By: /s/ John E. Peters
--------------------------------
Title: Vice President
INVESTORS FIDUCIARY TRUST COMPANY
By: /s/ Allen R. Strain
--------------------------------
Title: SVP
<PAGE>
EXHIBIT A
---------
FEE SCHEDULE
------------
<TABLE>
<CAPTION>
Transfer Agency Function Fee Payable by Fund
- ------------------------ -------------------
<S> <C>
1. Annual open shareholder $8.00 per year per account.
account fee.
2. Annual closed shareholder $6.00 per year per account.
account fee.
3. Establishment of new $4.00 per new account.
shareholder account.
4. Payment of dividend. $.40 per dividend payment
per account.
5. Process non-ACH purchase $.55 per transaction.
or redemption of shares
transaction.
6. Process ACH purchase or $.15 per transaction.
redemption of shares
transaction.
7. Non-monetary transactions $1.20 per year per open
fee. account.
8. All other shareholder $1.25 per transaction.
inquiry, correspondence and
research transactions.
9. Disaster recovery fee. $.40 per year per open and
closed account.
</TABLE>
The out-of-pocket expenses of IFTC will be reimbursed by Fund in
accordance with the provisions of Section 5 of the Agency
Agreement.
<PAGE>
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
November 10, 1995
Kemper Money Market Fund
120 South LaSalle Street
Chicago, Illinois 60603
Ladies and Gentlemen:
Reference is made to Post-Effective Amendment No. 41 to the Registration
Statement on Form N-1A under the Securities Act of 1933 being filed by Kemper
Money Market Fund (the "Fund") in connection with its proposed registration of
units of beneficial interest, no par value ("Shares"), in the Money Market
Portfolio, the Government Securities Portfolio and the Tax-Exempt Portfolio (the
"Portfolios").
We are counsel to the Fund and in such capacity are familiar with the
Fund's organization and have counseled the Fund regarding various legal matters.
We have examined such Fund records and other documents and certificates as we
have considered necessary or appropriate for the purpose of this opinion. As to
various questions of fact material to our opinion, we have relied upon
statements and certificates of officers and representatives of the Fund. In our
examination of such materials, we have assumed the genuineness of all signatures
and the conformity to original documents of all copies submitted to us.
Based upon the foregoing and upon the opinion dated July 8, 1987 by Ropes &
Gray of Boston, Massachusetts, we advise you and opine that (a) the Fund is a
duly authorized and validly existing voluntary association with transferrable
shares under the laws of the Commonwealth of Massachusetts and is authorized to
issue an unlimited number of Shares in the Portfolios; and (b) upon the issuance
of the Shares in accordance with the Fund's Agreement and Declaration of Trust
and the receipt by the Fund of a purchase price not less than the net asset
value per Share, the Shares will be legally issued and outstanding, fully paid
and non-assessable (although shareholders of the Fund may be subject to
liability under certain circumstances as described in the opinion from Ropes &
Gray).
<PAGE>
Kemper Money Market Fund
November 10, 1995
Page 2
We hereby consent to the use of this opinion in connection with said Post-
Effective Amendment.
Very truly yours,
/s/ Vedder, Price, Kaufman & Kammholz
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
COK/dd
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" and "Independent Auditors and Reports to Shareholders" and to the
use of our report dated September 15, 1995 in the Registration Statement (Form
N-1A) and its incorporation by reference in the related prospectus of the Kemper
Money Market Fund, filed with the Securities and Exchange Commission in this
Post-Effective Amendment No. 41 to the Registration Statement under the
Securities Act of 1933 (File No. 33-2-51992) and in this Amendment No. 41 to
the Registration Statement under the Investment Company Act of 1940 (File No.
811-2527).
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Chicago, Illinois
November 13, 1995
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees and Shareholders
Kemper Money Market Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the Money Market, Government Securities and
Tax-Exempt Portfolios, comprising Kemper Money Market Fund, as of July 31, 1995,
and the related statements of operations for the year then ended and changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the fiscal periods since 1986. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion of these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures include confirmation of investments owned as of July
31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly in all material respects, the financial position of each of
the Portfolios comprising Kemper Money Market Fund at July 31, 1995, the results
of their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended and the financial highlights for
each of the fiscal periods since 1986, in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Chicago, Illinois
September 15, 1995
<PAGE>
KEMPER
RETIREMENT PLAN PROTOTYPE
A Keogh/Corporate Retirement
Plan for Professionals and
Small Corporations
THE KEMPER RED BOOK
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
CHOOSING YOUR PLAN................................... SECTION 1
PLAN INSTALLATION FORMS.............................. SECTION 2
PARTICIPANT RECORDS ................................. SECTION 3
PLAN DOCUMENT ....................................... SECTION 4
</TABLE>
<PAGE>
CHOOSING YOUR PLAN
RETIREMENT PLANNING SOLUTIONS THAT BENEFIT BOTH YOU AND YOUR EMPLOYEES
Providing for retirement is an increasing concern for employers, as well
as employees. With a shrinking work force, employers will have to be more
competitive than ever to attract a qualified staff. The rising costs of
traditional pension plans, however, can be a significant financial drain
on a company's profits. So how can a company remain competitive and not
risk its bottom line?
Many employers have discovered that defined contribution plans such as
Money Purchase and Profit Sharing plans provide a viable solution that can
benefit both the company and its employees.
FIND OUT IF ONE OF THESE PLANS IS RIGHT FOR YOU...
With the variety of retirement plans available today, it's often difficult
to know which one is best for your company's needs. If you're a sole
proprietor, independent contractor, owner of a small business or in
private practice, with few or no employees, and are looking for a way to
save for retirement and reduce your tax liabilities, consider one of these
plans.
PROFIT SHARING PLAN
A profit sharing plan is just that - a plan that enables the
employees to participate in the profits of the company. The
flexibility of contribution limits and the relative ease of
maintenance make profit sharing plans an attractive alternative for
both employers and employees.
A profit sharing plan allows employees to participate in the
company's success, thereby giving further incentive for employee
productivity and loyalty. More profits mean higher contributions, up
to legal limits.
MONEY PURCHASE PLAN
A money purchase plan shares many of the same advantages and features
of a profit sharing plan, but has a higher contribution level. It
has the same eligibility requirements, tax benefits and distribution
choices. The difference is in the contribution limits and
requirements.
- Allows for higher contribution levels
- Contribution levels are fixed
Because there is a fixed contribution formula, required contributions
can be easily computed and budgeted. Once a percentage has been
determined, contributions are mandatory each year, and for the same
percentage level - regardless of whether the company is profitable
that year. Failure to contribute the required amount in a year could
result in stiff tax penalties, and jeopardize the qualified status of
the plan.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
TYPE OF PLAN PROFIT SHARING MONEY PURCHASE COMBINATION
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TYPE OF CONTRIBUTION Flexible Fixed Flexible/Fixed
- ------------------------------------------------------------------------------------------------------------
MAXIMUM ANNUAL 15% of 25% of 25% of
CONTRIBUTION LIMIT Eligible Payroll Eligible Payroll Eligible Payroll
- ------------------------------------------------------------------------------------------------------------
PARTICIPANT 25% of Compensation 25% of Compensation 25% of Compensation
ANNUAL LIMIT not to Exceed $30,000 not to Exceed $30,000 not to Exceed $30,000
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
COMBINED MONEY PURCHASE AND PROFIT SHARING PLAN
Many employers like the idea of making contributions as high as 25% of
eligible payroll, but are not comfortable committing to this every year.
Fortunately, the IRS allows a combination or "paired" plan that gives the
"best of both worlds."
- Higher contribution levels of a money purchase plan
- Flexible contribution limits of a profit sharing plan
Paired plans combine the flexibility of a profit sharing plan with the
higher contribution limits of a money purchase pension plan. A combined
plan lets you enjoy control over a portion of the contribution similar to
a profit sharing plan, but also offers the higher contribution limits
found in a money purchase plan. Employees are assured that they will be
provided with at least some level of retirement benefit.
Typically, if an employer wishes to maximize the contribution, he or she
would set the money purchase plan contribution at 10%, which would be
mandatory each year, and allow the remaining 15% to be a part of the
profit sharing plan, which is contingent on whether or not the company can
afford it. That way, the employer is only locked into a 10% mandatory
contribution rather than 25%.
THE KEMPER RED BOOK KEOGH PROTOTYPE
The Plan Document, contained in the last section of this booklet, provides
the plan parameters for self-employed partnerships and corporations, and
has been amended for the Tax Reform Act of 1986. Investors Fiduciary Trust
Company (IFTC) will act as trustee for a plan using Kemper mutual funds.
Kemper Investors Life Insurance Company (KILICO) annuities do not require
a trustee. Before any contributions can be made to the plan, an Adoption
Agreement (see section entitled "Plan Installation Forms") that outlines
the plan parameters must be signed and dated.
ELIGIBILITY
Since the plan is employer-sponsored, the employer has the ability to
establish minimum requirements for plan participation, generally based on
age and years of service. As the employer, you decide how flexible plan
participation will be, keeping within certain minimum requirements set by
the IRS. Of course, eligibility requirements may be lower. Those who must
be eligible for the plan are:
- Any employee over age 21, AND
- Employees who have had at least two years of service, AND
- Employees who are not covered by a collective bargaining agreement.
All employees (including leased and control group) who fulfill eligibility
requirements, except for union employees covered under a collective
bargaining agreement, are eligible participants in the plan. Entry dates
for the plan are semi-annual.
CONTRIBUTIONS
One of the most important benefits of the plan is that the employer's
contributions are a tax-deductible business expense. This special tax
treatment makes it one of the few remaining tax shelters available.
All plan participants employed on the last day of the plan year will share
in the employer's contribution regardless of the hours worked during the
plan year. Terminated participants will share in the employer's
contribution only if they completed at least 501 hours of service during
the plan year in which they terminated.
Compensation is defined as an employee's total gross salary earned while
the employee was actually a plan participant. Rollover contributions are
allowed if the Employer wishes. Employee after-tax contributions are not
allowed under this plan document.
<PAGE>
CHOOSING YOUR PLAN
DISTRIBUTIONS
Terminated participants will receive their distribution on the 60th day of
the plan year following separation of service. If the value of the account
is more than $3,500 the participant must agree to take his or her money,
and the participant can choose lump sum or installment payments. If the
account value is $3,500 or less, the participant receives a lump sum
payment. Participants are always 100% vested.
Kemper Financial Services, Inc. will provide self-trusteed, variable
documents which allow you to vary the plan parameters. Please contact your
representative or Kemper Financial Services, Inc. at 1-800-621-5027.
QUESTIONS AND ANSWERS
Q. WHAT IS THE DEADLINE FOR ESTABLISHING A RETIREMENT PLAN?
A. The plan must be established on or before the last day of the taxable
year for which a deduction is to be taken.
Q. DOES "ESTABLISH" MEAN THERE MUST BE ASSETS IN THE PLAN?
A. Yes, at least $250 is required to open and establish the account in
the tax year. The balance of the contribution must comply with tax
deadlines.
Q. WHAT IS THE DEADLINE FOR MAKING CONTRIBUTIONS ONCE THE PLAN IS
ESTABLISHED?
A. Contributions for any year must be made before the latest possible
filing date for the Employer's federal income tax return for that
year, including extensions.
Q. SHOULD I BE BONDED?
A. Yes, Employers should be bonded if the plan covers employees other
than the owner(s) and the owner(s) spouse; the bond must cover at
least 10% of the plan's assets; the face value of the bond may not be
less than $1,000.
Q. WHAT IS MEANT BY "YEAR OF SERVICE" WHEN DETERMINING WHO IS ELIGIBLE
TO PARTICIPATE IN THE PLAN?
A. "Year of Service" for purposes of eligibility means 12 consecutive
months during which an employee completes at least 1,000 hours of
service. The 12-month period begins on the day an employee performs
his or her first hour of service.
Q. WHEN DOES AN EMPLOYEE PARTICIPATE ONCE ELIGIBILITY REQUIREMENTS ARE
MET?
A. The employee becomes a Participant on the first day of the Plan Year,
or the first day of the seventh month of the Plan Year, following
satisfaction of the eligibility requirement. For example, if the Plan
Year is a calendar year and an employee satisfies the eligibility
requirement on March 1, he or she will enter the plan on July 1.
Q. CAN THE EMPLOYEE CONTRIBUTE UNDER THIS PLAN?
A. Pre-tax employee salary reduction contributions may be allowed, but
only if you elect to include the 401(k) arrangement found in Article
XIII of the Profit Sharing Adoption Agreement. After-tax
contributions are not allowed.
Q. WHAT IS SOCIAL SECURITY INTEGRATION?
A. When your overall retirement plan scheme combines Social Security
with your private retirement plan, this is called integration.
Integration allows you to take advantage of the Social Security tax
payments you already make when designing your private retirement
plan's formula. The result favors the highly paid employees because
they receive a larger portion of the total contribution.
Contribution formulas and worksheets for self-employed participants
in integrated plans are available from Kemper Financial Services upon
request.
Q. WHAT IS THE COMPENSATION FOR A SOLE PROPRIETOR?
A. If you are a sole proprietor or your business is a partnership, you
must base contributions on earned income, which is defined as net
profits minus the amount you contributed to the plan. Your net
profits are shown on the Schedule C form for a sole proprietor, and
the schedule K-1 form for a partnership. Contributions for all other
employees are based on gross earnings actually paid for services
rendered.
<PAGE>
Q. WHAT DOES IT MEAN TO "AMEND AND RESTATE" A PLAN?
A. To amend and restate your plan means you have updated your plan in
its entirety by replacing the plan document with a new plan document.
This may be necessary if your existing plan document prohibits plan
investments with Kemper or because of changes in the laws governing
qualified retirement plans.
Many employers are now formally updating their plans to comply with
the Tax Reform Act of 1986. These amendments must be retroactive to
the first day of your 1987 plan year unless interim amendments were
adopted for the 1987 and 1988 plan years.
INVESTING YOUR PLAN ASSETS
One of the most important decisions you have to make is where to invest
your plan's assets. The better your plan's investment performance, the
easier it will be for you and your employees to retire in comfort. You'll
want to select investments with a broad range of objectives to meet the
diverse investment needs of your employees, and take great care in
choosing the company that will manage your plan's assets.
...WITH KEMPER
That's why many plans like yours invest their plan assets with Kemper.
Kemper Financial Services, Inc. has managed investments for over 40 years
and has more than $67 billion in assets under management. Kemper offers a
variety of investment products to fit almost every investment objective.
Kemper's mutual funds and annuities provide investments to suit the needs
of either the aggressive or the conservative investor. Employees can
select the investments that best match their specific needs and
requirements. Consider Kemper's experience and professional managers when
choosing the investments for your plan.
FUNDING THE PLAN
...WITH MUTUAL FUNDS
The Employer completes the Employer Contribution Schedule. Each eligible
employee completes an Employee Enrollment Form. All necessary forms and a
check made payable to IFTC should be sent to:
Investors Fiduciary Trust Company
Attn: Retirement Plans
P.O. Box 419356
Kansas City, MO 64141-6356
The IFTC Trustee fee is $12 per account, per participant, per year, with a
$24 maximum charge per participant.
...WITH ANNUITIES
A KILICO Enrollment Application is completed for each plan participant.
Please call Policyholder Services for the proper forms at 1-800-554-5426.
The check should be made payable to Kemper Investors Life Insurance
Company and mailed to:
Kemper Investors Life Insurance Company
P.O. Box 95963
Chicago, IL 60694
There are no trustee fees when using KILICO products.
<PAGE>
CHOOSING YOUR PLAN
...WITH UNIT INVESTMENT TRUSTS
For a Kemper Capital Markets enrollment kit, please call Kemper
Capital Markets at 1-800-621-5024. Applications and a check made
payable to IFTC should be sent to:
Investors Fiduciary Trust Company
Attn: Retirement Plans
P.O. Box 419430
Kansas City, MO 64141-6430
The IFTC Trustee fee is $12 per account, per participant, per year,
with a $24 maximum charge per participant.
To obtain additional prospectuses for any of the Kemper products,
containing more complete information including management fees and
expenses, please contact your representative or Kemper Financial Services,
Inc. at 1-800-621-5027. Please read the prospectus carefully before you
invest or send money.
GETTING STARTED
The next two sections, "Plan Installation Forms" and "Participant
Records," provide the necessary forms to complete the installation of
the plan. Please read the instructions at the beginning of each
section carefully before completing the applicable forms.
If you are a sole proprietor and do not have any covered employees,
complete the Adoption Agreement only.
The last section, "Plan Document," is provided for your reference
only.
<PAGE>
PLAN INSTALLATION FORMS
GETTING STARTED
COMPLETE THE FOLLOWING DOCUMENTS AND RETURN ORIGINALS TO THE APPROPRIATE
ADDRESS SHOWN UNDER THE PRECEDING SECTION ENTITLED "FUNDING THE PLAN."
REMEMBER TO RETAIN A PHOTOCOPY FOR YOUR RECORDS.
ADOPTION AGREEMENT
Complete the information requested ONLY for the particular type
of plan you've selected (either profit sharing, money purchase or a
combination).
ENROLLMENT FORM
Photocopy and complete an enrollment form for EACH eligible participant.
SUMMARY PLAN DESCRIPTION CARD
Complete this card ONLY if you have Employees.
ASSET TRANSFER FORM
Complete this form ONLY if there are existing plan assets.
<PAGE>
"LINE-BY-LINE" INSTRUCTIONS FOR COMPLETING YOUR ADOPTION AGREEMENT
- Specify the type of business entity adopting the plan by checking the
appropriate box.
- Enter the address of the business. This may be a home address if there is
no separate business address.
- Enter the Employer's Taxpayer Identification Number (TIN). If you do not
presently have a TIN for your business, you should apply for one using IRS
Form SS-4. Form SS-4 is available from Kemper Financial Services upon
request.
- Enter the name of the Employer on the blank line provided. If the
Employer is a sole proprietor who does not have a formal business name,
enter the name of the individual adopting the plan.
ARTICLE I
1.17 (A) In most situations the Plan Year End will be December 31, but if
the Employer operates on a fiscal year, then enter the
appropriate date.
(B) If item (b) is left blank, the Limitation Year will be the same
as the Plan Year.
1.18 (A) If this Adoption Agreement is used to establish a new plan,
rather than amend an older plan, check item l.18(a) and skip
item 1.18(b).
(B) Complete item 1.18(b) if this is a restatement of an older plan.
ARTICLE II
2.01 (A) Check (1) or (2) to define the minimum age requirement (if any)
that must be attained before an employee is eligible to
participate in the plan.
(B) Check (1), (2) or (3) to define the minimum service (if any)
that must be completed before an employee is eligible to
participate in the plan. The plan defines a Year of Service as a
12 consecutive month period in which the employee works 1,000
hours or more. The 12 consecutive month period begins on the
date the employee first performs an Hour of Service and each
anniversary thereof.
ARTICLE III
3.01 If this is a MONEY PURCHASE PENSION PLAN, indicate the base
contribution rate in the first blank. The base contribution rate
must equal or exceed 3%. If the plan will be integrated with
Social Security, enter the integration rate in the second blank
and complete the integration level section.
3.04 If this is a PROFIT SHARING PLAN and the contribution allocation
will be integrated with Social Security, complete the
integration level section 13.00. If this is a PROFIT SHARING
PLAN, check here if you wish to include employee salary deferral
contributions. If you do NOT want to allow employee salary
deferral contributions, skip this item and go directly to the
"Effective Date Addendum" of Article V.
ARTICLE XIII
13.00 If this is a Profit Sharing Plan, check here if you wish to
include employee salary deferral contributions. If you do not
want to allow employee salary deferral contributions, skip this
item and go directly to the "Effective Date Addendum."
13.05 Enter a date, which is no later than April 15th, by which a
participant must notify you if he or she has exceeded the dollar
limit for employee salary deferral contributions. For
administrative ease, March 1 is recommended.
13.08(A) Leave blank and skip to item 13.09 if the Employer will not make
regular matching contributions to the plan. Check 13.08(a) if
the Employer intends to match the salary deferral contributions
of ALL participants.
(B) Check 13.08(b) if Highly Compensated Employees will not receive
the Employer's regular matching contribution.
(C) Enter the amount of the Employer's matching contribution on the
line provided. Note that the employer is REQUIRED to make this
matching contribution each year.
(D) If 13.08(d) is left blank, all of a participant's salary
deferral contributions will be matched by the Employer.
Enter a dollar amount and/or percentage on the blank lines
provided to limit the salary deferral contributions eligible for
the matching contribution.
13.09(A) Leave blank and skip to item 13.12 if the Employer will not make
Qualified Matching Contributions to the Plan.
Check 13.09(a) if the Employer intends to contribute Qualified
Matching Contributions for ALL participants.
<PAGE>
PLAN INSTALLATION FORMS
(B) Check 13.09 (b) if Highly Compensated Employees will not
receive the Qualified Matching Contribution.
(C) Enter the amount of the Employer's Qualified Matching
Contribution on the line provided. Note that the employer is
REQUIRED to make this Qualified Matching Contribution each
year.
(D) If (d) is left blank, all of a participant's salary deferral
contributions will be eligible for the qualified matching
contribution.
Enter a dollar amount and/or percentage on the blank lines
provided to limit the salary deferral contributions eligible
for the Qualified Matching Contribution.
13.12(A) Check 13.12 (a) if the Employer intends to contribute Qualified
Nonelective Contributions for ALL participants.
(B) Check 13.12 (b) if Highly Compensated Employees will not
receive Qualified Nonelective Contributions.
(C) If (c) is checked, a participant's share of the qualified
nonelective contribution will be based on the participant's
total compensation.
(D) If (d) is checked, only compensation up to the stated dollar
amount will be used to calculate a participant's share of the
qualified nonelective contribution.
SPECIAL RULES FOR SALARY REDUCTION AGREEMENTS
(A)(1) Check (1) and enter a percentage on the line provided if
you wish to establish a maximum deferral percentage.
(2) Check (2) and enter a percentage on the line provided if
you wish to establish a minimum deferral percentage.
(3) Check (3) if no restrictions are imposed on a participant's
salary reduction contributions.
(B) Check (1), (2), (3) OR (4) to restrict when a participant
may stop their salary deferral contributions.
(C) Check (1), (2), (3) OR (4) to indicate when a participant
may resume making salary deferral contributions.
(D) Check (1), (2), (3) OR (4) to indicate how frequently a
participant may change the amount of his or her salary
deferral contributions.
ARTICLE V
EFFECTIVE DATE ADDENDUM
If you are restating an older plan, complete only if the
effective date of the restatement is before January 1,1989
AND these specific provisions have changed as a result of
the restatement. If a provision listed below has changed, the
date on which that provision begins to apply may be later
than your restated effective date if you check the applicable
box. Indicate the later effective date by inserting a date
on the line provided.
If this is a NEW PLAN, skip the Effective Date Addendum and go
directly to "Participation Agreement."
PARTICIPATION AGREEMENT
If the Employer has an ownership interest in another business
which results in a controlled group of businesses as defined
by the Internal Revenue Code, then each related business must
sign the Participation Agreement as a Participating Employer.
The "Signatory Employer" is the Employer who also signs the
Execution Page of the adoption agreement.
If the employer sponsoring this plan has no ownership interest
in any other business, skip the Participation Agreement and go
directly to "Execution Page."
EXECUTION PAGE
The Employer should sign and date the appropriate Adoption
Agreement. The signature of the sole proprietor, general
partner or corporate officer belongs on the line above
"Employer." Whoever witnesses the Employer's signature should
sign on the line beside "Attest."
The Dealer/Agent should complete the dealer information section.
<PAGE>
ADOPTION AGREEMENT #001
STANDARDIZED PROFIT SHARING/401(K) PLAN
(PAIRED PROFIT SHARING PLAN)
THE EMPLOYER IS A:
/ / sole proprietorship
/ / partnership
/ / corporation
EMPLOYER'S ADDRESS:
________________________________________________________________________________
Street Address City State Zip Code
EMPLOYER'S FEDERAL TAXPAYER IDENTIFICATION NUMBER (TIN):________________________
THE EMPLOYER HEREBY ESTABLISHES THE ____________________________________________
Name of Employer
PROFIT SHARING PLAN in accordance with all the terms of the KEMPER RETIREMENT
PLAN PROTOTYPE KEOGH/CORPORATE AND TRUST AGREEMENT attached hereto, which the
Employer has received, read, accepts and hereby incorporates into this
STANDARDIZED PROFIT SHARING/401(K) PLAN ADOPTION AGREEMENT #001 with the
following additional terms and conditions:
ARTICLE I
DEFINITIONS
1.17 PLAN YEAR/LIMITATION YEAR
/ / (A) Plan Year means the 12 consecutive month period ending ________.
/ / (B) The Limitation Year is the Plan Year unless the following month
is designated as the last month of the limitation year: ________.
1.18 EFFECTIVE DATE (CHOOSE ONE)
/ / (A) NEW PLAN. The Effective Date of the Plan is the first day of the
Plan Year in which the Plan is adopted.
/ / (B) RESTATED PLAN. The restated Effective Date is _________. This Plan
is a substitution and amendment of an existing retirement plan
originally established _____________. [Note: If the restated
Effective Date is earlier than January 1, 1989, see the Effective
Date Addendum immediately preceding the Participation Agreement.]
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY
CONDITIONS. To become a Participant in the Plan,
an Employee must satisfy the following eligibility conditions:
(A) Age requirement. (Choose one)
/ / (1) Age __________ (specify age, not exceeding 21).
/ / (2) No age requirement.
(B) Service requirement. (Choose one)
/ / (1) One Year of Service.
/ / (2) Two Years of Service without an intervening Break
in Service. See Section 2.03(a) of the Plan.
/ / (3) No service requirement.
ENTRY DATE. Any Employee other than a Member of a Collective
Bargaining Unit will become a Participant on the Plan Entry Date (if
employed on that date) coincident with or immediately following the
date the Employee completes the eligibility conditions described in
Options (a) and (b) of this Adoption Agreement Section 2.01.
<PAGE>
PLAN INSTALLATION FORMS
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT
The amount of the Employer's annual contribution to the Trust will
equal the amount (or additional amount) the Employer may from time to
time deem advisable, irrespective of whether the Employer has Net
Profits.
3.04 CONTRIBUTION ALLOCATION
Profit Sharing plan - Employer contributions for the plan year will
be allocated to participants' accounts as follows: [NOTE: IF THE
EMPLOYER WILL NOT BE INTEGRATING THE PLAN WITH SOCIAL SECURITY OR
ADOPTING THE PAIRED MONEY PURCHASE PENSION PLAN #002, SKIP STEPS ONE,
TWO AND THREE BELOW AND GO DIRECTLY TO STEP FOUR.]
STEP ONE: Contributions will be allocated to each participant's
account in the ratio that each participant's total compensation bears
to all participants' total compensation, but not in excess of 3% of
each participant's total compensation.
STEP TWO: Any contributions remaining after the allocation in Step
One will be allocated to each participant's account in the ratio
that each participant's compensation for the plan year in excess of
the integration level bears to the excess compensation of all
participants, but not in excess of 3%.
STEP THREE: Any contributions remaining after the allocation in Step
Two will be allocated to each participant's account in the ratio that
the sum of each participant's total compensation plus excess
compensation bears to the sum of all participant's total compensation
plus total excess compensation, but not in excess of the
profit-sharing maximum disparity rate.
STEP FOUR: Any remaining employer contributions or forfeitures will
be allocated to each participant's account in the ratio that each
participant's total compensation for the plan year bears to all
participants' total compensation for that year.
The integration level shall be equal to the amount elected by the
employer in the Adoption Agreement. The taxable wage base (TWB) is
the maximum amount of earnings which may be considered wages for a
year under Section 3121(a)(1) of the Code in effect as of the
beginning of the plan year.
Compensation shall mean compensation as defined in Section 1.12 of
the plan.
The integration level is equal to (Choose one):
/ / Taxable Wage Base (TWB)
/ / $_______ (a dollar amount less than the TWB)
/ / ________ % of TWB (not to exceed 100%)
The maximum Profit Sharing disparity rate is equal to the lesser of:
(a) 2.7% or
(b) the applicable percentage determined in accordance with the
table below:
<TABLE>
<CAPTION>
IF THE INTEGRATION LEVEL:
IS MORE THAN: BUT NOT MORE THAN: THE APPLICABLE PERCENTAGE IS:
- ------------------------ ------------------ -----------------------------
<S> <C> <C>
$0 X(*) 2.7%
X(*) of TWB 80% of TWB 1.3%
80% of TWB Y(**) of TWB 2.4%
</TABLE>
* X = the greater of $10,000 or 20% of the TWB.
**Y = any amount more than 80% of the TWB but less than 100% of the TWB.
If the integration level used is equal to the TWB, the applicable
percentage is 2.7%.
3.17 DEFINED BENEFIT PLAN LIMITATION
If a Participant is or has ever been a participant in a defined
benefit plan maintained by the Employer:
________________________________________________________________
________________________________________________________________
(In the space above, provide language which will satisfy the 1.0
limitation under Code Section 415(e). Such language must preclude
employer discretion.)
<PAGE>
ARTICLE XIII
401(k) ARRANGEMENT
13.00 / / CHECK THIS BOX IF THIS PLAN IS A 401(k) PLAN AND COMPLETE THE
FOLLOWING:
13.01 ELIGIBILITY
If the service requirement elected by the Employer at Section 2.01 of
this Adoption Agreement is two (2) years, an Employee's eligibility
to make elective deferrals will be determined as if the service
requirement at Section 2.01 were one (1) year.
13.05 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
Participants who claim Excess Elective Deferrals for the preceding
taxable year must submit their claims in writing to the plan
administrator by ___________________________________________________.
Specify a date no later than April 15
13.06 ACTUAL DEFERRAL PERCENTAGE TEST
Qualified Matching Contributions and Qualified Nonelective
Contributions may be taken into account as Elective Deferrals for
purposes of calculating the Actual Deferral Percentages. In
determining Elective Deferrals for the purpose of the ADP test, the
employer shall include Qualified Matching Contributions and Qualified
Nonelective Contributions under this plan or any other plan of the
employer, as provided by regulations under the Code.
The amount of Qualified Matching Contributions taken into account as
Elective Deferrals for purposes of calculating the Actual Deferral
Percentage, subject to such other requirements as may be prescribed
by the Secretary of the Treasury, shall be all such Qualified
Matching Contributions.
The amount of Qualified Nonelective Contributions taken into account
as Elective Deferrals for purposes of calculating the Actual Deferral
Percentages, subject to such other requirements as may be prescribed
by the Secretary of the Treasury, shall be all such Qualified
Nonelective Contributions.
13.08 MATCHING CONTRIBUTIONS
The employer will make Matching Contributions to the plan on behalf
of [ELECT (a) or (b) plus (c) and/or (d)]:
/ / (A) All participants.
/ / (B) All participants who are Non Highly Compensated Employees
who make Elective Deferrals to the plan.
/ / (C) The Employer shall contribute and allocate to each
participant's Matching Contribution account an amount equal
to [______] percent of the participant's Elective Deferrals.
/ / (D) The Employer shall not match amounts provided above in
excess of [$______], or in excess of [______] percent, of
the participant's Compensation.
13.09 QUALIFIED MATCHING CONTRIBUTIONS
The Employer will make Qualified Matching Contributions to the plan
on behalf of [ELECT (a) or (b) plus (c) and/or (d)]:
/ / (A) All participants.
/ / (B) All participants who are Non Highly Compensated Employees
who make Elective Deferrals to the plan.
/ / (C) The Employer shall contribute and allocate to each
participant's Qualified Matching Contribution account an
amount equal to [_____] percent of the participant's
Elective Deferrals.
/ / (D) The Employer shall not match amounts provided above in
excess of [$________], or in excess of [_______] percent, of
the participant's Compensation.
<PAGE>
PLAN INSTALLATION FORMS
13.10 LIMITATIONS ON MATCHING CONTRIBUTIONS
In computing the Average Contribution Percentage, the Employer shall
take into account, and include as Contribution Percentage Amounts
Elective Deferrals and Qualified Nonelective Contributions under this
plan or any other plan of the Employer, as provided by regulations.
The amount of Qualified Nonelective Contributions that are taken into
account as Contribution Percentage Amounts for purposes of
calculating the Average Contribution Percentage, subject to such
other requirements as may be prescribed by the Secretary of the
Treasury, shall be an amount determined by the Employer.
The amount of Elective Deferrals taken into account as Contribution
Percentage Amounts for purposes of calculating the Average
Contribution Percentage, subject to such other requirements as may be
prescribed by the Secretary of the Treasury, shall be an amount
determined by the Employer.
13.12 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer will make Qualified Nonelective Contributions to the
plan. If the Employer does make such contributions to the plan, then
the amount of such contributions for each Plan Year shall be an
amount determined by the Employer.
Allocation of Qualified Nonelective Contributions shall be made to
the accounts of [ELECT ONE]:
/ / (A) All participants
/ / (B) Only Nonhighly Compensated participants
Allocation of Qualified Nonelective Contributions shall be made
[ELECT ONE]:
/ / (C) In the ratio that each participant's Compensation for the
Plan Year bears to the total Compensation of all
participants for such Plan Year.
/ / (D) In the ratio that each participant's Compensation not in
excess of [$______] for the Plan Year bears to the total
Compensation of all participants not in excess of [$______]
for such Plan Year.
SPECIAL RULES FOR SALARY REDUCTION AGREEMENTS
The following rules and restrictions apply to an Employee's salary
reduction agreement:
(A) Limitation on Amount. The Employee's salary reduction
contributions: (Choose at least one)
/ / (1) May not exceed _________% of Compensation for the
Plan Year, subject to the annual additions
limitation described in Part 2 of Article III of
the Plan.
/ / (2) Based on percentages of Compensation must equal at
least _________% of Compensation for the
reduction period.
/ / (3) No maximum limitation other than the annual
additions limitation.
(B) An Employee may revoke, on a prospective basis, a salary
reduction agreement: (Choose one)
/ / (1) Once during any Plan Year but not later than _________
of the Plan Year.
/ / (2) As of any Plan Entry Date.
/ / (3) As of the first day of any month.
/ / (4) Other (specify, but must be at least once per Plan
Year).
(C) An Employee who revokes his or her salary reduction agreement
may file a new salary reduction agreement with an effective
date: (Choose one):
/ / (1) No earlier than the first day of the next Plan Year.
/ / (2) As of any subsequent Plan Entry Date.
/ / (3) As of the first day of any month subsequent to the
month in which he or she revoked an Agreement.
/ / (4) Other (specify, but must be at least once per Plan
Year following the Plan Year of revocation).
(D) A Participant may increase or may decrease, on a prospective
basis, his salary reduction percentage or dollar amount:
/ / (1) As of the beginning of each payroll period.
/ / (2) As of the first day of each month.
/ / (3) As of any Plan Entry Date.
/ / (4) Other (specify, but must permit an increase or a
decrease at least once per Plan Year).
<PAGE>
ARTICLE V
EFFECTIVE DATE ADDENDUM
(RESTATED PLANS ONLY)
The Employer must complete this addendum only if the restated
Effective Date specified in Adoption Agreement Section 1.18 is
earlier than January 1,1989, and if a different restated effective
date applies to at least one of the provisions listed in this
addendum.
IDENTIFICATION OF SPECIAL EFFECTIVE DATES
In lieu of the restated Effective Date in Adoption Agreement Section
1.18, the following Special Effective Dates apply:
(Choose whichever elections apply)
/ / (A) COMPENSATION DEFINITION
The Compensation definition of Section 1.12 (other than
the $200,000 limitation) is effective for Plan Years
beginning after ______. [Note: May not be effective
later than the first day of the first Plan Year beginning
after the Employer executes this Adoption Agreement to
restate the Plan for the Tax Reform Act of 1986.]
/ / (B) ELIGIBILITY CONDITIONS
The eligibility conditions specified in Adoption Agreement
Section 2.01 are effective for Plan Years beginning after
December 31, 1988.
/ / (C) CONTRIBUTION/ALLOCATION FORMULA
The contribution formula elected under Adoption Agreement
Section 3.01 is effective for Plan Years beginning after
December 31, 1988.
/ / (D) ELIMINATION OF NET PROFITS
The requirement for the Employer not to have net profits
to contribute to this Plan is effective for Plan Years
beginning after __________________. [Note: The date
specified may not be earlier than December 31, 1985.]
For Plan Years prior to the Special Effective Date, the terms of the
Plan prior to its restatement under this Adoption Agreement will
control for purposes of the designated provisions.
<PAGE>
PLAN INSTALLATION FORMS
PARTICIPATION AGREEMENT
FOR PARTICIPATION BY RELATED GROUP MEMBERS (PLAN SECTION 1.30)
The undersigned Employer, by executing this Participation Agreement,
elects to become a Participating Employer in the
____________________________________________________________________
Name of Employer
PROFIT SHARING PLAN as if the Participating Employer were a signatory
to that Agreement. The Participating Employer accepts, and agrees to
be bound by, all of the elections granted under the provisions of the
Plan as made by ________________, the Signatory Employer to the
Execution Page of the Adoption Agreement.
1. The Effective Date of the undersigned Employer's participation in the
designated Plan is: _________________.
2. The undersigned Employer's adoption of this Plan constitutes:
/ / (A) the adoption of a new plan by the Employer.
/ / (B) the adoption of an amendment and restatement of a plan
currently maintained by the Employer, identified as
_________________________________________________________________
and having an original effective date of __________________________.
Dated this ______ day of _______ ,19__.
Attest:__________________________ By: ___________________________
Participating Employer
ACCEPTANCE BY THE SIGNATORY EMPLOYER TO THE EXECUTION PAGE OF THE
ADOPTION AGREEMENT AND BY THE TRUSTEE.
Accepted:________________________ By:____________________________
Date Signatory Employer
Accepted:________________________ Investors Fiduciary Trust Company
Date
By:____________________________
Authorized Signature
EACH PARTICIPATING EMPLOYER MUST COMPLETE A SEPARATE PARTICIPATION AGREEMENT.
TURN THE PAGE FOR IMPORTANT PLAN INFORMATION.
<PAGE>
EXECUTION PAGE
The Trustee, by executing this Adoption Agreement, accepts its position and
agrees to all of the obligations, responsibilities and duties imposed upon the
Trustee under this Plan and Trust. The Employer hereby agrees to the provisions
of this Plan and Trust, and in witness of its agreement, the Employer by its
duly authorized officers, has executed this Adoption Agreement on this _______
day of _________,19__.
Attest:______________________________ By:__________________________________
Employer
Investors Fiduciary Trust Company
Accepted:____________________________ By:__________________________________
Date Authorized Signature
USE OF ADOPTION AGREEMENT
Failure to properly complete the elections in this Adoption Agreement may
result in disqualification of the Employer's Plan. The 3-digit number assigned
to this Adoption Agreement is solely for the Plan Sponsor's record keeping
purposes and does not necessarily correspond to the plan number the Employer
assigns to its plan for ERISA reporting purposes. The Plan Sponsor offers the
following Paired Pension Plan with this Paired Profit Sharing Plan, identified
by 3-digit Adoption Agreement number: 002. This Adoption Agreement may be used
only in conjunction with Basic Plan Document 01.
PLAN SPONSOR
The Plan Sponsor identified on the first page of the basic plan document will
notify all adopting Employers of any amendment to this Plan or of any
abandonment or discontinuance by the Plan Sponsor of its maintenance of this
Plan. For inquiries regarding the adoption of the Plan, the Plan Sponsor's
intended meaning of any plan provisions or the effect of the opinion letter
issued to the Plan Sponsor, please contact the Plan Sponsor at the following
address and telephone number: Kemper Financial Services, Inc., 120 South LaSalle
Street, Chicago, Illinois 60603, 1-800-621-1148.
RELIANCE ON OPINION LETTER
If the Employer does not maintain (and has never maintained) any plan other
than this Plan and a Paired Pension Plan, it may rely on the Plan Sponsor's
opinion letter covering this Plan for purposes of plan qualification. For this
purpose, the Employer has not maintained another plan if this Plan, or the
Paired Pension Plan, amended and restated that prior plan and the prior plan
was the same type of plan as the restated plan. If the Employer maintains or
has maintained another plan other than a Paired Pension Plan, including a
welfare benefit fund, as defined in Code Section 419(e), which provides post-
retirement medical benefits for key employees (as defined in Code Section
419A(d)(3)), or an individual medical account (as defined in Code Section
415(1)(2)), the Employer may not rely on this Plan's qualified status unless
it obtains a determination letter from the applicable IRS Key District office.
==============================================================================
FOR DEALER USE ONLY
______________________________________________________________________________
Name or Number of Dealer Address
______________________________________________________________________________
Name or Number of Dealer's Representative
______________________________________________________________________________
Representative's Phone Number
______________________________________________________________________________
Location of Dealer Office in Which Plan Opened
______________________________________________________________________________
Authorized Signature of Dealer Date
<PAGE>
PLAN INSTALLATION FORMS
ADOPTION AGREEMENT #002
STANDARDIZED MONEY PURCHASE PENSION PLAN
(PAIRED PENSION PLAN)
THE EMPLOYER IS A:
/ / sole proprietorship
/ / partnership
/ / corporation
EMPLOYER'S ADDRESS:____________________________________________________________
Street Address City State Zip Code
EMPLOYER'S FEDERAL TAXPAYER IDENTIFICATION NUMBER (TIN): ______________________
THE EMPLOYER HEREBY ESTABLISHES THE ___________________________________________
Name of Employer
MONEY PURCHASE PENSION PLAN in accordance with all the terms of the KEMPER
RETIREMENT PLAN PROTOTYPE KEOGH/CORPORATE and TRUST AGREEMENT attached hereto,
which the Employer has received, read, accepts and hereby incorporates into
this STANDARDIZED MONEY PURCHASE PENSION PLAN ADOPTION AGREEMENT #002 with the
following additional terms and conditions:
ARTICLE I
DEFINITIONS
1.17 PLAN YEAR/LIMITATION YEAR
/ / (A) Plan Year means the 12 consecutive month period ending
every __________.
/ / (B) The Limitation Year is the Plan Year unless the following month
is designated as the last month of the limitation year: _______.
1.18 EFFECTIVE DATE (CHOOSE ONE)
/ / (A) NEW PLAN. The "Effective Date" of the Plan is the first day of
the Plan Year in which the Plan is adopted.
/ / (B) RESTATED PLAN. The restated Effective Date is _________. This
Plan is a substitution and amendment of an existing retirement
plan originally established _____________. [Note: If the restated
Effective Date is earlier than January 1, 1989, see the Effective
Date Addendum immediately preceding the Participation
Agreement.]
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY
ELIGIBILITY CONDITIONS. To become a Participant in the Plan, an
Employee must satisfy the following eligibility conditions:
/ / (A) Age requirement: (Choose one)
/ / (1) Age ______ (specify age, not exceeding 21).
/ / (2) No age requirement.
/ / (B) Service Requirement: (Choose one)
/ / (1) One Year of Service.
/ / (2) Two Years of Service, without an intervening Break in
Service. See Section 2.03(A) of the Plan.
/ / (3) No service requirement.
ENTRY DATE. Any Employee other than a Member of a Collective
Bargaining Unit will become a Participant on the Plan Entry Date
(if employed on that date) coincident with or immediately
following the date the Employee completes the eligibility
conditions described in Options (a) and (b) of this Adoption
Agreement Section 2.01.
<PAGE>
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT
The Employer will contribute for each participant who either
completes more than 500 hours of service during the Plan Year, or is
employed by the Employer on the last day of the Plan Year, an amount
equal to ______% (base contribution percentage, not less than 3%) of
each Participant's Compensation (as defined in Section 1.12 of the
Plan) for the Plan Year, plus _________% (not to exceed the base
contribution percentage by more than the lesser of: (1) the base
contribution percentage, or (2) the maximum disparity rate of such
Participant's Compensation in excess of the integration level.
NOTE: IF THE EMPLOYER ALSO MAINTAINS PAIRED PROFIT SHARING PLAN
#001, ONLY ONE OF THE PLANS MAY BE INTEGRATED.
The integration level shall be equal to the amount elected by the
Employer. The taxable wage base is the maximum amount of earnings
which may be considered wages for a year under Section 3121(a)(1) of
the Code in effect as of the beginning of the Plan Year.
The integration level is equal to: (Choose one)
/ / Taxable Wage Base (TWB)
/ / $_________ (a dollar amount less than the taxable wage base)
/ / __________ % of TWB (not to exceed 100%)
The maximum disparity rate is equal to the lesser of:
(A) 5.7%
(B) the applicable percentage determined in accordance with the
table below.
<TABLE>
<CAPTION>
IF THE INTEGRATION LEVEL:
IS MORE THAN BUT NOT MORE THAN THE APPLICABLE PERCENTAGE IS
- ------------------------- ----------------- ----------------------------
<S> <C> <C>
$0 X(*) 5.7%
X(*) of TWB 80% of TWB 4.3%
80% of TWB Y(**) 5.4%
(*) X = the greater of $10,000 or 20% of the TWB.
(**) Y = any more than 80% of the TWB but less than 100% of the TWB.
</TABLE>
If the integration level is equal to taxable wage base the
applicable percentage is 5.7%.
3.17 DEFINED BENEFIT PLAN LIMITATION
If a Participant is or has ever been a participant in a defined
benefit plan maintained by the Employer:
______________________________________________________________________
______________________________________________________________________
(In the space above, provide language which will satisfy the 1.0
limitation under Code Section 415(e). Such language must preclude
Employer discretion.)
EFFECTIVE DATE ADDENDUM
(RESTATED PLANS ONLY)
The Employer must complete this addendum only if the restated Effective Date
specified in Adoption Agreement Section 1.18 is earlier than January 1, 1989,
and a different restated effective date applies to at least one of the
provisions listed in this addendum.
IDENTIFICATION OF SPECIAL EFFECTIVE DATES. In lieu of the restated Effective
Date in Adoption Agreement Section 1.18, the following Special Effective Dates
apply: (Choose whichever elections apply)
/ / (A) COMPENSATION DEFINITION. The Compensation definition of Section
1.12 (other than the $200,000 limitation) is effective for Plan
Years beginning after ____________. [Note: May not be effective
later than the first day of the first Plan Year beginning after
the Employer executes this Adoption Agreement to restate the
Plan for the Tax Reform Act of 1986.]
/ / (B) ELIGIBILITY CONDITIONS. The eligibility conditions specified in
Adoption Agreement Section 2.01 are effective for Plan Years
beginning after December 31, 1988.
/ / (C) CONTRIBUTION/ALLOCATION FORMULA. The contribution formula
elected under Adoption Agreement Section 3.01 is effective for
Plan Years beginning after December 31, 1988.
For Plan Years prior to the Special Effective Date, the terms of the Plan prior
to its restatement under this Adoption Agreement will control for purposes of
the designated provisions.
<PAGE>
PLAN INSTALLATION FORMS
PARTICIPATION AGREEMENT
FOR PARTICIPATION BY RELATED GROUP MEMBERS (PLAN SECTION 1.30)
The undersigned Employer, by executing this Participation Agreement, elects to
become a Participating Employer in the
_______________________________________________________________________________
Name of Employer
MONEY PURCHASE PENSION PLAN as if the Participating Employer were a signatory
to that Agreement. The Participating Employer accepts, and agrees to be bound
by, all of the elections granted under the provisions of the Plan as made
by _________, the Signatory Employer to the Execution Page of the Adoption
Agreement.
1. The Effective Date of the undersigned Employer's participation in the
designated Plan is: ___________________________________.
2. The undersigned Employer's adoption of this Plan constitutes:
/ / (A) The adoption of a new plan by the Employer.
/ / (B) The adoption of an amendment and restatement of a plan
currently maintained by the Employer, identified as
______________________________________________________________________
and having an original effective date of ___________. Dated this ____
day of ______________, 19__.
Attest: ________________________ By: ______________________________
Participating Employer
ACCEPTANCE BY THE SIGNATORY EMPLOYER TO THE EXECUTION PAGE OF THE
ADOPTION AGREEMENT AND BY THE TRUSTEE.
Accepted: ______________________ By: _____________________________
Date Signatory Employer
Accepted: ______________________ Investors Fiduciary Trust Company
Date
BY: _____________________________
Authorized Signature
EACH PARTICIPATING EMPLOYER MUST COMPLETE A SEPARATE PARTICIPATION AGREEMENT.
TURN THE PAGE FOR IMPORTANT PLAN INFORMATION.
<PAGE>
EXECUTION PAGE
The Trustee, by executing this Adoption Agreement, accepts its position and
agrees to all of the obligations, responsibilities and duties imposed upon the
Trustee under this Plan and Trust. The Employer hereby agrees to the provisions
of this Plan and Trust, and in witness of its agreement, the Employer, by its
duly authorized officers, has executed this Adoption Agreement on this
__________ day of _______, 19__.
Attest:________________________________ By:__________________________________
Employer
Investors Fiduciary Trust Company
Accepted:______________________________ By:__________________________________
Authorized Signature
USE OF ADOPTION AGREEMENT
Failure to properly complete the elections in this Adoption Agreement may
result in disqualification of the Employer's Plan. The 3-digit number assigned
to this Adoption Agreement is solely for the Plan Sponsor's record keeping
purposes and does not necessarily correspond to the plan number the Employer
assigns to its Plan for ERISA reporting purposes. The Plan Sponsor offers the
following Paired Profit Sharing Plan with this Paired Pension Plan, identified
by 3-digit Adoption Agreement number 001. This Adoption Agreement may be only
used in conjunction with Basic Plan Document 01.
PLAN SPONSOR
The Plan Sponsor identified on the first page of the basic plan document will
notify all adopting Employers of any amendment to this Plan or of any
abandonment or discontinuance by the Plan Sponsor of its maintenance of this
Plan. For inquiries regarding the adoption of the Plan, the Plan Sponsor's
intended meaning of any plan provisions or the effect of the opinion letter
issued to the Plan Sponsor, please contact the Plan Sponsor at the following
address and telephone number: Kemper Financial Services, Inc., 120 South LaSalle
Street, Chicago, Illinois 60603, 1-800-621-1148.
RELIANCE ON OPINION LETTER
If the Employer does not maintain (and has never maintained) any plan other
than this Plan and a Paired Profit Sharing Plan, it may rely on the Plan
Sponsor's opinion letter covering this Plan for purposes of plan qualification.
For this purpose, the Employer has not maintained another plan if this Plan, or
the Paired Profit Sharing Plan, amended and restated that prior plan and the
prior plan was the same type of plan as the restated plan. If the Employer
maintains or later adopts or has maintained another plan other than a Paired
Profit Sharing Plan, including a welfare benefit fund, as defined in Code
Section 419(e), which provides post-retirement medical benefits for key
employees (as defined in Code Section 419A(d)(3)), or an individual medical
account (as defined in Code Section 415(1)(2)), the Employer may not rely on
this Plan's qualified status unless it obtains a determination letter from the
applicable IRS Key District office.
==============================================================================
FOR DEALER USE ONLY
______________________________________________________________________________
Name or Number of Dealer Address
______________________________________________________________________________
Name or Number of Dealer's Representative
______________________________________________________________________________
Representative's Phone Number
______________________________________________________________________________
Location of Dealer Office in Which Plan Opened
______________________________________________________________________________
Authorized Signature of Dealer Date
<PAGE>
PLAN INSTALLATION FORMS
EMPLOYEE ENROLLMENT FORM FOR MUTUAL FUNDS
INSTRUCTIONS:
1. Complete this form for each participant.
2. Enclose a check for the sum of all contributions made payable to
Investors Fiduciary Trust Company.
3. Deliver a prospectus(es) to each participant. (Participants should be
provided with a prospectus for each fund in which they are invested.)
Note: If you are enrolling more than five participants or if you are
enrolling participants for a 401(k) plan, you should use the KemFlex
Employer Master Account Application (Form-07) and a separate KemFlex
Employee Enrollment Form (Form-36) for each employee.
PARTICIPANT INFORMATION
______________________________________________________________________________
Name of Plan Date
______________________________________________________________________________
Participant Name
______________________________________________________________________________
Participant Social Security Number Participant Birthday
______________________________________________________________________________
Statement Mailing Address
______________________________________________________________________________
City State Zip Code
INVESTMENT SELECTION
FUND NAME AMOUNT
$
_______________________________________ ______________________
_______________________________________ ______________________
_______________________________________ ______________________
TOTAL $
______________________
THIS FORM SHOULD BE USED ONLY FOR MUTUAL FUND PURCHASES. TO FUND WITH
ANNUITIES, CALL KILICO CUSTOMER SERVICE AT 1-800-554-5426 AND REQUEST FORM
L-1004 (FORM L-1005 FOR 401(k) PLANS). TO FUND WITH UNIT INVESTMENT TRUSTS
CONTACT UIT CUSTOMER SERVICE AT 1-800-422-2848 AND REQUEST A UIT RETIREMENT
PLAN APPLICATION.
<PAGE>
PLAN INSTALLATION FORMS
ASSET TRANSFER FORM
INSTRUCTIONS:
This form is provided for your use in substituting the Kemper Red Book
Keogh Retirement Plan Prototype for your present qualified defined
contribution (profit sharing or money purchase pension plan).
1. Consult with your attorney or other tax advisor as to the
consequences of such an amendment.
2. Contact the present custodian bank, trustee or insurance company to
determine their requirements with respect to such transfer of assets.
3. Fill out the appropriate Kemper Red Book Keogh Retirement Plan
Prototype Adoption Agreement and Employee Enrollment Form for Mutual
Funds. Attach this Statement to it, and submit them to Investors
Fiduciary Trust Company, P.O. Box 419356, Kansas City, MO 64141-6356.
4. This statement and a letter of acceptance will be sent to the former
custodian, trustee or insurance company by IFTC. This statement
should suffice as instruction with respect to transmitting the funds
to Investors Fiduciary Trust Company, but the present custodian,
trustee, or insurance company may ask you to use its own form or
instructions, or impose additional requirements.
5. Indicate the total amount transferred on behalf of each participant
in the "Total Account Balance" column opposite the name of each
participant.
We hope this information will be useful to you; if you have any questions,
call Kemper's Sales Support Department at 1-800-621-5027.
To:____________________________________________________________________________
Current Custodian, Trustee or Insurance Company
_______________________________________________________________________________
Street Address
_______________________________________________________________________________
City State Zip Code
The undersigned Employer previously established a qualified retirement plan on
____________, 19____ described as:
_______________________________________________________________________________
Indicate Plan Name - for example, ABC, Inc. Profit Sharing Plan
The undersigned Employer has amended and restated the plan and named Investors
Fiduciary Trust Company as a trustee of the Plan effective ___________, 19____.
The undersigned employer hereby directs the above named custodian bank, trustee
or insurance company now holding assets of the Plan to liquidate all said
assets and transfer the proceeds directly to Investors Fiduciary Trust Company,
P.O. Box 419356, Kansas City, MO 64141-6356, as trustee of the Plan, as amended
and restated.
The following is an accurate description of the allocations of Plan assets. If
you are transferring any voluntary contributions, please notify us of each
account balance.
Participant Total Account Balance
_______________________________________ _____________________________________
_______________________________________ _____________________________________
_______________________________________ _____________________________________
_______________________________________ _____________________________________
Employer's Signature Date
AFTER MAKING A COPY FOR YOUR RECORDS, ATTACH THIS FORM TO THE ADOPTION
AGREEMENT AND THE EMPLOYEE ENROLLMENT FORM FOR MUTUAL FUNDS (PREVIOUS PAGE).
MAIL ALL FORMS TO INVESTORS FIDUCIARY TRUST COMPANY, P.O. BOX 419356,
KANSAS CITY, MO 64141-6356.
<PAGE>
PARTICIPANT RECORDS
PARTICIPANT RECORDS
The following forms allow you to complete the administrative details
that are required of you as a plan sponsor. After they have been distributed to
and completed by your employees, they should be kept on record in your
files and should NOT be returned to Kemper.
NOTICE TO INTERESTED PARTIES
If you have employees, this notice should be posted
with other labor relations information bulletins.
BENEFICIARY FORMS
Photocopy and distribute to EACH participant.
Collect and file with other plan records.
PRE-RETIREMENT NOTICE AND WAIVER
Distribute to each affected participant (see instructions).
Collect and file Waiver.
DISTRIBUTION ELECTION FORM
Photocopy and distribute ONLY to employees terminating employment.
Collect and file with other plan records.
<PAGE>
NOTICE TO INTERESTED PARTIES
1. Notice To: All Employees of ______________________________________________
Name of Employer
2. _______________________________ has ______________________________________
Name of Employer Adopted/Amended
the plan described below on ______________________________________________
Date
3. Name of Plan _____________________________________________________________
4. 3-Digit Plan Identification Number _______________________________________
5. Opinion Letter Number
/ / PS-D257426a
/ / MP-D257427a
6. Sponsor: Kemper Growth Fund, Inc., 120 South LaSalle Street, Chicago, IL
60603
7. Employer's TIN __________________________________________________________
8. Address of Employer _____________________________________________________
_________________________________________________________________________
9. Address of Key Director having jurisdiction of plan _____________________
_________________________________________________________________________
10. It ____________________ contemplated that the Plan will be submitted to
is/is not
the Internal Revenue Service for an advance determination as to whether
or not it meets the qualification requirements of section 401 of the
Internal Revenue Code with respect to its _______________________________
_________________________________________________________________________
Initial Qualification/Amendment
11. All Employees who have completed ___ Years of Service and attained age ___
are eligible to participate.
12. The IRS _________________ previously issued a determination letter with
has/has not
respect to the qualification of this Plan.
13. You have the right to submit to the Key District Director, at the above
address, either individually or jointly with other interested parties,
your comments as to whether this Plan meets the qualification requirements
of the Internal Revenue Code. You may instead, individually or jointly
with other interested parties, request the Department of Labor to submit,
on your behalf, comments to the Key District Director regarding
qualification of the Plan. If the Department declines to comment on all or
some of the matters you raise, you may, individually, or jointly if your
request was made to the Department jointly, submit your comments on these
matters to the Key District Director.
<PAGE>
PARTICIPANT RECORDS
14. The Department of Labor may not comment on behalf of interested parties
unless requested to do so by the lesser of 10 Employees or 10 percent of
the Employees who qualify as interested parties. The number of persons
needed for the Department to comment with respect to this Plan is ______.
If you request the Department to comment, your comment must in writing and
must specify the matters upon which comments are requested, and must also
include: (1) the information contained in items 2 through 9 of this
Notice; and (2) the number of persons needed for the Department to
comment. A request to the Department to comment should be addressed as
follows: Administrator of Pension and Welfare Benefit Programs, U.S.
Department of Labor, 200 Constitution Avenue, N.W., Washington, DC 20216,
Attn: 3001 Comment Request.
15. Comments submitted by you to the Key District Director must be in writing
and received by him by
_________________________________________________________________________
75 days after adoption date
However, if there are matters that you request the Department of Labor to
comment upon on your behalf, and the Department declines, you may submit
comments on these matters to the Key District Director to be received by
him within 15 days from the time the Department notifies you that it will
not comment on a particular matter, or by ___________________________,
75 days after adoption date
whichever is later, but in no event later than ___________________________.
90 days after adoption date
A request to the Department to comment on your behalf must be received by
it by ___________________________ if you wish to preserve your right to
45 days after adoption date
comment on a matter upon which the Department declines to comment, or by
_____________________________ if you wish to waive that right.
55 days after adoption date
16. Detailed instructions regarding the requirements for notification of
interested parties may be found in Sections 16, 17, and 18 of Revenue
Procedure 92-6. Additional information concerning this __________________
adoption/amendment
(including where applicable, an updated copy of the Plan and related Trust
Agreement, a copy of the Adoption Agreement establishing the Plan, and
copies of Section 16 of Revenue Procedure 92-6) is available during the
hours of __________ for inspection and copying. (There is a nominal charge
for copying and mailing.)
<PAGE>
DESIGNATION OF BENEFICIARY
ALL PARTICIPANTS MUST COMPLETE. RETURN TO YOUR EMPLOYER.
_______________________________________________________________________________
Name of Plan Date
_______________________________________________________________________________
Last Name First Name MI
_______________________________________________________________________________
Social Security Number
_______________________________________________________________________________
Date of Birth (month, day, year) Sex
I hereby designate the person(s) named below as the beneficiary of my vested
account(s) payable under the Plan by reason of my death. I UNDERSTAND THAT IF I
DESIGNATE ANYONE OTHER THAN MY SPOUSE AS THE SOLE BENEFICIARY, THE SPOUSAL
CONSENT PORTION OF THIS FORM MUST BE SIGNED IN THE PRESENCE OF A NOTARY PUBLIC
OR A REPRESENTATIVE OF THE PLAN.
_______________________________________________________________________________
Name of Beneficiary (Full given name)
_______________________________________________________________________________
Relation to Participant
_______________________________________________________________________________
Address (if different from Participant)
If more than one person is named as beneficiary, any payments to which they may
be entitled will be paid in equal shares to such of the designated persons as
shall then be living; or if none, then pursuant to the terms of Section 8.02 of
the Plan.
I RESERVE THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION. I HEREBY
REVOKE ALL PRIOR DESIGNATIONS (IF ANY) OF PRIMARY BENEFICIARIES AND CONTINGENT
BENEFICIARIES.
____________________________________ ____________________________
Date of this Designation Signature of Participant
CONSENT OF SPOUSE
I, the undersigned spouse of the Participant named in the foregoing
"Designation of Beneficiary," hereby consent to and accept the beneficiary
designation, without regard to whether I survive or predecease my spouse. I
understand this consent allows the beneficiary(ies) named above to be paid
amounts which would otherwise be paid to me. This consent is irrevocable unless
my spouse changes the designation. If my spouse changes the designation I
understand I must file a similar consent to the new designation, or my consent
is no longer effective.
___________________________________ ____________________________________
Date Signature of Spouse
___________________________________________________________________________
Signature of Witness Title
COMPLETE AND RETURN TO EMPLOYER
<PAGE>
PARTICIPANT RECORDS
PRE-RETIREMENT SURVIVOR ANNUITY MEMORANDUM
INSTRUCTIONS:
This memorandum must be provided to married money purchase pension plan and
certain profit sharing plan participants unless their spouse is the beneficiary
of at least 50% of the participant's account balance. A participant should
receive this memorandum during the Plan Year in which they turn age 32. They
will have the right to waive it, with spousal consent, during the Plan Year in
which the participant turns age 35. A married participant age 35 or older
should immediately be given this memorandum and the Waiver of Pre-retirement
Survivor Annuity form.
________________________________________________________________________ Plan
Name of Employer
PRE-RETIREMENT SURVIVOR ANNUITY. The Plan requires the Employer to distribute a
pre-retirement survivor annuity to your surviving spouse if your death occurs
before distributions have begun and you and your spouse are married during the
one year period ending on the date of your death.
Under the pre-retirement survivor annuity, your spouse will receive lifetime
monthly annuity payments. The Employer will purchase the annuity contract from
an insurance company using 50% of your vested account balance (including the
proceeds, if any, of life insurance contracts purchased on your behalf under
the Plan). The contract will be given to your surviving spouse as evidence of a
right to receive the annuity payments from the insurance company. Generally,
the Employer may not begin payment of the annuity prior to the date a
participant would have reached age 65 without the surviving spouse's consent.
However, the surviving spouse may elect to have distribution of the
pre-retirement survivor annuity at any time following the participant's death.
If, at the time of your death, 50% of your account balance is less than
$3,500, the Employer will pay your spouse a lump sum payment instead of the
annuity.
WAIVER ELECTION. The Plan requires payment of the pre-retirement survivor
annuity unless you have a valid waiver election in effect on the date of your
death. To have a valid waiver you and your spouse must complete the waiver
election form. YOUR WAIVER ELECTION IS NOT VALID UNLESS YOUR SPOUSE, DURING THE
ELECTION PERIOD, ALSO CONSENTS IN WRITING TO YOUR BENEFICIARY DESIGNATION,
UNLESS YOUR SPOUSE IS THE SOLE PRIMARY BENEFICIARY. Your waiver election is not
valid unless you and your spouse make the election within the election period.
The election period begins on the first day of the Plan Year immediately before
your 35th birthday or, if later, the date you receive this notice. The election
period ends on the date of your death. If you wish, you may waive the
pre-retirement survivor annuity prior to the beginning of the election period.
However, on the first day of the election period mentioned above, you and your
spouse would have to complete a second waiver form. If you terminate
employment, you may waive the pre-retirement survivor annuity at any time after
the date of your termination. You may revoke or make a new waiver election as
often as you like during the election period. You may revoke a waiver election
without your spouse's consent, but your spouse would have to consent to a new
waiver. A waiver election is valid only for the spouse consenting to the
waiver. Therefore, you should inform the Employer of any change in your marital
status.
FINANCIAL EFFECT OF YOUR ELECTION. If you and your spouse do NOT waive the
pre-retirement survivor annuity, the Employer will pay your surviving spouse
the pre-retirement survivor annuity and pay the remaining value of the account
to your designated beneficiary. If the Employer pays your spouse the annuity,
the Plan does not need your spouse's consent to the beneficiary designation.
Under a pre-retirement survivor annuity, your surviving spouse will receive
lifetime income. Benefits will not continue to other beneficiaries after your
spouse's death. Your surviving spouse can choose a lump sum or installment
payments instead of the pre-retirement survivor annuity.
If you and your spouse waive the pre-retirement survivor annuity, the Employer
will pay your entire vested account balance to your designated beneficiary. The
Plan generally requires payment of the death benefit in lump sum. If your
beneficiary receives a lump sum payment, the Employer will provide the
beneficiary a notice of the special tax benefits, if any, available for the
distribution. If your vested account balance at the time of your death exceeds
$3,500, your beneficiary may choose a lump sum or installment payments. Under
the installment method, the Employer will continue payments from your account
until the entire account has been depleted. Furthermore, your vested account
balance will continue to earn investment income. If a vested account balance
remains in the Plan at the time of your primary beneficiary's death, the Plan
will pay the remaining account balance to your primary beneficiary's estate,
unless your beneficiary designation directs otherwise. If you and your spouse
waive the pre-retirement survivor annuity, your spouse must consent to the
identity of the designated beneficiary but does not have to consent to the form
of payment made to the beneficiary.
PROCEDURE. If you and your spouse wish to have the pre-retirement survivor
annuity apply, YOU DO NOT NEED TO MAKE ANY ELECTION. If you and your spouse do
NOT wish to have the pre-retirement survivor annuity apply, sign the enclosed
Waiver of Pre-retirement Survivor Annuity election form within the election
period. We also have enclosed a Designation of Beneficiary Form.
PARTICIPANTS SHOULD RETAIN THIS IN THEIR FILES
<PAGE>
WAIVER OF PRE-RETIREMENT SURVIVOR ANNUITY
MARRIED PARTICIPANTS MUST COMPLETE THIS FORM IF THEY WISH TO WAIVE PAYMENT OF A
PRE-RETIREMENT SURVIVOR ANNUITY. RETURN TO YOUR EMPLOYER.
__________________________________________________________________________ Plan
Name of Employer
I elect to waive payment of a pre-retirement survivor annuity if my death
occurs before distributions have begun under the Plan. The Employer has given
me an explanation of the terms of the Pre-retirement Survivor Annuity, my right
to make this waiver election, the time period during which I may make this
waiver election, and the financial effect of my election not to receive the
Pre-retirement Survivor Annuity. I understand I may revoke this election at any
time during the election period.
______________________________________ _______________________________________
Date Signature of Participant
CONSENT OF SPOUSE
I, the undersigned spouse of the Participant named above, consent to the Waiver
of the Pre-retirement Survivor Annuity form of payment. I understand the terms
of the Pre-retirement Survivor Annuity, my right not to consent to this waiver
election, the time period during which my spouse and I may make this waiver
election, and the financial effect of my election not to receive the
Pre-retirement Survivor Annuity. I understand my consent is irrevocable unless
my spouse revokes the waiver election. I further understand my consent is valid
only if I consent, in writing, to my spouse's beneficiary designation or any
change in my spouse's beneficiary designation, unless my spouse has designated
me as sole primary beneficiary.
________________________________ ___________________________________________
Date Signature of Spouse
____________________________________________________________________________
Signature of Witness Title
COMPLETE AND RETURN TO EMPLOYER
<PAGE>
PARTICIPANT RECORDS
DISTRIBUTION ELECTION
PARTICIPANTS MUST COMPLETE THIS FORM ONLY IF THEIR ACCOUNT(S) IS OVER $3,500.
RETURN TO YOUR EMPLOYER.
_______________________________________________________________________ Plan
Name of Employer
A. INDICATE THE FORM OF DISTRIBUTION PAYMENT.
I, the undersigned Participant, elect payment of my account balance in
the following manner:
(1) / / I elect to transfer my distribution directly to a Kemper
IRA and defer taxes until I actually receive the money.
(Complete a Kemper IRA application if electing this
option.)
(2) / / In a lump sum.
(3) / / In a series of _______________________________
(monthly, quarterly, or annual)
installments over ____ years.
(4) / / In a qualified joint and survivor annuity contract.
(5) / / I elect to postpone distribution until the age of 65.
___________________________________ __________________________________
Date Signature of Participant
NOTE TO MARRIED MONEY PURCHASE PENSION PLAN AND CERTAIN PROFIT SHARING
PLAN PARTICIPANTS: If you requested payment of your account balance in a
form other than a qualified joint and survivor annuity, your spouse must
consent by signing Section B.
B. CONSENT OF SPOUSE
I, __________________________, spouse of the Participant, hereby consent
to the form of distribution payment elected above. I understand that by
giving this consent I am giving up the right to receive annuity benefit
payments which would otherwise be payable to me for my lifetime. I
understand my consent is irrevocable unless my spouse changes the form of
distribution payment. I understand any change is subject to my consent,
unless my spouse elects to receive the qualified joint and survivor
annuity.
___________________________________ ______________________________________
Date Signature of Participant
___________________________________ ______________________________________
Signature of Witness Title
IMPORTANT NOTE: A PARTICIPANT MAY WAIVE A QUALIFIED JOINT AND SURVIVOR
ANNUITY CONTRACT, AND A SPOUSE MAY CONSENT TO SUCH WAIVER PROVIDED THIS
ELECTION IS MADE WITHIN 90 DAYS OF THE FIRST PLAN DISTRIBUTION.
COMPLETE AND RETURN TO EMPLOYER
<PAGE>
PLAN DOCUMENT
RETIREMENT PLAN
PROTOTYPE DOCUMENT
The following Plan Document and Opinion Letters
are part of your permanent plan records and may be consulted to
reference specific plan provisions.
<PAGE>
KEMPER RED BOOK
KEOGH RETIREMENT PLAN PROTOTYPE TRUST AGREEMENT
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE I, DEFINITIONS
1.01 EMPLOYEE.............................................1
1.02 TRUSTEE..............................................1
1.03 PLAN ................................................1
1.04 ADOPTION AGREEMENT ..................................1
1.05 PLAN ADMINISTRATOR ..................................1
1.06 ADVISORY COMMITTEE...................................1
1.07 EMPLOYEE.............................................1
1.08 SELF-EMPLOYED INDIVIDUAL/OWNER-EMPLOYEE .............1
1.09 HIGHLY COMPENSATED EMPLOYEE..........................1
1.10 PARTICIPANT..........................................2
1.11 BENEFICIARY..........................................2
1.12 COMPENSATION.........................................2
1.13 EARNED INCOME .......................................3
1.14 ACCOUNT..............................................3
1.15 ACCRUED BENEFIT .....................................3
1.16 NONFORFEITABLE.......................................3
1.17 PLAN YEAR/LIMITATION YEAR............................3
1.18 EFFECTIVE DATE ......................................3
1.19 PLAN ENTRY DATE .....................................3
1.20 ACCOUNTING DATE .....................................3
1.21 TRUST................................................3
1.22 TRUST FUND ..........................................3
1.23 NONTRANSFERABLE ANNUITY .............................3
1.24 ERISA ...............................................3
1 25 CODE.................................................3
1 26 SERVICE .............................................3
1 27 HOUR OF SERVICE .....................................3
1.28 DISABILITY...........................................4
1.29 SERVICE FOR PREDECESSOR EMPLOYER ....................4
1.30 RELATED EMPLOYERS....................................4
1.31 LEASED EMPLOYEES ....................................5
1.32 SPECIAL RULES FOR OWNER-EMPLOYEES ...................5
1.33 TAXABLE WAGE BASE ...................................5
1.34 PAIRED PLANS ........................................5
1.35 MEMBER OF A COLLECTIVE BARGAINING UNIT ..............6
1.36 DESIGNATED INVESTMENT COMPANY .......................6
ARTICLE II, EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY..........................................6
2.02 YEAR OF SERVICE - PARTICIPATION .....................6
2.03 BREAK IN SERVICE - PARTICIPATION.....................6
2.04 PARTICIPATION UPON RE-EMPLOYMENT ....................6
2.05 CHANGE IN EMPLOYEE STATUS ...........................6
2.06 ELECTION NOT TO PARTICIPATE .........................6
</TABLE>
<PAGE>
PLAN DOCUMENT
<TABLE>
<S> <C>
ARTICLE III, EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT ..............................................7
3.02 DETERMINATION OF CONTRIBUTION .......................7
3.03 TIME OF PAYMENT OF CONTRIBUTION .....................7
3.04 RESERVED ............................................7
3.05 ACCRUAL OF BENEFIT ..................................7
3.06 .....................................................7
3.07 .....................................................7
3.08 .....................................................7
3.09 .....................................................7
3.10 .....................................................8
3.11 .....................................................8
3.12 .....................................................8
3.13 .....................................................8
3.14 .....................................................8
3.15 LIMITATIONS ON ALLOCATIONS ..........................8
3.16 SPECIAL ALLOCATION LIMITATION .......................9
3.17 DEFINED BENEFIT PLAN LIMITATION .....................9
3.18 DEFINITIONS - ARTICLE III ........................9-11
ARTICLE IV, PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS ............11
4.02 PARTICIPANT DEDUCTIBLE CONTRIBUTIONS ...............11
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS .................11
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY...........12
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION .12
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT..........12
ARTICLE V, TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE ..............................12
5.02 VESTING ............................................12
ARTICLE VI, TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT ..............13-15
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT ............15-17
6.03 BENEFIT PAYMENT ELECTIONS...........................17
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND
SURVIVING SPOUSES ...............................17-19
6.05 WAIVER ELECTION - QUALIFIED JOINT AND
SURVIVOR ANNUITY ...................................19
6.06 WAIVER ELECTION - PRE-RETIREMENT
SURVIVOR ANNUITY ................................19-20
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS.......20
ARTICLE VII, TRUSTEE, POWERS AND DUTIES
7.01 INVESTMENT OF TRUST ASSETS .........................21
7.02 VOTING AND OTHER ACTION ............................21
7.03 REPORTS OF THE TRUSTEE AND EMPLOYER ................21
7.04 TRUSTEE FEES AND EXPENSES OF THE ACCOUNT ...........21
7.05 CONCERNING THE TRUSTEE .............................22
7.06 AMENDMENT ..........................................22
7.07 RESIGNATION OR REMOVAL OF TRUSTEE...................22
7.08 TERMINATION OF TRUST ...............................22
7.09 MISCELLANEOUS ......................................22
ARTICLE VIII, PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION ............................23
8.02 NO BENEFICIARY DESIGNATION..........................23
8.03 PERSONAL DATA TO COMMITTEE..........................23
8.04 ADDRESS FOR NOTIFICATION............................23
8.05 ASSIGNMENT OR ALIENATION ...........................23
8.06 NOTICE OF CHANGE IN TERMS ..........................24
</TABLE>
<PAGE>
<TABLE>
<S> <C>
8.07 LITIGATION AGAINST THE TRUST .......................24
8.08 INFORMATION AVAILABLE...............................24
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS ............24
8.10 PARTICIPANT DIRECTION OF INVESTMENT ................24
ARTICLE IX, ADVISORY COMMITTEE - DUTIES WITH RESPECT TO
PARTICIPANT'S ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES ....................25
9.02 TERM ...............................................25
9.03 POWERS .............................................25
9.04 GENERAL ............................................25
9.05 FUNDING POLICY .....................................25
9.06 MANNER OF ACTION ...................................25
9.07 INTERESTED MEMBER ..................................25
9.08 INDIVIDUAL ACCOUNTS ................................25
9.09 VALUE OF PARTICIPANT'S ACCRUED BENEFIT .............26
9.10 ALLOCATIONS AND DISTRIBUTION OF NET INCOME
GAIN OR LOSS .......................................26
9.11 INDIVIDUAL STATEMENT................................26
9.12 ACCOUNT CHARGED ....................................26
9.13 MISSING BENEFICIARY ................................26
ARTICLE X, PROVISIONS RELATING TO INSURANCE
10.01 INSURANCE BENEFIT OR ANNUITY ......................27
10.02 FORM OF CONTRACT AND PREMIUM ......................27
10.03 LIMITATION OF LIFE INSURANCE PROTECTION ...........27
ARTICLE XI, MISCELLANEOUS
11.01 EVIDENCE ..........................................28
11.02 NO RESPONSIBILITY FOR EMPLOYER ACTION .............28
11.03 FIDUCIARIES NOT INSURERS ..........................28
11.04 WAIVER OF NOTICE ..................................28
11.05 SUCCESSORS.........................................28
11.06 WORD USAGE ........................................28
11.07 EMPLOYER'S RIGHT TO PARTICIPATE....................28
11.08 EMPLOYMENT NOT GUARANTEED .........................28
ARTICLE XII, EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
12.01 EXCLUSIVE BENEFIT .................................29
12.02 AMENDMENT BY EMPLOYER..............................29
12.03 AMENDMENT BY PLAN SPONSOR..........................30
12.04 DISCONTINUANCE.....................................30
12.05 MERGER/DIRECT TRANSFER.............................30
12.06 TERMINATION........................................31
ARTICLE XIII, CODE SECTION 401(k) ARRANGEMENTS
13.01 ELIGIBILITY........................................32
13.02 SALARY REDUCTION AGREEMENT ........................32
13.03 DEFINITIONS ....................................32-33
13.04 ELECTIVE DEFERRALS - CONTRIBUTION LIMITATION ......33
13.05 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS ......33-34
13.06 ACTUAL DEFERRAL PERCENTAGE TEST ...................34
13.07 DISTRIBUTION OF EXCESS CONTRIBUTIONS...............35
13.08 MATCHING CONTRIBUTIONS ............................35
13.09 QUALIFIED MATCHING CONTRIBUTIONS ..................35
13.10 LIMITATIONS ON MATCHING CONTRIBUTIONS ..........35-36
13.11 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS ....36
13.12 QUALIFIED NONELECTIVE CONTRIBUTIONS ...............36
13.13 DISTRIBUTION REQUIREMENTS..........................37
</TABLE>
<PAGE>
PLAN DOCUMENT
ARTICLE I
DEFINITIONS
1.01 "EMPLOYER" means each employer who adopts this Plan by executing an
Adoption Agreement.
1.02 "TRUSTEE" means Investors Fiduciary Trust Company.
1.03 "PLAN" means the retirement plan established or continued by the
Employer in the form of this Agreement, including the Adoption Agreement
which the Employer has executed.
1.04 "ADOPTION AGREEMENT" means the document executed by the Employer and the
Trustee by which the Employer establishes or continues this Plan.
1.05 "PLAN ADMINISTRATOR" is the Employer unless the Employer designates
another person to hold the position of Plan Administrator. In addition
to his other duties, the Plan Administrator has full responsibility for
compliance with the reporting and disclosure rules under ERISA with
respect to this Agreement.
1.06 "ADVISORY COMMITTEE" means the Employer's Advisory Committee as from
time to time constituted.
1.07 "EMPLOYEE" means any employee of the employer maintaining the Plan or of
any other employer required to be aggregated with such employer under
Code Section 4l4(b), (c), (m) or (o). The term employee shall also
include any leased employee deemed to be an employee of any employer
described in the previous paragraph as provided in Code Section 4l4(n)
or (o).
1.08 "SELF-EMPLOYED INDIVIDUAL/OWNER-EMPLOYEE." "Self-Employed Individual"
means an individual who has Earned Income (or who would have had Earned
Income but for the fact that the trade or business did not have net
earnings) for the taxable year from the trade or business for which the
Plan is established. "Owner-Employee" means a Self-Employed Individual
who is the sole proprietor in the case of a sole proprietorship. If the
Employer is a partnership, "Owner-Employee" means a Self-Employed
Individual who is a partner and owns more than 10% of either the capital
or profits interest of the partnership.
1.09 "HIGHLY COMPENSATED EMPLOYEE" means an Employee who, during the Plan
Year or during the preceding 12-month period:
(A) is a 5% owner of the Employer (applying the constructive
ownership rules of Code Section 318, and applying the principles
of Code Section 318, for an unincorporated entity);
(B) has Compensation in excess of $75,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year);
(C) has Compensation in excess of $50,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year) and is
part of the top-paid 20% group of Employees (based on
Compensation for the relevant year);
(D) has Compensation in excess of 50% of the dollar amount prescribed
in Code Section 415(b)(1)(A) (relating to defined benefit plans)
and is an officer of the Employer.
If the Employee satisfies the definition in clause (b), (c) or (d) in
the Plan Year but not during the preceding 12-month period and does not
satisfy clause (a) in either period, the Employee is a Highly
Compensated Employee only if he is one of the 100 most highly
compensated Employees for the Plan Year. The number of officers taken
into account under clause (d) will not exceed the greater of 3 or 10% of
the total number (after application of the Code Section 414(q)
exclusions) of Employees, but no more than 50 officers. If no Employee
satisfies the Compensation requirement in clause (d) for the relevant
year, the Advisory Committee will treat the highest paid officer as
satisfying clause (d) for that year.
For purposes of this Section, "Compensation" means Compensation as
defined in Section 1.12, and Compensation must include: (i) elective
deferrals under a Code Section 401(k) arrangement or under a Simplified
Employee Pension maintained by the Employer; and (ii) amounts paid by
the Employer which are not currently includible in the Employee's gross
income because of Code Sections 125 (cafeteria plans) or 403(b)
(tax-sheltered annuities). The Advisory Committee must make the
determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of the top paid 20% group, the
top 100 paid Employees, the number of officers includible in clause (d)
and the relevant Compensation, consistent with Code Section 414(q) and
regulations issued under that Code section. The Employer may make a
calendar year election to determine the Highly Compensated Employees for
the Plan Year, as prescribed by Treasury regulations. A calendar year
election must apply to all plans and arrangements of the Employer. For
purposes of applying any nondiscrimination test required under the Plan
or under the Code, in a manner consistent with applicable Treasury
regulations, the Advisory Committee will not treat as a separate
Employee a family member (a spouse, a lineal ascendant or descendant, or
a spouse of lineal ascendant or descendant) of a Highly Compensated
Employee described in clause (a) of this Section, or a family member of
one of the ten Highly Compensated Employees with the greatest
Compensation for the Plan Year, but will treat the Highly Compensated
Employee and all family members as a single Highly Compensated Employee.
This aggregation rule applies to a family member even if that family
member is a Highly Compensated Employee without family aggregation.
1
<PAGE>
The term "Highly Compensated Employee" also includes any former Employee
who separated from Service (or has a deemed Separation from Service, as
determined under Treasury regulations) prior to the Plan Year, performs
no Service for the Employer during the Plan Year, and was a Highly
Compensated Employee either for the separation year or any Plan Year
ending on or after his 55th birthday. If the former Employee's
Separation from Service occurred prior to January 1, 1987, he is a
Highly Compensated Employee only if he satisfied clause (a) of this
Section 1.09 or received Compensation in excess of $50,000 during: (1)
the year of his Separation from Service (or the prior year); or (2) any
year ending after his 54th birthday.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as
officers and the Compensation that is considered, will be made in
accordance with Code Section 414(q) and the regulations thereunder.
1.10 "PARTICIPANT" is any Employee other than a Member of a Collective
Bargaining Unit who is eligible to be and becomes a Participant in
accordance with the provisions of Section 2.01.
1.11 "BENEFICIARY" is a person designated by a Participant who is or may
become entitled to a benefit under the Plan. A Beneficiary who becomes
entitled to a benefit under the Plan remains a Beneficiary under the
Plan until the Trustee has fully distributed his benefit to him. A
Beneficiary's right to (and the Plan Administrator's, the Advisory
Committee's or a Trustee's duty to provide to the Beneficiary)
information or data concerning the Plan does not arise until he first
becomes entitled to receive a benefit under the Plan.
1.12 "COMPENSATION" means compensation as that term is defined in Section
3.18(b) of the Plan. If compensation for any prior plan year is taken
into account in determining an employee's contributions or benefits for
the current year, the compensation for such prior year is subject to the
applicable annual compensation limit in effect for that prior year. For
this purpose, for years beginning before January 1, 1990, the applicable
annual compensation limit is $200,000. For any self-employed individual
covered under the plan, compensation will mean earned income.
Compensation shall include only that compensation which is actually paid
to the participant during the applicable period. Except as provided
elsewhere in this plan, the applicable period shall be the plan year.
Furthermore, notwithstanding the above, the definition of compensation
includes elective contributions made by the Employer on the Employee's
behalf. "Elective contributions" are amounts excludible from the
Employee's gross income under Code Section 402(a)(8) (relating to a Code
Section 401(k) arrangement), Code Section 402(h) (relating to a
Simplified Employee Pension), Code Section 125 (relating to a cafeteria
plan) or Code Section 403(b) (relating to a tax-sheltered annuity) and
contributed at the Employee's election. The term "Compensation" does
not include:
(A) Employer contributions (other than "elective contributions") to a
plan of deferred compensation to the extent the contributions are
not included in the gross income of the Employee for the taxable
year in which contributed, on behalf of an Employee to a
Simplified Employee Pension Plan to the extent such contributions
are excludible from the Employee's gross income, and any
distributions from a plan of deferred compensation, regardless of
whether such amounts are includible in the gross income of the
Employee when distributed.
(B) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture.
(C) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option.
(D) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent
that the premiums are not includible in the gross income of the
Employee), or contributions made by an Employer (whether or not
under a salary reduction agreement) towards the purchase of an
annuity contract described in Code Section 403(b) (whether or
not the contributions are excludible from the gross income of the
Employee), other than "elective contributions," if elected in the
Employer's Adoption Agreement.
Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.12, unless the Plan reference specifies a
modification to this definition. The Advisory Committee will take into
account only Compensation actually paid for the relevant period.
For any Plan Year beginning after December 31, 1988, the Advisory
Committee must take into account only the first $200,000 (or such larger
amount as the Commissioner of Internal Revenue may prescribe under Code
Section 415(d)) of any Participant's Compensation, except that the dollar
increase in effect on January 1 of any calendar year is effective for
years beginning in such calendar year and the first adjustment to the
$200,000 limitation is effected on January 1,1990. If a plan determines
compensation on a period of time that contains fewer than 12 calendar
months, then the annual compensation limit is an amount equal to the
annual compensation limit for the calendar year in which the
compensation period begins multiplied by the ratio obtained by dividing
the number of full months in the period by 12. The $200,000
Compensation limitation applies to the combined Compensation of the
Employee and of any family member aggregated with the Employee under
Section 1.09 and who is either (i) the Employee's spouse; or (ii) the
Employee's lineal descendant who has not attained age 19 before the
close of the year. If, as a result of the application of such rules, the
adjusted $200,000 limitation is exceeded, then (except for purposes of
determining the portion of compensation up to the integration level if
this plan provides for permitted disparity, the Advisory Committee will
apply the contribution and allocation provisions of Article III by
prorating the $200,000 (or adjusted) limitation among the affected
individuals in proportion to each such individual's Compensation
determined prior to application of this limitation.
2
<PAGE>
PLAN DOCUMENT
NONDISCRIMINATION. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees: Compensation
means Compensation as defined in this Section 1.12.
Notwithstanding the preceding sentence, compensation for a participant
in a defined contribution plan who is permanently and totally disabled
(as defined in Code Section 22(e)(3)) is the compensation such
Participant would have received for the limitation year if the
participant had been paid at the rate of compensation paid immediately
before becoming permanently and totally disabled; such imputed
compensation for the disabled Participant may be taken into account
only if the participant is not a highly compensated employee (as
defined in Code Section 414(g)) and contributions made on behalf of
such participant are nonforfeitable when made.
1.13 "EARNED INCOME" means net earnings from self-employment in the trade
or business with respect to which the Employer has established the
Plan, provided personal services of the individual are a material
income producing factor. The Advisory Committee will determine net
earnings without regard to items excluded from gross income and the
deductions allocable to those items. Net earnings are reduced by
contributions by the employer to a qualified plan to the extent
deductible under Code Section 404. The Advisory Committee will
determine net earnings after the deduction allowed to the
Self-Employed Individual for all contributions made by the Employer
to a qualified plan and, for Plan Years beginning after December 31,
1989, the deduction allowed to the Self-Employed under Code
Section 164(f) for self-employment taxes.
1.14 "ACCOUNT" means the separate account(s) which the Advisory Committee
or the Trustee maintains for a Participant under the Employer's Plan.
1.15 "ACCRUED BENEFIT" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and
Employee contributions and earnings thereon including rollovers
whether vested before or after death and including the proceeds of
insurance contracts on the participant's life, if any.
1.16 "NONFORFEITABLE" means a Participant's or Beneficiary's unconditional
claim, legally enforceable against the Plan, to the Participant's
Accrued Benefit.
1.17 "PLAN YEAR" means the fiscal year, of the Plan, the consecutive month
period specified in the Employer's Adoption Agreement. The Employer's
Adoption Agreement also must specify the "Limitation Year" applicable
to the limitations on allocations described in Article III. If the
Employer maintains Paired Plans, each Plan must have the same Plan
Year.
1.18 "EFFECTIVE DATE" of this Plan is the date specified in the Employer's
Adoption Agreement.
1.19 "PLAN ENTRY DATE" means the first day of the Plan Year or the first
day of the sixth month of the Plan Year.
1.20 "ACCOUNTING DATE" is the last day of an Employer's Plan Year. Unless
otherwise specified in the Plan, the Advisory Committee will make all
Plan allocations for a particular Plan Year as of the Accounting Date
of that Plan Year.
1.21 "TRUST" means the separate Trust created under the Employer's Plan.
1.22 "TRUST FUND" means all property of every kind held or acquired by the
Trustee under the Employer's Plan, other than incidental benefit
insurance contracts.
1.23 "NONTRANSFERABLE ANNUITY" means an annuity which by its terms provides
that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any
purpose to any person other than Kemper Investors Life Insurance
Company. If the Trustee distributes an annuity contract, the contract
must be a Nontransferable Annuity.
1.24 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
l.25 "CODE" means the Internal Revenue Code of 1986, as amended.
1.26 "SERVICE" means any period of time the Employee is in the employ of
the Employer, including any period the Employee is on an unpaid leave
of absence authorized by the Employer under a uniform,
nondiscriminatory policy applicable to all Employees. "Separation from
Service" means a separation from Service with the Employer maintaining
this Plan.
1.27 "HOUR OF SERVICE" means:
(A) Each Hour of Service for which the Employer, either directly
or indirectly, pays an Employee, or for which the Employee is
entitled to payment, for the performance of duties for the
Employer. The Advisory Committee credits Hours of Service
under this paragraph (a) to the Employee for the computation
period in which the Employee performs the duties, irrespective
of when paid;
(B) Each Hour of Service for back pay, irrespective of mitigation
of damages, to which the Employer has agreed or for which the
Employee has received an award. The Advisory Committee credits
Hours of Service under this paragraph (b) to the Employee for
the computation period(s) to which the award or the agreement
pertains rather than for the computation period in which the
award, agreement or payment is made; and
3
<PAGE>
(C) Each Hour of Service for which the Employer, either directly
or indirectly, pays an Employee, or for which the Employee is
entitled to payment (irrespective of whether the employment
relationship is terminated) for reasons other than for the
performance of duties during a computation period, such as
leave of absence, vacation, holiday, sick leave, illness,
incapacity (including disability), layoff, jury duty or
military duty. The Advisory Committee will credit no more than
501 Hours of Service under this paragraph (c) to an Employee
on account of any single continuous period during which the
Employee does not perform any duties (whether or not such
period occurs during a single computation period). The
Advisory Committee credits Hours of Service under this
paragraph (c) in accordance with the rules of paragraphs (b)
and (c) of Labor Reg. Section 2530.200b-2, which the Plan, by
this reference, specifically incorporates in full within this
paragraph (c).
The Advisory Committee will not credit an Hour of Service under more
than one of the above paragraphs. A computation period for purposes of
this Section 1.27 is the Plan Year, Year of Service period, Break in
Service period or other period, as determined under the Plan provision
for which the Advisory Committee is measuring an Employee's Hours of
Service. The Advisory Committee will resolve any ambiguity with
respect to the crediting of an Hour of Service in favor of the
Employee.
An Employee for whom a record of hours worked is not maintained shall
be credited with 45 Hours of Service for each week in which he or she
completes at least one Hour of Service.
Solely for purposes of determining whether the Employee incurs a Break
in Service under any provision of this Plan, the Advisory Committee
must credit Hours of Service during an Employee's unpaid absence
period due to maternity or paternity leave. The Advisory Committee
considers an Employee on maternity or paternity leave if the
Employee's absence is due to the Employee's pregnancy, the birth of
the Employee's child, the placement with the Employee of an adopted
child, or the care of the Employee's child immediately following the
child's birth or placement. The Advisory Committee credits Hours of
Service under this paragraph on the basis of the number of Hours of
Service the Employee would receive if he were paid during the absence
period or, if the Advisory Committee cannot determine the number of
Hours of Service the Employee would receive, on the basis of 8 hours
per day during the absence period. The Advisory Committee will credit
only the number (not exceeding 501) of Hours of Service necessary to
prevent an Employee's Break in Service. The Advisory Committee credits
all Hours of Service described in this paragraph to the computation
period in which the absence period begins or, if the Employee does not
need these Hours of Service to prevent a Break in Service in the
computation period in which his absence period begins, the Advisory
Committee credits these Hours of Service to the immediately following
computation period.
Hours of service will also be credited for any individual considered
an employee for purposes of this Plan under Code Section 414(n) or
Section 414(o) and the regulations thereunder.
1.28 "DISABILITY" means inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12
months. The permanence and degree of such impairment shall be
supported by medical evidence. The Plan considers a Participant
disabled on the date the Advisory Committee determines the Participant
satisfies the definition of disability. The Advisory Committee may
require a Participant to submit to a physical examination in order to
confirm disability. The Advisory Committee will apply the provisions
of this Section 1.28 in a nondiscriminatory, consistent and uniform
manner.
1.29 "SERVICE FOR PREDECESSOR EMPLOYER"
If the Employer maintains the plan of a predecessor employer, the Plan
treats service of the Employee with the predecessor employer as
service with the Employer. If the Employer does not maintain the plan
of a predecessor employer, the Plan does not credit service with the
predecessor employer.
1.30 "RELATED EMPLOYERS"
A related group is a controlled group of corporations (as
defined in Code Section 414(b)), trades or businesses (whether or not
incorporated) which are under common control (as defined in Code
Section 414(c)), or an affiliated service group (as defined in Code
Section 414(m) or in Code Section 414(o)). If the Employer is a member
of a related group, the term "Employer" includes the related group
members for purposes of crediting Hours of Service, determining Years
of Service and Breaks in Service under Articles II and V, applying the
limitations on allocations in Part 2 of Article III, applying the top
heavy rules and the minimum allocation requirements of Article III,
the definitions of Employee, Highly Compensated Employee, Compensation
and Leased Employee, and for any other purpose required by the
applicable Code section or by a Plan provision. However, an Employer
may contribute to the Plan only by being a signatory to the Execution
Page of the Adoption Agreement or to a Participation Agreement to the
Employer's Adoption Agreement. If one or more of the Employer's
related group members becomes Participating Employers by executing a
Participation Agreement to the Employer's Adoption Agreement, the term
"Employer" includes the participating related group members, for all
purposes of the Plan, and "Plan Administrator" means the Employer that
is the signatory to the Execution Page of the Adoption Agreement.
All Employees of the Employer or of any member of the Employer's
related group, are eligible to participate in the Plan, irrespective
of whether the related group member directly employing the Employee is
a Participating Employer.
4
<PAGE>
PLAN DOCUMENT
1.31 "LEASED EMPLOYEES"
The Plan treats a Leased Employee as an Employee of the Employer. A
Leased Employee is an individual (who otherwise is not an Employee of
the Employer) who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer
(or for the Employer and any persons related to the Employer
determined in accordance with Code Section 414(n)(6) on a substantially
full-time basis for at least one year and who performs services
historically performed by employees in the Employer's business field.
If a Leased Employee is treated as an Employee by reason of this
Section 1.31 of the Plan, "Compensation" includes Compensation from
the leasing organization which is attributable to services performed
for the Employer. Contributions or benefits provided a leased employee
by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by
the recipient employer.
SAFE HARBOR PLAN EXCEPTION. The Plan does not treat a Leased Employee
as an Employee if the leasing organization covers the employee in a
safe harbor plan and, prior to application of this safe harbor plan
exception, 20% or less of the Employer's Employees (other than Highly
Compensated Employees) are Leased Employees. A safe harbor plan is a
money purchase pension plan providing immediate participation, full
and immediate vesting, and a nonintegrated contribution formula equal
to at least 10% of the employee's compensation without regard to
employment by the leasing organization on a specified date. The safe
harbor plan must determine the 10% contribution on the basis of
compensation as defined in Code Section 415(c)(3) plus elective
contributions (as defined in Section 1.12).
OTHER REQUIREMENTS. The Advisory Committee must apply this Section
1.31 in a manner consistent with Code Sections 414(n) and 414(o) and
the regulations issued under those Code sections. If a Leased
Employee is a Participant in the Plan and also participates in a
defined contribution plan maintained by the leasing organization,
then the Advisory Committee will determine the Leased Employee's
allocation of Employer contributions under Article III without
taking into account the Leased Employee's allocation, if any, under
the leasing organization's plan.
1.32 "SPECIAL RULES FOR OWNER-EMPLOYEES"
The following special provisions and restrictions apply to
Owner-Employees:
If this plan provides contributions or benefits for one or more
owner-employees who control both the business for which this plan is
established and one or more other trades or businesses, this plan and
the plan established for other trades or businesses must, when looked
at as a single plan, satisfy sections 401(a) and (d) for the
employees of this and all other trades or businesses.
If the plan provides contributions or benefits for one or more
owner-employees who control one or more other trades or businesses,
the employees of the other trades or businesses must be included in a
plan which satisfies sections 401(a) and (d) and which provides
contributions and benefits not less favorable than provided for
owner-employees under this plan.
If an individual is covered as an owner-employee under the plans of
two or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions or
benefits of the employees under the plan of the trades or businesses
which are controlled must be as favorable as those provided for him
under the most favorable plan of the trade or business which is not
controlled.
For purposes of the preceding paragraphs, an owner-employee, or two or
more owner-employees, will be considered to control a trade or
business if the owner-employee, or two or more owner-employees
together:
(1) own the entire interest in an unincorporated trade or
business, or
(2) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in the
partnership.
For purposes of the preceding sentence, an owner-employee, or two or
more owner-employees shall be treated as owning any interest in a
partnership which is owned, directly or indirectly, by a partnership
which such owner-employee, or such two or more owner-employees, are
considered to control within the meaning of the preceding sentence.
1.33 "TAXABLE WAGE BASE" means 100% of the taxable wage base as determined
under Section 230 of the Social Security Act in effect on the first
day of the plan year.
1.34 "PAIRED PLANS" means the Employer has adopted two Standardized Plan
Adoption Agreements offered with this Kemper Retirement Plan Prototype
Keogh/Corporate, one Adoption Agreement being a Paired Profit Sharing
Plan and one Adoption Agreement being a Paired Pension Plan. A Paired
Profit Sharing Plan may include a Code Section 401(k) arrangement. A
Paired Pension Plan must be a money purchase pension plan. Paired
Plans must be the subject of a favorable opinion letter issued by
the National Office of the Internal Revenue Service.
5
<PAGE>
1.35 "MEMBER OF A COLLECTIVE BARGAINING UNIT" means any employee who is
included in a unit and whose terms and conditions of employment are
covered by a collective bargaining agreement between the Employer and
employee representatives which does not provide for participation in
the Plan, provided that there is evidence that, in connection with
such agreement, retirement benefits were the subject of good-faith
bargaining. For this purpose, the term "employee representatives" does
not include any organization more than half of whose members are
employees who are owners, officers or executives of the Employer.
1.36 "DESIGNATED INVESTMENT COMPANY" means any registered investment
company the investment manager or principal underwriter of which is
Kemper Financial Services, Inc. or an affiliate.
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 "ELIGIBILITY"
Each Employee becomes a Participant in the Plan in accordance with the
participation option selected by the Employer in its Adoption
Agreement. If this Plan is a restated Plan, each Employee who was a
Participant in the Plan on the day before the Effective Date continues
as a Participant in the Plan.
2.02 "YEAR OF SERVICE - PARTICIPATION"
For purposes of an Employee's participation in the Plan under Adoption
Agreement Section 2.01, the Plan takes into account all of his Years
of Service with the Employer, except that if an Employee has a Break
in Service before satisfying the Plan's requirement for eligibility,
Service before such break will not be taken into account. "Year of
Service" means a 12 consecutive month period during which the Employee
completes not less than 1,000 Hours of Service, measuring the
beginning of the first 12 month period from the Employment
Commencement Date, and each anniversary thereof. "Employment
Commencement Date" means the date on which the Employee first performs
an Hour of Service for the Employer.
2.03 "BREAK IN SERVICE - PARTICIPATION"
An Employee incurs a "Break in Service" if during any 12 consecutive
month period he does not complete more than 500 Hours of Service with
the Employer. The "12 consecutive month period" under this Section 2.03
is the same 12 consecutive month period for which the Plan measures
"Years of Service" under Section 2.02.
TWO-YEAR ELIGIBILITY. If the Employer elects a 2 years of service
condition for eligibility purposes under Adoption Agreement Section
2.01, the Plan treats an Employee who incurs a one year Break in
Service and who has never become a Participant as a new Employee on
the date he first performs an Hour of Service for the Employer after
the Break in Service.
2.04 "PARTICIPATION UPON RE-EMPLOYMENT"
A Participant whose employment terminates re-enters the Plan as a
Participant on the date of his re-employment. An Employee who
satisfies the Plans' eligibility conditions but who terminates
employment prior to becoming a Participant becomes a Participant on
the later of the Plan Entry Date on which he would have entered the
Plan had he not terminated employment or the date of his
re-employment. Any Employee who terminates employment prior to
satisfying the Plan's eligibility conditions becomes a Participant in
accordance with Adoption Agreement Section 2.01.
2.05 "CHANGE IN EMPLOYEE STATUS"
If a Participant has not incurred a Separation from Service but ceases
to be eligible to participate in the Plan, by reason of becoming a
member of a Collective Bargaining Unit, the Advisory Committee must
treat the Participant as an excluded employee during the period such a
Participant is a Member of a Collective Bargaining Unit. The Advisory
Committee determines a Participant's sharing in the allocation of
Employer contributions by disregarding his Compensation paid by the
Employer for services rendered in his capacity as a Member of a
Collective Bargaining Unit. However, during such period of exclusion,
the Participant, without regard to employment classification,
continues to receive credit for vesting under Article V for each
included Year of Service and the Participant' Account continues to
share fully in Trust Fund allocations under Section 9.11.
If an excluded employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment
classification, he will participate in the Plan immediately if he has
satisfied the eligibility conditions of Section 2.01 and would have
been a Participant had he not been an excluded employee during his
period of Service. Furthermore, the Plan takes into account all of the
Participant's included Years of Service with the Employer as an
Excluded Employee for purposes of vesting credit under Article V.
In the event a participant is no longer a member of an eligible class
of employees and becomes ineligible to participate but has not
incurred a break in service, such employee will participate
immediately upon returning to an eligible class of employees. If such
participant incurs a break in service, eligibility will be determined
under the break in service rules of the plan.
2.06 "ELECTION NOT TO PARTICIPATE"
The Plan does not permit an otherwise eligible Employee nor any
Participant to elect not to participate in the Plan.
6
<PAGE>
PLAN DOCUMENT
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
PART 1. AMOUNT OF EMPLOYER CONTRIBUTIONS AND PLAN ALLOCATIONS:
SECTIONS 3.01 THROUGH 3.06
3.01 "AMOUNT"
For each Plan Year, the Employer contributes to the Trust the amount
determined by application of the contribution option selected by the
Employer in its Adoption Agreement. The Employer may not make a
contribution to the Trust for any Plan Year to the extent the
contribution would exceed the Participants' Maximum Permissible
Amounts.
The Trustee, upon written request from the Employer, must return to
the Employer the amount of the Employer's contribution made by the
Employer by mistake of fact or the amount of the Employer's
contribution disallowed as a deduction under Code Section 404. The
Trustee will not return any portion of the Employer's contribution
under the provisions of this paragraph more than one year after:
(A) The Employer made the contribution by mistake of fact; or
(B) The disallowance of the contribution as a deduction, and then,
only to the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to
the contribution, but the Trustee will decrease the Employer
contribution returnable for any losses attributable to it. The Trustee
may require the Employer to furnish it whatever evidence the Trustee
deems necessary to enable the Trustee to confirm the amount the
Employer has requested be returned is properly returnable under ERISA.
3.02 "DETERMINATION OF CONTRIBUTION"
The Employer, from its records, determines the amount of any
contributions to be made by it to the Trust under the terms of the
Plan.
3.03 "TIME OF PAYMENT OF CONTRIBUTION"
The Employer may pay its contribution for each Plan Year in one or
more installments without interest. The Employer must make its
contribution to the Trustee within the time prescribed by the Code or
applicable Treasury regulations.
3.04 "RESERVED"
3.05 "ACCRUAL OF BENEFIT"
The accrual of benefit shall be determined on the basis of the Plan
Year. In determining the amount of the Employer contribution to a
participant's account, only compensation with respect to that part of
a Plan Year the employee is actually a participant shall be taken into
account.
Employer contributions will be allocated to each Participant who
either completes 500 hours of service during the Plan Year or who is
employed by the Employer on the last day of the Plan Year.
PART 2. LIMITATIONS ON ALLOCATIONS: SECTIONS 3.06 THROUGH 3.09
[Note: Sections 3.06 through 3.09 apply only to Participants in this
Plan who do not participate, and who have never participated, in
another qualified plan or in a welfare benefit fund as defined in Code
Section 419(e) or an individual medical account as defined in Code
Section 415(1)(2) maintained by the Employer.
3.06 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation
Year may not exceed the Maximum Permissible Amount. If the amount the
Employer otherwise would contribute to the Participant's Account would
cause the Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, the Employer will reduce the amount of its
contribution so the Annual Additions for the Limitation Year will
equal the Maximum Permissible Amount.
3.07 Prior to the determination of the Participant's actual Compensation
for a Limitation Year, the Advisory Committee may determine the
Maximum Permissible Amount on the basis of the Participant's estimated
annual Compensation for such Limitation Year. The Advisory Committee
must make this determination on a reasonable and uniform basis for all
Participants similarly situated.
3.08 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the Maximum
Permissible Amount for such Limitation Year on the basis of the
Participant's actual Compensation for such Limitation Year.
3.09 If, pursuant to Section 3.08 there is an Excess Amount with respect to
a Participant for a Limitation Year, the Advisory Committee will
dispose of such Excess Amount as follows:
7
<PAGE>
(A) The Advisory Committee will return any nondeductible voluntary
Employee contributions to the Participant to the extent the
return would reduce the Excess Amount.
(B) If after the application of paragraph (a) an excess amount
still exists, and the Participant is covered by the Plan at
the end of the Limitation Year, the Excess Amount in the
Participant's account will be used to reduce Employer
Contributions (including any allocation of forfeitures) for
such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary.
(C) If, after the application of paragraph (b), an Excess Amount
still exists, and the Plan does not cover the Participant at
the end of the Limitation Year, then the Advisory Committee
will hold the Excess Amount unallocated in a suspense account.
The Advisory Committee will apply the suspense account to
reduce Employer Contributions for all remaining Participants
in the next Limitation Year, and in each succeeding Limitation
Year if necessary.
(D) The Advisory Committee will not distribute any Excess
Amount(s) to Participants or to former Participants. If a
suspense account is in existence at any time during a
limitation year pursuant to this section, it will not
participate in the allocation of the trust's investment gains
and losses. If a suspense account is in existence at any time
during a particular limitation year, all amounts in the
suspense account must be allocated and reallocated to
participants' accounts before any employer or any employee
contributions may be made to the plan for that limitation
year.
[Note: Sections 3.10 through 3.15 apply if, in addition to this Plan,
the Participant is covered under another qualified master or prototype
defined contribution plan maintained by the Employer, a welfare
benefit fund, as defined in Code Section 419(e) maintained by the
Employer or an individual medical account, as defined in Code Section
415(1)(2) maintained by the Employer which provides an annual
addition during any Limitation Year.]
3.10 The annual additions which may be credited to a participant's account
under this plan for any such limitation year will not exceed the
maximum permissible amount reduced by the annual additions credited to
a participant's account under the other plans and welfare benefit
funds for the same limitation year. If the annual additions with
respect to the participant under other defined contribution plans and
welfare benefit funds maintained by the employer are less than the
maximum permissible amount and the employer contribution that would
otherwise be contributed or allocated to the participant's account
under this plan would cause the annual additions for the limitation
year to exceed this limitation, the amount contributed or allocated
will be reduced so that the annual additions under all such plans and
funds for the limitation year will equal the maximum permissible
amount. If the annual additions with respect to the participant under
such other defined contribution plans and welfare benefit funds in the
aggregate are equal to or greater than the maximum permissible amount,
no amount will be contributed or allocated to the participant's
account under this plan for the limitation year.
3.11 Prior to the determination of the Participant's actual Compensation
for the Limitation Year, the Advisory Committee may determine the
amounts referred to in 3.10 above on the basis of the Participant's
estimated annual Compensation for such Limitation Year. The Advisory
Committee will make this determination on a reasonable and uniform
basis for all Participants similarly situated.
3.12 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the amounts
referred to in 3.10 on the basis of the Participant's actual
Compensation for such Limitation Year.
3.13 If pursuant to Section 3.12, a Participant's Annual Additions under
this Plan and all such other plans result in an Excess Amount, such
Excess Amount will consist of the Amounts last allocated. The Advisory
Committee will determine the Amounts last allocated by treating the
Annual Additions attributable to a welfare benefit fund or individual
medical account as allocated first, irrespective of the actual
allocation date under the welfare benefit fund.
3.14 If the Advisory Committee allocates an Excess Amount to a Participant
on an allocation date of this Plan which coincides with an allocation
date of another plan, the Excess Amount attributed to this Plan equals
the product of:
(i) the total Excess Amount allocated as of such date (including
any amount which the Advisory Committee would have allocated
but for the limitations of Code Section 415), times
(ii) the ratio of (1) the amount allocated to the Participant as of
such date under this Plan divided by (2) the total amount
allocated as of such date under all qualified master or
prototype defined contribution plans (determined without
regard to the limitations of Code Section 415).
3.15 The Advisory Committee will dispose of any Excess Amounts attributed
to this Plan as provided in Section 3.09.
[Note: Section 3.16 applies only to Participants who, in addition to
this Plan, participate in one or more qualified plans which are
qualified defined contribution plans other than a Master or Prototype
plan maintained by the Employer during the Limitation Year.]
8
<PAGE>
PLAN DOCUMENT
3.16 "SPECIAL ALLOCATION LIMITATION"
The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on behalf of any Participant are limited in
accordance with the provisions of Section 3.10 through 3.15, as though
the other plan were a Master or Prototype plan.
3.17 "DEFINED BENEFIT PLAN LIMITATION"
If the Employer maintains a defined benefit plan, or has ever
maintained a defined benefit plan which the Employer has terminated,
then the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any Participant for any Limitation Year
must not exceed 1.0. The annual additions which may be credited to the
participant's account under this plan for any limitation year will be
limited in accordance with Section 3.17 of the adoption agreement. To
the extent necessary to satisfy the limitations of this Section 3.17,
the Employer will reduce the Participant's projected annual benefit
under the defined benefit plan under which the Participant
participates. The Employer also must provide in an addendum to its
Adoption Agreement the manner in which the Plan will satisfy the
top-heavy requirements of Code Section 416 after taking into account
the existence (or prior maintenance) of the defined benefit plan.
3.18 "DEFINITIONS - ARTICLE III"
For purposes of this Article III, the following terms mean:
(A) "ANNUAL ADDITION" - The sum of the following amounts
allocated on behalf of a Participant for a Limitation Year, of
(i) all Employer contributions; (ii) all forfeitures; and
(iii) all Employee contributions. Except to the extent
provided in Treasury regulations, Annual Additions include
excess contributions described in Code Section 401(k), excess
aggregate contributions described in Code Section 401(m) and
excess deferrals described in Code Section 402(g),
irrespective of whether the plan distributes or forfeits such
excess amounts. Annual Additions also include Excess Amounts
reapplied to reduce Employer contributions under Section 3.09.
Amounts allocated after March 31, 1984, to an individual
medical account (as defined in Code Section 415(1)(2))
included as part of a defined benefit pension or annuity plan
maintained by the Employer are Annual Additions. Furthermore,
Annual Additions include contributions paid or accrued after
December 31, 1985, for taxable years ending after December
31,1985, attributable to post-retirement medical benefits
allocated to the separate account of a key employee (as
defined in Code Section 419A(d)(3)) under a welfare benefit
fund (as defined in Code Section 419(e)) maintained by the
Employer. For this purpose, any excess amount applied in the
limitation year to reduce employer contributions will be
considered annual additions for such limitation year.
(B) "COMPENSATION" - For purposes of applying the limitations of
Part 2 of this Article III, "Compensation" means a
participant's earned income, wages, salaries, and fees for
professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of
employment with the employer maintaining the plan to the
extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, reimbursements and expense allowances), and
excluding the following:
(I) Employer contributions to a plan of deferred
compensation which are not includible in the
employee's gross income for the taxable year in which
contributed, or employer contributions under a
simplified employee pension plan to the extent such
contributions are deductible by the employee, or any
distributions from a plan of deferred compensation;
(II) Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property)
held by the employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(III) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(IV) other amounts which received special tax benefits, or
contributions made by the employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity described in section 403(b) of
the Internal Revenue Code (whether or not the amounts
are actually excludible from the gross income of the
employee).
For purposes of applying the limitations of this article,
compensation for a limitation year is the compensation actually paid
or includible in gross income during such limitation year.
Notwithstanding the preceding sentence, compensation for a participant
in a defined contribution plan who is permanently and totally disabled
(as defined in Section 22(e)(3) of the Code) is the compensation such
participant would have received for the limitation year if the
participant would have received for the limitation year if the
participant had been paid at the rate of compensation paid immediately
before becoming permanently and totally disabled; such imputed
compensation for the disabled participant may be taken into account
only if the participant is not a highly compensated employee (as
defined in Section 414(g) of the Code) and contributions made on
behalf of such participant are nonforfeitable when made.
9
<PAGE>
(C) "EMPLOYER" - The Employer that adopts this Plan and any
related employers described in Section 1.30. Solely for
purposes of applying the limitations of Part 2 of this Article
III, the Advisory Committee will determine related employers
described in Section 1.30 by modifying Code Sections 414(b)
and (c) in accordance with Code Section 415(h).
(D) "EXCESS AMOUNT" - The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible
Amount.
(E) "LIMITATION YEAR" - The period selected by the Employer under
Adoption Agreement Section 1.17. All qualified plans of the
Employer must use the same Limitation Year. If the Employer
amends the Limitation Year to a different 12 consecutive
month period, the new Limitation Year must begin on a date
within the Limitation Year for which the Employer makes the
amendment, creating a short Limitation Year.
(F) "MASTER OR PROTOTYPE PLAN" - A plan the form of which is the
subject of a favorable opinion letter from the Internal
Revenue Service.
(G) "MAXIMUM PERMISSIBLE AMOUNT" - The lesser of (i) $30,000 (or,
if greater, one-fourth of the defined benefit dollar
limitation under Code Section 415(b)(1)(A)), or (ii) 25% of the
Participant's Compensation for the Limitation Year. If there
is a short Limitation Year because of a change in Limitation
Year, the Advisory Committee will multiply the $30,000 (or
adjusted) limitation by the following fraction:
Number of months in the short Limitation Year: 12
The 25% compensation limitation shall not apply to any
contribution for medical benefits (within the meaning of Code
Section 401(h) or 419A(f)(2) which is otherwise treated as an
annual addition under Code Section 415(l)(1) or 419A(d)(2).
(H) "DEFINED CONTRIBUTION PLAN" - A retirement plan which
provides for an individual account for each participant and
for benefits based solely on the amount contributed to the
participant's account, and any income, expenses, gains and
losses, and any forfeitures of accounts of other participants
which the plan may allocate to such participant's account. The
Advisory Committee must treat all defined contribution plans
(whether or not terminated) maintained by the Employer as a
single plan. Solely for purposes of the limitations of Part 2
of this Article III, the Advisory Committee will treat
employee contributions made to a defined benefit plan
maintained by the Employer as a separate defined contribution
plan. The Advisory Committee also will treat as a defined
contribution plan an individual medical account (as defined in
Code Section 415(1)(2)) included as part of a defined benefit
plan maintained by the Employer and, for taxable years ending
after December 31,1985, a welfare benefit fund under Code
Section 419(e) maintained by the Employer to the extent there
are post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section
419A(d)(3)).
(I) "DEFINED BENEFIT PLAN" - A retirement plan which does not
provide for individual accounts for Employer contributions.
The Advisory Committee must treat all defined benefit plans
(whether or not terminated) maintained by the Employer as a
single plan.
[Note: The definitions in paragraphs (j) and (k) apply only if
the limitation described in Section 3.17 applies to the
Employer's Plan.]
(J) "DEFINED BENEFIT PLAN FRACTION" -PROJECTED annual benefit of
the Participant under the defined benefit plan(s) The lesser of
(I) 125% of the dollar limitation determined under
Code Section 415 (b) and (d) for the Limitation Year,
or
(II) 140% of the Participant's average Compensation
for his high three (3) consecutive Years of Service
To determine the denominator of this fraction, the
Advisory Committee will make any adjustment required under
Code Section 415(b) and will determine a Year of Service,
unless otherwise provided in an addendum to Adoption Agreement
Section 3.06, as a Plan Year in which the Employee completed
at least 1,000 Hours of Service. The "projected annual
benefit" is the annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if the plan
expresses such benefit in a form other than a straight life
annuity or qualified joint and survivor annuity) of the
Participant under the terms of the defined benefit plan on the
assumptions he continues employment until his normal
retirement age (or current age, if later) as stated in the
defined benefit plan, his compensation continues at the same
rate as in effect in the Limitation Year under consideration
until the date of his normal retirement age and all other
relevant factors used to determine benefits under the defined
benefit plan remain constant as of the current Limitation Year
for all future Limitation Years.
CURRENT ACCRUED BENEFIT. If the Participant accrued benefits
in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the dollar
limitation used in the denominator of this fraction will not
be less than the Participant's Current Accrued Benefit. A
Participant's Current Accrued Benefit is the sum of the annual
benefits under such defined benefit plans which the
Participant had accrued as of the end of the 1986 Limitation
Year (the last Limitation Year beginning before January
1, 1987), determined without regard to any cost of living
adjustment occurring after May 5, 1986. This Current Accrued
Benefit rule applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements
of Code Section 415 as in effect at the end of the 1986
Limitation Year.
10
<PAGE>
PLAN DOCUMENT
Notwithstanding the above, if the participant was a
participant as of the first day of the first limitation year
beginning after December 31, 1986, in one or more defined
benefit plans maintained by the employer which were in
existence on May 6, 1986, the denominator of this fraction
will not be less than 125 percent of the sum of the annual
benefits under such plans which the participant had accrued as
of the close of the last limitation year beginning before
January 1,1987, disregarding any changes in the terms and
conditions of the plan after May 5, 1986. The preceding
sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of
Section 415 for all limitation years beginning before January
1, 1987
(k) "DEFINED CONTRIBUTION PLAN FRACTION" - Section 5.5 Defined
contribution fraction: A fraction, the numerator of which is
the sum of the annual additions to the participant's account
under all the defined contribution plans (whether or not
terminated) maintained by the employer for the current and all
prior limitation years (including the annual additions
attributable to the participant's nondeductible employee
contributions to all defined benefit plans, whether or not
terminated, maintained by the employer, and the annual
additions attributable to all welfare benefit funds, as
defined in Section 419(e) of the Code, and individual medical
accounts, as defined in Section 415(1)(2) of the Code,
maintained by the employer), and the denominator of which is
the sum of the maximum aggregate amounts for the current and
all prior limitation years of service with the employer
(regardless of whether a defined contribution plan was
maintained by the employer). The maximum aggregate amount in
any limitation year is the lesser of 125 percent of the
dollar limitation determined under Sections 415(b) and (d) of
the Code in effect under Section 415(c)(1)(A) of the Code or
35 percent of the participant 's compensation for such year.
If the employee was a participant as of the end of the first
day of the first limitation year beginning after December 31,
1986, in one or more defined contribution plans maintained by
the employer which were in existence on May 6, 1986, the
numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise
exceed 1.0 under the terms of this plan. Under the adjustment,
an amount equal to the product of (l) the excess of the sum of
the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of
this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last
limitation year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the
plan made after May 5, 1986, but using the Section 415
limitation applicable to the first limitation year beginning
on or after January 1, 1987.
The annual addition for any limitation year beginning before
January 1, 1987, shall not be recomputed to treat all employee
contributions as annual additions.
The average compensation for the three consecutive years of
service with the employer that produces the highest average.
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 "PARTICIPANT ON DEDUCTIBLE CONTRIBUTIONS"
This Plan does not permit Participant nondeductible contributions. If,
prior to the adoption of this Plan, the Plan accepted Participant
nondeductible contributions for a Plan Year beginning after December
31, 1986, those contributions must satisfy the requirements of Code
Section 401(m) and must be maintained in a separate account which
will be nonforfeitable at all times. This Section 4.01 does not
prohibit the Plan's acceptance of Participant nondeductible
contributions prior to the first Plan Year commencing after the Plan
Year in which the Employer adopts this Plan.
4.02 "PARTICIPANT DEDUCTIBLE CONTRIBUTIONS"
The Plan will not accept Participant deductible contributions which
are made for a taxable year beginning after December 31, 1986.
Contributions made prior to that date will be maintained in a separate
account which will be nonforfeitable at all times. The account will
share in the gains and losses of the trust in the same manner as
described in Section 9.10 of the Plan. No part of the deductible
voluntary contribution account will be used to purchase life
insurance. Subject to Article VI, joint and survivor annuity
requirements (if applicable), the participant may withdraw any part of
the deductible voluntary contribution account by making a written
application to the Advisory Committee.
4.03 "PARTICIPANT ROLLOVER CONTRIBUTIONS"
Any Participant, with the Employer's written consent and after filing
with the Employer the form prescribed by the Advisory Committee, may
contribute cash or other property to the Trust other than as a
voluntary contribution if the contribution is a "rollover
contribution" which the Code permits an employee to transfer either
directly or indirectly from one qualified plan to another qualified
plan. Before accepting a rollover contribution, the Trustee may
require an Employee to furnish satisfactory evidence that the proposed
transfer is in fact a "rollover contribution" which the Code permits
an employee to make to a qualified plan. A rollover contribution is
not an Annual Addition under Part 2 of Article III.
11
<PAGE>
The Employer will invest the rollover contribution in a segregated
investment Account for the Participant's sole benefit unless the
Employer in its sole discretion, agrees to invest the rollover
contribution as part of the Trust Fund. The Employer will not have
any investment responsibility with respect to a Participant's
segregated rollover Account. The Participant, however, from time to
time, may direct the Employer in writing as to the investment of his
segregated rollover Account in shares of a Designated Investment
Company, annuity contract(s) or life insurance sold or distributed by
Kemper Financial Services, Inc. A Participant's segregated rollover
Account alone will bear any extraordinary expenses resulting from
investments made at the direction of the Participant. As of the
Accounting Date (or other valuation date) for each Plan Year, the
Advisory Committee will allocate and credit the net income (or net
loss) from a Participant's segregated rollover Account and the
increase or decrease in the fair market value of the assets of a
segregated rollover Account solely to that Account. The Employer is
not liable nor responsible for any loss resulting to any Beneficiary,
nor to any Participant, by reason of any sale or investment made or
other action taken pursuant to and in accordance with the direction of
the Participant. In all other respects, the Employer will administer
and distribute a rollover contribution in the same manner as any
Employer contribution made to the Trust.
An eligible Employee, prior to satisfying the Plan's eligibility
conditions, may make a rollover contribution to the Trust to the same
extent and in the same manner as a Participant. If an Employee makes a
rollover contribution to the Trust prior to satisfying the Plan's
eligibility conditions, the Advisory Committee and Trustee must treat
the Employee as a Participant for all purposes of the Plan except the
Employee is not a Participant for purposes of sharing in Employer
contributions under the Plan until he actually becomes a Participant
in the Plan. If the Employee has a Separation from Service prior to
becoming a Participant, the Trustee will distribute his rollover
contribution Account to him as if it were an Employer contribution
Account.
4.04 "PARTICIPANT CONTRIBUTION - FORFEITABILITY"
A Participant's Accrued Benefit is, at all times, 100% Nonforfeitable.
4.05 "PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION"
A Participant, by giving prior written notice to the Trustee, may
withdraw all or any part of the value of his Accrued Benefit derived
from his Participant contributions described in this Article IV. A
distribution of Participant contributions must comply with the joint
and survivor requirements described in Article VI, if those
requirements apply to the Participant. A Participant may not exercise
his right to withdrawn the value of his Accrued Benefit derived from
his Participant contributions more than once during any Plan Year. The
Trustee, in accordance with the direction of the Advisory Committee,
will distribute a Participant's unwithdrawn Accrued Benefit
attributable to his Participant contributions in accordance with the
provisions of Article VI applicable to the distribution of the
Participant's Nonforfeitable Accrued Benefit.
4.06 "PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT"
The Advisory Committee must maintain, or must direct the Trustee to
maintain, a separate Account(s) in the name of each Participant to
reflect the Participant's Accrued Benefit under the Plan derived from
his Participant contributions. A Participant's Accrued Benefit derived
from his Participant contributions as of any applicable date is the
balance of his separate Participant contribution Account(s). A
separate account will be maintained by the trustee for the
nondeductible employee contribution of each participant.
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 "NORMAL RETIREMENT AGE"
Normal Retirement Age is age 65.
5.02 "VESTING"
All contributions made by or on behalf of each participant, together
with all earnings thereon, shall immediately become, and at all times
shall remain, fully vested in such participant, and nonforfeitable.
The minimum allocation required (to the extent required to be
nonforfeitable under Section 416(b)) may not be forfeited under Code
Sections 411(a)(3)(B) or 411(a)(3)(D).
12
<PAGE>
PLAN DOCUMENT
ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 "TIME OF PAYMENT OF ACCRUED BENEFIT"
Unless, pursuant to Section 6.03, the Participant or the Beneficiary
elects in writing to a different time or method of payment, the
Advisory Committee will direct the Trustee to commence distribution of
a Participant's Nonforfeitable Accrued Benefit in accordance with this
Section 6.01. A Participant must consent, in writing, to any
distribution required under this Section 6.01 if the present value of
the Participant's Nonforfeitable Accrued Benefit, at the time of the
distribution to the Participant, exceeds $3,500 and the Participant
has not attained the later of Normal Retirement Age or age 62.
Furthermore, the Participant's spouse also must consent, in writing,
to any distribution, for which Section 6.04 requires the spouse's
consent. For all purposes of this Article VI, the term "annuity
starting date" means the first day of the first period for which the
Plan pays an amount as an annuity or in any other form. A distribution
date under this Article VI unless otherwise specified within the Plan,
is the 60th day of the Plan Year, or as soon as administratively
practicable following that distribution date. For purposes of the
consent requirements under this Article VI, if the present value of
the Participant's Nonforfeitable Accrued Benefit, at the time of any
distribution, exceeds $3,500, the Advisory Committee must treat that
present value as exceeding $3,500 for purposes of all subsequent Plan
distributions to the Participant.
If the value of a participant's vested account balance derived from
employer and employee contribution exceeds (or at the time of any
prior distribution exceeded) $3,500, and the account balance is
immediately distributable, the participant and the participant's
spouse (or where either the participant or the spouse has died, the
survivor) must consent to any distribution of such account balance.
The consent of the participant and the participant's spouse shall be
obtained in writing within the 90-day period ending on the annuity
starting date. The annuity starting date is the first day of the first
period for which an amount is paid an annuity or any other form. The
plan administrator shall notify the participant and the participant's
spouse of the right to defer any distribution until the participant's
account balance is no longer immediately distributable. Such
notification shall include a general description of the material
features, and explanation of the relative values of, the optional
forms of benefit available under the plan in a manner that would
satisfy the notice requirements of Code Section 417(a)(3), and shall be
provided no less than 30 days and no more than 90 days prior to the
annuity starting date. Notwithstanding the foregoing, only the
participant need consent to the commencement of a distribution in the
form of a qualified joint and survivor annuity while the account
balance is immediately distributable. (Furthermore, if payment in the
form of a qualified joint and survivor annuity is not required with
respect to the participant pursuant to Section 6.04(E) of the plan,
only the participant need consent to the distribution of an account
balance that is immediately distributable.) Neither the consent of the
participant nor the participant's spouse shall be required to the
extent that a distribution is required to satisfy Code Section
401(a)(9) or to the extent that a distribution is required to satisfy
Code Sections 401(a)(9) or 415. In addition, upon termination of this
plan, if the plan does not offer an annuity option (purchased from a
commercial provider) and if the employer or any entity within the same
controlled group as the employer does not maintain another defined
contribution plan (other than an employee stock ownership plan as
defined in section 4975(e)(7) of the Code), the participant's account
balance may, without the participant's consent, be distributed
to the participant. However, if any entity within the same controlled
group as the employer maintains another defined contribution plan
(other than an employee stock ownership plan as defined in section
4975(e)(7) of the Code) then the participant's account balance will be
transferred, without the participant's consent, to the other plan if
the participant does not consent to an immediate distribution.
Notwithstanding the foregoing, only the participant need consent to
the commencement of a distribution in the form of a qualified joint
and survivor annuity while the account balance is immediately
distributable. (Furthermore, if payment in the form of a qualified
joint and survivor annuity is not required with respect to the
participant pursuant to Section 6.04(E) of the plan, only the
participant need consent to the distribution for an account balance
that is immediately distributable). Neither the consent of the
participant nor the participant's spouse shall be required to the
extent that a distribution is required to satisfy Section 401(a)(9)
or Section 415 of the Code. In addition, upon termination of this
plan, if the plan does not offer an annuity option (purchased from a
commercial provider), the participant's account balance may, without
the participant's consent, be distributed to the participant or
transferred to another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of the
Code) within the same controlled group.
An account balance is immediately distributable if any part of the
account balance could be distributed to the participant (or surviving
spouse) before the participant attains or would have attained if not
deceased the later of normal retirement age or age 62.
For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first
plan year beginning after December 31, 1988, the participant's vested
account balance shall not include amounts attributable to accumulated
deductible employee contributions within the meaning of Section
72(o)(5)(B) of the Code.
(A) SEPARATION FROM SERVICE FOR A REASON OTHER THAN DEATH. For a
Participant who separates from Service with the Employer for a
reason other than death, the Advisory Committee will direct
the Trustee to commence distribution of the Participant's
Accrued Benefit, as follows:
(1) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT
EXCEEDING $3,500. In a lump sum, on the 60th day
following the close of the Plan Year in which the
Participant's Separation from Service occurs.
13
<PAGE>
(2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS
$3,500. In a form and at the time elected by the
Participant, pursuant to Section 6.03. In the absence
of an election by the Participant, the Advisory
Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in a
lump sum (or, if applicable, the normal annuity form
of distribution required under Section 6.04), on the
60th day following the close of the Plan Year in
which the latest of the following events occurs: (a)
the Participant attains Normal Retirement Age; (b)
the Participant attains age 62; or (c) the
Participant separates from Service. Notwithstanding
the foregoing, the failure of a participant and
spouse to consent to a distribution while a benefit
is immediately distributable shall be deemed to be an
election to defer commencement of payment of any
benefit sufficient to satisfy this section.
(3) DISABILITY. If the Participant terminates employment
because of disability, in lump sum, no later than the
60th day following the close of the Plan Year in
which the participant terminates employment because
of disability, subject to the requirements of this
Article VI and subject to the applicable mandatory
commencement dates described in Paragraphs (1) and
(2).
(B) REQUIRED BEGINNING DATE. If any distribution commencement date
described under Paragraph (A) of this Section 6.01, either by
Plan provision or by Participant election (or nonelection), is
later than the Participant's Required Beginning Date, the
Advisory Committee instead must direct the Trustee to make
distribution under this Section 6.01 on the Participant's
Required Beginning Date. A Participant's Required Beginning
Date is the April 1 following the close of the calendar year
in which the Participant attains age 70-1/2. However, if the
Participant, prior to incurring a Separation from Service,
attained age 70-1/2 by January 1, 1988, and, for the five Plan
Year period ending in the calendar year in which he attained
age 70-1/2 and for all subsequent years, the Participant was
not a more than 5% owner (as defined in Section 1.09(a)), the
Required Beginning Date is the April 1 following the close of
the calendar year in which the Participant separates from
Service, or, if earlier, the April 1 following the close of
the calendar year in which the Participant becomes a more than
5% owner. Furthermore, if a Participant attained age 70-1/2
during 1988 and did not incur a Separation from Service prior
to January 1,1989, his Required Beginning Date is April 1,
1990. A mandatory distribution at the Participant's Required
Beginning Date will be in lump sum (or, if applicable, the
normal annuity form of distribution required under Section
6.04) unless the Participant, pursuant to the provisions of
this Article VI, makes a valid election to receive an
alternative form of payment.
(1) GENERAL RULE. The required beginning date of a
participant is the first day of April of the calendar
year following the calendar year in which the
participant attains age 70-1/2.
(2) TRANSITIONAL RULES. The required beginning date of a
participant who attains age 70-1/2 before January
1, 1988, shall be determined in accordance with (a) or
(b) below:
(A) NON-FIVE PERCENT OWNERS. The required
beginning date of a participant who is not a
five-percent owner is the first day of April
of the calendar year following the calendar
year in which the later of retirement or
attainment of age 70-1/2 occurs.
(B) FIVE-PERCENT OWNERS. The required beginning
date of a participant who is a five-percent
owner during any year beginning after
December 31, 1979, is the first day of April
following the later of:
(i) the calendar year in which the
participant attains age 70-1/2, or
(ii) the earlier of the calendar year
with or within which ends the plan
year in which the participant
becomes a five-percent owner, or the
calendar year in which the
participant retires.
The required beginning date of a participant who is not a
five-percent owner who attains age 70-1/2 during 1988 and who
has not retired as of January 1, 1989, is April 1, 1990.
(3) FIVE-PERCENT OWNER. A participant is treated as a
five-percent owner for purposes of this section if
such participant is a five-percent owner as defined
in Section 416(i) of the Code (determined in
accordance with Section 416 but without regard to
whether the plan is top-heavy) at any time during
the plan year ending with or within the calendar
year in which such owner attains age 66-1/2 or any
subsequent plan year.
(4) Once distributions have begun to a five-percent owner
under this section, they must continue to be
distributed, even if the participant ceases to be a
five-percent owner in a subsequent year.
(C) DEATH OF THE PARTICIPANT. The Advisory Committee will direct
the Trustee, in accordance with this Section 6.01(C), to
distribute to the Participant's Beneficiary the Participant's
Nonforfeitable Accrued Benefit remaining in the Trust at the
time of the Participant's death.
(1) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT
DOES NOT EXCEED $3,500. The Advisory Committee,
subject to the requirements of Section 6.04, must
direct the Trustee to pay the deceased Participant's
Nonforfeitable Accrued Benefit in a single cash sum,
as soon as administratively practicable following the
Participant's death or, if later, the date on which
the Advisory Committee receives notification of or
otherwise confirms the Participant's death.
14
<PAGE>
PLAN DOCUMENT
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEED
$3,500. The Advisory Committee will direct the Trustee to pay
the deceased Participant's Nonforfeitable Accrued Benefit at
the time and in the form elected by the Participant or, if
applicable by the Beneficiary, as permitted under this Article
VI. In the absence of an election, subject to the requirements
of Section 6.04, the Advisory Committee will direct the
Trustee to distribute the Participant's undistributed
Nonforfeitable Accrued Benefit in a lump sum on the first
distribution date following the close of the Plan Year in
which the Participant's death occurs or, if later, the first
distribution date following the date the Advisory Committee
receives notification of or otherwise confirms the
Participant's death.
If the death benefit is payable to the Participant's surviving
spouse in full, the surviving spouse, in addition to the
distribution options provided in this Section 6.01(C), may
elect distribution at any time or in any form (other than a
joint and survivor annuity) this Article VI would permit for a
Participant.
Subject to Article VI Joint and Survivor Annuity Requirements,
the requirements of this Article shall apply to any
distribution of a participant's interest and will take
precedence over any inconsistent provisions of this plan.
Unless otherwise specified, the provisions of this Article
apply to the calendar year beginning after December 31, 1984.
All distributions required under this Article shall be
determined and made in accordance with the proposed
regulations under Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the proposed regulations.
6.02 "METHOD OF PAYMENT OF ACCRUED BENEFIT"
Subject to the annuity distribution requirements, if any, prescribed
by Section 6.04, and any restrictions prescribed by Section 6.03, a
Participant or Beneficiary may elect distribution under one, or any
combination, of the following methods: (a) by payment in a lump sum;
or (b) by payment in monthly, quarterly or annual installments over a
fixed reasonable period of time, not exceeding the life or life
expectancy of the Participant, or the joint and last survivor life or
life expectancy of the Participant and an individual the Participant
designates as his Beneficiary (his "designated Beneficiary").
The distribution options permitted under this Section 6.02 are
available only if the present value of the Participant Nonforfeitable
Accrued Benefit, at the time of the distribution to the Participant,
exceeds $3,500. To facilitate installment payments under this Article
VI, the Advisory Committee may direct the Trustee to segregate all or
any part of the Participant's Accrued Benefit in a separate Account.
The Trustee will invest the Participant's segregated Account in
Federally insured interest bearing savings account(s) or time
deposit(s) (or a combination of both), or in other fixed income
investments. A segregated Account remains a part of the Trust, but it
alone shares in any income it earns, and it alone bears any expense or
loss it incurs. A Participant or Beneficiary may elect to receive an
installment distribution in the form of a Nontransferable Annuity
Contract. Under an installment distribution, the Participant or
Beneficiary, at any time, may elect to accelerate the payment of all,
or any portion, of the Participant's unpaid Nonforfeitable Accrued
Benefit, subject to the requirements of Section 6.04.
(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS.
The Advisory Committee may not direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit,
nor may the Participant elect to have the Trustee distribute
his Nonforfeitable Accrued Benefit, under a method of
payment which, as of the Required Beginning Date, does not
satisfy the minimum distribution requirements under Code
Section 401(a)(9) and the applicable Treasury regulations. The
minimum distribution for a calendar year equals the
Participant's Nonforfeitable Accrued Benefit as of the latest
valuation date preceding the beginning of the calendar year
divided by the Participant's life expectancy or, if
applicable, the joint and last survivor expectancy of the
Participant and his designated Beneficiary (as determined
under Section 8.01, subject to the requirements of the Code
Section 401(a)(9) regulations). The Advisory Committee will
increase the Participant's Nonforfeitable Accrued Benefit, as
determined on the relevant valuation date, for contributions
allocated after the valuation date and by December 31 of the
valuation calendar year, and will decrease the valuation by
distributions made after the valuation date and by December 31
of the valuation calendar year. For purposes of this
valuation, the Advisory Committee will treat any portion of
the minimum distribution for the first distribution calendar
year made after the close of that year as a distribution
occurring in that first distribution calendar year. In
computing a minimum distribution the Advisory Committee must
use the unisex life expectancy multiples under Treas. Reg.
Section 1.72-9. The Advisory Committee, only upon the
participant's written request, will not compute the minimum
distribution for a calendar year subsequent to the first
calendar year for which the Plan requires a minimum
distribution by redetermining the applicable life expectancy.
Otherwise, the Advisory Committee will redetermine the joint
life and last survivor expectancy of the Participant and a
nonspouse designated Beneficiary in a manner which takes into
account any adjustment to a life expectancy other than the
Participant's life expectancy.
If the Participant's spouse is not his designated Beneficiary,
a method of payment to the Participant (whether by Participant
election or by Advisory Committee direction) may not provide
more than incidental benefits to the Beneficiary. For Plan
Year beginning after December 31, 1988, the Plan must satisfy
the minimum distribution incidental benefit ("MDIB")
requirement in the Treasury regulations issued under Code
Section 401(a)(9) for distributions made on or after the
Participant's Required Beginning Date and before the
Participant's death. To satisfy the MDIB requirement, the
Advisory Committee will compute the minimum distribution
required by this Section 6.02(A) by substituting the
applicable MDIB divisor for the applicable life expectancy
factor, if the MDIB divisor is a lesser number. Following the
Participant's death, the Advisory Committee will compute the
minimum distribution required by this Section 6.02(A) solely
on the basis of the applicable life expectancy factor and will
disregard the MDIB factor.
15
<PAGE>
For Plan Years beginning prior to January l, 1989, the Plan
satisfies the incidental benefits requirement if the
distributions to the Participant satisfied the MDIB
requirement or if the present value of the retirement benefits
payable solely to the Participant is greater than 50% of the
present value of the total benefits payable to the Participant
and his Beneficiaries. The Advisory Committee must determine
whether benefits to the Beneficiary are incidental as of the
date the Trustee is to commence payment of the retirement
benefits to the Participant, or as of any date the Trustee
redetermines the payment period to the Participant.
The minimum distribution for the first distribution calendar
year is due by the Participant's Required Beginning Date. The
minimum distribution for each subsequent distribution calendar
year, including the calendar year in which the Participant's
Required Beginning Date falls, is due by December 31 of that
year. If the Participant receives distribution in the form of
a Nontransferable Annuity Contract, the distribution satisfies
this Section 6.02(A) if the contract complies with the
requirements of Code Section 401(a)(9) and the applicable
Treasury regulations.
(B) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES.
If any portion of the Participant's interest is payable to a
designated beneficiary, method of distribution to the
Participant's Beneficiary must satisfy Code Section 401(a)(9)
and the applicable Treasury regulations. If the Participant's
death occurs after his Required Beginning Date or, if earlier,
the date the Participant commences an irrevocable annuity
pursuant to Section 6.04, the method of payment to the
Beneficiary must provide for completion of payment over a
period which does not exceed the payment period which had
commenced for the Participant. If the Participant's death
occurs prior to his Required Beginning Date, and the
Participant had not commenced an irrevocable annuity pursuant
to section 6.04, the method of payment to the Beneficiary,
subject to Section 6.04, must provide for completion of
payment to the Beneficiary over a period not exceeding (i) by
December 31 of the calendar year containing the fifth
anniversary of the Participant's; or (ii) if the Beneficiary
is a designated Beneficiary, the designated Beneficiary's life
expectancy. The Advisory Committee may not direct payment of
the Participant's Nonforfeitable Accrued Benefit over a period
described in clause (ii) unless the Trustee will commence
payment to the designated Beneficiary no later than the
December 31 following the close of the calendar year in which
the Participant's death occurred or, if later, and the
designated Beneficiary is the Participant's surviving spouse,
December 31 of the calendar year in which the Participant
would have attained age 70-1/2. If the Trustee will make
distribution in accordance with clause (ii), the minimum
distribution for a calendar year equals the Participant's
Nonforfeitable Accrued Benefit as of the latest valuation date
preceding the beginning of the calendar year divided by the
designated Beneficiary's life expectancy. The Advisory
Committee must use the unisex life expectancy multiples under
Treas. Section Reg. 1.72-9 for purposes of applying this
paragraph. The Advisory Committee, only upon the written
request of the Participant or of the Participant's surviving
spouse, may recalculate the life expectancy of the
Participant's surviving spouse no more frequently than
annually, but may not recalculate the life expectancy of a
nonspouse designated Beneficiary after the Trustee commences
payment to the designated Beneficiary. The Advisory Committee
will apply this paragraph by treating any amount paid to the
Participant's child, which becomes payable to the
Participant's surviving spouse upon the child's attaining the
age of majority, as paid to the Participant' surviving spouse.
Upon the Beneficiary's written request, the Advisory Committee
must direct the Trustee to accelerate payment of all, or any
portion, of the Participant's unpaid Accrued Benefit, as soon
as administratively practicable following the effective date
of that request.
If the participant has not made an election pursuant to this
Section 6.02 by the time of his or her death, the
participant's designated beneficiary must elect the method of
distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to
begin under this Section, or (2) December 31 of the calendar
year which contains the fifth anniversary of the date of death
of the participant. If the participant has no designated
beneficiary, or if the designated beneficiary does not elect a
method of distribution, distribution of the participant's
entire interest must be completed by December 31 of the
calendar year containing the fifth anniversary of the
participant's death.
For purposes of this Section 6.02, if the surviving spouse
dies after the participant, but before payments to such spouse
begin, the provisions of this Section 6.02, with the exception
of paragraph (b) therein, shall be applied as if the surviving
spouse were the participant.
For the purposes of this Section 6.02, distribution of a
participant's interest is considered to begin on the
Participant's required beginning date (or the date
distribution is required to begin to the surviving spouse). If
distribution in the form of an annuity irrevocably commences
to the Participant before the required beginning date, the
date distribution is considered to begin is the date
distribution actually commences.
APPLICABLE LIFE EXPECTANCY. The life expectancy (or joint and
last survivor expectancy) calculated using the attained age of
the Participant (or designated Beneficiary as of the
Participant's (or designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date life expectancy was first
calculated. If life expectancy is being recalculated, the
applicable life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being
recalculated such succeeding calendar year.
16
<PAGE>
PLAN DOCUMENT
DISTRIBUTION CALENDAR YEAR. A calendar year for which a
minimum distribution is required. For distributions beginning
before the participant's death, the first distribution
calendar year is the calendar year immediately preceding the
calendar year which contains the participant's required
beginning date. For distributions beginning after the
participant's death, the first distribution calendar year is
the calendar year in which distributions are required to begin
pursuant to this Section 6.02 above.
6.03 "BENEFIT PAYMENT ELECTIONS"
Not earlier than 90 days before nor later than 30 days before the
Participant's annuity starting date, the Plan Administrator must
provide a benefit notice to a Participant who is eligible to make an
election under this Section 6.03. The benefit notice must explain the
optional forms of benefit in the Plan, including the material features
and relative values of those options, and the Participant's right to
defer distribution until he attains the later of Normal Retirement Age
or age 62.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit in
accordance with that election. Any election under this Section 6.03 is
subject to the requirements of Section 6.02 and of Section 6.04. The
Participant or Beneficiary must make an election under this Section
6.03 by filing his election with the Advisory Committee at any time
before the Trustee otherwise would commence to pay a Participant's
Accrued Benefit in accordance with the requirements of Article VI.
(A) PARTICIPANT ELECTIONS AFTER SEPARATE FROM SERVICE. If the
present value of a Participant's Nonforfeitable Accrued
Benefit exceeds $3,500, he may elect to have the Trustee
commence distribution as of any distribution date, but not
earlier than the first distribution date of the first Plan
Year following the Participant's separation from service. The
Participant may reconsider an election at any time prior to
the annuity starting date and elect to commence distribution
as of any other distribution date. A Participant who has not
separated from Service may elect distribution as of any
distribution date following his attainment of Normal
Retirement Age.
(B) PARTICIPANT ELECTIONS PRIOR TO TERMINATION OF EMPLOYMENT. No
distribution options are permitted prior to a Participant's
Separation of Service.
(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased
Participant's Nonforfeitable Accrued Benefit exceeds $3,500,
the Participant's Beneficiary may elect to have the Trustee
distribute the Participant's Nonforfeitable Accrued Benefit in
a form and within a period permitted under Section 6.02. The
Beneficiary's election is subject to any restrictions
designated in writing by the Participant and not revoked as of
his date of death.
(D) TRANSITIONAL ELECTIONS. Notwithstanding the provisions of
Section 6.01 and 6.02, if the Participant (or Beneficiary)
signed a written distribution designation prior to January 1,
1984, the Advisory Committee must distribute the Participant's
Nonforfeitable Accrued Benefit in accordance with that
designation, subject however, to the requirements, if
applicable, of Sections 6.04, 6.05 and 6.06. This Section
6.03(D) does not apply to a pre-1984 distribution designation,
and the Advisory Committee will not comply with that
designation, if any of the following applies: (1) the method
of distribution would have disqualified the Plan under Code
Section 401(a)(9) as in effect on December 31, 1983; (2) the
Participant did not have an Accrued Benefit as of December
31, 1983; (3) the distribution designation does not specify the
timing and form of the distribution and the death
Beneficiaries (in order of priority); (4) the substitution of
a Beneficiary modifies the payment period of the distribution;
or, (5) the Participant (or Beneficiary) modifies or revokes
the distribution designation. In the event of a revocation,
the Plan must distribute, no later than December 31 of the
calendar year following the year of revocation, the amount
which the Participant would have received under Section
6.02(A) if the election had not been in effect or, if the
Beneficiary revokes the election, the amount which the
Beneficiary would have received under Section 6.02(B) if the
election had not been in effect. The Advisory Committee will
apply this Section 6.03(D) to rollovers and transfers in
accordance with Part J of the Code Section 401(a)(9)
regulations.
6.04 "ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES"
(A) JOINT AND SURVIVOR ANNUITY. The Advisory Committee must direct
the Trustee to distribute a married or unmarried Participant's
Nonforfeitable Accrued Benefit in the form of a qualified
joint and survivor annuity, unless the Participant makes a
valid waiver election (described in Section 6.05) within the
90 day period ending on the annuity starting date. The
participant may elect to have such annuity distributed upon
attainment of the earliest retirement age under the plan. The
earliest retirement age is the earliest date on which, under
the plan, the participant could elect to receive retirement
benefits. If, as of the annuity starting date, the participant
is married, a qualified joint and survivor annuity is an
immediate annuity which is purchasable with the Participant's
Nonforfeitable Accrued Benefit and which provides a life
annuity for the Participant and a survivor annuity payable for
the remaining life of the Participant's surviving spouse equal
to not less than 50% and not more than 100% of the amount of
the annuity payable during the life of the Participant. If, as
of the annuity starting date, the Participant is not married,
a qualified joint and survivor annuity is an immediate life
annuity for the Participant which is purchasable with the
Participant's Nonforfeitable Accrued Benefit. On or before the
annuity starting date, the Advisory Committee, without
Participant or spousal consent, must direct the Trustee to pay
the Participant's Nonforfeitable Accrued Benefit in a lump
sum, in lieu of a qualified joint and survivor annuity, in
accordance with Section 6.01, if the Participant's
Nonforfeitable Accrued Benefit is not greater than $3,500.
This Section 6.04(A) applies only to a Participant who has
completed at least one Hour of Service with the Employer after
August 23, 1984.
17
<PAGE>
(B) PRE-RETIREMENT SURVIVOR ANNUITY. If a married Participant dies
prior to his annuity starting date, the Advisory Committee
will direct the Trustee to distribute a portion of the
Participant's Nonforfeitable Accrued Benefit to the
Participant's surviving spouse in the form of a pre-retirement
survivor annuity, unless the Participant has a valid waiver
election (as described in Section 6.06) in effect within the
election period, or unless the Participant and his spouse were
not married throughout the one year period ending on the date
of his death. The surviving spouse may elect to have such
annuity distributed within a reasonable period after the
participant's death. The period which begins on the first day
of the plan year in which the participant attains age 35 and
ends on the date of the participant's death. If a participant
separates from service prior to the first day of the plan
year in which age 35 is attained, with respect to the account
balance as of the date of separation, the election period
shall begin on the date of separation. A pre-retirement
survivor annuity is an annuity which is purchasable with 50%
of the Participant's Nonforfeitable Accrued Benefit
(determined as of the date of the Participant's death) and
which is payable for the life of the Participant's surviving
spouse. The value of the pre-retirement survivor annuity is
attributable to Employer contributions and to Employee
contributions in the same proportion as the Participant's
Nonforfeitable Accrued Benefit is attributable to those
contributions. If the present value of the pre-retirement
survivor annuity does not exceed $3,500, the Advisory
Committee, on or before the annuity starting date (as
determined under Section 6.01(C)), must direct the Trustee to
make a lump sum distribution to the Participant's surviving
spouse, in lieu of a pre-retirement survivor annuity. This
Section 6.04(B) applies only to a Participant who dies after
August 22, 1984, and either (i) completes at least one Hour of
Service with the Employer after August 22, 1984, or (ii)
separated from Service with at least 10 Years of Service (as
defined in Section 5.06) and completed at least one Hour of
Service with the Employer in a Plan Year beginning after
December 31, 1975.
(C) SURVIVING SPOUSE ELECTIONS. If the present value of the
pre-retirement survivor annuity exceeds $3,500, the
Participant's surviving spouse may elect to have the Trustee
commence payment of the pre-retirement survivor annuity at any
time following the date of the Participant's death, but not
later than the mandatory distribution periods described in
Section 6.02, and may elect either or any combination of the
two forms of payment described in Section 6.02, in lieu of the
pre-retirement survivor annuity. In the absence of an election
by the surviving spouse, the Advisory Committee must direct
the Trustee to distribute the pre-retirement survivor annuity
on the first distribution date following the close of the Plan
Year in which the latest of the following events occurs (i)
the Participant's death; (ii) the date the Advisory Committee
receives notification of or otherwise confirms the
Participant's death; (iii) the date the Participant would have
attained Normal Retirement Age; or (iv) the date the
Participant would have attained age 62.
(D) SPECIAL RULES. If the Participant has in effect a valid waiver
election regarding the qualified joint and survivor annuity or
the pre-retirement survivor annuity, the Advisory Committee
must direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit in accordance with Sections
6.01, 6.02 and 6.03. For purposes of applying this Article VI,
the Advisory Committee treats a former spouse as the
Participant's spouse or surviving spouse, and a current spouse
will not be treated as the spouse or surviving spouse, to the
extent provided under a qualified domestic relations order
described in Section 6.07. The provisions of this Section
6.04, and of Sections 6.05 and 6.06, apply separately to the
portion of the Participant's Nonforfeitable Accrued Benefit
subject to the qualified domestic relations order and to the
portion of the Participant's Nonforfeitable Accrued Benefit
not subject to that order. The spouse (surviving spouse) is
the spouse or surviving spouse of the participant, provided
that a former spouse will be treated as the spouse or
surviving spouse and a current spouse will not be treated as
the spouse or surviving spouse to the extent provided under a
qualified domestic relations order as described in Section
414(p) of the Code.
(E) PROFIT SHARING PLAN EXCEPTION. If the Plan is a profit sharing
plan, the preceding provisions of this Section 6.04 do not
apply to any Participant in the Plan except: (1) a Participant
as respects whom the Plan is a direct or indirect transferee
from a plan subject to the Code Section 417 requirements and
the Plan received the transfer after December 31, 1984, unless
the transfer is an elective transfer described in Section
12.06; (2) a Participant who elects a life annuity
distribution (if Section 12.02 of the Plan requires the Plan
to provide a life annuity distribution option); and (3) a
Participant whose benefits under a defined benefit plan
maintained by the Employer are offset by benefits provided
under this Plan. Sections 6.05 and 6.06 only apply to
Participants to whom the preceding provisions of this Section
6.04 apply.
This Section shall apply to a participant in a profit-sharing
plan, and to any distribution, made on or after the first day
of the first plan year beginning after December 31, 1988, from
or under a separate account attributable solely to accumulated
deductible employee contributions, as defined in Section
72(o)(5)(B) of the Code, and maintained on behalf of a
participant in a money purchase pension plan (including a
target benefit plan), if the following conditions are
satisfied: (1) the participant does not or cannot elect
payments in the form of a life annuity; and (2) on the death
of a participant, the participant's vested account balance
will be paid to the participant's surviving spouse, but if
there is no surviving spouse, or if the surviving spouse has
consented in a manner conforming to a qualified election, then
to the participant's designated beneficiary. The surviving
spouse may elect to have distribution of the vested account
balance commence within the 90-day period following the date
of the participant's death. The account balance shall be
adjusted for gains or losses occurring after the participant's
death in accordance with the provision of the plan governing
the adjustment of account balances for other types of
distributions. This section Section 6.04(E) shall not be
operative with respect to a participant in a profit-sharing
plan if the plan is a direct or indirect transferee of a
defined benefit plan, money purchase plan, a target benefit
plan, stock bonus, or profit-sharing plan which is subject to
the survivor annuity requirements of Section 401(a)(11) and
Section 417. If this Section 6.04(E) is operative, then the
provisions of this Article, other than this Section 6.04,
shall be inoperative.
18
<PAGE>
The participant may waive the spousal death benefit described in this
Section at any time provided that no such waiver shall be effective
unless it satisfies the conditions of Section 6.05 (other than the
notification requirement referred to therein) that would apply to the
participant's waiver of the qualified pre-retirement survivor annuity.
For purposes of this Section 6.04(E), vested account balance shall
mean, in the case of a money purchase pension plan or a target benefit
plan, the participant's separate account balance attributable solely
to accumulated deductible employee contributions within the meaning of
Section 72(o)(5)(B) of the Code. In the case of a profit-sharing plan,
vested account balance shall have the same meaning as Nonforfeitable
Accrued Benefit.
6.05 "WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY"
Not earlier than 90 days before nor later than 30 days before the
Participant's annuity starting date, the Plan Administrator must
provide the Participant a written explanation of the terms and
conditions of the qualified joint and survivor annuity, the
Participant's right to make, and the effect of, an election to waive
the joint and survivor form of benefit, the rights of the
Participant's spouse regarding the waiver election and the
Participant's right to make, and the effect of, a revocation of a
waiver election. The Plan does not limit the number of times the
Participant may revoke a waiver of the qualified joint and survivor
annuity or make a new waiver during the election period.
A married Participant's waiver election is not valid unless (a) the
Participant's spouse (to whom the survivor annuity is payable under
the qualified joint and survivor annuity) has consented in writing to
the waiver election, the spouse's consent acknowledges the effect of
the election, and a notary public or the Plan Administrator (or his
representative) witnesses the spouse's consent, (b) the election
designates a specific beneficiary, including any class of
beneficiaries or any contingent beneficiaries, which may not be
changed without spousal consent (or the spouse expressly permits
designations by the participant without any further spousal consent;
(c) the spouse consents to the alternate form of payment designated by
the Participant or to any change in that designated form of payment,
and (d) unless the spouse is the Participant's sole primary
Beneficiary, the spouse consents to the Participant's Beneficiary
designation or to any change in the Participant's Beneficiary
designation. The spouse's consent to a waiver of the qualified joint
and survivor annuity is irrevocable, unless the Participant revokes
the waiver election. The spouse may execute a blanket consent to any
form of payment designation or to any Beneficiary designation made by
the Participant, if the spouse acknowledges the right to limit that
consent to a specific designation but, in writing, waives that right.
The consent requirements of this Section 6.05 apply to a former spouse
of the Participant, to the extent required under a qualified domestic
relations order described in Section 6.07. A revocation of a prior
waiver may be made by a participant without the consent of the spouse
at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this
provision shall be valid unless the participant has received notice as
provided in this Section 6.05.
The Plan Administrator will accept as valid a waiver election which
does not satisfy the spousal consent requirements if the Plan
Administrator establishes the Participant does not have a spouse, the
Plan Administrator is not able to locate the Participant's spouse, the
Participant is legally separated or has been abandoned (within the
meaning of State law) and the Participant has a court order to that
effect, or other circumstances exist under which the Secretary of the
Treasury will excuse the consent requirement. If the Participant's
spouse is legally incompetent to give consent, the spouse's legal
guardian (even if the guardian is the Participant) may give consent.
Any consent obtained from a spouse shall be effective only with
respect to such spouse.
6.06 "WAIVER ELECTION - PRE-RETIREMENT SURVIVOR ANNUITY"
The Plan Administrator must provide a written explanation of the
pre-retirement survivor annuity to each married Participant, within
the following period which ends last: (1) the period beginning on the
first day of the Plan Year in which the Participant attains age 32 and
ending on the last day of the Plan Year in which the Participant
attains age 35; (2) a reasonable period ending after an Employee
becomes a Participant; (3) a reasonable period ending after the joint
and survivor rules become applicable to the Participant; or (4) a
reasonable period ending after a fully subsidized pre-retirement
survivor annuity no longer satisfies the requirements for a fully
subsidized benefit. A reasonable period described in clauses (2), (3)
and (4) is the two-year period beginning one year before and ending
one year after the applicable event. If the Participant separates from
Service before attaining age 35, clauses (1), (2), (3) and (4) do not
apply and the Plan Administrator must provide the written explanation
within the two-year period beginning one year before and ending one
year after the Separation from Service. The written explanation must
describe, in a manner consistent with Treasury regulations, the terms
and conditions of the pre-retirement survivor annuity comparable to
the explanation of the qualified joint and survivor annuity required
under Section 6.05. The Plan does not limit the number of times the
Participant may revoke a waiver of the pre-retirement survivor annuity
or make a new waiver during the election period.
A Participant's waiver election of the pre-retirement survivor annuity
is not valid unless (a) the Participant makes the waiver election no
earlier than the first day of the Plan Year in which he attains age 35
and (b) the Participant's spouse (to whom the pre-retirement survivor
annuity is payable) satisfies the consent requirements described in
Section 6.05, except the spouse need not consent to the form of
benefit payable to the designated Beneficiary. The spouse's consent to
the waiver of the pre-retirement survivor annuity is irrevocable,
unless the Participant revokes the waiver election. Irrespective of
the time of election requirement described in clause (a), if the
Participant separates from Service prior to the first day of the Plan
Year in which he attains age 35, the Plan Administrator will accept a
waiver election as respects the Participant's Accrued Benefit
attributable to his Service prior to his Separation from Service. If
the participant thereafter returns to employment with the employer,
the applicable period for such participant shall be redetermined.
Pre-age 35
19
<PAGE>
waiver: A participant who will not yet attain age 35 as of the end of
any current Plan Year may make a special qualified election to waive
the qualified pre-retirement survivor annuity for the period beginning
on the date of such election and ending on the first day of the Plan
Year in which the participant will attain age 35. Such election shall
not be valid unless the participant receives a written explanation of
the qualified pre-retirement survivor annuity in such terms as are
comparable to the explanation required under Section 6.05. Qualified
pre-retirement survivor annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
participant attains age 35. Any new waiver on or after such date shall
be subject to the full requirements of this Article.
Notwithstanding the other requirements of this Section 6.06, the
respective notices prescribed by this Section need not be given to a
participant if (1) the plan "fully subsidizes" the costs of a
qualified joint and survivor annuity or qualified pre-retirement
survivor annuity, and (2) the plan does not allow the participant to
waive the qualified joint and survivor annuity or qualified
pre-retirement survivor annuity and does not allow a married
participant to designate a nonspouse beneficiary. For purposes of this
Section 6.06, a plan fully subsidizes the costs of a benefit if no
increase in cost, or decrease in benefits to the participant may
result from the participant's failure to elect another benefit. Any
consent obtained from a spouse shall be effective only with respect to
such spouse.
6.07 "DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS"
Nothing contained in this Plan prevents the Trustee, in accordance
with the direction of the Advisory Committee, from complying with the
provisions of a qualified domestic relations order (as defined in Code
Section 414(p)). This Plan specifically permits distribution to an
alternate payee under a qualified domestic relations order at any time,
irrespective of whether the Participant has attained his earliest
retirement age (as defined under Code Section 414(p)) under the Plan.
A distribution to an alternate payee prior to the Participant's
attainment of earliest retirement age is available only if: (l) the
order specifies distribution at that time or permits an agreement
between the Plan and the alternate payee to authorize an earlier
distribution; and (2) if the present value of the alternate payee's
benefits under the Plan exceeds $3,500, and if the order requires, the
alternate payee consents to any distribution occurring prior to the
Participant's attainment of earliest retirement age. Nothing in this
Section 6.07 permits a Participant a right to receive distribution at
a time otherwise not permitted under the Plan nor does it permit the
alternate payee to receive a form of payment not permitted under the
Plan.
The Plan Administrator must establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon
receiving a domestic relations order, the Plan Administrator promptly
will notify the Participant and any alternate payee named in the
order, in writing, of the receipt of the order and the Plan's
procedures for determining the qualified status of the order. Within a
reasonable period of time after receiving the domestic relations
order, the Plan Administrator must determine the qualified status of
the order and must notify the Participant and each alternate payee, in
writing, of its determination. The Plan Administrator must provide
notice under this paragraph by mailing to the individual's address
specified in the domestic relations order, or in a manner consistent
with Department of Labor regulations.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Plan Administrator is making its
determination of the qualified status of the domestic relations order,
the Advisory Committee must make a separate accounting of the amounts
payable. If the Plan Administrator determines the order is a qualified
domestic relations order within 18 months of the date amounts first
are payable following receipt of the order, the Advisory Committee
will direct the Trustee to distribute the payable amounts in
accordance with the order. If the Plan Administrator does not make its
determination of the qualified status of the order within the 18-month
determination period, the Advisory Committee will direct the Trustee
to distribute the payable amounts in the manner the Plan would
distribute if the order did not exist and will apply the order
prospectively if the Plan Administrator later determines the order is
a qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Advisory Committee may direct
the Trustee to invest any partitioned amount in a segregated
subaccount or separate account and to invest the account in Federally
insured, interest-bearing savings account(s) or time deposit(s) (or a
combination of both), or in other fixed income investments. A
segregated subaccount remains a part of the Trust, but it alone shares
in any income it earns, and it alone bears any expense or loss it
incurs. The Trustee will make any payments or distributions required
under this Section 6.07 by separate benefit checks of other separate
distribution to the alternate payee(s).
20
<PAGE>
PLAN DOCUMENT
ARTICLE VII
TRUSTEE, POWERS AND DUTIES
7.01 "INVESTMENT OF TRUST ASSETS"
The Trustee shall accept and hold in the Trust such contributions of
money on behalf of the Employer and Participants as it may receive
from time to time, but not more frequently than once each month, from
the Employer. All such contributions of money shall be accompanied by
written instructions from the Employer specifying the Participants'
sub-accounts to which they are to be credited, the amount to be
invested in and the choice of Designated Investment Company stock, and
by furnishing such instructions the Employer represents to the Trustee
that the same are in accordance with any uniform rules adopted by the
Employer and made known to Participants. If written instructions are
not received, or if received, are in the opinion of the Trustee
unclear, the Trustee may hold all or a portion of the contributions in
cash without liability for rising security prices or distributions,
pending receipt of written instructions or clarification. A
Participant, through his Employer, may request an exchange of all or
part of the investment company shares held hereunder for any other
investment company shares eligible for purchase under the Plan, upon
terms and conditions and within the limitations imposed by the then
current prospectuses of the respective investment companies.
Investment in shares of the Designated Investment Company shall be
made at the price and in the manner in which such shares are then
being publicly offered by such investment company. All dividends and
capital gain distributions received on such shares shall be reinvested
in such shares. If any distribution on shares of the fund may be
received at the election of the shareholder in additional shares or in
cash or other property, the Trustee shall elect to receive it in
additional shares. Sales charges attributable to the acquisition of
shares shall be charged to the account of the Participant for which
such shares are acquired. All investment company shares acquired by
the Trustee shall be registered in the name of the Trustee or of its
registered nominee.
The Employer shall remit directly to the insurance company any
premiums life insurance or annuities which constitute contributions
under the Plan, and the Trustee shall have no duty to account
therefor. Any such life insurance and/or annuity contracts shall be
issued in restricted and nontransferable form and be held by the
Employer.
7.02 "VOTING AND OTHER ACTIONS"
The Trustee shall deliver, or cause to be executed and delivered, to
the Employer all notices, prospectuses, financial statements, proxies,
and proxy soliciting material relating to shares of Designated
Investment Company stock held pursuant to the Plan. The Trustee shall
not vote any of the shares of the Fund held hereunder.
7.03 "REPORTS OF THE TRUSTEE AND EMPLOYER"
The Trustee shall keep accurate and detailed records of all receipts,
investments, disbursements and other transactions under this Trust.
Not later than forty-five (45) days after the close of each Plan Year
(or after the Trustee's resignation or removal pursuant to Section XI
hereof), the Trustee shall file with the Employer and each Participant
or Beneficiary for whom account is maintained by the Trustee under
this Agreement a written report or reports reflecting the receipts,
disbursements and other transactions effected by it during such Plan
Year (or period ending with such resignation or removal) and the
assets and liabilities of such account at its close. Upon the
expiration of a period of sixty (60) days immediately following the
date on which such reports are filed, the Trustee shall be forever
released and discharged from all liability and accountability to
anyone with respect to its acts, transactions, duties, obligations or
responsibility as shown in or reflected by such reports, except with
respect to any such acts or transactions as to which written
objections have been filed with the Trustee within such sixty day
period.
The Employer shall furnish to the Trustee, and the Trustee shall
furnish to the Employer, such information relevant to the Plan and
Trust as may be required under the Internal Revenue Code and any
Regulations issued or forms adopted by the Treasury Department
thereunder.
The Trustee shall keep such records, make such identifications, and
file with the Internal Revenue Service such returns and other
information concerning the Trust as may be required of it under the
Internal Revenue Code and any Regulations issued or forms adopted by
the Treasury Department thereunder.
7.04 "TRUSTEE FEES AND EXPENSES OF THE ACCOUNT"
Any income taxes or other taxes of any kind whatsoever that may be
levied or assessed upon or in respect of the Trust, any transfer taxes
incurred in connection with the investment and reinvestment of the
assets of the Trust, all other administrative expenses incurred by the
Trustee in the performance of its duties including fees for legal
services rendered to the Trustee, and such compensation to the Trustee
as may be agreed upon from time to time between the Trustee and the
Employer shall be paid from the assets of the Trust and shall, unless
allocable to the Accounts of specific Participants, be charged
proportionately to their respective accounts.
21
<PAGE>
7.05 "CONCERNING THE TRUSTEE"
The Trustee shall not be responsible in any way for the collection of
contributions provided for under the Plan, the purpose or propriety of
any distribution made pursuant to Section V hereof, or any other
action taken at the Employer's request. Nor shall the Trustee be
responsible for the administration of the Plan, its validity or
effect, or the qualification of the Plan or of the Trust Agreement
under the provisions of the Internal Revenue Code. The Trustee shall
not be required to examine the Plan or be charged with notice of its
provisions. The Trustee shall not be required to take any action upon
receipt of any notice from the Internal Revenue Service except to
forward a copy thereof to the Employer with a request for written
instructions. The Employer shall at all times fully indemnify and save
harmless the Trustee, its successors and assigns, from and against any
and all loss resulting from liability to which the Trustee may be
subject by reason of any act or conduct (except willful misconduct or
gross negligence) in its capacity as Trustee hereunder, including all
expenses reasonably incurred in its defense, in case the Employer
fails to provide such defense. The Trustee shall be under no duty to
take any action other than as herein specified with respect to the
Trust unless the Employer shall furnish the Trustee with instructions
in proper form and as authorized by the terms of the Plan; or to
defend or engage in any suit with respect to the Trust unless the
Trustee shall have first agreed in writing to do so and shall have
been fully indemnified to the satisfaction of the Trustee. The Trustee
shall be protected in acting upon any written order from the Employer
or any other notice, request, consent, certificate or other instrument
or paper believed by it to be genuine and to have been properly
executed, and, so long as it acts in good faith, in taking or omitting
to take any other action. The Trustee shall not be liable for interest
on any cash or cash balances maintained in the Trust pending
investment in accordance with appropriate directions from the
Employer.
7.06 "AMENDMENT"
If the Employer's plan fails to attain or retain qualification, such
plan will no longer participate in the prototype Plan and will be
considered an individually designed plan.
7.07 "RESIGNATION OR REMOVAL OF TRUSTEE"
The Trustee may resign at any time upon thirty (30) days notice in
writing to the Employer, and may be removed by the Employer at any
time upon thirty (30) days notice in writing to the Trustee. Upon such
resignation or removal, the Employer shall appoint a successor
Trustee. Upon receipt by the Trustee of written acceptance of such
appointment by the successor Trustee, the Trustee shall transfer and
pay over to such successor the assets of the Trust Account and all
records pertaining thereto. The Trustee is authorized, however, to
reserve such sum of money as it may deem advisable for payment of all
its fees, compensation, costs and expenses, or for payment of any
other liability constituting a charge on or against the assets of the
Trust or on or against the Trustee, with any balance of such reserve
remaining after the payment of all such items to be paid over to the
successor Trustee. The successor Trustee shall hold the assets paid
over to it under terms similar to those of this Agreement that qualify
under section 401 of the Code. If within thirty (30) days after the
Trustee's resignation or removal the Employer has not appointed a
successor Trustee which has accepted such appointment, the Trustee
shall, unless it elects to terminate the Trust pursuant to Section
XII, appoint such successor itself.
7.08 "TERMINATION OF TRUST"
The Trustee may elect to terminate the Trust if within thirty (30)
days after its resignation or removal pursuant to Section X the
Employer has not appointed a successor Trustee which has accepted such
appointment. The Trustee shall terminate the Trust upon receiving
notice of the Employer's death, if the Employer is a sole proprietor,
or upon receiving notice of the termination of the partnership, if the
Employer is a partnership, or upon receiving notice of the dissolution
of the corporation, if the Employer is a corporation, unless provision
is made by a successor to the business of the Employer for the
continuation of the Plan and this Agreement upon terms satisfactory to
the Trustee.
Termination of the Trust shall be effected by distributing all assets
thereof to the Participants and their designated beneficiaries
pursuant to the direction of the Employer (or in the absence of such
direction as determined by the Trustee), as on the termination of the
Plan. Upon the completion of such distribution, the Trustee shall be
relieved from all further liability with respect to all amounts so
paid.
7.09 "MISCELLANEOUS"
At no time shall it be possible for any part of the assets of the
Trust to be used for or diverted to purposes other than for the
exclusive benefit of Participants and Beneficiaries.
Any notice from the Trustee to the Employer, Participant or
Beneficiary provided for in this Agreement shall be effective if sent
by first class mail to the last address of record.
Upon receipt of a written request from the Employer, the Trustee shall
transfer the assets in the Trust for a Participant to any other
qualified plan maintained by the Employer for the benefit of such
Participant; and the Trustee shall have no further liability under the
Plan and Trust with respect to any assets so transferred.
This Agreement shall bind and inure to the benefit of the personal
representatives, successors and assigns of the Employer and the
Trustee.
22
<PAGE>
PLAN DOCUMENT
ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 "BENEFICIARY DESIGNATION"
Any Participant may from time to time designate, in writing, any
person or persons, contingently or successively, to whom the Trustee
will pay his Accrued Benefit (including any life insurance proceeds
payable to the Participant's Account) on event of his death and the
Participant may designate the form and method of payment. The Advisory
Committee will prescribe the form for the written designation of
Beneficiary and, upon the Participant's filing the form with the
Advisory Committee, the form effectively revokes all designations
filed prior to that date by the same Participant.
COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and survivor
requirements of Article VI apply to the Participant, this Section 8.01
does not impose any special spousal consent requirements on the
Participant's Beneficiary designation. However, in the absence of
spousal consent (as required by Article VI) to the Beneficiary
designation: (1) any waiver of the joint and survivor annuity or of
the pre-retirement survivor annuity is not valid; and (2) if the
Participant dies prior to his annuity starting date, the Beneficiary
designation will apply only to the portion of the death benefit which
is not payable as a pre-retirement survivor annuity.
PROFIT SHARING PLAN EXCEPTION. If the Plan is a profit sharing plan,
and the Employer elects to apply the joint and survivor requirements
only to Participants described in Section 6.04(E), the Beneficiary
designation of a married Participant who is not described in Section
6.04(E) is not valid unless the Participant's spouse consents (in a
manner described in Section 6.05) to the Beneficiary designation. The
spousal consent requirement in this paragraph does not apply if the
Participant and his spouse are not married throughout the one year
period ending on the date of the Participant's death, or if the
Participant's spouse is the Participant's sole primary Beneficiary.
8.02 "NO BENEFICIARY DESIGNATION"
If a Participant fails to name a Beneficiary in accordance with
Section 8.01, or if the Beneficiary named by a Participant predeceases
him or dies before complete distribution of the Participant's Accrued
Benefit as prescribed by the Participant's Beneficiary form, then the
Trustee will pay the Participant's Accrued Benefit in accordance with
Section 6.02 in the following order of priority:
(A) The Participant's surviving spouse;
(B) The Participant's surviving children, including adopted
children, in equal shares;
(C) The Participant's surviving parents, in equal shares; or
(D) The legal representative of the estate of the last to die of
the Participant and his Beneficiary.
The Advisory Committee will direct the Trustee as to the method and to
whom the Trustee will make payment under this Section 8.02. If a
benefit is forfeited because the participant or beneficiary cannot be
found, such benefit will be reinstated if a claim is made by the
participant or beneficiary.
8.03 "PERSONAL DATA TO COMMITTEE"
Each Participant and each Beneficiary of a deceased Participant must
furnish to the Advisory Committee such evidence, data or information
as the Advisory Committee considers necessary or desirable for the
purpose of administering the Plan. The provisions of this Plan are
effective for the benefit of each Participant upon the condition
precedent that each Participant will furnish promptly full, true and
complete evidence, data and information when requested by the Advisory
Committee, provided the Advisory Committee advises each Participant of
the effect of his failure to comply with its request.
8.04 "ADDRESS FOR NOTIFICATION"
Each Participant and each Beneficiary of a deceased Participant must
file with the Advisory Committee from time to time, in writing, his
post office address and any change of post office address. Any
communication, statement or notice addressed to a Participant, or
Beneficiary, at his last post office address filed with the Advisory
Committee, or as shown on the records of the Employer, binds the
Participant, or Beneficiary, for all purposes of this Plan.
8.05 "ASSIGNMENT OR ALIENATION"
Subject to Code Section 414(p) relating to qualified domestic
relations orders or domestic relations orders entered into before
January 1, 1985, neither a Participant nor a Beneficiary may
anticipate, assign or alienate voluntarily or involuntarily (either at
law or in equity) any benefit provided under the Plan, and the Trustee
will not recognize any such anticipation, assignment or alienation.
Furthermore, a benefit under the Plan is not subject to attachment,
garnishment, levy, execution or other legal or equitable process.
23
<PAGE>
8.06 "NOTICE OF CHANGE IN TERMS"
The Plan Administrator, within the time prescribed by ERISA and the
applicable regulations, must furnish all Participants and
Beneficiaries a summary description of any material amendment to the
Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 "LITIGATION AGAINST THE TRUST"
A court of competent jurisdiction may authorize any appropriate
equitable relief to redress violations of ERISA or to enforce any
provisions of ERISA or the terms of the Plan. A fiduciary may receive
reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.
8.08 "INFORMATION AVAILABLE"
Any Participant in the Plan or any Beneficiary may examine copies of
the Plan description, latest annual report, any bargaining agreement,
this Plan and Trust, contract or any other instrument under which the
Plan was established or is operated. The Plan Administrator will
maintain all of the items listed in this Section 8.08 in his office,
or in such other place or places as he may designate from time to time
in order to comply with the regulations issued under ERISA, for
examination during reasonable business hours. Upon the written request
of a Participant or Beneficiary the Plan Administrator must furnish
him with a copy of any item listed in this Section 8.08. The Plan
Administrator may make a reasonable charge to the requesting person
for the copy so furnished.
8.09 "APPEAL PROCEDURE FOR DENIAL OF BENEFITS"
The Plan Administrator must provide adequate notice in writing to any
Participant or to any Beneficiary ("Claimant") whose claim for
benefits under the Plan the Advisory Committee has denied. The Plan
Administrator's notice to the Claimant must set forth:
(A) The specific reason for the denial;
(B) Specific references to pertinent Plan provisions on which the
Advisory Committee based its denial;
(C) A description of any additional material and information
needed for the Claimant to perfect his claim and an
explanation of why the material or information is needed; and
(D) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Advisory Committee
within 75 days after receipt of the Plan Administrator's
notice of denial of benefits. The Plan Administrator's notice
must further advise the Claimant that his failure to appeal
the action to the Advisory Committee in writing within the
75-day period will render the Advisory Committee's
determination final, binding and conclusive.
If the Claimant should appeal to the Advisory Committee, he, or his
duly authorized representative, may submit, in writing, whatever
issues and comments he, or his duly authorized representative, feels
are pertinent. The Claimant, or his duly authorized representative,
may review pertinent Plan documents. The Advisory Committee will
re-examine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under
the circumstances. The Advisory Committee must advise the Claimant of
its decision within 60 days of the Claimant's written request for
review, unless special circumstances (such as a hearing) would make
the rendering of a decision within the 60-day limit unfeasible, but in
no event may the Advisory Committee render a decision respecting a
denial for a claim for benefits later than 120 days after its receipt
of a request for review.
The Plan Administrator's notice of denial of benefit must identify the
name of each member of the Advisory Committee and the name and address
of the Advisory Committee member to whom the Claimant may forward
his appeal.
8.10 "PARTICIPANT DIRECTION OF INVESTMENT"
A Participant has the right to direct the Employer with respect to the
investment or re-investment of the assets comprising the Participant's
individual Account only if the Employer consents in writing to permit
such direction. If the Employer consents to Participant direction of
investment, the Employer and each Participant must execute a letter
agreement as a part of this Plan containing such conditions,
limitations and other provisions they deem appropriate before the
Employer will follow any Participant direction as respects the
investment or re-investment of any part of the Participant's
individual Account. The Employer is not liable for any loss, nor is
liable for any breach, resulting from a Participant's direction of the
investment of any part of his individual Account.
24
<PAGE>
PLAN DOCUMENT
ARTICLE IX
ADVISORY COMMITTEE -
DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 "MEMBERS' COMPENSATION, EXPENSES"
The Employer must appoint an Advisory Committee to administer the
Plan, the members of which may or may not be Participants in the Plan,
or which may be the Plan Administrator acting alone. The members of
the Advisory Committee will serve without compensation for services as
such, but the Employer will pay all expenses of the Advisory
Committee, including the expense for any bond required under ERISA.
9.02 "TERM"
Each member of the Advisory Committee serves until the appointment of
his successor.
9.03 "POWERS"
In case of a vacancy in the membership of the Advisory Committee, the
remaining members of the Advisory Committee may exercise any and all
of the powers, authority, duties and discretion conferred upon the
Advisory Committee pending the filling of the vacancy.
9.04 "GENERAL"
The Advisory Committee has the following powers and duties:
(A) To select a Secretary, who need not be a member of
the Advisory Committee;
(B) To determine the rights of eligibility of an Employee
to participate in the Plan, the value of a
Participant's Accrued Benefit and the Nonforfeitable
percentage of each Participant's Accrued Benefit;
(C) To adopt rules of procedure and regulations necessary
for the proper and efficient administration of the
Plan provided the rules are not inconsistent with the
terms of this Agreement;
(D) To enforce the terms of the Plan and the rules and
regulations it adopts;
(E) To direct the Trustee as respects the crediting and
distribution of the Trust;
(F) To review and render decisions respecting a claim for
(or denial of a claim for) a benefit under the Plan;
(G) To furnish the Employer with information which the
Employer may require for tax or other purposes;
(H) To engage the service of agents whom it may deem
advisable to assist it with the performance of its
duties;
(I) To establish and maintain a funding standard account
and to make credits and charges to the account to the
extent required by and in accordance with the
provisions of the Code.
The Advisory Committee must exercise all of its powers, duties
and discretion under the Plan in a uniform and
nondiscriminatory manner.
9.05 "FUNDING POLICY"
The Advisory Committee will review, not less often than annually, all
pertinent Employee information and Plan data in order to establish the
funding policy of the Plan and to determine the appropriate methods of
carrying out the Plan's objectives.
9.06 "MANNER OF ACTION"
The decision of a majority of the members appointed and qualified
controls.
9.07 "INTERESTED MEMBER"
No member of the Advisory Committee may decide or determine any matter
concerning the distribution, nature or method of settlement of his own
benefits under the Plan, except in exercising an election available to
that member in his capacity as a Participant, unless the Plan
Administrator is acting alone in the capacity of the Advisory
Committee.
9.08 "INDIVIDUAL ACCOUNTS"
The Advisory Committee will maintain, or direct the Trustee to
maintain, a separate Account, or multiple Accounts, in the name of
each Participant to reflect the Participant's Accrued Benefit under
the Plan.
The Advisory Committee will make its allocations, or request the
Trustee to make its allocations, to the Accounts of the Participants
in accordance with the provisions of Section 9.11. The Advisory
Committee may direct the Trustee to maintain a temporary segregated
investment Account in the name of a Participant to prevent a
distortion of income, gain or loss allocations under Section 9.11. The
Advisory Committee must maintain records of its activities.
25
<PAGE>
9.09 "VALUE OF PARTICIPANT'S ACCRUED BENEFIT"
The value of each Participant's Accrued Benefit consists of that
proportion of the net worth (at fair market value) of the Employer's
Trust Fund which the net credit balance in his Account (exclusive of
the cash value of incidental benefit insurance contracts) bears to the
total net credit balance in the Accounts (exclusive of the cash value
of the incidental benefit insurance contracts) of all Participants
plus the cash surrender value of any incidental benefit insurance
contracts held by the Employer on the Participant's life.
For purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit is its value as of the valuation date
immediately preceding the date of the distribution.
9.10 "ALLOCATIONS AND DISTRIBUTION OF NET INCOME GAIN OR LOSS"
A "valuation date" under this Plan is each Accounting Date. As of each
valuation date, the Advisory Committee must adjust Accounts to reflect
net income, gain or loss since the last valuation date. The valuation
period is the period beginning the day after the last valuation date
and ending on the current valuation date.
The assets of the trust will be valued annually at fair market value
as of the last day of the plan year. On such date, the earnings and
losses of the trust will be allocated to each participant's account in
the ratio that such account balance bears to all account balances.
TRUST FUND ACCOUNTS. The allocation provisions of this paragraph apply
to all Participant Accounts other than segregated investment Accounts.
The Advisory Committee first will adjust the Participant Accounts, as
those Accounts stood at the beginning of the current valuation period,
for amounts charged during the valuation period to the Accounts in
accordance with Section 9.12 (relating to distributions) and Section
10.01 (relating to insurance premiums), for the cash value of
incidental benefit insurance contracts and for the amount of any
Account which the Trustee has fully distributed since the immediately
preceding valuation date. The Advisory Committee subject to Section
9.12, will allocate the net income, gain or loss pro rata to the
adjusted Participant Accounts. The allocable net income, gain or loss
is the net income (or net loss), including the increase or decrease in
the fair market value of assets, since the last valuation date.
SEGREGATED INVESTMENT ACCOUNTS. A segregated investment Account
receives all income it earns and bears all expense or loss it incurs.
ADDITIONAL RULES. An Excess Amount or suspense account
described in Part 2 of Article III does not share in the allocation of
net income, gain or loss described in this Section 9.10. If the
Employer's Plan includes a Code Section 401(k) arrangement, the
Employer may specify in its Adoption Agreement alternate valuation
provisions authorized by that Adoption Agreement. This Section 9.10
applies solely to the allocation of net income, gain or loss of the
Trust. The Advisory Committee will allocate the Employer contributions
in accordance with Article III.
9.11 "INDIVIDUAL STATEMENT"
As soon as practicable after the Accounting Date of each Plan Year,
but within the time prescribed by ERISA and the regulations under
ERISA, the Plan Administrator will deliver to each Participant (and to
each Beneficiary) a statement reflecting the condition of his Accrued
Benefit in the Trust as of that date and such other information ERISA
requires be furnished the Participant or Beneficiary. No Participant,
except a member of the Advisory Committee, has the right to inspect
the records reflecting the Account of any other Participant.
9.12 "ACCOUNT CHARGED"
The Advisory Committee will charge all distributions made to a
Participant or to his Beneficiary from his Account against the Account
of the Participant when made.
9.13 "MISSING BENEFICIARY"
If the Employer shall be unable to locate any Beneficiary entitled to
receive payment of any death benefit payable hereunder, after
reasonable search, for a period of two years after such benefit
becomes payable, the amount of such benefit shall cease to be payable
to such Beneficiary, and shall become payable instead to the personal
representative of such former Participant.
26
<PAGE>
PLAN DOCUMENT
ARTICLE X
PROVISIONS RELATING TO INSURANCE
10.01 "INSURANCE BENEFIT ANNUITY"
The Employer in accordance with the direction of the respective
Participants in accordance with any uniform rules adopted by the
Employer and made known to Participants may elect to invest
contributions to the Plan in incidental life insurance benefits or
one or more annuity contracts distributed by Kemper Financial
Services, Inc. or an affiliate, provided, however, that:
(A) ORDINARY LIFE. The premiums paid for ordinary life
insurance on the life of a Participant must at all times
be less than 50% of the Employer contributions made on
behalf of such Participant. For purposes of these
incidental insurance provisions, ordinary life insurance
contracts are contracts with both nondecreasing death
benefits and nonincreasing premiums.
(B) TERM. The premiums paid for term, universal and all
other life insurance which is not ordinary life insurance
on the life of any Participant may not exceed 25% of the
Employer contributions made on behalf of such
Participant.
(C) COMBINATION. If both ordinary life and term insurance are
purchased on the life of any Participant, the sum of the term
insurance premium plus one-half of the ordinary life premiums
may not exceed 25% of the Employer contributions made on
behalf of such Participant.
(D) ANNUITIES. The terms of any annuity contract purchased
and distributed by the Plan to a Participant shall comply
with the requirements of this Plan.
Such direction of the participant's creates a segregated
asset account. Except as provided in this Section 10.01
and Section 8.10, each participant will have a ratable
interest in all assets of the trust. It will be the
Employer's responsibility to see that the limitations of
this Article X are not exceeded.
10.02 "FORM OF CONTRACT AND PREMIUM"
The Employer shall apply for any contract under this Article X and
each application for contract, and the contracts themselves, shall
nominate and designate the Participant as sole owner, but each
contract shall be held by the Employer and shall be restricted and
not transferable.
The Employer shall pay directly to the insurance company all
amounts pursuant to an election under this Article X and shall
charge the premiums on any such contract(s) against the
contributions by or on behalf of such Participant. After payment
of any premium, the Employer shall remit the balance of such
contributions to the Trustee hereunder. The Employer shall hold
all contracts issued under the Plan and fully account for same to
the Trustee upon written request.
In the event of any conflicts between the terms of this Plan and
the terms of any insurance contracts hereunder, the Plan provisions
shall control.
Any dividends or credits earned on insurance contracts will be
allocated to the participant's account derived from employer
contributions for whose benefit the contract is held.
10.03 "LIMITATION OF LIFE INSURANCE PROTECTION"
The Employer shall not continue any life insurance protection for
any Participant beyond his actual termination of employment.
If the Employer holds any insurance contract(s) on the life of a
Participant when the Participant terminates his employment, subject
to Article VI, the Employer shall transfer the contract(s) to the
Participant endorsed so as to vest in the transferee all right,
title and interest to the contract(s), free and clear of the Plan;
subject, however, to restrictions as to surrender or payment of
benefits as the issuing insurance company may permit and as the
Employer shall direct.
Subject to Article VI, Joint and Survivor Annuity Requirements, the
contracts on a participant's life will be converted to cash or an
annuity or distributed to the participant upon commencement of
benefits.
27
<PAGE>
ARTICLE XI MISCELLANEOUS
11.01 "EVIDENCE"
Anyone required to give evidence under the terms of the Plan may do
so by certificate, affidavit, document or other information which the
person to act in reliance may consider pertinent, reliable and
genuine, and to have been signed, made or presented by the proper
party or parties. Both the Advisory Committee and the Trustee are
fully protected in acting and relying upon any evidence described
under the immediately preceding sentence.
11.02 "NO RESPONSIBILITY FOR EMPLOYER ACTION"
Neither the Trustee nor the Advisory Committee has any obligation or
responsibility with respect to any action required by the Plan to be
taken by the Employer, any Participant or eligible Employee, or for
the failure of any of the above persons to act or make any payment or
contribution, or to otherwise provide any benefit contemplated under
this Plan. Furthermore, the Plan does not require the Trustee or the
Advisory Committee to collect any contribution required under the
Plan, or to determine the correctness of the amount of any Employer
contribution. Neither the Trustee nor the Advisory Committee need
inquire into or be responsible for any action or failure to act on
the part of the others. Any action required of a corporate Employer
must be by its Board of Directors or its designate.
11.03 "FIDUCIARIES NOT INSURERS"
The Trustee, the Advisory Committee, the Plan Administrator and the
Employer in no way guarantee the Trust Fund from loss or
depreciation. The Employer does not guarantee the payment of any
money which may be or becomes due to any person from the Trust Fund.
The liability of the Advisory Committee and the Trustee to make any
payment from the Trust Fund at any time and all times is limited to
the then available assets of the Trust.
11.04 "WAIVER OF NOTICE"
Any person entitled to notice under the Plan may waive the notice.
11.05 "SUCCESSORS"
The Plan is binding upon all persons entitled to benefits under the
Plan, their respective heirs and legal representatives, upon the
Employer, its successors and assigns, and upon the Trustee, the
Advisory Committee, the Plan Administrator and their successors.
11.06 "WORD USAGE"
Words used in the masculine also apply to the feminine where
applicable, and wherever the context of the Employer's Plan dictates,
the plural includes the singular and the singular includes the
plural.
11.07 "EMPLOYER'S RIGHT TO PARTICIPATE"
If the Employer's Plan fails to attain or retain qualification under
section 401 of the Code, the Plan will no longer participate in this
Kemper Simplified Prototype Retirement Plan and will be considered an
individually-designed plan.
11.08 "EMPLOYMENT NOT GUARANTEED"
Nothing contained in this Plan, or with respect to the establishment
of the Trust, or any modification of amendment to the Plan or Trust,
or in the creation of any Account, or the payment of any benefit,
gives any Employee, Employee-Participant or any Beneficiary any right
to continue employment, any legal or equitable right against the
Employer, or Employee of the Employer, or against the Trustee, or its
agents or employees, or against the Plan Administrator, except as
expressly provided by the Plan, the Trust, ERISA or by a separate
agreement.
28
<PAGE>
PLAN DOCUMENT
ARTICLE XII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
12.01 "EXCLUSIVE BENEFIT"
Any contribution made by the employer because of a mistake of fact
must be returned to the employer within one year of the contribution.
In the event that the Commissioner of Internal Revenue determines
that the plan is not initially qualified under the Internal Revenue
Code, any contribution made incident to that initial qualification by
the employer must be returned to the employer within one year after
the date the initial qualification is denied, but only if the
application for the qualification is made by the time prescribed by
law for filing the employer's return for the taxable year in which
the plan is adopted, or such later date as the Secretary of the
Treasury may prescribe.
12.02 "AMENDMENT BY EMPLOYER"
The Employer may change the choice of options in the adoption
agreement and add overriding language in the adoption agreement when
such language is necessary to satisfy Section 415 or Section 416 of
the Code because of the required aggregation of multiple plans, and
add certain model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause
the plan to be treated as individually designed. An employer that
amends the plan for any other reason, including a waiver of the
minimum funding requirement under Section 412(d), will no longer
participate in this master or prototype plan and will be considered
to have an individually designed plan.
No amendment may authorize or permit any of the Trust Fund (other
than the part which is required to pay taxes and administration
expenses) to be used for or diverted to purposes other than for the
exclusive benefit of the Participants or their Beneficiaries or
estates. No amendment may cause or permit any portion of the Trust
Fund to revert to or become a property of the Employer. The Employer
also may not make any amendment which affects the rights, duties or
responsibilities of the Trustee, the Plan Administrator or the
Advisory Committee without the written consent of the affected
Trustee, the Plan Administrator or the affected member of the
Advisory Committee.
If the plan's vesting schedule is amended, or the plan is amended in
any way that directly or indirectly affects the computation of the
participant's nonforfeitable percentage or if the plan is deemed
amended by an automatic change to or from a top-heavy vesting
schedule, each participant with at least 3 years of service with the
employer may elect, within a reasonable period after the adoption of
the amendment or change, to have the nonforfeitable percentage
computed under the plan without regard to such amendment or change.
For participants who do not have at least one hour of service in any
plan year beginning after December 31, 1988, the preceding sentence
shall be applied by substituting "five years of service" for "three
years of service" where such language appears.
The period during which the election may be made shall commence with
the date the amendment is adopted or deemed to be made and shall end
on the latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the participant is issued written notice of
the amendment by the employer or plan administrator.
Furthermore, if the vesting schedule of a plan is amended, in the
case of an employee who is a participant as of the later of the date
such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such
employee's right to his employer-derived accrued benefit will not be
less than his percentage computed under the plan without regard to
such amendment.
CODE SECTION 411(D)(6) PROTECTED BENEFITS. An amendment (including
the adoption of this Plan as a restatement of an existing plan) may
not decrease a Participant's Accrued Benefit, except to the extent
permitted under Code Section 412(c)(8), and may not reduce or
eliminate Code Section 411 (d)(6) protected benefits determined
immediately prior to the adoption date (or, if later, the effective
date) of the amendment. An amendment reduces or eliminates Code
Section 411 (d)(6) protected benefits if the amendment has the effect
of either (1) eliminating or reducing an early retirement benefit or
a retirement-type subsidy (as defined in Treasury regulations), or
(2) except as provided by Treasury regulations, eliminating an
optional form of benefit. The Advisory Committee must disregard an
amendment to the extent application of the amendment would fail to
satisfy this paragraph. If the Advisory Committee must disregard an
amendment because the amendment would violate clause (1) or clause
(2), the Advisory Committee must maintain a schedule of the early
retirement option or other optional forms of benefit the Plan must
continue for the affected Participants.
The Employer must make all amendments in writing. Each amendment must
state the date to which it is either retroactively or prospectively
effective. See Section 11.08 for the effect of certain amendments
adopted by the Employer.
29
<PAGE>
12.03 "AMENDMENT BY PLAN SPONSOR"
The Plan Sponsor, without the Employer's consent, may amend the Plan
and Trust, from time to time, in order to conform the Plan and Trust
to any requirement for qualification of the Plan and Trust under the
Internal Revenue Code. The Plan Sponsor may not amend the Plan in any
manner which would modify any election made by the Employer under the
Plan without the Employer's written consent.
For purposes of sponsoring organization amendments, the mass
submitter shall be recognized as the agent of the sponsoring
organization. If the sponsoring organization does not adopt the
amendments made by the mass submitter, it will no longer be identical
to or a minor modifier of the mass submitter plan.
12.04 "DISCONTINUANCE"
The Employer has the right, at any time, to suspend or discontinue
its contributions under the Plan, and to terminate, at any time, this
Plan and the Trust created under this Agreement. The Plan will
terminate upon the first to occur of the following:
(A) The date terminated by action of the Employer;
(B) The date the Employer is judicially declared bankrupt or
insolvent, unless the proceeding authorizes continued
maintenance of the Plan;
(C) The dissolution, merger, consolidation or reorganization
of the Employer or the sale by the Employer of all or
substantially all of its assets, unless the successor or
purchaser makes provision to continue the Plan, in which
event the successor or purchaser must substitute itself
as the Employer under this Plan.
In the event of a complete discontinuance of contributions under the
plan, the account balance of each affected participant will be
nonforfeitable.
12.05 "MERGER/DIRECT TRANSFER"
The Trustee may not consent to, or be a party to, any merger or
consolidation with another plan, or to a transfer of assets or
liabilities to another plan, unless immediately after the merger,
consolidation or transfer (if the plan is then terminated), the
surviving Plan provides each Participant a benefit equal to or
greater than the benefit each Participant would have received had the
Plan terminated immediately before the merger or consolidation or
transfer. The Trustee possesses the specific authority to enter into
merger agreements or direct transfer of assets agreements with the
trustees of other retirement plans described in Code Section 401(a),
including an elective transfer, and to accept the direct transfer of
plan assets, or to transfer plan assets, as a party to any such
agreement.
The Trustee may accept a direct transfer of plan assets on behalf of
an Employee prior to the date the Employee satisfies the Plan's
eligibility conditions. If the Trustee accepts such a direct transfer
of plan assets, the Advisory Committee and Trustee must treat the
Employee as a Participant for all purposes of the Plan except the
Employee is not a Participant for purposes of sharing in Employer
contributions under the Plan until he actually becomes a Participant
in the Plan.
The Trustee, after August 9,1988, may not consent to, or be a
party to a merger, consolidation or transfer of assets with a defined
benefit plan, except with respect to an elective transfer. The
Trustee will hold, administer and distribute the transferred assets
as a part of the Trust Fund and the Trustee must maintain a separate
Employer contribution Account for the benefit of the Employee on
whose behalf the Trustee accepted the transfer in order to reflect
the value of the transferred assets. Unless a transfer of assets to
this Plan is an elective transfer, the Plan will preserve all Code
Section 411(d)(6) protected benefits with respect to those
transferred assets, in the manner described in Section 13.02. A
transfer is an elective transfer if: (1) the transfer satisfies the
first paragraph of this Section 13.06; (2) the transfer is voluntary,
under a fully informed election by the Participant; (3) the
Participant has an alternative that retains his Code Section
411(d)(6) protected benefits (including an option to leave his
benefit in the transferor plan, if that plan is not terminating); (4)
the transfer satisfies the applicable spousal consent requirements of
the Code; (5) the transferor plan satisfies the joint and survivor
notice requirements of the Code, if the Participant's transferred
benefit is subject to those requirements; (6) the Participant has a
right to immediate distribution from the transferor plan, in lieu of
the elective transfer; (7) the transferred benefit is at least the
greater of the single sum distribution provided by the transferor
plan for which the Participant is eligible or the present value of
the Participant's accrued benefit under the transferor plan payable
at that plan's normal retirement age; (8) the Participant has a 100%
Nonforfeitable interest in the transferred benefit; and (9) the
transfer otherwise satisfies applicable Treasury regulations. An
elective transfer may occur between qualified plans of any type. Any
direct transfer of assets from a defined benefit plan after August 9,
1988, which is not an elective transfer will render the Employer's
Plan individually designed.
DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(K). If the Plan
receives a direct transfer (by merger or otherwise) of elective
contributions (or amounts treated as elective contributions) under a
Plan with a Code Section 401(k) arrangement, the distribution
restrictions of Code Sections 401(k)(2) and (10) continue to apply
to those transferred elective contributions.
30
<PAGE>
PLAN DOCUMENT
12.06 "TERMINATION"
Upon termination of the Plan, the distribution provisions of Article
VI remain operative, with the following exceptions:
(1) If the present value of the Participant's Nonforfeitable
Accrued Benefit does not exceed $3,500, the Advisory
Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit to him in
lump sum as soon as administratively practicable after
the Plan terminates; and
(2) If the present value of the Participant's Nonforfeitable
Accrued Benefit exceeds $3,500, the Participant or the
Beneficiary, in addition may elect to have the Trustee
commence distribution of his Nonforfeitable Accrued
Benefit as soon as administratively practicable after the
Plan terminates.
To liquidate the Trust, the Advisory Committee will
purchase a deferred annuity contract for each Participant
which protects the Participant's distribution rights
under the Plan, if the Participant's Nonforfeitable
Accrued Benefit exceeds $3,500 and the Participant does
not elect an immediate distribution pursuant to Paragraph
(2). The Trust will continue until the Trustee in
accordance with the direction of the Advisory Committee
has distributed all of the benefits under the Plan.
On each valuation date, the Advisory Committee will
credit any part of a Participant's Accrued Benefit
retained in the Trust with its proportionate share of the
Trust's income, expenses, gains and losses, both realized
and unrealized. Upon termination of the Plan, the Amount,
if any, in a suspense account under Article III will
revert to the Employer, subject to the conditions of the
Treasury regulations permitting such a reversion. A
resolution or amendment to freeze all future benefit
accrual but otherwise to continue maintenance of this
Plan, is not a termination for purposes of this Section
12.06.
DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(K). If
the Employer's Plan includes a Code Section 401(k)
arrangement or if transferred assets described in Section
13.06 are subject to the distribution restrictions of Code
Sections 401(k)(2) and (10), the special distribution
provisions of this Section 12.06 are subject to the
restrictions of this paragraph. The portion of the Participant's
Nonforfeitable Accrued Benefit attributable to elective
contributions (or to amounts treated under the Code
Section 401(k) arrangement as elective contributions) is
not distributable on account of Plan termination, as
described in this Section 12.06, unless: (a) the
Participant otherwise is entitled under the Plan to a
distribution of that portion of his Nonforfeitable
Accrued Benefit; or (b) the Plan termination occurs
without the establishment of a successor plan. A
successor plan under clause (b) is a defined contribution
plan (other than an ESOP) maintained by the Employer (or
by a related employer) at the time of the termination of
the Plan or within the period ending twelve months after
the final distribution of assets. A distribution made
after March 31, 1988, pursuant to clause (b), must be part
of a lump sum distribution to the Participant of his
Nonforfeitable Accrued Benefit.
In the event of the termination or partial termination of
the plan, the account balance of each affected
participant will be nonforfeitable.
31
<PAGE>
ARTICLE XIII
CODE SECTION 401(k) ARRANGEMENTS
13.01 "ELIGIBILITY"
This Article XIII applies to an Employer's Plan only if the Plan
includes a Code Section 401(k) arrangement.
An employee's eligibility to make Elective Deferrals may not be
conditioned upon the completion of more than one (1) year of service
or the attainment of more than age twenty-one (21). An employee's
eligibility to receive Matching Contributions, Qualified Matching
Contributions, or Qualified Nonelective Contributions may be
conditioned upon the completion of up to two (2) years of service. No
contributions or benefits (other than Matching Contributions or
Qualified Matching Contributions) may be conditioned upon an
employee's Elective Deferrals.
The Employer must specify a reasonable period in the Adoption
Agreement of at least once each calendar year during which a
participant may elect to commence Elective Deferrals. Such election
may not be made retroactively. A participant's election to commence
elective Deferrals must remain in effect until modified or
terminated.
The Employer must also specify in the Adoption Agreement a reasonable
period at least once each calendar year to terminate an election or
to modify the amount or frequency of his or her Elective Deferrals.
13.02 "SALARY REDUCTION AGREEMENT"
The Employer will elect in its Adoption Agreement the terms of the
Code Section 401(k) arrangement under the Plan.
Any Employee eligible to participate in the Plan may file a salary
reduction agreement with the Advisory Committee. The salary reduction
agreement may not be effective earlier than the following date which
occurs last: (i) the Employee's Plan Entry Date (or, in the case of
a reemployed Employee, his reparticipation date under Article II);
(ii) the execution date of the Employee's salary reduction agreement;
(iii) the date the Employer adopts the Code Section 401(k)
arrangement by executing the Adoption Agreement; or (iv) the
effective date of the Code Section 401(k) arrangement, as specified
in the Employer's Adoption Agreement. A salary reduction agreement
must specify the amount of Compensation (as defined in Section 1.12)
or percentage of Compensation the Employee wishes to defer. The
salary reduction agreement will apply only to Compensation which
becomes currently available to the Employee after the effective
date of the salary reduction agreement. The Employer will apply a
reduction election to all Compensation (and to increases in such
Compensation) unless the Employee specifies in his salary reduction
agreement to limit the election to certain Compensation. The Employer
will specify in Adoption Agreement Section 3.01 the rules and
restrictions applicable to the Employee's salary reduction
agreements, however, under no circumstances, may a salary reduction
agreement or other deferral mechanism be adopted retroactively.
13.03 "DEFINITIONS"
For purposes of this Article XIII:
(1) "ACTUAL DEFERRAL PERCENTAGE" shall mean, for a specified
group of participants for a Plan Year, the average of the
ratios (calculated separately for each participant in
such group) of (1) the amount of employer contributions
actually paid over to the trust on behalf of such
participant for the Plan Year to (2) the participant's
Compensation for such Plan Year to (whether or not the
employee was a participant for the entire Plan Year).
Employer contributions on behalf of any participant shall
include: (1) any Elective Deferrals made pursuant to the
participant's deferral election, including Excess
Elective Deferrals of Highly Compensated Employees, but
excluding Elective Deferrals that are taken into account
in the Contribution Percentage test (provided the ADP
test is satisfied both with and without exclusion of
these Elective Deferrals); and (2) at the election of the
employer, Qualified Nonelective Contributions and
Qualified Matching Contributions. For purposes of
computing Actual Deferral Percentages, an employee who
would be a participant but for the failure to make
Elective Deferrals shall be treated as a participant on
whose behalf no Elective Deferrals are made.
(2) "AGGREGATE LIMIT" shall mean the sum of (i) 125 percent
of the greater of the ADP of the Nonhighly Compensated
Employees for the Plan Year or the ACP of Nonhighly
Compensated Employees under the plan subject to Code
Section 401(m) for the Plan Year beginning with or
within the Plan Year of the CODA and (ii) the lesser of
200% or two plus the lesser of such ADP or ACP. "Lesser"
is substituted for "greater" in (i) above, and "greater"
is substituted for "lesser" after "two plus the" in (ii),
if it would result in a larger Aggregate Limit.
(3) "AVERAGE CONTRIBUTION PERCENTAGE" shall mean the average
of the Contribution Percentages of the Eligible
Participants in a group.
(4) "CONTRIBUTION PERCENTAGE" shall mean the ratio (expressed
as a percentage) of the participant's Contribution
Percentage Amounts to the participant's Compensation for
the Plan Year (whether or not the employee was a
participant for the entire Plan Year).
32
<PAGE>
PLAN DOCUMENT
(5) "CONTRIBUTION PERCENTAGE AMOUNTS" shall mean the sum of
the Employee Contributions, Matching Contributions, and
Qualified Matching Contributions (to the extent not taken
into account for purposes of the ADP test) made under the
plan on behalf of the participant for the Plan Year. If
so elected in the adoption agreement the employer may
include Qualified Nonelective Contributions in the
Contribution Percentage Amounts. The employer also may
elect to use Elective Deferrals in the Contribution
Percentage Amounts so long as the ADP test is met before
the Elective Deferrals are used in the ACP test and
continues to be met following the exclusion of those
Elective Deferrals that are used to meet the ACP test.
(6) "ELECTIVE DEFERRALS" shall mean any employer
contributions made to the plan at the election of the
participant, in lieu of cash compensation, and shall
include contributions made pursuant to a salary reduction
agreement or other deferral mechanism. With respect to
any taxable year, a participant's Elective Deferral is
the sum of all Employer contributions made on behalf of
such participant pursuant to an election to defer under
any qualified CODA as described in Code Section 401(k),
any simplified employee pension cash or deferred
arrangement as described in Code Section 402(h)(1)(B),
any eligible deferred compensation plan under Code
Section 457, any plan as described under Code Section
501(c)(18), and any employer contributions made on behalf
of a participant for the purchase of an annuity contract
under Code Section 403(b) pursuant to a salary reduction
agreement.
(7) "ELIGIBLE PARTICIPANT" shall mean any employee who is
eligible to make an Employee Contribution, or an Elective
Deferral (if the employer takes such contributions into
account in the calculation of the Contribution
Percentage), or to receive a Matching Contribution
(including forfeitures) or a Qualified Matching
Contribution.
(8) "EXCESS AGGREGATE CONTRIBUTIONS" shall mean, with respect
to any Plan Year, the excess of:
(a) The aggregate Contribution Percentage Amounts
taken into account in computing the numerator of
the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such
Plan Year, over
(b) The maximum Contribution Percentage Amounts
permitted by the ACP test (determined by
reducing contributions made on behalf of Highly
Compensated Employees in order of their
Contribution Percentages beginning with the
highest of such percentages).
(9) "EXCESS CONTRIBUTIONS" shall mean, with respect to any
Plan Year, the excess of:
(a) The aggregate amount of employer contributions
actually taken into account in computing the ADP
of Highly Compensated Employees for such Plan
Year, over
(b) The maximum amount of such contributions
permitted by the ADP test (determined by
reducing contributions made on behalf of Highly
Compensated Employees in order of the ADPs,
beginning with the highest of such percentages).
(10) "EXCESS ELECTIVE DEFERRALS" shall mean those Elective
Deferrals that are includible in a participant's gross
income under Section 402(g) of the Code to the extent such
participant's Elective Deferrals for a taxable year
exceed the dollar limitation under such Code section.
Excess Elective Deferrals shall be treated as annual
additions under the plan.
(11) "MATCHING CONTRIBUTION" shall mean an employer
contribution made to this or any other defined
contribution plan on behalf of a participant on account
of an Employee Contribution made by such participant, or
on account of a participant's Elective Deferral, under a
plan maintained by the employer.
(12) "QUALIFIED NONELECTIVE CONTRIBUTIONS" shall mean
contributions (other than Matching Contributions or
Qualified Matching Contributions) made by the employer
and allocated to participants' accounts that the
participants may not elect to receive in cash until
distributed from the plan; that are nonforfeitable when
made; and that are distributable only in accordance with
the distribution provisions that are applicable to
Elective Deferrals and Qualified Matching Contributions.
13.04 "ELECTIVE DEFERRALS - CONTRIBUTION LIMITATION"
No participant shall be permitted to have Elective Deferrals made
under this plan, or any other qualified plan maintained by the
Employer, during any taxable year, in excess of the dollar limitation
contained in Section 402(g) of the Code in effect at the beginning of
such taxable year.
13.05 "DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS"
A participant may assign to this plan any Excess Elective Deferrals
made during a taxable year of the participant by notifying the plan
administrator on or before the date specified in the adoption
agreement of the amount of the Excess Elective Deferrals to be
assigned to the plan.
33
<PAGE>
Notwithstanding any other provision of the plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15 to any participant to
whose account Excess Elective Deferrals were assigned for the
preceding year and who claims Excess Elective Deferrals for such
taxable year.
Determination of income or loss: Excess Elective Deferrals shall be
adjusted for any income or loss up to the date of distribution. The
income or loss allocable to Excess Elective Deferrals is the sum of:
(1) income or loss allocable to the participant's Elective Deferral
account for the taxable year multiplied by a fraction, the numerator
of which is such participant's Excess Elective Deferrals for the year
and the denominator is the participant's account balance attributable
to Elective Deferrals without regard to any income or loss occurring
during such taxable year; and (2) ten percent of the amount
determined under (1) multiplied by the number of whole calendar
months between the end of the participant's taxable year and the date
of distribution, counting the month of distribution if distribution
occurs after the 15th of such month.
13.06 "ACTUAL DEFERRAL PERCENTAGE TEST"
The Actual Deferral Percentage (hereinafter "ADP") for participants
who are Highly Compensated Employees for each Plan Year and the ADP
for participants who are Nonhighly Compensated Employees for the same
Plan Year must satisfy one of the following tests:
(1) The ADP for participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
participants who are Nonhighly Compensated Employees for
the same Plan Year multiplied by 1.25; or
(2) The ADP for participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
participants who are Nonhighly Compensated Employees for
the same Plan Year multiplied by 2.0, provided that the
ADP for participants who are Highly Compensated Employees
does not exceed the ADP for participants who are
Nonhighly Compensated Employees by more than two (2)
percentage points.
SPECIAL RULES:
1. The ADP for any participant who is a Highly
Compensated Employee for the Plan Year and who
is eligible to have Elective Deferrals (and
Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP test)
allocated to his or her accounts under two or
more arrangements described in Section 401(k)
of the Code, that are maintained by the
employer, shall be determined as if such
Elective Deferrals (and, if applicable, such
Qualified Nonelective Contributions or Qualified
Matching Contributions, or both) were made under
a single arrangement. If a Highly Compensated
Employee participates in two or more cash or
deferred arrangements that have different Plan
Years, all cash or deferred arrangements ending
with or within the same calendar year shall be
treated as a single arrangement.
2. In the event that this plan satisfies the
requirements of Sections 401(k), 401(a)(4), or
410(b) of the Code only if aggregated with one
or more other plans, or if one or more other
plans satisfy the requirements of such sections
of the Code only if aggregated with this plan,
then this Section shall be applied by determin-
ing the ADP of employees as if all such plans
were a single plan. For Plan Years beginning
after December 31, 1989, plans may be aggregated
in order to satisfy Section 401(k) of the Code
only if they have the same Plan Year.
3. For purposes of determining the ADP of a
participant who is a five-percent owner or one
of the ten most highly paid Highly Compensated
Employees, the Elective Deferrals (and Qualified
Nonelective Contributions or Qualified Matching
Contributions, or both, if treated as Elective
Deferrals for purposes of the ADP test) and
Compensation of such participant shall include
the Elective Deferrals (and, if applicable
Qualified Nonelective Contributions and
Qualified Matching Contributions, or both) and
Compensation for the Plan Year of Family Members
(as defined in Section 414(g)(6) of the Code).
Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as
separate employees in determining the ADP both
for participants who are Nonhighly Compensated
Employees and for participants who are Highly
Compensated Employees.
4. For purposes of determining the ADP test,
Elective Deferrals, Qualified Nonelective
Contributions and Qualified Matching
Contributions must be made before the last day
of the twelve-month period immediately following
the Plan Year to which contributions relate.
5. The employer shall maintain records sufficient
to demonstrate satisfaction of the ADP test and
the amount of Qualified Nonelective
Contributions of Qualified Matching
Contributions, or both, used in such test.
6. The determination and treatment of the ADP
amounts of any participant shall satisfy such
other requirements as may be prescribed by the
Secretary of the Treasury.
34
<PAGE>
PLAN DOCUMENT
13.07 "DISTRIBUTION OF EXCESS CONTRIBUTIONS"
Notwithstanding any other provision of this plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
participants to whose accounts such Excess Contributions were
allocated for the preceding Plan Year. If such excess amounts are
distributed more than 2-1/2 months after the last day of the Plan
Year in which such excess amounts arose, a ten (10) percent excise
tax will be imposed on the employer maintaining the plan with respect
to such amounts. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions of the
Excess Contributions attributable to each of such employees. Excess
Contributions shall be allocated to Participants who are subject to
the family member aggregation rules of Section 414(g)(6) of the Code
in the manner prescribed by the regulations.
Excess Contributions (including the amounts recharacterized) shall be
treated as annual additions under the plan.
Determination of Income or Loss: Excess Contributions shall be
adjusted for any income or loss up to the date of distribution. The
income or loss allocable to Excess Contributions is the sum of: (1)
income or loss allocable to the participant's Elective Deferral
account (and, if applicable, the Qualified Nonelective Contribution
account or the Qualified Matching Contribution account or both) for
the Plan Year multiplied by a fraction, the numerator of which is
such participant's Excess contributions for the year and the
denominator is the participant's account balance attributable to
Elective Deferrals (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if any of such
contributions are included in the ADP test) without regard to any
income or loss occurring during such Plan Year; and (2) ten percent
of the amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution
occurs after the 15th of such month.
Accounting for Excess Contributions: Excess Contributions shall be
distributed from the participant's Elective Deferral account and
Qualified Matching Contribution account (if applicable) in proportion
to the participant's Elective Deferrals and Qualified Matching
Contributions (to the extent used in the ADP test) for the Plan Year.
Excess Contributions shall be distributed from the participant's
Qualified Nonelective Contribution account only to the extent that
such Excess Contributions exceed the balance in the participant's
Elective Deferral account and Qualified Matching Contribution
account.
13.08 "MATCHING CONTRIBUTIONS"
If elected by the employer in the adoption agreement, the employer
will make Matching Contributions to the plan.
13.09 "QUALIFIED MATCHING CONTRIBUTIONS"
If elected by the employer in the adoption agreement, the employer
will make Qualified Matching Contributions to the plan.
13.10 "LIMITATIONS ON MATCHING CONTRIBUTIONS"
The ACP for participants who are Highly Compensated Employees for
each Plan Year and the ACP for participants who are Nonhighly
Compensated Employees for the same Plan Year must satisfy one of the
following tests:
(A) The ACP for participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for
participants who are Nonhighly Compensated Employees for
the same Plan Year multiplied by 1.25; or
(B) The ACP for participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for
participants who are Nonhighly Compensated Employees for
the same Plan Year multiplied by two (2), provided that
the ACP for participants who are Highly Compensated
Employees does not exceed the ACP for participants who
are Nonhighly Compensated Employees by more than two (2)
percentage points.
SPECIAL RULES:
1. Multiple Use: If one or more Highly Compensated
Employees participate in both a CODA and a plan
subject to the ACP test maintained by the
employer and the sum of the ADP or ACP of those
Highly Compensated Employees subject to either
or both tests exceeds the Aggregate Limit, then
the ACP of those Highly Compensated Employees
who also participate in a CODA will be reduced
(beginning with such Highly Compensated Employee
whose ACP is the highest) so that the limit is
not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage
Amounts is reduced shall be treated as an Excess
Aggregate Contribution. The ADP or ACP of the
Highly Compensated Employees are determined
after any corrections required to meet the ADP
or ACP tests. Multiple use does not occur if
either the ADP or ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the
ADP or ACP of the Nonhighly Compensated
Employees.
2. For purposes of this Section, the Contribution
Percentage for any participant who is a Highly
Compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his
or her account under two or more plans described
in Section 401(a) of the Code, or arrangements
described in Section 401(k) of the Code that are
maintained by the employer, shall be determined
as if the total of such Contribution Percentage
Amounts was made under each plan. If a Highly
Compensated Employee participates in two or more
cash or deferred arrangements that have
different plan years, all cash or deferred
arrangements ending with or within the same
calendar year shall be treated as a single
arrangement.
35
<PAGE>
3. In the event that this plan satisfies the
requirements of Sections 401(m), 401(a)(4) or
410(b) of the Code only if aggregated with one
or more other plans, or if one or more other
plans satisfy the requirements of such sections
of the Code only if aggregated with this plan,
then this Section shall be applied by
determining the Contribution Percentage of
employees as if all such plans were a single
plan. For plan years beginning after December
31, 1989, plans may be aggregated in order to
satisfy Section 401(m) of the Code only if they
have the same Plan Year.
4. For purposes of determining the Contribution
percentage of a participant who is a
five-percent owner or one of the most highly
paid Highly Compensated Employees, the
Contribution Percentage Amounts and Compensation
of such participant shall include the
Contribution Percentage Amounts and Compensation
for the Plan Year of Family Members (as defined
in Section 414(g)(6) of the Code). Family
Members, with respect to Highly Compensated
Employees, shall be disregarded as separate
employees in determining the Contribution
Percentage both for participants who are
Nonhighly Compensated Employees and for
participants who are Highly Compensated
Employees.
5. For purposes of determining the Contribution
Percentage test, Employee Contributions are
considered to have been made in the Plan Year in
which contributed to the trust. Matching
Contributions and Qualified Nonelective
Contributions will be considered made for a Plan
Year if made no later than the end of the
twelve-month period beginning on the day after
the close of the Plan Year.
6. The employer shall maintain records sufficient
to demonstrate satisfaction of the ACP test and
the amount of Qualified Nonelective
Contributions or Qualified Matching
Contributions, or both, used in such test.
7. The determination and treatment of the
Contribution Percentage of any participant shall
satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
13.11 "DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS"
Notwithstanding any other provision of this plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each Plan
Year to participants whose accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. Excess
Aggregate Contributions shall be allocated to participants who are
subject to the family member aggregation rules of Section 414(g)(6)
of the Code in the manner prescribed by the regulations. If such
Excess Aggregate Contributions are distributed more than 2-1/2 months
after the last day of the Plan Year in which such excess amounts
arose, a ten (10) percent excise tax will be imposed on the employer
maintaining the plan with respect to those amounts. Excess Aggregate
Contributions shall be treated as annual additions under the plan.
Determination of Income or Loss: Excess Aggregate Contributions shall
be adjusted for any income or loss up to the date of distribution.
The income or loss allocable to Excess Aggregate Contributions is the
sum of: (1) income or loss allocable to the participant's Employee
Contribution account, Matching Contribution account (if any, and if
all amounts therein are not used in the ADP test) and, if applicable,
Qualified Nonelective Contribution account and Elective Deferral
account for the Plan Year multiplied by a fraction, the numerator of
which is such participant's Excess Aggregate Contributions for the
year and the denominator is the participant's account balance(s)
attributable to Contribution Percentage Amounts without regard to any
income or loss occurring during such Plan Year; and (2) ten percent
of the amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution
occurs after the 15th of such month.
Accounting for Excess Aggregate Contributions: Excess Aggregate
Contributions shall be distributed on a pro rata basis from the
participant's Matching Contribution account and qualified Matching
Contribution account (and, if applicable, the participant's Qualified
Nonelective Contribution account or Elective Deferral account, or
both).
Such determination shall be made after first determining Excess
Elective Deferrals pursuant to Section 13.03(10) and then
determining Excess Contributions pursuant to Section 13.03(9).
13.12 "QUALIFIED NONELECTIVE CONTRIBUTIONS"
The employer may elect to make Qualified Nonelective Contributions
under the plan on behalf of employees as provided in the adoption
agreement.
In addition, in lieu of distributing Excess Contributions as provided
in Section 13.07 of the plan, or Excess Aggregate Contributions as
provided in Section 13.11 of the plan, and to the extent elected by
the employer in the adoption agreement, the employer may make
Qualified Nonelective Contributions on behalf of Nonhighly
Compensated Employees that are sufficient to satisfy either the
Actual Deferral Percentage test or the Average Contribution
Percentage test, or both, pursuant to regulations under the Code.
36
<PAGE>
PLAN DOCUMENT
13.13 "DISTRIBUTION REQUIREMENTS"
Elective Deferrals, Qualified Nonelective Contributions, and
Qualified Matching Contributions, and income allocable to each are
not distributable to a participant or his or her beneficiary or
beneficiaries, in accordance with such participant's or beneficiary
or beneficiaries election, earlier than upon separation from service,
death, or disability.
Such amounts may also be distributed upon:
1. Termination of the plan without the establishment of
another defined contribution plan.
2. The disposition by a corporation to an unrelated
corporation of substantially all of the assets (within
the meaning of Section 409(d)(2) of the Code) used in a
trade or business of such corporation if such corporation
continues to maintain this plan after the disposition,
but only with respect to employees who continue
employment with the corporation acquiring such assets.
3. The disposition by a corporation to an unrelated entity
of such corporation's interest in a subsidiary (within
the meaning of Section 409(d)(3) of the Code) if such
corporation continues to maintain this plan, but only
with respect to employees who continue employment with
such subsidiary.
4. The attainment of age 59-1/2.
All distributions that may be made pursuant to one or
more of the foregoing distributable events are subject to
the spousal and participant consent requirements (if
applicable) contained in Sections 401(a)(11) and 417 of
the Code.
37
<PAGE>
IRS Letters
Serial No. D257426a
Serial No. D257427a
Dated: 3/19/91
<PAGE>
AMENDATORY AGREEMENT
Adoption of 401(a)(31) Model Amendment (Revenue Procedure 93-12)
Kemper Growth Fund, as Prototype Plan Sponsor ("Sponsor"), makes this
Amendatory Agreement to the Kemper Retirement Plan Prototype.
WITNESSETH
WHEREAS, it is necessary to amend the Prototype Plan basic plan
document to provide plan participants with the option of electing a direct
transfer of any eligible rollover distribution to an eligible retirement plan;
and
WHEREAS, the Prototype Plan gives the Sponsor authority, without the
approval of any adopting employer, to make amendments necessary to conform the
Prototype Plan to any requirement for qualification under the Internal Revenue
Code.
NOW THEREFORE, in consideration of the above premises, the Sponsor as
designated agent for all sponsoring organizations for purposes of making plan
amendments hereby amends the Prototype Plan to include the following amendment,
as an appendix to the basic plan document. This amendment, which is identical
to the model language in the Appendix of Revenue Procedure 93-12, applies to
any plan maintained by an employer under the Prototype Plan.
APPENDIX TO BASIC PLAN DOCUMENT
ARTICLE VI
6.02(C). THIS ARTICLE APPLIES TO DISTRIBUTIONS MADE ON OR AFTER JANUARY 1,
1993.
Notwithstanding any provision of the plan to the contrary that would
otherwise limit a distributee's election under the Article, a Distributee may
elect, at the time and in the manner prescribed by the plan administrator, to
have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.
6.02(D). DEFINITIONS.
(1) ELIGIBLE ROLLOVER DISTRIBUTION: An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include: any distribution that is on of a series of substantially equal
periodic payments (not less frequently than annually) make for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(2) ELIGIBLE RETIREMENT PLAN: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
(3) DISTRIBUTEE: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving spouse
and the employee's or former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
section 414(p) of the Code, are distributees with regard to the interest of the
spouse or former spouse.
(4) DIRECT ROLLOVER: A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributee.
With respect to each adopting employer's plan maintained under this Prototype
Plan, this amendment is effective as of January 1, 1993.
IN WITNESS WHEREOF, the Sponsor has executed this Amendatory Agreement on the
20th day of January, 1993.
Kemper Growth Fund
By /s/ Paul Murphy
-----------------------------------------------------------
"Sponsor's" Authorized Representative
<PAGE>
APPENDIX ARTICLE B
RESOLVED, that Kemper Growth Fund ("Sponsor"), in its capacity as a prototype
sponsoring organization under IRS Revenue Procedure 89-9, amend the Prototype
Plan basic plan document by adopting Appendix Article B, a copy of which is
attached to this resolution. The amendment will be effective for all adopting
employers of the Prototype Plan for plan years beginning after December 31,
1993.
Adopted this seventeenth day of February, 1994.
Kemper Financial Services, Inc.
By: Paul Murphy
-------------------------------------------
*Sponsor's Authorized Representative
ARTICLE B
APPENDIX TO BASIC PLAN DOCUMENT
This Article is necessary to comply with the Omnibus Budget
Reconciliation Act of 1993 (OBRA '93) and is an integral part of the basic plan
document. Section 11.07 applies to any modification or amendment of this
Article.
In addition to other applicable limitations set forth in the plan,
and notwithstanding any other provision of the plan to the contrary, for plan
years beginning on or after January 1, 1994, the annual compensation of each
employee taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding
12 months, over which compensation is determined (determination period)
beginning in such calendar year. If a determination period consists of fewer
than 12 months, the OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the determination
period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference
in this plan to the limitation under Section 401(a)(17) of the Code shall mean
the OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan
year, the compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the first
day of the first plan year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
<PAGE>
Kemper Financial Services, Inc.
120 South LaSalle Street
Chicago, IL 60603
<PAGE>
INDIVIDUAL RETIREMENT TRUST ACCOUNT FORM (UNDER SECTION 408(a) OF THE
INTERNAL REVENUE CODE)
KEEP FOR YOUR RECORDS.
FORM 5305 DO NOT FILE WITH
INDIVIDUAL RETIREMENT TRUST ACCOUNT INTERNAL REVENUE
(REV. OCTOBER 1992) SERVICE
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
<TABLE>
<S><C>
State of } SS / / Amendment
----------------------------------------------------------------------------
County of
---------------------------------------------------------------------------
Grantor's name Grantor's date of birth
--------------------------------- --------------------------------------
Grantor's address Grantor's social security number
------------------------------ ----------------------------
Trustee's name INVESTORS FIDUCIARY TRUST COMPANY
------------------------------------------------------------------------------------------------
Trustee's address or principal place of business KANSAS CITY, MISSOURI
--------------------------------------------------------------
</TABLE>
The Grantor whose name appears above is establishing an Individual Retirement
Account under section 408(a) to provide for his or her retirement and for the
support of his or her beneficiaries after death. The Trustee named above has
given the Grantor the disclosure statement required under Regulations section
1.406-6. The Grantor has assigned the trust __________ dollars ($_______) in
cash. The Grantor and the Trustee made the following agreement:
ARTICLE I
The Trustee may accept additional cash contributions on behalf of the Grantor
for a tax year of the Grantor. The total cash contributions are limited to
$2,000 for the tax year unless the contribution is a rollover described in
section 402(c) (but only after December 31, 1992), 403(a)(4), 403(b)(8),
408(d)(3), or an employer contribution to a simplified employee pension plan as
described in section 408(1). Rollover contributions before January 1, 1993,
include rollovers described in section 402(a)(5), 402(a)(7), 403(a)(4),
403(b)(8), 408(d)(3) or an employer contribution to a simplified employee
pension plan described in section 408(k).
ARTICLE II
The Grantor's interest in the balance in the trust account is nonforfeitable.
ARTICLE III
1. No part of the trust funds may be invested in life insurance contracts, nor
may the assets of the trust account be commingled with other property except in
a common trust fund or common investment fund (within the meaning of section
408(a)(5).
2. No part of the trust funds may be invested in collectibles (within the
meaning of section 408(m).
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Grantor's interest in the trust account shall be made in
accordance with the following requirements and shall otherwise comply with
section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section
1. 401(a)(9)-2, the provisions of which are herein incorporated by reference.
2. Unless otherwise elected by the time distributions are required to begin to
the Grantor under paragraph 3, or to the surviving spouse under paragraph 4,
other than in the case of a life annuity, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the Grantor and
the surviving spouse and shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be recalculated.
3. The Grantor's entire interest in the trust account must be, or begin to be,
distributed by the Grantor's required beginning date, April 1 following the
calendar year end in which the Grantor reaches age 70 1/2. By that date, the
Grantor may elect, in a manner acceptable to the trustee, to have the balance
in the trust account distributed in:
(A) A single sum payment.
(B) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the grantor.
(C) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Grantor and his or her designated beneficiary.
(D) Equal or substantially equal annual payments over a specified period that
may not be longer than the Grantor's life expectancy.
(E) Equal or substantially equal payments over a specified period that may not
be longer than the joint life and last survivor expectancy of the Grantor and
his or her designated beneficiary.
4. If the Grantor dies before his or her entire interest is distributed to him
or her, the entire remaining interest will be distributed as follows:
(A) If the Grantor dies on or after distribution of his or her interest has
begun, distribution must continue to be made in accordance with paragraph 3.
(B) If the Grantor dies before distribution of his or her interest has begun,
the entire remaining interest will, at the election of the Grantor or, if the
Grantor has not so elected, at the election of the beneficiary or
beneficiaries, either
(I) Be distributed by the December 31 of the year containing the fifth
anniversary of the Grantor's death, or
(II) Be distributed in equal or substantially equal payments over the life or
life expectancy of the designated beneficiary or beneficiaries starting by
December 31 of the year following the year of the Grantor's death. If, however,
the beneficiary is the Grantor's surviving spouse, then this distribution is
not required to begin before December 31 of the year in which the Grantor would
have turned age 70 1/2.
(C) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has irrevocably
commenced, distributions are treated as having begun on the Grantor's required
beginning date, even though payments may actually have been made before that
date.
(D) If the Grantor dies before his or her entire interest has been distributed
and if the beneficiary is other than the surviving spouse, no additional cash
contributions or rollover contributions may be accepted in the account.
5. In the case of a distribution over life expectancy in equal or substantially
equal annual payments, to determine the minimum annual payment for each year,
divide the Grantor's entire interest in the trust as of the close of business
on December 31 of the preceding year by the life expectancy of the Grantor (or
the joint life and last survivor expectancy of the Grantor and the Grantor's
designated beneficiary, or the life expectancy of the designated beneficiary,
whichever applies). In the case of distributions under paragraph 3, determine
the initial life expectancy (or joint life and last survivor expectancy) using
the attained ages of the Grantor and designated beneficiary as of their
birthdays in the year the Grantor reaches age 70 1/2. In the case of a
distribution in accordance with paragraph 4(b)(ii), determine life expectancy
using the attained age of the designated beneficiary as of the beneficiary's
birthday in the year distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
<PAGE>
INDIVIDUAL RETIREMENT TRUST ACCOUNT FORM (CONTINUED)
ARTICLE V
1. The Grantor agrees to provide the Trustee with information necessary for the
Trustee to prepare any reports required under section 408(i) and Regulations
1.408-5 and 1.408-6.
2. The Trustee agrees to submit reports to the Internal Revenue Service and the
Grantor as prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and related
regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time to comply with the provisions
of the Code and related regulations. Other amendments may be made with the
consent of the persons whose signature appear below.
ARTICLE VIII
1. DEFINITIONS: "Designated Investment Company" shall mean any Kemper Mutual
Fund, or any other registered investment company with the same investment
advisor or principal underwriter, if certified to the Trustee as being
available for investment pursuant to this trust.
2. INVESTMENT OF ACCOUNT ASSETS: The amount of each contribution shall be
applied to the purchase of shares of a Designated Investment Company at the
price and in the manner in which such shares are then being publicly offered by
such investment company. All dividends and capital gain distributions received
on the shares of a Designated Investment Company other than Kemper Bond
Enhanced Securities Trust shall be reinvested in such shares. Any distributions
from the Kemper Bond Enhanced Securities Trust shall be invested in one of the
other Designated Investment Companies set forth in the prospectus and selected
by the Grantor, or in the absence of a selection will be invested in the Kemper
Money Market Fund-Government Securities Portfolio.
3. DISTRIBUTIONS: Notwithstanding the provisions of Article IV, if the Grantor
or a beneficiary does not choose a method of distribution in accordance with
Article IV, the Trustee is authorized, but is not required, to elect a
distribution option other than a single sum payment, to make distributions
pursuant to such election in kind, and to liquidate sufficient shares of a
Designated Investment Company to withhold federal income tax from distributions
as required by law. Further, the Trustee shall not be responsible for any
distribution or failure to distribute in the absence of written instructions
acceptable to the Trustee from the Trustee from the Grantor or beneficiary in
accordance with Article IV including, but not limited to, any tax or penalty
resulting from such distribution or failure to distribute.
4. AMENDMENT AND TERMINATION: The Grantor may, at any time, and from time to
time, terminate the Trust in whole or in part by delivering to the Trustee a
signed written copy of such termination and the Grantor delegated to the
Trustee the right to amend the Trust (including retroactive amendments) by
written notice to the Grantor mailed to his last address known to the Trustee,
and the Grantor shall be deemed to have consented to any such amendment,
provided that no amendment shall cause or permit any part of the asset of the
Trust Account to be diverted to purposes other than for the exclusive benefit
of the Grantor or beneficiaries, and no amendment shall be made except in
accordance with any applicable laws and regulations affecting this Trust.
5. RESIGNATION OR REMOVAL OF TRUSTEE: The Trustee may resign at any time upon
thirty (30) days of notice in writing to the Grantor, and may be removed by the
Grantor at any time upon thirty (30) days notice in writing to the Trustee.
Upon such resignation or removal, the Grantor shall appoint a successor
Trustee, which successor shall be a "bank" as defined in section 408(n). Upon
receipt by the Trustee of written acceptance of such appointment by the
successor Trustee, the Trustee shall transfer and pay over to such successor
the assets of the Trust Account and all records pertaining thereto. The Trustee
is authorized, however, to reserve such sum of money as it may deem advisable
for payment of all its fees, compensation, costs and expenses, or for payment
of any other liability constituting a charge on or against the assets of the
Trust Account or on or against the Trustee, which any balance of such reserve
remaining after the payment of such items to be paid over to the successor
Trustee. The successor Trustee shall hold the assets paid over to it under
terms similar to those of this Agreement that qualify under the provisions of
the Internal Revenue Code. If within thirty (30) days after the Trustee's
resignation or removal the Grantor has not appointed a successor trustee, which
has accepted with appointment, the Trustee shall appoint such successor itself.
6. TRUSTEE'S ANNUAL FEES: The Grantor shall be charged by the Trustee for its
services here-under in such amount as the Trustee shall establish from time to
time. Sufficient shares may be liquidated from the Trust Account to pay the
fee. The annual fee in effect on the date of this agreement is set forth in the
Application Guide. A different fee may be substituted at any time upon written
notice to the Grantor. A Grantor who does not consent to such new fee should
terminate this agreement pursuant to Paragraph 4 of Article IX within 30 days
of the notice to the new fee. If no such termination is made within 30 days of
the notice of the new fee, the Grantor will be deemed to have consented to the
new fee.
7. STATE LAW REQUIREMENTS: This Trust shall be construed, administered and
enforced according to the laws of the State of Missouri.
8. EXCESS CONTRIBUTIONS: If, because of an erroneous assumption as to earned
income for any other reason, a contribution which is an excess contribution is
made on behalf the Grantor for any year, adjustment of such excess contribution
shall be in accordance with the provisions of this paragraph. The full amount
of such excess contribution and net income attributable thereto shall be
distributed to the Grantor, in cash or kind upon written notice to the Trustee
from the Grantor which states the amount of such excess contribution.
9. INALIENABILITY OF BENEFITS: The benefits provided hereunder shall not be
subject to alienation, assignment, garnishment, attachment, execution or levy
of any kind, and any attempt to cause such benefits to be subjected shall not
be recognized, except to such extent as may be required by law.
10. EXCHANGE PRIVILEGE: With respect to any of the Designated Investment
Company shares, the Grantor may, upon submission of written instructions
acceptable to the Trustee, cause such shares to be exchanged for shares of any
other Designated Investment Company meeting the requirements of this Trust upon
the terms and within the limitations imposed by the then current prospectus of
such investment company.
11. DESIGNATION OF BENEFICIARY: The Grantor shall have the right, by written
notice to the Trustee, to designate or change a beneficiary to receive any
benefit to which such Grantor may be entitled in the event of the Grantor's
death prior to the complete distribution of such benefit. If no such designation
is in effect on a Grantor's death, the beneficiary shall be the Grantor's
estate.
12. RESPONSIBILITY AS TO CONTRIBUTIONS OR DISTRIBUTIONS: Neither the Trustee
nor the Designated Investment Company will under any circumstances be
responsible for the timing, purpose or propriety of any contribution or of any
distribution made hereunder, nor shall the Trustee or the Designated Investment
Company incur any liability or responsibility for any tax imposed account of
any such contribution or distribution. Without limiting the generality of the
foregoing, neither the Trustee nor the Designated Investment Company is
obligated to make any distribution absent a specific direction from the Grantor
or the designated beneficiary to do so.
[KEMPER MUTUAL FUNDS LOGO]
INVESTMENT MANAGER:
Kemper Financial Services, Inc.
PRINCIPAL UNDERWRITER:
Kemper Distributors, Inc.
120 South LaSalle Street
Chicago, Illinois 60603
Trustee Signature INVESTORS FIDUCIARY TRUST COMPANY Grantor's Signature
- --------------------------------------------------------------------------------
IRA-10B 2/95 203932
<PAGE>
IRA DISCLOSURE STATEMENT IMPORTANT--PLEASE RETAIN
IRAs: AN INTRODUCTION
WHAT IS AN IRA?
Your Individual Retirement Account (IRA) is a trust created for the exclusive
benefit of you and your beneficiaries. It is created by a written instrument
that meets the following requirements:
- - Contribution restrictions stated in Article I of the trust instrument.
- - Investment restrictions stated in Article III of the trust instrument.
- - Distribution of benefits requirements contained in Article IV of the trust
instrument.
- - The trustee is a bank as defined in the Internal Revenue Code.
- - You will have a non-forfeitable interest in your account.
ESTABLISHING THE PLAN
HOW DO I ESTABLISH MY KEMPER IRA?
Read this disclosure statement and retain it for your files.
Complete and sign the correct application. (2 applications are necessary if
both you and your spouse wish to establish an IRA).
MAKE CHECK PAYABLE TO THE KEMPER FUND OF YOUR CHOICE, AND MAIL COMPLETED
APPLICATION AND CONTRIBUTION TO:
INVESTORS FIDUCIARY TRUST COMPANY (IFTC)
P.O. BOX 419356
KANSAS CITY, MO 64141-6356
MAY I REVOKE MY IRA?
You have the right to revoke your account within seven days of the date on
which your application was signed. To revoke your account write to IFTC at the
address referenced above.
ELIGIBILITY
WHO CAN ADOPT AN IRA?
You may adopt an IRA if you are receiving compensation from employment,
earnings from self-employment or alimony, and have not attained age 70 1/2. You
may also adopt an IRA if you have received a qualifying rollover distribution
from another plan within the preceding 60 days or if you wish to transfer
assets from another IRA. See "Rollover/Transfer of Assets" section on the
following page.
WHAT ABOUT A NON-WORKING SPOUSE?
A spousal IRA allows an individual who qualifies for an IRA and his or her
non-working spouse to set up two IRA accounts: one for each spouse. See
"Contribution Limits" section below.
CONTRIBUTION LIMITS
HOW MUCH CAN I CONTRIBUTE EACH YEAR?
If you are receiving compensation you may contribute the lesser of $2,000 or
100% of your compensation.
For a year in which you are receiving compensation, but your spouse is not, you
can set up an IRA for your spouse and contribute the lesser of: $2,250 or 100%
of your compensation. The maximum contribution must be split between the two
accounts so that no more than $2,000 is placed in either account.
No contribution will be allowed for the year in which you attain age 70 1/2 and
thereafter.
FOR MY IRA, WHAT IS CONSIDERED COMPENSATION?
Compensation is defined as wages, salaries or professional fees, other amounts
received for personal services actually rendered (including income earned from
self-employment), and any taxable alimony received. It does not include earnings
from property such as interest, rents and dividends. If your compensation is
not includable in gross income (such as income earned from sources outside the
United States, it is not treated as compensation in determining the maximum
limitation for the deduction.
WHEN CAN A CONTRIBUTION BE MADE?
Your annual contribution may be made during the taxable year or no later than
the due date for filing your federal income tax return not including extensions.
WHAT HAPPENS IF I OVER-CONTRIBUTE TO MY IRA?
There is a 6% annual excise tax on contributions to an IRA over the annual
contributions limit. However, if you withdraw the excess contribution and
earnings thereon from the IRA before the due date for filing your federal
income tax return (including extensions) for the year of the excess
contribution, the excise tax is not imposed, the withdrawn contribution is not
taxable and the withdrawn earnings are taxable in the year the excess
contribution was made.
If the excess is not withdrawn, you may use the excess as part of next year's
contribution by reducing the next year's contribution by the amount of the
excess. You will, however, be liable for the 6% excise tax on the
over-contributed amount for each year it remains an excess contribution.
HOW DOES MY MARITAL STATUS AFFECT MY IRA?
Since a contribution is available to each eligible individual, both husband
and wife can contribute if each individually is eligible and each adopts a
separate individual retirement savings program. The contribution limitation is
computed separately for each spouse, whether or not they file a joint tax
return.
CAN MY EMPLOYER CONTRIBUTE TO MY IRA?
Yes, but these contributions are included in your gross income as compensation
and must be claimed as a deduction on your federal income tax return, just as
if you had received the money and made the contribution.
DEDUCTION LIMITS
HOW MUCH CAN I DEDUCT EACH YEAR?
If you and your spouse are not covered by a retirement plan at work, the
amount you can deduct is the same as the amount you can contribute (see
"Contribution Limit" above). If you or your spouse are covered by a retirement
plan at work, the $2,000 limit is reduced $10 for each $50 that your adjusted
gross income exceeds:
$40,000 (married filing jointly), $25,000 (single), or $0 (married filing
separately), and the $2,250 limit is reduced $10 for each $44.44 that your
adjusted gross income exceeds $40,000.
DISTRIBUTION FROM YOUR IRA
WHEN CAN I TAKE MONEY OUT OF MY IRA?
You can begin to take money out of your IRA without penalty after age 59 1/2,
but you must begin to take money out by April 1 following the year in which you
attain age 70-1/2.
WHAT IF I TAKE A DISTRIBUTION BEFORE AGE 59 1/2?
There is an additional tax equal to 10% of the taxable amount of a distribution
before age 59 1/2, unless you are disabled or take your distributions as a
series of substantially equal periodic payments over your life or life
expectancy or the joint lives or life expectancies of you and your beneficiary.
The amounts of such periodic payments may not be changed before the later of
five years or at attainment of age 59 1/2.
HOW ARE MY DISTRIBUTIONS TAXED?
The distributions are generally taxed as ordinary income in the year they are
received. Distributions are non-taxable to the extent they represent a return
of non-deductible contributions.
The non-taxable percentage of such a distribution is determined by dividing
the undistributed non-deductible contributions to all your IRAs by the total
value of all your IRAs (including SEPs and rollover IRAs).
DO I HAVE A CHOICE ON HOW TO RECEIVE MY DISTRIBUTIONS UPON RETIREMENT?
Yes, subject to the minimum distribution incidental benefit (MDIB) requirement
described below, distributions may be taken as:
- - Regular payments over the joint lives or life expectancies of you and your
designated beneficiary.
- - An annuity purchased with the money in your IRA payable over the joint lives
or life expectancies of you and your beneficiary.
- - Annuity or regular payments over any period shorter than the above.
- - A lump sum.
WHAT IS THE MINIMUM ANNUAL DISTRIBUTION?
The amount to be distributed for each year (commencing with the year in which
you attain age 70 1/2) must be at least an amount equal to the quotient
obtained by dividing the value of the IRA by your life expectancy or by the
joint and last survivor life expectancy of you and your designated beneficiary,
subject to the MDIB requirement described on the next page. The minimum
distribution for the year in which you attain age 70 1/2 may be deferred until
April 1 of the following year. Note that if you elect to defer the minimum
distribution for the year you attain age 70 1/2 to the following year, you will
be required to take 2 years' minimum distributions in that year. Life expectancy
and joint and last survivor expectancy are computed by use of the tables
contained in IRS Publication 590. For purposes of this computation, the life
expectancy of you or your spouse may be recalculated annually, while the life
expectancy of a nonspouse beneficiary may not be recalculated.
<PAGE>
IRA DISCLOSURE STATEMENT (CONTINUED)
WHAT IS THE MINIMUM DISTRIBUTION INCIDENTAL BENEFIT (MDIB) REQUIREMENT?
The MDIB Requirement requires that a death benefit under an IRA be incidental
to the primary purpose of the IRA which is to provide your retirement benefits.
Thus, if your designated beneficiary is more than 10 years younger, you must
assume he or she is exactly 10 years younger than you to determine your joint
and last survivor life expectancy.
WHAT IF I HAVE MORE THAN ONE IRA?
If you have more than one IRA, you may take the total amount of your minimum
distribution amounts from one IRA or you may allocate it among your IRAs.
WHAT IF I TAKE AN AMOUNT LESS THAN DESCRIBED ABOVE?
A 50% excise tax will be imposed on the difference between the minimum payout
required and the amount actually paid, unless the underdistribution was due to
reasonable cause.
WHAT ABOUT FEDERAL INCOME TAX WITHHOLDING?
The Trustee may be required to withhold 10% from any taxable distribution from
an IRA unless you elect no withholding at the time your distributions begin.
Whether or not you allow the Trustee to withhold, you may be required to make
quarterly estimated tax payments.
SPECIAL CONSIDERATIONS
CAN I USE MY IRA AS COLLATERAL FOR A LOAN?
No. If you use any portion of your IRA as security for a loan the portion so
used will be treated as distributed to you.
HAS THIS PLAN BEEN SUBMITTED TO THE IRS FOR APPROVAL?
The use of IRS Form 5305 (included in this packet) makes such submission
unnecessary.
ROLLOVER/TRANSFER OF ASSETS DO DISTRIBUTIONS FROM MY EMPLOYER'S TAX-QUALIFIED
PLAN QUALIFY FOR IRA ROLLOVER TREATMENT?
Yes, part or all of a lump-sum distribution or a series of distributions if
made during one calendar year as the result of termination of employment,
attainment of age 59 1/2, disability, death, or plan termination may be rolled
over into an IRA.
You do not have to roll over the total taxable amount of the distribution, but
whatever portion is not rolled over will be taxed as ordinary income in the
year received and will not qualify for either long-term capital gains or
special averaging. The maximum amount that can be rolled over is the total
distribution minus the dollar amount of any voluntary non-deductible
contributions you made.
Please consult your accountant regarding current IRS regulations on the tax
treatment of rollovers from tax-qualified plans.
WHEN MUST THE ROLLOVER BE COMPLETED?
The check and application must be sent to the IRA trustee within 60 days of
receipt of a qualifying distribution.
CAN I TAKE A TAX DEDUCTION FOR A ROLLOVER?
No. You are not allowed to take a tax deduction for the amount transferred
from a qualified employer's plan or retirement savings program to an IRA.
WHAT IS THE DIFFERENCE BETWEEN A ROLLOVER AND A DIRECT TRANSFER OF ASSETS?
With a rollover, you actually receive the distribution from an IRA or qualified
employer's plan. A direct transfer of assets occurs when the existing trustee or
custodian makes the check payable and sends the distribution directly to the
new trustee or custodian.
A rollover distribution from an IRA may be made to you only once a year. The
one year period begins on the date you receive the IRA distribution. There is
no minimum holding period for a direct transfer of assets from one trustee to
another.
WHAT STEPS DO I NEED TO TAKE TO PROCESS A ROLLOVER OR DIRECT TRANSFER OF
ASSETS?
You can do a rollover by notifying your current IRA trustee or custodian in
writing that you wish to take a distribution from your IRA and roll over to a
new IRA. Once the distribution is received you may either endorse the check over
to the new trustee or deposit the check received and issue a new check for the
amount received to the new trustee and send it along with an IRA Application to
the new trustee.
To accomplish a direct transfer of assets, you simply notify your existing
trustee in writing of your intentions. Then send a copy of the letter along
with an IRA application to the new trustee. Your old trustee will send your
distribution directly to the new trustee.
REPORTING REQUIREMENTS
DOES THE IRA REQUIRE A LOT OF PAPERWORK EACH YEAR?
No, unless you have to pay an excise or penalty tax or you received a
nontaxable distribution or you made a nondeductible contribution (other than a
rollover), no special income tax return is required. If an excise or penalty tax
is due you must file IRS Form 5329 with your Form 1040. If you designate an IRA
contribution as nondeductible you must attach Form 8606 to your 1040 for the
year of the nondeductible contribution and for any year you take a
non-deductible distribution (other than a rollover to another IRA).
SIMPLIFIED EMPLOYEE PENSION PLAN (SEP)
DOES THE KEMPER IRA QUALIFY FOR A SEP?
Yes, but the SEP must be established and maintained by your employer. More
information about establishing a SEP is available from Kemper upon request.
WHAT IS THE MAXIMUM DEDUCTION FOR A SEP-IRA?
The lesser of 15% of your compensation with respect to the sponsoring employer
or $30,000.
FINANCIAL DISCLOSURE
WHAT ELSE DO I NEED TO KNOW ABOUT KEMPER'S IRAs?
Information about the fund or trust you have selected is included in the
appropriate prospectus. The acquisition cost and how the value of your account
changes are described in the prospectus.
A SHARES
If $1,000 is invested in Kemper Technology Fund, Kemper Total Return Fund,
Kemper Growth Fund, Kemper Small Capitalization Equity Fund, Kemper
International Fund or Kemper Blue Chip Fund, the amount of the sales charge
will be $57.50. If $1,000 is invested in Kemper Target Equity Funds, the amount
of the sales charge will be $50. If $1,000 is invested in Kemper High Yield
Fund, Kemper Income and Capital Preservation Fund, Kemper Diversified Income
Fund, Kemper Global Income Fund, Kemper U.S. Mortgage Fund or Kemper U.S.
Government Securities Fund, the amount of the sales charge will be $45. If
$1,000 is invested in Kemper Adjustable Rate U.S. Government Fund or Kemper
Short-Intermediate Government Fund, the amount of the sales charge will be $35.
If $1,000 is invested in Kemper Money Market Fund-Government Securities
Portfolio or Kemper Money Market Fund-Money Market Portfolio, there will be no
sales charge.
B SHARES
If $1,000 is invested in Kemper Mutual Funds B shares, there is no initial
sales charge. B shares are subject to an annual distribution fee and, on
redemption, may be subject to a contingent deferred sales charge and have a
conversion privilege to A shares after 6 years.
C SHARES
If $1,000 is invested in Kemper Mutual Funds C shares, there is no initial
sales charge. C shares are subject to an annual distribution fee and have no
conversion privilege.
There is an annual $12 trustee fee for the Kemper Family of Funds. An
individual holding two or more accounts in Kemper Family of Funds will be
charged a maximum of $24. The fees may be paid either by separate check or will
be automatically deducted from your account by IFTC. This fee is subject to
change as provided in Article IX, Paragraph 6 of the trust instrument. These
fees are paid either by a separate check or by the liquidation of sufficient
shares or units. If not paid by a separate check, IFTC will automatically
deduct the annual trustee fee on or about May 1. If an account is opened after
May 1, IFTC will deduct the $12 annual trustee fee on or about December 1 in
the year the account is opened. (See "Application Guide" for more details.)
This fee is subject to change upon notice by IFTC to you as provided in Article
IX, Paragraph 6 of the trust instrument.
The deadline for an IRA contribution is generally April 15 of the year
following the taxable year for which the contribution will apply. IFTC and
Kemper will not be responsible for postal delays or delays resulting from
incomplete applications. Applications received by IFTC postmarked after the
deadline and improperly completed applications will be returned to the sender.
IRA-10A 7/94 [KEMPER MUTUAL FUNDS LOGO]
203921
<PAGE>
<TABLE>
<S> <C>
IRA APPLICATION (PLEASE PRINT) FOR ASSISTANCE IN COMPLETING THIS FORM, CALL
KEMPER SHAREHOLDER SERVICES AT 1-800-621-1048.
1. INFORMATION ABOUT YOU For internal use only
Name ___________________________________________________________________________
Address ________________________________________________________________________
City _______________________________ State _____________________ Zip ___________
Daytime Phone Number(_____)_____________________________________________
Social Security Number ________/___________/_________ Date of Birth ____/____/____
2. YOUR BENEFICIARIES (PLEASE INCLUDE SOCIAL SECURITY NUMBERS FOR ALL BENEFICIARIES)
Primary Beneficiary Name _____________________________________ Secondary Beneficiary Name ________________________________________
Address ______________________________________________________ Address ___________________________________________________________
City _____________________________ State __________ Zip ______ City _____________________________ State _______________ Zip ______
Relationship__________________________________________________ Relationship ______________________________________________________
SS#_____________/_____/__________ Date of Birth ____/____/____ SS# _______________ /______ /__________ Date of Birth ____/____/____
3. TYPE OF IRA (CHECK ONLY ONE)
/ / Individual / / Simplified Employee Plan (SEP) / / Spousal
4. TYPE OF TRANSACTION (CHECK ALL BOXES THAT APPLY)
/ / Contribution: (CIRCLE ONE) A. Individual B. Employer (ONLY APPLIES TO SEPS)
/ / Direct Transfer of Assets (PLEASE ATTACH IRA TRANSFER FORM)
/ / Rollover from: (CIRCLE ONE) A. Another Annual B. Another IRA, where the initial contribution C. A Qualified
Contribution IRA was from a qualified retirement plan Retirement Plan
/ / I have reached the age of 59 1/2 and am eligible to take a distribution without tax penalty from my IRA: (CIRCLE ONE)
A. IRA Distribution Form B. Please send my
is attached dividends in cash
5. YOUR INVESTMENT CHOICES ($250 MINIMUM PER FUND TO ESTABLISH AN IRA. $50 IF NUMBER 7 [BANK DIRECT DEPOSIT] SELECTED.)
(SEE FRONT CARD FOR FUND NAMES. NOTE NUMBER 9 BELOW REGARDING RECEIPT OF PROSPECTUS.)
/ / A Shares / / B Shares / / C Shares 199___ 199___
(PLEASE CHOOSE SHARE CLASS) (CIRCLE ONE) (CIRCLE ONE)
Indiv/Employer Indiv/Employer
Contribution Contribution Rollover Transfer
Fund Name _____________________________ $__________ $__________ $__________ __________%
Fund Name _____________________________ $__________ $__________ $__________ __________%
Fund Name _____________________________ $__________ $__________ $__________ __________%
Trustee Fee (OPTIONAL) $____________
6. TELEPHONE EXCHANGES
I authorize exchanges between Kemper Mutual Funds upon instruction from any person by telephone. / / YES / / NO
NOTE: IF NEITHER BOX IS CHECKED, THE TELEPHONE EXCHANGE PRIVILEGE WILL BE PROVIDED.
7. BANK DIRECT DEPOSIT
I authorize the Fund's agent to draw checks or initiate Automated Clearing House ("ACH") debits against the bank account on the
attached voided check in the amount of $_____ (minimum $50), beginning on the ____ day of _____ month and on the same day of each
month thereafter. If the date falls on a weekend or holiday, funds will be invested on the next business day. The investment will be
applied to the following Fund account(s). A $50 minimum per Fund applies.
Fund Name ______________________________ $_______________ (NOTE: THE BANK ACCOUNT MUST
Fund Name ______________________________ $_______________ HAVE CHECK OR DRAFT WRITING
Fund Name ______________________________ $_______________ PRIVILEGES.)
8. YOUR FINANCIAL REPRESENTATIVE
Representative _____________________________ Name of Firm ________________________________________________________
Address_____________________________________ City __________________________ State __________________ Zip ________
Rep. Daytime Phone (___)___________ Rep.#____________ Dealer #______________ Branch #______________
9. YOUR SIGNATURE BY SIGNING THIS APPLICATION ESTABLISHING AN IRA, THE UNDERSIGNED:
- - Establishes an Individual Retirement Account pursuant to the Employee Retirement Income Security Act of 1974 and in accordance
with all the terms of the Trust Agreement on Form 5305;
- - Appoints Investors Fiduciary Trust Company, or its successors, as Trustee of the account;
- - States that he or she has received, read, accepts and specifically incorporates herein the Trust Agreement on Form 5305 and
Disclosure Statement;
- - Agrees to promptly give instructions to the Trustee necessary to enable the Trustee to carry out its duties under the Trust
Agreement and;
- - Agrees that he or she has received and read the prospectus for the investment(s) selected and that this account will be
subject to the prospectus as amended from time to time.
Under penalties of perjury, I certify that the number shown on this form is my correct social security number, and that I have not
been notified by the IRS that I am subject to back-up withholding. I certify that I have the power and authority to establish this
account and select the privileges requested. Account holders can request the following telephone privilege on this application:
telephone exchange transactions. Please note that the telephone exchange privilege is automatic unless the account holder refuses
it. Neither a Fund nor its agents will be liable for any loss, expense or cost arising out of any telephone request pursuant to
this privilege, including any fraudulent or unauthorized request, and THE ACCOUNT HOLDER WILL BEAR THE RISK OF LOSS, so long as the
Fund or its agent reasonably believes, based upon reasonable verification procedures, that the telephonic instructions are genuine.
The verification procedures include recording instructions, requiring certain identifying information before acting upon
instructions, and sending written confirmations.
Your Signature _________________________________________________ Date ____________________________________________________________
IRA-10 2/95 203911
</TABLE>
<PAGE>
IRA APPLICATION GUIDE
1. INFORMATION ABOUT YOU
Fill this section out completely.
2. YOUR BENEFICIARIES
You can change your beneficiaries by writing a letter of instruction to
Investors Fiduciary Trust Company, c/o Kemper Service Company, P.O. Box 419415,
Kansas City, MO 64141-6415. Reference your name, fund, and fund account number.
If you have more than one beneficiary, please identify the primary and
secondary beneficiary.
3. TYPE OF IRA
INDIVIDUAL: A working individual may contribute up to $2,000 or 100% of
compensation, whichever is less.
SIMPLIFIED EMPLOYEE PLAN (SEP): Must be established and maintained by the
employer. The maximum contribution is the lesser of 15% of your compensation
or $30,000. For more information on establishing a SEP, call Kemper
Shareholder Services at 1-800-621-1048.
SPOUSAL: Two applications are necessary if both you and your spouse wish to
establish an IRA. If you're contributing for both you and your non-working
spouse, the maximum contribution is the lesser of 100% of your compensation or
$2,250. The maximum contribution must be split between the two accounts so that
no more than $2,000 is placed in either account.
4. TYPE OF TRANSACTION
DIRECT TRANSFER OF ASSETS: When changing custodians on an existing IRA, the IRA
must be released by the present custodian. To obtain information concerning the
transfer of IRA assets call Kemper Shareholder Services at 1-800-621-1048.
ROLLOVER: With a rollover, you actually receive a distribution from an IRA, or
qualified employer's plan. Once the distribution is received, you may either
endorse the check over to the new trustee or deposit the check received and,
within 60 days of receipt, issue a new check for the amount received to the new
trustee and send it along with an IRA Application to the new trustee.
You may roll over your IRA as many times as you wish. However, each time you do
roll over, the funds must remain with the new trustee for at least 12 months.
(PLEASE NOTE: CONTACT YOUR ACCOUNTANT ABOUT THE TAX CONSEQUENCES OF RECEIVING
A CASH DISTRIBUTION FROM YOUR EMPLOYER'S TAX-QUALIFIED PLAN BEFORE
FORWARDING A CHECK TO KEMPER TO OPEN AN IRA. UNDER CURRENT IRS PROVISIONS, THERE
MAY BE TAX LIABILITY ASSOCIATED WITH TAKING PHYSICAL POSSESSION OF YOUR
DISTRIBUTION, INSTEAD OF AUTOMATICALLY TRANSFERRING YOUR BALANCE INTO A KEMPER
IRA).
5. YOUR INVESTMENT CHOICES
Elect your investment choice(s) from among the Kemper Funds for which you have
received a prospectus. The minimum investment to establish an IRA is $250 per
Fund; the minimum subsequent investment is $50. The minimum initial investment
is $50 per Fund if the Bank Direct Deposit option is selected.
TRUSTEE FEE
There is an annual $12 trustee fee for the Kemper Family of Funds.
An individual holding two or more accounts in Kemper Family of Funds will be
charged a maximum of $24. The fees may be paid either by separate check or will
be automatically deducted from your account by Investors Fiduciary Trust
Company. This fee is subject to change as provided in Article IX of the
Individual Retirement Trust Account Form.
WHEN AND HOW THE $12 FEE IS AUTOMATICALLY DEDUCTED
If the $12 annual trustee fee is not paid by separate check, Investors
Fiduciary Trust Company will automatically deduct the $12 fee from your
account. Annual trustee fees are assessed on a calendar year basis.
If you opened your account prior to May 1st of the calendar year, the fee will
be deducted on May 1st. If you opened your account after May 1st of that
calendar year, the $12 fee will be deducted on December 1st. In every calendar
year after the year in which you opened your account, the fee will be deducted
on May 1st.
WHAT TO DO IF YOU ELECT TO PAY THE $12 ANNUAL FEE DIRECTLY
- - You may pay the first year fee by including $12 with your first contribution
and making the proper entry in Section 5 of the IRA Application.
- - If you elect to send in the $12 annual fee by separate check in subsequent
years, make sure to do so prior to the May 1st automatic deduction. Send a
letter referencing the exact name on your account, the fund name and the
account number. Make your check payable to Investors Fiduciary Trust Company
and mail to Investors Fiduciary Trust Company, c/o Kemper Service Company, P.O.
Box 419356, Kansas City, MO 64141-6356.
6. TELEPHONE EXCHANGES
To make exchanges, call 1-800-621-1048. Please see the prospectus for exchange
privilege limitations. The exchange privilege may be modified, suspended or
terminated by a Fund.
7. BANK DIRECT DEPOSIT
With Bank Direct Deposit, you can make automatic contributions for as little as
$50 from your checking account into your Kemper IRA. There is no service
charge, no checks to write and it's a great way to invest for the future.
8. YOUR FINANCIAL REPRESENTATIVE
You must complete this section if you have a financial representative. The
information is necessary for proper identification of the account and can be
obtained from your representative.
9. YOUR SIGNATURE
Please be sure to sign and date this section.
10. RETURN YOUR APPLICATION
IF NOT A TRANSFER...
Mail the IRA APPLICATION, a check made payable to Kemper Fund of your choice
(and the IRA DISTRIBUTION FORM if applicable) to:
INVESTORS FIDUCIARY TRUST COMPANY - C/O KEMPER SERVICE COMPANY
P.O. BOX 419356 - KANSAS CITY, MO 64141-6356
FOR TRANSFERS ONLY...
Mail the IRA Application, IRA Transfer Form (and the IRA Distribution form if
applicable) to:
INVESTORS FIDUCIARY TRUST COMPANY - C/O KEMPER SERVICE COMPANY
P.O. BOX 419222 - KANSAS CITY, MO 64141-6222
FOR MORE INFORMATION
If you need further information, please contact your financial representative
directly or call Kemper Shareholder Services at 1-800-621-1048 7:00 a.m. to
6:00 p.m. Central Time (Monday-Friday) and 9:00 a.m. to 2:00 p.m. (Saturday).
If you have tax or legal questions, contact your tax advisor or any district
office of the IRS.
[KEMPER MUTUAL FUNDS LOGO]
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Charles F. Custer, Stephen B. Timbers and Philip J. Collora
and each of them, any of whom may act without the joinder of
the others, as his attorney-in-fact to sign and file on his
behalf individually and in the capacity stated below such
registration statements, amendments, post-effective
amendments, exhibits, applications and other documents with
the Securities and Exchange Commission or any other
regulatory authority as may be desirable or necessary in
connection with the public offering of shares of Kemper Money
Market Fund.
Signature Title Date
--------- ----- ----
/s/ Stephen B. Timbers Trustee October 12, 1995
- ---------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Charles F. Custer, Stephen B. Timbers and Philip J. Collora
and each of them, any of whom may act without the joinder of
the others, as his attorney-in-fact to sign and file on his
behalf individually and in the capacity stated below such
registration statements, amendments, post-effective
amendments, exhibits, applications and other documents with
the Securities and Exchange Commission or any other
regulatory authority as may be desirable or necessary in
connection with the public offering of shares of Kemper Money
Market Fund.
Signature Title Date
--------- ----- ----
/s/ David W. Belin Trustee October 12, 1995
- --------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Charles F. Custer, Stephen B. Timbers and Philip J. Collora
and each of them, any of whom may act without the joinder of
the others, as his attorney-in-fact to sign and file on his
behalf individually and in the capacity stated below such
registration statements, amendments, post-effective
amendments, exhibits, applications and other documents with
the Securities and Exchange Commission or any other
regulatory authority as may be desirable or necessary in
connection with the public offering of shares of Kemper Money
Market Fund.
Signature Title Date
--------- ----- ----
/s/ Lewis A. Burnham Trustee October 12, 1995
- --------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Charles F. Custer, Stephen B. Timbers and Philip J. Collora
and each of them, any of whom may act without the joinder of
the others, as his attorney-in-fact to sign and file on his
behalf individually and in the capacity stated below such
registration statements, amendments, post-effective
amendments, exhibits, applications and other documents with
the Securities and Exchange Commission or any other
regulatory authority as may be desirable or necessary in
connection with the public offering of shares of Kemper Money
Market Fund.
Signature Title Date
--------- ----- ----
/s/ Donald L. Dunaway Trustee October 12, 1995
- --------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Charles F. Custer, Stephen B. Timbers and Philip J. Collora
and each of them, any of whom may act without the joinder of
the others, as his attorney-in-fact to sign and file on his
behalf individually and in the capacity stated below such
registration statements, amendments, post-effective
amendments, exhibits, applications and other documents with
the Securities and Exchange Commission or any other
regulatory authority as may be desirable or necessary in
connection with the public offering of shares of Kemper Money
Market Fund.
Signature Title Date
--------- ----- ----
/s/ Robert B. Hoffman Trustee October 12, 1995
- --------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Charles F. Custer, Stephen B. Timbers and Philip J. Collora
and each of them, any of whom may act without the joinder of
the others, as his attorney-in-fact to sign and file on his
behalf individually and in the capacity stated below such
registration statements, amendments, post-effective
amendments, exhibits, applications and other documents with
the Securities and Exchange Commission or any other
regulatory authority as may be desirable or necessary in
connection with the public offering of shares of Kemper Money
Market Fund.
Signature Title Date
--------- ----- ----
/s/ Donald R. Jones Trustee October 12, 1995
- --------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Charles F. Custer, Stephen B. Timbers and Philip J. Collora
and each of them, any of whom may act without the joinder of
the others, as his attorney-in-fact to sign and file on his
behalf individually and in the capacity stated below such
registration statements, amendments, post-effective
amendments, exhibits, applications and other documents with
the Securities and Exchange Commission or any other
regulatory authority as may be desirable or necessary in
connection with the public offering of shares of Kemper Money
Market Fund.
Signature Title Date
--------- ----- ----
/s/ David B. Mathis Trustee October 12, 1995
- --------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Charles F. Custer, Stephen B. Timbers and Philip J. Collora
and each of them, any of whom may act without the joinder of
the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity
stated below such registration statements, amendments,
post-effective amendments, exhibits, applications and other
documents with the Securities and Exchange Commission or any
other regulatory authority as may be desirable or necessary
in connection with the public offering of shares of Kemper
Money Market Fund.
Signature Title Date
--------- ----- ----
/s/ Shirley D. Peterson Trustee October 12, 1995
- --------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Charles F. Custer, Stephen B. Timbers and Philip J. Collora
and each of them, any of whom may act without the joinder of
the others, as his attorney-in-fact to sign and file on his
behalf individually and in the capacity stated below such
registration statements, amendments, post-effective
amendments, exhibits, applications and other documents with
the Securities and Exchange Commission or any other
regulatory authority as may be desirable or necessary in
connection with the public offering of shares of Kemper Money
Market Fund.
Signature Title Date
--------- ----- ----
/s/ William P. Sommers Trustee October 12, 1995
- --------------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JULY 31,
1995 ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000055189
<NAME> KEMPER MONEY MARKET FUND
<SERIES>
<NUMBER> 01
<NAME> MONEY MARKET PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 4,017,857
<INVESTMENTS-AT-VALUE> 4,017,857
<RECEIVABLES> 23,268
<ASSETS-OTHER> 5,905
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,047,030
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 21,932
<TOTAL-LIABILITIES> 21,932
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,053,426
<SHARES-COMMON-STOCK> 4,025,098
<SHARES-COMMON-PRIOR> 4,148,789
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (28,328)
<NET-ASSETS> 4,025,098
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 231,048
<OTHER-INCOME> 0
<EXPENSES-NET> (20,949)
<NET-INVESTMENT-INCOME> 210,099
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (28,328)
<NET-CHANGE-FROM-OPS> 181,771
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (210,099)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,434,790
<NUMBER-OF-SHARES-REDEEMED> (5,758,910)
<SHARES-REINVESTED> 200,429
<NET-CHANGE-IN-ASSETS> (123,691)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (10,924)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (20,949)
<AVERAGE-NET-ASSETS> 4,047,233
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .005
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE JULY 31, 1995 ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000055189
<NAME> KEMPER MONEY MARKET FUND
<SERIES>
<NUMBER> 02
<NAME> GOVERNMENT SECURITIES PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 599,475
<INVESTMENTS-AT-VALUE> 599,475
<RECEIVABLES> 4,489
<ASSETS-OTHER> 2,420
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 606,384
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,783
<TOTAL-LIABILITIES> 2,783
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 603,601
<SHARES-COMMON-STOCK> 603,601
<SHARES-COMMON-PRIOR> 707,368
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 603,601
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 34,371
<OTHER-INCOME> 0
<EXPENSES-NET> (2,781)
<NET-INVESTMENT-INCOME> 31,590
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 31,590
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (31,590)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 808,318
<NUMBER-OF-SHARES-REDEEMED> (941,532)
<SHARES-REINVESTED> 29,447
<NET-CHANGE-IN-ASSETS> (103,767)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (1,637)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2,781)
<AVERAGE-NET-ASSETS> 606,510
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .005
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE JULY 31, 1995 ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000055189
<NAME> KEMPER MONEY MARKET FUND
<SERIES>
<NUMBER> 03
<NAME> TAX EXEMPT PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 763,214
<INVESTMENTS-AT-VALUE> 763,214
<RECEIVABLES> 6,558
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 769,772
<PAYABLE-FOR-SECURITIES> 4,651
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,978
<TOTAL-LIABILITIES> 9,629
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 760,143
<SHARES-COMMON-STOCK> 760,143
<SHARES-COMMON-PRIOR> 792,131
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 760,143
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 29,687
<OTHER-INCOME> 0
<EXPENSES-NET> (3,096)
<NET-INVESTMENT-INCOME> 26,591
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 26,591
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (26,591)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 816,602
<NUMBER-OF-SHARES-REDEEMED> (874,113)
<SHARES-REINVESTED> 25,523
<NET-CHANGE-IN-ASSETS> (31,988)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (2,072)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (3,096)
<AVERAGE-NET-ASSETS> 767,694
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.03)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .004
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
November 10, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Kemper Money Market Fund
------------------------
To The Commission:
We are counsel to the above-referenced investment company (the "Fund") and
as such have participated in the preparation and review of Post-Effective
Amendment No. 41 to the Fund's registration statement being filed pursuant to
Rule 485(b) under the Securities Act of 1933. In accordance with paragraph
(b)(4) of Rule 485, we hereby represent that such amendment does not contain
disclosures which would render it ineligible to become effective pursuant to
paragraph (b) thereof.
Very truly yours,
/s/ Vedder, Price, Kaufman & Kammholz
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
COK/dd
