<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 21, 1995
REGISTRATION NO. 33-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
----------------
REGISTRATION STATEMENT
ON
FORM S-6
A. EXACT NAME OF TRUST:
KEMPER DEFINED FUNDS SERIES 31
B. NAME OF DEPOSITOR:
KEMPER UNIT INVESTMENT TRUSTS
(a service of Kemper Securities, Inc.)
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
KEMPER UNIT INVESTMENT TRUSTS
77 West Wacker Drive, 29th Floor
Chicago, Illinois 60601
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
Copy to:
ROBERT K. BURKE MARK J. KNEEDY
Kemper Unit Investment Trusts c/o Chapman and Cutler
77 West Wacker Drive, 29th Floor 111 West Monroe Street
Chicago, Illinois 60601 Chicago, Illinois 60603
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT OF
TITLE AND AMOUNT OF PROPOSED MAXIMUM REGISTRATION
SECURITIES BEING REGISTERED AGGREGATE OFFERING PRICE FEE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Kemper De- An indefinite number of Indefinite $500
fined Funds Units of Beneficial Inter-
Series 31 est pursuant to Rule 24f-2
under the Investment Com-
pany Act of 1940
</TABLE>
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the Registration Statement.
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- --------------------------------------------------------------------------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
<PAGE>
KEMPER DEFINED FUNDS SERIES 31
----------------
CROSS-REFERENCE SHEET
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTIONS AS
TO THE PROSPECTUS IN FORM S-6)
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
I. ORGANIZATION AND GENERAL INFORMATION
<C> <S> <C>
1. (a) Name of trust............. Prospectus front cover
(b) Title of securities Prospectus front cover
issued......................
2. Name and address of each Miscellaneous
depositor.....................
3. Name and address of trustee... Miscellaneous
4. Name and address of principal Public Offering of Units
underwriters..................
5. State of organization of The Trust Funds
trust.........................
6. Execution and termination of The Trust Funds; Administration of the
trust......................... Trust Funds
7. Changes of name............... *
8. Fiscal year................... Tax Status
9. Litigation.................... *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Rights of Unitholders
securities..................
(b) Cumulative or distributive Administration of the Trust Funds
securities..................
(c) Redemption................ Redemption
(d) Conversion, transfer, Rights of Unitholders
etc.........................
(e) Periodic payment plan..... *
(f) Voting rights............. Rights of Unitholders
(g) Notice of Administration of the Trusts Funds
certificateholders..........
(h) Consents required......... Rights of Unitholders; Administration
of the Trust Funds
(i) Other provisions.......... Tax Status
11. Type of securities comprising The Trust Funds; Portfolios
units.........................
12. Certain information regarding *
periodic payment
certificates.................
13. (a) Load, fees, expenses, Essential Information; Public Offering
etc......................... of Units; Comparison of Public
Offering Price and Redemption Value;
Estimated Current Return and
Estimated Long-Term Return; Expenses
and Charges
(b) Certain information
regarding periodic payment
certificates................ *
(c) Certain percentages....... Essential Information; Public Offering
of Units
</TABLE>
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*Inapplicable, answer negative or not required.
i
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<C> <S> <C>
(d) Certain other fees, etc. Rights of Unitholders; Expenses and
payable by holders............ Charges
(e) Certain profits receivable
by depositor, principal,
underwriters, trustee or Expenses and Charges; Public Offering
affiliated persons............ of Units
(f) Ratio of annual charges to *
income........................
14. Issuance of trust's securities.. The Trust Funds; Rights of Unitholders
15. Receipt and handling of payments
from
purchasers..................... *
16. Acquisition and disposition of
underlying securities.......... The Trust Funds; Administration of the
Trust Funds
17. Withdrawal or redemption........ Public Offering of Units; Redemption;
Comparison of Public Offering Price
and Redemption Value
18. (a) Receipt, custody and Administration of the Trust Funds
disposition of income.........
(b) Reinvestment of Distribution Reinvestment
distributions.................
(c) Reserves or special funds... Expenses and Charges
(d) Schedule of distributions... *
19. Records, accounts and reports... Administration of the Trust Funds;
Miscellaneous
20. Certain miscellaneous provisions
of trust
agreement
(a) Amendment................... Administration of the Trust Funds
(b) Termination................. Administration of the Trust Funds
(c) and (d) Trustee, removal and Resignation, Removal and Liability
successor.....................
(e) and (f) Depositor, removal Resignation, Removal and Liability
and successor.................
21. Loans to security holders....... *
22. Limitations on liability........ Resignation, Removal and Liability
23. Bonding arrangements............ *
24. Other material provisions of *
trust agreement................
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor....... Miscellaneous
26. Fees received by depositor...... See Item 13(a) and 13(e)
27. Business of depositor........... Miscellaneous
28. Certain information as to
officials and affiliated
persons of depositor........... Miscellaneous
29. Voting securities of depositor.. Miscellaneous
30. Persons controlling depositor... Miscellaneous
31. Payment by depositor for certain
services
rendered to trust.............. *
32. Payment by depositor for certain
other services
rendered to trust.............. *
</TABLE>
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*Inapplicable, answer negative or not required.
ii
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<C> <S> <C>
33. Remuneration of employees of *
depositor......................
34. Remuneration of other persons
for certain services
rendered to trust.............. *
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of Trust's Public Offering of Units
securities by states............
36. Suspension of sales of trust's *
securities......................
37. Revocation of authority to *
distribute......................
38. (a) Method of Distribution...... Public Offering of Units
(b) Underwriting Agreements..... Public Offering of Units
(c) Selling Agreements.......... Public Offering of Units
39. (a) Organization of principal Miscellaneous
underwriters..................
(b) N.A.S.D. membership of
principal
underwriters.................. Miscellaneous
40. Certain fees received by See Items 13(a) and 3(e)
principal underwriters..........
41. (a) Business of principal Miscellaneous
underwriters..................
(b) Branch offices of principal *
underwriters..................
(c) Salesmen of principal *
underwriters..................
42. Ownership of trust's securities *
by certain persons.............
43. Certain brokerage commissions
received by principal
underwriters................... Public Offering of Units
44. (a) Method of valuation......... Public Offering of Units; Comparison
of Public Offering Price and
Redemption Value
(b) Schedule as to offering *
price.........................
(c) Variation in offering price Public Offering of Units
to certain persons............
45. Suspension of redemption rights. Redemption
46. (a) Redemption valuation........ Redemption; Public Offering of Units;
Comparison of Public Offering Price
and Redemption Value
(b) Schedule as to redemption *
price.........................
47. Maintenance of position in Public Offering of Units; Comparison
underlying securities.......... of Public Offering Price and
Redemption Value; Redemption
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Administration of the Trust Funds;
trustee........................ Miscellaneous
49. Fees and expenses of trustee.... Expenses and Charges
50. Trustee's lien.................. Expenses and Charges
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Insurance of Holders of trust's *
securities.....................
</TABLE>
- --------
*Inapplicable, answer negative or not required.
iii
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
VII. POLICY OF REGISTRANT
<C> <S> <C>
52. (a) Provisions of trust agreement
with respect to selection or
elimination of underlying The Trust Funds; Portfolios;
securities....................... Administration of the Trust Funds
(b) Transactions involving
elimination of underlying
securities....................... *
(c) Policy regarding substitution
or elimination of underlying
securities....................... Administration of the Trust Funds
(d) Fundamental policy not *
otherwise covered................
53. Tax status of Trust................ Tax Status
VII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last ten *
years.............................
55-58. Certain information regarding
periodic payment certificates..... *
59. Financial statements (Instruction Statements of Condition; Report of
1(c) to Form S-6)................. Independent Certified Public
Accountants
</TABLE>
- --------
*Inapplicable, answer negative or not required.
iv
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any State.
PRELIMINARY PROSPECTUS DATED FEBRUARY 21, 1995
SUBJECT TO COMPLETION
KEMPER DEFINED FUNDS SERIES 31
GNMA PORTFOLIO, SERIES 4 (REINVESTMENT TRUST)
GNMA PORTFOLIO, SERIES 5
GNMA Portfolio, Series 4 was formed for the purpose of obtaining safety of
capital and current monthly distributions of interest through investment in a
portfolio primarily consisting of mortgage-backed securities of the modified
pass-through type. For GNMA Portfolio, Series 4 only, in an effort to minimize
the effect of principal payments and prepayments during the period when such
reinvestment is practical in the opinion of the Sponsor (the "Reinvestment
Period"), the Sponsor will direct the Trustee to reinvest all distributions of
principal into additional Ginnie Maes which are similar as to maturity and
interest rates as the Ginnie Maes upon which the principal was received. The
Sponsor currently expects the Reinvestment Period to last approximately 5 years
from the Initial Date of Deposit. There may be times in which such reinvestment
will not be feasible because the additional Ginnie Maes are not available or
for other reasons described herein. Amounts in the Principal Account which
cannot be reinvested during the Reinvestment Period will be distributed to
Unitholders semi-annually unless the amount available for distribution is less
than $.01 per Unit.
GNMA Portfolio, Series 5 was formed for the purpose of obtaining safety of
capital and current monthly distributions of interest and principal through
investment in a portfolio primarily consisting of mortgage-backed securities of
the modified pass-through type. The Trustee will not reinvest distributions of
principal into additional Ginnie Maes for GNMA Portfolio, Series 5 but will
distribute payments and prepayments of principal to Unitholders as described
herein.
All payments of principal and interest on the mortgage-backed securities are
fully guaranteed by the Government National Mortgage Association ("GNMA"). The
full faith and credit of the United States is pledged to the payment of the
securities in each Trust but the Units themselves are not backed by such full
faith and credit. The value of the Units, the estimated current return and the
estimated long-term return to new purchasers will fluctuate with the value of
the portfolio which will generally decrease or increase inversely with changes
in interest rates. Units of the Trusts are particularly well suited for
purchase by Individual Retirement Accounts, Keough Plans, pension funds and
other tax deferred retirement plans. Minimum purchase for any Trust: $1,000
($250 for IRA accounts).
RISK FACTORS. Units of a Trust are not deposits 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. For a discussion of the risks associated with an investment in Units
of a Trust, see "The Trust Funds--Risk Factors and Portfolio Information."
- --------------------------------------------------------------------------------
SPONSOR: KEMPER UNIT INVESTMENT TRUSTS
(A service of Kemper Securities, Inc.)
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The investor is advised to read and retain this Prospectus for future
reference.
PROSPECTUS DATED , 1995
<PAGE>
KEMPER DEFINED FUNDS SERIES 31
ESSENTIAL INFORMATION
AT THE OPENING OF BUSINESS ON THE INITIAL DATE OF DEPOSIT
SPONSOR AND EVALUATOR: KEMPER UNIT INVESTMENT TRUSTS, A SERVICE OF KEMPER
SECURITIES, INC.
TRUSTEE: INVESTORS FIDUCIARY TRUST COMPANY
<TABLE>
<CAPTION>
GNMA SERIES 4 GNMA SERIES 5
-------------------- --------------------
<S> <C> <C>
Public Offering Price Per Unit.... $ $
Principal Amount of Securities per
Unit............................. $ $
Estimated Current Return based on
Public Offering Price(1) (2) (3). % %
Estimated Long-Term Return (1) (2)
(3).............................. % %
Principal Amount of Securities.... $ $
Number of Units...................
Fractional Undivided Interest per
Unit.............................
Calculation of Public Offering
Price--Less than 10,000 Units:
Aggregate Offering Price of Secu-
rities.......................... $ $
Aggregate Offering Price of Secu-
rities per Unit................. $ $
Plus Sales Charge per Unit (4)... $ $
Public Offering Price per Unit
(5)............................. $ $
Redemption Price Per Unit......... $ $
Sponsor's Initial Repurchase Price
per Unit......................... $ $
Excess of Public Offering Price
per Unit over Redemption Price
per Unit......................... $ $
Excess Public Offering Price per
Unit over Sponsor's Initial Re-
purchase Price per Unit.......... $ $
Calculation of Estimated Net An-
nual Interest Rate per Unit:
Estimated Annual Interest Rate... % %
Less: Estimated Annual Expenses
expressed as a percentage....... % %
-------------------- --------------------
Estimated Net Annual Interest
Rate............................ % %
Estimated Daily Rate of Net Inter-
est Accrual per Unit............. $ $
Trustee's Annual Fee per $1,000
principal amount of Securities
(6).............................. $ $
Trustee's Annual Estimated Ex-
penses per $1,000 principal
amount of Securities (6)......... $ $
Interest Payments (7):
First Payment per Unit, repre-
senting days................. $ $
Sales Charge (4):
As a percentage of Public Offer-
ing Price per Unit.............. % %
As a percentage of net amount in-
vested.......................... % %
As a percentage of net amount in-
vested in earning assets........ % %
Type of GNMA Securities...........
Estimated Average Life of GNMA Se-
curities.........................
Weighted Average Years to Maturi-
ty...............................
Evaluator's Maximum Annual Evalua-
tion Fee per $1,000 Principal
Amount of Securities............. $ $
Sponsor's Maximum Annual Surveil-
lance Fee per $1,000 Principal
Amount of Securities............. $ $
Cusip Numbers.....................
Initial Date of Deposit........... , 1995 , 1995
First Settlement Date............. , 1995 , 1995
Mandatory Termination Date........
Minimum principal value of the
Trust under which Trust Agreement 40% of the 40% of the
may be terminated................ initial aggregate initial aggregate
principal amount of principal amount of
Securities deposited Securities deposited
in the Trust in the Trust
</TABLE>
- --------
Evaluations for purposes of sale, purchase or redemption of Units are made
as of the close of business of the Sponsor (currently 3:15 p.m. Central
Time) next following receipt of an order for a sale or purchase of Units or
receipt by Investors Fiduciary Trust Company of Units tendered for
redemption.
2
<PAGE>
- --------
(1) The Estimated Current Return and Estimated Long-Term Return are increased
for transactions entitled to a reduced sales charge. See "Public Offering
of Units--Public Offering Price."
(2) The Estimated Current Returns are calculated by dividing the estimated net
annual interest rate per Unit by the Public Offering Price. The estimated
net annual interest rate per Unit will vary with changes in fees and
expenses of the Trustee, the Sponsor and the Evaluator and with the
principal prepayment, redemption, principal reinvestment, maturity,
exchange or sale of Securities while the Public Offering Price will vary
with changes in the offering price of the underlying Securities and with
changes in the accrued interest; therefore, there is no assurance that the
present Estimated Current Returns indicated above will be realized in the
future. The 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
the estimated average life of all the Securities and (2) takes into
account the expenses and sales charge associated with each Trust Unit.
Since the market values and the estimated average lives or estimated
retirement dates, as the case may be, of the Securities and expenses of
each Trust will change, there is no assurance that the present Estimated
Long-Term Returns as indicated above will be realized in the future. The
Estimated Current Returns and Estimated Long-Term Returns are expected to
differ because the calculation of the Estimated Long-Term Returns reflects
the estimated date and amount of principal returned while the Estimated
Current Return calculations includes only the net annual interest rate and
Public Offering Price.
(3) This figure is based on estimated per Unit cash flows. Estimated cash
flows will vary with changes in fees and expenses, with changes in current
interest rates and with the principal prepayment, principal reinvestment,
redemption, maturity, call, exchange or sale of the underlying Securities
and with changes in the average life assumptions of the GNMA pools. The
estimated cash flows to Unitholders for the Trusts are either set forth
under "Estimated Cash Flows to Unitholders" or are available upon request
at no charge from the Sponsor.
(4) The sales charge as a percentage of the net amount invested in earning
assets will increase as accrued interest increases. Transactions subject
to quantity discounts (see "Public Offering of Units--Public Offering
Price") will have reduced sales charges, thereby reducing all percentages
in the table.
(5) Anyone ordering Units for settlement after the First Settlement Date will
pay accrued interest from such date to the date of settlement (normally
five business days after order) less distributions from the Interest
Account subsequent to the First Settlement Date. For purchases settling on
the First Settlement Date, no accrued interest will be included in the
Public Offering Price.
(6) See "Expenses and Charges."
(7) Unitholders will receive interest distributions monthly. The Record Date
is the first day of the month, commencing , 1995, and the
distribution date is the fifteenth day of the month, commencing
, 1995.
3
<PAGE>
THE TRUST FUNDS
GENERAL
Kemper Defined Funds Series 31 (GNMA Portfolio Series 4 and GNMA Portfolio
Series 5) (the "Fund") is comprised of separate "unit investment trusts" (each
a "Trust" or a "Trust Fund") created under Missouri law pursuant to a Trust
Agreement (hereinafter referred to as the "Indenture")* between Kemper Unit
Investment Trusts, a service of Kemper Securities, Inc. (the "Sponsor") and
Investors Fiduciary Trust Company (the "Trustee"). On the date of this
Prospectus (the "Initial Date of Deposit") the Sponsor deposited the underlying
Securities of the Trusts with the Trustee at prices equal to the valuation of
such Securities on the offering side of the market on such date as determined
by Muller Data Corporation (a firm regularly engaged in the business of
evaluating, quoting or appraising comparable securities), and the Trustee
delivered to the Sponsor units of interest ("Units") representing the entire
ownership of the Trusts. Except as otherwise indicated in "Notes to Portfolios"
the Securities so deposited were represented by purchase contracts assigned to
the Trustee together with an irrevocable letter or letters of credit issued by
a commercial bank or banks in the amount necessary to complete the purchase
thereof. Unitholders of the Trusts will have the right to have their Units
redeemed at a price based on the aggregate bid side evaluation of the
Securities in the portfolio of a Trust ("Redemption Price per Unit"), if they
cannot be sold in the over-the-counter market which the Sponsor proposes to
maintain. See "Public Offering of Units--Secondary Market."
The purpose and objective of GNMA Portfolio Series 4 is to provide investors
with an appropriate vehicle to obtain safety of capital and monthly
distributions of interest through investment in a fixed portfolio of securities
primarily consisting of taxable mortgage-backed securities of the modified
pass-through type ("Ginnie Maes") guaranteed by the Government National
Mortgage Association ("GNMA") and backed by the full faith and credit of the
United States. For GNMA Portfolio Series 4 only, in an effort to minimize the
effect of principal payments and prepayments during the period when such
reinvestment is practical in the opinion of the Sponsor (the "Reinvestment
Period"), the Sponsor will direct the Trustee to reinvest all distributions of
principal into additional Ginnie Maes which are similar as to maturity and
interest rates as the Ginnie Maes upon which the principal was received. The
Sponsor currently expects the Reinvestment Period to last approximately 5 years
from the Initial Date of Deposit. There may be times in which such reinvestment
will not be feasible because the additional Ginnie Maes are not available or
for other reasons described herein. Amounts in the Principal Account which
cannot be reinvested during the Reinvestment Period will be distributed to
Unitholders semi-annually unless the amount available for distribution is less
than $.01 per Unit.
The purpose and objective of GNMA Portfolio Series 5 is to provide investors
with an appropriate vehicle to obtain safety of capital and monthly
distributions of interest and principal through investment in a fixed portfolio
primarily consisting of Ginnie Maes backed by the full faith and credit of the
United States. The Trustee will not reinvest distributions of principal into
additional Ginnie Maes for GNMA Portfolio Series 5 but will instead distribute
such principal to Unitholders as described herein.
Value of the Units, the estimated current return and estimated long-term return
to new purchasers will fluctuate with the value of the Securities included in
the portfolio which will generally decrease or increase inversely with changes
in interest rates. See "Tax Status." As used herein, the term "Securities" or
"Portfolio
- ------------------
* To the extent reference is made to the Indenture, any statements herein are
qualified in their entirety by the provisions of said Indenture.
4
<PAGE>
Obligations" means the Ginnie Maes and zero coupon U.S. Treasury Obligations
initially deposited in the Trusts described herein and includes all contracts
to purchase such Ginnie Maes and U.S. Treasury Obligations accompanied by an
irrevocable letter of credit sufficient to perform such contracts initially
deposited in the Trusts and described herein under "Portfolio" for each Trust
and any additional Ginnie Maes and U.S. Treasury Obligations deposited in the
Trusts following the Initial Date of Deposit.
With the deposit of the Securities in the Trusts on the Initial Date of
Deposit, the Sponsor established for each Trust a percentage relationship
between the principal amounts of Securities of specified interest rates and
ranges of maturities in the related Portfolio. From time to time, pursuant to
the Indenture, following the Initial Date of Deposit the Sponsor may deposit
additional Securities in each Trust and Units may be continuously offered for
sale to the public by means of this Prospectus resulting in a potential
increase in the outstanding number of Units of such Series. Any additional
Securities deposited in each Trust will
maintain as far as practicable the original percentage relationship between the
principal amounts of Securities of specified interest rates and ranges of
maturities in the original Portfolio of such Trust. Precise duplication of this
original percentage relationship may not be possible because fractions of
Securities may not be purchased, but duplication will continue to be the goal
in connection with any such additional Securities. Under certain circumstances,
the Sponsor may also direct the Trustee to reinvest certain surplus monies in
the Principal Account of certain Trusts in additional Ginnie Maes. See
"Portfolio Selection." See "Administration of the Trust Funds--Portfolio
Supervision."
On the Initial Date of Deposit, each Unit represented the fractional undivided
interest in the Securities and estimated net income of each Trust set forth
under "Essential Information" in the ratio of 1 Unit for each $10 face amount
of Securities initially deposited in that Trust. Because regular payments of
principal are to be received and certain of the Securities from time to time
may be redeemed or will mature in accordance with their terms or may be sold
under certain circumstances described herein and because additional Securities
may be deposited into each Trust from time to time, each Trust is not expected
to retain its present size and composition. Units will remain outstanding until
redeemed upon tender to the Trustee by any Unitholder (which may include the
Sponsor) or until the termination of that Trust pursuant to the Indenture.
The guaranteed payment of principal and interest afforded by both Ginnie Maes
and U.S. Treasury Obligations may make investment in a Trust particularly well
suited for purchase by Individual Retirement Accounts, Keogh Plans, pension
funds and other tax-deferred retirement plans. In addition, the ability to buy
Units (minimum purchase $1,000 per Trust, $250 for IRA accounts) at a Public
Offering Price of approximately $10.00 per Unit enables such investors to
tailor the dollar amount of their purchases of Units to take maximum possible
advantage of the annual deductions available for contributions to such plans.
Investors should consult with their tax advisers before investing. See
"Retirement Plans."
Reinvestment of Principal for GNMA Portfolio Series 4. During the period when
reinvestment is practical in the opinion of the Sponsor (the "Reinvestment
Period"), the Sponsor will direct the Trustee to reinvest all payments and
prepayments of principal from the underlying Ginnie Maes in GNMA Portfolio
Series 4 into additional Ginnie Mae securities which have similar maturities
and interest rates as the Securities upon which the principal was received. The
Sponsor currently expects the Reinvestment Period to last approximately 5 years
from the Initial Date of Deposit. Reinvestment of principal into additional
Ginnie Maes during periods when interest rates are at a level different from
those prevailing at the Initial Date of Deposit will have the effect of
increasing or decreasing monthly distributions of interest income from GNMA
Portfolio Series 4. Reinvestment of principal into the Ginnie Maes eligible for
inclusion in GNMA Portfolio Series 4 will also have the effect of increasing
the par value of the Units for reinvestment during periods of
5
<PAGE>
increasing interest rates from those prevailing at the Initial Date of Deposit
and during periods of declining interest rates the par value of the Units will
decrease. There may be times when the Principal Account of GNMA Portfolio
Series 4 has cash which cannot be reinvested because additional Ginnie Maes are
not available or the amount of cash in the Principal Account is insufficient to
buy additional Ginnie Maes without such Trust incurring disproportionate
expenses. During these periods the amounts in the Principal Account will remain
uninvested, thus reducing the return to Unitholders. Amounts, if any, which
cannot be reinvested during the Reinvestment Period in additional Ginnie Maes
will be distributed to Unitholders semiannually unless the amount available for
distribution is less than $.01 per Unit. In such a circumstance, Unitholders
should be aware that at the time of the receipt of such principal they may not
be able to reinvest such principal in other securities at a yield equal to or
in excess of the yield which such principal would have earned to Unitholders
had the principal been reinvested in additional Ginnie Maes by the Trustee. In
addition, principal will not be reinvested and will be distributed to
Unitholders if required to maintain the status of GNMA Portfolio Series 4 as a
"regulated investment company." See "Tax Status." The costs of acquiring the
additional Ginnie Maes will be borne by GNMA Portfolio Series 4 and hence the
Unitholders. Although it is currently anticipated that the Trustee will
purchase Ginnie Maes directly from market makers, the Trustee may retain the
Sponsor to purchase the additional Ginnie Maes and pay them usual and customary
brokerage commissions. There will be no attempt to time or delay the purchase
of additional Ginnie Maes for reinvestment to take advantage of market
movements.
Monthly Distributions. Monthly distributions of interest received by each
Trust, and principal received by GNMA Portfolio Series 5, will be paid in cash
unless the Unitholder elects to have them automatically reinvested in any
mutual fund registered in such Unitholder's state of residence which is
underwritten or advised by an affiliate of the Sponsor, Kemper Financial
Services, Inc. (the "Kemper Funds"), other than those Kemper Funds sold with a
contingent deferred sales charge. Since the portfolio securities and investment
objectives of such Kemper Funds may differ significantly from that of the GNMA
Portfolios, Unitholders should carefully consider the consequences before
selecting such Kemper Funds for reinvestment. Any such reinvestment is made at
net asset value (that is, without a sales charge). Investors have the ability
to designate that only principal payments (including prepayments) or only
interest payments or both are to be reinvested (see "Distribution
Reinvestment"). However, because of the small dollar amounts involved and the
fact that a Trust is not required to make a principal distribution unless the
amount in the Principal Account for such Trust is equivalent to $.01 or more
per Unit, it is not anticipated that any distribution of principal will be made
until several months after the Initial Date of Deposit. At that time any
principal payments accumulated in an account will be distributed as described
herein. In connection with GNMA Portfolio Series 4, amounts in the Principal
Account which cannot be reinvested during the Reinvestment Period will be
distributed to Unitholders semi-annually unless the amount in the Principal
Account is less than $.01 per Unit. Following the Reinvestment Period for GNMA
Portfolio Series 4 and in connection with GNMA Portfolio Series 5,
distributions of principal will be made in any month the amount in the
Principal Account equals or exceeds $.01 per Unit. Distributions will be made
on or about the 15th day of the month to Unitholders of record on the 1st day
of such month, commencing with the first distribution indicated herein under
"Essential Information."
Special Risk Considerations. An investment in Units should be made with an
understanding of the risks which an investment in fixed-rate long-term debt
obligations and U.S. Treasury Obligations may entail, including the risk that
the value of the portfolios and hence of the Units will decline with increases
in interest rates. Some or all of the Securities in the Trust Funds may have
been purchased at a market discount. The current returns (coupon interest rate)
of such Securities are lower than the current returns of similar, comparably
rated securities issued at currently prevailing interest rates. See "Risk
Factors and Portfolio Information" below.
6
<PAGE>
Estimated Current Return and Estimated Long-Term Return. As of the opening of
business of the Initial Date of Deposit, the Estimated Long-Term Return and
Estimated Current Return, if applicable, for each Trust were as set forth in
"Essential Information." The Estimated Current Return is calculated by dividing
the estimated net annual interest rate per Unit by the Public Offering Price.
The net estimated annual interest rate per Unit will vary with changes in the
fees and expenses of the Trustee, Sponsor and Evaluator and with the exchange,
redemption, sale, scheduled payments, prepayments, principal reinvestment or
maturity of underlying Securities in each portfolio. The Public Offering Price
of a Trust will also vary with fluctuations in the evaluation of the underlying
Securities and with changes in the accrued interest; therefore, there is no
assurance that the present Estimated Current Return will be realized in the
future. The 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 average life of all of
the Securities and (2) takes into account the expenses and sales charge
associated with each Unit of a Trust. Since the market values and the estimated
average lives or estimated retirements, as the case may be, of the Securities
and the expenses of a Trust will change, it can be expected that the Estimated
Long-Term Returns will fluctuate in the future. Estimated Current Return and
Estimated Long-Term Return are expected to differ because the calculation of
the Estimated Long-Term Return reflects the estimated date and amount of
principal returned while the Estimated Current Return calculation includes only
the net annual interest rate and Public Offering Price.
Market for Units. After the initial offering period, while under no obligation
to do so, the Sponsor intends to, and certain of the other Underwriters may,
maintain a market for the Units and to offer to repurchase such Units at prices
subject to change at any time which are based on the aggregate bid side
evaluation of the Securities in a Trust Fund plus accrued interest, if any.
RISK FACTORS AND PORTFOLIO INFORMATION
Each Trust is a unit investment trust whose objectives are to obtain safety of
capital and to provide current monthly distributions of interest through
investment in a fixed portfolio initially consisting primarily of contracts to
purchase taxable mortgage-backed securities of the modified pass-through type
("Ginnie Maes" or "Securities"), including so-called "Ginnie Mae II's," which
involve larger pools of mortgages and which have a central paying agent, fully
guaranteed as to principal and interest by the Government National Mortgage
Association ("GNMA"). All of the Ginnie Maes in the Trusts consist of pools of
long term mortgages on 1- to 4-family dwellings. Certain GNMA Portfolio Series
may also include certain zero coupon U.S. Treasury Obligations.
An investment in Units of a Trust Fund should be made with an understanding of
the risks which an investment in fixed rate long term 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 Securities will fluctuate inversely with changes in interest rates.
In addition, the potential for appreciation of the underlying Securities, which
might otherwise be expected to occur as a result of a decline in interest
rates, may be limited or negated by increased principal prepayments in respect
of the underlying mortgages. The high inflation of prior years, together with
the fiscal measures adopted to attempt to deal with it, have resulted in wide
fluctuations in interest rates and, thus, in the value of fixed rate long term
debt obligations generally. The Sponsor cannot predict whether such
fluctuations will continue in the future.
The Securities in the Trust Funds were chosen in part on the basis of their
respective stated maturity dates. The ranges of maturity dates of each of the
Securities contained in the Trusts are shown on the "Portfolios." The stated
mandatory termination date of the GNMA Portfolios are set forth under
"Essential Information." See "Life of the Securities and of the GNMA Trust
Funds" below.
7
<PAGE>
The Trust Funds may be appropriate mediums for investors who desire to
participate in a portfolio of taxable fixed income securities offering the
safety of capital provided by securities backed by the full faith and credit
of the United States but who do not wish to invest the minimum amount which is
required for a direct investment in GNMA guaranteed securities. The portfolio
of each GNMA Trust Fund initially consists of contracts to purchase Ginnie
Maes, including so-called Ginnie Mae II's, fully guaranteed as to payments of
principal and interest by the Government National Mortgage Association.
Each group of Ginnie Maes described herein as having a specified range of
maturities includes individual mortgage-backed securities which have varying
ranges of maturities within each range specified under "Essential
Information." Each such group of Ginnie Maes is described as one category of
securities because current market conditions accord no difference in price
among the individual Ginnie Mae securities within such group on the basis of
the difference in the maturity dates of each Ginnie Mae. As long as this
market condition prevails, a purchase of Ginnie Maes with the same coupon rate
and a maturity date within the range mentioned above will be considered an
acquisition of the same Security. In the future, however, the difference in
maturity ranges could affect the market value of the individual Ginnie Maes.
At such time, any additional purchases by a Trust will take into account the
maturities of the individual Securities.
During the Reinvestment Period for GNMA Portfolio Series 4 only, the Sponsor
will direct the Trustee to reinvest principal payments and prepayments into
additional securities. Precise duplication of the Ginnie Maes to be purchased
with reinvested principal may not be possible because fractions of Ginnie Maes
may not be purchased and substantially similar securities may not be
available, but duplication will be the goal of the Sponsor with respect to the
purchase of additional securities. Principal amounts which cannot be
reinvested will be distributed to Unitholders of such Trust semiannually
unless the amount available for distribution is less than $.01 per Unit. After
the Reinvestment Period, principal will not be reinvested and will be
distributed monthly (subject to amount limitations) to Unitholders of such
Trust. See "Administration of the Trust Funds--Distributions from the
Interest, Principal and Capital Gains Accounts."
The Trusts may contain Securities which were acquired at a market discount.
Such Securities trade at less than par value because the interest rates
thereon are lower than interest rates on comparable debt securities being
issued at currently prevailing interest rates. If such interest rates for
newly issued and otherwise comparable securities increase, the market discount
of previously issued securities will increase and if such interest rates for
newly issued comparable securities decline, the market discount of previously
issued securities will decrease, other things being equal. Market discount
attributable to interest rate changes does not indicate a lack of market
confidence in the issue. The reinvestment of principal by the Trustee in
additional Ginnie Maes may result in Securities being acquired at a market
discount or market premium.
Unitholders of Units will be "at risk" with respect to such Securities (i.e.,
may derive either gain or loss from fluctuations in the evaluation of the
Securities) from the date they commit for Units. See "Estimated Current Return
and Estimated Long-Term Return."
The mortgages underlying a Ginnie Mae may be prepaid at any time without
penalty. A lower or higher return on Units may occur depending on (i) whether
the price at which the respective Ginnie Maes were acquired by a Trust is
lower or higher than par (which represents the price at which such Ginnie Maes
will be redeemed upon prepayment), (ii) whether principal is reinvested (in
the case of GNMA Portfolio Series 4) or distributed to Unitholders and (iii)
if reinvestment occurs (in connection with GNMA Portfolio Series 4 only),
whether the Ginnie Maes purchased by the Trustee with reinvested principal are
purchased
8
<PAGE>
at a premium or discount from par. During periods of declining interest rates,
prepayments of Ginnie Maes may occur with increasing frequency because, among
other reasons, mortgagors may be able to refinance their outstanding mortgages
at lower interest rates. In such a case, (i) the reinvestment of principal (in
connection with GNMA Portfolio Series 4 only), may be at prices which result in
a lower return on Units or (ii) principal will be distributed to Unitholders
who cannot reinvest such principal distributions in other securities at an
attractive yield. See "Life of the Securities and of the GNMA Trust Funds."
Set forth below is a brief description of the current method of origination of
Ginnie Maes; the nature of such securities, including the guaranty of GNMA; the
basis of selection and acquisition of the Ginnie Maes included in the Trusts;
and the expected life of the Ginnie Maes and of the Trusts. The "Portfolios"
contain information concerning the coupon rate and range of stated maturities
of the Ginnie Maes in the Trusts.
Origination. The Ginnie Maes included in each Trust are backed by the
indebtedness secured by underlying mortgage pools of long-term mortgages on 1-
to 4-family dwellings. The pool of mortgages which is to underlie a particular
new issue of Ginnie Maes is assembled by the proposed issuer of such Ginnie
Maes. The issuer is typically a mortgage banking firm, and in every instance
must be a mortgagee approved by and in good standing with the Federal Housing
Administration ("FHA"). In addition, GNMA imposes its own criteria on the
eligibility of issuers, including a net worth requirement.
The mortgages which are to comprise a new Ginnie Mae pool may have been
originated by the issuer itself in its capacity as a mortgage lender or may be
acquired by the issuer from a third party. Such third party may be another
mortgage banker, a banking institution, the Veterans Administration ("VA")
(which in certain instances acts as a direct lender and thus originates its own
mortgages) or one of several governmental agencies. All mortgages in any given
pool will be insured under the National Housing Act, as amended ("FHA-insured")
or Title V of the Housing Act of 1949 ("FMHA-insured") or guaranteed under the
Servicemen's Readjustment Act of 1944, as amended, or Chapter 37 of Title 38,
U.S.C. ("VA-guaranteed"). Such mortgages will have a date for the first
scheduled monthly payment of principal that is not more than one year prior to
the date on which GNMA issues its guaranty commitment as described below, will
have comparable interest rates and maturity dates, and will meet additional
criteria of GNMA. All mortgages in the pools backing the Ginnie Maes contained
in the GNMA Portfolio Series are mortgages on 1- to 4-family dwellings. In
general, the mortgages in these pools provide for monthly payments over the
life of the mortgage (aside from prepayments) designed to repay the principal
of the mortgage over such period, together with interest at the fixed rate of
the unpaid balance.
To obtain GNMA approval of a new pool of mortgages, the issuer will file with
GNMA an application containing information concerning itself, describing
generally the pooled mortgages, and requesting that GNMA approve the issue and
issue its commitment (subject to GNMA's satisfaction with the mortgage
documents and other relevant documentation) to guarantee the timely payment of
principal of and interest on the Ginnie Maes to be issued by the issuer. If the
application is in order, GNMA will issue its commitment and will assign a GNMA
pool number to the pool. Upon completion of the required documentation
(including detailed information as to the underlying mortgages, a custodial
agreement with a Federal or state regulated financial institution satisfactory
to GNMA pursuant to which the underlying mortgages will be held in safekeeping,
and a detailed guaranty agreement between GNMA and the issuer) the issuance of
the Ginnie Maes is permitted. When the Ginnie Maes are issued, GNMA will
endorse its guaranty thereon. The aggregate principal amount of Ginnie Maes
issued will be equal to the then aggregate unpaid principal balances of the
pooled mortgages. The interest rate borne by the Ginnie Maes is currently fixed
at 1/2 of 1% below the interest rate of the pooled 1- to 4-family mortgages,
the differential being applied to the payment of servicing and custodial
charges as well as GNMA's guaranty fee.
9
<PAGE>
Ginnie Mae II's consist of jumbo pools of mortgages consisting of pools of
mortgages from more than one issuer. The major advantage of Ginnie Mae II's
lies in the fact that a central paying agent sends one check to the holder on
the required payment date. This greatly simplifies the current procedure of
collecting distributions from each issuer of a Ginnie Mae, since such
distributions are often received late.
Nature of Ginnie Maes and GNMA Guaranty. All of the Ginnie Maes in the GNMA
Portfolio Series, including the Ginnie Mae II's, are of the "modified pass-
through" type, i.e., they provide for timely monthly payments to the registered
holders thereof (including a GNMA Portfolio Series) of a pro rata share of the
scheduled principal payments on the underlying mortgages, whether or not
collected by the issuers. Such monthly payments will also include, on a pro
rata basis, any prepayments of principal of such mortgages received and
interest (net of the servicing and other charges described above) on the
aggregate unpaid principal balance of such Ginnie Maes, whether or not the
interest on the underlying mortgages has been collected by the issuers.
The Ginnie Maes in the GNMA Portfolio Series are guaranteed as to timely
payment of principal and interest by GNMA. Funds received by the issuers on
account of the mortgages backing the Ginnie Maes in the GNMA Portfolio Series
are intended to be sufficient to make the required payments of principal of and
interest on such Ginnie Maes but, if such funds are insufficient for that
purpose, the guaranty agreements between the issuers and GNMA require the
issuers to make advances sufficient for such payments. If the issuers fail to
make such payments, GNMA will do so.
GNMA is authorized by Section 306(g) of Title III of the National Housing Act
to guarantee the timely payment of principal of and interest on securities
which are based on or backed by a trust or pool composed of mortgages insured
by FHA, the Farmers' Home Administration ("FMHA") or guaranteed by the VA.
Section 306(g) provides further that the full faith and credit of the United
States is pledged to the payment of all amounts which may be required to be
paid under any guaranty under such subsection. An opinion of an Assistant
Attorney General of the United States, dated December 9, 1969, states that such
guaranties "constitute general obligations of the United States backed by its
full faith and credit."* GNMA is empowered to borrow from the United States
Treasury to the extent necessary to make any payments of principal and interest
required under such guaranties. Ginnie Maes are backed by the aggregate
indebtedness secured by the underlying FHA-insured, FMHA-insured or VA-
guaranteed mortgages and, except to the extent of funds received by the issuers
on account of such mortgages, Ginnie Maes do not constitute a liability of nor
evidence any recourse against such issuers, but recourse thereon is solely
against GNMA. Holders of Ginnie Maes (such as the Trusts) have no security
interest in or lien on the underlying mortgages.
The GNMA guaranties referred to herein relate only to payment of principal of
and interest on the Ginnie Maes in the portfolio and not to the Units offered
hereby.
Life of the Securities and of the GNMA Trust Funds. Monthly payments of
principal will be made, and additional prepayments of principal may be made, to
the GNMA Trust Funds in respect of the mortgages underlying the Ginnie Maes in
each GNMA Portfolio Series. All of the mortgages in the pools relating to the
Ginnie Maes in each GNMA Portfolio Series are subject to prepayment without any
significant premium or penalty at the option of the mortgagors. It has been the
experience of the mortgage industry that the average life of mortgages
comparable to those contained in the GNMA Portfolio Series, owing to
prepayments, refinancings and payments from foreclosures is considerably less
than the stated maturity for each series set forth in "Essential Information."
- --------
* Any statement in this Prospectus that a particular Security is backed by the
full faith and credit of the United States is based upon the opinion of an
Assistant Attorney General of the United States and should be so construed.
10
<PAGE>
In the mid 1970's, published tables for Ginnie Maes utilized a 12 year average
life assumption for Ginnie Mae pools of 26-30 year mortgages on 1- to 4-family
dwellings. This assumption was derived from the FHA experience relating to
prepayments on such mortgages during the period from the mid 1950's to the mid
1970's. This 12 year average life assumption was calculated in respect of a
period during which mortgage lending rates were fairly stable. That assumption
is probably no longer an accurate measure of the life of Ginnie Maes or their
underlying single family mortgage pools. However, current yield tables,
published in 1981, still utilize the 12 year average life assumption and Ginnie
Maes continue to be traded based on this assumption. Recently it has been
observed that mortgages issued at high interest rates have experienced
accelerated prepayment rates which would indicate a shorter average life than
12 years.
A number of factors, including homeowner's mobility, change in family size and
mortgage market interest rates will affect the average life of the Ginnie Maes
in the Trust Funds. For example, Ginnie Maes issued during a period of high
interest rates will be backed by a pool of mortgage loans bearing similarly
high rates. In general, during a period of declining interest rates, new
mortgage loans with interest rates lower than those charged during periods of
high rates will become available. To the extent a homeowner has an outstanding
mortgage with a high rate, he may refinance his mortgage at a lower interest
rate or he may rapidly repay his old mortgage. Should this happen, a Ginnie Mae
issued with a high interest rate may experience a rapid prepayment of principal
as the underlying mortgage loans prepay in whole or in part. Accordingly, there
can be no assurance that the prepayment levels which will be actually realized
will conform to the experience of the FHA, other mortgage lenders or other
Ginnie Mae investors. It is not possible to meaningfully predict prepayment
levels regarding the Ginnie Maes in the Trust Funds. Even though the
reinvestment of principal might mitigate the effects of prepayments of
principal, the termination of a Trust Fund might be accelerated as a result of
prepayments made as described herein.
In addition to prepayments which the Trustee is unable to reinvest, sales of
Securities in a Trust Fund under certain permitted circumstances may result in
an accelerated termination of such Trust Fund. Also, it is possible that, in
the absence of a secondary market for the Units or otherwise, redemptions of
Units may occur in sufficient numbers to reduce a Trust Fund to a size
resulting in such termination. Early termination of a Trust Fund may have
important consequences to the Unitholder; e.g., to the extent that Units were
purchased with a view to an investment of longer duration, the overall
investment program of the investor may require readjustment; or the overall
return on investment may be less or greater than anticipated, depending in part
on whether the purchase price paid for Units represented the payment of an
overall premium or a discount, respectively, above or below the stated
principal amounts of the underlying mortgages. In addition, a capital gain or
loss may result for tax purposes from termination of a Trust.
11
<PAGE>
KEMPER DEFINED FUNDS SERIES 31
GNMA PORTFOLIO, SERIES 4
PORTFOLIO
AS OF THE INITIAL DATE OF DEPOSIT: , 1995
- --------------------------------------------------------------------------------
Government National Mortgage Association, Modified Pass-Through Mortgage-Backed
Securities and
U.S. Treasury Securities*
<TABLE>
<CAPTION>
Cost of
Face Range of Stated Securities
Amount Issuer Coupon Maturities(1) of Trust(2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ $
- -------- --------
$ $
======== ========
</TABLE>
- --------
SEE "NOTES TO PORTFOLIOS."
KEMPER DEFINED FUNDS SERIES 31
GNMA PORTFOLIO, SERIES 5
PORTFOLIO
AS OF THE INITIAL DATE OF DEPOSIT: , 1995
- --------------------------------------------------------------------------------
Government National Mortgage Association, Modified Pass-Through Mortgage-Backed
Securities and
U.S. Treasury Securities*
<TABLE>
<CAPTION>
Cost of
Face Range of Stated Securities
Amount Issuer Coupon Maturities(1) of Trust(2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ $
- -------- --------
$ $
======== ========
</TABLE>
- --------
SEE "NOTES TO PORTFOLIOS."
12
<PAGE>
NOTES TO PORTFOLIOS
(1) The principal amount of Securities listed as having the range of maturities
shown is an aggregate of individual Securities having varying ranges of
maturities within that shown. They are listed as one category of Securities
with a single range of maturities because of current market conditions that
accord no difference in price among the Securities grouped together on the
basis of the difference in their maturity ranges. At some time in the
future, however, the difference in maturity ranges could affect the market
value of the individual Securities.
(2) Some Securities may be represented by contracts to purchase such
Securities. During the initial offering period, evaluations of Securities
are made on the basis of current offering side evaluations of the
Securities. The aggregate offering price is greater than the aggregate bid
price of the Securities, which is the basis on which Redemption Prices will
be determined for purposes of redemption of Units after the initial
offering period. Other information regarding the Securities in the Trust
Funds, at the opening of business on the Initial Date of Deposit, is as
follows:
<TABLE>
<CAPTION>
Profit
or Annual
(Loss) Interest
Cost of Securities to Income to Bid Side Value
Trust Fund to Sponsor Sponsor Trust of Securities
---------- ------------------ ------- --------- --------------
<S> <C> <C> <C> <C>
GNMA Series 4........... $ $ $ $
GNMA Series 5........... $ $ $ $
</TABLE>
(3) This Security has been purchased at a deep discount from the par value
because there is little or no stated interest income thereon. Securities
which pay no interest are normally described as "zero coupon" bonds. Over
the life of Securities purchased at a deep discount the value of such
Securities will increase such that upon maturity the holders of such
Securities will receive 100% of the principal amount thereof.
----------------
* In addition to the information as to the GNMA modified pass-through mortgage-
backed Securities set forth under "Portfolios," the Trustee will furnish
Unitholders a statement listing the name of issuer, pool number, interest
rate, maturity date and principal amount for each such Security in the
portfolio upon written request.
----------------
13
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
UNITHOLDERS
KEMPER DEFINED FUNDS SERIES 31 (GNMA PORTFOLIO SERIES 4 AND GNMA PORTFOLIO
SERIES 5)
We have audited the accompanying statements of condition, including the
portfolios, of Kemper Defined Funds Series 31 (GNMA Portfolio Series 4 and GNMA
Portfolio Series 5) as of the opening of business on , 1995. These
statements of condition are the responsibility of the Sponsor. Our
responsibility is to express an opinion on these statements of condition based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statements of condition are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statements of condition. Our
procedures included confirmation of the letter of credit held by the Trustee on
, 1995. An audit also includes assessing the accounting principles
used and significant estimates made by the Sponsor, as well as evaluating the
overall statements of condition presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the statements of condition referred to above present fairly,
in all material respects, the financial position of Kemper Defined Funds Series
31 (GNMA Portfolio Series 4 and GNMA Portfolio Series 5) at the opening of
business on , 1995, in conformity with generally accepted accounting
principles.
Grant Thornton LLP
Chicago, Illinois
, 1995
14
<PAGE>
KEMPER DEFINED FUNDS SERIES 31
GNMA PORTFOLIO SERIES 4 AND GNMA PORTFOLIO SERIES 5
STATEMENTS OF CONDITION
AS OF THE OPENING OF BUSINESS ON , 1995, THE INITIAL DATE OF
DEPOSIT
<TABLE>
<CAPTION>
GNMA GNMA
PORTFOLIO SERIES 4 PORTFOLIO SERIES 5
------------------ ------------------
<S> <C> <C>
INVESTMENT IN SECURITIES
Securities deposited in Trust(1)......... $ $
Contracts to purchase Securities(1)......
Accrued interest to First Settlement Date
on Securities(1)(2).....................
---------- ----------
Total.................................. $ $
========== ==========
Number of Units..........................
INTEREST OF UNITHOLDERS
Cost to investors(3).....................
Less: Gross underwriting commission(3)...
---------- ----------
Net interest to Unitholders(1)(2)(3).....
---------- ----------
Total.................................. $ $
========== ==========
</TABLE>
- --------
NOTES:
(1) The aggregate value of the Securities listed in each Portfolio and their
cost to each Trust are the same. The value of the Securities is determined
by Muller Data Corporation on the bases set forth under "Public Offering of
Units--Public Offering Price." The contracts to purchase Securities are
collateralized by an irrevocable letter of credit of $ which has been
deposited with the Trustee. Of this amount, $ relates to the offering
price of Securities to be purchased and $ relates to accrued interest on
such Securities to the expected dates of delivery.
(2) The Trustee will advance to each Trust the amount of net interest accrued
to the First Settlement Date for distribution to the Sponsor as the
Unitholder of record.
(3) The aggregate public offering price includes a sales charge for each Trust
as set forth under "Essential Information," assuming all single
transactions involve less than 10,000 Units. For single transactions
involving 10,000 or more Units, the sales charge is reduced (see "Public
Offering of Units--Public Offering Price") resulting in an equal reduction
in both the Cost to investors and the Gross underwriting commission while
the Net interest to Unitholders remains unchanged.
15
<PAGE>
RATING OF UNITS
Standard & Poor's Ratings Group ("Standard & Poor's") has rated the Units of
each Trust "AAA." This is the highest rating assigned by Standard & Poor's.
Standard & Poor's has been compensated by the Sponsor for its services in
rating Units of the Trust Funds.
A Standard & Poor's rating (as described by Standard & Poor's) on the units of
an investment trust (hereinafter referred to collectively as "units" or
"trust") is a current assessment of creditworthiness with respect to the
investments held by such trust. This assessment takes into consideration the
financial capacity of the issuers and of any guarantors, insurers, lessees, or
mortgagors with respect to such investments. The assessment, however, does not
take into account the extent to which trust expenses or portfolio asset sales
for less than the trust's purchase price will reduce payment to the Unitholder
of the interest and principal required to be paid on the portfolio assets. In
addition, the rating is not a recommendation to purchase, sell, or hold units,
inasmuch as the rating does not comment as to market price of the units or
suitability for a particular investor.
Trusts rated "AAA" are composed exclusively of assets that are rated "AAA" by
Standard & Poor's or have, in the opinion of Standard & Poor's, credit
characteristics comparable to assets rated "AAA," or certain short-term
investments. Standard & Poor's defines its "AAA" rating for such assets as the
highest rating assigned by Standard & Poor's to a debt obligation. Capacity to
pay interest and repay principal is very strong.
PORTFOLIO SELECTION
In selecting Ginnie Maes and U.S. Treasury Obligations for deposit in the Trust
Funds, the following factors, among others, were considered by the Sponsor: (i)
the types of such obligations available; (ii) the prices and yields of such
obligations relative to other comparable obligations, including the extent to
which such obligations are traded at a premium or at a discount from par; and
(iii) the maturities of such obligations.
Each Trust consists of such of the unamortized principal amount of the
Portfolio Obligations listed under the appropriate Trust Fund's "Portfolio" (or
contracts to purchase such obligations) as may continue to be held from time to
time in such Trust and any additional obligations acquired and held by such
Trust pursuant to the provisions of the Indenture (including provisions with
respect to deposits of Portfolio Obligations in connection with the issuance of
additional Units) together with accrued and undistributed interest thereon and
undistributed cash representing payments and prepayments of principal and
proceeds realized from the disposition of Portfolio Obligations. Neither the
Sponsor nor the Trustee shall be liable in any way for any default, failure or
defect in any of the Portfolio Obligations. However, should any contract
deposited hereunder (or to be deposited in connection with the issuance of
additional Units), fail, the Sponsor shall, on or before the next following
Distribution Date, unless substantially all of the moneys held in such Trust to
cover such purchase are reinvested in substitute Portfolio Obligations in
accordance with the Indenture, cause to be refunded to the Unitholders of that
Trust the attributable sales charge, plus the attributable cost of the
Portfolio Obligations to that Trust, plus accrued interest, if any, at the
coupon rate of the relevant Portfolio Obligations to the date the Portfolio
Obligations are removed from the Trust.
Each Trust may contain "zero coupon" U.S. Treasury Obligations. See footnote
(3) in "Notes to Portfolios." Zero coupon obligations are purchased at a deep
discount because the buyer receives only the right to receive a final payment
at the maturity of the obligations and does not receive any periodic interest
A-1
<PAGE>
payments. The effect of owning deep discount obligations which do not make
current interest payments (such as the zero coupon obligations) 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 obligations are subject to substantially greater price
fluctuations during periods of changing market interest rates than are
securities of comparable quality which pay interest.
Because regular payments of principal are to be received and certain of the
Securities from time to time may be redeemed or will mature in accordance with
their terms or may be sold under certain circumstances described herein, Trusts
referred to herein might not retain their present size and composition.
THE UNITS
On the Initial Date of Deposit, each Unit represented the fractional undivided
interest in the appropriate Trust set forth for such Trust under "Essential
Information" above in the ratio of one Unit for each $10.00 principal amount of
Portfolio Obligations in the Trust. Thereafter, if any Units are redeemed by
the Trustee, the principal amount of Portfolio Obligations in such Trust will
be reduced by amounts allocable to redeemed Units, and the fractional undivided
interest represented by each Unit in the balance will be increased. However, if
additional Units are issued by a Trust (in connection with the deposit by the
Sponsor of additional Portfolio Obligations), the aggregate value of Portfolio
Obligations in such Trust will be increased by amounts allocable to additional
Units, and the fractional undivided interest represented by each Unit in the
balance will be decreased. Units will remain outstanding until redeemed upon
tender to the Trustee by any Unitholder (which may include the Sponsor) or
until the termination of such Trust. See "Redemption" and "Administration of
the Trust Funds--Termination."
ESTIMATED CURRENT RETURN AND ESTIMATED LONG-TERM RETURN
As of the opening of business on the Initial Date of Deposit, the Estimated
Current Return and the Estimated Long-Term Return for each Trust were as set
forth in "Essential Information" for each Trust. Estimated Current Return is
calculated by dividing the estimated net annual interest rate per Unit by the
Public Offering Price. The estimated net annual interest rate per Unit will
vary with changes in fees and expenses of the Trustee, the Sponsor and the
Evaluator and with the principal prepayment, redemption, principal
reinvestment, maturity, exchange or sale of Securities while the Public
Offering Price will vary with changes in the offering price of the underlying
Securities and with changes in accrued interest; therefore, there is no
assurance that the present Estimated Current Return will be realized in the
future. The 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 the estimated average life of all
the Securities and (2) takes into account the expenses and sales charge
associated with each Trust Unit. Since the market values and the estimated
average lives or estimated retirements, as the case may be, of the Securities
and the expenses of a Trust will change, there is no assurance that the present
Estimated Long-Term Return will be realized in the future. The Estimated
Current Return and Estimated Long-Term Return are expected to differ because
the calculation of the Estimated Long-Term Return reflects the estimated dates
and amounts of principal returned while the Estimated Current Return
calculations include only net annual interest rates and Public Offering Price.
A-2
<PAGE>
Payments received in respect of the mortgages underlying the Ginnie Maes in
each series of the GNMA Portfolio will consist of a portion representing
interest and a portion representing principal. Although the aggregate monthly
payment made by the obligor on each mortgage remains constant (aside from
optional prepayments of principal), in the early years most of each such
payment will represent interest, while in later years, the proportion
representing interest will decline and the proportion representing principal
will increase. However, by reason of optional prepayments, principal payments
in the earlier years on the mortgages underlying the Ginnie Maes may be
substantially in excess of those required by the amortization schedules of such
mortgages. Therefore, principal payments in later years may be substantially
less since the aggregate unpaid principal balances of such underlying mortgages
may have been greatly reduced. To the extent that the underlying mortgages
bearing higher interest rates in the Trust Funds are prepaid faster than the
other underlying mortgages, the net annual interest rate per Unit and the
Estimated Current Return on the Units of such Series can be expected to
decline. Monthly payments to the Unitholders will reflect all of the foregoing
factors.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. Units of each Trust Fund are offered at the Public
Offering Price thereof. During the initial offering period, the Public Offering
Price per Unit is equal to the aggregate of the offering side evaluations of
the Securities in a Trust Fund (as determined, pursuant to the terms of a
contract with the Evaluator, by Muller Data Corporation, a non-affiliated firm
regularly engaged in the business of evaluating, quoting or appraising
comparable securities), plus or minus a pro rata share of cash, if any, in the
Principal Account held or owned by a Trust Fund, plus accrued interest, if any,
plus the applicable sales charge referred to in the table below divided by the
number of outstanding Units of such Trust Fund. The Public Offering Price for
secondary market transactions, on the other hand, is based on the bid side
evaluations of the Securities in a Trust Fund plus or minus cash, if any, in
the Principal Account held or owned by such Trust Fund, plus accrued interest,
if any, plus a sales charge based upon the dollar weighted average maturity
such Trust Fund. The sales charges for primary sales for each Trust are set
forth in "Essential Information."
The sales charge per Unit will be reduced pursuant to the following graduated
scale:
<TABLE>
<CAPTION>
MIDGET TRUST LONG-TERM TRUST
----------------- -----------------
PERCENT PERCENT PERCENT PERCENT
OF OF NET OF OF NET
OFFERING AMOUNT OFFERING AMOUNT
TICKET SIZE* PRICE INVESTED PRICE INVESTED
- ------------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
Less than $100,000.......................... 3.50 3.627 3.95 4.112
$100,000 to $249,999........................ 3.25 3.359 3.70 3.842
$250,000 to $499,999........................ 2.85 2.934 3.35 3.466
$500,000 to $999,999**...................... 2.60 2.669 3.10 3.199
</TABLE>
- --------
*The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied
on whichever basis is more favorable to the investor.
**For any transactions in excess of these amounts, contact the Sponsor for the
applicable sales charge.
The reduced sales charges as shown on the table above will apply to all
purchases of Units on any one day by the same purchaser from the same firm, and
for this purpose, purchases of Units of these Series 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
A-3
<PAGE>
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. The Sponsor will also allow
purchasers who commit to purchase $1 million or more of a Trust's Units during
a 12 month period to do so at the applicable reduced sales charge for such
series pursuant to a letter of intent, subject to certain restrictions.
The Sponsor intends to permit officers, directors and employees of the Sponsor
and Evaluator and, in the sole discretion of the Sponsor, registered
representatives of selling firms to purchase Units of each Series without a
sales charge, although a transaction processing fee may be imposed on such
trades.
The Sponsor reserves the right to reject, in whole or in part, any order for
the purchase of Units and the right to change the amount of the sales charge
from time to time.
The Public Offering Price includes accrued interest. Accrued interest is the
accumulation of unpaid interest on a security from the last day on which
interest thereon was paid. Interest on Securities generally is paid monthly,
although a Trust Fund accrues such interest daily. Because of this, a Trust
Fund always has an amount of interest earned but not yet collected by the
Trustee. For this reason, with respect to sales settling subsequent to the
First Settlement Date, the Public Offering Price of Units will have added to it
the proportionate share of accrued interest to the date of settlement.
Unitholders will receive on the next distribution date of a Trust the amount,
if any, of accrued interest paid on their Units. If a Unitholder sells or
redeems all or a portion of his Units or if the Securities are sold or
otherwise removed or if the Trust Fund is liquidated, he will receive at that
time his proportionate share of the accrued interest related to his Units.
Since the Trustee has the use of the funds held in the Interest Account for
distributions to Unitholders and since such Account is non-interest-bearing to
Unitholders, the Trustee benefits thereby.
In an effort to reduce the amount of accrued interest which would otherwise
have to be paid in addition to the Public Offering Price in the sale of Units
to the public, the Trustee will advance the amount of accrued interest as of
the First Settlement Date and the same will be distributed to the Sponsor as
the Unitholder of record as of the First Settlement Date. Consequently, the
amount of accrued interest to be added to the Public Offering Price of Units
will include only accrued interest from the First Settlement Date to the date
of settlement, less any distributions from the Interest Account subsequent to
the First Settlement Date.
The Public Offering Price of any Series on the date of this Prospectus or on
any subsequent date will vary from the Public Offering Price set forth under
"Essential Information" for such Series in accordance with fluctuations in the
valuation of the underlying Portfolio Obligations in such Series of the Trust
and the addition or deletion of accrued interest.
During the initial offering period and thereafter, the aggregate bid or
offering prices of the Securities in each Trust, as is appropriate, shall be
determined for such Trust by the Evaluator, in the following manner: (a) on the
basis of current bid or offering prices for the Portfolio Obligations, (b) if
bid or offering prices are not available for the Portfolio Obligations, on the
basis of current bid or offering prices for comparable securities, (c) by
determining the value of the Portfolio Obligations on the bid or offering side
of the market by appraisal, or (d) by any combination of the above. The
Evaluator may obtain current price information as to the Portfolio Obligations
from investment dealers or brokers. Such evaluations and computations will be
made as of the close of business on each business day commencing with the
Initial Date of Deposit of the Portfolio Obligations and will be effective for
all sales of Units made during the preceding 24-hour period. Evaluations, for
purposes of redemptions by the Trustee, will be made each business day as of
the Evaluation Time stated under "Essential Information," for such Series
effective for all redemptions made subsequent to the last preceding
determination.
A-4
<PAGE>
In connection with the Ginnie Maes deposited in a Trust there is a period of
time beginning on the first day of each month, during which the total amount of
payments (including prepayments, if any) of principal for the preceding month
on the various mortgages underlying each of the Securities in such Trust Fund
will not yet have been reported by the issuer to GNMA and made generally
available to the public. During this period, the precise principal amount of
the underlying mortgages remaining outstanding for each Security in a Trust
Fund, and therefore the precise principal amount of such Security, will not be
known, although the principal amount outstanding for the preceding month will
be known. Therefore, the exact amount of principal to be acquired by the
Trustee as a holder of such Securities which may be reinvested (during the
Reinvestment Period) or distributed to Unitholders of such Series will not be
known. The Sponsor does not expect that the amounts of such prepayments and the
differences in such principal amounts from month to month will be material in
relation to the GNMA Portfolio Series due to the number of mortgages underlying
each Security and the number of such Securities in the Trusts. However, there
can be no assurance that they will not be material. For purposes of the
determination by the Evaluator of the offering prices and bid prices of the
Securities in each GNMA Portfolio Series and for purposes of calculations of
accrued interest on the Units, during the period in each month prior to the
time when the precise amounts of principal of the Ginnie Maes for the month
become publicly available, the Evaluator will base its evaluations and
calculations, which are the basis for calculations of the Public Offering
Price, the Sponsor's Repurchase Price in the secondary market and the
Redemption Price per Unit of each GNMA Portfolio Series, upon the principal
amount of such Series outstanding for the preceding month. The Sponsor expects
that the differences in such principal amounts from month to month will not be
material to the Trusts. Nevertheless, the Sponsor will adopt procedures as to
pricing and evaluation for the Units of each GNMA Portfolio Series, with such
modifications, if any, deemed necessary by the Sponsor for the protection of
Unitholders, designed to minimize the impact of such differences upon the
calculation of the Public Offering Price per Unit, the Sponsor's Repurchase
Price per Unit in the secondary market and the Redemption Price per Unit of
such Series.
On the business day indicated under "Essential Information" the Public Offering
Price per Unit and the Sponsor's Initial Repurchase Price per Unit (based on
the offering side evaluation of the Portfolio Obligations) of a Trust Fund
exceeded the Redemption Price per Unit (based upon the bid side evaluation of
the Portfolio Obligations).
INITIAL PUBLIC DISTRIBUTION. During the initial offering period (i) for Units
issued on the Initial Date of Deposit and (ii) for additional Units issued
after such date in respect of additional Ginnie Maes or U.S. Treasury
Obligations deposited by the Sponsor, Units of each Trust will be distributed
to the public at the Public Offering Price, which is based on the offering
prices of the Portfolio Obligations in such Series, plus cash, if any, in the
Principal Account held or owned by a Trust Fund, plus accrued interest, if any,
by means of this Prospectus through various dealers and through others. Units
of a Series reacquired by the Sponsor during the initial offering period may be
resold at the then current Public Offering Price. Upon the termination of the
initial offering period of a Series, unsold Units or Units acquired by the
Sponsor in the secondary market referred to below may be offered to the public
by this Prospectus at the then current Public Offering Price of such Series,
which is based on the bid prices of the Portfolio Obligations, plus accrued
interest.
The Sponsor intends to qualify Units for sale (in any state in which
qualification is deemed necessary by the Sponsor) through dealers who are
members of the National Association of Securities Dealers, Inc. and through
others. The Sponsor does not intend to qualify Units of any Series for sale in
any foreign country and this Prospectus does not constitute an offer to sell
Units in any country where Units cannot lawfully be sold without registration.
A-5
<PAGE>
SECONDARY MARKET. After the initial offering period, while not obligated to do
so, the Sponsor intends, subject to change at any time, to maintain a market
for Units of each Trust offered hereby and to continuously offer to purchase
said Units at prices based on the aggregate bid prices of the underlying
Portfolio Obligations, together with accrued interest to the expected date of
settlement. To the extent that a secondary market is maintained during the
initial offering period, the prices at which Units of a Trust will be
repurchased will be based upon the aggregate offering side evaluation of the
Portfolio Obligations in such Trust. The aggregate bid prices of the underlying
Portfolio Obligations in each Trust, upon which the Sponsor's Repurchase Price
and the Redemption Price are based, are expected to be less than the related
aggregate offering prices (which is the evaluation method used during the
initial public offering period). Accordingly, Unitholders who wish to dispose
of their Units should inquire of their bank or broker as to current market
prices in order to determine whether there is in existence any price in excess
of the Redemption Price and, if so, the amount thereof.
The offering price of any Units acquired by the Sponsor will be in accord with
that described in the currently effective Prospectus describing such Units. Any
profit or loss resulting from the resale of such Units, after allowance of a
discount to the dealer or other entity which makes the sale, will belong to the
Sponsor. The Sponsor may suspend or discontinue purchases of Units of any Trust
at prices based on the bid prices of the Portfolio Obligations in such Trust if
the supply of Units exceeds demand, or for other business reasons.
PROFITS OF SPONSOR. Sales of Units may be made to or through dealers or through
others at prices which represent discounts from the Public Offering Price as
set forth below. Discounted rates for each GNMA Portfolio Series are as
follows:
<TABLE>
<CAPTION>
MIDGET TRUST
-----------------------------------------------------------
SECONDARY
PRIMARY MARKET MARKET
------------------------------------------------- ---------
VOLUME DISCOUNTS**
--------------------------------------
FIRM SALES FIRM SALES FIRM SALES
REGULAR OR SALE OR SALE OR SALE
CONCESSION ARRANGEMENTS ARRANGEMENTS ARRANGEMENTS
OR AGENCY ($250,000 TO ($500,000 TO ($1,000,000
DOLLAR AMOUNT OF TRADE* COMMISSION $499,999) $999,999) OR MORE) ALL SALES
- ----------------------- ---------- ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
$0 to $99,999........... 2.10% 2.15% 2.20% 2.25% 2.10%
$100,000 to $249,999.... 2.00 2.05 2.10 2.20 2.10
$250,000 to $499,999.... 1.75 1.80 1.80 1.85 1.80
$500,000 to $999,999***. 1.50 1.55 1.55 1.60 1.55
<CAPTION>
LONG-TERM TRUST
-----------------------------------------------------------
SECONDARY
PRIMARY MARKET MARKET
------------------------------------------------- ---------
VOLUME DISCOUNTS**
--------------------------------------
FIRM SALES FIRM SALES FIRM SALES
REGULAR OR SALE OR SALE OR SALE
CONCESSION ARRANGEMENTS ARRANGEMENTS ARRANGEMENTS
OR AGENCY ($250,000 TO ($500,000 TO ($1,000,000
DOLLAR AMOUNT OF TRADE* COMMISSION $499,999) $999,999) OR MORE) ALL SALES
- ----------------------- ---------- ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
$0 to $99,999........... 2.50% 2.60% 2.65% 2.70% 2.60%
$100,000 to $249,999.... 2.50 2.55 2.60 2.65 2.60
$250,000 to $499,999.... 2.25 2.30 2.30 2.35 2.30
$500,000 to $999,999***. 2.00 2.05 2.05 2.10 2.05
</TABLE>
- --------
* The breakpoint discount are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $1,000 per 100 Units.
A-6
<PAGE>
** Volume discounts will be given to firms who reach cumulative firm sales or
sales arrangement levels of at least $250,000 during the initial one month
period after the Initial Date of Deposit. After a firm has met the minimum
$250,000 volume level, volume discounts will be given on all trades
originated from or by that firm, including those placed prior to reaching
the $250,000 level, and will continue to be given during the entire
initial offering period.
***For any transactions in excess of these amounts, contact the Sponsor for
the applicable rates.
The Sponsor reserves the right to change the discounts set forth above from
time to time. In addition to such discounts, the Sponsor may, from time to
time, pay or allow an additional discount, in the form of cash or other
compensation, to dealers employing registered representatives who sell, during
a specified time period, a minimum dollar amount of Units of a Trust and other
unit investment trusts underwritten by the Sponsor.
Certain commercial banks are making Units of each Trust 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 above. 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. The difference between
the discounts and the sales charge will be retained by the Sponsor.
The Sponsor also may have realized a profit (or sustained a loss) on the
deposit of the Portfolio Obligations in each Trust representing the difference
between the cost of the Portfolio Obligations to the Sponsor and the cost of
the Portfolio Obligations to the Trust. See "Portfolios." During the initial
offering period and thereafter to the extent additional Units continue to be
issued and offered for sale to the public, the Sponsor may realize additional
profit or sustain a loss due to daily fluctuations in the offering prices of
the Portfolio Obligations in a Trust and thus in the Public Offering Price of
Units received by the Sponsor.
The Sponsor may also realize profits or sustain losses while maintaining a
secondary market in the Units of a Trust, in the amount of any difference
between the prices at which it buys Units and the prices at which Units are
resold after allowing for the discount (such prices include a sales charge) or
the prices at which the Sponsor redeems such Units (based on the bid side of
the Portfolio Obligations in such Trust), as the case may be.
Although payment is normally made five business days following the order for
purchase, payment may be made prior thereto. A person will become the owner of
Units on the First Settlement Date or any date of settlement thereafter
provided payment has been received. Cash, if any, made available to the
Sponsor prior to the date of settlement for the purchase of Units may be used
in the Sponsor's business and may be deemed to be a benefit to the Sponsor,
subject to the limitations of the Securities Exchange Act of 1934. If a
Unitholder desires to have certificates representing Units purchased, such
certificates will be delivered as soon as possible following his 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.
Cash, if any, received by a dealer from Unitholders prior to the settlement
date for a purchase of Units of any Series may be used in such dealer's
business subject to the limitations of Rule 15c3-3 under the Securities
Exchange Act of 1934 and may be of benefit to the dealer.
TAX STATUS
In the opinion of Chapman and Cutler, counsel for the Sponsor, under existing
law:
A-7
<PAGE>
Each Trust is an association taxable as a corporation under the Internal
Revenue Code and intends to qualify for and elect tax treatment as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). By qualifying for and electing such treatment, such Trust will not be
subject to Federal income tax on net investment income or net capital gains
distributed to Unitholders of such Trust. The Code imposes a 4% excise tax on
certain undistributed income of a regulated investment company that does not
timely distribute certain percentages of its ordinary taxable income and
capital gains by the end of each calender year. Each Trust intends to timely
distribute taxable income and capital gains to avoid the imposition of such
tax. Distributions of the entire net investment income of each Trust is
required by the Indenture.
Distributions from a Trust, to the extent of the earnings and profits of such
Trust, will constitute dividends for Federal income tax purposes which are
taxable as ordinary income to Unitholders. Distributions of a Series' net
investment income and any net short-term capital gain will be taxable as
ordinary income to the Unitholders of such Trust. Distributions from each Trust
will not be eligible for the 70% dividends received deduction for corporations.
Although distributions generally will be treated as distributed when paid,
distributions declared in October, November or December, payable to Unitholders
of record on a specified date in one of those months and paid during January of
the following year will be treated as having been distributed by each Trust
(and received by the Unitholders) on December 31 of the year such distributions
are declared.
Distributions which a Trust designates as capital gain dividends will be
taxable to Unitholders thereof as long-term capital gains, regardless of the
length of time the Units have been held by a Unitholder. Distributions in
partial liquidation, reflecting the proceeds of prepayments, redemptions,
maturities (including monthly mortgage payments of principal in GNMA Series) or
sales of Portfolio Obligations from a Trust (exclusive of net capital gain)
will not be taxable to Unitholders of such Trust to the extent that they
represent a return of capital for tax purposes. The portion of distributions
which represents a return of capital will, however, reduce a Unitholder's basis
in his Units, and to the extent they exceed the basis of his Units will be
taxable as a capital gain. A Unitholder will realize a taxable gain or loss
when his Units are sold or redeemed for an amount different from his original
cost after reduction for previous distributions to the extent that they
represented a return of capital. Such gain or loss will constitute either a
long-term or short-term capital gain or loss depending upon the length of time
the Unitholder has held his Units. Any loss of Units held six months or less
will be treated as long-term capital loss to the extent of any long-term
capital gains dividends received (or deemed to have been received) by the
Unitholder with respect to such Units. For taxpayers other than corporations,
net capital gains are presently subject to a maximum stated marginal rate of
28%. 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. A capital loss is long-term
if the asset is held for more than one year and short-term if held for one year
or less.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by a Trust as long as the Units of
such Trust are held by or for 500 or more persons at all times during the
taxable year. In the event the Units of a Trust are held by fewer than 500
persons, additional taxable income will be realized by the individual (and
other noncorporate) Unitholders in excess of the distributions received from
such Trust.
A-8
<PAGE>
The Revenue Reconciliation Act of 1993 (the "Act") raised tax rates on ordinary
income while capital gains remain subject to a 28% maximum stated rate. Because
some or all capital gains are taxed at a comparatively lower rate under the
Act, the 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.
If a Ginnie Mae has been purchased by a Trust at a market discount (i.e., for a
purchase price less than its outstanding principal amount) unless the amount of
market discount is "de minimis" as specified in the Code, each payment of
principal on the Ginnie Mae will constitute ordinary income to such Series of
the Trust to the extent of any accrued market discount. In the case of a Ginnie
Mae, the amount of market discount that is deemed to accrue each month shall
generally be the amount of discount that bears the same ratio to the total
amount of remaining market discount that the amount of interest paid during the
accrual period (each month) bears to the total amount of interest remaining to
be paid on the Ginnie Mae as of the beginning of the accrual period.
The market discount rules do not apply to stripped U.S. Treasury Obligations
because they are stripped debt instruments subject to special original issue
discount rules. Unitholders should consult their tax advisers as to the amount
of original issue discount which accrues.
Additional Units of a Trust may be issued after the Initial Date of Deposit in
respect of additional Portfolio Obligations deposited in such Trust by the
Sponsor. Because of possible market interest rate fluctuations, the purchase
price to a Trust of such additional Portfolio Obligations may differ from the
purchase price of the Ginnie Maes in such Trust thereof on the Initial Date of
Deposit. If interest rates decline and such additional Portfolio Obligations
are purchased at a higher price than the Portfolio Obligations originally
deposited, then the amounts includable in the taxable income of such Trust in
proportion to the asset value of that Trust will be reduced for all Unitholders
thereof, not just the Unitholders of such additional Units. Conversely, if
interest rates rise and such additional Portfolio Obligations are purchased at
a lower price than the Portfolio Obligations originally deposited, then the
amounts includable in the taxable income of such Trust in proportion to the
asset value of that Trust will be increased for all Unitholders thereof, not
just the Unitholders of such additional Units.
Each Unitholder of each Trust shall receive an annual statement describing the
tax status of the distributions paid by such Trust. Foreign Unitholders should
consult their own tax advisers with respect to the tax consequences or
ownership of Units.
It should be remembered that even if distributions are reinvested, they are
still treated as distributions for income tax purposes.
RETIREMENT PLANS
As indicated under "Tax Status" above, Unitholders of a GNMA Portfolio Series
will be required for income tax purposes to include amounts in ordinary gross
income in advance of the receipt of the cash attributable to such income.
Therefore, purchase of Units may be appropriate only for an account which can
pay taxes with other funds in advance of the receipt of the cash attributable
to such income or for Individual Retirement Accounts, Keogh plans, pension
funds and other qualified retirement plans, certain of which are briefly
described below.
A-9
<PAGE>
Generally, capital gains and income received under each of the foregoing plans
are deferred from Federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special income averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax laws
related thereto and should consult their attorneys or tax advisers with respect
to the establishment and maintenance of any such plan. Such plans are offered
by brokerage firms and other financial institutions. Each Trust will waive the
$1,000 minimum investment requirement for IRA accounts. The minimum investment
is $250 for tax-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 is
married, filing separately), if either an individual or their spouse (if
married, filing jointly) is an active participant in an employer maintained
retirement plan. Thus, if an individual has adjusted gross income over $35,000
($50,000 if married, filing jointly or $0 if married, filing separately) and if
an individual or their spouse is an active participant in an employer
maintained retirement plan, no IRA deduction is permitted. Under the Code, an
individual may make nondeductible contributions to the extent deductible
contributions are not allowed. All distributions from an IRA (other than the
return of certain excess contributions) are treated as ordinary income for
Federal income taxation purposes provided that under the Code an individual
need not pay tax on the return of nondeductible contributions, the amount
includable in income for the taxable year is the portion of the amount
withdrawn for the taxable year as the individual's aggregate nondeductible IRA
contributions bear to the aggregate balance of all IRAs of the individual.
A participant's interest in an IRA must be, or commence to be, distributed to
the participant not later than April 1 of the calendar year following the year
during which the participant attains age 70 1/2. Distributions made before
attainment of age 59 1/2, except in the case of the participant's death or
disability, or where the amount distributed is to be rolled over to another
IRA, or where the distributions are taken as a series of substantially equal
periodic payments over the participant's life or life expectancy (or the joint
lives or life expectancies of the participant and the designated beneficiary)
are generally subject to a surtax in an amount equal to 10% of the
distribution. The amount of such periodic payments may not be modified before
the later of five years or attainment of age 59 1/2. Excess contributions are
subject to an annual 6% excise tax.
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
lesser of 25% of compensation or $30,000. Prototype plan documents for
establishing qualified retirement plans are available from the Sponsor upon
request.
Excess Distributions Tax. In addition to the other taxes due by reason of a
plan distribution, a tax of 15% may apply to certain aggregate distributions
from IRAs, Keogh plans, and corporate retirement plans to the extent such
aggregate taxable distributions exceed specified amounts (generally $150,000,
as adjusted) during a tax year. This 15% tax will not apply to distributions on
account of death, qualified domestic relations orders or amounts rolled over to
an eligible plan. In general, for lump sum distributions the excess
distribution over $750,000 (as adjusted) will be subject to the 15% tax.
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The Trustee, Investors Fiduciary Trust Company ("IFTC"), has agreed to act as
custodian for certain retirement plan accounts. An annual fee of $12.00 per
account, if not paid separately, will be assessed by the Trustee and paid
through the liquidation of shares of the reinvestment account. An individual
wishing IFTC to act as custodian must complete a Kemper UIT/IRA application and
forward it along with a check made payable to Investors Fiduciary Trust
Company. Certificates for Individual Retirement Accounts can not be issued.
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 mutual fund registered in such Unitholder's
state of residence which is underwritten or advised by an affiliate of the
Sponsor, Kemper Financial Services, Inc. (the "Kemper Funds"), other than those
Kemper Funds sold with a contingent deferred sales charge. 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 management
of these Kemper Funds is contained in their respective prospectuses, which can
be obtained from the Sponsor or an investor's financial representative upon
request. An investor should read the appropriate prospectus prior to making the
election to reinvest. Unitholders who desire to have their distributions
automatically reinvested should inform their financial representative at the
time of purchase or should file with the Program Agent referred to below a
written notice of such election.
Unitholders who initially elect to receive distributions in cash may elect to
participate in the reinvestment program by filing with the Program Agent an
election to have such distributions reinvested without charge. The 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
distribution. The election to participate in the reinvestment program shall
remain in effect until a subsequent notice is received in writing by the
Program Agent. See "Administration of the Trust Funds--Distributions from the
Interest, Principal and Capital Gains Accounts."
The Program Agent is Investors Fiduciary Trust Company. All inquiries
concerning participation in distribution reinvestment should be directed to the
Program Agent at P.O. Box 419430, Kansas City, Missouri 64173-0216, telephone
816-474-8786.
Unitholders of each Trust participating in IRAs, Keogh Plans and other tax
deferred retirement plans, may find it highly advantageous to participate in
the Reinvestment Program in order to keep the monies in the account fully
invested at all times. Should reinvestment be selected, an account with an
identical registration to that established at the time Trust Units are
purchased will be set up in the reinvestment fund selected by the investor.
Investors should consult with their plan custodian as to the appropriate
disposition of distributions. If participants in IRAs, Keogh plans and other
tax deferred retirement plans do not elect a reinvestment option, cash
distributions will be sent to the custodian of the retirement plan and not to
the investors, since payments to the investors would constitute a distribution
from the plan which would result in tax penalties for premature withdrawals
from such programs. See "Retirement Plans."
REDEMPTION
RIGHT OF REDEMPTION. It may be possible, in some cases, for Units of a Trust to
be sold in the over-the-counter market for a higher price than the Redemption
Value for such Units. Therefore, a Unitholder who
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wishes to dispose of this Units is advised to inquire through his financial
representative as to current market prices for Units in order to determine if
there is an over-the-counter price in excess of the Redemption Value per Unit
or the Sponsor's Repurchase Price for such Trust.
A Unitholder who does not dispose of Units in the secondary market described
above may cause Units to be redeemed by the Trustee by making a written request
to the Trustee, Investors Fiduciary Trust Company, P.O. Box 419430, Kansas
City, Missouri 64173-0216 and, in the case of Units evidenced by a certificate,
by tendering such certificate to the Trustee, properly endorsed or accompanied
by a written instrument or instruments of transfer in form satisfactory to the
Trustee. Unitholders must sign the request, and such certificate or transfer
instrument, exactly as their names appear on the records of the Trustee and on
any certificate representing the Units to be redeemed. If the amount of the
redemption is $25,000 or less and the proceeds are payable to the Unitholder(s)
of record at the address of record, no signature guarantee is necessary for
redemption by individual account owners (including joint owners) or fiduciary
accounts where the fiduciary is named in the account registration. Additional
documentation may be requested, and a signature guarantee is always required,
from corporations, executors, administrators, Trustees, guardians or
associations. If required, the signatures must be guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guarantee 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 seventh calendar day following
the day on which a tender for redemption is received, or if the seventh
calendar day is not a business day, on the first business day prior thereto
(the "Redemption Date") by payment of cash equivalent to the Redemption Value,
determined as set forth below under "Computation of Redemption Value," as of
the evaluation time stated under "Essential Information," for the appropriate
Series next following such tender, multiplied by the number of Units of such
Trust being redeemed. Any Units redeemed shall be cancelled and any undivided
fractional interest in such Trust extinguished. The price received upon
redemption might be more or less than the amount paid by the Unitholder
depending on the value of the Portfolio Obligations in such Trust at the time
of redemption.
During the period in which the Sponsor maintains a secondary market for Units
of a Trust, the Sponsor has the right to repurchase any Unit presented for
tender to the Trustee for redemption no later than the close of business on the
second business day following such presentation.
The Trustee is irrevocably authorized in its discretion, if the Sponsor does
not elect to repurchase any Unit tendered for redemption or if the Sponsor
itself tenders Units for redemption, in lieu of redeeming Units presented for
tender at the Redemption Value, to sell such Units in the over-the-counter
market for the account of a tendering Unitholder at prices which will return to
the Unitholder monies, net after brokerage commissions, transfer taxes and
other charges, equal to or in excess of the Redemption Value for such Units. In
the event of any such sale, the Trustee will pay the net proceeds thereof to
the Unitholder on the day he would otherwise be entitled to receive payment of
the Redemption Value.
Any amounts to be paid on redemption representing interest shall be withdrawn
from the Interest Account of such Trust to the extent funds are available. All
other amounts paid on redemption shall be withdrawn from the Principal Account
of such Trust. The Trustee is authorized by the Indenture to sell Portfolio
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Obligations in order to provide funds for redemption. To the extent Portfolio
Obligations are sold, the size of that Trust will be reduced. Portfolio
Obligations will be sold by the Trustee so as to maintain, as closely as
practicable, the original percentage relationship between the principal amounts
of the Portfolio Obligations in such Trust. The Portfolio Obligations to be
sold for purposes of redeeming Units will be selected from a list supplied by
the Sponsor. The Portfolio Obligations will be chosen for this list by the
Sponsor on the basis of such market and credit factors as it may determine are
in the best interests of such Trust. Provision is made under the Indenture for
the Sponsor to specify minimum face amounts in which blocks of Portfolio
Obligations are to be sold in order to obtain the best price available. While
such minimum amounts may vary from time to time in accordance with market
conditions, it is anticipated that the minimum face amounts which would be
specified would range from $25,000 to $100,000. Sales may be required at a time
when the Portfolio Obligations would not otherwise be sold and might result in
lower prices than might otherwise be realized. Moreover, due to the minimum
principal amount in which Portfolio Obligations may be required to be sold, the
proceeds of such sales may exceed the amount necessary for payment of Units
redeemed. To the extent not used to meet other redemption requests in such
Trust, such excess proceeds will be distributed pro rata to all remaining
Unitholders of record of such Trust, unless reinvested in substitute Portfolio
Obligations. See "Administration of the Trust Funds--Portfolio Supervision."
COMPUTATION OF REDEMPTION VALUE. The value of each Trust is determined as of
the Evaluation Time stated under "Essential Information" for the appropriate
Series above (a) semiannually, on June 30 and December 31 of each year (or the
last business day prior thereto), (b) on any business day as of the Evaluation
Time next following the tender of any Unit and (c) on any other business day
desired by the Sponsor or the Trustee, (1) by adding:
a. The aggregate bid side evaluation of the Portfolio Obligations in such
Trust, as determined by the Evaluator;
b. Cash on hand in such Trust, other than money deposited to purchase
contract obligations or money credited to the Reserve Account; and
c. Accrued but unpaid interest on the Portfolio Obligations in such Trust
to the Redemption Date.
(2) and then deducting from the resulting figure: amounts representing any
applicable taxes or governmental charges payable by such Trust for the purpose
of making an addition to the reserve account (as defined in the Indenture, the
"Reserve Account"), amounts representing estimated accrued expenses (including
audit fees) of such Trust, amounts representing unpaid fees and expenses of the
Trustee, Sponsor (if applicable), counsel and the Evaluator and monies held for
distribution to Unitholders of record of such Trust as of the business day
prior to the evaluation being made on the days or dates set forth above;
(3) and then dividing the result of the above computation by the total number
of Units of such Trust outstanding on the date of evaluation. The resulting
figure equals the Redemption Value for each Unit of such Series. The Evaluator
will determine the aggregate current bid price evaluation of the Securities in
each Trust as set forth under "Public Offering of Units--Public Offering
Price."
POSTPONEMENT OF REDEMPTION. The right of redemption of any Trust may be
suspended and payment of the Redemption Value per Unit postponed for more than
seven calendar days following a tender of Units for redemption for any period
(as determined by the Securities and Exchange Commission) during which the New
York Stock Exchange is closed, other than for customary weekend and holiday
closings, or during which trading on that Exchange is restricted or an
emergency exists as a result of which disposal or evaluation of the Portfolio
Obligations is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. The Trustee is not
liable to any person or in any way for any loss or damage that may result from
any such suspension or postponement.
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COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
The Public Offering Price of Units of each Trust in the initial offering period
is determined on the basis of current offering prices for the Portfolio
Obligations in such Trust (see "Public Offering of Units," herein), while the
Redemption Value and Sponsor's Repurchase Price for Units of such Trust is
determined on the basis of current bid prices for the Portfolio Obligations. On
the business day indicated under "Essential Information" for the appropriate
Trust, the Public Offering Price (which includes a sales charge) of each Series
exceeded the Redemption Value thereof by the amount indicated under "Essential
Information" for such Trust. The bid prices for the Portfolio Obligations may
be expected to be less than the offering prices. Under current market
conditions the bid prices for Ginnie Maes are expected to be approximately 1/4
to 1/2 of 1% lower in the case of such Securities backed by mortgages on 1- to
4-family dwellings. Under current market conditions the bid prices for U.S.
Treasury Obligations are expected to be approximately 1/8 to 1/4 of 1% lower
than the offer price of such obligations. On the business day indicated under
"Essential Information" for the appropriate Trust the bid side evaluation was
lower than the offering side evaluation by the amount set forth in the
"Portfolio" for the appropriate Trust. For this reason, among others (including
fluctuations in the market prices of such Portfolio Obligations and the fact
that the Public Offering Price of each Trust includes the sales charge), the
amount realized by a Unitholder upon any redemption of Units may be less than
the price paid by him for such Units.
RIGHTS OF UNITHOLDERS
UNITHOLDERS. A Unitholder is deemed to be a beneficiary of a Trust which he
purchased and is vested with all right, title and interest in the appropriate
Trust, each of which was created by the Indenture. A Unitholder may at any time
tender his Units to the Trustee for redemption.
OWNERSHIP OF UNITS. Ownership of Units of a Trust will not be evidenced by
certificates 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, by presenting and surrendering such certificate to the Trustee
properly endorsed or accompanied by a written instrument or instruments of
transfer which should be sent registered or certified mail for the protection
of the Unitholder. Unitholders must sign such written request, and such
certificate or transfer instrument, exactly as their names appear on the
records of the Trustee and on any certificate representing the Units to be
transferred. Such signatures must be guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other guarantee
program in addition to, or in substitution for, STAMP, as may be accepted by
the Trustee.
Certificates will be issued in denominations of 100 Units or any number of
Units in excess thereof. 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 exchange. The
Trustee at the present time does not intend to charge for the normal transfer
or exchange of certificates. Destroyed, stolen, mutilated or lost certificates
will be replaced upon delivery to the Trustee of satisfactory indemnity
(generally amounting to 3% of the market value of the Units), affidavit of
loss, if appropriate, evidence of ownership and payment of expenses incurred.
Any mutilated certificate must be presented to the Trustee before a substitute
certificate will be issued.
CERTAIN LIMITATIONS. The death or incapacity of any Unitholder (or the
dissolution of the Sponsor) will not operate to terminate a Trust nor entitle
the legal representatives or heirs of such Unitholder to claim an accounting or
to take any other action or proceeding in any court for a partition or winding
up of the Trust or any Series thereof.
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No Unitholder shall have the right to vote except with respect to removal of
the Trustee or amendment and termination of a Trust of which they are a
Unitholder. See "Administration of the Trust Funds--Amendment" and
"Administration of the Trust Funds--Termination." Unitholders shall have no
right to control the operation or administration of a Trust in any manner,
except upon the vote of Unitholders representing 66 2/3% of the Units of a
Series outstanding for purposes of amendment, termination or discharge of the
Trustee, all as provided in the Indenture; however, no Unitholder shall ever be
under any liability to any third party for any action taken by the Trustee,
Evaluator or Sponsor.
EXPENSES AND CHARGES
INITIAL EXPENSES. All expenses and charges incurred prior to or in
establishment of a Trust, including the cost of the initial preparation,
printing and execution of the Indenture and the certificates, the initial fees
of the Trustee and an evaluator, initial legal and auditing expenses, the cost
of the preparation and printing of this Prospectus and all other advertising
and selling expenses have been, or will be, paid by the Sponsor.
FEES. The Sponsor will receive no fee from a Trust for its services as such.
However, the Sponsor does receive a portfolio surveillance fee, which is earned
for portfolio supervisory services, and an evaluation fee for regularly
evaluating the portfolio, in each case at the rate set forth under "Essential
Information" for the appropriate Trust, computed monthly on the basis of the
largest principal amount of Portfolio Obligations in such Series of the Trust
at any time during the preceding month. Such fees, which may not exceed the
amounts set forth under "Essential Information," may exceed the actual costs of
providing portfolio supervisory and/or evaluation services for the Trusts, but
at no time will the total amount the Sponsor receives for providing such
services to all unit investment trusts sponsored by the Sponsor in any calendar
year exceed the aggregate cost of providing such services in that year.
The Trustee will receive for its services under the Indenture the fee set forth
under "Essential Information" for the appropriate Trust, computed monthly on
the basis of the largest principal amount of Portfolio Obligations in such
Trust at any time during the preceding month. In no event will the Trustee be
paid less than $2,000 per Trust in any one year.
The Trustee's fees and the Sponsor's portfolio surveillance and evaluator fees
are payable monthly on or before each Distribution Date from the Interest
Account to the extent funds are available and thereafter from the Principal
Account. Any of such fees may be increased without approval of the Unitholders
in proportion to 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 Trustee also receives benefits to the extent that it holds funds on deposit
in various non-interest bearing accounts created under the Indenture.
OTHER CHARGES. The following additional charges are or may be incurred by a
Trust as more fully described in the Indenture: (a) fees of the Trustee for
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 the Portfolio Obligations) and of counsel
designated by the Sponsor, (c) various governmental charges, (d) expenses and
costs of any action taken by the Trustee to protect such Trust and the rights
and interests of the Unitholders thereof, (e) indemnification of the Trustee
for any loss, liability or expense incurred by it in the administration of such
Trust without gross negligence, bad faith, wilful malfeasance or wilful
misconduct on its part or reckless disregard of its obligations and duties, (f)
indemnification of the Sponsor for any losses, liabilities and expenses
incurred in acting as Sponsor under the Indenture without gross negligence, bad
faith, wilful malfeasance or wilful misconduct or reckless disregard of its
obligations and duties, and (g) expenditures incurred in contacting Unitholders
upon termination of such Trust.
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The fees and expenses set forth herein are payable out of each Trust and when
so paid by or owing to the Trustee are secured by a lien on such Trust. If the
balances in the Interest and Principal Accounts are insufficient to provide for
amounts payable by any Trust, the Trustee has the power to sell Portfolio
Obligations from such Series to pay such amounts. To the extent Portfolio
Obligations are sold, the size of such Trust will be reduced and the
proportions of the types of Portfolio Obligations will change. Such sales might
be required at a time when Portfolio Obligations would not otherwise be sold
and might result in lower prices than might otherwise be realized. Moreover,
due to the minimum principal amount in which Portfolio Obligations may be
required to be sold, the proceeds of such sales may exceed the amount necessary
for the payment of such fees and expenses.
ADMINISTRATION OF THE TRUST FUNDS
RECORDS AND ACCOUNTS. In accordance with the Indenture, the Trustee shall keep
records of all transactions at its office. Such records shall include the name
and address of, and the number of Units held by, every Unitholder of each
Trust. Such books and records 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 Indenture on
file in its office available for inspection at all reasonable times during
usual business hours by any Unitholder, together with a current list of the
Securities held in each Trust. Pursuant to the Indenture, the Trustee may
employ one or more agents for the purpose of custody and safeguarding of the
Portfolio Obligations comprising the Trust Funds.
DISTRIBUTIONS FROM THE INTEREST, PRINCIPAL AND CAPITAL GAINS ACCOUNTS.
The terms of the Ginnie Maes provide for payment to the holders thereof
(including each Trust) on the fifteenth day of each month of amounts collected
by or due to the issuers thereof with respect to the underlying mortgages
during the preceding month. The Trustee will collect the interest due a Trust
on the Securities therein as it becomes payable and credit such interest to a
separate Interest Account for such Trust created by the Indenture.
Distributions will be made to each Unitholder of record of each Trust on the
appropriate Distribution Date (see "Essential Information") and will consist of
an amount substantially equal to such Unitholder's pro rata share of the cash
balances, if any, in the Interest Account, the Principal Account and any
Capital Gains Account of such Trust, computed as of the close of business on
the preceding Record Date.
During the Reinvestment Period in connection with GNMA Portfolio Series 4, the
pro rata share of cash in the Principal Account which has not been reinvested
or committed for reinvestment will also be computed as of the first day of June
and December and distributions to the Unitholders as of such Record Date will
be made on June 15 and December 15. After the Reinvestment Period for GNMA
Portfolio Series 4 and in all cases for GNMA Portfolio Series 5, the pro rata
share of cash in the Principal Account will also be computed as of the first
day of each month and distributions to the Unitholders as of such Record Date
will be made on the fifteenth day of such month. Proceeds from the disposition
of any of the Securities or amounts representing principal on the Securities
received after such Record Date and prior to the following Distribution Date
will be held in the Principal Account and not distributed until the next
Distribution Date. The Trustee is not required to pay interest on funds held in
the Principal or Interest Account (but may itself earn interest thereon and
therefore benefits from the use of such funds) nor to make a distribution from
the Principal Account unless the amount available for distribution shall equal
at least $0.01 per Unit.
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Distributions for an IRA, Keogh or other tax-deferred retirement plan will not
be sent to the individual Unitholder. These distributions will go directly to
the custodian of the plan to avoid the penalties associated with premature
withdrawals from such accounts. See "Retirement Plans."
All funds collected or received will be held by the Trustee in trust, without
interest to Unitholders, as part of the appropriate Trust or the Reserve
Accounts referred to below until required to be disbursed in accordance with
the provisions of the Indenture. Such funds will be segregated on the trust
ledger of the Trustee so long as such practice preserves a valid preference of
Unitholders of such Trust under the bankruptcy laws of the United States, or if
such preference is not preserved, the Trustee shall handle such funds in such
other manner as shall constitute the segregation and holding thereof in trust
within the meaning of the Investment Company Act of 1940, as the same may be
from time to time amended. To the extent permitted by the Indenture and
applicable banking regulations, such funds are available for use by the Trustee
pursuant to normal banking procedures.
The first distribution, if any, for persons who purchase Units between a Record
Date and a Distribution Date will be made on the second Distribution Date
following their purchase of Units.
The Trustee is authorized by the Indenture to withdraw from the Principal
and/or Interest Accounts of each Trust such amounts as it deems necessary to
establish a reserve for any taxes or other governmental charges that may be
payable out of such Trust, which amounts will be deposited in a separate
Reserve Account. If the Trustee determines that the amount in the Reserve
Account is greater than the amount necessary for payment of any taxes or other
governmental charges, it will promptly deposit the excess back into the Account
from which it was withdrawn.
PORTFOLIO SUPERVISION. The Indenture permits the Sponsor to direct the Trustee
to dispose of any Portfolio Obligation in a Trust upon the happening of any of
the following events:
1. Default in the payment of principal or interest on any of the
Portfolio Obligations when due and payable,
2. Institution of legal proceedings seeking to restrain or enjoin the
payment of any of the Portfolio Obligations or attacking their validity,
3. A breach of covenant or warranty which could adversely affect the
payment of debt service on the Portfolio Obligations,
4. Default in the payment of principal or interest on any other
outstanding obligation guaranteed or backed by the full faith and credit of
the United States of America,
5. A decline in market price to such an extent, or such other market
credit or other factors exist, as in the opinion of the Sponsor would make
retention of any of the Portfolio Obligations detrimental to a Trust and to
the interests of the Unitholders,
6. An offer is made to refund or refinance any of the Portfolio
Obligations in the Trust Funds, or
7. Termination of a Trust.
The Trustee shall sell any Portfolio Obligation in a Trust if there is a
default in the payment of principal and interest on such Portfolio Obligation
and no provision for payment is made therefore and the Sponsor fails to
instruct the Trustee to sell or hold such Portfolio Obligation within thirty
days after notice to the Sponsor from the Trustee of such default. The Trustee
shall not be liable for any depreciation or loss by reason of any sale of
Portfolio Obligations or by reason of the failure of the Sponsor to give
directions to the Trustee.
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Amounts received by a Trust upon the sale of any Portfolio Obligation under the
conditions set forth above will be deposited in the Principal Account, Interest
Account or Capital Gains Account for such Series, as appropriate, when received
and pursuant to the Sponsor's instructions will be distributed by the Trustee
on the next Distribution Date to Unitholders of record of such Series on the
Record Date prior to such Distribution Date.
REPORTS TO UNITHOLDERS. With each distribution, the Trustee will furnish or
cause to be furnished to the Unitholders of such Series a statement of the
amount of interest and other receipts, if any, distributed, expressed in each
case as a dollar amount per Unit.
The accounts of each Trust are required to be audited annually, at such Trust's
expense, by independent certified public accountants designated by the Sponsor,
unless the Sponsor determines that such an audit would not be in the best
interest of the Unitholders. The accountants' report will be furnished by the
Trustee to any Unitholder of such Trust upon written request.
Within a reasonable period of time after the end of each calendar year, the
Trustee will furnish to each person who at any time during such calendar year
was a Unitholder of record of a Trust a statement setting forth for the
applicable Trust:
1. As to the Interest Account:
(a) the amount of interest received on the Portfolio Obligations,
including amounts received as a portion of the proceeds of any disposition
of Portfolio Obligations;
(b) the amount paid from the Interest Account representing accrued
interest for any Units redeemed and amounts paid or reserved for purchases
of substitute Portfolio Obligations;
(c) the deductions from the Interest Account for applicable taxes or
other governmental charges, if any, and fees and expenses of the Trustee
(including auditing fees), the Sponsor, the Evaluator and counsel;
(d) the deductions from the Interest Account for payment into the Reserve
Account; and
(e) the net amount remaining after such payments and deductions expressed
both as a total dollar amount and as a dollar amount per Unit outstanding
on the last business day of such calendar year.
2. As to the Principal Account:
(a) the dates of the sale, maturity, liquidation or redemption of any of
the Portfolio Obligations and the net proceeds received therefrom,
excluding any portion credited to the Interest Account;
(b) the amount paid from the Principal Account representing the principal
of any Units redeemed and amounts paid or reserved for purchases of
substitute Portfolio Obligations;
(c) the deductions from the Principal Account, if any, for payment of
applicable taxes or other governmental charges, fees and expenses of the
Trustee (including auditing fees), the Sponsor, the Evaluator and counsel;
(d) the deductions from the Principal Account for payment into the
Reserve Account; and
(e) the net amount remaining after such payments and deductions expressed
both as a total dollar amount and as a dollar amount per Unit outstanding
on the last business day of such calendar year.
A-18
<PAGE>
3. The following information:
(a) a list of the Portfolio Obligations, as appropriate, as of the last
business day of such calendar year grouped by coupon and maturity range;
(b) the number of Units outstanding on the last business day of such
calendar year;
(c) the Unit Value (as defined in the Indenture) based on the last Trust
evaluation made during such calendar year; and
(d) the amounts actually distributed during such calendar year from the
Interest, Principal and Capital Gains Accounts, separately stated,
expressed both as total dollar amounts and as dollar amounts per Unit
outstanding on the Record Dates for such distributions.
AMENDMENT. The Indenture may be amended by the Trustee and the Sponsor without
the consent of Unitholders (a) to cure any ambiguity or to correct or
supplement any provision thereof which may be defective or inconsistent, (b) to
change any provision thereof as may be required by the Securities and Exchange
Commission or any successor governmental agency, (c) to make such other
provisions as shall not adversely affect the interest of the Unitholders (as
determined in good faith by the Sponsor and the Trustee) and (d) to take such
action as may be needed from time to time to ensure that the Trusts continue to
satisfy the qualifications of a regulated investment company; provided,
however, that the Indenture may also be amended with respect to any Trust by
the Sponsor and the Trustee (or the performance of any of the provisions of the
Indenture may be waived) with the consent of Unitholders representing 66 2/3%
of the Units then outstanding of such Trust for the purposes of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of modifying in any manner the rights of Unitholders thereof.
However, the Indenture may not be amended, without the consent of the holders
of all Units of a Trust then outstanding, so as (1) to permit, except in
accordance with the terms and conditions of the Indenture, the acquisition of
any Portfolio Obligations other than those specified in the Indenture, or (2)
to reduce the aforesaid percentage of Units of a Trust the holders of which are
required to consent to certain of such amendments and may not be amended so as
to reduce the interest in such Trust represented by Units without the consent
of the holder of such Units. The Trustee shall promptly notify Unitholders of
the substance of any such amendment.
TERMINATION. The Indenture provides that a Trust will terminate shortly after
the maturity, redemption, sale or other disposition of the last of the
Portfolio Obligations held in such Trust. See "Essential Information" for each
Trust. If the value of a Trust as shown by an evaluation is less than forty
percent (40%) of the par value of the Portfolio Obligations deposited in such
Trust, the Trustee shall, if directed by the Sponsor in writing, terminate such
Trust. A Trust may also be terminated at any time by the written consent of
holders of Units representing 66 2/3% of the Units then outstanding of such
Trust.
Upon termination, the Trustee will sell the Portfolio Obligations then held in
the appropriate Trust and credit the moneys derived from such sale to the
Principal, Capital Gains and Interest Accounts thereof. A Trust will then,
after deduction of any fees and expenses of such Trust and payment into the
Reserve Account of any amount required for taxes or other governmental charges
that may be payable by such Trust, distribute to each Unitholder of such
Series, only upon surrender for cancellation of his certificate, if issued,
after due notice of such termination, such Unitholder's pro rata share in the
Interest, Capital Gains and Principal Accounts. The sale of Portfolio
Obligations in a Trust upon termination may result in a lower amount than might
otherwise be realized if such sale were not required at such time. For this
reason, among others, the amount realized by a Unitholder upon termination may
be less than the principal amount of Portfolio Obligations represented by the
Units held by such Unitholder.
A-19
<PAGE>
RESIGNATION, REMOVAL AND LIABILITY
REGARDING THE TRUSTEE. The Trustee shall be under no liability for any action
taken in good faith in reliance on prima facie properly executed documents or
for the disposition of moneys or Securities from any Trust, nor shall the
Trustee be liable or responsible in any way for depreciation or loss incurred
by reason of the disposition of any Portfolio Obligations by the Trustee.
However, the Trustee shall be liable for wilful malfeasance, wilful misconduct,
bad faith or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under the Indenture. In
the event of a failure of the Sponsor to act, the Trustee may act under the
Indenture and shall not be liable for any action taken by it in good faith. The
Trustee shall not be personally liable for any taxes or other governmental
charges imposed upon a Trust or in respect of the Portfolio Obligations or the
interest thereon. The Indenture also contains other customary provisions
limiting the liability of the Trustee and providing for the indemnification of
the Trustee for any loss or claim accruing to it without gross negligence, bad
faith, wilful misconduct, wilful malfeasance or reckless disregard of its
duties and obligations under the Indenture on its part.
The Trustee or any successor may resign by executing an instrument in writing,
filing the same with the Sponsor and mailing a copy of such notice or
resignation to all Unitholders then of record. Upon receiving such notice the
Sponsor will use its best efforts to appoint a successor Trustee promptly. The
Sponsor may at any time remove the Trustee, with or without cause, and appoint
a successor as provided in the Indenture. If within 30 days of the resignation
of a Trustee no successor has been appointed or, if appointed, has not accepted
the appointment, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The resignation or removal of
a Trustee becomes effective only when the successor Trustee accepts its
appointment as such or when a court of competent jurisdiction appoints a
successor Trustee.
REGARDING THE SPONSOR. The Sponsor shall be under no liability to a Trust or to
Unitholders for taking any action or for refraining from any action in good
faith or for errors in judgment, nor shall the Sponsor be liable or responsible
in any way for depreciation or loss incurred by reason of the disposition of
any Portfolio Obligations. The Sponsor will, however, be liable for its own
wilful malfeasance, wilful misconduct, bad faith, gross negligence or reckless
disregard of its duties and obligations under the Indenture.
If at any time the Sponsor shall resign under the Indenture or shall fail or be
incapable of performing its duties thereunder or shall become bankrupt or its
affairs are taken over by public authorities, the Indenture directs the Trustee
to either (1) appoint a successor Sponsor or Sponsors at rates of compensation
deemed reasonable by the Trustee not exceeding amounts prescribed by the
Securities and Exchange Commission, or (2) continue to act as Sponsor itself
without terminating the Indenture.
REGARDING THE EVALUATOR. The Trustee, Sponsor and Unitholders may rely on any
evaluation furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture 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, Sponsor or Unitholders for errors in judgment. The Evaluator shall,
however, be liable for its own wilful malfeasance, bad faith, gross negligence
or reckless disregard of its obligations and duties under the Indenture.
The Evaluator may resign or may be removed by the Sponsor and the Trustee, and
the Sponsor and the Trustee are to use their best efforts to appoint a
satisfactory successor. Such resignation or removal shall become effective upon
the acceptance of appointment by the successor Evaluator. If upon resignation
of
A-20
<PAGE>
the Evaluator no successor accepts appointment within thirty days after notice
of resignation, the Evaluator may apply to a court of competent jurisdiction
for the appointment of a successor. At the present time, pursuant to a contract
with the Evaluator, Muller Data Corporation, a non-affiliated firm regularly
engaged in the business of evaluating, quoting or appraising comparable
securities, provides, for both the initial offering period and secondary market
transactions, portfolio evaluations of the Securities in the Trust Funds which
are then reviewed by the Evaluator. In the event the Sponsor is unable to
obtain current evaluations from Muller Data Corporation, it may make its own
evaluations or it may utilize the services of any other non-affiliated
evaluator or evaluators it deems appropriate.
MISCELLANEOUS
SPONSOR. The Sponsor, Kemper Unit Investment Trusts, with an office at 77 West
Wacker Drive, 29th Floor, Chicago, Illinois 60601 (800) 621-5024, is a service
of Kemper Securities, Inc., which is a wholly owned subsidiary of Kemper
Financial Companies, Inc. which, in turn, is a wholly-owned subsidiary of
Kemper Corporation. The Sponsor will act as underwriter of any other unit
investment trust products developed by the Sponsor in the future. As of January
31, 1994, the total stockholder's equity of Kemper Securities, Inc. was
$261,673,436 (unaudited).
The foregoing information with regard to the Sponsor relates to the Sponsor
only and not to the Trusts. Such information is included in this Prospectus
only for the purpose of informing investors as to the financial responsibility
of the Sponsor and its ability to carry out its contractual obligations shown
herein. More comprehensive financial information can be obtained from the
Sponsor upon request.
TRUSTEE. The Trustee, Investors Fiduciary Trust Company, is a trust company
specializing in investment related services, organized and existing under the
laws of Missouri, having its trust office at 127 West 10th Street, Kansas City,
Missouri 64105. The Trustee is subject to supervision and examination by the
Division of Finance of the State of Missouri and the Federal Deposit Insurance
Corporation. Investors Fiduciary Trust Company is owned by State Street Boston
Corporation.
The Trustee, whose duties are ministerial in nature, has not participated in
selecting any of the Securities in the Trust Funds. For information relating to
the responsibilities of the Trustee under the Indenture, reference is made to
the material set forth under "Administration of the Trust Funds."
LEGAL OPINION. The legality of the Units offered hereby and certain matters
relating to Federal tax law have been passed upon by Chapman and Cutler, 111
West Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The statements of condition and the related portfolios at the Initial Date of
Deposit included in this Prospectus and the Registration Statement have been
audited by Grant Thornton LLP, independent certified public accountants, as set
forth in their report herein, and are included in reliance upon such report and
upon the authority of such firm as experts in accounting and auditing.
A-21
<PAGE>
<TABLE>
<CAPTION>
PAGE
CONTENTS ----
<S> <C>
ESSENTIAL INFORMATION...................................................... 2
THE TRUST FUNDS............................................................ 4
General................................................................... 4
Risk Factors and Portfolio Information.................................... 7
PORTFOLIOS................................................................. 12
NOTES TO PORTFOLIOS........................................................ 13
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS.............................................................. 14
STATEMENTS OF CONDITION.................................................... 15
RATING OF UNITS............................................................ A-1
PORTFOLIO SELECTION........................................................ A-1
THE UNITS.................................................................. A-2
ESTIMATED CURRENT RETURN AND ESTIMATED
LONG-TERM RETURN......................................................... A-2
PUBLIC OFFERING OF UNITS................................................... A-3
Public Offering Price..................................................... A-3
Initial Public Distribution............................................... A-5
Secondary Market.......................................................... A-6
Profits of Sponsor........................................................ A-6
TAX STATUS................................................................. A-7
RETIREMENT PLANS........................................................... A-9
DISTRIBUTION REINVESTMENT.................................................. A-11
REDEMPTION................................................................. A-11
Right of Redemption....................................................... A-11
Computation of Redemption Value........................................... A-13
Postponement of Redemption................................................ A-13
COMPARISON OF PUBLIC OFFERING PRICE
AND REDEMPTION VALUE..................................................... A-14
RIGHTS OF UNITHOLDERS...................................................... A-14
Unitholders............................................................... A-14
Ownership of Units........................................................ A-14
Certain Limitations....................................................... A-14
EXPENSES AND CHARGES....................................................... A-15
Initial Expenses.......................................................... A-15
Fees...................................................................... A-15
Other Charges............................................................. A-15
ADMINISTRATION OF THE TRUST FUNDS.......................................... A-16
Records and Accounts...................................................... A-16
Distributions from the Interest, Principal and
Capital Gains Accounts.................................................. A-16
Portfolio Supervision..................................................... A-17
Reports to Unitholders.................................................... A-18
Amendment................................................................. A-19
Termination............................................................... A-19
RESIGNATION, REMOVAL AND LIABILITY......................................... A-20
Regarding the Trustee..................................................... A-20
Regarding the Sponsor..................................................... A-20
Regarding the Evaluator................................................... A-20
MISCELLANEOUS.............................................................. A-21
Sponsor................................................................... A-21
Trustee................................................................... A-21
Legal Opinion............................................................. A-21
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS................................... A-21
</TABLE>
-----------------------------------
THIS PROSPECTUS DOES NOT CONTAIN ALL OF THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENT AND EXHIBITS RELATING THERETO, FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION, WASHINGTON, D.C. UNDER THE SECURITIES ACT OF 1933 AND
THE INVESTMENT COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS MADE.
-----------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
NOT CONTAINED IN THIS PROSPECTUS AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
TRUST, THE TRUSTEE, OR THE SPONSOR. THE FUND IS REGISTERED AS A UNIT INVESTMENT
TRUST UNDER THE INVESTMENT COMPANY ACT OF 1940. SUCH REGISTRATION DOES NOT
IMPLY THAT THE FUND OR THE UNITS HAVE BEEN GUARANTEED, SPONSORED, RECOMMENDED
OR APPROVED BY THE UNITED STATES OR ANY STATE OR ANY AGENCY OR OFFICER THEREOF.
-----------------------------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO
MAKE SUCH OFFER IN SUCH STATE.
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW ON FEBRUARY 21, 1995 BY THE FOLLOWING PERSONS,
WHO CONSTITUTE A MAJORITY OF THE BOARD OF DIRECTORS OF KEMPER SECURITIES, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
James R. Boris
- -------------------------------------------
James R. Boris Chairman and Chief Executive Officer
Stephen G. McConahey
- -------------------------------------------
Stephen G. McConahey President and Chief Operating Officer
Frank V. Geremia
- -------------------------------------------
Frank V. Geremia Senior Executive Vice President
David M. Greene
- -------------------------------------------
David M. Greene Senior Executive Vice President
Arthur J. McGivern
- -------------------------------------------
Arthur J. McGivern Senior Executive Vice President and General
Counsel
Ramon Pecuch
- -------------------------------------------
Ramon Pecuch Senior Executive Vice President and
Director
Thomas R. Reedy
- -------------------------------------------
Thomas R. Reedy Senior Executive Vice President and
Director
Janet L. Reali
- -------------------------------------------
Janet L. Reali Executive Vice President, Corporate Counsel
and Secretary
Daniel D. Williams
- -------------------------------------------
Daniel D. Williams Executive Vice President and Treasurer
David B. Mathis
- -------------------------------------------
David B. Mathis Director
Stephen B. Timbers
- -------------------------------------------
Stephen B. Timbers Director
Donald F. Eller
- -------------------------------------------
Donald F. Eller Director
Charles M. Kierscht
- -------------------------------------------
Charles M. Kierscht Director
</TABLE>
/s/ Michael J. Thoms
_____________________________________
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) AS FILED ON DECEMBER 14, 1994.
S-1
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Amended Registration Statement comprises the following papers and
documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The following exhibits:
<TABLE>
<C> <S>
1.1 --Form of Trust Indenture and Agreement (to be filed by amendment).
1.1.1 --Standard Terms and Conditions of Trust. Reference is made to Exhibit 1.1.1(a)
to the Registration Statement on Form S-6 with respect to Kemper Government
Securities Trust (Registration No. 33-26754) as filed on February 14, 1989.
2.1 --Form of Certificate of Ownership (pages three to nine, inclusive, of the
Standard Terms and Conditions of Trust included as Exhibit 1.1.1).
3.1 --Opinion of counsel to the Sponsor as to legality of the securities being
registered including a consent to the use of its name under the headings "Tax
Status" and "Legal Opinions" in the Prospectus and opinion of counsel as to
Federal income tax status of the securities included in the Trusts (to be filed
by amendment).
4.1 --Consent of Standard & Poor's Ratings Group (to be filed by amendment).
4.2 --Consent of Muller Data Corporation (to be filed by amendment).
4.3 --Consent of Grant Thornton LLP (to be filed by amendment).
7.1 --Power of Attorney. Reference is made to Exhibit 7.1 to the Registration
Statement with respect to Kemper Defined Funds Series 28 (Registration No. 33-
56779) as filed December 14, 1994.
</TABLE>
S-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
KEMPER DEFINED FUNDS SERIES 31 HAS DULY CAUSED THIS REGISTRATION STATEMENT TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED, IN THE
CITY OF CHICAGO, AND STATE OF ILLINOIS, ON THE 21ST DAY OF FEBRUARY, 1995.
KEMPER DEFINED FUNDS SERIES 31
Registrant
By: KEMPER UNIT INVESTMENT TRUSTS,
a service of KEMPER SECURITIES,
INC.
Depositor
By: /s/ Michael J. Thoms
-----------------------------------
Michael J. Thoms
S-3
