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File No. 33-32470
CIK #858239
Securities and Exchange Commission
Washington, D. C. 20549
Post-Effective
Amendment No. 2
to
Form S-6
For Registration under the Securities Act of 1933
of Securities of Unit Investment Trusts Registered
on Form N-8B-2
KEMPER EQUITY PORTFOLIO TRUST, SERIES 1
Name and executive office address of Depositor:
KEMPER UNIT INVESTMENT TRUSTS
(a service of Kemper Securities, Inc.)
77 West Wacker - 5th Floor
Chicago, Illinois 60601
Name and complete address of agent for service:
C. PERRY MOORE
77 West Wacker - 5th Floor
Chicago, Illinois 60601
X( X ) Check box if it is proposed that this filing will become effective
immediately upon pursuant to paragraph (b) of Rule 485.
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KEMPER EQUITY PORTFOLIO TRUSTS
PART ONE
THE DATE OF THIS PART ONE IS THAT DATE WHICH
IS SET FORTH IN PART TWO OF THE PROSPECTUS
Kemper Equity Portfolio Trusts, were formed with the investment objectives of
obtaining maximum capital appreciation and dividend income through investment in
a fixed portfolio of 20 equity securities of companies selected to achieve the
Trusts' objectives and in certain Trusts, the securities are concentrated within
a specific industry. The Securities selected for each Trust are considered by
the Sponsor to have the potential to achieve the Trust's objectives over the
approximate term of such Trust. See 'Portfolios' in Part Two for each Trust.
There is no assurance that the Trusts will achieve their objectives.
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SPONSOR: KEMPER UNIT INVESTMENT TRUSTS, a
service of Kemper Securities, Inc.
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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.
The investor is advised to read and retain both parts of this Prospectus for
future reference.
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SUMMARY
THE TRUST FUNDS. Kemper Equity Portfolio Trusts, (the 'Trust Funds' or 'Trusts')
are separate and distinct unit investment trusts registered under the Investment
Company Act of 1940.
The Trust Funds consist of common stocks issued by companies which the Sponsor
believes have the potential to achieve the objectives of the respective Trusts
(the 'Securities'). For the criteria used by the Sponsor in selecting the
Securities, see 'Portfolios--Securities Selection.' The value of all portfolio
Securities and, therefore, the value of the Units may be expected to fluctuate
in value depending on the full range of economic and market influences affecting
corporate profitability, the financial condition of issuers and the prices of
equity securities in general and the Securities in particular. Maximum capital
appreciation and dividend income are, of course, dependent upon several factors
including, among other factors, the financial condition of the issuers of the
Securities (see 'Portfolios').
Each Unit of a Trust offered represents that undivided interest in that Trust
indicated under 'Essential Information' in Part Two for each Trust. To the
extent that any Units are redeemed by the Trustee, the fractional undivided
interest in a Trust represented by each unredeemed Unit will increase
accordingly, although the actual interest in the Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor or the
Underwriters, or until the termination of the Trust Agreement.
PUBLIC OFFERING PRICE. The secondary market Public Offering Price will be equal
to the aggregate underlying bid value of the Securities in a Trust Fund, plus or
minus a pro rata share of cash, if any, in the Capital Account held or owned by
such Trust Fund, plus a sales charge of 4.0% of the Public Offering Price
(equivalent to 4.167% of the net amount invested). The sales charge is reduced
on a graduated scale for sales involving at least 10,000 Units of a Trust or
$100,000 and will be applied on whichever basis is more favorable to the
investor.
DISTRIBUTIONS OF INCOME AND CAPITAL. Distributions of dividends received by each
Trust and any funds in the Capital Account will be made quarterly. See
'Unitholders--Distributions to Unitholders.'
REINVESTMENT. Each Unitholder of the Trust Funds may elect to have distributions
of income, capital gains and/or capital on their Units automatically invested in
shares of any Kemper front-end load mutual fund (other than those funds sold
with a contingent deferred sales charge). Such distributions will be reinvested
without charge to the participant on each applicable Distribution Date. See
'Unitholders--Distribution Reinvestment.' A current prospectus for the
reinvestment fund selected, if any, will be furnished to any investor who
desires additional information with respect to reinvestment.
MARKET FOR UNITS. While under no obligation to do so, the Sponsor intends to,
and certain of the other dealers may, maintain a market for the Units of the
Trusts and offer to repurchase such Units at prices subject to change at any
time which are based on the current underlying bid prices of the Securities in
the Trust Fund involved. If the supply of Units exceeds demand or if some other
business reason warrants it, the Sponsor and/or the dealers may either
discontinue all purchases of Units or discontinue purchases of Units at such
prices. A Unitholder may also dispose of Units through redemption at the
Redemption Price on the date of tender to the Trustee. See
'Redemption--Computation of Redemption Price.'
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REDEMPTION IN KIND. Upon redemption of Units of a Trust Fund a Unitholder
generally may request to receive in lieu of cash his share of each of the
Securities then held by the Trust Fund, if he would be entitled to receive at
least $50,000 of proceeds and he has tendered for redemption prior to that date
set forth in Part Two for each Trust (see 'Redemption' and 'Administration of
the Trusts--Amendment and Termination').
TERMINATION. No later than the date specified under the Liquidation Period in
'Essential Information' in Part Two, Securities will begin to be sold in
connection with the termination of a Trust Fund and it is expected that all
Securities in such Trust Fund will be sold by the Mandatory Termination Date set
forth in 'Essential Information' in Part Two for each Trust. The Sponsor will
determine the manner, timing and execution of the sale of the underlying
Securities. See 'Administration of the Trusts--Amendment and Termination.'
THE TRUST FUNDS
Kemper Equity Portfolio Trusts are unit investment trusts created under the laws
of the State of Missouri pursuant to a trust indenture dated the Initial Date of
Deposit (the 'Trust Agreements') between Kemper Unit Investment Trusts, a
service of Kemper Securities, Inc. (the 'Sponsor') and Investors Fiduciary Trust
Company (the 'Trustee').*
The portfolio of each Trust contains common stocks issued by 20 different
companies selected for the purpose of obtaining maximum capital appreciation and
dividend income. Certain Trusts are concentrated within a specific industry. As
used herein, the term 'Securities' means the common stocks initially deposited
in each Trust Fund and described in the portfolio and any additional common
stocks acquired and held by a Trust Fund pursuant to the provisions of the Trust
Agreement.
PORTFOLIOS
Securities Selection. At all times each Trust will hold at least 80% of its
assets in equity securities. In selecting Securities for the Trust, the
following factors, among others, were considered by the Sponsor: (a) the quality
of the Securities, (b) the yield and price of the Securities relative to other
similar securities and (c) the likelihood that earnings and dividends will
continue or increase. In connection with Trusts diversified in the public
utilities industry, the stability of utility stocks was also considered.
Utilities tend to be more stable than other companies because they are
monopolies that provide essential services. In times of economic slowdown or
recovery, people still need to use the power of utility companies. Due to the
expected slowdown of nuclear construction programs and the decrease in excess
energy capacity, the Sponsor considered both the historical stability of the
utility sector as well as the potential for dividend growth by specific
companies in the sector. In selecting securities for the Income and Growth
Series the following factors were considered: (1) the company's historical
policy of paying consistent and increasing dividends; (2) the growth potential
in earnings for the company; (3) whether the company has a market capitalization
of at least $300,000,000; and (4) the diversification by industry and geographic
region of the country. In selecting securities for Trusts concentrated in the
banking industry the Sponsor considered the following factors: (1) whether the
company is a banking institution; (2) the principal location of the banking
institution; (3) whether the banking institution is a potential acquisition
candidate; (4) whether the banking institution is located in a state which
permits some form of interstate banking; (5) whether
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* Reference is made to the Trust Agreement and any statement contained herein is
qualified in its entirety by the provisions of the Trust Agreement.
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the banking institution has (a) a market capitalization of at least $100
million, (b) a market price to book value ratio of no greater than 165% and a
portfolio average price to book value ratio of less than 140%, (c) a
nonperforming assets to total assets ratio of less than 3.25% and (d) either
reserve coverage to nonperforming assets plus 90 days past due loans of more
than 60% or a Tier I capital ratio of greater than 7.75%. In addition, such a
portfolio is selected to provide a dividend yield of at least 3.00%
In selecting the Securities for each Trust, the Sponsor has chosen equity
securities that in its view have the potential for capital appreciation.
Although there can be no assurance that such Securities will appreciate in value
over the life of the Trusts, over time stock investments have generally
outperformed most other asset classes. However, it should be remembered that
common stocks carry greater risks, including the risk that the value of an
investment can go down (see 'Certain Investment Considerations' in this
section), and past performance is no guarantee of future results.
For specific information and the market price of each Security as of the date of
this Part One Prospectus, see 'Schedules of Investments' in Part Two for such
Trust.
General. Each Trust Fund may be an appropriate investment vehicle for investors
who desire to participate in a portfolio of equity securities with greater
diversification than they might be able to acquire individually. An investment
in Units of the Trust Funds should be made with an understanding of the risks
inherent in an investment in equity securities, including the risk that the
financial condition of the issuers of the Securities may become impaired or that
the general condition of the stock market may worsen (both of which may
contribute directly to a decrease in the value of the Securities and thus in the
value of the Units) or the risk that holders of common stock have a right to
receive payments from the issuers of those stocks that is generally inferior to
that of creditors of, or holders of debt obligations issued by, the issuers and
that the rights of holders of common stock generally rank inferior to the rights
of holders of preferred stock. Common stocks are especially susceptible to
general stock market movements and to volatile increases and decreases in value
as market confidence in and perceptions of the issuers change. These perceptions
are based on unpredictable factors including expectations regarding government,
economic, monetary and fiscal policies, inflation and interest rates, economic
expansion or contraction, and global or regional political, economic or banking
crises.
Banking Institutions. Certain Trusts may be concentrated in common stocks
issued by companies in the banking industry. In view of this, an investment in
Units of such Trusts should be made with an understanding of the problems and
risks inherent in the banking industry in general. Commercial banks and their
holding companies are especially subject to the adverse effects of economic
recession, volatile interest rates, portfolio concentrations in geographic
markets and in commercial and residential real estate loans, and competition
from new entrants in their fields of business. Economic conditions in the real
estate markets, which have been weak in the recent past, can have a significant
effect upon banks because they generally have a substantial percentage of their
assets invested in loans secured by real estate, as has recently been the case
for a number of banks with respect to commercial real estate in the northeastern
and southwestern regions of the United States. Commercial banks and their
holding companies are subject to extensive federal regulation and, when such
institutions are state-chartered, to state regulation as well. Regulatory
actions, such as increases in the minimum capital requirements applicable to
commercial banks and increases in deposit insurance premiums required to be paid
by commercial banks to the FDIC, can negatively impact earnings and the ability
of a company to pay dividends. Neither federal insurance of deposits nor
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governmental regulation, however, ensures the solvency or profitability of
commercial banks or their holding companies, or insures against any risk of
investment in the securities issued by such institutions.
There has been much recent attention focused on the thrift and banking
industries regarding prospects for legislative and regulatory changes which
could have a material impact on investments in banking institutions. In December
1991, the Federal Deposit Insurance Corporation Improvement Act of 1991 was
enacted providing, among other things, for an increase of supervisory authority
over financial institutions. Additional legislative and regulatory changes may
be forthcoming. For example, the deposit insurance system is under review by
Congress and federal regulators and proposed reforms of that system could, among
other things, restrict the ways in which deposited moneys can be used by banks
or reduce the dollar amount or number of deposits insured for any depositor.
Such reforms could reduce profitability as investment opportunities available to
banking institutions become more limited and as consumers look more actively for
savings vehicles other than bank deposits. Legislation broadening bank powers
also is being studied by Congress which, if enacted, could provide new earnings
opportunities for banks but would also further expose banks to well-established
competitors, such as securities firms and insurance companies, as well as
companies engaged in other areas of business if Congress were to eliminate the
historic barriers between commerce and banking. Increased competition may result
from broadening national interstate banking powers, including interstate
branching, as has been recently proposed. The Sponsor makes no prediction as to
what, if any, manner of bank regulatory reform might ultimately be adopted or
what ultimate effect such reform might have on a Trust's portfolio.
Utility Companies. Certain Trusts may be concentrated in common stocks issued
by companies in the public utilities industry. An investment in Units of these
Trusts should be made with an understanding of the characteristics of the public
utility industry and the risks which such an investment may entail. General
problems of such issuers would include the difficulty in financing large
construction programs in an inflationary period, the limitations on operations
and increased costs and delays attributable to environmental considerations, the
difficulty of the capital market in absorbing utility debt, the difficulty in
obtaining fuel at reasonable prices and the effect of energy conservation. All
of such issuers have been experiencing certain of these problems in varying
degrees. In addition, Federal, state and municipal governmental authorities may
from time to time review existing, and impose additional, regulations governing
the licensing, construction and operation of nuclear power plants, which may
adversely affect the ability of the issuers of certain of the Securities in the
portfolio to make payments of principal and/or interest on such Securities.
Utilities are generally subject to extensive regulation by state utility
commissions which, for example, establish the rates which may be charged and the
appropriate rate of return on an approved asset base, which must be approved by
the state commissions. Certain utilities have had difficulty from time to time
in persuading regulators, who are subject to political pressures, to grant rate
increases necessary to maintain an adequate return on investment and voters in
many states have the ability to impose limits on rate adjustments (for example,
by initiative or referendum). Any unexpected limitations could negatively affect
the profitability of utilities whose budgets are planned far in advance. In
addition, gas pipeline and distribution companies have had difficulties in
adjusting to short and surplus energy supplies, enforcing or being required to
comply with long-term contracts and avoiding litigation from their customers, on
the one hand, or suppliers, on the other.
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Certain of the issuers of the Securities in such a Trust may own or operate
nuclear generating facilities. Governmental authorities may from time to time
review existing, and impose additional, requirements governing the licensing,
construction and operation of nuclear power plants. Nuclear generating projects
in the electric utility industry have experienced substantial cost increases,
construction delays and licensing difficulties. These have been caused by
various factors, including inflation, high financing costs, required design
changes and rework, allegedly faulty construction, objections by groups and
governmental officials, limits on the ability to finance, reduced forecasts of
energy requirements and economic conditions. This experience indicates that the
risk of significant cost increases, delays and licensing difficulties remains
present through to completion and achievement of commercial operation of any
nuclear project. Also, nuclear generating units in service have experienced
unplanned outages or extensions of scheduled outages due to equipment problems
or new regulatory requirements sometimes followed by a significant delay in
obtaining regulatory approval to return to service. A major accident at a
nuclear plant anywhere, such as the accident at a nuclear plant in Chernobyl,
could cause the imposition of limits or prohibitions on the operation,
construction or licensing of nuclear units in the United States.
Other general problems of the gas, water, telephone and electric utility
industry (including state and local joint action power agencies) include
difficulty in obtaining timely and adequate rate increases, difficulty in
financing large construction programs to provide new or replacement facilities
during an inflationary period, rising costs of rail transportation to transport
fossil fuels, the uncertainty of transmission service costs for both interstate
and intrastate transactions, changes in tax laws which adversely affect a
utility's ability to operate profitably, increased competition in service costs,
recent reductions in estimates of future demand for electricity and gas in
certain areas of the country, restrictions on operations and increased cost and
delays attributable to environmental considerations, uncertain availability and
increased cost of capital, unavailability of fuel for electric generation at
reasonable prices, including the steady rise in fuel costs and the costs
associated with conversion to alternate fuel sources such as coal, availability
and cost of natural gas for resale, technical and cost factors and other
problems associated with construction, licensing, regulation and operation of
nuclear facilities for electric generation, including among other considerations
the problems associated with the use of radioactive materials and the disposal
of radioactive wastes, and the effects of energy conservation. Each of the
problems referred to could adversely affect the ability of the issuers of any
utility bonds in the Trust to make payments due on these bonds.
In view of the uncertainties discussed above, there can be no assurance that any
company's share of the full cost of nuclear units under construction ultimately
will be recovered in rates or of the extent to which a company could earn an
adequate return on its investment in such units. The likelihood of a
significantly adverse event occurring in any of the areas of concern described
above varies, as does the potential severity of any adverse impact. It should be
recognized, however, that one or more of such adverse events could occur and
individually or collectively could have a material adverse impact on the
financial condition or the results of operations of a company's ability to make
interest and principal payments on its outstanding debt.
Retail Companies. Certain Trusts may be concentrated in common stocks issued by
companies in the retail industry. The profitability of companies engaged in the
retailing industry will be affected by various factors including the general
state of the economy and consumer spending trends. There have been major changes
in the retail environment in the last year due to the declaration of bankruptcy
by some of the major corporations involved in the retail industry, and the
department store segment in
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particular. The continued viability of the retail industry will depend on the
industry's ability to adapt and to compete in changing economic and social
conditions, to attract and retain capable management, and to finance expansion.
Continued weakness in the banking and real estate industry, the current
recessionary economic climate with the consequent slowdown in employment growth,
less favorable trends in unemployment and a marked deceleration in real
disposable personal income growth has resulted in significant pressure on both
consumer wealth and consumer confidence. All in all, the economic and spending
environment will likely be characterized by protracted weakness in the near
future. In addition, competitiveness of the retail industry will require large
capital outlays for investment in the installation of automated checkout
equipment to control inventory, to track the sale of individual items and to
gauge the success of sales campaigns. Increasing employee and retiree benefit
costs may also have an adverse effect on the industry.
Certain Investment Considerations. Holders of common stock incur more risk than
holders of preferred stocks and debt obligations because common stockholders, as
owners of the entity, have generally inferior rights to receive payments from
the issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stock issued by the issuer. Holders of common stock of
the type held by the portfolio have a right to receive dividends only when and
if, and in the amounts, declared by the issuer's Board of Directors and to
participate in amounts available for distribution by the issuer only after all
other claims on the issuer have been paid or provided for. By contrast, holders
of preferred stock have the right to receive dividends at a fixed rate when and
as declared by the issuer's Board of Directors, normally on a cumulative basis,
but do not participate in other amounts available for distribution by the
issuing corporation. Cumulative preferred stock dividends must be paid before
common stock dividends and any cumulative preferred stock dividend omitted is
added to future dividends payable to the holders of cumulative preferred stock.
Preferred stocks are also entitled to rights on liquidation which are senior to
those of common stocks. Moreover, common stocks do not represent an obligation
of the issuer and therefore do not offer any assurance of income or provide the
degree of protection of capital of debt securities. Indeed, the issuance of debt
securities or even preferred stock will create prior claims for payment of
principal, interest, liquidation preferences and dividends which could adversely
affect the ability and inclination of the issuer to declare or pay dividends on
its common stock or the rights of holders of common stock with respect to assets
of the issuer upon liquidation or bankruptcy. Further, unlike debt securities
which typically have a stated principal amount payable at maturity (whose value,
however, will be subject to market fluctuations prior thereto), common stocks
have neither a fixed principal amount nor a maturity and have values which are
subject to market fluctuations for as long as the stocks remain outstanding. The
value of the Securities in the portfolios thus may be expected to fluctuate over
the entire life of the Trust Funds to values higher or lower than those
prevailing on the date of this Part One Prospectus.
Whether or not the Securities are listed on a national security exchange, the
principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. The investigation by the Securities and Exchange
Commission of illegal insider trading in connection with corporate takeovers,
and possible congressional inquiries and legislation relating to this
investigation, may adversely affect the ability of certain dealers to remain
market makers. In addition, each Trust Fund is restricted under the Investment
Company Act of 1940 from selling Securities to the Sponsor.
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The price at which the Securities may be sold to meet redemptions and the value
of each Trust Fund will be adversely affected if trading markets for the
Securities are limited or absent.
Litigation and Legislation. From time to time Congress considers proposals to
reduce the rate of the dividends-received deduction. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return to
investors who can take advantage of the deduction. Unitholders are urged to
consult their own tax advisers. Further, at any time after the date of this Part
One Prospectus, litigation may be initiated on a variety of grounds, or
legislation may be enacted with respect to the Securities in a Trust Fund or the
issuers of the Securities. There can be no assurance that future litigation or
legislation will not have a material adverse effect on the Trust Funds or will
not impair the ability of issuers to achieve their business goals.
FEDERAL TAX STATUS
Federal Income Taxes. The following is a general discussion of certain of the
Federal income tax consequences of the purchase, ownership and disposition of
the Units. The summary is limited to investors who hold the Units as 'capital
assets' (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986, as amended (the 'Code'). Unitholders
should consult their tax advisers in determining the Federal, state, local and
any other tax consequences of the purchase, ownership and disposition of Units
in the Trust Funds.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
Each Trust Fund is not an association taxable as a corporation for Federal
income tax purposes.
Each Unitholder will be considered the owner of a pro rata portion of each
of the respective Trust's assets for Federal income tax purposes under the
Code, and the income of such Trust will be treated as income of the
Unitholders thereof under the Code. Each Unitholder will be considered to
have received his pro rata share of income derived from each asset of the
respective Trust Fund when such income is received by such Trust Fund.
Each Unitholder will have a taxable event when a Security is disposed of
(whether by sale, exchange, liquidation or otherwise) or when the
Unitholder redeems or sells his Units. The cost of the Units to a
Unitholder on the date such Units are purchased is allocated among the
Securities held in a Trust Fund (in accordance with the proportion of the
fair market values of such Securities), subject to the adjustments
discussed below, in order to determine his tax basis for his pro rata
portion in each Security.
Taxation of Dividends Received by a Trust Fund. For Federal income tax purposes,
a Unitholder's pro rata portion of dividends as defined by Section 316 of the
Code paid by a corporation with respect to a Security are taxable as ordinary
income to the extent of such corporation's current and accumulated 'earnings and
profits.' A Unitholder's pro rata portion of dividends which exceed such current
and accumulated earnings and profits will first reduce a Unitholder's tax basis
in such Security and to the extent that such dividends exceed a Unitholder's tax
basis in such Security shall generally be treated as capital gain. In general,
any such capital gain will be short-term unless a Unitholder has held his Units
for more than one year. In addition, Unitholders may recognize taxable income in
an amount equal to their pro rata share of any interest from U.S. Treasury
obligations in which the Trustee is authorized to invest between distribution
dates as such interest accrues.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such Unitholder's
pro rata portion of dividends received
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by a Trust Fund (to the extent such dividends are taxable as ordinary income, as
discussed above) in the same manner as if such corporation directly owned the
Securities paying such dividends. However, a corporation owning Units should be
aware that Section 246 and 246A of the Code impose additional limitations on the
eligibility of dividends for the 70% dividends received deduction. These
limitations include a requirement that stock (and therefore Units) must
generally be held at least 46 days (as determined under Section 246(c) of the
Code). Proposed regulations have been issued which address special rates that
must be considered in determining whether the 46-day holding period requirement
is met. Moreover, the allowable percentage of the deduction will be reduced from
70% if a corporation owns certain stock (or Units) the financing of which is
directly attributable to indebtedness incurred by such corporation. It should be
noted that various legislative proposals that would affect the dividends
received deduction have been introduced. Unitholders should consult their tax
advisors with respect to the limitations on and possible modifications to the
dividends received deduction.
Limitations on Deductibility of Trust Fund Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by a Trust Fund is deductible
by the Unitholder to the same extent as though the expense had been paid
directly by him, subject to the following limitation. It should be noted that as
a result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to the
extent they exceed 2% of such individual's adjusted gross income. Unitholders
may be required to treat some or all of the expenses of a Trust Fund as
miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a Trust
Fund or Disposition of Units. A Unitholder's portion of gain, if any, upon the
sale or redemption of Units or the disposition of Securities held by a Trust
Fund will generally be considered a capital gain except in the case of a dealer
or a financial institution and will be long-term if the Unitholder has held his
Units for more than one year. A Unitholder's portion of loss, if any, upon the
sale or redemption of Units or the disposition of Securities held by a Trust
Fund will generally be considered a capital loss (except in the case of a dealer
or a financial institution) and, in general, will be long-term if the Unitholder
has held his Units for more than one year. For taxpayers other than
corporations, net capital gains are subject to a maximum stated marginal tax
rate of 28% effective for tax years beginning after December 31, 1990.
Unitholders should consult their tax advisers regarding the recognition of
capital gains and losses for Federal income tax purposes.
'The Revenue Reconciliation Act of 1993' (the 'Tax Act') was recently enacted.
The Tax Act raises tax rates on ordinary income while capital gains remain
subject to a maximum 28% stated rate. Because some or all capital gains are
taxed at a comparatively lower rate under the Tax Act, the Tax Act includes a
provision that recharacterizes capital gains that are 'conversion transactions'
effective for transactions entered into after April 30, 1993. Unitholders and
prospective investors should consult with their tax advisors regarding the
potential effect of this provision on their investment in Units.
If the Unitholder disposes of a Unit, he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust Fund involved including
his pro rata portion of all of the Securities represented by the Unit.
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Special Tax Consequences of Distributions In Kind Upon Redemption of Units. As
discussed in 'Redemption,' under certain circumstances a Unitholder tendering
Units for redemption may request a Distribution In Kind of Securities upon the
redemption of Units. As previously discussed, prior to the redemption of Units,
a Unitholder is considered as owning a pro rata portion of each of a Trust
Fund's assets for Federal income tax purposes. The receipt of a Distribution In
Kind upon the redemption of Units would be deemed an exchange of such redeeming
Unitholder's pro rata portion of each of the shares of stock and other assets
held by a Trust Fund in exchange for an undivided interest in whole shares of
stock and possibly cash.
There are generally three different potential tax consequences which may occur
under a Distribution In Kind with respect to each Security owned by a Trust
Fund. A 'Security' for this purpose is a particular class of stock issued by a
particular corporation. If the Unitholder receives only whole shares of a
Security in exchange for his or her pro rata portion in each share of such
Security held by a Trust Fund, there is no taxable gain or loss recognized upon
such deemed exchange pursuant to Section 1036 of the Code. If the Unitholder
receives whole shares of a particular Security plus cash in lieu of a fractional
share of such Security, and if the fair market value of the Unitholder's pro
rata portion of the shares of such Security exceeds his tax basis in his pro
rata portion of such Security, taxable gain would be recognized in an amount not
to exceed the amount of such cash received, pursuant to Section 1031(b) of the
Code. No taxable loss would be recognized upon such an exchange pursuant to
Section 1031(c) of the Code, whether or not cash is received in lieu of a
fractional share. Under either of these circumstances, special rules will be
applied under Section 1031(d) of the Code to determine the Unitholder's tax
basis in the shares of such particular Security which he receives as part of the
Distribution In Kind. Finally, if a Unitholder's pro rata interest in a Security
does not equal a whole share, he may receive entirely cash in exchange for his
pro rata portion of a particular Security. In such case, taxable gain or loss is
measured by comparing the amount of cash received by the Unitholder with his tax
basis in such Security.
Because each Trust Fund will own many Securities, a Unitholder who requests a
Distribution In Kind will have to analyze the tax consequences with respect to
each Security owned by the Trust Fund involved. The amount of taxable gain (or
loss) recognized upon such redemption will generally equal the sum of the gain
(or loss) recognized under the rules described above by the redeeming Unitholder
with respect to each Security owned by a Trust Fund. Redeeming Unitholders who
request a Distribution In Kind are advised to consult their tax advisers in this
regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among the Securities held in a Trust
Fund in accordance with the proportion of the fair market values of such
Securities on the date the Units are purchased in order to determine such
Unitholder's tax basis for his pro rata portion of each Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by a Trust Fund will be reduced to the extent dividends paid with respect
to such Security are received by such Trust Fund which are not taxable as
ordinary income as described above.
General. Each Unitholder will be requested to provide the Unitholder's taxpayer
identification number to the Trustee and to certify that the Unitholder has not
been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by a Trust Fund to
such
10
<PAGE> 11
Unitholder (including amounts received upon the redemption of Units) will be
subject to back-up withholding. Distributions by a Trust Fund will generally be
subject to United States income taxation and withholding in the case of Units
held by non-resident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisers.
The foregoing discussion relates only to United States Federal income taxes;
Unitholders may be subject to state and local taxation in other jurisdictions.
Unitholders should consult their tax advisers regarding potential state or local
taxation with respect to the Units.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. During the secondary market, Units are offered at the
Public Offering Price (which is based on the aggregate underlying bid value of
the Securities in the Trust Fund and includes a sales charge of 4.0% of the
Public Offering Price which charge is equivalent to 4.167% of the net amount
invested) plus a pro rata share of any accumulated dividends. Such underlying
value shall also include the proportionate share of any undistributed cash held
in the Capital Account of the Trust involved.
The sales charge per Unit of a Trust Fund in the secondary market will be
reduced pursuant to the following graduated scale:
<TABLE>
<CAPTION>
PERCENT
PERCENT OF
OF NET
OFFERING AMOUNT
NO. OF UNITS* PRICE INVESTED
- -------------------------------------------------------------------- ----- ------
<S> <C> <C>
Less than 10,000.................................................... 4.00 % 4.167 %
10,000 but less than 25,000......................................... 3.50 3.627
25,000 but less than 50,000......................................... 3.00 3.093
50,000 but less than 75,000......................................... 2.50 2.564
75,000 or more...................................................... 2.25 2.302
</TABLE>
- ---------------
* The breakpoint sales charges are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied on
whichever basis is more favorable to the investor.
The reduced sales charges as shown on the tables above will apply to all
purchases of Units on any one day by the same purchaser from the same
Underwriter or dealer and for this purpose purchases of Units of a Trust Fund
will be aggregated with concurrent purchases of units of any other unit
investment trust that may be offered by the Sponsor. Additionally, Units
purchased in the name of a spouse or child (under 21) of such purchaser will be
deemed to be additional purchases by such purchaser. The reduced sales charges
will also be applicable to a trust or other fiduciary purchasing for a single
trust estate or single fiduciary account.
The Sponsor intends to permit officers, directors and employees of the Sponsor
and its affiliates and, in the discretion of the Sponsor, registered
representatives of selling firms to purchase Units of the Trust Funds without a
sales charge, although a transaction processing fee may be imposed on such
trades.
During the secondary market, the Evaluator will appraise or cause to be
appraised daily the value of the underlying Securities as of 3:15 P.M. Central
time on days the New York Stock Exchange is open and will adjust the Public
Offering Price of the Units commensurate with such valuation. Such Public
Offering Price will be effective for all orders received at or prior to the
close of trading on the New York Stock Exchange on each such day. Orders
received by the Trustee, Sponsor or any dealer for
11
<PAGE> 12
purchases, sales or redemptions after that time, or on a day when the New York
Stock Exchange is closed, will be held until the next determination of price.
The value of the Securities is determined on each business day by the Evaluator
based on the last bid prices during the secondary market and for redemptions on
the day the valuation is made for Securities listed on a national stock exchange
or, if not so listed, on the last offer (or bid as the case may be) prices on
the over-the-counter market or by taking into account the same factors referred
to under 'Redemption--Computation of Redemption Price.'
The minimum purchase in the secondary market is 100 Units of a particular Trust
Fund.
PUBLIC DISTRIBUTION OF UNITS. During the secondary offering period, Units of
each Trust Fund will be distributed to the public at the Public Offering Price
determined in the manner provided above.
The Sponsor has qualified Units of each Trust Fund for sale in a number of
states. Units will be sold through dealers who are members of the National
Association of Securities Dealers, Inc. and through others. Sales may be made to
or through dealers at prices which represent discounts from the Public Offering
Price as set forth below. Certain commercial banks are making Units of the Trust
Funds available to their customers on an agency basis. A portion of the sales
charge paid by their customers is retained by or remitted to the banks in the
amounts shown in the table below. Under the Glass-Steagall Act, banks are
prohibited from underwriting Trust Fund Units; however, the Glass-Steagall Act
does permit certain agency transactions and the banking regulators have
indicated that these particular agency transactions are permitted under such
Act. In addition, state securities laws on this issue may differ from the
interpretations of Federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law. The
Sponsor reserves the right to change the discounts set forth below from time to
time. In addition to such discounts, the Sponsor may, from time to time, pay or
allow an additional discount, in the form of cash or other compensation, to
dealers employing registered representatives who sell, during a specified time
period, a minimum dollar amount of Units of a Trust and other unit investment
trusts underwritten by the Sponsor. At various times the Sponsor may implement
programs under which the sales force of a broker or dealer may be eligible to
win nominal awards for certain sales efforts, or under which the Sponsor will
reallow to any such broker or dealer that sponsors sales contests or recognition
programs conforming to criteria established by the Sponsor, or participates in
sales programs sponsored by the Sponsor, an amount not exceeding the total
applicable sales charges on the sales generated by such person at the public
offering price during such programs. Also, the Sponsor in its discretion may
from time to time pursuant to objective criteria established by the Sponsor pay
fees to qualifying brokers or dealers for certain services or activities which
are primarily intended to result in sales of Units of the Trust Funds. Such
payments are made by the Sponsor out of its own assets, and not out of the
assets of the Trust Funds. These programs will not change the price Unitholders
pay for their Units or the
12
<PAGE> 13
amount that a Trust Fund will receive from the Units sold. The difference
between the discount and the sales charge will be retained by the Sponsor.
<TABLE>
<CAPTION>
FIRM
SALES
OR
REGULAR SALE
CONCESSION ARRANGEMENTS
OR ($250,000
AGENCY OR
NUMBER OF UNITS* COMMISSION MORE)
- ----------------------------------------------------------------- ------ ------
<S> <C> <C>
Less than 10,000................................................. 2.75 % 3.00 %
10,000 but less than 25,000...................................... 2.25 2.50
25,000 but less than 50,000...................................... 2.00 2.25
50,000 but less than 75,000...................................... 1.50 1.75
75,000 or more................................................... 1.25 1.50
</TABLE>
- ---------------
* The breakpoint discounts are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit.
The Sponsor reserves the right to reject, in whole or in part, any order for the
purchase of Units.
SPONSOR PROFITS. The Sponsor will receive gross sales charges equal to the
percentage of the Public Offering Price of the Units of a Trust Fund as stated
under 'Public Offering Price.'
MARKET FOR UNITS
While not obligated to do so, the Sponsor intends to, subject to change at any
time, maintain a market for Units of the Trust Funds offered hereby and to
continuously offer to purchase said Units at prices, determined by the
Evaluator, based on the bid value of the underlying Securities. The aggregate
bid prices of the underlying Securities are expected to be less than the related
aggregate offering prices (which is the evaluation method used during the
initial public offering period). Accordingly, Unitholders who wish to dispose of
their Units should inquire of their bank or broker as to current market prices
in order to determine whether there is in existence any price in excess of the
Redemption Price and, if so, the amount thereof. The offering price of any Units
resold by the Sponsor will be in accord with that described in the currently
effective prospectus describing such Units. Any profit or loss resulting from
the resale of such Units will belong to the Sponsor. The Sponsor may suspend or
discontinue purchases of Units of the Trust Funds if the supply of Units exceeds
demand, or for other business reasons.
REDEMPTION
GENERAL. A Unitholder who does not dispose of Units in the secondary market
described above may cause Units to be redeemed by the Trustee by making a
written request to the Kemper Service Company, service agent for the Trustee at
P.O. Box 419430, Kansas City, Missouri 64141-6430 and, in the case of Units
evidenced by a certificate, by tendering such certificate to the Trustee,
properly endorsed or accompanied by a written instrument or instruments of
transfer in form satisfactory to the Trustee. Unitholders must sign the request,
and such certificate or transfer instrument, exactly as their names appear on
the records of the Trustee and on any certificate representing the Units to be
redeemed. If the amount of the redemption is $25,000 or less and the proceeds
are payable to the Unitholder(s) of record at the address of record, no
signature guarantee is necessary for redemptions by individual account owners
(including joint owners). Additional documentation may be requested, and a
signature guarantee is always required, from corporations, executors,
administrators, trustees,
13
<PAGE> 14
guardians or associations. The signatures must be guaranteed by a commercial
bank or trust company, savings & loan association or by a member firm of a
national securities exchange. A certificate should only be sent by registered or
certified mail for the protection of the Unitholder. Since tender of the
certificate is required for redemption when one has been issued, Units
represented by a certificate cannot be redeemed until the certificate
representing such Units has been received by the purchasers.
Redemption shall be made by the Trustee on the seventh calendar day following
the day on which a tender for redemption is received, or if the seventh calendar
day is not a business day, on the first business day prior thereto (the
'Redemption Date') by payment of cash equivalent to the Redemption Price for the
Trust Fund involved, determined as set forth below under 'Computation of
Redemption Price,' as of the evaluation time stated under 'Essential
Information,' next following such tender, multiplied by the number of Units
being redeemed. Any Units redeemed shall be cancelled and any undivided
fractional interest in such Trust Fund extinguished. The price received upon
redemption might be more or less than the amount paid by the Unitholder
depending on the value of the Securities in a Trust Fund at the time of
redemption.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing a tax return. Under normal circumstances the
Trustee obtains the Unitholder's tax identification number from the selling
broker. However, any time a Unitholder elects to tender Units for redemption,
such Unitholder should make sure that the Trustee has been provided a certified
tax identification number in order to avoid this possible 'back-up withholding.'
In the event the Trustee has not been previously provided such number, one must
be provided at the time redemption is requested.
Any amounts paid on redemption representing unpaid dividends shall be withdrawn
from the Income Account of the Trust Fund involved to the extent that funds are
available for such purpose. All other amounts paid on redemption shall be
withdrawn from the Capital Account for such Trust Fund. The Trustee is empowered
to sell Securities for a Trust Fund in order to make funds available for the
redemption of Units of such Trust Fund. Such sale may be required when
Securities would not otherwise be sold and might result in lower prices than
might otherwise be realized. To the extent Securities are sold, the size and
diversity of the affected Trust Fund will be reduced.
The Trustee is irrevocably authorized in its discretion, if an Underwriter does
not elect to purchase any Unit tendered for redemption, in lieu of redeeming
such Units, to sell such Units in the over-the-counter market for the account of
tendering Unitholders at prices which will return to the Unitholders amounts in
cash, net after brokerage commissions, transfer taxes and other charges, equal
to or in excess of the Redemption Price for such Units. In the event of any such
sale, the Trustee shall pay the net proceeds thereof to the Unitholders on the
day they would otherwise be entitled to receive payment of the Redemption Price.
Unitholders tendering Units for redemption may request a distribution in kind (a
'Distribution In Kind') from the Trustee in lieu of cash redemption. A
Unitholder may request a Distribution In Kind of an amount and value of
Securities per Unit equal to the Redemption Price per Unit as determined as of
the evaluation time next following the tender, provided that the tendering
Unitholder is entitled
14
<PAGE> 15
to receive at least $50,000 of proceeds as part of his or her distribution and
the Unitholder has elected to redeem prior to the date specified in Part Two for
each Trust. If the Unitholder meets these requirements, a Distribution In Kind
will be made by the Trustee through the distribution of each of the Securities
of the Trust involved in book entry form to the account of the Unitholder's bank
or broker-dealer at Depository Trust Company. The tendering Unitholder shall be
entitled to receive whole shares of each of the Securities comprising the
portfolio of the Trust involved and cash from the Capital Account equal to the
fractional shares to which the tendering Unitholder is entitled. The Trustee
shall make any adjustments necessary to reflect differences between the
Redemption Price of the Units and the value of the Securities distributed in
kind as of the date of tender. If funds in the Capital Account are insufficient
to cover the required cash distribution to the tendering Unitholder, the Trustee
may sell Securities. The in kind redemption option may be terminated by the
Sponsor on a date other than that specified under 'Redemption In Kind' on page 3
of this Prospectus upon notice to the Unitholders prior to the specified date.
To the extent that Securities are redeemed in kind or sold, the size and
diversity of the affected Trust Fund will be reduced but each remaining Unit
will continue to represent approximately the same proportional interest in each
Security. Sales may be required at a time when Securities would not otherwise be
sold and may result in lower prices than might otherwise be realized. The price
received upon redemption may be more or less than the amount paid by the
Unitholder depending on the value of the Securities in the portfolio at the time
of redemption. Special Federal income tax consequences will result if a
Unitholder requests a Distribution In Kind (see 'Federal Tax Status').
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which (as determined by the Securities
and Exchange Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result of which
disposal by the Trustee of Securities is not reasonably practicable or it is not
reasonably practicable to fairly determine the value of the underlying
Securities in accordance with each Trust Agreement; or (3) for such other period
as the Securities and Exchange Commission may by order permit. The Trustee is
not liable to any person in any way for any loss or damage which may result from
any such suspension or postponement.
COMPUTATION OF REDEMPTION PRICE. The Redemption Price per Unit (as well as the
secondary market Public Offering Price) will be determined on the basis of the
aggregate underlying bid value of the Securities in the Trust Fund involved. On
the Initial Date of Deposit, the Public Offering Price per Unit (which is based
on the underlying offering prices of the Securities and includes the sales
charge) exceeded the value at which Units could have been redeemed by the amount
shown under 'Essential Information.' While the Trustee has the power to
determine the Redemption Price per Unit when Units are tendered for redemption,
such authority has been delegated to the Evaluator which determines the price
per Unit on a daily basis. The Redemption Price per Unit is the pro rata share
of each Unit in a Trust Fund determined on the basis of (i) the cash on hand in
such Trust Fund or monies in the process of being collected and (ii) the value
of the Securities in the Trust Fund less (a) amounts representing taxes or other
governmental charges payable out of the Trust, (b) any amount owing to the
Trustee for its advances and (c) the accrued expenses of such Trust. The
Evaluator may determine the value of the Securities in a Trust Fund in the
following manner: if the Security is listed on a national securities exchange,
the evaluation will generally be based on the last bid price on the exchange
(unless the Evaluator deems the price inappropriate as a basis for
15
<PAGE> 16
evaluation). If the Security is not so listed or, if so listed and the principal
market for the Security is other than on the exchange, the evaluation will
generally be made by the Evaluator in good faith based on the last bid price on
the over-the-counter market (unless the Evaluator deems such price inappropriate
as a basis for evaluation) or, if a bid price is not available, (1) on the basis
of the current bid price for comparable securities, (2) by the Evaluator's
appraising the value of the Securities in good faith at the bid side of the
market or (3) by any combination thereof. See 'Public Offering of Units--Public
Offering Price.'
RETIREMENT PLANS
Each Trust Fund may be well suited for purchase by Individual Retirement
Accounts, Keogh Plans, pension funds and other qualified retirement plans,
certain of which are briefly described below.
Generally, capital gains and income received under each of the foregoing plans
are deferred from Federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special income averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax laws
related thereto and should consult their attorneys or tax advisers with respect
to the establishment and maintenance of any such plan. Such plans are offered by
brokerage firms and other financial institutions. Each Trust will waive the
$1,000 minimum investment requirement for IRA accounts. The minimum investment
is $250 for tax-defined plans such as IRA accounts. Fees and charges with
respect to such plans may vary.
Individual Retirement Account--IRA. Any individual under age 70 1/2 may
contribute the lesser of $2,000 or 100% of compensation to an IRA annually. Such
contributions are fully deductible if the individual (and spouse if filing
jointly) are not covered by a retirement plan at work. The deductible amount an
individual may contribute to an IRA will be reduced $10 for each $50 of adjusted
gross income over $25,000 ($40,000 if married, filing jointly or $0 if married,
filing separately), if either an individual or their spouse (if married, filing
jointly) is an active participant in an employer maintained retirement plan.
Thus, if an individual has adjusted gross income over $35,000 ($50,000 if
married, filing jointly or $0 if married, filing separately) and if an
individual or their spouse is an active participant in an employer maintained
retirement plan, no IRA deduction is permitted. Under the Code, an individual
may make nondeductible contributions to the extent deductible contributions are
not allowed. All distributions from an IRA (other than the return of certain
excess contributions) are treated as ordinary income for Federal income taxation
purposes provided that under the Code an individual need not pay tax on the
return of nondeductible contributions, the amount includable in income for the
taxable year is the portion of the amount withdrawn for the taxable year as the
individual's aggregate nondeductible IRA contributions bear to the aggregate
balance of all IRAs of the individual.
A participant's interest in an IRA must be, or commence to be, distributed to
the participant not later than April 1 of the calendar year following the year
during which the participant attains age 70 1/2. Distributions made before
attainment of age 59 1/2, except in the case of the participant's death or
disability, or where the amount distributed is to be rolled over to another IRA,
or where the distributions are taken as a series of substantially equal periodic
payments over the participant's life or life expectancy (or the joint lives or
life expectancies of the participant and the designated beneficiary) are
generally subject to a surtax in an amount equal to 10% of the distribution. The
amount of such periodic payments may not be modified before the later of five
years or attainment of age 59 1/2. Excess contributions are subject to an annual
6% excise tax.
16
<PAGE> 17
IRA applications, disclosure statements and trust agreements are available from
the Sponsor upon request.
Qualified Retirement Plans. Units of each Trust may be purchased by qualified
pension or profit sharing plans maintained by corporations, partnerships or sole
proprietors. The maximum annual contribution for a participant in a money
purchase pension plan or to paired profit sharing and pension plans is the
lesser of 25% of compensation or $30,000. Prototype plan documents for
establishing qualified retirement plans are available from the Sponsor upon
request.
Excess Distributions Tax. In addition to the other taxes due by reason of a
plan distribution, a tax of 15% may apply to certain aggregate distributions
from IRAs, Keogh plans, and corporate retirement plans to the extent such
aggregate taxable distributions exceed specified amounts (generally $150,000, as
adjusted) during a tax year. This 15% tax will not apply to distributions on
account of death, qualified domestic relations orders or amounts rolled over to
an eligible plan. In general, for lump sum distributions the excess distribution
over $750,000 (as adjusted) will be subject to the 15% tax.
The Trustee, Investors Fiduciary Trust Company ('IFTC'), has agreed to act as
custodian for certain retirement plan accounts. An annual fee of $12.00 per
account, if not paid separately, will be assessed by the Trustee and paid
through the liquidation of shares of the reinvestment account. An individual
wishing IFTC to act as custodian must complete a Kemper UIT/IRA application and
forward it along with a check made payable to Investors Fiduciary Trust Company.
Certificates for Individual Retirement Accounts can not be issued.
UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of a Trust Fund will not be evidenced by
certificates unless a Unitholder, the Unitholder's registered broker/dealer or
the clearing agent for such broker/dealer makes a written request to the
Trustee. Units are transferable by making a written request to the Trustee and,
in the case of Units evidenced by a certificate, by presenting and surrendering
such certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent by registered or
certified mail for the protection of the Unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate representing
the Units to be transferred. Such signatures must be guaranteed by a participant
in the Securities Transfer Agents Medallion Program ('STAMP') or with such other
signature program in addition to, or in substitution for, STAMP, as may be
accepted by the Trustee.
Units may be purchased and certificates, if requested, will be issued in
denominations of one Unit or any multiple thereof, subject to each Trust's
minimum investment requirement of 100 Units or $1,000. Fractions of Units, if
any, will be computed to three decimal places. Any certificate issued will be
numbered serially for identification, issued in fully registered form and will
be transferable only on the books of the Trustee. The Trustee may require a
Unitholder to pay a reasonable fee, to be determined in the sole discretion of
the Trustee, for each certificate re-issued or transferred and to pay any
governmental charge that may be imposed in connection with each such transfer or
interchange. The Trustee at the present time does not intend to charge for the
normal transfer or interchange of certificates. Destroyed, stolen, mutilated or
lost certificates will be replaced upon delivery to the
17
<PAGE> 18
Trustee of satisfactory indemnity (generally amounting to 3% of the market value
of the Units), affidavit of loss, evidence of ownership and payment of expenses
incurred.
DISTRIBUTIONS TO UNITHOLDERS. Income received by a Trust is credited by the
Trustee to the Income Account of such Trust. Other receipts are credited to the
Capital Account of such Trust. Income received by a Trust will be distributed on
or shortly after the date set forth in Part Two for each Trust on a pro rata
basis to Unitholders of record as of the preceding record date (which will be
the first day of the related month). All distributions will be net of applicable
expenses. There is no assurance that any actual distributions will be made since
all dividends received may be used to pay expenses. In addition, amounts from
the Capital Account of such Trust, if any, will be distributed at least annually
in December to the Unitholders then of record. Proceeds received from the
disposition of any of the Securities after a record date and prior to the
following distribution date will be held in the Capital Account and not
distributed until the next distribution date applicable to such Capital Account.
The Trustee shall not be required to make a distribution from the Capital
Account unless the cash balance on deposit therein available for distribution
shall be sufficient to distribute at least $1.00 per Unit. The Trustee is not
required to pay interest on funds held in the Capital or Income Accounts (but
may itself earn interest thereon and therefore benefits from the use of such
funds). The Trustee is authorized to reinvest any funds held in the Capital or
Income Accounts, pending distribution, in U.S. Treasury obligations which mature
on or before the next applicable distribution date. Any obligations so acquired
must be held until they mature and proceeds therefrom may not be reinvested.
The distribution to the Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of an amount
substantially equal to such portion of the Unitholders' pro rata share of the
dividend distributions then held in the Income Account after deducting estimated
expenses. Because dividends are not received by a Trust at a constant rate
throughout the year, such distributions to Unitholders are expected to
fluctuate. Persons who purchase Units will commence receiving distributions only
after such person becomes a record owner. Notification to the Trustee of the
transfer of Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.
As of the first day of each month, the Trustee will deduct from the Income
Account of a Trust and, to the extent funds are not sufficient therein, from the
Capital Account of such Trust amounts necessary to pay the expenses of the Trust
(as determined on the basis set forth under 'Trust Operating Expenses'). The
Trustee also may withdraw from said accounts such amounts, if any, as it deems
necessary to establish a reserve for any governmental charges payable out of
such Trust. Amounts so withdrawn shall not be considered a part of the Trust's
assets until such time as the Trustee shall return all or any part of such
amounts to the appropriate accounts. In addition, the Trustee may withdraw from
the Income and Capital Accounts of such Trust such amounts as may be necessary
to cover redemptions of Units.
DISTRIBUTION REINVESTMENT. Kemper Financial Services, Inc. ('KFS'), an affiliate
of the Sponsor, is the investment manager and principal underwriter of several
front-end load mutual funds. Each Unitholder of a Trust Fund may elect to have
distributions of capital (including capital gains, if any) or dividends or both
automatically invested without charge in shares of any one of these funds, other
than those Kemper-advised mutual funds sold with a contingent deferred sales
charge. Since the portfolio securities and investment objectives of such
Kemper-advised mutual funds may differ significantly from that of the Trust
Funds, Unitholders should carefully consider the consequences before selecting
such mutual funds for reinvestment. Detailed information with respect to the
18
<PAGE> 19
investment objectives and the management of such mutual funds is contained in
their respective prospectuses, which can be obtained from the Sponsor upon
request. An investor should read the prospectus of the reinvestment fund
selected prior to making the election to reinvest. Unitholders who desire to
have such distributions automatically reinvested should inform their broker at
the time of purchase or should file with the Program Agent referred to below a
written notice of election.
Unitholders who are receiving distributions in cash may elect to participate in
distribution reinvestment by filing with the Program Agent an election to have
such distributions reinvested without charge. Such election must be received by
the Program Agent at least ten days prior to the Record Date applicable to any
distribution in order to be in effect for such Record Date. Any such election
shall remain in effect until a subsequent notice is received by the Program
Agent. See 'Unitholders--Distributions to Unitholders.'
The Program Agent is Investors Fiduciary Trust Company. All inquiries concerning
participation in distribution reinvestment should be directed to the Kemper
Service Company, service agent for the Program Agent at P.O. Box 419430, Kansas
City, Missouri 64141-6430, telephone (800) 422-2848.
STATEMENTS TO UNITHOLDERS. With each distribution, the Trustee will furnish or
cause to be furnished to each Unitholder a statement of the amount of income and
the amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit.
The accounts of each Trust Fund are required to be audited annually, at such
Trust Fund's expense, by independent public accountants designated by such
Sponsor, unless the Trustee determines that such an audit would not be in the
best interest of the Unitholders of such Trust Fund. The accountants' report
will be furnished by the Trustee to any Unitholder of a Trust Fund upon written
request. Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish to each person who at any time during the calendar
year was a Unitholder of a Trust Fund a statement, covering the calendar year,
setting forth for such Trust Fund:
A. As to the Income Account:
1. Income received;
2. Deductions for applicable taxes and for fees and expenses of the Trust and
for redemptions of Units, if any; and
3. The balance remaining after such distributions and deductions, expressed in
each case both as a total dollar amount and as a dollar amount representing the
pro rata share of each Unit outstanding on the last business day of such
calendar year; and
B. As to the Capital Account:
1. The dates of disposition of any Securities (other than pursuant to
Distribution In Kind) and the net proceeds received therefrom;
2. The results of Distributions In Kind in connection with redemptions of Units,
if any;
3. Deductions for payment of applicable taxes and fees and expenses of the Trust
held for distribution to Unitholders of record as of a date prior to the
determination; and
19
<PAGE> 20
4. The balance remaining after such distributions and deductions expressed both
as a total dollar amount and as a dollar amount representing the pro rata share
of each Unit outstanding on the last business day of such calendar year; and
C. The following information:
1. A list of the Securities as of the last business day of such calendar year;
2. The number of Units outstanding on the last business day of such calendar
year;
3. The Redemption Price based on the last evaluation made during such calendar
year;
4. The amount actually distributed during such calendar year from the Income and
Capital Accounts separately stated, expressed both as total dollar amounts and
as dollar amounts per Unit outstanding on the Record Dates for each such
distribution.
RIGHTS OF UNITHOLDERS. A Unitholder may at any time tender Units to the Trustee
for redemption. The death or incapacity of any Unitholder will not operate to
terminate a Trust Fund nor entitle legal representatives or heirs to claim an
accounting or to bring any action or proceeding in any court for partition or
winding up of a Trust Fund.
No Unitholder shall have the right to control the operation and management of a
Trust Fund in any manner, except to vote with respect to the amendment of the
Trust Agreement or termination of a Trust Fund.
INVESTMENT SUPERVISION
The Trust Funds are unit investment trusts and are not 'actively managed' funds.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analyses. The portfolios of the Trust Funds, however, will
not be actively managed and therefore the adverse financial condition of an
issuer will not necessarily require the sale of its securities from a portfolio.
However, the Sponsor may direct the Trustee to dispose of Securities upon
default in payment of amounts due on debt obligations of the issuer of the
Securities or upon a decline in price or the occurrence of other market or
credit factors that in the opinion of the Sponsor would make the retention of
such Securities in a Trust Fund detrimental to the interest of the Unitholders.
If the Trustee disposes of such Securities, the Trustee cannot use the proceeds
of the sale to purchase additional Securities to be included in such Trust. Any
proceeds must be distributed directly to the Unitholders on a pro rata basis.
The Trustee may sell Securities, designated by the Sponsor, from a Trust Fund
for the purpose of redeeming Units of such Trust Fund tendered for redemption
and the payment of expenses.
ADMINISTRATION OF THE TRUSTS
THE TRUSTEE. The Trustee, Investors Fiduciary Trust Company, is a trust company
specializing in investment related services, organized and existing under the
laws of Missouri, having its trust office at 127 West 10th Street, Kansas City,
Missouri 64105. The Trustee is subject to supervision and examination by the
Division of Finance of the State of Missouri and the Federal Deposit Insurance
Corporation. Investors Fiduciary Trust Company is jointly owned by DST Systems,
Inc. and Kemper Financial Services, Inc., an affiliate of the Sponsor.
20
<PAGE> 21
The Trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolios of the Trust Funds. For information relating to the
responsibilities of the Trustee under the Trust Agreement, reference is made to
the material set forth under 'Unitholders.'
In accordance with the Trust Agreement, the Trustee shall keep records of all
transactions at its office. Such records shall include the name and address of,
and the number of Units held by, every Unitholder of each Trust Fund. Such books
and records shall be open to inspection by any Unitholder of a Trust Fund at all
reasonable times during usual business hours. The Trustee shall make such annual
or other reports as may from time to time be required under any applicable state
or Federal statute, rule or regulation. The Trustee shall keep a certified copy
or duplicate original of the Trust Agreement on file in its office available for
inspection at all reasonable times during usual business hours by any
Unitholder, together with a current list of the Securities held in a Trust Fund.
Pursuant to the Trust Agreement, the Trustee may employ one or more agents for
the purpose of custody and safeguarding of Securities comprising each Trust
Fund.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of the trust created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor.
The Trustee or successor trustee must mail a copy of the notice of resignation
to all Unitholders then of record, not less than sixty days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. In case the Trustee becomes
incapable of acting or is adjudged a bankrupt or is taken over by public
authorities, the Sponsor may remove the Trustee and appoint a successor trustee
as provided in the Trust Agreement. Notice of such removal and appointment shall
be mailed to each Unitholder by the Sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original Trustee shall vest in the
successor. The Trustee shall be a corporation organized under the laws of the
United States, or any state thereof, which is authorized under such laws to
exercise trust powers. The Trustee shall have at all times an aggregate capital,
surplus and undivided profits of not less than $2,000,000.
THE SPONSOR. The Sponsor, Kemper Unit Investment Trusts, with an office at 77
West Wacker Drive, 5th Floor, Chicago, Illinois 60601, (800) 621-5024, is a
service of Kemper Securities, Inc. which is a wholly-owned subsidiary of Kemper
Financial Companies, Inc. which, in turn, is a wholly-owned subsidiary of Kemper
Corporation. The Sponsor acts as underwriter of a number of other Kemper unit
investment trusts and will act as underwriter of any other unit investment trust
products developed by the Sponsor in the future. As of April 30, 1993, the total
stockholder's equity of Kemper Securities, Inc. was $426,125,017 (unaudited).
If at any time the Sponsor shall fail to perform any of its duties under the
Trust Agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the Trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the Trust Agreement and liquidate the Trust Fund
involved as provided therein, or (c) continue to act as Trustee without
terminating the Trust Agreement.
21
<PAGE> 22
The foregoing financial information with regard to the Sponsor relates to the
Sponsor only and not to the Trust Funds. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations with respect to the Trust Funds. More comprehensive financial
information can be obtained upon request from the Sponsor.
THE EVALUATOR. Kemper Unit Investment Trusts, the Sponsor, also serves as
Evaluator. The Evaluator may resign or be removed by the Trustee in which even
the Trustee is to use its best efforts to appoint a satisfactory successor. Such
resignation or removal shall become effective upon acceptance of appointment by
the successor evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within thirty days after notice of resignation, the
Evaluator may apply to a court of competent jurisdiction for the appointment of
a successor. Notice of such resignation or removal and appointment shall be
mailed by the Trustee to each Unitholder.
AMENDMENT AND TERMINATION. The Trust Agreement may be amended by the Trustee and
the Sponsor without the consent of any of the Unitholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective or
inconsistent; (2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental agency; or (3)
to make such provisions as shall not materially adversely affect the interests
of the Unitholders. The Trust Amendment with respect to a Trust Fund may also be
amended in any respect by the Sponsor and the Trustee, or any of the provisions
thereof may be waived, with the consent of the holders of Units representing
66 2/3% of the Units then outstanding of such Trust Fund, provided that no such
amendment or waiver will reduce the interest of any Unitholder thereof without
the consent of such Unitholder or reduce the percentage of Units required to
consent to any such amendment or waiver without the consent of all Unitholders
of such Trust Fund. In no event shall the Trust Agreement be amended to increase
the number of Units of a Trust Fund issuable thereunder or to permit, except in
accordance with the provisions of the Trust Agreement, the acquisition of any
Securities in addition to or in substitution for those initially deposited in a
Trust Fund. The Trustee shall promptly notify Unitholders of the substance of
any such amendment.
The Trust Agreement provides that a Trust Fund shall terminate upon the
liquidation, redemption or other disposition of the last of the Securities held
in such Trust Fund but in no event is it to continue beyond the Mandatory
Termination Date set forth under 'Essential Information.' If the value of a
Trust Fund shall be less than the applicable minimum value stated under
'Essential Information' (40% of the aggregate value of the Securities--based on
the value at the date of deposit of such Securities into such Trust Fund), the
Trustee may, in its discretion, and shall, when so directed by the Sponsor,
terminate the Trust Fund. The Trust Fund may be terminated at any time by the
holders of Units representing 66 2/3% of the Units thereof then outstanding.
No later than the date specified under 'Liquidation Period' set forth under
'Essential Information,' the Trustee will begin to sell all of the underlying
Securities on behalf of Unitholders in connection with the termination of a
Trust Fund. The Sponsor has agreed to assist the Trustee in these sales. The
sale proceeds will be net of any incidental expenses involved in the sales.
The Sponsor will attempt to sell the Securities as quickly as it can during the
Liquidation Period without in its judgment materially adversely affecting the
market price of the Securities, but it is expected that all of the Securities
will in any event be disposed of by the end of the Liquidation Period. The
Sponsor does not anticipate that the period will be longer than one month, and
it could be as short as one day, depending on the liquidity of the Securities
being sold. The liquidity of any
22
<PAGE> 23
Security depends on the daily trading volume of the Security and the amount that
the Sponsor has available for sale on any particular day.
It is expected (but not required) that the Sponsor will generally follow the
following guidelines in selling the Securities: for highly liquid Securities,
the Sponsor will generally sell Securities on the first day of the Liquidation
Period; for less liquid Securities, on each of the first two days of the
Liquidation Period, the Sponsor will generally sell any amount of any underlying
Securities at a price no less than 1/2 of one point under the last closing sale
price of those Securities. Thereafter, the price limit will increase to one
point under the last closing sale price. After four days, the Sponsor currently
intends to sell at least a fraction of the remaining underlying Securities, the
numerator of which is one and the denominator of which is the total number of
days remaining (including that day) in the Liquidation Period without any price
restrictions. Of course, no assurances can be given that the market value of the
Securities will not be adversely affected during the Liquidation Period.
Any Unitholder who wishes to receive a Distribution In Kind at the termination
of a Trust and who otherwise qualifies for such a distribution (see
'Redemption') must notify the Trustee no later than the date indicated in Part
Two for each Trust.
In the event of termination of a Trust Fund, written notice thereof will be sent
by the Trustee to all Unitholders of such Trust Fund. Within a reasonable period
after termination, the Trustee will sell any Securities remaining in that Trust
Fund and, after paying all expenses and charges incurred by such Trust Fund,
will distribute to Unitholders thereof (upon surrender for cancellation of
certificates for Units, if issued) their pro rata share of the balances
remaining in the Income and Capital Accounts of the Trust Fund.
LIMITATIONS ON LIABILITY. The Sponsor: The Sponsor is liable for the performance
of its obligations arising from its responsibilities under the Trust Agreement,
but will be under no liability to the Unitholders for taking any action or
refraining from any action in good faith pursuant to the Trust Agreement or for
errors in judgment, except in cases of its own gross negligence, bad faith or
willful misconduct. The Sponsor shall not be liable or responsible in any way
for depreciation or loss incurred by reason of the sale of any Securities.
The Trustee: The Trust Agreement provides that the Trustee shall be under no
liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of monies, Securities or
certificates except by reason of its own gross negligence, bad faith or willful
misconduct, nor shall the Trustee be liable or responsible in any way for
depreciation or loss incurred by reason of the sale by the Trustee of any
Securities. In the event that the Sponsor shall fail to act, the Trustee may act
and shall not be liable for any such action taken by it in good faith. The
Trustee shall not be personally liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the interest
thereof. In addition, the Trust Agreement contains other customary provisions
limiting the liability of the Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation furnished
by the Evaluator and shall have no responsibility for the accuracy thereof. The
Trust Agreement provides that the determinations made by the Evaluator shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the Trustee
or Unitholders for errors in judgment, but shall be liable only for its gross
negligence, lack of good faith or willful misconduct.
23
<PAGE> 24
EXPENSES OF THE TRUSTS
The Sponsor will not charge the Trusts any fees for services performed as
Sponsor. The Sponsor will receive a portion of the sale commissions paid in
connection with the purchase of Units and will share in profits, if any, related
to the deposit of Securities in the Trust Funds. The Sponsor has borne all the
expenses of creating and establishing the Trusts including the cost of the
initial preparation, printing and execution of the Prospectus, Trust Agreement
and certificates, legal and accounting expenses, advertising and selling
expenses, payment of closing fees, the expenses of the Trustee and other out-
of-pocket expenses.
The Trustee receives for its services that fee set forth under 'Essential
Information' in Part Two for each Trust. The Trustee's fee which is calculated
monthly is based on the largest number of Units outstanding during the calendar
year for which such compensation relates. The Trustee's fees are payable monthly
on or before the fifteenth day of the month from the Income Account to the
extent funds are available and then from the Capital Account. The Trustee
benefits to the extent there are funds for future distributions, payment of
expenses and redemptions in the Capital and Income Accounts since these Accounts
are non-interest bearing and the amounts earned by the Trustee are retained by
the Trustee. Part of the Trustee's compensation for its services to the Trust
Funds is expected to result from the use of these funds.
For evaluation of Securities in the Trust Funds, the Evaluator shall receive
that fee set forth under 'Essential Information' in Part Two for each Trust,
payable monthly, based upon the largest number of Units outstanding during the
calendar year for which such compensation relates.
The Trustee's fees and the Evaluator's fees are deducted from the Income Account
of each Trust Fund to the extent funds are available and then from the Capital
Account. Each such fee may be increased without approval of Unitholders by
amounts not exceeding a proportionate increase in the Consumer Price Index
entitled 'All Services Less Rent of Shelter,' published by the United States
Department of Labor, or any equivalent index substituted therefor.
The following additional charges are or may be incurred by each Trust Fund: (a)
fees for the Trustee's extraordinary services; (b) expenses of the Trustee
(including legal and auditing expenses, but not including any fees and expenses
charged by an agent for custody and safeguarding of Securities) and of counsel,
if any; (c) various governmental charges; (d) expenses and costs of any action
taken by the Trustee to protect a Trust or the rights and interests of the
Unitholders; (e) indemnification of the Trustee for any loss, liability or
expense incurred by it in the administration of a Trust not resulting from gross
negligence, bad faith or willful misconduct on its part; (f) indemnification of
the Sponsor for any loss, liability or expense incurred in acting in that
capacity without gross negligence, bad faith or willful misconduct; and (g)
expenditures incurred in contacting Unitholders upon termination of a Trust
Fund. The fees and expenses set forth herein are payable out of the Trust Fund
involved and, when owing to the Trustee, are secured by a lien on that Trust
Fund. The fees and expenses set forth herein are payable out of the Trust
involved. When such fees and expenses are paid by or owing to the Trustee, they
are secured by a lien on the portfolio of such Trust Fund. Since the Securities
are all common stocks, and the income stream produced by dividend payments is
unpredictable, the Sponsor cannot provide any assurance that dividends will be
sufficient to meet any or all expenses of a Trust Fund. If the balances in the
Income and Capital Accounts are insufficient to provide for amounts payable by a
Trust, the Trustee has the power to sell Securities to pay such amounts. These
sales may result in capital gains or losses to Unitholders. See 'Federal Tax
Status.'
24
<PAGE> 25
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to Federal
tax law have been passed upon by Chapman and Cutler, 111 West Monroe Street,
Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT AUDITORS
The statements of net assets, including the schedules of investments of each
Trust, appearing in Part Two for each Prospectus and Registration Statement have
been audited by Ernst & Young, independent auditors, as set forth in their
reports thereon appearing elsewhere therein and in the Registration Statement,
and are included in reliance upon such reports given upon the authority of such
firm as experts in accounting and auditing.
------------------
25
<PAGE> 26
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
CONTENTS
SUMMARY........................................ 2
THE TRUST FUNDS................................ 3
PORTFOLIOS..................................... 3
FEDERAL TAX STATUS............................. 8
PUBLIC OFFERING OF UNITS....................... 11
Public Offering Price........................ 11
Public Distribution of Units................. 12
Sponsor Profits.............................. 13
MARKET FOR UNITS............................... 13
REDEMPTION..................................... 13
General...................................... 13
Computation of Redemption Price.............. 15
RETIREMENT PLANS............................... 16
UNITHOLDERS.................................... 17
Ownership of Units........................... 17
Distributions to Unitholders................. 18
Distribution Reinvestment.................... 18
Statements to Unitholders.................... 19
Rights of Unitholders........................ 20
INVESTMENT SUPERVISION......................... 20
ADMINISTRATION OF THE TRUSTS................... 20
The Trustee.................................. 20
The Sponsor.................................. 21
The Evaluator................................ 22
Amendment and Termination.................... 22
Limitations on Liability..................... 23
EXPENSES OF THE TRUSTS......................... 24
LEGAL OPINIONS................................. 25
INDEPENDENT AUDITORS........................... 25
</TABLE>
- --------------------------------------------------------------
This Prospectus does not contain all
of the information with respect to
the investment company set forth in
its registration statement and
exhibits relating thereto which have
been filed with the Securities and
Exchange Commission, Washington,
D.C. under the Securities Act of
1933 and the Investment Company Act
of 1940, and to which reference is
hereby made.
- --------------------------------------------------------------
No person is authorized to give any
information or to make any
representations with respect to this
investment company not contained in
this Prospectus; and any information
or representation not contained
herein must not be relied upon as
having been authorized by the
Trusts, the Trustee, or the Sponsor.
Such registration does not imply
that the Trusts or the Units have
been guaranteed, sponsored,
recommended or approved by the
United States or any state or any
agency or officer thereof.
- --------------------------------------------------------------
This Prospectus does not constitute
an offer to sell, or a solicitation
of an offer to buy, securities in
any state to any person to whom it
is not lawful to make such offer in
such state or country.
<PAGE> 27
- -----------------------------------------------------------------------
- ---------------------------------------------------------------------
KEMPER
EQUITY
PORTFOLIO
TRUSTS.
- ---------------------------------------------------------------------
- -----------------------------------------------------------------------
----------------------------------------------------------------------
--------------------------------------------------------------------
PROSPECTUS
--------------------------------------------------------------------
----------------------------------------------------------------------
PART ONE
The date of this Part One is that date which
is set forth in Part Two of the Prospectus
------------------------------------------------------------------------------
KEMPER UNIT INVESTMENT TRUSTS
------------------------------------------------------------------------------
<PAGE> 2
Kemper Equity Portfolio Trust
Series 1
(Income and Growth)
Part Two
Dated April 29, 1994
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.
NOTE: Part Two of this Prospectus May Not Be Distributed unless
Accompanied by Part One.
<PAGE> 3
Kemper Equity Portfolio Trust
Series 1
(Income and Growth)
Essential Information
As of April 4, 1994
Sponsor and Evaluator: Kemper Unit Investment Trusts
Trustee: Investors Fiduciary Trust Company
<TABLE>
<S> <C>
GENERAL INFORMATION
Aggregate Value of the Stocks in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,977,696
Number of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561,507
Fractional Undivided Interest in the Trust per Unit . . . . . . . . . . . . . . . . . . . . . 1/561,507
Public Offering Price per Unit:
Aggregate Value of Securities in the Trust . . . . . . . . . . . . . . . . . . . . . . . . $5,977,696
Aggregate Value of Securities per Unit . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10.65
Net Cash per Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .09
Sales Charge 3.0% (3.093% of the net amount invested) per Unit . . . . . . . . . . . . . . $ .33
Public Offering Price per Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11.07
Redemption Price per Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10.74
</TABLE>
<TABLE>
<S> <C>
Minimum Value of the Trust under
which Trust Agreement may be
Terminated . . . . . . . . . . . . . . . . . Trust agreement may be terminated if value
of Trust Fund is less than 40% of the value
of the Securities when deposited in the portfolio.
Date of Trust Agreement . . . . . . . . . . . March 25, 1992
Mandatory Termination Date . . . . . . . . . July 25, 1996
Evaluator's Annual Evaluation Fee . . . . . . Maximum of $.0045 per Unit
Trustee's Annual Fee . . . . . . . . . . . . $.008 per Unit
Record Dates . . . . . . . . . . . . . . . . First day of January, April, July and October
Distribution Dates . . . . . . . . . . . . . Fifteenth day of January, April, July and October
</TABLE>
Evaluations for purpose of sale, purchase or redemption of Units are made as of
3:15 P.M. Central Time next following receipt of an order for a sale or
purchase of Units or receipt by Investors Fiduciary Trust Company of Units
tendered for redemption.
i
<PAGE> 4
Report of Independent Auditors
Unitholders
Kemper Equity Portfolio Trust
Series 1 (Income and Growth)
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Kemper Equity Portfolio Trust Series 1 (Income
and Growth) as of December 31, 1993, and the related statements of operations
and changes in net assets for the year then ended and for the period from March
25, 1992 (Date of Initial Deposit) to December 31, 1992. These financial
statements are the responsibility of the Trust's sponsor. Our responsibility
is to express an opinion on these financial statements 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 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 December 31, 1993,
by correspondence with the custodial bank. An audit also includes assessing
the accounting principles used and significant estimates made by the sponsor,
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 referred to above present fairly, in
all material respects, the financial position of Kemper Equity Portfolio Trust
Series 1 (Income and Growth) at December 31, 1993, and the results of its
operations and the changes in its net assets for the year then ended and for
the period from March 25, 1992 to December 31, 1992, in conformity with
generally accepted accounting principles.
/s/ ERNST & YOUNG
ERNST & YOUNG
Kansas City, Missouri
April 15, 1994
1
<PAGE> 5
Kemper Equity Portfolio Trust
Series 1
(Income and Growth)
Statement of Assets and Liabilities
December 31, 1993
<TABLE>
<S> <C> <C>
ASSETS
Investments, at value (cost $6,228,816) (Note 1) $7,072,447
Cash 72,946
Dividends receivable 24,369
---------
Total assets 7,169,762
LIABILITIES AND NET ASSETS
Distributions payable 72,294
Accrued liabilities 982
---------
73,276
Net assets, applicable to 638,076 Units outstanding (Note 5):
Cost of Trust assets (Note 1) $6,228,816
Unrealized appreciation (Note 2) 843,631
Distributable funds 24,039
---------------------------
Net assets $7,096,486
---------
---------
Net asset value per Unit $11.12
---------
---------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 6
Kemper Equity Portfolio Trust
Series 1
(Income and Growth)
Statement of Operations
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED MARCH 25, 1992
DECEMBER 31, TO DECEMBER 31,
1993 1992
----------------------------------
<S> <C> <C>
Investment income -- dividends $345,656 $301,536
Expenses:
Trustee's fees and related expenses 8,077 6,173
Evaluator's fees 3,305 2,526
---------------------------
Total expenses 11,382 8,699
---------------------------
Net investment income 334,274 292,837
Realized and unrealized gain on investments:
Net realized gain 280,643 --
Unrealized appreciation during the period 298,606 545,025
---------------------------
Net gain on investments 579,249 545,025
---------------------------
Net increase in net assets resulting from operations $913,523 $837,862
---------------------------
---------------------------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 7
Kemper Equity Portfolio Trust
Series 1
(Income and Growth)
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED MARCH 25, 1992
DECEMBER 31, TO DECEMBER 31,
1993 1992
--------------------------------
<S> <C> <C>
Operations:
Net investment income $ 334,274 $ 292,837
Net realized gain on investments 280,643 --
Unrealized appreciation on investments during the period
298,606 545,025
------------------------------
Net increase in net assets resulting from operations 913,523 837,862
Distributions to Unitholders:
Net investment income (328,250) (274,507)
Capital transactions:
Issuance of 850,767 Units -- 8,255,460
Redemption of 212,691 Units (2,307,602) --
------------------------------
Total increase (decrease) in net assets (1,722,329) 8,818,815
Net assets:
Beginning of the period 8,818,815 --
------------------------------
End of the period (including distributable funds
applicable to Trust Units of $24,039 and $18,330
at December 31, 1993 and 1992, respectively) $ 7,096,486 $8,818,815
------------------------------
------------------------------
Trust Units outstanding at the end of the period
638,076 850,767
------------------------------
------------------------------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 8
Kemper Equity Portfolio Trust
Series 1
(Income and Growth)
Schedule of Investments
December 31, 1993
<TABLE>
<CAPTION>
INDUSTRY AND NAME OF ISSUER MARKET
SHARES (PERCENTAGE OF PORTFOLIO) (1) VALUE
---------------------------------------------------------------------------------
<S> <C> <C>
BUSINESS PRODUCT AND SERVICES (12.69%)
5,220 Dun & Bradstreet Corporation (4.54%) $ 321,030
12,180 Harland (John H.) Co. (3.70%) 261,870
13,920 Ogden Corporation (4.45%) 314,940
CONSUMER CYCLICAL (9.10%)
8,700 Armstrong World Industries, Inc. (6.54%) 462,187
12,180 A.T. Cross & Company (2.56%) 181,178
CONSUMER STAPLE (13.91%)
9,570 Borden, Inc. (2.30%) 162,690
7,830 Eastman Kodak Company (6.20%) 438,480
20,010 Flowers Industries, Inc. (5.41%) 382,691
ENERGY (16.28%)
15,660 Kansas City Power & Light Company (5.09%) 360,180
13,050 Phillips Petroleum Company (5.35%) 378,450
5,220 Mobil Corporation (5.84%) 412,380
FINANCIAL SERVICES (15.81%)
13,920 American General Corporation (5.61%) 396,720
6,090 CIGNA Corporation (5.40%) 382,148
13,920 National City Corporation (4.80%) 339,300
HEALTH CARE (9.50%)
8,700 Mckesson Corporation (6.64%) 469,800
3,480 Bristol Myers Squibb Company (2.86%) 201,840
INDUSTRIAL GOODS (5.05%)
8,265 ARCO Chemical Company (5.05%) 357,461
RETAIL (6.43%)
8,700 J.C. Penney Company (6.43%) 454,575
TELECOMMUNICATIONS (11.23%)
11,310 GTE Corporation (5.60%) 395,850
5,220 Ameritech Corporation (5.63%) 398,677
----------
$7,072,447
----------
----------
</TABLE>
NOTE TO SCHEDULE OF INVESTMENTS
1. Percentages are based on the market value of the Securities in the Trust.
See accompanying notes to financial statements.
5
<PAGE> 9
Kemper Equity Portfolio Trust
Series 1
(Income and Growth)
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS
The value of Stocks is determined by Kemper Unit Investment Trusts (A Service
of Kemper Securities, Inc.), the "Evaluator" and sponsor of the Trust. The
evaluation is based on the closing bid price on that day on the national
securities exchange which is the principal market on which the Security is
traded. If there is no appropriate bid price available from a national
securities exchange, then the price is determined as follows: (a) on the basis
of current bid prices for comparable securities, (b) appraisal of the value of
the Stocks in good faith on the bid side of the market or (c) by any
combination of the above.
COST OF INVESTMENTS
Cost of the Trust's Stocks was based on the last offer prices of the Stocks on
the dates of deposits of such securities acquired during the primary sales
period, as determined by the Evaluator. Realized gain (loss) from investment
transactions is reported on a first-in, first-out basis.
INVESTMENT INCOME
Dividends are recorded on the ex-dividend date.
2. UNREALIZED APPRECIATION AND DEPRECIATION
Following is an analysis of net unrealized appreciation (depreciation) at
December 31, 1993:
Gross unrealized appreciation $1,189,574
Gross unrealized depreciation (345,943)
----------
Net unrealized appreciation $ 843,631
----------
----------
6
<PAGE> 10
Kemper Equity Portfolio Trust
Series 1
(Income and Growth)
Notes to Financial Statements (continued)
3. TRANSACTIONS WITH AFFILIATES
The Trustee, Investors Fiduciary Trust Company, is 50% owned by Kemper
Financial Services, Inc., an affiliate of Kemper Unit Investment Trusts.
Payments to the Trustee will be paid at the rate of approximately $.008 per
annum per Unit. Such compensation will be computed monthly on the basis of the
largest number of Units outstanding at any time during the calendar year. The
Trustee also will benefit to the extent that it holds funds in
noninterest-bearing accounts. In addition, the regular and recurring annual
expenses of the Trust, including without limitation certain mailing, printing
and other miscellaneous expenses, are estimated to be $.003 per Unit. Actual
expenses payable by the Trust may be more or less than this estimate.
The annual Evaluator's fee, calculated monthly, is $.0045 per annum per Unit
based upon the largest number of Units outstanding during the calendar year.
4. FEDERAL INCOME TAXES AND DIVIDENDS TO UNITHOLDERS
The Trust is not an association taxable as a corporation for federal income tax
purposes. Each Unitholder is considered to be the owner of a pro rata portion
of the Trust under Subpart E, Subchapter J of Chapter 1 of the Internal Revenue
Code of 1986, as amended. Accordingly, no provision has been made for federal
income taxes.
5. OTHER INFORMATION
COST TO INVESTORS
The cost to initial investors of Units of the Trust was based on the aggregate
value of the Stocks in the Trust valued at the closing prices on the offer side
of the market on the business day prior to the Date of Deposit, plus or minus a
pro rata share of any distributable funds, plus a sales charge of 4.0% (4.167%
of the net amount invested). Thereafter, the Public Offering Price per Unit
will be based on the aggregate market value of the Securities valued at the
closing bid prices, plus or minus a pro rata share of any distributable funds,
plus a 3.0% sales charge (equivalent to 3.093% of the net amount invested).
The sponsor intends to permit officers, directors and employees of the sponsor
and its affiliates and, in the discretion of the sponsor, registered
representatives of selling firms to purchase Units of the Trust without a sales
charge.
7
<PAGE> 11
Kemper Equity Portfolio Trust
Series 1
(Income and Growth)
Notes to Financial Statements (continued)
5. OTHER INFORMATION (CONTINUED)
Selected data per Unit of the Trust outstanding during each period --
<TABLE>
<CAPTION>
PERIOD FROM
MARCH 25,
YEAR ENDED 1992 TO
DECEMBER 31, DECEMBER 31,
1993 1992
-----------------------------------
<S> <C> <C>
Investment income -- dividends $ .48 $ .41
Expenses .02 .01
--------------------------
Net investment income .46 .40
Distribution to Unitholders:
Net investment income (.45) (.38)
Net gain on investments .74 .75
--------------------------
Change in net asset value .75 .77
Net asset value:
Beginning of the period 10.37 9.60*
--------------------------
End of the period, including distributable funds $11.12 $10.37
--------------------------
--------------------------
</TABLE>
* Value at Date of Initial Deposit (March 25, 1992).
8
<PAGE> 12
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our report dated April 15, 1994, in this
Post-Effective Amendment to the Registration Statement (Form S-6) and related
Prospectus of Kemper Equity Portfolio Trust Series 1 (Income and Growth) dated
April 29, 1994.
/s/ ERNST & YOUNG
ERNST & YOUNG
Kansas City, Missouri
April 29, 1994
<PAGE> 13
CONTENTS OF POST-EFFECTIVE AMENDMENT
TO REGISTRATION STATEMENT
This Post-Effective amendment to the Registration Statement comprises the
following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The
Registrant, Kemper Equity Portfolio Trust, Series 1, 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 Amendment to the 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 28th day of April, 1994.
KEMPER EQUITY PORTFOLIO TRUST,
SERIES 1
Registrant
By: Kemper Unit Investment
Trusts
(a service of Kemper
Securities, Inc.)
Depositor
By /s/ C. Perry Moore
-----------------------
C. Perry Moore
Attorney-In-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on April 28,
1994 by the following persons, who constitute a majority of the Board of
Directors of Kemper Securities, Inc.
SIGNATURE TITLE
James R. Boris Chairman and Chief Executive Officer
James R. Boris
Donald F. Eller Senior Executive Vice President and Director
Donald F. Eller
Stanley R. Fallis Senior Executive Vice President, Chief Financial
Stanley R. Fallis Officer and Director
Frank V. Geremia Senior Executive Vice President and Director
Frank V. Geremia
David B. Mathis Director
David B. Mathis
Robert T. Jackson Director
Robert T. Jackson
Jay B. Walters Senior Executive Vice President and Director
Jay B. Walters
Frederick C. Hosken Senior Executive Vice President and Director
Frederick C. Hosken
Charles M. Kierscht Director
Charles M. Kierscht
Arthur J. McGivern Director
Arthur J. McGivern
C. Perry Moore
- ---------------------
C. Perry Moore
C. Perry Moore signs this document pursuant to power of attorney filed
with the Securities and Exchange Commission with (a) Amendment No. 1 to the
Registration Statement on Form S-6 for Kemper Tax-Exempt Insured Income Trust,
Series A-70 and Multi-State Series 28 and Kemper Tax-Exempt Income Trust,
Multi-State Series 42 (Registration No. 33-35425, (b) Amendment No. 1 to the
Registration Statement of Form S-6 for Kemper Tax-Exempt Insured Income Trust,
Series A-72 and Multi-State Series 30 (Registration No. 33-37178) and (c)
Amendment No. 1 to the Registration Statement of Form S-6 for Kemper Tax-Exempt
Insured Income Trust, Multi-State Series 51 (Registration No. 33-48398).
