File No. 33-60906 CIK #900511
Securities and Exchange CommissionWashington, D. C. 20549
Post-Effective
Amendment No. 3
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 Defined Funds Insured Corporate Series 1 and Series 2
Name and executive office address of Depositor:
EVEREN Unit Investment Trusts
(a division of EVEREN Securities, Inc.)
77 West Wacker - 29th Floor
Chicago, Illinois 60601
Name and complete address of agent for service:
Robert K. Burke
77 West Wacker - 29th Floor
Chicago, Illinois 60601
( X ) Check box if it is proposed that this filing will
become effective at 2:00 p.m. on April 29, 1996 pursuant to
paragraph (b) of Rule 485.
KEMPER INSURED CORPORATE TRUST
KEMPER DEFINED FUNDS INSURED CORPORATE SERIES
PROSPECTUS PART ONE
Kemper Insured Corporate Trust and Kemper Defined Funds Insured
Corporate Series (the "Trusts") were formed for the purpose of
providing a high level of current income through investment in a
fixed portfolio consisting primarily of corporate debt
obligations issued after July 18, 1994 by utility companies.
Certain Trusts also contain zero coupon U.S. Treasury
obligations.
Insurance guaranteeing the scheduled payment of principal and
interest on all of the Bonds (other than any U.S. Treasury
obligations) in the portfolio listed in Part Two has been
obtained directly by the issuer of such Bonds or by the Sponsor
of the Trusts from MBIA Insurance Corporation. See "Insurance on
the Portfolios" and "Portfolio" appearing in Part Two for each
Trust. This insurance is effective so long as the Bonds are
outstanding. As a result of such insurance, the Bonds so insured
in each Trust and the Units of each Trust received on the
original date of deposit a rating of "Aaa" by Moody's Investors
Service, Inc. ("Moody's"). All the Bonds in each Trust have
received a rating of "AAA" by Standard & Poor's, a Division of
The McGraw-Hill Companies, Inc. ("Standard & Poor's") as of the
original date of deposit. The insurance does not relate to the
Units of the respective Trusts offered hereby or to their market
value. See "Insurance on the Portfolios." No representation is
made as to any insurer's ability to meet its commitments.
Units of the Trusts are not deposits or obligations of, or
guaranteed by, any bank, and Units are not federally insured or
otherwise protected by the Federal Deposit Insurance Corporation
and involve investment risk including loss of principal. The use
of the term "Insured" in the name of the Trust Funds does not
mean that the Units of the Trusts are insured by any governmental
or private organization. The Units are not insured.
For foreign investors who are not United States citizens or
residents, interest income from each Trust may not be subject to
federal withholding taxes if certain conditions are met. See
"Federal Tax Status."
This Prospectus is in two parts. Read and retain both parts for
future reference.
The date of this Part One is that date which is set forth in Part
Two of the Prospectus.
SPONSOR: EVEREN UNIT INVESTMENT TRUSTS,a service of EVEREN
Securities, Inc.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COM-MISSION 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.
TABLE OF CONTENTS
SUMMARY 1
Public Offering Price 1
Interest and Principal Distributions 1
Reinvestment 1
Estimated Current Return and Estimated Long-Term Return 1
Market for Units 1
Risk Factors 1
THE TRUST 2
TRUST PORTFOLIOS 2
Portfolio Selection 2
Risk Factors 3
General Trust Information 6
INSURANCE ON THE PORTFOLIOS 6
RETIREMENT PLANS 8
Individual Retirement Account--IRA 8
Qualified Retirement Plans 9
Excess Distributions Tax 9
DISTRIBUTION REINVESTMENT 9
INTEREST, ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT
RETURN 10
FEDERAL TAX STATUS 11
Limitations on Deductibility of Trust Expenses by Unitholders 12
Acquisition Premium 12
Original Issue Discount 12
Market Discount 13
Computation of the Unitholder's Tax Basis 13
Recognition of Taxable Gain or Loss upon Disposition of
Obligations by a Trust or Disposition of Units 14
Foreign Investors 14
General 15
TAX REPORTING AND REALLOCATION 15
PUBLIC OFFERING OF UNITS 16
Public Offering Price 16
Accrued Interest 18
Purchased and Daily Accrued Interest 19
Public Distribution of Units 19
Profits of Sponsor 21
MARKET FOR UNITS 21
REDEMPTION 21
Computation of Redemption Price 23
UNITHOLDERS 24
Ownership of Units 24
Distributions to Unitholders 24
Statement to Unitholders 25
Rights of Unitholders 27
INVESTMENT SUPERVISION 27
ADMINISTRATION OF THE TRUST 28
The Trustee 28
The Evaluator 29
Amendment and Termination 29
Limitations on Liability 30
EXPENSES OF THE TRUST 31
THE SPONSOR 32
LEGAL OPINIONS 32
INDEPENDENT AUDITORS 32
Essential Information*
Report of Independent Auditors*
Statement of Assets and Liabilities*
Statement of Operations*
Statement of Changes in Net Assets*
Schedule of Investments*
Notes to Schedules of Investments*
Notes to Financial Statements*
*Information on these items appears in Part Two
SUMMARY
Public Offering Price. The Public Offering Price per Unit of a
Series of the Trust is equal to a pro rata share of the aggregate
bid prices of the Bonds in such Series plus or minus a pro rata
share of cash, if any, in the Principal Account, held or owned by
the Series plus accrued interest or Purchased Interest and Daily
Accrued Interest, as applicable, plus a sales charge shown under
"Public Offering of Units." The sales charge is reduced on a
graduated scale as indicated under "Public Offering of Units -
Public Offering Price."
Interest and Principal Distributions. Distributions of the
estimated annual interest income to be received by a Series of
the Trust, after deduction of estimated expenses, will be made
monthly unless the Unitholder elects to receive such
distributions semi-annually (if available). Distributions will
be paid on the Distribution Dates to Unitholders of record of
such Series on the Record Dates set forth for the applicable
option. See "Essential Information" in Part Two. Unitholders of
Kemper Defined Funds Insured Corporate Series will receive
distributions monthly.
The distribution of funds, if any, in the Principal Account of
each Series, will be made as provided in
"Unitholders_Distributions to Unitholders."
Reinvestment. Each Unitholder may elect to have distributions of
principal or interest or both automatically invested without
charge in shares of certain Kemper Financial Services, Inc.
mutual funds. See "Distribution Reinvestment."
Estimated Current Return and Estimated Long-Term Return. The Estimated
Current Return is calculated by dividing the estimated
net annual interest income per Unit by the Public Offering Price
of such Trust. The estimated net annual interest income per Unit
will vary with changes in fees and expenses of the Trustee,
Sponsor and Evaluator and with the principal prepayment,
redemption, maturity, exchange or sale of Bonds while the Public
Offering Price will vary with changes in the bid price of the
underlying Bonds and with changes in accrued interest or
Purchased Interest and Daily Accrued Interest, as applicable;
therefore, there is no assurance that the present Estimated
Current Returns will be realized in the future. Estimated
Long-Term Return is calculated using a formula which (1) takes
into consideration, and determines and factors in the relative
weightings of, the market values, yields (which takes into
account the amortization of premiums and the accretion of
discounts) and estimated retirements of all of the Bonds in the
Trust and (2) takes into account the expenses and sales charge
associated with each Trust Unit. Since the market values and
estimated retirement dates of the Bonds and the expenses of the
Trust will change, there is no assurance that the present
Estimated Long-Term Return will be realized in the future.
Estimated Current Return and Estimated Long-Term Return are
expected to differ because the calculation of Estimated Long-Term
Return reflects the estimated date and amount of principal
returned while Estimated Current Return calculations include only
net annual interest income and Public Offering Price.
Market for Units. While under no obligation to do so, the
Sponsor intends, subject to change at any time, to maintain a
market for the Units of each Series of the Trust and to
continuously offer to repurchase such Units at prices which are
based on the aggregate bid side evaluation of the Bonds in such
Series of the Trust plus accrued interest or Purchased Interest
and Daily Accrued Interest, as applicable.
Risk Factors. An investment in the Trusts should be made with an
understanding of the risks associated therewith, including, among
other factors, the inability of the issuer or an insurer to pay
the principal of or interest on a bond when due, volatile
interest rates, early call provisions and general economic
conditions. See "Trust Portfolio_Risk Factors."
THE TRUST
Each Series of the Trust is one of a series of unit investment
trusts created by the Sponsor under the name Kemper Insured
Corporate Trust or Kemper Defined Funds Insured Corporate Series,
all of which are similar, and each of which was created under the
laws of the State of Missouri pursuant to a Trust Agreement* (the
"Trust Agreement"). EVEREN Unit Investment Trusts, a service of
EVEREN Securities, Inc. (formerly known as Kemper Securities,
Inc.), acts as Sponsor and The Bank of New York acts as Trustee.
The objective of each Trust is to provide a high level of current
income through investment in the Bonds. There is, of course, no
guarantee that a Trust's objectives will be achieved.
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* Reference is made to the Trust Agreement, and any statements
contained herein are qualified in their entirety by the
provisions of the Trust Agreement.
The Trusts may be appropriate investment vehicles for investors
who desire to participate in a portfolio of taxable fixed income
securities issued primarily by public utilities with greater
diversification than investors might be able to acquire
individually. Diversification of a Trust's assets will not
eliminate the risk of loss always inherent in the ownership of
securities. In addition, Bonds of the type deposited in the
Trusts often are not available in small amounts.
An investment in Units should be made with an understanding of
the risks which an investment in fixed rate debt obligations may
entail, including the risk that the value of the portfolio and
hence of the Units will decline with increases in interest rates.
The value of the underlying Bonds will fluctuate inversely with
changes in interest rates. The uncertain economic conditions of
recent years, together with the fiscal measures adopted to
attempt to deal with them, have resulted in wide fluctuations in
interest rates and, thus, in the value of fixed rate debt
obligations generally and intermediate and long-term obligations
in particular. The Sponsor cannot predict the degree to which
such fluctuations will continue in the future.
TRUST PORTFOLIOS
Portfolio Selection. The Bonds for each Trust was based largely
upon the experience and judgment of the Sponsor. In making such
selections the Sponsor considered the following factors: (a) the
price of the Bonds relative to other issues of similar quality
and maturity; (b) whether the Bonds were issued by a utility
company; (c) the diversification of the bonds as to location of
issuer; (d) the income to the Unitholders of the Trusts; (e)
whether the Bonds were insured or the availability and cost of
insurance for the scheduled payment of principal and interest on
the Bonds; (f) in certain Series whether the Bonds were issued
after July 18, 1984 (g) the stated maturity of the bonds.
The Sponsor may not alter the portfolio of a Series of the Trust,
except upon the happening of certain extraordinary circumstances.
See "Investment Supervision." Certain Series of the Trust contain
Bonds which may be subject to optional call or mandatory
redemption pursuant to sinking fund provisions, in each case
prior to their stated maturity. A bond subject to optional call
is one which is subject to redemption or refunding prior to
maturity at the option of the issuer, often at a premium over
par. A refunding is a method by which a bond issue is redeemed,
at or before maturity, by the proceeds of a new bond issue. A
bond subject to sinking fund redemption is one which is subject
to partial call from time to time at par from a fund accumulated
for the scheduled retirement of a portion of an issue prior to
maturity. Special or extraordinary redemption provisions may
provide for redemption at par of all or a portion of an issue
upon the occurrence of certain circumstances, which may be prior
to the optional call dates shown in the "Schedules of Investments
of the Trust" in Part Two. Redemption pursuant to optional call
provisions is more likely to occur, and redemption pursuant to
special or extraordinary redemption provisions may occur, when
the Bonds have an offering side evaluation which represents a
premium over par, that is, when they are able to be refinanced at
a lower cost. The proceeds from any such call or redemption
pursuant to sinking fund provisions as well as proceeds from the
sale of Bonds and from Bonds which mature in accordance with
their terms, unless utilized to pay for Units tendered for
redemption, will be distributed to Unitholders and will not be
used to purchase additional Bonds for the Trust. Accordingly,
any such call, redemption, sale or maturity will reduce the size
and diversity of the Trust and the net annual interest income and
may reduce the Estimated Current Return and the Estimated
Long-Term Return. See "Interest, Estimated Long-Term Return and
Estimated Current Return." The call, redemption, sale or
maturity of Bonds also may have tax consequences to a Unitholder.
See "Federal Tax Status." Information with respect to the call
provisions and maturity dates of the Bonds is contained in
"Schedules of Investments."
Risk Factors. Public Utility Issues. Certain of the aggregate
principal amount of the Bonds in each Trust are obligations of
public utility issuers. In general, public utilities are
regulated monopolies engaged in the business of supplying light,
water, power, heat, transportation or means of communication.
Historically, the utilities industry has provided investors in
securities issued by companies in this industry with high levels
of reliability, stability and relative total return on their
investments. However, an investment in the Trusts should be made
with an understanding of the characteristics of such issuers 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 Bonds in the portfolio to make payments of principal
and/or interest on such Bonds.
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. Also, changes in certain accounting standards currently
under consideration by the Financial Accounting Standards Board
could cause significant write-downs of assets and reductions in
earnings for many investor-owned utilities. 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.
Certain of the issuers of the Bonds in 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 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
plant in Chernobyl, U.S.S.R., could cause the imposition of
limits or prohibitions on the operation, construction or
licensing of nuclear units in the United States.
In view of the uncertainties discussed above, there can be no
assurance that any bond issuer's share of the full cost of
nuclear units under construction ultimately will be recovered in
rates or of the extent to which a bond issuer 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 or on a bond
issuer's ability to make interest and principal payments on its
outstanding debt.
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, 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 a Trust
to make payments due on these Bonds.
In addition, the ability of state and local joint action power
agencies to make payments on bonds they have issued is dependent
in large part on payments made to them pursuant to power supply
or similar agreements. Courts in Washington and Idaho have held
that certain agreements between Washington Public Power Supply
System ("WPPSS") and the WPPSS participants are unenforceable
because the participants did not have the authority to enter into
the agreements. While these decisions are not specifically
applicable to agreements entered into by public entities in other
states, they may cause a reexamination of the legal structure and
economic viability of certain projects financed by joint action
power agencies, which might exacerbate some of the problems
referred to above and possibly lead to legal proceedings
questioning the enforceability of agreements upon which payment
of these bonds may depend.
In addition, business conditions of the telephone industry in
general may affect the performance of the Trust Fund. General
problems of telephone companies include regulation of rates for
service by the FCC and various state or other regulatory
agencies. However, over the last several years regulation has
been changing, resulting in increased competition. The new
approach is more market oriented, more flexible and more
complicated. For example, Federal and certain state regulators
have instituted "price cap" regulation which couples protection
of rate payers for basic services with flexible pricing for
ancillary services. These new approaches to regulation could
lead to greater risks as well as greater rewards for operating
telephone companies such as those in the Trust Funds. Inflation
has substantially increased the operating expenses and costs of
plants required for growth, service, improvement and replacement
of existing plants. Continuing cost increases, to the extent not
offset by improved productivity and revenues from increased
business, would result in a decreasing rate of return and a
continuing need for rate increases. Although allowances are
generally made in rate-making proceedings for cost increases, delays
may be experienced in obtaining the necessary rate
increases and there can be no assurance that the regulatory
agencies will grant rate increases adequate to cover operating
and other expenses and debt service requirements. To meet
increasing competition, telephone companies will have to commit
substantial capital, technological and marketing resources.
Telephone usage, and therefore revenues, could also be adversely
affected by any sustained economic recession. New technology
such as cellular service and fiber optics, will require
additional capital outlays. The uncertain outcomes of future
labor agreements may also have a negative impact on the telephone
companies. Each of these problems could adversely affect the
ability of the telephone company issuers of any Bonds in a
portfolio to make payments of principal and interest on their
Bonds.
Zero Coupon U.S. Treasury Obligations. Certain of the Bonds in
certain of the Trusts are "zero coupon" U.S. Treasury bonds.
Zero coupon bonds are purchased at a deep discount because the
buyer receives only the right to receive a final payment at the
maturity of the bond and does not receive any periodic interest
payments. The effect of owning deep discount bonds which do not
make current interest payments (such as the zero coupon bonds) is
that a fixed yield is earned not only on the original investment
but also, in effect, on all discount earned during the life of
such income on such obligation at a rate as high as the implicit
yield on the discount obligation, but at the same time eliminates
the holder's ability to reinvest at higher rates in the future.
For this reason, zero coupon bonds are subject to substantially
greater price fluctuations during periods of changing market
interest rates than are securities of comparable quality which
pay interest.
General Trust Information. Because certain of the Bonds in each
Trust may from time to time under certain circumstances be sold
or redeemed or will mature in accordance with their terms and
because the proceeds from such events will be distributed to
Unitholders and will not be reinvested, no assurance can be given
that a Trust will retain for any length of time its present size
and composition. Neither the Sponsor nor the Trustee shall be
liable in any way for any default, failure or defect in any Bond.
The Trustee will have no power to vary the investment of a Trust;
i.e., the Trustee will have no managerial power to take advantage
of market variations to improve a Unitholder's investment.
To the best of the Sponsor's knowledge, there is no litigation
pending as of the date of this Part One Prospectus in respect of
any Bond which might reasonably be expected to have a material
adverse effect on the Trust Funds. At any time after the date of
this Part One Prospectus, litigation may be instituted on a
variety of grounds with respect to the Bonds. The Sponsor is
unable to predict whether any such litigation may be instituted,
or if instituted, whether such litigation might have a material
adverse effect on the Trust Funds. The Sponsor and the Trustee
shall not be liable in any way for any default, failure or defect
in any Bond.
INSURANCE ON THE PORTFOLIOS
All Bonds in each Series of the Trust, except for the U.S.
Treasury obligations, are insured as to the scheduled payment of
interest and principal, either by the Sponsor or by the Bond
issuer under a financial guaranty insurance policy obtained from
MBIA Insurance Corporation ("MBIA Corporation"). See "Schedules
of Investments" in Part Two. The premium for each such insurance
policy has been paid in advance by such issuer or the Sponsor and
each such policy is non-cancelable and will remain in force so
long as the Bonds are outstanding and MBIA Corporation remains in
business. No premiums for such insurance are paid by the Trusts.
If MBIA Corporation is unable to meet its obligations under its
policy or if the rating assigned to the claims-paying ability of
MBIA Corporation deteriorates, no other insurer has any
obligation to insure any issue adversely affected by either of
these events.
The aforementioned insurance guarantees the scheduled payment of
principal and interest on all of the Bonds in each Trust, except
for the U.S. Treasury obligations. It does not guarantee the
market value of the Bonds or the value of the Units of a Series
of the Trust. This insurance is effective so long as the Bond is
outstanding, whether or not held by a Trust. Therefore, any such
insurance may be considered to represent an element of market
value in regard to the Bonds, but the exact effect, if any, of
this insurance on such market value cannot be predicted.
MBIA Corporation is the principal operating subsidiary of MBIA,
Inc., a New York Stock Exchange listed company. MBIA, Inc. is not
obligated to pay the debts of or claims against MBIA Corporation.
MBIA Corporation, which commenced municipal bond insurance
operations on January 5, 1987, is a limited liability corporation
rather than a several liability association. MBIA Corporation is
domiciled in the State of New York and licensed to do business in
all 50 states, the District of Columbia, the Commonwealth of the
Northern Mariana Islands, the Commonwealth of Puerto Rico, the
Virgin Islands of the United States and the Territory of Guam.
As of September 30, 1995, MBIA Corporation had admitted assets of
$3.7 billion (unaudited), total liabilities of $2.5 billion
(unaudited), and total policyholder's surplus of $1.2 billion
(unaudited), prepared in accordance with statutory accounting
practices prescribed or permitted by insurance regulatory
authorities. As of December 31, 1994, MBIA Corporation had
admitted assets of $3.4 billion (audited), total liabilities of
$2.3 billion (audited) and total capital and surplus of $1.1
billion (audited) determined in accordance with statutory
accounting practices prescribed or permitted by insurance
regulatory authorities. Copies of MBIA Corporation's financial
statements prepared in accordance with statutory accounting
practices are available from MBIA Corporation. The address of
MBIA Corporation is 113 King Street, Armonk, New York 10504.
Effective December 31, 1989, MBIA, Inc. acquired Bond Investors
Group, Inc. On January 5, 1990, the Insurer acquired all of the
outstanding stock of Bond Investors Group, Inc., the parent of
BIG, now known as MBIA Insurance Corp. of Illinois. Through a reinsurance
agreement, BIG had ceded all of its net insured
risks, as well as its unearned premium and contingency reserves,
to the Insurer and the Insurer has reinsured BIG's net
outstanding exposure.
Moody's Investors Service rates all bonds issues insured by MBIA
"Aaa" and short-term loans "MIG1," both designated to be of the
highest quality. Standard & Poor's rates all new issues insured
by MBIA "AAA."
Because the Bonds in each Series of the Trust (other than the
U.S. Treasury obligations) are insured as to the scheduled
payment of principal and interest and on the basis of the
financial condition and the method of operation of MBIA
Corporation, Moody's Investors Service, Inc., on the original
Date of Deposit of each Series, assigned to each Trust's Units
its "AAA" investment rating. This is the highest rating assigned
to securities by such rating agency. These ratings should not be
construed as an approval of the offering of the Units by Standard
& Poor's or as a guarantee of the market value of a Trust or the
Units thereof.
Bonds in a Trust for which insurance has been obtained by the
issuer thereof or by the Sponsor from MBIA Corporation (all of
which were rated "AAA") may or may not have a higher yield than
uninsured bonds rated "AAA" by Standard & Poor's. In selecting
Bonds for the portfolio of the Trusts, the Sponsor has applied
the criteria herein before described.
RETIREMENT PLANS
Units of the Trust Funds 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. The Trust Funds will waive the
$1,000 minimum investment requirement for IRA accounts. The
minimum investment is $250 for tax-deferred 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 Internal Revenue Code of 1986,
as amended (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 deductible 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.
IRA applications, disclosure statements and trust agreements are
available from the Sponsor upon request.
Qualified Retirement Plans. Units of a 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 lessor
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 eligible for tax-deferred rollover treatment.
In general, for lump sum distributions the excess distributions
over $750,000 (as adjusted) will be subject to the 15% tax.
The Trustee 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 the Trustee to act as custodian must complete a EVEREN UIT/IRA
application and forward it along with a check made
payable to the Trustee. Certificates for Individual Retirement
Accounts cannot be issued.
DISTRIBUTION REINVESTMENT
Each Unitholder of a Trust may elect to have distributions of
principal (including capital gains, if any) or interest or both
automatically invested without charge in shares of any open-end
mutual fund registered in such Unitholder's state of residence
which is underwritten or advised by Kemper Financial Services,
Inc. (the "Kemper Funds"), other than those Kemper Funds sold
with a contingent deferred sales charge.
If individuals indicate they wish to participate in the
Reinvestment Program but do not designate a reinvestment fund,
the Program Agent referred to below will contact such individuals
to determine which reinvestment fund or funds they wish to elect.
Since the portfolio securities and investment objectives of such
Kemper Funds may differ significantly from that of the Trust
Funds, Unitholders should carefully consider the consequences
before selecting such Kemper Funds for reinvestment. Detailed
information with respect to the investment objectives and the
management of the Funds is contained in their respective
prospectuses, which can be obtained from any Trust Underwriter
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 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 "Distributions to
Unitholders."
The Program Agent is the Trustee. All inquiries concerning
participation in distribution reinvestment should be directed to
the Program Agent at its unit investment trust division office.
INTEREST, ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT RETURN
As of the opening of business on the date indicated therein, the
Estimated Long-Term Returns and the Estimated Current Returns for
each Series of the Trust were as set forth under "Essential
Information" for the applicable Trust in Part Two of this
Prospectus. Estimated Current Returns are calculated by dividing
the estimated net annual interest income per Unit by the Public
Offering Price. The estimated net annual interest income per
Unit will vary with changes in fees and expenses of the Trustee,
the Sponsor and the Evaluator and with the principal prepayment,
redemption, maturity, exchange or sale of Bonds while the Public
Offering Price will vary with changes in the offering price of
the underlying Bonds and with changes in accrued interest or Purchased
Interest and Daily Accrued Interest, as applicable;
therefore, there is no assurance that the present Estimated
Current Returns will be realized in the future. Estimated
Long-Term Returns are calculated using a formula which (1) takes
into consideration, and determines and factors in the relative
weightings of, the market values, yields (which takes into
account the amortization of premiums and the accretion of
discounts) and estimated retirements of all of the Bonds in a
Trust and (2) takes into account the expenses and sales charge
associated with each Trust Unit. Since the market values and
estimated retirements of the Bonds and the expenses of the Trust
will change, there is no assurance that the present Estimated
Long-Term Returns will be realized in the future. Estimated
Current Returns and Estimated Long-Term Returns are expected to
differ because the calculation of Estimated Long-Term Returns
reflects the estimated date and amount of principal returned
while Estimated Current Returns calculations include only net
annual interest income and Public Offering Price.
FEDERAL TAX STATUS
In the opinion of Chapman and Cutler, special counsel for the
Sponsor:
1. Each Trust is not an association taxable as a corporation for
United States Federal income tax purposes.
2. Each Unitholder will be considered the owner of a pro rata
portion of each of a Trust's assets for Federal income tax
purposes under Subpart E, Subchapter J of Chapter 1 of the
Internal Revenue Code of 1986 (the "Code"); and the income will
be treated as income of the Unitholders. Each Unitholder will be
considered to have received his pro rata share of interest
derived from each Trust asset when such interest is received by a
Trust. Each Unitholder will also be required to include in
taxable income for federal income tax purposes, original issue
discount with respect to his interest in any Bonds held by a
Trust at the same time and in the same manner as though the
Unitholder were the direct owner of such interest.
3. Each Unitholder will have a taxable event when a Bond is
disposed of (whether by sale, exchange, liquidation, redemption,
or payment at maturity) or when the Unitholder redeems or sells
his Units. A Unitholder's tax basis in his Units will equal his
tax basis in his pro rata portion of all the assets of the Trust.
Such basis is determined (before the adjustments described below)
by apportioning the tax basis for the Units among each of the
Trust assets according to value as of the valuation date nearest
the date of acquisition of the Units. Unitholders must reduce
the tax basis of their Units for their share of accrued interest
received, if any, on Bonds delivered after the date the
Unitholders pay for their Units to the extent such interest
accrued on such Bonds during the period from the Unitholder's
settlement date to the date such Bonds are delivered to the
Trust, and, consequently, such Unitholders may have an increase
in taxable gain or reduction in capital loss upon the disposition
of such Units. Gain or loss upon the sale or redemption of Units
is measured by comparing the proceeds of such sale or redemption with
the adjusted basis of the Units. If the Trustee disposes of
Bonds, gain or loss is recognized to the Unitholder (subject to
various nonrecognition provisions of the Code). The amount of any
such gain or loss is measured by comparing the Unitholders pro
rata share of the total proceeds from such disposition with his
basis for his fractional interest in the asset disposed of. The
basis of each Unit and of each Bond which was issued with
original issue discount (or which has market discount) (including
any U.S. Treasury obligations) must be increased by the amount of
accrued original issue discount (and accrued market discount if
the Unitholder elects to include market discount in income as it
accrues) and the basis of each Unit and of each Bond which was
purchased by a Trust at a premium must be reduced by the annual
amortization of bond premium which the Unitholder has properly
elected to amortize under Section 171 of the Code. The tax basis
reduction requirements of the Code relating to amortization of
bond premium may, under some circumstances, result in the
Unitholder realizing a taxable gain when his Units are sold or
redeemed for an amount equal to or less than his original cost.
The U.S. Treasury obligations held by a Trust, if any, are
treated as bonds that were originally issued at an original issue
discount provided, pursuant to a Treasury Regulation (the
"Regulation") issued on December 28, 1992, that the amount of
original issue discount determined under Section 1286 of the Code
is not less than a "de minimis" amount as determined thereunder
(as discussed below under "Original Issue Discount"). Because
U.S. Treasury obligations represent interests in "stripped" U.S.
Treasury bonds, a Unitholder's initial cost for his pro rata
portion of each U.S. Treasury obligation held by a Trust
(determined at the time he acquires his Units, in the manner
described above) shall be treated as its "purchase price" by the
Unitholder. Original issue discount is effectively treated as
interest for Federal income tax purposes, and the amount of
original issue discount in this case is generally the difference
between the Bond's purchase price and its stated redemption price
at maturity. A Unitholder will be required to include in gross
income for each taxable year the sum of his daily portions of
original issue discount attributable to the Bonds held by a Trust
as such original issue discount accrues and will, in general, be
subject to Federal income tax with respect to the total amount of
such original issue discount that accrues for such year even
though the income is not distributed to the Unitholders during
such year to the extent it is not less than a "de minimis" amount
as determined under the Regulation. In general, original issue
discount accrues daily under a constant interest rate method
which takes into account the semi-annual compounding of accrued
interest. In the case of U.S. Treasury obligations, this method
will generally result in an increasing amount of income to the
Unitholders each year. Unitholders should consult their tax
advisers regarding the Federal income tax consequences and
accretion of original issue discount.
Limitations on Deductibility of Trust Expenses by Unitholders.
Each Unitholder's pro rata share of each expense paid by a Trust
is deductible by the Unitholder to the same extent as though the expense
had been paid directly by him. It should be noted that
as a result of the Tax Reform Act of 1986 (the "Act"), 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 expenses paid by a Trust as
miscellaneous itemized deductions subject to this limitation.
Premium. If a Unitholder's tax basis of his pro rata portion in
any Bonds held by a Trust exceeds the amount payable by the
issuer of the Bond with respect to such pro rata interest upon
the maturity of the Bond, such excess would be considered premium
which may be amortized by the Unitholder at the Unitholder's
election as provided in Section 171 of the Code. Unitholders
should consult their tax advisors regarding whether such election
should be made and the manner of amortizing premium.
Original Issue Discount. Certain of the Bonds in each Trust may
have been acquired with "original issue discount." In the case
of any Bonds in a Trust acquired with "original issue discount"
that exceeds a "de minimis" amount as specified in the Code, such
discount is includable in taxable income of the Unitholders on an
accrual basis computed daily, without regard to when payments of
interest on such Bonds are received. The Code provides a complex
set of rules regarding the accrual of original issue discount.
These rules provide that original issue discount generally
accrues on the basis of a constant compound interest rate over
the term of the Bonds. Unitholders should consult their tax
advisers as in the amount of original issue discount which
accrues.
Special original issue discount rules apply if the purchase price
of the Bond by a Trust exceeds its original issue price plus the
amount of original issue discount which would have previously
accrued based upon its issue price (its "adjusted issue price").
Similarly these special rules would apply to a Unitholder if the
tax basis of his pro rata portion of a Bond issued with original
issue discount exceeds his pro rata portion of its adjusted issue
price. Unitholders should also consult their tax advisers
regarding these special rules.
It is possible that a corporate Bond that has been issued at an
original issue discount may be characterized as a "high-yield
discount obligation" within the meaning of Section 163(e)(5) of
the Code. To the extent that such an obligation is issued at a
yield in excess of six percentage points over the applicable
Federal rate, a portion of the original issue discount on such
obligation will be characterized as a distribution on stock
(e.g., dividends) for purposes of the dividends received
deduction which is available to certain corporations with respect
to certain dividends received by such corporation.
Market Discount. If a Unitholder's tax basis in his pro rata
portion of Bonds is less than the allocable portion of such
Bond's stated redemption price at maturity (or, if issued with
original issue discount, the allocable portion of its "revised
issue price"), such difference will constitute market discount
unless the amount of market discount is "de minimis" as specified in the
Code. Market discount accrues daily computed on a
straight line basis, unless the Unitholder elects to calculate
accrued market discount under a constant yield method.
Unitholders should consult their tax advisors as to the amount of
market discount which accrues.
Accrued market discount is generally includable in taxable income
to the Unitholders as ordinary income for Federal tax purposes
upon the receipt of serial principal payments on the Bonds, on
the sale, maturity or disposition of such Bonds by a Trust, and
on the sale by a Unitholder of Units, unless a Unitholder elects
to include the accrued market discount in taxable income as such
discount accrues. If a Unitholder does not elect to annually
include accrued market discount in taxable income as it accrues,
deductions for any interest expense incurred by the Unitholder
which is incurred to purchase or carry his Units will be reduced
by such accrued market discount. In general, the portion of any
interest expense which was not currently deductible would
ultimately be deductible when the accrued market discount is
included in income. Unitholders should consult their tax
advisers regarding whether an election should be made to include
market discount in income as it accrues and as to the amount of
interest expense which may not be currently deductible.
Computation of the Unitholder's Tax Basis. The tax basis of a
Unitholder with respect to his interest in a Bond is increased by
the amount of original issue discount (and market discount, if
the Unitholder elects to include market discount, if any, on the
Bonds held by a Trust in income as it accrues) thereon properly
included in the Unitholder's gross income as determined for
Federal income tax purposes and reduced by the amount of any
amortized acquisition premium which the Unitholder has properly
elected to amortize under Section 171 of the Code. A
Unitholder's tax basis in his Units will equal his tax basis in
his pro rata portion of all of the assets of the Trust.
Recognition of Taxable Gain or Loss upon Disposition of
Obligations by a Trust or Disposition of Units. A Unitholder
will recognize taxable capital gain (or loss) when all or part of
his pro rata interest in a Bond is disposed of in a taxable
transaction for an amount greater (or less) than his tax basis
therefor. As previously discussed, gain realized on the
disposition of the interest of a Unitholder in any Bond deemed to
have been acquired with market discount will be treated as
ordinary income to the extent the gain does not exceed the amount
of accrued market discount not previously taken into income. Any
capital gain or loss arising from the disposition of a Bond by a
Trust or the disposition of Units by a Unitholder will be
short-term capital gain or loss unless the Unitholder has held
his Units for more than one year in which case such capital gain
or loss will be generally long-term. For taxpayers other than
corporations, net capital gains are subject to a maximum marginal
stated tax rate of 28 percent. However it should be noted that
legislative proposals are introduced from time to time that
affect tax rates and could affect relative differences at which
ordinary income and capital gains are taxed. The tax basis
reduction requirements of the Code relating to amortization of bond
premium may under some circumstances, result in the
Unitholder realizing taxable gain when his Units are sold or
redeemed for an amount equal to or less than his original cost.
If the Unitholder disposes of a Unit, he is deemed thereby to
have disposed of his entire pro rata interest in all Trust assets
including his pro rata portion of all of the Bonds represented by
the Unit. This may result in a portion of the gain, if any, on
such sale being taxable as ordinary income under the market
discount rules (assuming no election was made by the Unitholder
to include market discount in income as it accrues) as previously
discussed.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised
tax rates on ordinary income while capital gains remain subject
to a 28 percent maximum 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 as ordinary income in the case of certain financial
transactions that are "conversion transactions" effective for
transactions entered into after April 30, 1993. Unitholders and
prospective investors should consult with their tax advisers
regarding the potential effect of this provision on their
investment in Units.
Foreign Investors. A Unitholder who is a foreign investor (i.e.,
an investor other than a U.S. citizen or resident or a U.S.
corporation, partnership, estate or trust) will generally not be
subject to United States federal income taxes, including
withholding taxes, on interest income (including any original
issue discount) on, or any gain from the sale or other
disposition of, his pro rata interest in any Bond or the sale of
his Units provided that all of the following conditions are met:
(i) the interest income or gain is not effectively connected with
the conduct by the foreign investor of a trade or business within
the United States, (ii) either the interest is United States
source income (which is the case for most securities issued by
United States issuers), the Bond is issued after July 18, 1984
(which is the case for each Bond held by a Trust), the foreign
investor does not own, directly or indirectly, 10% or more of the
total combined voting power of all classes of voting stock of the
issuer of the Bond and the foreign investor is not a controlled
foreign corporation related (within the meaning of Section
864(d)(4) of the Code) to the issuer of the Bond, or the interest
income is not from sources within the United States, (iii) with
respect to any gain, the foreign investor (if an individual) is
not present in the United States for 183 days or more during his
or her taxable year, and (iv) the foreign investor provides all
certification which may be required of his status. Foreign
investors should consult their tax advisers with respect to
United States tax consequences of ownership of Units. On
December 7, 1995, the U.S. Treasury Department released proposed
legislation that, if adopted, could affect the United States
federal income taxation of such non-United States Unitholders and
the portion of the Trust's income allocable to non-United States
Unitholders.
It should be noted that the Tax Act includes a provision which eliminates
the exemption from United States taxation, including
withholding taxes, for certain "contingent interest." The
provision applies to interest received after December 31, 1993.
No opinion is expressed herein regarding the potential
applicability of this provision and whether United States
taxation or withholding taxes could be imposed with respect to
income derived from the Units as a result thereof. Unitholders
and prospective investors should consult with their tax advisers
regarding the potential effect of this provision on their
investment in Units.
General. Each Unitholder (other than a foreign investor who has
properly provided the certifications described in the preceding
paragraph) 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 to such
Unitholder will be subject to back-up withholding.
The foregoing discussion relates only to United States Federal
income taxes; Unitholders may be subject to state and local
taxation in other jurisdictions (including a foreign investor's
country of residence). Unitholders should consult their tax
advisers regarding potential state, local, or foreign taxation
with respect to the Units.
TAX REPORTING AND REALLOCATION
Because the Trusts receive interest and makes monthly
distributions based upon a Trust's expected total collections of
interest and any anticipated expenses, certain tax reporting
consequences may arise. A Trust is required to report Unitholder
information to the Internal Revenue Service ("IRS"), based upon
the actual collection of interest by such Trust on the securities
in such Trust, without regard to such Trust's expenses or to such
Trust's payments to Unitholders during the year. If
distributions to Unitholders exceed interest collected, the
difference will be reported as a return of principal which will
reduce a Unitholder's cost basis in its Units (and its pro rata
interest in the securities in a Trust). A Unitholder must
include in taxable income the amount of income reported by a
Trust to the IRS regardless of the amount distributed to such
Unitholder. If a Unitholder's share of taxable income exceeds
income distributions made by a trust to such Unitholder, such
excess is in all likelihood attributable to the payment of
miscellaneous expenses of such Trust which will not be deductible
by an individual Unitholder as an itemized deduction except to
the extent that the total amount of certain itemized deductions,
such as investments expenses (which would include the
Unitholder's share of Trust expenses), tax return preparation
fees and employee business expenses, exceeds 2% of such
Unitholder's adjusted gross income. Alternatively, in certain
cases, such excess may represent an increase in the Unitholder's
tax basis in the Units owned. Investors with questions regarding
these issues should consult with their tax advisers.
PUBLIC OFFERING OF UNITS
Public Offering Price. Units of each Series of the Trust are
offered at the Public Offering Price. The Public Offering Price
per Unit of a Series is equal to the aggregate bid side
evaluation of the Bonds in the Series' portfolio (as determined
pursuant to the terms of a contract with the Evaluator, Cantor
Fitzgerald & Co., a non-affiliated firm regularly engaged in the
business of evaluating, quoting or appraising comparable
securities), plus or minus (a) cash, if any, in the Principal
Account, held or owed by the Series, (b) Purchased Interest (if
any) and (c) Daily Accrued Interest, divided by the number of
outstanding Units of that Series of the Trust, plus the sales
charge applicable. The sales charge is based upon the dollar
weighted average maturity of a Trust and is determined in
accordance with the table set forth below. For purposes of this
computation, Bonds will be deemed to mature on their expressed
maturity dates unless: (a) the Bonds have been called for
redemption or funds or securities have been placed in escrow to
redeem them on an earlier call date, in which case such call date
will be deemed to be the date upon which they mature; or (b) such
Bonds are subject to a "mandatory tender," in which case such
mandatory tender will be deemed to be the date upon which they
mature. The effect of this method of sales charge computation
will be that different sales charge rates will be applied to a
Trust based upon the dollar weighted average maturity of such
Trust's portfolio, in accordance with the following schedule:
DOLLAR WEIGHTED AVERAGE PERCENT OF PUBLIC NET AMOUNT
YEARS TO MATURITY OFFERING PRICE INVESTED
0 to .99 years 0.00% 0.000%
1 to 3.99 years 2.00 2.041
4 to 7.99 years 3.50 3.627
8 to 14.99 years 4.50 4.712
15 or more years 5.50 5.820
The sales charge will be reduced as set forth in the table below.
DOLLAR WEIGHTED AVERAGE YEARS TO MATURITY*
4 to 7.99 8 to 14.99 15 or More
AMOUNT OF INVESTMENT Sales Charge (% of Public Offering Price)
$1 to $99,999 3.50% 4.50% 5.50%
$100,000 to $499,999 3.25 4.25 5.00
$500,000 to $999,999 3.00 4.00 4.50
$1,000,000 or more 2.75 3.75 4.00
- -------------------------
* If the dollar weighted average maturity of a Trust is from 1
to 3.99 years, the sales charge is 2% and 1.5% of the Public
Offering Price for purchases of $1 to $249,999 and $250,000 or
more, respectively.
The reduced sales charge as shown on the preceding charts will
apply to all purchases of Units on any one day by the same
purchaser from the same firm in the amounts stated herein, and
for this purpose, purchases of Units of a Series of the Trust
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 charge will also
be applicable to a trust or other fiduciary purchasing for a
single trust estate or single fiduciary account.
Investors who purchase Units through brokers or dealers pursuant
to a current management agreement which by contract or operation
of law does not allow such broker or dealer to earn an additional
commission (other than any fee or commission paid for maintenance
of such investor's account under the management agreement) on
such transactions may purchase such Units at the current Public
Offering Price net of the applicable broker or dealer concession.
See "Public Offering of Units -- Public Distribution of Units"
below.
The Sponsor intends to permit officers, directors and employees
of the sponsor and Evaluator and, at the discretion of the
Sponsor, registered representatives of selling firms to purchase
Units of the Trust without a sales charge, although a transaction
processing fee may be imposed on such trades.
The Public Offering Price on the date shown on the cover page of
Part Two of the Prospectus or on any subsequent date will vary
from the amounts stated under "Essential Information" in Part Two
due to fluctuations in the prices of the underlying Bonds. The
aggregate bid side evaluation of the Bonds shall be determined
(a) on the basis of current bid prices of the Bonds, (b) if bid
prices are not available for any particular Bond, on the basis of
current bid prices for comparable bonds, (c) by determining the
value of the Bonds on the bid side of the market by appraisal, or
(d) by any combination of the above. The value of insurance
obtained by an issuer of Bonds or by the Sponsor is reflected and
included in the market value of such Bonds.
The foregoing evaluations and computations shall be made as of
the Evaluation Time stated under "Essential Information" in Part
Two, on each business day effective for all sales made during the
preceding 24-hour period, and for purposes of resales and
repurchases of Units.
The interest on the Bonds in each Series of the Trust, less the
related estimated fees and expenses, is estimated to accrue in
the annual amounts per Unit set forth under "Essential
Information" in Part Two. The amount of net interest income
which accrues per Unit may change as Bonds mature or are
redeemed, exchanged or sold, or as the expenses of a Series of
the Trust change or as the number of outstanding Units of such
Series changes.
Payment for Units must be made on or before the third business
day following purchase. If a Unitholder desires to have
certificates representing Units purchased, such certificates will
be delivered as soon as possible following a written request
therefor. For information with respect to redemption of Units
purchased, but as to which certificates requested have not been
received, see "Redemption" below.
The following section entitled "Accrued Interest" applies to all
series of Kemper Insured Corporate Trust and certain Kemper
Defined Funds Insured Corporate Series.
Accrued Interest. Accrued interest consists of two elements.
The first element arises as a result of accrued interest which is
the accumulation of unpaid interest on a bond from the last day
on which interest thereon was paid. Interest on the Bonds is
actually paid either monthly or semi-annually to a Trust.
However, interest on the Bonds is accounted for daily on an
accrual basis. Because of this, a Trust always has an amount of
interest earned but not yet collected by the Trustee because of
coupons that are not yet due. For this reason, the Public
Offering Price of Units of certain Trusts will have added to it
the proportionate share of accrued and undistributed interest to
the date of settlement.
The Trustee advanced the amount of accrued interest on the First
Settlement Date and the same was distributed to the Sponsor.
Such advance was repaid to the Trustee through the first receipts
of interest received on the Bonds. Consequently, the amount of
accrued interest added to the Public Offering Price of Units of
certain Trusts included only accrued interest arising after the
First Settlement Date of a Trust, less any distributions from the
Interest Account subsequent to this First Settlement Date. Since
the First Settlement Date was the date of settlement for anyone
who ordered Units on the Date of Deposit, no accrued interest was
added to the Public Offering Price of Units ordered on the Date
of Deposit.
The second element of accrued interest arises because of the
structure of the Interest Account. The Trustee has no cash for
distribution to Unitholders until it receives interest payments
on the Bonds in a Trust. The Trustee is obligated to provide its
own funds, at times, in order to advance interest distributions.
The Trustee will recover these advancements when such interest is
received. Interest Account balances are established so that it
will not be necessary on a regular basis for the Trustee to
advance its own funds in connection with such interest
distributions. The Interest Account balances are also structured
so that there will generally be positive cash balances and since
the funds held by the Trustee will be used by it to earn interest
thereon, it benefits thereby (see "Expenses of the Trust").
Accrued interest is computed as of the initial record date of the
Trusts. On the date of the first distribution of interest to
Unitholders after the First Settlement Date, the interest
collected by the Trustee will be sufficient to repay its
advances, to allow for accrued interest under the monthly,
quarterly and semi-annual plans of distribution and to generate
enough cash to commence distributions to Unitholders. If a
Unitholder sells or redeems all or a portion of his Units or if
the Bonds in a Trust are sold or otherwise removed or if a Trust
is liquidated, he will receive at that time his proportionate
share of the accrued interest computed to the settlement date in
the case of sale or liquidation and to the date of tender in the
case of redemption of such Trust.
The following section entitled "Purchased and Daily Accrued
Interest" applies only to certain series of Kemper Defined Funds
Insured Corporate Series. See "Essential Information" in Part
Two for a description of accrued interest on the Bonds.
Purchased and Daily Accrued Interest. Accrued interest consists
of two elements. The first element arises as a result of accrued
interest which is the accumulation of unpaid interest on a bond
from the later of the last day on which interest thereon was paid
or the date of original issuance of the bond. Interest on the
coupon Bonds in a Trust Fund is paid semi-annually to the Trust.
A portion of the aggregate amount of such accrued interest on the
Bonds in a Trust to the First Settlement Date of the Trust is
referred to herein as "Purchased Interest." Included in the
Public Offering Price of the Trust Units of Kemper Defined
Funds Insured Corporate Series is the Purchased Interest. In an
effort to reduce the amount of Purchased Interest which would
otherwise have to be paid by Unitholders, the Trustee may advance
a portion of the accrued interest to the Sponsor as the
unitholder of record as of the First Settlement Date. The second
element of accrued interest arises because the estimated net
interest on the Units in the Trust Fund is accounted for daily on
an accrual basis (herein referred to as "Daily Accrued
Interest"). Because of this, the Units always have an amount of
interest earned but not yet paid or reserved for payment. For
this reason, the Public Offering Price of Units will include the
proportionate share of Daily Accrued Interest to the date of
settlement.
If a unitholder sells or redeems all or a portion of his Units or
if the Bonds are sold or otherwise removed or if a Trust Fund is
liquidated, he will receive at that time his proportionate share
of the Purchased Interest (if any) and Daily Accrued Interest
computed to the settlement date in the case of sale or
liquidation and to the date of tender in the case of redemption
in a Trust Fund.
Public Distribution of Units. The Sponsor has qualified Units
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 in the table below. Certain
commercial banks are making Units of the Trusts 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
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.
DOLLAR WEIGHTED AVERAGE YEARS TO MATURITY*
4 to 7.99 8 to 14.99 15 or More
AMOUNT OF INVESTMENT Discount per Unit (% of Public Offering Price)
$1,000 to $99,999 2.00% 3.00% 4.00%
$100,000 to $499,999 1.75 2.75 3.50
$500,000 to $999,999 1.50 2.50 3.00
$1,000,000 or more 1.25 2.25 2.50
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* If the dollar weighted average maturity of a Trust is from 1
to 3.99 years, the concession or agency commission is 1.00% of
the Public Offering Price.
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 the Trust and other unit
investment trusts underwritten by the Sponsor.
The Sponsor reserves the right to change the levels of discounts
at any time. The difference between the discount and the sales
charge will be retained by the Sponsor.
The Sponsor reserves the right to reject, in whole or in part,
any order for the purchase of Units.
Profits of Sponsor. The Sponsor will retain a portion of the
sales charge on each Unit sold, representing the difference
between the Public Offering Price of the Units and the discounts
allowed to firms selling such Units. The Sponsor may realize
additional profit or loss as a result of the possible change in
the daily evaluation of the Bonds in a Trust, since the value of
its inventory of Units may increase or decrease.
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 each Series of
the Trust offered hereby and to continuously offer to purchase
said Units at prices, as determined by the Evaluator, based on
the aggregate bid prices of the underlying Bonds of such Series,
together with Purchased Interest (if any) and Daily Accrued
Interest to the expected date of settlement. Accordingly,
Unitholders who wish to dispose of their Units should inquire of
their broker or bank as to the current market price of the Units
prior to making a tender for redemption to the Trustee.
REDEMPTION
If more favorable terms do not exist in the over-the-counter
market described above, Unitholders of a Series of the Trust may
cause their Units to be redeemed by the Trustee by making a
written request to the Trustee, The Bank of New York, 101 Barclay
Street, New York, New York 10286 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 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 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, guardians or associations.
The signatures must be guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such
other signature program in addition to, or in substitution for,
STAMP, as may be accepted by the Trustee. 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 purchaser.
Redemption shall be made by the Trustee on the third business day
following the day on which a tender for redemption is received
(the "Redemption Date"), by payment of cash equivalent to the
Redemption Price for that Series of the Trust, determined as set
forth below under "Computation of Redemption Price," as of the
Evaluation Time stated under "Essential Information" in Part Two,
next following such tender, multiplied by the number of Units
being redeemed. The price received upon redemption might be more
or less than the amount paid by the Unitholder depending on the
value of the Bonds in the portfolio at the time of redemption.
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a certain 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 interest shall be
withdrawn from the Interest Account of such Series to the extent
that funds are available for such purpose. All other amounts
paid on redemption shall be withdrawn from the Principal Account
of such Series. The Trustee is empowered to sell Bonds from the
portfolio of a Series in order to make funds available for the
redemption of Units of such Series. Such sale may be required
when Bonds would not otherwise be sold and might result in lower
prices than might otherwise be realized. To the extent Bonds are
sold, the size and diversity of that Series of the Trust will be
reduced.
The Trustee is irrevocably authorized in its discretion, if the
Sponsor does not elect to purchase any Units 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 such 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.
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 Bonds is not
reasonably practicable or it is not reasonably practicable fairly
to determine the value of the underlying Bonds in accordance with
the 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 for Units
of each Series of the Trust is computed by the Evaluator as of
the Evaluation Time stated under "Essential Information" in Part
Two next occurring after the tendering of a Unit for redemption
and on any other business day desired by it, by
A. adding (1) the cash on hand in such Series of the
Trust; (2) the aggregate value of the Bonds held in such Series
of the Trust, as determined by the Evaluator on the basis of bid
prices therefor; and (3) accrued interest or Purchased Interest
and Daily Accrued Interest (as applicable) on the Bonds in that
Series of the Trust as of the date of computation;
B. deducting therefrom (1) amounts representing any
applicable taxes or governmental charges payable out of that
Series of the Trust and for which no deductions have been
previously made for the purpose of additions to the Reserve
Account described under "Expenses of the Trust"; (2) amounts
representing estimated accrued expenses of that Series of the
Trust including, but not limited to, fees and expenses of the
Trustee (including legal and auditing fees), the Evaluator, the
Sponsor and bond counsel, if any; (3) cash held for distribution
to Unitholders of record as of the business day prior to the
evaluation being made; and (4) other liabilities incurred by
such Series of the Trust; and
C. finally, dividing the results of such computation by
the number of Units of such Series of the Trust outstanding as of
the date thereof.
UNITHOLDERS
Ownership of Units. Ownership of Units of the Trust will not be
evidenced by a certificate unless a Unitholder or the
Unitholder's registered 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, 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 (if
applicable), 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
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 whole unit multiple
thereof subject to any minimum investment requirement established
by the Sponsor from time to time. 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 Trustee of satisfactory indemnity
(generally amounting to not more than 3% of the market value of
the Units), affidavit of loss, evidence of ownership and payment
of expenses incurred.
Distributions to Unitholders. Interest Distributions. Interest
received by a Series of the Trust, including any portion of the
proceeds from a disposition of Bonds which represents accrued
interest, is credited by the Trustee to the Interest Account for
such Series. All other receipts are credited by the Trustee to a
separate Principal Account for such Series. During each year the
distributions to the Unitholders of each Series of the Trust as
of each Record Date (see "Essential Information" in Part Two)
will be made on the following Distribution Date or shortly
thereafter and shall consist of an amount substantially equal to
one-twelfth or one-half (depending on the distribution option
selected) of such holders' pro rata share of the net estimated
net annual interest income to the Interest Account for such
Series of the Trust, after deducting estimated expenses.
Persons who purchase Units of the Trust between a Record Date and
a Distribution Date will receive their first distribution on the
second Distribution Date following their purchase of Units. All
distributions of principal and interest will be paid in cash
unless a Unitholder has elected to reinvest principal and/or
interest payments in shares of one of the reinvestment funds.
See "Distribution Reinvestment." Interest distributions per Unit
for each Series will be in the amounts shown under "Essential
Information" in the applicable Part Two and may change as
underlying Bonds are redeemed, paid or sold, or as expenses of
such Series of the Trust change or the number of outstanding
Units of such Series of the Trust changes.
Since interest on Bonds in each Series of the Trust is payable at
varying intervals, usually in semiannual installments, and
distributions of income are made to Unitholders of a Series of
the Trust at what may be different intervals from receipt of
interest, the interest accruing to such Series of the Trust may
not be equal to the amount of money received and available for
distribution from the Interest Account of such Series.
Therefore, on each Distribution Date the amount of interest
actually on deposit in the Interest Account and available for
distribution may be slightly more or less than the interest
distribution made. In order to eliminate fluctuations in
interest distributions resulting from such variances, the Trustee
is authorized by the Trust Agreement to advance such amounts as
may be necessary to provide interest distributions of
approximately equal amounts. The Trustee will be reimbursed,
without interest, for any such advances from funds available in
the Interest Account of such Series.
Because the interest to which Unitholders of a Series of the
Trust are entitled will at most times exceed the amount available
for distribution, there will almost always remain an item of
accrued interest that is added to the daily value of the Units of
such Series. If Unitholders of a Series sell or redeem all or a
portion of their Units they will be paid their proportionate
share of the accrued interest of such Series to, but not
including, the fifth business day after the date of a sale or to
the date of tender in the case of a redemption.
Unitholders purchasing Units will initially receive distributions
in accordance with the election of the prior owner. Unitholders
desiring to change their distribution option may do so by sending
written notice to the Trustee, together with their certificate
(if one was issued). Certificates should only be sent by
registered or certified mail to minimize the possibility of loss.
If written notice and any certificate are received by the Trustee
not later than January 1 or July 1 of a year, the change will
become effective on January 2 for distributions commencing with
February 15 or August 15, respectively, of that year. If notice
is not received by the Trustee, the Unitholder will be deemed to
have elected to continue with the same option for the subsequent
twelve months.
Principal Distributions. In addition, the Trustee will
distribute on each Distribution Date or shortly thereafter, to
each Unitholder of record on the preceding Record Date, an amount
substantially equal to such holders' pro rata share of the cash
balance, if any, in the Principal Account of such Series computed
as of the close of business on the preceding Record Date.
However, no distribution will be required if the balance in the
Principal Account of such Series is less than $1.00 per Unit.
Statement to Unitholders. With each distribution, the Trustee
will furnish or cause to be furnished to each Unitholder a
statement of the amount of interest 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 Series of the Trust are required to be
audited, at the Series' expense, annually by independent auditors
designated by the Sponsor, unless the Trustee determines that
such an audit would not be in the best interest of the
Unitholders of such Series of the Trust. The accountants' report
will be furnished by the Trustee to any Unitholder of such Series
of the Trust 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 Series of the
Trust a statement covering the calendar year, setting forth:
A. As to the Interest Account:
1. The amount of interest received on the Bonds in such
Series including amounts received as a portion of the proceeds of
any disposition of the Bonds;
2. The amount paid from the Interest Account of such
Series representing accrued interest of any Units redeemed;
3. The deductions from the Interest Account of such Series
for applicable taxes, if any, fees and expenses (including
auditing fees) of the Trustee, the Evaluator, the Sponsor and
bond counsel, if any;
4. Any amounts credited by the Trustee to a Reserve
Account for such Series described under "Expenses of the Trust";
and
5. The net amount remaining after such payments and
deductions, expressed both as a total dollar amount and a dollar
amount per Unit outstanding on the last business day of such
calendar year.
B. As to the Principal Account:
1. The dates of the maturity, liquidation or redemption of
any of the Bonds in such Series and the net proceeds received
therefrom excluding any portion credited to the Interest Account;
2. The amount paid from the Principal Account of such
Series representing the principal of any Units redeemed;
3. The deductions from the Principal Account of such
Series for payment of applicable taxes, if any, fees and expenses
(including auditing expenses) of the Trustee, the Evaluator, the
Sponsor and of bond counsel, if any;
4. Any amounts credited by the Trustee to a Reserve
Account for such Series described under "Expenses of the Trust";
and
5. The net amount remaining after distributions of
principal and deductions, expressed both as a dollar amount and
as a dollar amount per Unit outstanding on the last business day
of such calendar year.
C. The following information:
1. A list of the Bonds in such Series as of the last
business day of such calendar year;
2. The number of Units of such Series outstanding on the
last business day of such calendar year;
3. The Redemption Price of such Series based on the last
Trust Evaluation made during such calendar year;
4. The amount actually distributed during such calendar
year from the Interest and Principal Accounts of such Series
separately stated, expressed both as total dollar amounts and as
dollar amounts per Unit of such Series outstanding on the Record Date
for each such distribution.
Rights of Unitholders. A Unitholder may at any time tender Units
to the Trustee for redemption. No Unitholder of a Series shall
have the right to control the operation and management of such
Series or of the Trust in any manner, except to vote with respect
to amendment of the Trust Agreement or termination of such Series
of the Trust. The death or incapacity of any Unitholder will not
operate to terminate the Series or the Trust 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
such Series or the Trust.
INVESTMENT SUPERVISION
The Sponsor may not alter the portfolio of the Trust by the
purchase, sale or substitution of Bonds, except in the special
circumstances noted below. Thus, with the exception of the
redemption or maturity of Bonds in accordance with their terms,
and/or the sale of Bonds to meet redemption requests, the assets
of the Trust will remain unchanged under normal circumstances.
The Sponsor may direct the Trustee to dispose of Bonds the value
of which has been affected by certain adverse events, including
institution of certain legal proceedings, a decline in their
price or the occurrence of other market factors, including
advance refunding, so that in the opinion of the Sponsor the
retention of such Bonds in a Series of the Trust would be
detrimental to the interest of the Unitholders of such Series.
The proceeds from any such sales, exclusive of any portion which
represents accrued interest, will be credited to the Principal
Account for distribution to the Unitholders.
The Sponsor is required to instruct the Trustee to reject any
offer made by an issuer of the Bonds to issue new obligations in
exchange or substitution for any of such Bonds pursuant to a
refunding or refinancing plan, except that the Sponsor may
instruct the Trustee to accept or reject such an offer or to take
any other action with respect thereto as the Sponsor may deem
proper if (1) the issuer is in default with respect to such Bonds
or (2) in the written opinion of the Sponsor the issuer will
probably default with respect to such Bonds in the reasonably
foreseeable future. Any obligation so received in exchange or
substitution will be held by the Trustee subject to the terms and
conditions of the Trust Agreement to the same extent as Bonds
originally deposited thereunder. Within five days after the
deposit of obligations in exchange or substitution for underlying
Bonds, the Trustee is required to give notice thereof to each
Unitholder, identifying the Bonds eliminated and the Bonds
substituted therefor.
The Trustee may sell Bonds designated by the Sponsor from a
Series of the Trust for the purpose of redeeming Units of such
Series tendered for redemption and the payment of expenses.
ADMINISTRATION OF THE TRUST
The Trustee. The Trustee is The Bank of New York, a trust
company organized under the laws of New York. The Bank of New
York has its offices at 101 Barclay Street, New York, New York
10286, telephone 1-800-701-8178. The Bank of New York is subject
to supervision and examination by the Superintendent of Banks of the
State of New York and the Board of Governors of the Federal
Reserve System, and its deposits are insured by the Federal
Deposit Insurance Corporation to the extent permitted by law.
The Trustee, whose duties are ministerial in nature, has not
participated in selecting the portfolio of any Series of the
Trust. For information relating to the responsibilities of the
Trustee under the Trust Agreements, reference is made to the
material set forth under "Unitholders."
In accordance with the Trust Agreements, the Trustee shall keep
proper 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 Series. The books and records
with respect to a Series of the Trust shall be open to inspection
by any Unitholder of such Series at all reasonable times during
the 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 Agreements 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 Bonds held in
each Series of the Trust. Pursuant to the Trust Agreements, the
Trustee may employ one or more agents for the purpose of custody
and safeguarding of Bonds comprising each Trust Fund.
Under the Trust Agreements, the Trustee or any successor trustee
may resign and be discharged of the trust created by the Trust
Agreements 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. The Sponsor may at any time remove the Trustee with
or without cause and appoint a successor trustee as provided in
the Trusts Agreements. 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 a
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 $5,000,000.
The Evaluator. EVEREN Unit Investment Trusts, a service of
EVEREN Securities, Inc., the Sponsor, also serves as Evaluator.
The Evaluator may resign or be removed by the Trustee, in which
event 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. At the present time, pursuant to a
contract with the Evaluator, Cantor Fitzgerald & Co., a
non-affiliated firm regularly engaged in the business of
evaluating, quoting or appraising comparable securities, provides
portfolio evaluations of the Bonds in the Trusts which are then
reviewed by the Evaluator. In the event the Sponsor is unable to
obtain current evaluations from Cantor Fitzgerald & Co., it may
make its own evaluations or it may utilize the services of any
other non-affiliated evaluator or evaluators it deems
appropriate.
Amendment and Termination. The Trust Agreements 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 adversely
affect the interests of the Unitholders. The Trust Agreements
may also be amended in any respect by the Sponsor and the
Trustee, or any of the provisions thereof may be waived, with the
written consent of the holders of Units representing 66-2/3% of
the Units then outstanding, provided that no such amendment or
waiver will reduce the interest in a Series of the Trust of any
Unitholder 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. In no event shall
the Trust Agreements be amended to increase the number of Units
issuable thereunder or to permit, except in accordance with the
provisions of the Trust Agreements, the acquisition of any Bonds
in addition to or in substitution for those in the Trust. The
Trustee shall promptly notify Unitholders of the substance of any
such amendment.
The Trust Agreements provide that a Series of the Trust shall
terminate upon the maturity, redemption or other disposition, of
the last of the Bonds held in such Series, but in no event later
than the Mandatory Termination Date set forth under "Essential
Information" in Part Two for each Trust. If the value of a Series
of the Trust shall be less than the applicable minimum Trust
value stated under "Essential Information" in Part Two (40% of
the aggregate principal amount of Bonds deposited in the Trust),
the Trustee may, in its discretion, and shall, when so directed
by the Sponsor, terminate such Series of the Trust. A Series of
the Trust may be terminated at any time by the holders of Units
representing 66-2/3% of the Units of such Series then
outstanding. In the event of termination, written notice thereof
will be sent by the Trustee to all Unitholders of such Series.
Within a reasonable period after termination, the Trustee will
sell any Bonds remaining in such Series of the Trust and, after
paying all expenses and charges incurred by such Series of the
Trust, will distribute to Unitholders of such Series (upon
surrender for cancellation of certificates for Units, if issued)
their pro rata share of the balances remaining in the Interest
and Principal Accounts of such Series.
Limitations on Liability. The Sponsor: The Sponsor is liable
for the performance of its obligations arising from its
responsibilities under the Trust Agreements, 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 Agreements 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 Bonds.
The Trustee: The Trust Agreements 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, Bonds, 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 Bonds. 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 Bonds or upon the interest
thereon. In addition, the Trust Agreements 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 Agreements
provide 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.
EXPENSES OF THE TRUST
The Sponsor will not charge any Series of the Trust fees for
services performed as Sponsor, except the Sponsor shall receive
an annual surveillance fee for services performed for such Trust
Funds in an amount not to exceed the amount shown under
"Essential Information" in Part Two for performing portfolio
surveillance services for each Trust. Such fee (which is based
on the largest number of Units outstanding during each year) may
exceed the actual costs of providing such surveillance services
for a Trust, but at no time will the total amount received for
portfolio surveillance services rendered to such Series in any
calendar year exceed the aggregate cost to the Sponsor for
providing such services. The foregoing fees may be increased
without approval of the Unitholders by amounts not exceeding
proportionate increases under the category "All Services Less
Rent of Shelter" in the Consumer Price Index published by the
United States Department of Labor or, if such category is no longer
published, in a comparable category. The Sponsor paid all
the expenses of creating and establishing the Trust, including
the cost of the initial preparation, printing and execution of
the Prospectus, Trust Agreements and the certificates, legal and
accounting expenses, advertising and selling expenses, payment of
closing fees, expenses of the Trustee, initial evaluation fees
and other out-of-pocket expenses.
The Trustee receives for its services the fee set forth under
"Essential Information" appearing in Part Two. The Trustee fee
which is calculated monthly is based on the largest aggregate
principal amount of Bonds in each Trust Fund at any time during
the period. Funds that are available for future distributions,
redemptions and payment of expenses are held in accounts which
are non-interest bearing to Unitholders and are available for use
by the Trustee pursuant to normal banking procedures; however,
the Trustee is also authorized by the Trust Agreements to make
from time to time certain non-interest bearing advances to the
Trust Funds. The Trustee's fee is payable on or before each
Distribution Date. See "Unitholders-Distributions to
Unitholders."
For evaluation of Bonds in a Series of the Trust, the Evaluator
receives a fee payable monthly, calculated on an annual rate as
set forth under "Essential Information" in Part Two, based upon
the largest aggregate principal amount of Bonds in such Series of
the Trust at any time during such monthly period.
The Trustee's fees, the Evaluator's fees and the surveillance
fees are deducted from the Interest Account of each Series to the
extent funds are available and then from the Principal Account of
such Series. Such fees 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 a
Series of the Trust: (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 any agent for custody and safeguarding of Bonds) and
of bond counsel, if any; (c) various governmental charges; (d)
expenses and costs of any action taken by the Trustee to protect
the Trust or such Series, 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 such
Series of the 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
as Sponsor of such Series of the Trust without gross negligence,
bad faith or willful misconduct; and (g) expenditures incurred in
contacting Unitholders upon termination of the Series. The fees
and expenses set forth herein are payable out of such Series of
the Trust and, when owed to the Trustee, are secured by a lien on
the assets of the Series of the Trust.
Fees and expenses of a Series of the Trust shall be deducted
from the Interest Account of such Series, or, to the extent funds are
not available in such Account, from the Principal Account of
such Series. The Trustee may withdraw from the Principal Account
or the Interest Account of such Series such amounts, if any, as
it deems necessary to establish a reserve for any taxes or other
governmental charges or other extraordinary expenses payable out
of that Series of the Trust. Amounts so withdrawn shall be
credited to a separate account maintained for such Series known
as the Reserve Account and shall not be considered a part of such
Series when determining the value of the Units of such Series
until such time as the Trustee shall return all or any part of
such amounts to the appropriate account.
THE SPONSOR
The Sponsor, EVEREN Unit Investment Trusts, with an office at 77
West Wacker Drive, 29th Floor, Chicago, Illinois 60601, (800)
621-5024, is a service of EVEREN Securities, Inc., which is a
wholly-owned subsidiary of EVEREN Capital Corporation. EVEREN
Unit Investment Trusts, as service of EVEREN Securities, Inc. was
formerly known as Kemper Unit Investment Trusts, a service of
Kemper Securities, Inc. The Sponsor acts as underwriter of a
number of other EVEREN unit investment trusts and will act as
underwriter of any other unit investment trust created by the
Sponsor in the future. As of December 31, 1995, the total
stockholder's equity of EVEREN Securities, Inc. was 261,286,862.
If at any time the Sponsor shall fail to perform any of its
duties under the Trust Agreements or shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or its
affairs are 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 Agreements and
liquidate the Trust or any Series thereof as provided therein or
(c) continue to act as Trustee without terminating the Trust
Agreements.
The foregoing financial information with regard to the Sponsor
relates to the Sponsor only and not to this Trust or any Series.
Such information is included in this Prospectus only for the
purposes of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its
contractual obligations with respect to the Series of the Trust.
More comprehensive financial information can be obtained upon
request from the Sponsor.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters
relating to federal tax law were passed upon by Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor.
INDEPENDENT AUDITORS
The statement of net assets, including the schedule of
investments, appearing in Part Two of this Prospectus and
Registration Statement, with information pertaining to the
specific Series of the Trust to which such statement relates, has
been audited by Ernst & Young LLP, independent auditors, as set
forth in their report appearing in Part Two and is included in reliance
upon such report given upon the authority of such firm
as experts in accounting and auditing.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 1
Part Two
Dated April 29, 1996
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>
Kemper Defined Funds
Insured Corporate Series 1
Essential Information
As of December 31, 1995
Sponsor and Evaluator: EVEREN Unit Investment Trusts(3)
Trustee: Investors Fiduciary Trust Company(4)
<TABLE>
<CAPTION>
General Information
<S> <C>
Principal Amount of Securities $28,689,000
Number of Units 2,867,945
Fractional Undivided Interest in the Trust per Unit 1/2,867,945
Principal Amount of Securities per Unit $10
Calculation of Public Offering Price:
Aggregate Value of Securities in the Trust $27,765,655
Aggregate Value of Securities per Unit $9.681
Principal Cash per Unit (1) $.012
Purchased Interest per Unit through settlement
date of January 4, 1996 $.072
Total Price including Purchased Interest per Unit $9.765
Sales Charge of 4.5% of Public Offering Price
(4.712% of net amount invested) per Unit $.460
Public Offering Price per Unit $10.225
Redemption Price per Unit $9.765
Calculation of Estimated Net Annual Interest Income per Unit:
Estimated Annual Interest Income $.6065
Less: Estimated Annual Expense $.0181
Estimated Net Annual Interest Income $.5884
Daily Rate at which Estimated Net Annual Interest Income
Accrues per Unit $.001634
Estimated Current Return Based on Public Offering Price (2) 5.75%
Estimated Long-Term Return (2) 5.76%
</TABLE>
[FN]
1. This amount, if any, represents principal cash or overdraft which is an
asset or liability of the Trust and is included in the Public Offering Price.
2. The Estimated Current Return and Estimated Long-Term Return will vary with
changes in the Public Offering Price and there is no assurance that such
returns on the date hereof will be applicable on a subsequent date of
purchase. These estimated returns are increased for transactions entitled to
a reduced sales charge (see "Public Offering of Units - Public Offering Price"
- - Part One).
3. See Note 1 to the accompanying financial statements of the Trust regarding
a change in ownership of Kemper Unit Investment Trusts and Kemper Securities,
Inc.
4. See Note 6 to the accompanying financial statements of the Trust regarding
the change in Trustee.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 1
Essential Information (continued)
As of December 31, 1995
Sponsor and Evaluator: EVEREN Unit Investment Trusts
Trustee: Investors Fiduciary Trust Company
Record and Distribution Date Record Date is the first of each
month and distributions to
Unitholders on such record dates
will be made on the 15th day of the
month.
Distribution Dates No distribution (other than capital
gains distributions) need be made
from the Principal Account if the
balance therein, excluding capital
gains, is less than $1.00 per Unit.
Trustee's Annual Fee (including
estimated expenses) $1.33 per 100 Units (includes $1.07
of Trustee's annual fee per $1,000
principal amount of underlying
Securities and $.15 of out-of-pocket
expenses per 100 Units).
Evaluator's Annual Fee $.30 per $1,000 principal amount of
underlying Securities.
Surveillance Fee $.25 per $1,000 principal amount of
underlying Securities.
Date of Trust Agreement and
Initial Deposit July 21, 1993
Mandatory Termination Date December 31, 2027
Weighted Average Stated Maturity
of Bonds 8.47 years
Discretionary Liquidation Amount The Trust may be terminated if the
value thereof is less than
$13,260,000 (40% of the par value of
the Securities deposited in the
Trust).
<PAGE>
Report of Independent Auditors
Unitholders
Kemper Defined Funds
Insured Corporate Series 1
We have audited the accompanying statement of assets and liabilities of Kemper
Defined Funds Insured Corporate Series 1, including the schedule of
investments, as of December 31, 1995, and the related statements of operations
and changes in net assets for each of the two years in the period then ended
and for the period from July 21, 1993 (Date of Initial Deposit) to
December 31, 1993. 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, 1995,
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 Defined Funds Insured
Corporate Series 1 at December 31, 1995, and the results of its operations and
the changes in its net assets for the periods indicated above in conformity
with generally accepted accounting principles.
Ernst & Young LLP
Kansas City, Missouri
April 15, 1996
<PAGE>
Kemper Defined Funds
Insured Corporate Series 1
Statement of Assets and Liabilities
December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Securities, at value (cost $28,903,052) $27,765,655
Interest receivable 593,199
-----------
Total assets 28,358,854
Liabilities and net assets
Cash overdraft 227,222
Accrued liabilities 5,000
-----------
232,222
Net assets, applicable to 2,867,945 Units
outstanding:
Cost of Trust assets, including purchased
interest of $192,152 $29,095,204
Unrealized depreciation (1,137,397)
Distributable funds 168,825
----------- -----------
Net assets $28,126,632
===========
Net asset value per Unit $9.81
===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 1
Statements of Operations
<TABLE>
<CAPTION>
Period from
Jul. 21,
1993 to
Year ended Dec. 31 Dec. 31,
1995 1994 1993
<S> <C> <C> <C>
---------- ------------ ----------
Investment income - interest $1,999,211 $2,100,881 $396,153
Expenses:
Trustee's fees and related expenses 41,586 41,501 9,130
Evaluator's and portfolio surveillance
fees 17,226 18,115 3,986
---------- ------------ ----------
Total expenses 58,812 59,616 13,116
---------- ------------ ----------
Net investment income 1,940,399 2,041,265 383,037
Realized and unrealized gain (loss)
on investments:
Net realized loss (269,066) - -
Unrealized appreciation
(depreciation) during the period 4,079,591 (4,696,817) (520,171)
---------- ------------ ----------
Net gain (loss) on investments 3,810,525 (4,696,817) (520,171)
---------- ------------ ----------
Net increase (decrease) in net assets
resulting from operations $5,750,924 $(2,655,552) $(137,134)
========== ============ ==========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 1
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period from
Jul. 21,
1993 to
Year ended Dec. 31 Dec. 31,
1995 1994 1993
<S> <C> <C> <C>
----------- ----------- -----------
Operations:
Net investment income $1,940,399 $2,041,265 $383,037
Net realized loss on investments (269,066) - -
Unrealized appreciation (depreciation)
on investments during the period 4,079,591 (4,696,817) (520,171)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 5,750,924 (2,655,552) (137,134)
Distributions to Unitholders:
Net investment income (1,887,378) (1,633,771) (87,738)
Principal from investment transactions - (282,255) (214,067)
----------- ----------- -----------
Total distributions to Unitholders (1,887,378) (1,916,026) (301,805)
Capital transactions:
Issuance of 2,805,000 Units - - 28,335,825
Issuance of 510,000 Units - 5,114,680 -
Redemption of 447,055 Units (4,176,902) - -
----------- ----------- -----------
Total increase (decrease) in net assets (313,356) 543,102 27,896,886
Net assets:
Beginning of the period 28,439,988 27,896,886 -
----------- ----------- -----------
End of the period (including
distributable funds applicable to
Trust Units of $168,825, $162,752
and $137,952 at December 31, 1995,
1994 and 1993, respectively) $28,126,632 $28,439,988 $27,896,886
=========== =========== ===========
Trust Units outstanding at the end
of the period 2,867,945 3,315,000 2,805,000
=========== =========== ===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
Kemper Defined Funds
Insured Corporate Series 1
Schedule of Investments
December 31, 1995
<CAPTION>
Coupon Maturity Redemption Principal
Name of Issuer(5) Rate Date Provisions(2) Rating(1) Amount(4) Value(3)
<S> <C> <C> <C> <C> <C> <C>
------- ---------- -------------- -------- ----------- -----------
Baltimore Gas & Electric Company 6.125% 7/01/2003 Non-Callable AAA $3,900,000 $3,909,567
Detroit Edison Company 7.40 1/15/2003 Non-Callable AAA 6,500,000 6,911,970
Niagara Mohawk Power Corporation 6.625 7/01/2005 Non-Callable AAA 5,806,000 5,447,338
Pacific Gas & Electric Company 6.25 8/01/2003 Non-Callable AAA 1,000 1,005
Pacificorp 6.75 4/01/2005 Non-Callable AAA 2,600,000 2,663,619
Philadelphia Electric Company 6.50 5/01/2003 Non-Callable AAA 621,000 624,192
Texas Utilities Electric Company 6.75 7/01/2005 Non-Callable AAA 6,206,000 6,298,283
U.S. Treasury Securities (6) 0.00 5/15/2004 Non-Callable AAA 3,055,000 1,909,681
----------- -----------
$28,689,000 $27,765,655
=========== ===========
</TABLE>
[FN]
See accompanying notes to Schedule of Investments.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 1
Notes to Schedule of Investments
1. All ratings are by Standard & Poor's Corporation, unless marked with the
symbol "*", in which case the rating is by Moody's Investors Service, Inc.
The symbol "NR" indicates Bonds for which no rating is available.
2. There is shown under this heading the year in which each issue of Bonds is
initially redeemable and the redemption price for that year or, if currently
redeemable, the redemption price currently in effect; unless otherwise
indicated, each issue continues to be redeemable at declining prices
thereafter, but not below par value. The prices at which the Bonds may be
redeemed or called prior to maturity may or may not include a premium and, in
certain cases, may be less than the cost of the Bonds to the Trust. In
addition, certain Bonds in the Portfolio may be redeemed in whole or in part
other than by operation of the stated redemption provisions under certain
unusual or extraordinary circumstances specified in the instruments setting
forth the terms and provisions of such Bonds.
3. See Note 1 to the accompanying financial statements for a description of
the method of determining cost and value.
4. At December 31, 1995, the Portfolio of the Trust consists of 7 obligations
issued by public utility companies and 1 U.S. Treasury Security. None of the
Bonds in the Trust will mature within five years after December 31, 1995.
5. Insurance on the corporate Bonds in the Trust was obtained either directly
by the issuer of the Bonds or by the Trust's sponsor.
6. This Bond has been purchased at a discount from the par value because
there is no stated interest income thereon. Such Bond is normally described
as a "zero coupon" Bond. Over the life of the Bond the value increases, so
that upon maturity, the holders of the Bond will receive 100% of the principal
amount thereof.
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 1
Notes to Financial Statements
1. Significant Accounting Policies
Trust Sponsor and Evaluator
From the Trust's date of deposit through September 14, 1995, the Trust's
sponsor and evaluator was Kemper Unit Investment Trusts, a division of Kemper
Securities, Inc. At that date, the members of certain Kemper Corporation
operating units acquired ownership of certain Kemper units, which included
Kemper Securities, Inc. In connection with the acquisition, Kemper
Securities, Inc. changed its name to EVEREN Securities, Inc., and Kemper Unit
Investment Trusts became EVEREN Unit Investment Trusts, which now serves as
the "Evaluator" and sponsor of the Trust. Subsequent to the date of
acquisition, neither EVEREN Securities, Inc. nor EVEREN Unit Investment Trusts
is affiliated with Kemper Financial Services, Inc. or Kemper Corporation.
Valuation of Securities
Corporate Securities and the zero coupon obligation are stated at bid prices
as determined by EVEREN Unit Investment Trusts. The aggregate bid prices of
the Securities are determined based on (a) current bid prices of the
Securities, (b) current bid prices for comparable securities, (c) appraisal,
or (d) any combination of the above. (See Note 5 - Insurance.)
Cost of Securities
Cost of the Trust's Securities is based on the offering prices of the
Securities on the dates of deposit of such Securities acquired during the
primary sales period, plus amortization of original issue discount for the
zero coupon obligation. The premium or discount for the fixed rate
obligations is not being amortized. Realized gain (loss) from Security
transactions is reported on an identified cost basis.
Investment Income
Interest income consists of amortization of original issue discount on the
zero coupon obligation and interest accrued as earned on the fixed rate
obligations.
Cost of Trust Assets
At December 31, 1995, the Cost of Trust assets, which is a component of net
assets, includes purchased interest paid by Unitholders.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 1
Notes to Financial Statements (continued)
2. Unrealized Appreciation and Depreciation
Following is an analysis of net unrealized depreciation at December 31, 1995:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized depreciation $(1,170,292)
Gross unrealized appreciation 32,895
------------
Net unrealized depreciation $(1,137,397)
============
</TABLE>
3. Transactions with Affiliates
Investors Fiduciary Trust Company (IFTC), who served as Trustee through
February 29, 1996, was 50% owned by Kemper Financial Services, Inc., an
affiliate of Kemper Unit Investment Trusts until January 31, 1995, at which
time State Street Boston Corporation acquired IFTC. Payments to the Trustee
included $1.07, $.99 and $.99 of Trustee's annual fee per $1,000 principal
amount of underlying Securities in the Trust at December 31, 1995, 1994 and
1993, respectively, calculated monthly, based on the largest aggregate
principal amount of Securities in the Trust at any time during the month and
reimbursement of out-of-pocket expenses of $.15 per 100 Units through December
31, 1995, calculated monthly, based on the largest number of Trust Units
outstanding at any time during the month.
The annual Evaluator's fee and portfolio surveillance fee, calculated monthly,
are $.30 and $.25, respectively, per $1,000 principal amount of Securities in
the Trust based on the largest aggregate principal amount of Securities in the
Trust at any time during the month.
4. Federal Income Taxes
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
offering price of the Securities on the date of an investor's purchase, plus
or minus a pro rata share of cash or overdraft in the Principal Account,
purchased interest and daily accrued interest, plus a sales charge of 3.9% of
the Public Offering Price (equivalent to 4.058% of the net amount invested).
The Public Offering Price for secondary market transactions is based on the
aggregate bid prices of the Securities plus or minus a pro rata share of cash
or overdraft in the Principal Account, purchased interest and daily accrued
interest on the date of an investor's purchase, plus a sales charge of 4.5% of
the Public Offering Price (equivalent to 4.712% of the net amount invested).
<PAGE>
Kemper Defined Funds
Insured Corporate Series 1
Notes to Financial Statements (continued)
5. Other Information (continued)
Insurance
Insurance guaranteeing the payment of all principal and interest on the
corporate Bonds in the portfolio has been obtained from an independent company
by the issuer of the Bonds involved or by the Trust's sponsor. Insurance
obtained by the Trust's sponsor or a Bond issuer is effective as long as such
Bonds are outstanding. As a result of such insurance, the Units of the Trust
have received a rating of "AAA" by Standard & Poor's Corporation. No
representation is made as to any insurer's ability to meet its commitments.
Selected data per Unit of the Trust outstanding during each period (amounts
relating to net investment income are based on weighted average Units
outstanding) -
<TABLE>
<CAPTION>
Period from
Jul. 21,
1993 to
Year ended Dec. 31 Dec. 31,
1995 1994 1993
<S> <C> <C> <C>
----- ------ -----
Investment income - interest $.64 $.64 $.27
Expenses .02 .02 .01
----- ------ -----
Net investment income .62 .62 .26
Distributions to Unitholders:
Net investment income (.59) (.50) (.06)
Principal from investment transactions - (.09) (.14)
----- ------ -----
Total distributions to Unitholders (.59) (.59) (.20)
Net gain (loss) on investments 1.20 (1.40) (.01)
----- ------ -----
Change in net asset value 1.23 (1.37) .05
Net asset value:
Beginning of the period 8.58 9.95 9.90*
----- ------ -----
End of the period, including
distributable funds $9.81 $8.58 $9.95
===== ====== =====
</TABLE>
[FN]
*Value at Date of Initial Deposit (July 21, 1993).
6. Change of Trustee
On March 1, 1996, The Bank of New York assumed all trustee responsibilities
from IFTC.
<PAGE>
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, 1996, in this Post-
Effective Amendment to the Registration Statement (Form S-6) and related
Prospectus of Kemper Defined Funds Insured Corporate Series 1 dated April 29,
1996.
Ernst & Young LLP
Kansas City, Missouri
April 29, 1996
<PAGE>
Kemper Defined Funds
Insured Corporate Series 2
Part Two
Dated April 29, 1996
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>
Kemper Defined Funds
Insured Corporate Series 2
Essential Information
As of December 31, 1995
Sponsor and Evaluator: EVEREN Unit Investment Trusts(3)
Trustee: Investors Fiduciary Trust Company(4)
<TABLE>
<CAPTION>
General Information
<S> <C>
Principal Amount of Securities $49,225,000
Number of Units 4,922,500
Fractional Undivided Interest in the Trust per Unit 1/4,922,500
Principal Amount of Securities per Unit $10
Calculation of Public Offering Price:
Aggregate Value of Securities in the Trust $46,230,265
Aggregate Value of Securities per Unit $9.392
Principal Cash per Unit (1) $.003
Purchased Interest per Unit through settlement date of
January 4, 1996 $.122
Total Price including Purchase Interest per Unit $9.517
Sales Charge of 5.5% of Public Offering Price
(5.820% of net amount invested) per Unit $.554
Public Offering Price per Unit $10.071
Redemption Price per Unit $9.517
Calculation of Estimated Net Annual Interest Income per Unit:
Estimated Annual Interest Income $.6869
Less: Estimated Annual Expense $.0158
Estimated Net Annual Interest Income $.6711
Daily Rate at which Estimated Net Annual Interest Income
Accrues per Unit $.001864
Estimated Current Return Based on Public Offering Price (2) 6.66%
Estimated Long-Term Return (2) 7.00%
</TABLE>
[FN]
1. This amount, if any, represents principal cash or overdraft which is an
asset or liability of the Trust and is included in the Public Offering Price.
2. The Estimated Current Return and Estimated Long-Term Return will vary with
changes in the Public Offering Price and there is no assurance that such
returns on the date hereof will be applicable on a subsequent date of
purchase. These estimated returns are increased for transactions entitled to
a reduced sales charge (see "Public Offering of Units - Public Offering Price"
- - Part One).
3. See Note 1 to the accompanying financial statements of the Trust regarding
a change in ownership of Kemper Unit Investment Trusts and Kemper Securities,
Inc.
4. See Note 6 to the accompanying financial statements of the Trust regarding
the change in Trustee.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 2
Essential Information (continued)
As of December 31, 1995
Sponsor and Evaluator: EVEREN Unit Investment Trusts
Trustee: Investors Fiduciary Trust Company
Record and Distribution Date Record Date is the first of each
month and distributions to
Unitholders on such record dates
will be made on the 15th day of the
month.
Distribution Dates No distribution (other than capital
gains distributions) need be made
from the Principal Account if the
balance therein, excluding capital
gains, is less than $1.00 per Unit.
Trustee's Annual Fee (including
estimated expenses) $1.096 per 100 Units (includes $.90
of Trustee's annual fee per $1,000
principal amount of underlying
Securities and $.15 of out-of-pocket
expenses per 100 Units).
Evaluator's Annual Fee $.30 per $1,000 principal amount of
underlying Securities.
Surveillance Fee $.25 per $1,000 principal amount of
underlying Securities.
Date of Trust Agreement and
Initial Deposit July 21, 1993
Mandatory Termination Date December 31, 2027
Weighted Average Stated Maturity
of Bonds 28.16 years
Discretionary Liquidation Amount The Trust may be terminated if the
value thereof is less than
$20,090,000 (40% of the par value of
the Securities deposited in the
Trust).
<PAGE>
Report of Independent Auditors
Unitholders
Kemper Defined Funds
Insured Corporate Series 2
We have audited the accompanying statement of assets and liabilities of Kemper
Defined Funds Insured Corporate Series 2, including the schedule of
investments, as of December 31, 1995, and the related statements of operations
and changes in net assets for each of the two years in the period then ended
and for the period from July 21, 1993 (Date of Initial Deposit) to
December 31, 1993. 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, 1995,
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 Defined Funds Insured
Corporate Series 2 at December 31, 1995, and the results of its operations and
the changes in its net assets for the periods indicated above in conformity
with generally accepted accounting principles.
Ernst & Young LLP
Kansas City, Missouri
April 15, 1996
<PAGE>
Kemper Defined Funds
Insured Corporate Series 2
Statement of Assets and Liabilities
December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Corporate Securities, at value (cost $47,776,184) $46,230,265
Interest receivable 900,239
-----------
Total assets 47,130,504
Liabilities and net assets
Cash overdraft 24,929
Accrued liabilities (276)
-----------
24,653
Net assets, applicable to 4,922,500 Units
outstanding:
Cost of Trust assets, including purchased
interest of $571,010 $48,347,194
Unrealized depreciation (1,545,919)
Distributable funds 304,576
----------- -----------
Net assets $47,105,851
===========
Net asset value per Unit $9.57
===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 2
Statements of Operations
<TABLE>
<CAPTION>
Period from
Jul. 21,
1993 to
Year ended Dec. 31 Dec. 31,
1995 1994 1993
<S> <C> <C> <C>
----------- ------------ -----------
Investment income - interest $3,472,951 $3,419,486 $648,050
Expenses:
Trustee's fees and related expenses 54,115 50,852 10,610
Evaluator's and portfolio
surveillance fees 27,381 27,154 5,666
----------- ------------ -----------
Total expenses 81,496 78,006 16,276
----------- ------------ -----------
Net investment income 3,391,455 3,341,480 631,774
Realized and unrealized gain (loss)
on investments:
Net realized loss (34,475) - -
Unrealized appreciation
(depreciation) during the period 6,645,975 (7,120,057) (1,071,837)
----------- ------------ -----------
Net gain (loss) on investments 6,611,500 (7,120,057) (1,071,837)
----------- ------------ -----------
Net increase (decrease) in net assets
resulting from operations $10,002,955 $(3,778,577) $(440,063)
=========== ============ ===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 2
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period from
Jul. 21,
1993 to
Year ended Dec. 31 Dec. 31,
1995 1994 1993
<S> <C> <C> <C>
---------- ----------- -----------
Operations:
Net investment income $3,391,455 $3,341,480 $631,774
Net realized loss on investments (34,475) - -
Unrealized appreciation
(depreciation) on investments
during the period 6,645,975 (7,120,057) (1,071,837)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 10,002,955 (3,778,577) (440,063)
Distributions to Unitholders:
Net investment income (3,358,746) (2,935,630) (145,730)
Principal from investment
transactions - (317,788) (362,654)
----------- ----------- -----------
Total distributions to Unitholders (3,358,746) (3,253,418) (508,384)
Capital transactions:
Issuance of 3,895,000 Units - - 38,514,652
Issuance of 1,127,500 Units - 10,852,982 -
Redemption of 100,000 Units (925,550) - -
----------- ----------- -----------
Total increase in net assets 5,718,659 3,820,987 37,566,205
Net assets:
Beginning of the period 41,387,192 37,566,205 -
----------- ----------- -----------
End of the period (including
distributable funds applicable
to Trust Units of $304,576,
$298,034 and $235,480 at
December 31, 1995, 1994 and
1993, respectively) $47,105,851 $41,387,192 $37,566,205
=========== =========== ===========
Trust Units outstanding at the end
of the period 4,922,500 5,022,500 3,895,000
=========== =========== ===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
Kemper Defined Funds
Insured Corporate Series 2
Schedule of Investments
December 31, 1995
<CAPTION>
Coupon Maturity Redemption Principal
Name of Issuer(5) Rate Date Provisions(2) Rating(1) Amount(4) Value(3)
<S> <C> <C> <C> <C> <C> <C>
------- ---------- -------------- -------- ----------- -----------
Duquesne Light Company 7.625% 4/15/2023 1998 @ 105.38 AAA $4,900,000 $5,120,646
Florida Power & Light Company 7.625 6/01/2024 1998 @ 104.41 AAA 7,350,000 7,655,393
Houston Lighting & Power Company 7.50 7/01/2023 2003 @ 103.51 AAA 7,350,000 7,683,690
Niagara Mohawk Power Corporation 7.875 4/01/2024 2003 @ 103.00 AAA 5,785,000 5,264,639
Pacific Gas & Electric Company 7.25 8/01/2026 2003 @ 103.63 AAA 4,808,000 4,764,007
Philadelphia Electric Company 7.75 5/01/2023 1998 @ 105.29 AAA 7,350,000 7,781,372
Texas Utilities Electric Company 7.625 7/01/2025 2003 @ 102.69 AAA 6,850,000 7,009,194
U.S. Treasury Securities (6) 0.00 8/15/2022 Non-Callable AAA 4,832,000 951,324
----------- -----------
$49,225,000 $46,230,265
=========== ===========
</TABLE>
[FN]
See accompanying notes to Schedule of Investments.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 2
Notes to Schedule of Investments
1. All ratings are by Standard & Poor's Corporation, unless marked with the
symbol "*", in which case the rating is by Moody's Investors Service, Inc.
The symbol "NR" indicates Bonds for which no rating is available.
2. There is shown under this heading the year in which each issue of Bonds is
initially redeemable and the redemption price for that year or, if currently
redeemable, the redemption price currently in effect; unless otherwise
indicated, each issue continues to be redeemable at declining prices
thereafter, but not below par value. The prices at which the Bonds may be
redeemed or called prior to maturity may or may not include a premium and, in
certain cases, may be less than the cost of the Bonds to the Trust. In
addition, certain Bonds in the Portfolio may be redeemed in whole or in part
other than by operation of the stated redemption provisions under certain
unusual or extraordinary circumstances specified in the instruments setting
forth the terms and provisions of such Bonds.
3. See Note 1 to the accompanying financial statements for a description of
the method of determining cost and value.
4. At December 31, 1995, the Portfolio of the Trust consists of 7 obligations
issued by public utility companies and 1 U.S. Treasury Security.
Approximately 40% of the aggregate principal amount of Bonds in the Trust are
subject to call by the issuers within five years after December 31, 1995.
5. Insurance on the corporate Bonds in the Trust was obtained either directly
by the issuer of the Bonds or by the Trust's sponsor.
6. This Bond has been purchased at a discount from the par value because
there is no stated interest income thereon. Such Bond is normally described
as a "zero coupon" Bond. Over the life of the Bond the value increases, so
that upon maturity, the holders of the Bond will receive 100% of the principal
amount thereof.
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 2
Notes to Financial Statements
1. Significant Accounting Policies
Trust Sponsor and Evaluator
From the Trust's date of deposit through September 14, 1995, the Trust's
sponsor and evaluator was Kemper Unit Investment Trusts, a division of Kemper
Securities, Inc. At that date, the members of certain Kemper Corporation
operating units acquired ownership of certain Kemper units, which included
Kemper Securities, Inc. In connection with the acquisition, Kemper
Securities, Inc. changed its name to EVEREN Securities, Inc., and Kemper Unit
Investment Trusts became EVEREN Unit Investment Trusts, which now serves as
the "Evaluator" and sponsor of the Trust. Subsequent to the date of
acquisition, neither EVEREN Securities, Inc. nor EVEREN Unit Investment Trusts
is affiliated with Kemper Financial Services, Inc. or Kemper Corporation.
Valuation of Securities
Corporate Securities and the zero coupon obligation are stated at bid prices
as determined by EVEREN Unit Investment Trusts. The aggregate bid prices of
the Securities are determined based on (a) current bid prices of the
Securities, (b) current bid prices for comparable securities, (c) appraisal,
or (d) any combination of the above. (See Note 5 - Insurance.)
Cost of Securities
Cost of the Trust's Securities is based on the offering prices of the
Securities on the dates of deposit of such Securities acquired during the
primary sales period, plus amortization of original issue discount for the
zero coupon obligation. The premium or discount for the fixed rate
obligations is not being amortized. Realized gain (loss) from Security
transactions is reported on an identified cost basis.
Investment Income
Interest income consists of amortization of original issue discount on the
zero coupon obligation and interest accrued as earned on the fixed rate
obligations.
Cost of Trust Assets
At December 31, 1995, the cost of Trust assets, which is a component of net
assets, includes purchased interest paid by Unitholders.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 2
Notes to Financial Statements (continued)
2. Unrealized Appreciation and Depreciation
Following is an analysis of net unrealized depreciation at December 31, 1995:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized depreciation $(1,643,850)
Gross unrealized appreciation 97,931
------------
Net unrealized depreciation $(1,545,919)
============
</TABLE>
3. Transactions with Affiliates
Investors Fiduciary Trust Company (IFTC), who served as Trustee through
February 29, 1996, was 50% owned by Kemper Financial Services, Inc., an
affiliate of Kemper Unit Investment Trusts until January 31, 1995, at which
time State Street Boston Corporation acquired IFTC. Payments to the Trustee
included $.90, $.83 and $.83 of the Trustee's annual fee per $1,000 principal
amount of underlying Securities in the Trust at December 31, 1995, 1994 and
1993, respectively, calculated monthly, based on the largest aggregate
principal amount of Securities in the Trust at any time during the month and
reimbursement of out-of-pocket expenses of $.15 per 100 Units through December
31, 1995, calculated monthly, based on the largest number of Trust Units
outstanding at any time during the month.
The annual Evaluator's fee and portfolio surveillance fee, calculated monthly,
are $.30 and $.25, respectively, per $1,000 principal amount of Securities in
the Trust based on the largest aggregate principal amount of Securities in the
Trust at any time during the month.
4. Federal Income Taxes
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
offering price of the Securities on the date of an investor's purchase, plus
or minus a pro rata share of cash or overdraft in the Principal Account,
purchased interest and daily accrued interest, plus a sales charge of 4.2% of
the Public Offering Price (equivalent to 4.384% of the net amount invested).
The Public Offering Price for secondary market transactions is based on the
aggregate bid prices of the Securities plus or minus a pro rata share of cash
or overdraft in the Principal Account, purchased interest and daily accrued
interest on the date of an investor's purchase, plus a sales charge of 5.5% of
the Public Offering Price (equivalent to 5.820% of the net amount invested).
<PAGE>
<TABLE>
Kemper Defined Funds
Insured Corporate Series 2
Notes to Financial Statements (continued)
5. Other Information (continued)
Insurance
Insurance guaranteeing the payment of all principal and interest on the
corporate Bonds in the portfolio has been obtained from an independent company
by the issuer of the Bonds involved or by the Trust's sponsor. Insurance
obtained by the Trust's sponsor or a Bond issuer is effective as long as such
Bonds are outstanding. As a result of such insurance, the Units of the Trust
have received a rating of "AAA" by Standard & Poor's Corporation. No
representation is made as to any insurer's ability to meet its commitments.
Selected data per Unit of the Trust outstanding during each period (amounts
relating to net investment income are based on weighted average Units
outstanding) -
<CAPTION>
Period from
Jul. 21,
1993 to
Year ended Dec. 31 Dec. 31,
1995 1994 1993
<S> <C> <C> <C>
----- ------ -----
Investment income - interest $.70 $.70 $.35
Expenses .02 .02 .01
----- ------ -----
Net investment income .68 .68 .34
Distributions to Unitholders:
Net investment income (.67) (.60) (.07)
Principal from investment transactions - (.07) (.16)
----- ------ -----
Total distributions to Unitholders (.67) (.67) (.23)
Net gain (loss) on investments 1.32 (1.41) (.04)
----- ------ -----
Change in net asset value 1.33 (1.40) .07
Net asset value:
Beginning of the period 8.24 9.64 9.57*
----- ------ -----
End of the period, including
distributable funds $9.57 $8.24 $9.64
===== ====== =====
</TABLE>
[FN]
*Value at Date of Initial Deposit (July 21, 1993).
6. Change of Trustee
On March 1, 1996, The Bank of New York assumed all trustee responsibilities
from IFTC.
<PAGE>
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, 1996, in this Post-
Effective Amendment to the Registration Statement (Form S-6) and related
Prospectus of Kemper Defined Funds Insured Corporate Series 2 dated April 29,
1996.
Ernst & Young LLP
Kansas City, Missouri
April 29, 1996
<PAGE>
Contents of Post-Effective AmendmentTo 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>
Signatures
Pursuant to the requirements of the Securities Act of 1933, The
Registrant, Kemper Defined Funds Insured Corporate Series 1 and
Series 2, 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,
1996.
Kemper Defined Funds Insured Corporate Series 1 and Series 2
Registrant
By: EVEREN Unit Investment Trusts
(a division of EVEREN Securities, Inc.)
Depositor
By: Michael J. Thoms
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on
April 28, 1996 by the following persons, who constitute a
majority of the Board of Directors of EVEREN Securities, Inc.
Signature Title
James R. Boris Chairman and Chief Executive Officer
James R. Boris
Daniel D. Williams Senior Executive Vice President, Chief
Daniel D. Williams Financial Officer and Treasurer
Frank V. Geremia Senior Executive Vice President
Frank V. Geremia
Stephen G. McConahey President and Chief Operating Officer
Stephen G. McConahey
Stanley R. Fallis Senior Executive Vice President and Chief
Stanley R. Fallis Administrative Officer
David M. Greene Senior Executive Vice President and
David M. Greene Director of Client Services
Thomas R. Reedy Senior Executive Vice President and
Thomas R. Reedy Director of Capital Markets
Janet L. Reali Executive Vice President, Corporate Counsel
Janet L. Reali and Corporate Secretary
Michael J. Thoms
Michael J. Thoms signs this document pursuant to a Power of
Attorney filed with the Securities and Exchange Commission with
Amendment No. 1 to the Registration Statement on Form S-6 for
Kemper Defined Funds Series 28 (Registration No. 33-56779).
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Post-effective Amendment Number 3 to Form S-6 and is qualified in
its entirety by reference to such Post-effective Amendment to Form S-6.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> KEMPER DEFINED FUNDS INSURED CORPORATE
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 28,903,052
<INVESTMENTS-AT-VALUE> 27,765,655
<RECEIVABLES> 593,199
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 28,358,854
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 232,222
<TOTAL-LIABILITIES> 232,222
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,095,204
<SHARES-COMMON-STOCK> 2,867,945
<SHARES-COMMON-PRIOR> 3,315,000
<ACCUMULATED-NII-CURRENT> 168,825
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,137,397)
<NET-ASSETS> 28,126,632
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,999,211
<OTHER-INCOME> 0
<EXPENSES-NET> 58,812
<NET-INVESTMENT-INCOME> 1,940,399
<REALIZED-GAINS-CURRENT> (269,066)
<APPREC-INCREASE-CURRENT> 4,079,591
<NET-CHANGE-FROM-OPS> 5,750,924
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,887,378)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 447,055
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (313,356)
<ACCUMULATED-NII-PRIOR> 162,752
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Post-effective Amendment Number 3 to Form S-6 and is qualified in
its entirety by reference to such Post-effective Amendment to Form S-6.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> KEMPER DEFINED FUNDS INSURED CORPORATE
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 47,776,184
<INVESTMENTS-AT-VALUE> 46,230,265
<RECEIVABLES> 900,239
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 47,130,504
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 24,653
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 48,347,194
<SHARES-COMMON-STOCK> 4,922,500
<SHARES-COMMON-PRIOR> 5,022,500
<ACCUMULATED-NII-CURRENT> 304,576
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,545,919)
<NET-ASSETS> 47,105,851
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,472,951
<OTHER-INCOME> 0
<EXPENSES-NET> 81,496
<NET-INVESTMENT-INCOME> 3,391,455
<REALIZED-GAINS-CURRENT> (34,475)
<APPREC-INCREASE-CURRENT> 6,645,975
<NET-CHANGE-FROM-OPS> 10,002,955
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,358,746)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 100,000
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,718,659
<ACCUMULATED-NII-PRIOR> 298,034
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
