SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 15, 1994
KEMPER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-10242 36-6169781
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
One Kemper Drive 60049
Long Grove, Illinois (Zip Code)
(Address or principal
executive offices)
Registrant's telephone number, including area code (708) 320-4700
ITEM 5. OTHER EVENTS
On December 15, 1994, Kemper Corporation's ("Kemper") wholly owned
subsidiary, Kemper Asset Holdings, Inc. ("KAHI") and five money market
mutual funds (each a "Fund," and collectively, the "Funds") entered into a
Put and Call Agreement (the "Agreement") respecting $198 million in
principal amount of County of Orange, California 1994-95 Taxable Notes due
7/10/95 -- floating rate (the "Notes") owned in the aggregate by the Funds.
Kemper guaranteed KAHI's obligations under the Agreement (the "Guaranty").
Kemper Financial Services, Inc. ("KFS"), a wholly owned subsidiary of
Kemper Financial Companies, Inc. ("KFC"), is each Fund's investment adviser
and manager. KFC is more than 96% owned by Kemper on a fully converted
basis.
Reference is made to the Agreement and the Guaranty for a description of
their respective terms and conditions. A copy of the Agreement and the
Guaranty is filed as Exhibit 10 to this Current Report on Form 8-K.
The Board of Trustees of each Fund has directed each Fund to exercise its
rights under the Agreement to require KAHI to purchase the Notes on the Put
Date (as defined in the Agreement) unless, prior to the Put Date, the
Agreement and Guaranty have been replaced by a credit enhancement (i.e., a
letter of credit or similar instrument) from a Qualified Party (as defined
in the Agreement).
The Agreement will result in a $198 million increase in Kemper's
off-balance-sheet commitments at year-end 1994. Kemper is currently
evaluating what, if any, impact the Orange County and Orange County
Investment Pool bankruptcy filings will have on Kemper's consolidated
results for the quarter and year ended December 31, 1994.
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS
(c) Exhibits.
Exhibit Number Page
10 Put and Call Agreement and Guaranty 4
dated as of December 15, 1994
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KEMPER CORPORATION
Date: December 20, 1994 By: /S/ JOHN H. FITZPATRICK
____________________________
John H. Fitzpatrick
Executive Vice President and
Chief Financial Officer
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Exhibit 10
PUT AND CALL AGREEMENT
AGREEMENT made as of this 15th day of December, 1994 among KEMPER
ASSET HOLDINGS, INC., a Delaware corporation ("KAHI") and wholly-owned
subsidiary of KEMPER CORPORATION, a Delaware corporation ("Kemper"), KEMPER
MONEY MARKET FUND ("KMMF"), CASH EQUIVALENT FUND ("CEF"), KEMPER PORTFOLIOS
("KP"), CASH ACCOUNT TRUST ("CAT") and KEMPER INVESTORS FUND ("KINF"), each
a Massachusetts business trust (each of KMMF, CEF, KP, CAT and KIF a "Fund"
and collectively the "Funds").
WHEREAS, the Funds currently hold in the portfolios indicated (each a
"Portfolio") certain County of Orange, California 1994-95 Taxable Notes
due 7/10/95 -- floating rate (the "Notes") in the principal amount
indicated:
Principal Amount
Fund of Notes
- ---- ----------------
KMMF -- Money Market Portfolio $100,000,000
CEF -- Money Market Portfolio 80,000,000
KP -- Kemper Cash Reserves Fund 10,000,000
CAT -- Money Market Portfolio 5,000,000
KINF -- Money Market Portfolio 3,000,000
---------------
Total $ 198,000,000
===============
WHEREAS, the County of Orange, California, has filed a petition under
Chapter 9 of the United States Bankruptcy Code (the "Code"); and
WHEREAS, Kemper, KAHI and each of the Funds desire that the Funds and
their shareholders be protected with respect to all interest and principal
called for by the terms of the Notes;
NOW, THEREFORE, intending to be legally bound hereby, the parties
agree:
1. Each Fund, on the Put Date (as hereinafter defined) shall have the
unconditional right to require KAHI to purchase at par, plus accrued
interest compounded monthly (without considering any limitations which may
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be imposed on such accrual under the Code), all or part of the Notes then
held by such Fund in accordance with the terms of this Agreement. Such
Fund(s) may exercise such right by giving written notice to KAHI and Kemper
not later than 5:00 p.m. (Central time) on the business day prior to such
Put Date; provided that prior to March 14, 1995 no Fund shall deliver any
such notice unless Kemper shall fail to maintain a private short term debt
rating of "Duff 1") by Duff & Phelps Credit Rating Co. ("Duff & Phelps").
Such Fund(s) shall tender and KAHI shall purchase and pay for the Notes
being acquired by wire transfer of immediately available funds by 12:00
noon (Central time) on such Put Date. As used herein, the term "Put Date"
shall mean (a) March 15, 1995 or (b) any earlier date on which Kemper shall
fail to maintain a private short term debt rating of "Duff 1" by Duff &
Phelps.
2. KAHI shall have the unconditional right to require each Fund to
sell to KAHI, at the greater of (a) par plus accrued interest compounded
monthly (without considering any limitations which may be imposed on such
accrual under the Code) or (b) market, all or such part of the Notes held
by such Fund as KAHI shall designate at any time and from time to time
prior to March 15, 1995. KAHI may exercise its rights under this Paragraph
by giving written notice to such Fund(s) not later than 5:00 p.m. (Central
time) on the business day immediately preceding the date of purchase
designated by KAHI. Such Fund(s) shall tender and KAHI shall purchase and
pay for the Notes or such portion thereof as KAHI shall have elected to
purchase by wire transfer of immediately available funds by 12:00 noon
(Central time) on such date of purchase.
3. Each Fund may, at any time and from time to time prior to March
15, 1995, sell the Notes or any part thereof to any other person. Upon any
such sale any rights and/or obligations of KAHI under Paragraphs 1 and 2
above with respect to the sold Notes shall be extinguished.
4. Each Fund hereby assigns to KAHI any and all actions, claims and
other rights of every kind and nature (other than for principal and
interest and such Fund's right under Paragraph 1 above) related in any way
to any Notes, including without limitation such Fund's purchase of any
Notes, that such Fund sells to KAHI pursuant to Paragraph 1 or 2 above,
including without limitation any rights and other claims under federal or
state securities laws, under the Code and under any other laws. KAHI
hereby accepts such assignment.
5. All decisions by any Fund to exercise or not exercise its right
under Paragraph 1 above, or to sell all or any part of the Notes to other
persons under Paragraph 3 above, shall require the approval of a majority
of the trustees of such Fund who are not interested persons (as defined in
the Investment Company Act of 1940) of the Fund.
6. This Agreement shall terminate at such time as all obligations of
KAHI under Paragraph 1 above shall have been satisfied or shall have
expired, or at such earlier time as KAHI shall have acquired all of the
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Notes in accordance with the terms hereof, provided that the assignment
provided for in Paragraph 4 shall survive any such termination. This
Agreement shall also terminate with respect to any Notes at such time as
the Fund holding such Notes has been (a) paid any interest due (without
considering any limitations on accrual which may be imposed under the
Code), compounded monthly, and (b) provided an irrevocable letter of credit
or similar instrument issued by a Qualified Party that unconditionally
obligates such Qualified Party to pay such Fund the principal amount of and
all accrued interest (without considering any limitations which may be
imposed on such accrual under the Code) on such Notes when due thereafter
under the terms thereof if not so paid by the issuer of such Notes. As
used in the preceding sentence, the term "Qualified Party" means a party
not affiliated with KAHI or Kemper but rated by the Requisite NRSROs in the
highest category for Short-term obligations (as the terms "Requisite
NRSROs" and "Short-term" are defined in Rule 2a-7 under the Investment
Company Act of 1940).
7. This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and shall not be assignable by either party. This
Agreement may be amended only by a writing signed on behalf of all
parties.
8. Except as otherwise provided herein, all notices or consents
required or permitted by this Agreement shall be in writing and shall be
deemed delivered if delivered in person or if sent by registered or
certified mail, return receipt requested, by facsimile or similar
transmission, or by overnight delivery, as follows, unless such address is
changed by written notice hereunder:
(a) If to KAHI and/or Kemper:
Kemper Asset Holdings, Inc. and
Kemper Corporation
One Kemper Drive
Long Grove, Illinois 60049
Attn: Chief Financial Officer
with a copy to:
Kathleen A. Gallichio
Senior Vice President, General Counsel
and Corporate Secretary
Kemper Corporation
One Kemper Drive
Long Grove, Illinois 60049
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(b) If to a Fund:
[Name of Fund]
c/o Kemper Financial Services, Inc.
120 South LaSalle Street
Chicago, Illinois 60603
Attn: Chief Investment Officer
with a copy to:
Charles F. Custer
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, Illinois 60601
9. This Agreement is executed by or on behalf of the Fund(s) and the
obligations hereunder are not binding upon any of the Trustees, officers or
holders of shares of any Fund individually but are binding only upon each
Fund and its respective assets and property. All obligations of any Fund
under this Agreement shall apply only to the Portfolio indicated above, and
no assets of any other portfolio shall be liable for the obligations of
such Portfolio.
10. Each Fund's Declaration of Trust as amended is on file with the
Secretary of the Commonwealth of Massachusetts. This Agreement shall be
construed in accordance with the laws of the State of Illinois (except as
to Paragraphs 9 and 10 hereof which shall be construed in accordance with
the laws of the Commonwealth of Massachusetts).
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IN WITNESS WHEREOF, the parties have caused this instrument to be
executed as of the day and year first above written.
ATTEST: KEMPER ASSET HOLDINGS, INC.
/S/ ARTHUR J. MCGIVERN By: /S/ JOHN H. FITZPATRICK
- ------------------------ ------------------------
Its President
--------------------
ATTEST: KEMPER MONEY MARKET FUND
CASH EQUIVALENT FUND
KEMPER PORTFOLIOS
CASH ACCOUNT TRUST
KEMPER INVESTORS FUND
/S/ PHILIP J. COLLORA By: /S/ CHARLES M. KIERSCHT
- ------------------------ ------------------------
Its President
-------------------
GUARANTY
FOR VALUE RECEIVED, KEMPER CORPORATION, a Delaware corporation
("Kemper"), hereby unconditionally guarantees any and all obligations of
KEMPER ASSET HOLDINGS, INC., a Delaware corporation (KAHI"), under the
foregoing Put and Call Agreement of even date, including without limitation
obligations of payment. Kemper hereby waives any defenses that KAHI may
have, now or in the future, to any such obligations.
Dated as of December 15, 1994.
ATTEST: KEMPER CORPORATION
ARTHUR J. MCGIVERN By: /S/ JOHN H. FITZPATRICK
- -------------------- ------------------------
Its Executive V. P.
--------------------
W:1915AJM
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