<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 21, 1994
REGISTRATION NO. 33-51627
CIK 916334
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
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AMENDMENT NO. 2
TO
REGISTRATION STATEMENT
ON
FORM S-6
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FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
A. EXACT NAME OF TRUST:
KEMPER EQUITY PORTFOLIO TRUSTS
SERIES 6
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, 5TH FLOOR
CHICAGO, ILLINOIS 60601
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
Copy to:
C. Perry Moore MARK J. KNEEDY
Kemper Unit Investment Trusts c/o Chapman and Cutler
77 Wacker Drive, 5th floor 111 West Monroe Street
Chicago, Illinois 60601 Chicago, Illinois 60603
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<CAPTION>
CALCULATION OF REGISTRATION FEE
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PROPOSED
MAXIMUM
TITLE AND AMOUNT AGGREGATE AMOUNT OF
OF SECURITIES OFFERING REGISTRATION
BEING REGISTERED PRICE FEE
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<S> <C> <C> <C>
Series 6 An indefinite Indefinite $500
number of Units (previously
of Beneficial paid)
Interest pursuant
to Rule 24f-2 under
the Investment Company
Act of 1940
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</TABLE>
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the Registration
Statement.
/X/ Check box if it is proposed that this filing will become automatically
effective at 2:00 P.M. on January 21, 1994 pursuant to paragraph (b) of Rule
487.
<PAGE> 2
CROSS-REFERENCE SHEET
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTIONS AS
TO THE PROSPECTUS IN FORM S-6)
<TABLE>
<CAPTION>
FORM S-6
FORM N-8B-2 ITEM NUMBER HEADING IN PROSPECTUS
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<S> <C>
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust................................. Prospectus front cover
(b) Title of securities issued.................... Essential Information
2. Name and address of each depositor................ \ Administration of the Trust
3. Name and address of trustee....................... /
4. Name and address of principal underwriters........ *
5. State of organization of trust.................... The Trust Fund
6. Execution and termination of trust agreement...... The Trust Fund;
Administration of the Trust
7. Changes of name................................... The Trust Fund
8. Fiscal year....................................... *
9. Litigation........................................ *
<CAPTION>
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
<S> <C>
10. (a) Registered or bearer securities............... Unitholders
(b) Cumulative or distributive securities......... The Trust Fund
(c) Redemption.................................... Redemption
(d) Conversion, transfer, etc. ................... Unitholders;
Market for Units
(e) Periodic payment plan......................... *
(f) Voting rights................................. Unitholders
/ Investment Supervision;
(g) Notice of certificateholders.................. < Administration of the Trust;
\ Unitholders
(h) Consents required............................. Unitholders;
Administration of the Trust
(i) Other provisions.............................. Federal Tax Status
11. Type of securities comprising units............... The Trust Fund; The Trust Portfolio; Portfolio
12. Certain information regarding periodic payment
certificates...................................... *
/ Essential Information;
13. (a) Load, fees, expenses, etc..................... < Public Offering of Units;
\ Expenses of the Trust
(b) Certain information regarding periodic payment
certificates............................... *
(c) Certain percentages........................... Essential Information;
Public Offering of Units
(d) Certain other fees, etc. payable by holders... Unitholders
(e) Certain profits receivable by depositor, / Expenses of the Trust;
principal, underwriters, writers, trustee <
or affiliated persons...................... \ Public Offering of Units
(f) Ratio of annual charges to income............. *
14. Issuance of trust's securities.................... / The Trust Fund;
\ Unitholders
15. Receipt and handling of payments from
purchasers........................................ *
</TABLE>
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* Inapplicable, answer negative or not required.
<PAGE> 3
<TABLE>
<CAPTION>
FORM S-6
FORM N-8B-2 ITEM NUMBER HEADING IN PROSPECTUS
- ------------------------------------------------------ --------------------------------------------------
<S> <C>
/ The Trust Fund; The Trust Portfolio;
16. Acquisition and disposition of underlying < Investment Supervision;
securities........................................ \ Market for Units;
17. Withdrawal or redemption.......................... / Redemption;
\ Public Offering of Units
18. (a) Receipt, custody and disposition of income.... Unitholders
(b) Reinvestment of distributions................. Unitholders
(c) Reserves or special funds..................... Expenses of the Trust
(d) Schedule of distributions..................... *
/ Unitholders;
19. Records, accounts and reports..................... < Redemption;
\ Administration of the Trust
20. Certain miscellaneous provisions of trust
agreement
(a) Amendment..................................... \
(b) Termination................................... \ Administration of the Trust
(c) and (d) Trustee, removal and successor........ /
(e) and (f) Depositor, removal and successor...... /
21. Loans to security holders......................... *
22. Limitations on liability.......................... Administration of the Trust
23. Bonding arrangements.............................. *
24. Other material provisions of trust agreement...... *
<CAPTION>
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
<S> <C>
25. Organization of depositor......................... Administration of the Trust
26. Fees received by depositor........................ See Items 13(a) and 13(e)
27. Business of depositor............................. \
28. Certain information as to officials and affiliated \
persons of depositor............................ > Administration of the Trust
29. Voting securities of depositor.................... /
30. Persons controlling depositor..................... /
31. Payment by depositor for certain services rendered |
to trust........................................ |
32. Payment by depositor for certain other services \
rendered to trust............................... > *
33. Remuneration of employees of depositor for certain /
services rendered to trust...................... |
34. Remuneration of other persons for certain services |
rendered to trust...............................
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of Trust's securities by states...... Public Offering of Units
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....................... / Market for Units
(c) Selling Agreements............................ Public Offering of Units
39. (a) Organization of principal underwriters........ \ Administration of the Trust
(b) N.A.S.D. membership of principal underwriters. /
40. Certain fees received by principal underwriters... See Items 13(a) and 13(e)
</TABLE>
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* Inapplicable, answer negative or not required.
<PAGE> 4
<TABLE>
<CAPTION>
FORM S-6
FORM N-8B-2 ITEM NUMBER HEADING IN PROSPECTUS
- ------------------------------------------------------ --------------------------------------------------
<S> <C> <C>
41. (a) Business of principal underwriters............ | Administration of the Trust
(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
(b) Schedule as to offering price................. *
(c) Variation in offering price to certain
persons.................................... Public Offering of Units
45. Suspension of redemption rights................... Redemption
| Redemption;
46. (a) Redemption valuation.......................... \ Market for Units;
/ Public Offering of Units
(b) Schedule as to redemption price............... | *
\ Market for Units;
47. Maintenance of position in underlying / Public Offering of Units;
securities...................................... |
Redemption
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of trustee............ | Administration of the Trust
49. Fees and expenses of trustee...................... > Expenses of the Trust
50. Trustee's lien.................................... |
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Insurance of holders of trust's securities........ Cover Page;
Expenses of the Trust
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust agreement with respect to
selection or
elimination of underlying securities....... | The Trust Fund;
\ Investment Supervision
(b) Transactions involving elimination of /
underlying securities...................... | *
(c) Policy regarding substitution or elimination
of underlying securities...................
Investment Supervision
(d) Fundamental policy not otherwise covered...... *
| Essential Information; The Trust
53. Tax status of Trust............................... > Portfolio;
| Federal Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last ten years.......... |
55. \
56. Certain information regarding periodic payment / *
certificates.................................... |
57.
58.
59. Financial statements (Instruction 1(c) to Form
S-6)............................................ *
</TABLE>
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* Inapplicable, answer negative or not required.
<PAGE> 5
KEMPER EQUITY PORTFOLIO TRUSTS
SERIES 6 (OIL AND ENERGY GROWTH SERIES)
Kemper Equity Portfolio Trusts, Series 6 (Oil and Energy Growth Series) (the
"Trust") was formed with the investment objective of obtaining maximum capital
appreciation through investment in a fixed portfolio of equity securities of
companies diversified within the oil and energy industry, including common
stocks of foreign issuers in American Depositary Receipt ("ADR") form. The
Securities selected are considered by the Sponsor to have the potential to
achieve the Trust's objective over the approximate three year term of the Trust.
See "The Trust Portfolio." There is no assurance that the Trust will achieve its
objective.
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SPONSOR: KEMPER UNIT INVESTMENT TRUSTS, a
service of Kemper Securities, Inc.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The investor is advised to read and retain this Prospectus for future reference.
THE DATE OF THIS PROSPECTUS IS JANUARY 21, 1994.
<PAGE> 6
SUMMARY
THE TRUST FUND. Kemper Equity Portfolio Trusts, Series 6 (Oil and Energy Growth
Series) (the "Trust Fund" or "Trust") is a unit investment trust registered
under the Investment Company Act of 1940.
The Trust Fund initially consists of securities and delivery statements (i.e.,
contracts) to purchase common stocks issued by companies which the Sponsor
believes have the potential to achieve the objective of the Trust (the
"Securities"). For the criteria used by the Sponsor in selecting the Securities,
see "The Trust Portfolio--Securities Selection." The value of all portfolio
Securities and, therefore, the value of the Units may be expected to fluctuate
in value depending on the full range of economic and market influences affecting
corporate profitability, the financial condition of issuers and the prices of
equity securities in general and the Securities in particular. Maximum capital
appreciation is, of course, dependent upon several factors including, among
other factors, the financial condition of the issuers of the Securities (see
"The Trust Portfolio").
Series 6 was formed with the investment objective of obtaining maximum capital
appreciation through investment in a fixed portfolio of equity securities of
companies diversified within the oil and energy industry over the approximate
three year term of the Trust.
Additional Units of the Trust may be issued at any time by depositing in the
Trust additional Securities or contracts to purchase additional Securities
together with irrevocable letters of credit or cash. As additional Units are
issued by the Trust as a result of the deposit of additional Securities by the
Sponsor, the aggregate value of the Securities in the Trust will be increased
and the fractional undivided interest in the Trust represented by each Unit will
be decreased. The Sponsor may continue to make additional deposits of Securities
into the Trust for a period of up to one year following the Initial Date of
Deposit, provided that such additional deposits will be in amounts which will
maintain, for the first 90 days, as closely as possible the same original
percentage relationship among the number of shares of each Security in the Trust
established by the initial deposit of Securities and, thereafter, the same
percentage relationship that existed on such 90th day. Thus, although additional
Units will be issued, each Unit will continue to represent approximately the
same number of shares of each Security, and the percentage relationship among
the shares of each Security in the Trust will remain the same. The required
percentage relationship among the Securities in the Trust will be adjusted to
reflect the occurrence of a stock dividend, a stock split or a similar event
which affects the capital structure of the issuer of a Security in the Trust but
which does not affect the Trust's percentage ownership of the common stock
equity of such issuer at the time of such event.
Each Unit of the Trust initially offered represents that undivided interest in
the Trust indicated under "Essential Information." To the extent that any Units
are redeemed by the Trustee or additional Units are issued as a result of
additional Securities being deposited by the Sponsor, the fractional undivided
interest in the Trust represented by each unredeemed Unit will increase or
decrease accordingly, although the actual interest in the Trust represented by
such fraction will remain unchanged. Units will remain outstanding until
redeemed upon tender to the Trustee by Unitholders, which may include the
Sponsor or the Underwriters, or until the termination of the Trust Agreement.
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of the Trust Fund
during the initial offering period is based on the aggregate underlying offer
value (see "Public Offering of Units--Public Offering Price") of the Securities
in the Trust Fund plus or minus a pro rata share of cash, if any, in the Capital
Account held or owed by the Trust Fund, plus a sales charge of 4.0% (equivalent
to 4.167% of the net amount invested). After the initial public offering period,
the secondary market Public
2
<PAGE> 7
Offering Price will be equal to the aggregate underlying bid value of the
Securities in the Trust Fund, plus or minus a pro rata share of cash, if any, in
the Capital Account held or owned by the Trust Fund, plus a sales charge of 4.0%
of the Public Offering Price (equivalent to 4.167% of the net amount invested).
The sales charge is reduced on a graduated scale for sales involving at least
10,000 Units of the Trust or $100,000 and will be applied on whichever basis is
more favorable to the investor.
DISTRIBUTIONS OF INCOME AND CAPITAL. Distributions of dividends received by the
Trust and any funds in the Capital Account will be made quarterly. See
"Unitholders--Distributions to Unitholders."
REINVESTMENT. Each Unitholder of the Trust Fund may elect to have distributions
of income, capital gains and/or capital on their Units automatically invested in
shares of any Kemper front-end load mutual fund (other than those funds sold
with a contingent deferred sales charge). Such distributions will be reinvested
without charge to the participant on each applicable Distribution Date. See
"Unitholders--Distribution Reinvestment." A current prospectus for the
reinvestment fund selected, if any, will be furnished to any investor who
desires additional information with respect to reinvestment.
MARKET FOR UNITS. While under no obligation to do so, the Sponsor intends to,
and certain of the other dealers may, maintain a market for the Units of the
Trust and offer to repurchase such Units at prices subject to change at any time
which are based on the current underlying bid prices of the Securities in the
Trust Fund. If the supply of Units exceeds demand or if some other business
reason warrants it, the Sponsor and/or the dealers may either discontinue all
purchases of Units or discontinue purchases of Units at such prices. A
Unitholder may also dispose of Units through redemption at the Redemption Price
on the date of tender to the Trustee. See "Redemption--Computation of Redemption
Price."
REDEMPTION IN KIND. Upon redemption of Units of the Trust Fund a Unitholder
generally may request to receive in lieu of cash his share of each of the
Securities then held by the Trust Fund, if (1) he would be entitled to receive
at least $25,000 of proceeds or if he paid at least $25,000 to acquire the units
being tendered and (2) he has tendered for redemption prior to January 14, 1997
(see "Redemption" and "Administration of the Trust--Amendment and Termination").
TERMINATION. No later than the date specified under the Liquidation Period in
"Essential Information," Securities will begin to be sold in connection with the
termination of the Trust Fund and it is expected that all Securities in the
Trust Fund will be sold by the Mandatory Termination Date. The Sponsor will
determine the manner, timing and execution of the sale of the underlying
Securities. See "Administration of the Trust--Amendment and Termination."
RISK FACTORS. For certain risk considerations related to the Trust Fund, see
"Risk Factors."
3
<PAGE> 8
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 6 (OIL AND ENERGY GROWTH SERIES)
ESSENTIAL INFORMATION
AS OF JANUARY 20, 1994*
SPONSOR AND EVALUATOR: KEMPER UNIT INVESTMENT TRUSTS, A SERVICE OF KEMPER
SECURITIES, INC.
TRUSTEE: INVESTORS FIDUCIARY TRUST COMPANY
<TABLE>
<CAPTION>
<S> <C>
Number of Units.............................................. 522,589
Fractional Undivided Interest Per Unit....................... 1/522,589
Public Offering Price:
Aggregate Value of Securities in Portfolio (1)........... $5,016,850
Aggregate Value of Securities per Unit................... $9.60
Plus Sales Charge of 4.0%
(4.167% of the net amount invested).................... $0.40
Public Offering Price Per Unit (2)....................... $10.00
Redemption Price Per Unit.................................... $9.52
Sponsor's Initial Repurchase Price Per Unit.................. $9.60
Excess of Public Offering Price Per Unit over Redemption
Price Per Unit............................................. $0.48
Excess of Public Offering Price Per Unit over Sponsor's
Initial
Repurchase Price Per Unit.................................. $0.40
Minimum Value of the Trust under which Trust Agreement may be
Terminated................................................. Trust Agreement may be terminated if value of the
Trust Fund is less than 40% of the value of the
Securities when deposited in the portfolio
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units of the Trust
Fund are made as of 3:15 p.m. Central Time next following receipt of an order
for a sale or purchase of Units or receipt by Investors Fiduciary Trust Company
of Units tendered for redemption.
<TABLE>
<CAPTION>
<S> <C>
Initial Date of Deposit...................................... January 21, 1994
Mandatory Termination Date................................... February 21, 1998
Liquidation Period........................................... Beginning on January 21, 1997 until no later than the
related Mandatory Termination Date
Evaluator's Annual Evaluation Fee............................ Maximum of $0.0045 per Unit
Trustee's Annual Fee......................................... $0.008 per Unit
Record and Computation Dates................................. FIRST day of January, April, July and October
Distribution Dates........................................... FIFTEENTH day of January, April, July and October
* The business day prior to the Initial Date of Deposit
</TABLE>
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(1) Each Security listed on a national securities exchange is valued at the last
offer price, or if the Security is not listed on a national securities
exchange, at the last offer price on the over-the-counter market.
(2) On the Initial Date of Deposit there will be no accumulated dividends in the
Income Account. Anyone ordering Units after such date will pay his pro rata
share of any accumulated dividends in such Income Account.
4
<PAGE> 9
THE TRUST FUND
Kemper Equity Portfolio Trusts, Series 6 (Oil and Energy Growth Series) is a
unit investment trust created under the laws of the State of Missouri pursuant
to a trust indenture dated the Initial Date of Deposit (the "Trust Agreement")
between Kemper Unit Investment Trusts, a service of Kemper Securities, Inc. (the
"Sponsor") and Investors Fiduciary Trust Company (the "Trustee").*
The portfolio contains common stocks issued by companies diversified within the
oil and energy industry, including common stocks of foreign issuers in American
Depositary Receipt ("ADR") form. As used herein, the term "Securities" means the
common stocks initially deposited in the Trust Fund and described in the
portfolio and any additional common stocks acquired and held by the Trust Fund
pursuant to the provisions of the Trust Agreement.
With the deposit of the Securities in the Trust Fund on the Initial Date of
Deposit, the Sponsor has established a proportionate relationship among the
number of shares of each stock deposited in the portfolio. For a period of up to
one year following the Initial Date of Deposit, the Sponsor may deposit
additional Securities or contracts to purchase additional Securities along with
cash (or a bank letter of credit in lieu of cash) to pay for such contracted
Securities, maintaining, for the first 90 days, as closely as possible the same
original proportionate relationship among the number of shares of each stock in
the portfolio and, thereafter, the same percentage relationship that existed on
such 90th day. Thus, although additional Units will be issued, each Unit will
continue to represent approximately the same number of shares of each Security,
and the percentage relationship among the shares of each Security in the Trust
Fund will remain approximately the same. The required percentage relationship
among the Securities in the Trust Fund will be adjusted to reflect the
occurrence of a stock dividend, a stock split or a similar event which affects
the capital structure of the issuer of a Security in the Trust Fund but which
does not affect the Trust Fund's percentage ownership of the common stock equity
of such issuer at the time or such event.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee Securities
or contracts for the purchase thereof for deposit in the Trust Fund. For the
Securities so deposited, the Trustee delivered to the Sponsor documentation
evidencing the ownership of that number of Units of the Trust Fund set forth
under "Essential Information."
THE TRUST PORTFOLIO
Securities Selection. At all times the Trust will hold at least 80% of its
assets in equity securities. In selecting Securities for the Trust, the
following factors, among others, were considered by the Sponsor: (a) the quality
of the Securities, (b) the price of the Securities relative to other similar
securities, and (c) the potential for capital appreciation.
In selecting the Securities for the Trust, the Sponsor has chosen equity
securities that in its view have the potential for capital appreciation.
Although there can be no assurance that such Securities will appreciate in value
over the life of the Trust, over time stock investments have generally
outperformed most other asset classes. However, it should be remembered that
common stocks carry greater risks, including the risk that the value of an
investment can decrease (see "Certain Investment Considerations" in this
section), and past performance is no guarantee of future results.
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*Reference is made to the Trust Agreement and any statement contained herein is
qualified in its entirety by the provisions of the Trust Agreement.
5
<PAGE> 10
The following information provides a brief summary for each of the Securities in
the Trust. For specific information and the market price of each Security as of
the Initial Date of Deposit, see "Portfolio."
SERIES 6 (OIL AND ENERGY GROWTH SERIES)
ANADARKO PETROLEUM CORPORATION, along with its subsidiaries, explores, develops,
and produces oil, gas and natural gas liquids. The Company's drilling program
has finds in the Anadarko Basin in Oklahoma, the Midcontinent Basin, the Permian
Basin of West Texas and New Mexico and the Rocky Mountain regions of Nevada,
Wyoming and southern Alberta. Anadarko also drills offshore.
APACHE CORPORATION explores for, develops, produces, processes and markets
natural gas and oil on and offshore. The Company holds under lease approximately
1,224,051 gross acreage mostly in the Midcontinent, Gulf Coast and Rocky
Mountain regions in the US and about 12,887,946 gross undeveloped acres. Apache
also has 2,582 gross gas and 4,194 gross oil wells and some international
interests.
BRITISH PETROLEUM COMPANY, PLC. (ADR), through its subsidiaries, explores for,
produces, refines and markets oil and natural gas worldwide. The Company also
markets chemicals and plastics worldwide. British Petroleum manufactures and
sells branded animal food products and seed grain to livestock, aquaculture and
vegetable farmers around the world.
BURLINGTON RESOURCES, INC. is a diversified energy and natural resources
company. Operations include a natural gas pipeline system extending from the gas
producing regions of the Southwest to California as well as the exploration,
production and marketing of natural gas. Burlington is also involved in the
production of crushed rock products, precious metals and calcium carbonate.
CHEVRON CORPORATION is an international oil company with activities in the US
and abroad. The Company is involved in worldwide, integrated petroleum
operations which consist of exploring for, developing and producing petroleum
liquids and natural gas as well as transporting the products. Chevron is also
active in the mineral and chemical industries.
CROSS TIMBERS OIL COMPANY acquires, explores for and develops oil and natural
gas properties, which are located in New Mexico, Texas and Oklahoma. The Company
also markets and transports such products.
DEVON ENERGY CORPORATION acquires, explores, operates and develops oil and gas
properties. The Company's significant oil and gas interests are located in the
Mid-Continent Area, the San Juan Basin in New Mexico, and the Permian Basin
located in Western Texas and Southeast New Mexico.
ENRON OIL & GAS COMPANY explores for, develops and produces natural gas and
crude oil primarily in major producing basins in the US and, to a lesser extent,
in Canada and other international areas. Enron's core areas are Wyoming and
Texas. Ninety-one percent of the Company's domestic reserves are natural gas. A
majority of the Company is owned by Enron Corporation.
EXXON CORPORATION explores for and produces crude oil and natural gas, and
manufactures petroleum products. The Company explores for and mines coal and
minerals, and transports/sells crude oil, natural gas and petroleum products.
Operations are both domestic and international, including a representative
office in Moscow.
6
<PAGE> 11
KERR-MCGEE CORPORATION produces crude oil and natural gas, manufactures
chemicals and mines coal. The Company's petroleum operations are located in the
North Sea, Canada and the Gulf of Mexico.
LOUISIANA LAND AND EXPLORATION COMPANY produces oil and natural gas. The Company
has interests in Canada, Columbia, the North Sea, onshore in Louisiana and the
Rocky Mountain region and offshore in the Gulf of Mexico in the US. Louisiana
Land also owns a refinery in Mobile, Alabama.
MITCHELL ENERGY & DEVELOPMENT explores for and produces oil and gas, produces
natural gas liquids and operates intrastate pipelines. Production is primarily
from areas in north Texas and the Texas Gulf Coast. The Company also has real
estate development operations in the Houston, Texas area known as the Woodlands,
a planned community development project.
MOBIL CORPORATION is a major integrated, international oil company with
interests in petrochemicals and plastics. The Company explores for, produces and
markets oil, gas and petroleum products worldwide. Mobil also produces and
markets petrochemicals, industrial and consumer plastics and lubricants. Other
activities include research and development support for its businesses.
MURPHY OIL CORPORATION is involved in the worldwide exploration for and
production of oil and natural gas. Murphy also has interests in offshore
drilling, farming, timber and land management. Subsidiaries include Ocean
Drilling & Exploration Company, Murphy Eastern Oil Company and Deltic Farm &
Timber Company.
NOBLE AFFILIATES, INC. is an independent energy company which, through its
subsidiaries, explores for and produces oil and gas. The Company conducts its
operations throughout basins in the United States including the Gulf of Mexico
and offshore California. In addition, Noble operates internationally in
countries such as Canada, Africa and Indonesia.
ORYX ENERGY COMPANY, together with its subsidiaries, acquires, explores for,
develops, produces and markets crude oil and condensate, natural gas and natural
gas liquids. The company operates and distributes its products internationally.
PHILLIPS PETROLEUM COMPANY explores for and produces petroleum worldwide and
refines and markets petroleum in The US. The Company also produces and
distributes chemicals and plastics worldwide.
ST. MARY LAND & EXPLORATION COMPANY is an independent oil and gas company with
diversified interests in the US and around the world. These interests also
include an active development project in Russia.
SANTA FE ENERGY RESOURCES, INC. is involved in the exploration, development and
production of oil and natural gas in most of the major producing basins in the
continental United States. The Company also has undeveloped land in Argentina,
Columbia, Indonesia and Pakistan.
SEAGULL ENERGY CORPORATION is involved in oil and gas exploration, development
and production primarily onshore and offshore along the Texas and Louisiana
coasts. The Company also owns and operates gas pipeline systems in these states.
Seagull also operates natural gas and oil producing properties, reserves and
undeveloped properties in Oklahoma, Texas, Kansas and New Mexico.
SOCIETE NATIONALE ELF AQUITANE (ADR) is an oil and gas company that explores
for, develops, produces, refines and sells petroleum products. The company sells
its products in France and Europe. Elf Aquitaine also produces specialty
chemicals, health care products and perfumes.
7
<PAGE> 12
UNOCAL CORPORATION explores for and produces oil and natural gas and
manufactures and markets petroleum and chemical products. The Company's
exploration activities are located worldwide. Unocal also operates wholesale and
retail petroleum products outlets throughout the United States.
VINTAGE PETROLEUM, INC. is an independent oil and gas company which acquires
producing oil and gas properties that have the potential for increased value
through exploration and development. The Company also purchases, gathers and
markets crude oil and natural gas and explores and develops non-producing
properties. Properties are located in the Gulf Coast, East Texas and
mid-continent US.
WISER OIL COMPANY explores for, produces and wholesales crude oil and natural
gas. The Company's oil and gas interests are located in the United States.
YPF SOCIEDAD ANONIMA (ADR) is an integrated oil and gas company which explores
for, develops and produces oil and natural gas in Argentina. The Company also
refines, markets, transports and distributes oil and various other petroleum
products, petroleum derivatives, petrochemicals and liquid petroleum gas.
RISK FACTORS
General. The Trust Fund may be an appropriate investment vehicle for investors
who desire to participate in a portfolio of equity securities with greater
diversification than they might be able to acquire individually. An investment
in Units of the Trust Fund should be made with an understanding of the risks
inherent in an investment in equity securities, including the risk that the
financial condition of the issuers of the Securities may become impaired or that
the general condition of the stock market may worsen (both of which may
contribute directly to a decrease in the value of the Securities and thus in the
value of the Units) or the risk that holders of common stock have a right to
receive payments from the issuers of those stocks that is generally inferior to
that of creditors of, or holders of debt obligations issued by, the issuers and
that the rights of holders of common stock generally rank inferior to the rights
of holders of preferred stock. Common stocks are especially susceptible to
general stock market movements and to volatile increases and decreases in value
as market confidence in and perceptions of the issuers change. These perceptions
are based on unpredictable factors including expectations regarding government,
economic, monetary and fiscal policies, inflation and interest rates, economic
expansion or contraction, and global or regional political, economic or banking
crises.
The Trust includes Securities which are issued by companies engaged in refining
and marketing oil and related products. According to the U.S. Department of
Commerce, the factors which will most likely shape the industry to 1996 and
beyond include the price and availability of oil from the Middle East, changes
in United States environmental policies and the continued decline in U.S.
production of crude oil. Possible effects of these factors may be increased U.S.
and world dependence on oil from the Organization of Petroleum Exporting
Countries ("OPEC") and highly uncertain and potentially more volatile oil
prices. Factors which the Sponsor believes may increase the profitability of oil
and petroleum operations include increasing demand for oil and petroleum
products as a result of the continued increases in annual miles driven and the
improvement in refinery operating margins caused by increases in average
domestic refinery utilization rates. The existence of surplus crude oil
production capacity and the willingness to adjust production levels are the two
principal requirements for stable crude oil markets. Without excess capacity,
supply disruptions in some countries cannot be compensated for by others.
Surplus capacity in Saudi Arabia and a few other countries and the utilization
of that capacity prevented
8
<PAGE> 13
during the Persian Gulf crisis, and continue to prevent, severe market
disruption. Although unused capacity contributed to market stability in 1990 and
1991, it ordinarily creates pressure to overproduce and contributes to market
uncertainty. The likely restoration of a large portion of Kuwait and Iraq's
production and export capacity over the next few years could lead to such a
development in the absence of substantial growth in world oil demand. Formerly,
OPEC members attempted to exercise control over production levels in each
country through a system of mandatory production quotas. Because of the crisis
in the Middle East, the mandatory system has since been replaced with a
voluntary system. Production under the new system has had to be curtailed on at
least one occasion as a result of weak prices, even in the absence of supplies
from Kuwait and Iraq. The pressure to deviate from mandatory quotas, if they are
reimposed, is likely to be substantial and could lead to a weakening of prices.
In the longer term, additional capacity and production will be required to
accommodate the expected large increases in world oil demand and to compensate
for expected sharp drops in U.S. crude oil production and exports from the
Soviet Union. Only a few OPEC countries, particularly Saudi Arabia, have the
petroleum reserves that will allow the required increase in production capacity
to be attained. Given the large-scale financing that is required, the prospect
that such expansion will occur soon enough to meet the increased demand is
uncertain.
Declining U.S. crude oil production will likely lead to increased dependence on
OPEC oil, putting refiners at risk of continued and unpredictable supply
disruptions. Increasing sensitivity to environmental concerns will also pose
serious challenges to the industry over the coming decade. Refiners are likely
to be required to make heavy capital investments and make major production
adjustments in order to comply with increasingly stringent environmental
legislation, such as the 1990 amendments to the Clean Air Act. If the cost of
these changes is substantial enough to cut deeply into profits, smaller refiners
may be forced out of the industry entirely. Moreover, lower consumer demand due
to increases in energy efficiency and conservation, due to gasoline
reformulations that call for less crude oil, due to warmer winters or due to a
general slowdown in economic growth in this country and abroad, could negatively
affect the price of oil and the profitability of oil companies. No assurance can
be given that the demand for or prices of oil will increase or that any
increases will not be marked by great volatility. Some oil companies may incur
large cleanup and litigation costs relating to oil spills and other
environmental damage. Oil production and refining operations are subject to
extensive federal, state and local environmental laws and regulations governing
air emissions and the disposal of hazardous materials. Increasingly stringent
environmental laws and regulations are expected to require companies with oil
production and refining operations to devote significant financial and
managerial resources to pollution control. General problems of the oil and
petroleum products industry include the ability of a few influential producers
significantly to affect production, the concomitant volatility of crude oil
prices and increasing public and governmental concern over air emissions, waste
product disposal, fuel quality and the environmental effects of fossil-fuel use
in general.
In addition, any future scientific advances concerning new sources of energy and
fuels or legislative changes relating to the energy industry or the environment
could have a negative impact on the petroleum products industry. While
legislation has been enacted to deregulate certain aspects of the oil industry,
no assurances can be given that new or additional regulations will not be
adopted. Each of the problems referred to could adversely affect the financial
stability of the issuers of any petroleum industry stocks in the Trust.
The Trust may also include securities which are issued by companies engaged in
the exploration for and mining of various minerals, such as coal, and/or the
manufacture, transportation, or marketing of
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<PAGE> 14
chemical products and plastics. The problems faced by such companies are similar
to those discussed with regard to petroleum companies.
The Trust may include Securities which are issued by companies that own or
operate nuclear generating facilities. Governmental authorities may from time to
time review existing, and impose additional, requirements governing the
licensing, construction and operation of nuclear power plants. Nuclear
generating projects in the electric utility industry have experienced
substantial cost increases, construction delays and licensing difficulties.
These have been caused by various factors, including inflation, high financing
costs, required design changes and rework, allegedly faulty construction,
objections by groups and governmental officials, limits on the ability to
finance, reduced forecasts of energy requirements and economic conditions. This
experience indicates that the risk of significant cost increases, delays and
licensing difficulties remains present through the completion and achievement of
commercial operation of any nuclear project. Also, nuclear generating units in
service have experienced unplanned outages or extensions of scheduled outages
due to equipment problems or new regulatory requirements sometimes followed by a
significant delay in obtaining regulatory approval to return to service. A major
accident at a nuclear plant anywhere, such as the accident at a plant in
Chernobyl, could cause the imposition of limits or prohibitions on the
operation, construction or licensing of nuclear units in the United States.
In view of the uncertainties discussed above, there can be no assurance that any
company's share of the full cost of nuclear units under construction ultimately
will be recovered in rates or of the extent to which a company could earn an
adequate return on its investment in such units. The likelihood of a
significantly adverse event occurring in any of the areas of concern described
above varies, as does the potential severity of any adverse impact. It should be
recognized, however, that one or more of such adverse events could occur and
individually or collectively could have a material adverse impact on the
financial condition or the results of operations of a company.
The Trust may include Securities which are issued by companies whose revenues
are primarily derived from the sale of electric energy. The problems faced by
such issuers include the difficulty in obtaining approval for timely and
adequate rate increases from the applicable public utility commissions, the
difficulty of financing large construction programs, increased competition,
reductions in estimates of future demand for electricity in certain areas of the
country, the limitations on operations and increased costs and delays
attributable to environmental considerations, the difficulty of the capital
market in absorbing utility debt, the difficulty in obtaining fuel at reasonable
prices and the effect of energy conservation. All of such issuers have been
experiencing certain of these problems in varying degrees. In addition, Federal,
state and municipal governmental authorities may from time to time review
existing, and impose additional, regulations governing the licensing,
construction and operation of nuclear power plants, which may adversely affect
the financial condition or the results of operations of such issuers.
The Trust may include Securities which are issued by companies engaged in the
exploration, drilling, production, refining, transmission, marketing or
distribution of natural gas. The problems faced by such issuers include many of
those faced by electric utilities discussed above, and, in addition, rising
costs of rail transportation to transport fossil fuels, availability and costs
of natural gas for resale and difficulties of gas pipeline and distribution
companies in adjusting to short and surplus energy supplies, enforcing or being
required to comply with long-term contracts and avoiding litigation from their
customers and suppliers. All of such issuers have been experiencing certain of
these problems in varying degrees.
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<PAGE> 15
Certain Investment Considerations. Holders of common stock incur more risk than
holders of preferred stocks and debt obligations because common stockholders, as
owners of the entity, have generally inferior rights to receive payments from
the issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stock issued by the issuer. Holders of common stock of
the type held by the portfolio have a right to receive dividends only when and
if, and in the amounts, declared by the issuer's Board of Directors and to
participate in amounts available for distribution by the issuer only after all
other claims on the issuer have been paid or provided for. By contrast, holders
of preferred stock have the right to receive dividends at a fixed rate when and
as declared by the issuer's Board of Directors, normally on a cumulative basis,
but do not participate in other amounts available for distribution by the
issuing corporation. Cumulative preferred stock dividends must be paid before
common stock dividends and any cumulative preferred stock dividend omitted is
added to future dividends payable to the holders of cumulative preferred stock.
Preferred stocks are also entitled to rights on liquidation which are senior to
those of common stocks. Moreover, common stocks do not represent an obligation
of the issuer and therefore do not offer any assurance of income or provide the
degree of protection of capital of debt securities. Indeed, the issuance of debt
securities or even preferred stock will create prior claims for payment of
principal, interest, liquidation preferences and dividends which could adversely
affect the ability and inclination of the issuer to declare or pay dividends on
its common stock or the rights of holders of common stock with respect to assets
of the issuer upon liquidation or bankruptcy. Further, unlike debt securities
which typically have a stated principal amount payable at maturity (whose value,
however, will be subject to market fluctuations prior thereto), common stocks
have neither a fixed principal amount nor a maturity and have values which are
subject to market fluctuations for as long as the stocks remain outstanding. The
value of the Securities in the portfolios thus may be expected to fluctuate over
the entire life of the Trust Fund to values higher or lower than those
prevailing on the Initial Date of Deposit.
Whether or not the Securities are listed on a national security exchange, the
principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. The investigation by the Securities and Exchange
Commission of illegal insider trading in connection with corporate takeovers,
and possible congressional inquiries and legislation relating to this
investigation, may adversely affect the ability of certain dealers to remain
market makers. In addition, the Trust Fund is restricted under the Investment
Company Act of 1940 from selling Securities to the Sponsor. The price at which
the Securities may be sold to meet redemptions and the value of the Trust Fund
will be adversely affected if trading markets for the Securities are limited or
absent.
Since certain of the Securities in the Trust consist of securities of foreign
issuers, an investment in the Trust involves some investment risks that are
different in some respects from an investment in a trust that invests entirely
in securities of domestic issuers. Those investment risks include future
political and governmental restrictions which might adversely affect the payment
or receipt of payment of dividends on the relevant Securities. In addition, for
the foreign issuers that are not subject to the reporting requirements of the
Securities Exchange Act of 1934, there may be less publicly available
information than is available from a domestic issuer. Also, foreign issuers are
not necessarily subject to uniform accounting, auditing and financial reporting
standards, practices and requirements comparable to those applicable to domestic
issuers. However, due to the nature of the issuers of Securities
11
<PAGE> 16
included in the Trust, the Sponsor believes that adequate information will be
available to allow the Portfolio Supervisor to provide portfolio surveillance.
The securities of certain of the foreign issuers in the Trust are in ADR form.
ADRs evidence American Depositary Receipts which represent common stock
deposited with a custodian in a depositary. American Depositary Shares, and
receipts therefor (ADRs), are issued by an American bank or trust company to
evidence ownership of underlying securities issued by a foreign corporation.
These instruments may not necessarily be denominated in the same currency as the
securities into which they may be converted. For purposes of the discussion
herein, the term ADR generally includes American Depositary Shares.
ADRs may be sponsored or unsponsored. In an unsponsored facility, the depositary
initiates and arranges the facility at the request of market makers and acts as
agent for the ADR holder, while the company itself is not involved in the
transaction. In a sponsored facility, the issuing company initiates the facility
and agrees to pay certain administrative and shareholder-related expenses.
Sponsored facilities use a single depositary and entail a contractual
relationship between the issuer, the shareholder and the depositary; unsponsored
facilities involve several depositaries with no contractual relationship to the
company. The depositary bank that issues an ADR generally charges a fee, based
on the price of the ADR, upon issuance and cancellation of the ADR. This fee
would be in addition to the brokerage commissions paid upon the acquisition or
surrender of the security. In addition, the depositary bank incurs expenses in
connection with the conversion of dividends or other cash distributions paid in
local currency into U.S. dollars and such expenses are deducted from the amount
of the dividend or distribution paid to holders, resulting in a lower payout per
underlying shares represented by the ADR than would be the case if the
underlying share were held directly. Certain tax considerations, including tax
rate differentials and withholding requirements, arising from applications of
the tax laws of one nation to nationals of another and from certain practices in
the ADR market may also exist with respect to certain ADRs. In varying degrees,
any or all of these factors may affect the value of the ADR compared with the
value of the underlying shares in the local market. In addition, the rights of
holders of ADRs may be different than those of holders of the underlying shares,
and the market for ADRs may be less liquid than that for the underlying shares.
ADRs are registered securities pursuant to the Securities Act of 1933 and may be
subject to the reporting requirements of the Securities Exchange Act of 1934.
For those Securities that are ADRs, currency fluctuations will affect the U.S.
dollar equivalent of the local currency price of the underlying domestic share
and, as a result, are likely to affect the value of the ADRs and consequently
the value of the Securities. The foreign issuers of securities that are ADRs may
pay dividends in foreign currencies which must be converted into dollars. Most
foreign currencies have fluctuated widely in value against the United States
dollar for many reasons, including supply and demand of the respective currency,
the soundness of the world economy and the strength of the respective economy as
compared to the economies of the United States and other countries. Therefore,
for any securities of issuers (whether or not they are in ADR form) whose
earnings are stated in foreign currencies, or which pay dividends in foreign
currencies or which are traded in foreign currencies, there is a risk that their
United States dollar value will vary with fluctuations in the United States
dollar foreign exchange rates for the relevant currencies.
On the basis of the best information available to the Sponsor at the present
time, none of the Securities are subject to exchange control restrictions under
existing law which would materially interfere with payment to the Trust of
dividends due on, or proceeds from the sale of, the Securities.
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<PAGE> 17
However, there can be no assurance that exchange control regulations might not
be adopted in the future which might adversely affect payments to the Trust. In
addition, the adoption of exchange control regulations and other legal
restrictions could have an adverse impact on the marketability of international
securities in the Trust and on the ability of the Trust to satisfy its
obligation to redeem Units tendered to the Trustee for redemption.
Investors should note that additional Units may be offered to the public. This
may have an effect upon the value of previously existing Units. To create
additional Units the Sponsor will purchase additional Securities. Brokerage fees
incurred in purchasing such Securities will be an expense of the Trust. Thus,
payment of brokerage fees by the Trust will affect the value of every Unit and
the net income per Unit received by the Trust. In particular, Unitholders who
purchase Units during the primary offering period of the Units would experience
a dilution of their investment as a result of any brokerage fees paid by the
Trust during subsequent deposits of additional Securities.
Litigation and Legislation. From time to time Congress considers proposals to
reduce the rate of the dividends-received deduction. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return to
investors who can take advantage of the deduction. Unitholders are urged to
consult their own tax advisers. Further, at any time after the Initial Date of
Deposit, litigation may be initiated on a variety of grounds, or legislation may
be enacted with respect to the Securities in the Trust Fund or the issuers of
the Securities. There can be no assurance that future litigation or legislation
will not have a material adverse effect on the Trust Fund or will not impair the
ability of issuers to achieve their business goals.
FEDERAL TAX STATUS
Federal Income Taxes. The following is a general discussion of certain of the
Federal income tax consequences of the purchase, ownership and disposition of
the Units. The summary is limited to investors who hold the Units as "capital
assets" (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986, as amended (the "Code"). Unitholders
should consult their tax advisers in determining the Federal, state, local and
any other tax consequences of the purchase, ownership and disposition of Units
in the Trust Fund.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
The Trust Fund is not an association taxable as a corporation for Federal
income tax purposes.
Each Unitholder will be considered the owner of a pro rata portion of each
of the Trust's assets for Federal income tax purposes under the Code, and
the income of the Trust will be treated as income of the Unitholders
thereof under the Code. Each Unitholder will be considered to have received
his pro rata share of income derived from each asset of the Trust Fund when
such income is received by the Trust Fund.
Each Unitholder will have a taxable event when a Security is disposed of
(whether by sale, exchange, liquidation, redemption or otherwise) or when
the Unitholder redeems or sells his Units. The cost of the Units to a
Unitholder on the date such Units are purchased is allocated among the
Securities held in the Trust Fund (in accordance with the proportion of the
fair market values of such Securities), subject to the adjustments
discussed below, in order to determine his tax basis for his pro rata
portion in each Security.
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<PAGE> 18
Taxation of Dividends Received by the Trust Fund. For Federal income tax
purposes, a Unitholder's pro rata portion of dividends as defined by Section 316
of the Code paid by a corporation with respect to a Security are taxable as
ordinary income to the extent of such corporation's current and accumulated
"earnings and profits." A Unitholder's pro rata portion of dividends which
exceed such current and accumulated earnings and profits will first reduce a
Unitholder's tax basis in such Security and to the extent that such dividends
exceed a Unitholder's tax basis in such Security shall generally be treated as
capital gain. In general, any such capital gain will be short-term unless a
Unitholder has held his Units for more than one year. In addition, Unitholders
may recognize taxable income in an amount equal to their pro rata share of any
interest from U.S. Treasury obligations in which the Trustee is authorized to
invest between distribution dates as such interest accrues.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such Unitholder's
pro rata portion of dividends received by the Trust Fund (to the extent such
dividends are taxable as ordinary income, as discussed above, and are
attributable to domestic corporations) in the same manner as if such corporation
directly owned the Securities paying such dividends. However, a corporation
owning Units should be aware that Section 246 and 246A of the Code impose
additional limitations on the eligibility of dividends for the 70% dividends
received deduction. These limitations include a requirement that stock (and
therefore Units) must generally be held at least 46 days (as determined under
Section 246(c) of the Code). Proposed regulations have been issued which address
special rules that must be considered in determining whether the 46 day holding
requirement is met. Moreover, the allowable percentage of the deduction will be
reduced from 70% if a corporation owns certain stock (or Units) the financing of
which is directly attributable to indebtedness incurred by such corporation. It
should be noted that various legislative proposals that would affect the
dividends received deduction have been introduced. Unitholders should consult
their tax advisers with respect to the limitations on and possible modifications
to the dividends received deduction.
To the extent dividends received by a Trust are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.
Limitations on Deductibility of Trust Fund Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust Fund is deductible
by the Unitholder to the same extent as though the expense had been paid
directly by him, subject to the following limitation. It should be noted that as
a result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to the
extent they exceed 2% of such individual's adjusted gross income. Unitholders
may be required to treat some or all of the expenses of the Trust Fund as
miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by the Trust
Fund or Disposition of Units. A Unitholder's portion of gain, if any, upon the
sale or redemption of Units or the disposition of Securities held by the Trust
Fund will generally be considered a capital gain except in the case of a dealer
or a financial institution and will be long-term if the Unitholder has held his
Units for more than one year. A Unitholder's portion of loss, if any, upon the
sale or redemption of Units or the disposition of Securities held by the Trust
Fund will generally be considered a capital loss (except in the case of a dealer
or a financial institution) and, in general, will be long-term if the Unitholder
has held his Units
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<PAGE> 19
for more than one year. For taxpayers other than corporations, net capital gains
are subject to a maximum stated marginal tax 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 difference at which ordinary income and
capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Tax 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 Tax Act, the Tax Act includes a provision that would recharacterize 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 should consult their tax advisers regarding the potential
effect of this provision on their investment in Units.
If the Unitholder disposes of a Unit, he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust Fund including his pro
rata portion of all of the Securities represented by the Unit.
Special Tax Consequences of Distributions In Kind Upon Redemption of Units. As
discussed in "Redemption," under certain circumstances a Unitholder tendering
Units for redemption may request a Distribution In Kind of Securities upon the
redemption of Units. As previously discussed, prior to the redemption of Units,
a Unitholder is considered as owning a pro rata portion of each of the Trust
Fund's assets for Federal income tax purposes. The receipt of a Distribution In
Kind upon the redemption of Units would be deemed an exchange of such redeeming
Unitholder's pro rata portion of each of the shares of stock and other assets
held by the Trust Fund in exchange for an undivided interest in whole shares of
stock and possibly cash.
There are generally three different potential tax consequences which may occur
under a Distribution In Kind with respect to each Security owned by the Trust
Fund. A "Security" for this purpose is a particular class of stock issued by a
particular corporation. If the Unitholder receives only whole shares of a
Security in exchange for his or her pro rata portion in each share of such
Security held by the Trust Fund, there is no taxable gain or loss recognized
upon such deemed exchange pursuant to Section 1036 of the Code. If the
Unitholder receives whole shares of a particular Security plus cash in lieu of a
fractional share of such Security, and if the fair market value of the
Unitholder's pro rata portion of the shares of such Security exceeds his tax
basis in his pro rata portion of such Security, taxable gain would be recognized
in an amount not to exceed the amount of such cash received, pursuant to Section
1031(b) of the Code. No taxable loss would be recognized upon such an exchange
pursuant to Section 1031(c) of the Code, whether or not cash is received in lieu
of a fractional share. Under either of these circumstances, special rules will
be applied under Section 1031(d) of the Code to determine the Unitholder's tax
basis in the shares of such particular Security which he receives as part of the
Distribution In Kind. Finally, if a Unitholder's pro rata interest in a Security
does not equal a whole share, he may receive entirely cash in exchange for his
pro rata portion of a particular Security. In such case, taxable gain or loss is
measured by comparing the amount of cash received by the Unitholder with his tax
basis in such Security.
Because the Trust Fund will own many Securities, a Unitholder who requests a
Distribution In Kind will have to analyze the tax consequences with respect to
each Security owned by the Trust Fund. The amount of taxable gain (or loss)
recognized upon such redemption will generally equal the sum of the gain (or
loss) recognized under the rules described above by the redeeming Unitholder
with
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<PAGE> 20
respect to each Security owned by the Trust Fund. Redeeming Unitholders who
request a Distribution In Kind are advised to consult their tax advisers in this
regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among the Securities held in the Trust
Fund in accordance with the proportion of the fair market values of such
Securities on the date the Units are purchased in order to determine such
Unitholder's tax basis for his pro rata portion of each Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by the Trust Fund will be reduced to the extent dividends paid with respect
to such Security are received by the Trust Fund which are not taxable as
ordinary income as described above.
General. Each Unitholder will be requested to provide the Unitholder's taxpayer
identification number to the Trustee and to certify that the Unitholder has not
been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by the Trust Fund
to such Unitholder (including amounts received upon the redemption of Units)
will be subject to back-up withholding. Distributions by the Trust Fund (other
than those that are not treated as U.S. source income) will generally be subject
to United States income taxation and withholding in the case of Units held by
non-resident alien individuals, foreign corporations or other non-United States
persons. Such persons should consult their tax advisers.
It should be noted that payments to the Trust Fund of dividends on Securities
that are attributable to foreign corporations may be subject to foreign
withholding taxes and Unitholders should consult their tax advisers regarding
the potential tax consequences relating to the payment of any such withholding
taxes by the Trust Fund. Any dividends withheld as a result thereof will
nevertheless be treated as income to the Unitholders. Because, under the grantor
trust rules, an investor is deemed to have paid directly his share of foreign
taxes that have been paid or accrued, if any, an investor may be entitled to a
foreign tax credit or deduction for United States tax purposes with respect to
such taxes. Investors should consult their tax advisers with respect to foreign
withholding taxes and foreign tax credits.
The foregoing discussion relates only to United States Federal income taxes;
Unitholders may be subject to state and local taxation in other jurisdictions.
Unitholders should consult their tax advisers regarding potential state or local
taxation with respect to the Units.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. During the initial offering period, Units of the Trust
Fund are offered at the Public Offering Price (which is based on the aggregate
underlying offer value of the Securities in the Trust Fund and includes a sales
charge of 4.0% of the Public Offering Price which charge is equivalent to 4.167%
of the net amount invested) plus a pro rata share of any accumulated dividends
in the Income Account of the Trust. In the secondary market, Units are offered
at the Public Offering Price (which is based on the aggregate underlying bid
value of the Securities in the Trust Fund and includes a sales charge of 4.0% of
the Public Offering Price which charge is equivalent to 4.167% of the net amount
invested) plus a pro rata share of any accumulated dividends. Such underlying
value shall also include the proportionate share of any undistributed cash held
in the Capital Account of the Trust.
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<PAGE> 21
The sales charge per Unit of the Trust Fund in both the primary and secondary
market will be reduced pursuant to the following graduated scale:
<TABLE>
<CAPTION>
PERCENT
PERCENT OF
OF NET
OFFERING AMOUNT
NO. OF UNITS* PRICE INVESTED
- -------------------------------------------------------------------- ----- ------
<S> <C> <C>
Less than 10,000.................................................... 4.00 % 4.167 %
10,000 but less than 25,000......................................... 3.50 3.627
25,000 but less than 50,000......................................... 3.00 3.093
50,000 but less than 75,000......................................... 2.50 2.564
75,000 or more...................................................... 2.25 2.302
</TABLE>
- ---------------
* The breakpoint sales charges are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied
on whichever basis is more favorable to the investor.
The reduced sales charges as shown on the tables above will apply to all
purchases of Units on any one day by the same purchaser from the same
Underwriter or dealer and for this purpose purchases of Units of the Trust Fund
will be aggregated with concurrent purchases of units of any other unit
investment trust that may be offered by the Sponsor. Additionally, Units
purchased in the name of a spouse or child (under 21) of such purchaser will be
deemed to be additional purchases by such purchaser. The reduced sales charges
will also be applicable to a trust or other fiduciary purchasing for a single
trust estate or single fiduciary account.
The Sponsor intends to permit officers, directors and employees of the Sponsor
and its affiliates and registered representatives of selling firms to purchase
Units of the Trust Fund without a sales charge, although a transaction
processing fee may be imposed on such trades.
As indicated above, the initial Public Offering Price of the Units was
established by adding to the determination of the aggregate underlying value of
the Securities an amount equal to 4.167% of such value and dividing the sum so
obtained by the number of Units outstanding. Such underlying value shall include
the proportionate share of any cash held in the Capital Account. This
computation produced a gross underwriting profit equal to 4.0% of the Public
Offering Price. Such price determination as of the opening of business on the
Initial Date of Deposit was made on the basis of an evaluation of the Securities
in the Trust prepared by the Trustee. After the opening of business on the
Initial Date of Deposit, the Evaluator will appraise or cause to be appraised
daily the value of the underlying Securities as of 3:15 P.M. Central time on
days the New York Stock Exchange is open and will adjust the Public Offering
Price of the Units commensurate with such valuation. Such Public Offering Price
will be effective for all orders received at or prior to the close of trading on
the New York Stock Exchange on each such day. Orders received by the Trustee,
Sponsor or any dealer for purchases, sales or redemptions after that time, or on
a day when the New York Stock Exchange is closed, will be held until the next
determination of price.
The value of the Securities is determined on each business day by the Evaluator
based on the last offer prices during the initial offering period and on the
last bid prices during the secondary market and for redemptions on the day the
valuation is made for Securities listed on a national stock exchange or, if not
so listed, on the last offer (or bid as the case may be) prices on the
over-the-counter market or by taking into account the same factors referred to
under "Redemption--Computation of Redemption Price."
The minimum purchase in both the primary and secondary markets is 100 Units.
17
<PAGE> 22
PUBLIC DISTRIBUTION OF UNITS. During the initial offering period, Units of the
Trust Fund will be distributed to the public at the Public Offering Price
thereof. Upon the completion of the initial offering, Units which remain unsold
or which may be acquired in the secondary market (see "Market for Units") may be
offered at the Public Offering Price determined in the manner provided above.
The Sponsor intends to qualify Units of the Trust Fund for sale in a number of
states. Units will be sold through dealers who are members of the National
Association of Securities Dealers, Inc. and through others. Sales may be made to
or through dealers at prices which represent discounts from the Public Offering
Price as set forth in the table below. Certain commercial banks are making Units
of the Trust Fund available to their customers on an agency basis. A portion of
the sales charge paid by their customers is retained by or remitted to the banks
in the amounts shown in the table below. Under the Glass-Steagall Act, banks are
prohibited from underwriting Trust Fund Units; however, the Glass-Steagall Act
does permit certain agency transactions and the banking regulators have
indicated that these particular agency transactions are permitted under such
Act. In addition, state securities laws on this issue may differ from the
interpretations of Federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law. The
Sponsor reserves the right to change the discounts set forth below from time to
time. In addition to such discounts, the Sponsor may, from time to time, pay or
allow an additional discount, in the form of cash or other compensation, to
dealers employing registered representatives who sell, during a specified time
period, a minimum dollar amount of Units of the Trust and other unit investment
trusts underwritten by the Sponsor. At various times the Sponsor may implement
programs under which the sales force of a broker or dealer may be eligible to
win nominal awards for certain sales efforts, or under which the Sponsor will
reallow to any such broker or dealer that sponsors sales contests or recognition
programs conforming to criteria established by the Sponsor, or participates in
sales programs sponsored by the Sponsor, an amount not exceeding the total
applicable sales charges on the sales generated by such person at the public
offering price during such programs. Also, the Sponsor in its discretion may
from time to time pursuant to objective criteria established by the Sponsor pay
fees to qualifying brokers or dealers for certain services or activities which
are primarily intended to result in sales of Units of the Trust Fund. Such
payments are made by the Sponsor out of its own assets, and not out of the
assets of the Trust Fund. These programs will not change the price Unitholders
pay for their Units or the amount that the Trust Fund will receive from the
Units sold. The difference between the discount and the sales charge will be
retained by the Sponsor.
<TABLE>
<CAPTION>
FIRM
SALES
OR
REGULAR SALE
CONCESSION ARRANGEMENTS
OR ($250,000
AGENCY OR
NUMBER OF UNITS* COMMISSION MORE)**
- ----------------------------------------------------------------- ------ ------
<S> <C> <C>
Less than 10,000................................................. 2.75 % 3.00 %
10,000 but less than 25,000...................................... 2.25 2.50
25,000 but less than 50,000...................................... 2.00 2.25
50,000 but less than 75,000...................................... 1.50 1.75
75,000 or more................................................... 1.25 1.50
</TABLE>
- ---------------
* The breakpoint discounts are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit.
** Volume discounts will be given to firms who reach cumulative firm sales or
sales arrangement levels of at least $250,000 of the Trust from the Initial
Date of Deposit through February 21, 1994 (assuming the primary offering
period continues through such date). 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.
The Sponsor reserves the right to reject, in whole or in part, any order for the
purchase of Units.
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<PAGE> 23
SPONSOR PROFITS. The Sponsor will receive gross sales charges equal to the
percentage of the Public Offering Price of the Units of the Trust Fund as stated
under "Public Offering Price." In addition, the Sponsor may realize a profit (or
sustain a loss) as of the Initial Date of Deposit resulting from the difference
between the purchase prices of the Securities to the Sponsor and the cost of
such Securities to the Trust Fund, which is based on the evaluation of the
Securities on the Initial Date of Deposit. Thereafter, on subsequent deposits
the Sponsor may realize profits or sustain losses from such deposits. See
"Portfolio." The Sponsor may realize additional profits or losses during the
initial offering period on unsold Units as a result of changes in the daily
market value of the Securities in the Trust Fund.
MARKET FOR UNITS
After the initial offering period, while not obligated to do so, the Sponsor
intends to, subject to change at any time, maintain a market for Units of the
Trust Fund offered hereby and to continuously offer to purchase said Units at
prices, determined by the Evaluator, based on the bid value of the underlying
Securities. To the extent that a market is maintained during the initial
offering period, the prices at which Units will be repurchased will be based
upon the aggregate offering side evaluation of the Securities in the Trust. The
aggregate bid prices of the underlying Securities are expected to be less than
the related aggregate offering prices (which is the evaluation method used
during the initial public offering period). Accordingly, Unitholders who wish to
dispose of their Units should inquire of their broker as to current market
prices in order to determine whether there is in existence any price in excess
of the Redemption Price and, if so, the amount thereof. The offering price of
any Units resold by the Sponsor will be in accord with that described in the
currently effective prospectus describing such Units. Any profit or loss
resulting from the resale of such Units will belong to the Sponsor. The Sponsor
may suspend or discontinue purchases of Units of the Trust Fund if the supply of
Units exceeds demand, or for other business reasons.
REDEMPTION
GENERAL. A Unitholder who does not dispose of Units in the secondary market
described above may cause Units to be redeemed by the Trustee by making a
written request to the Kemper Service Company, service agent for the Trustee at
P.O. Box 419430, Kansas City, Missouri 64141-6430 and, in the case of Units
evidenced by a certificate, by tendering such certificate to the Trustee,
properly endorsed or accompanied by a written instrument or instruments of
transfer in form satisfactory to the Trustee. Unitholders must sign the request,
and such certificate or transfer instrument, exactly as their names appear on
the records of the Trustee and on any certificate representing the Units to be
redeemed. If the amount of the redemption is $25,000 or less and the proceeds
are payable to the Unitholder(s) of record at the address of record, no
signature guarantee is necessary for redemptions by individual account owners
(including joint owners). Additional documentation may be requested, and a
signature guarantee is always required, from corporations, executors,
administrators, trustees, guardians or associations. The signatures must be
guaranteed by a participant in the Securities Transfer Agents Medallion Program
("STAMP") or such other signature guaranty 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 purchasers.
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<PAGE> 24
Redemption shall be made by the Trustee on the seventh calendar day following
the day on which a tender for redemption is received, or if the seventh calendar
day is not a business day, on the first business day prior thereto (the
"Redemption Date") by payment of cash equivalent to the Redemption Price for the
Trust Fund, determined as set forth below under "Computation of Redemption
Price," as of the evaluation time stated under "Essential Information," next
following such tender, multiplied by the number of Units being redeemed. Any
Units redeemed shall be cancelled and any undivided fractional interest in the
Trust Fund extinguished. The price received upon redemption might be more or
less than the amount paid by the Unitholder depending on the value of the
Securities in the Trust Fund at the time of redemption.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing a tax return. Under normal circumstances the
Trustee obtains the Unitholder's tax identification number from the selling
broker. However, any time a Unitholder elects to tender Units for redemption,
such Unitholder should make sure that the Trustee has been provided a certified
tax identification number in order to avoid this possible "back-up withholding."
In the event the Trustee has not been previously provided such number, one must
be provided at the time redemption is requested.
Any amounts paid on redemption representing unpaid dividends shall be withdrawn
from the Income Account of the Trust Fund to the extent that funds are available
for such purpose. All other amounts paid on redemption shall be withdrawn from
the Capital Account for the Trust Fund. The Trustee is empowered to sell
Securities for the Trust Fund in order to make funds available for the
redemption of Units of the Trust Fund. Such sale may be required when Securities
would not otherwise be sold and might result in lower prices than might
otherwise be realized. To the extent Securities are sold, the size and diversity
of the Trust Fund will be reduced.
Unitholders tendering Units for redemption may request a distribution in kind (a
"Distribution In Kind") from the Trustee in lieu of cash redemption. A
Unitholder may request a Distribution In Kind of an amount and value of
Securities per Unit equal to the Redemption Price per Unit as determined as of
the evaluation time next following the tender, provided that the tendering
Unitholder is (1) entitled to receive at least $25,000 of proceeds as part of
his or her distribution or if he paid at least $25,000 to acquire the units
being tendered and (2) the Unitholder has elected to redeem prior to the date
specified under "Redemption In Kind" on page 3 of this Prospectus. If the
Unitholder meets these requirements, a Distribution In Kind will be made by the
Trustee through the distribution of each of the Securities of the Trust in book
entry form to the account of the Unitholder's bank or broker-dealer at
Depository Trust Company. The tendering Unitholder shall be entitled to receive
whole shares of each of the Securities comprising the portfolio of the Trust and
cash from the Capital Account equal to the fractional shares to which the
tendering Unitholder is entitled. The Trustee shall make any adjustments
necessary to reflect differences between the Redemption Price of the Units and
the value of the Securities distributed in kind as of the date of tender. If
funds in the Capital Account are insufficient to cover the required cash
distribution to the tendering Unitholder, the Trustee may sell Securities. The
in kind redemption option may be terminated by the Sponsor on a date other than
that specified under "Redemption In Kind" on page 3 of this Prospectus upon
notice to the Unitholders prior to the specified date.
20
<PAGE> 25
To the extent that Securities are redeemed in kind or sold, the size and
diversity of the Trust Fund will be reduced but each remaining Unit will
continue to represent approximately the same proportional interest in each
Security. Sales may be required at a time when Securities would not otherwise be
sold and may result in lower prices than might otherwise be realized. The price
received upon redemption may be more or less than the amount paid by the
Unitholder depending on the value of the Securities in the portfolio at the time
of redemption. Special Federal income tax consequences will result if a
Unitholder requests a Distribution In Kind (see "Federal Tax Status").
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which (as determined by the Securities
and Exchange Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result of which
disposal by the Trustee of Securities is not reasonably practicable or it is not
reasonably practicable to fairly determine the value of the underlying
Securities in accordance with the Trust Agreement; or (3) for such other period
as the Securities and Exchange Commission may by order permit. The Trustee is
not liable to any person in any way for any loss or damage which may result from
any such suspension or postponement.
COMPUTATION OF REDEMPTION PRICE. The Redemption Price per Unit (as well as the
secondary market Public Offering Price) will be determined on the basis of the
aggregate underlying bid value of the Securities in the Trust Fund. On the
Initial Date of Deposit, the Public Offering Price per Unit (which is based on
the underlying offering prices of the Securities and includes the sales charge)
exceeded the value at which Units could have been redeemed by the amount shown
under "Essential Information." While the Trustee has the power to determine the
Redemption Price per Unit when Units are tendered for redemption, such authority
has been delegated to the Evaluator which determines the price per Unit on a
daily basis. The Redemption Price per Unit is the pro rata share of each Unit in
the Trust Fund determined on the basis of (i) the cash on hand in the Trust Fund
or monies in the process of being collected and (ii) the value of the Securities
in the Trust Fund less (a) amounts representing taxes or other governmental
charges payable out of the Trust, (b) any amount owing to the Trustee for its
advances and (c) the accrued expenses of the Trust. The Evaluator may determine
the value of the Securities in the Trust Fund in the following manner: if the
Security is listed on a national securities exchange, the evaluation will
generally be based on the last bid price on the exchange (unless the Evaluator
deems the price inappropriate as a basis for evaluation). If the Security is not
so listed or, if so listed and the principal market for the Security is other
than on the exchange, the evaluation will generally be made by the Evaluator in
good faith based on the last bid price on the over-the-counter market (unless
the Evaluator deems such price inappropriate as a basis for evaluation) or, if a
bid price is not available, (1) on the basis of the current bid price for
comparable securities, (2) by the Evaluator's appraising the value of the
Securities in good faith at the bid side of the market or (3) by any combination
thereof. See "Public Offering of Units--Public Offering Price."
RETIREMENT PLANS
The Trust Fund may be well suited for purchase by Individual Retirement
Accounts, Keogh Plans, pension funds and other qualified retirement plans,
certain of which are briefly described below.
Generally, capital gains and income received under each of the foregoing plans
are deferred from Federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in
21
<PAGE> 26
some cases, be eligible for special income averaging or tax-deferred rollover
treatment. Investors considering participation in any such plan should review
specific tax laws related thereto and should consult their attorneys or tax
advisers with respect to the establishment and maintenance of any such plan.
Such plans are offered by brokerage firms and other financial institutions. The
Trust will waive the $1,000 minimum investment requirement for IRA accounts. The
minimum investment is $250 for tax-defined plans such as IRA accounts. Fees and
charges with respect to such plans may vary.
Individual Retirement Account--IRA. Any individual under age 70 1/2 may
contribute the lesser of $2,000 or 100% of compensation to an IRA annually. Such
contributions are fully deductible if the individual (and spouse if filing
jointly) are not covered by a retirement plan at work. The deductible amount an
individual may contribute to an IRA will be reduced $10 for each $50 of adjusted
gross income over $25,000 ($40,000 if married, filing jointly or $0 if married,
filing separately), if either an individual or their spouse (if married, filing
jointly) is an active participant in an employer maintained retirement plan.
Thus, if an individual has adjusted gross income over $35,000 ($50,000 if
married, filing jointly or $0 if married, filing separately) and if an
individual or their spouse is an active participant in an employer maintained
retirement plan, no IRA deduction is permitted. Under the Code, an individual
may make nondeductible contributions to the extent deductible contributions are
not allowed. All distributions from an IRA (other than the return of certain
excess contributions) are treated as ordinary income for Federal income taxation
purposes provided that under the Code an individual need not pay tax on the
return of nondeductible contributions, the amount includable in income for the
taxable year is the portion of the amount withdrawn for the taxable year as the
individual's aggregate nondeductible IRA contributions bear to the aggregate
balance of all IRAs of the individual.
A participant's interest in an IRA must be, or commence to be, distributed to
the participant not later than April 1 of the calendar year following the year
during which the participant attains age 70 1/2. Distributions made before
attainment of age 59 1/2, except in the case of the participant's death or
disability, or where the amount distributed is to be rolled over to another IRA,
or where the distributions are taken as a series of substantially equal periodic
payments over the participant's life or life expectancy (or the joint lives or
life expectancies of the participant and the designated beneficiary) are
generally subject to a surtax in an amount equal to 10% of the distribution. The
amount of such periodic payments may not be modified before the later of five
years or attainment of age 59 1/2. Excess contributions are subject to an annual
6% excise tax.
IRA applications, disclosure statements and trust agreements are available from
the Sponsor upon request.
Qualified Retirement Plans. Units of the 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
22
<PAGE> 27
lump sum distributions the excess distribution over $750,000 (as adjusted) will
be subject to the 15% tax.
The Trustee, Investors Fiduciary Trust Company ("IFTC"), has agreed to act as
custodian for certain retirement plan accounts. An annual fee of $12.00 per
account, if not paid separately, will be assessed by the Trustee and paid
through the liquidation of shares of the reinvestment account. An individual
wishing IFTC to act as custodian must complete a Kemper UIT/IRA application and
forward it along with a check made payable to Investors Fiduciary Trust Company.
Certificates for Individual Retirement Accounts can not be issued.
UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of the Trust Fund will not be evidenced
by certificates unless a Unitholder, the Unitholder's registered broker/dealer
or the clearing agent for such broker/dealer makes a written request to the
Trustee. Units are transferable by making a written request to the Trustee and,
in the case of Units evidenced by a certificate, by presenting and surrendering
such certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent by registered or
certified mail for the protection of the Unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate representing
the Units to be transferred. Such signatures must be guaranteed as stated under
"Redemption -- General."
Units may be purchased and certificates, if requested, will be issued in
denominations of one Unit or any multiple thereof, subject to the Trust's
minimum investment requirement of 100 Units or $1,000. Fractions of Units, if
any, will be computed to three decimal places. Any certificate issued will be
numbered serially for identification, issued in fully registered form and will
be transferable only on the books of the Trustee. The Trustee may require a
Unitholder to pay a reasonable fee, to be determined in the sole discretion of
the Trustee, for each certificate re-issued or transferred and to pay any
governmental charge that may be imposed in connection with each such transfer or
interchange. The Trustee at the present time does not intend to charge for the
normal transfer or interchange of certificates. Destroyed, stolen, mutilated or
lost certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity (generally amounting to 3% of the market value of the Units),
affidavit of loss, evidence of ownership and payment of expenses incurred.
DISTRIBUTIONS TO UNITHOLDERS. Income received by the Trust is credited by the
Trustee to the Income Account of the Trust. Other receipts are credited to the
Capital Account of the Trust. Income received by the Trust will be distributed
on or shortly after the 15th day of January, April, July and October of each
year on a pro rata basis to Unitholders of record as of the preceding record
date (which will be the first day of the related month). All distributions will
be net of applicable expenses. There is no assurance that any actual
distributions will be made since all dividends received may be used to pay
expenses. In addition, amounts from the Capital Account of the Trust, if any,
will be distributed at least annually in December to the Unitholders then of
record. Proceeds received from the disposition of any of the Securities after a
record date and prior to the following distribution date will be held in the
Capital Account and not distributed until the next distribution date applicable
to the Capital Account. The Trustee shall not be required to make a distribution
from the Capital Account unless the cash balance on deposit therein available
for distribution shall be sufficient to distribute at least $1.00 per 100 Units.
The Trustee is not required to pay interest on funds held in the Capital or
Income
23
<PAGE> 28
Accounts (but may itself earn interest thereon and therefore benefits from the
use of such funds). The Trustee is authorized to reinvest any funds held in the
Capital or Income Accounts, pending distribution, in U.S. Treasury obligations
which mature on or before the next applicable distribution date. Any obligations
so acquired must be held until they mature and proceeds therefrom may not be
reinvested.
The distribution to the Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of an amount
substantially equal to such portion of the Unitholders' pro rata share of the
dividend distributions then held in the Income Account after deducting estimated
expenses. Because dividends are not received by the Trust at a constant rate
throughout the year, such distributions to Unitholders are expected to
fluctuate. Persons who purchase Units will commence receiving distributions only
after such person becomes a record owner. Notification to the Trustee of the
transfer of Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.
As of the first day of each month, the Trustee will deduct from the Income
Account of the Trust and, to the extent funds are not sufficient therein, from
the Capital Account of the Trust amounts necessary to pay the expenses of the
Trust (as determined on the basis set forth under "Trust Operating Expenses").
The Trustee also may withdraw from said accounts such amounts, if any, as it
deems necessary to establish a reserve for any governmental charges payable out
of the Trust. Amounts so withdrawn shall not be considered a part of the Trust's
assets until such time as the Trustee shall return all or any part of such
amounts to the appropriate accounts. In addition, the Trustee may withdraw from
the Income and Capital Accounts of the Trust such amounts as may be necessary to
cover redemptions of Units.
DISTRIBUTION REINVESTMENT. Kemper Financial Services, Inc. ("KFS"), an affiliate
of the Sponsor, is the investment manager and principal underwriter of several
front-end load mutual funds. Each Unitholder of the Trust Fund may elect to have
distributions of capital (including capital gains, if any) or dividends or both
automatically invested without charge in shares of any one of these funds, other
than those Kemper-advised mutual funds sold with a contingent deferred sales
charge. Since the portfolio securities and investment objectives of such
Kemper-advised mutual funds generally will differ significantly from those of
the Trust Fund, Unitholders should carefully consider the consequences before
selecting such mutual funds for reinvestment. Detailed information with respect
to the investment objectives and the management of such mutual funds is
contained in their respective prospectuses, which can be obtained from the
Sponsor upon request. An investor should read the prospectus of the reinvestment
fund selected prior to making the election to reinvest. Unitholders who desire
to have such distributions automatically reinvested should inform their broker
at the time of purchase or should file with the Program Agent referred to below
a written notice of election.
Unitholders who are receiving distributions in cash may elect to participate in
distribution reinvestment by filing with the Program Agent an election to have
such distributions reinvested without charge. Such election must be received by
the Program Agent at least ten days prior to the Record Date applicable to any
distribution in order to be in effect for such Record Date. Any such election
shall remain in effect until a subsequent notice is received by the Program
Agent. See "Unitholders--Distributions to Unitholders."
24
<PAGE> 29
The Program Agent is Investors Fiduciary Trust Company. All inquiries concerning
participation in distribution reinvestment should be directed to the Kemper
Service Company, service agent for the Program Agent at P.O. Box 419430, Kansas
City, Missouri 64141-6430, telephone (800) 422-2848.
STATEMENTS TO UNITHOLDERS. With each distribution, the Trustee will furnish or
cause to be furnished to each Unitholder a statement of the amount of income and
the amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit.
The accounts of the Trust Fund are required to be audited annually, at the Trust
Fund's expense, by independent public accountants designated by such Sponsor,
unless the Sponsor determines that such an audit would not be in the best
interest of the Unitholders of the Trust Fund. The accountants' report will be
furnished by the Trustee to any Unitholder of the Trust Fund upon written
request. Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish to each person who at any time during the calendar
year was a Unitholder of the Trust Fund a statement, covering the calendar year,
setting forth for the Trust Fund:
A. As to the Income Account:
1. Income received;
2. Deductions for applicable taxes and for fees and expenses of the Trust and
for redemptions of Units, if any; and
3. The balance remaining after such distributions and deductions, expressed in
each case both as a total dollar amount and as a dollar amount representing the
pro rata share of each Unit outstanding on the last business day of such
calendar year; and
B. As to the Capital Account:
1. The dates of disposition of any Securities (other than pursuant to
Distribution In Kind) and the net proceeds received therefrom;
2. The results of Distributions In Kind in connection with redemptions of Units,
if any;
3. Deductions for payment of applicable taxes and fees and expenses of the Trust
held for distribution to Unitholders of record as of a date prior to the
determination; and
4. The balance remaining after such distributions and deductions expressed both
as a total dollar amount and as a dollar amount representing the pro rata share
of each Unit outstanding on the last business day of such calendar year; and
C. The following information:
1. A list of the Securities as of the last business day of such calendar year;
2. The number of Units outstanding on the last business day of such calendar
year;
3. The Redemption Price based on the last evaluation made during such calendar
year;
4. The amount actually distributed during such calendar year from the Income and
Capital Accounts separately stated, expressed both as total dollar amounts and
as dollar amounts per Unit outstanding on the Record Dates for each such
distribution.
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<PAGE> 30
RIGHTS OF UNITHOLDERS. A Unitholder may at any time tender Units to the Trustee
for redemption. The death or incapacity of any Unitholder will not operate to
terminate the Trust Fund nor entitle legal representatives or heirs to claim an
accounting or to bring any action or proceeding in any court for partition or
winding up of the Trust Fund.
No Unitholder shall have the right to control the operation and management of
the Trust Fund in any manner, except to vote with respect to the amendment of
the Trust Agreement or termination of the Trust Fund.
INVESTMENT SUPERVISION
The Trust Fund is a unit investment trust and is not an "actively managed" fund.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analyses. The portfolio of the Trust Fund, however, will
not be actively managed and therefore the adverse financial condition of an
issuer will not necessarily require the sale of its securities from the
portfolio. However, the Sponsor may direct the Trustee to dispose of Securities
upon default in payment of amounts due on debt obligations of the issuer of the
Securities or upon a decline in price or the occurrence of other market or
credit factors that in the opinion of the Sponsor would make the retention of
such Securities in the Trust Fund detrimental to the interest of the
Unitholders. If the Trustee disposes of such Securities, the Trustee cannot use
the proceeds of the sale to purchase additional Securities to be included in the
Trust. Any proceeds must be distributed directly to the Unitholders on a pro
rata basis.
The Trustee may sell Securities, designated by the Sponsor, from the Trust Fund
for the purpose of redeeming Units of the Trust Fund tendered for redemption and
the payment of expenses.
ADMINISTRATION OF THE TRUST
THE TRUSTEE. The Trustee, Investors Fiduciary Trust Company, is a trust company
specializing in investment related services, organized and existing under the
laws of Missouri, having its trust office at 127 West 10th Street, Kansas City,
Missouri 64105. The Trustee is subject to supervision and examination by the
Division of Finance of the State of Missouri and the Federal Deposit Insurance
Corporation. Investors Fiduciary Trust Company is jointly owned by DST Systems,
Inc. and Kemper Financial Services, Inc., an affiliate of the Sponsor.
The Trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolio of the Trust Fund. For information relating to the
responsibilities of the Trustee under the Trust Agreement, reference is made to
the material set forth under "Unitholders."
In accordance with the Trust Agreement, the Trustee shall keep records of all
transactions at its office. Such records shall include the name and address of,
and the number of Units held by, every Unitholder of the Trust Fund. Such books
and records shall be open to inspection by any Unitholder of the Trust Fund at
all reasonable times during usual business hours. The Trustee shall make such
annual or other reports as may from time to time be required under any
applicable state or Federal statute, rule or regulation. The Trustee shall keep
a certified copy or duplicate original of the Trust Agreement on file in its
office available for inspection at all reasonable times during usual business
hours by any Unitholder, together with a current list of the Securities held in
the Trust Fund. Pursuant to the Trust Agreement, the Trustee may employ one or
more agents for the purpose of custody and safeguarding of Securities comprising
the Trust Fund.
26
<PAGE> 31
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of the trust created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor.
The Trustee or successor trustee must mail a copy of the notice of resignation
to all Unitholders then of record, not less than sixty days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. In case the Trustee becomes
incapable of acting or is adjudged a bankrupt or is taken over by public
authorities, the Sponsor may remove the Trustee and appoint a successor trustee
as provided in the Trust Agreement. Notice of such removal and appointment shall
be mailed to each Unitholder by the Sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original Trustee shall vest in the
successor. The Trustee must be a corporation organized under the laws of the
United States, or any state thereof, be authorized under such laws to exercise
trust powers and have at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
THE SPONSOR. The Sponsor, Kemper Unit Investment Trusts, with an office at 77
West Wacker Drive, 5th Floor, Chicago, Illinois 60601, (800) 621-5024, is a
service of Kemper Securities, Inc. which is a wholly-owned subsidiary of Kemper
Financial Companies, Inc. which, in turn, is a wholly-owned subsidiary of Kemper
Corporation. The Sponsor acts as underwriter of a number of other Kemper unit
investment trusts and will act as underwriter of any other unit investment trust
products developed by the Sponsor in the future. As of April 30, 1993, the total
stockholder's equity of Kemper Securities, Inc. was $426,125,017 (unaudited).
If at any time the Sponsor shall fail to perform any of its duties under the
Trust Agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the Trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the Trust Agreement and liquidate the Trust Fund as
provided therein, or (c) continue to act as Trustee without terminating the
Trust Agreement.
The foregoing financial information with regard to the Sponsor relates to the
Sponsor only and not to the Trust Fund. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations with respect to the Trust Fund. More comprehensive financial
information can be obtained upon request from the Sponsor.
THE EVALUATOR. Kemper Unit Investment Trusts, the Sponsor, also serves as
Evaluator. The Evaluator may resign or be removed by the Trustee in which even
the Trustee is to use its best efforts to appoint a satisfactory successor. Such
resignation or removal shall become effective upon acceptance of appointment by
the successor evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within thirty days after notice of resignation, the
Evaluator may apply to a court of competent jurisdiction for the appointment of
a successor. Notice of such resignation or removal and appointment shall be
mailed by the Trustee to each Unitholder.
27
<PAGE> 32
AMENDMENT AND TERMINATION. The Trust Agreement may be amended by the Trustee and
the Sponsor without the consent of any of the Unitholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective or
inconsistent; (2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental agency; or (3)
to make such provisions as shall not adversely affect the interests of the
Unitholders. The Trust Amendment with respect to the Trust Fund may also be
amended in any respect by the Sponsor and the Trustee, or any of the provisions
thereof may be waived, with the consent of the holders of Units representing
66 2/3% of the Units then outstanding of the Trust Fund, provided that no such
amendment or waiver will reduce the interest of any Unitholder thereof without
the consent of such Unitholder or reduce the percentage of Units required to
consent to any such amendment or waiver without the consent of all Unitholders
of the Trust Fund. In no event shall the Trust Agreement be amended to increase
the number of Units of the Trust Fund issuable thereunder or to permit the
acquisition of any Securities in addition to or in substitution for those
initially deposited in the Trust Fund, except in accordance with the provisions
of the Trust Agreement. The Trustee shall promptly notify Unitholders of the
substance of any such amendment.
The Trust Agreement provides that the Trust Fund shall terminate upon the
liquidation, redemption or other disposition of the last of the Securities held
in the Trust Fund but in no event is it to continue beyond the Mandatory
Termination Date set forth under "Essential Information." If the value of the
Trust Fund shall be less than the applicable minimum value stated under
"Essential Information" (40% of the aggregate value of the Securities--based on
the value at the date of deposit of such Securities into the Trust Fund), the
Trustee may, in its discretion, and shall, when so directed by the Sponsor,
terminate the Trust Fund. The Trust Fund may be terminated at any time by the
holders of Units representing 66 2/3% of the Units thereof then outstanding.
No later than the date specified under "Liquidation Period" set forth under
"Essential Information," the Trustee will begin to sell all of the underlying
Securities on behalf of Unitholders in connection with the termination of the
Trust Fund. The Sponsor has agreed to assist the Trustee in these sales. The
sale proceeds will be net of any incidental expenses involved in the sales.
The Sponsor will attempt to sell the Securities as quickly as it can during the
Liquidation Period without in its judgment materially adversely affecting the
market price of the Securities, but it is expected that all of the Securities
will in any event be disposed of by the end of the Liquidation Period. The
Sponsor does not anticipate that the period will be longer than one month, and
it could be as short as one day, depending on the liquidity of the Securities
being sold. The liquidity of any Security depends on the daily trading volume of
the Security and the amount that the Sponsor has available for sale on any
particular day.
It is expected (but not required) that the Sponsor will generally follow the
following guidelines in selling the Securities: for highly liquid Securities,
the Sponsor will generally sell Securities on the first day of the Liquidation
Period; for less liquid Securities, on each of the first two days of the
Liquidation Period, the Sponsor will generally sell any amount of any underlying
Securities at a price no less than 1/2 of one point under the last closing sale
price of those Securities. Thereafter, the price limit will increase to one
point under the last closing sale price. After four days, the Sponsor currently
intends to sell at least a fraction of the remaining underlying Securities, the
numerator of which is one and the denominator of which is the total number of
days remaining (including that day) in the Liquidation Period without any price
restrictions. Of course, no assurances can be given that the market value of the
Securities will not be adversely affected during the Liquidation Period.
28
<PAGE> 33
Any Unitholder who wishes to receive a Distribution In Kind at the termination
of the Trust and who otherwise qualifies for such a distribution (see
"Redemption") must notify the Trustee no later than the date indicated under
"Redemption In Kind" on page 3 of this Prospectus.
In the event of termination of the Trust Fund, written notice thereof will be
sent by the Trustee to all Unitholders of the Trust Fund. Within a reasonable
period after termination, the Trustee will sell any Securities remaining in the
Trust Fund and, after paying all expenses and charges incurred by the Trust
Fund, will distribute to Unitholders thereof (upon surrender for cancellation of
certificates for Units, if issued) their pro rata share of the balances
remaining in the Income and Capital Accounts of the Trust Fund.
LIMITATIONS ON LIABILITY. The Sponsor: The Sponsor is liable for the performance
of its obligations arising from its responsibilities under the Trust Agreement,
but will be under no liability to the Unitholders for taking any action or
refraining from any action in good faith pursuant to the Trust Agreement or for
errors in judgment, except in cases of its own gross negligence, bad faith or
willful misconduct or its reckless disregard for its duties thereunder. The
Sponsor shall not be liable or responsible in any way for depreciation or loss
incurred by reason of the sale of any Securities.
The Trustee: The Trust Agreement provides that the Trustee shall be under no
liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of monies, Securities or
certificates except by reason of its own gross negligence, bad faith or willful
misconduct, or its reckless disregard for its duties under the Trust Agreement,
nor shall the Trustee be liable or responsible in any way for depreciation or
loss incurred by reason of the sale by the Trustee of any Securities. In the
event that the Sponsor shall fail to act, the Trustee may act and shall not be
liable for any such action taken by it in good faith. The Trustee shall not be
personally liable for any taxes or other governmental charges imposed upon or in
respect of the Securities or upon the interest thereof. In addition, the Trust
Agreement contains other customary provisions limiting the liability of the
Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation furnished
by the Evaluator and shall have no responsibility for the accuracy thereof. The
Trust Agreement provides that the determinations made by the Evaluator shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the Trustee
or Unitholders for errors in judgment, but shall be liable only for its gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the Trust Agreement.
EXPENSES OF THE TRUST
The Sponsor will not charge the Trust any fees for services performed as
Sponsor. The Sponsor will receive a portion of the sale commissions paid in
connection with the purchase of Units and will share in profits, if any, related
to the deposit of Securities in the Trust Fund. The Sponsor has borne all the
expenses of creating and establishing the Trust including the cost of the
initial preparation, printing and execution of the Prospectus, Trust Agreement
and certificates, legal and accounting expenses, advertising and selling
expenses, payment of closing fees, the expenses of the Trustee and other out-
of-pocket expenses.
The Trustee receives for its services that fee set forth under "Essential
Information." The Trustee's fee which is calculated monthly is based on the
largest number of Units outstanding during the calendar year for which such
compensation relates. The Trustee's fees are payable monthly on or before the
fifteenth day of the month from the Income Account to the extent funds are
available and then from the Capital Account. The Trustee benefits to the extent
there are funds for future distributions,
29
<PAGE> 34
payment of expenses and redemptions in the Capital and Income Accounts since
these Accounts are non-interest bearing and the amounts earned by the Trustee
are retained by the Trustee. Part of the Trustee's compensation for its services
to the Trust Fund is expected to result from the use of these funds.
For evaluation of Securities in the Trust Fund, the Evaluator shall receive that
fee set forth under "Essential Information", payable monthly, based upon the
largest number of Units outstanding during the calendar year for which such
compensation relates.
The Trustee's fees and the Evaluator's fees are deducted from the Income Account
of the Trust Fund to the extent funds are available and then from the Capital
Account. Each such fee may be increased without approval of Unitholders by
amounts not exceeding a proportionate increase in the Consumer Price Index or
any equivalent index substituted therefor.
The following additional charges are or may be incurred by the Trust Fund: (a)
fees for the Trustee's extraordinary services; (b) expenses of the Trustee
(including legal and auditing expenses, but not including any fees and expenses
charged by an agent for custody and safeguarding of Securities) and of counsel,
if any; (c) various governmental charges; (d) expenses and costs of any action
taken by the Trustee to protect the Trust or the rights and interests of the
Unitholders; (e) indemnification of the Trustee for any loss, liability or
expense incurred by it in the administration of the Trust not resulting from
gross negligence, bad faith or willful misconduct on its part or its reckless
disregard for its obligations under the Trust Agreement; (f) indemnification of
the Sponsor for any loss, liability or expense incurred in acting in that
capacity without gross negligence, bad faith or willful misconduct or its
reckless disregard for its obligations under the Trust Agreement; and (g)
expenditures incurred in contacting Unitholders upon termination of the Trust
Fund. The fees and expenses set forth herein are payable out of the Trust Fund
and, when owing to the Trustee, are secured by a lien on the Trust Fund. Since
the Securities are all common stocks, and the income stream produced by dividend
payments, if any, is unpredictable, the Sponsor cannot provide any assurance
that dividends will be sufficient to meet any or all expenses of the Trust Fund.
If the balances in the Income and Capital Accounts are insufficient to provide
for amounts payable by the Trust, the Trustee has the power to sell Securities
to pay such amounts. These sales may result in capital gains or losses to
Unitholders. See "Federal Tax Status."
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to Federal
tax law have been passed upon by Chapman and Cutler, 111 West Monroe Street,
Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The statement of condition and the related portfolio at the Initial Date of
Deposit included in this Prospectus have been audited by Grant Thornton,
independent certified public accountants, as set forth in their report in the
Prospectus, and are included herein in reliance upon the authority of said firm
as experts in accounting and auditing.
------------------
30
<PAGE> 35
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
UNITHOLDERS
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 6 (OIL AND ENERGY GROWTH SERIES)
We have audited the accompanying statement of condition and the related
portfolio of Kemper Equity Portfolio Trusts, Series 6 (Oil and Energy Growth
Series), as of January 21, 1994. The statement of condition and portfolio are
the responsibility of the Sponsor. Our responsibility is to express an opinion
on such financial statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of the Securities at January 21, 1994 and a letter of credit
deposited to purchase Securities by correspondence with the Trustee. An audit
also includes assessing the accounting principles used and significant estimates
made by the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kemper Equity Portfolio Trusts,
Series 6 (Oil and Energy Growth Series) as of January 21, 1994, in conformity
with generally accepted accounting principles.
GRANT THORNTON
Chicago, Illinois
January 21, 1994
31
<PAGE> 36
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 6 (OIL AND ENERGY GROWTH SERIES)
STATEMENT OF CONDITION
AT THE OPENING OF BUSINESS ON JANUARY 21, 1994, THE INITIAL DATE OF DEPOSIT
TRUST PROPERTY
<TABLE>
<CAPTION>
<S> <C>
Securities deposited in the Trust (1)........................................... $ 1,033,775
Contracts to purchase Securities (1)(2)......................................... 3,983,075
-----------
Total........................................................................... $ 5,016,850
-----------
-----------
Number of Units................................................................. 522,589
-----------
-----------
INTEREST OF UNITHOLDERS
Cost to investors (3)........................................................... $ 5,225,890
Less: Gross underwriting commission (3)......................................... 209,040
-----------
Net interest to unitholders (1)(2)(3)........................................... $ 5,016,850
-----------
-----------
</TABLE>
- ---------------
NOTES:
(1) Aggregate cost of the Securities listed in the Portfolio is based on
offering side evaluations as determined by the Trustee.
(2) An irrevocable letter of credit issued by Chemical Bank has been deposited
with the Trustee covering the funds (aggregating $3,983,075) necessary for
the purchase of the Securities in the Trust Fund represented by purchase
contracts.
(3) The aggregate cost to investors includes a sales charge computed at the rate
of 4.0% of the Public Offering Price (equivalent to 4.167% of the net
amount invested) assuming no reduction of sales charges for quantity
purchases.
32
<PAGE> 37
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 6 (OIL AND ENERGY GROWTH SERIES)
PORTFOLIO AS OF THE INITIAL DATE OF DEPOSIT:
JANUARY 21, 1994
<TABLE>
<CAPTION>
AGGREGATE
NAME OF ISSUER NUMBER COST OF MARKET
OF SECURITIES DEPOSITED PERCENTAGE OF PRICE PER SECURITIES CAPITALIZATION
OR CONTRACTED FOR(1)(3) OF PORTFOLIO(1) SYMBOL SHARES SHARE TO TRUST(2) MILLIONS OF $(4)
- --------------------------------------------- --------------- ------ ------- --------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C>
INTEGRATED PETROLEUM COMPANIES
British Petroleum Company Plc. (ADR) ........ 4.15% BP 3100 $67.125 $ 208,088 $30,448
Chevron Corporation.......................... 4.34% CHV 2400 90.750 217,800 29,551
Societe Nationale Elf Aquitane (ADR)......... 4.15% ELF 5800 35.875 208,075 18,402
Exxon Corporation............................ 4.10% XON 3100 66.375 205,763 82,438
Kerr-McGee Corporation....................... 4.16% KMG 4500 46.375 208,687 2,252
Mobil Corporation............................ 4.14% MOB 2600 80.000 208,000 31,978
Phillips Petroleum Company................... 4.14% P 7100 29.250 207,675 7,634
Unocal Corporation........................... 4.12% UCL 7200 28.750 207,000 6,934
YPF Sociedad Anonima (ADR)................... 4.16% YPF 7800 26.750 208,650 9,443
EXPLORATION & PRODUCTION COMPANIES
Anadarko Petroleum Corporation............... 3.83% APC 4000 48.000 192,000 2,813
Apache Corporation........................... 3.90% APA 7600 25.750 195,700 1,562
Burlington Resources, Inc. .................. 3.81% BR 4100 46.625 191,162 6,075
Cross Timbers Oil Company.................... 4.09% XTO 13800 14.875 205,275 237
Devon Energy Corporation..................... 3.79% DVN 9000 21.125 190,125 440
Enron Oil & Gas Company...................... 3.68% EOG 4300 43.000 184,900 3,440
Louisiana Land & Exploration Co. ............ 3.83% LLX 4600 41.750 192,050 1,384
Mitchell Energy & Development................ 4.15% MND/A 9800 21.250 208,250 1,119
Murphy Oil Corporation....................... 4.13% MUR 5100 40.625 207,188 1,820
Noble Affiliates, Inc. ...................... 3.70% NBL 7000 26.500 185,500 1,320
Oryx Energy Company.......................... 4.26% ORX 12300 17.375 213,712 1,684
St. Mary Land & Exploration Co. ............. 3.92% MARY 14300 13.750 196,625 120
Santa Fe Energy Resources, Inc. ............. 3.78% SFR 19700 9.625 189,613 864
Seagull Energy Corp. ........................ 3.77% SGO 6900 27.375 188,887 702
Vintage Petroleum, Inc. ..................... 3.75% VPI 10600 17.750 188,150 355
Wiser Oil Company............................ 4.15% WZR 11800 17.625 207,975 158
------- ------- -----------
100.00% $5,016,850
------- -----------
------- -----------
</TABLE>
NOTES TO PORTFOLIO
(1) All or a portion of the Securities have been deposited in the Trust. Any
undelivered Securities are represented by "regular way" contracts for the
performance of which an irrevocable letter of credit has been deposited with
the Trustee. At the Initial Date of Deposit, the Sponsor has assigned to the
Trustee all of its rights, title and interest in and to such undelivered
Securities. Contracts to purchase Securities were entered into on January
20, 1994 and all have expected settlement dates on January 27, 1994 (see
"The Trust Fund"). Percentages are based on the cost of Securities to the
Trust Fund.
(2) The market value of each Security is based on the closing offer price on a
national securities exchange if the Security is listed thereon or, if not so
listed, then on the over-the-counter market, in each case, on the day prior
to the Initial Date of Deposit. As of the Initial Date of Deposit the
aggregate cost of the Securities to the Sponsor was $4,980,700 and its gross
profit (loss) was $36,150.
(3) British Petroleum Company, Plc (United Kingdom), Societe Nationale Elf
Aquitane (France) and YPF Sociedad Anonima (Argentina) are American
Depositary Receipts of foreign companies.
(4) Source: Bloomberg L.P. or Standard and Poors Compustat Services, Inc.
33
<PAGE> 38
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
CONTENTS
SUMMARY........................................ 2
ESSENTIAL INFORMATION.......................... 4
THE TRUST FUND................................. 5
THE TRUST PORTFOLIO............................ 5
RISK FACTORS................................... 8
FEDERAL TAX STATUS............................. 13
PUBLIC OFFERING OF UNITS....................... 16
Public Offering Price........................ 16
Public Distribution of Units................. 18
Sponsor Profits.............................. 19
MARKET FOR UNITS............................... 19
REDEMPTION..................................... 19
General...................................... 19
Computation of Redemption Price.............. 21
RETIREMENT PLANS............................... 21
UNITHOLDERS.................................... 23
Ownership of Units........................... 23
Distributions to Unitholders................. 23
Distribution Reinvestment.................... 24
Statements to Unitholders.................... 25
Rights of Unitholders........................ 26
INVESTMENT SUPERVISION......................... 26
ADMINISTRATION OF THE TRUST.................... 26
The Trustee.................................. 26
The Sponsor.................................. 27
The Evaluator................................ 27
Amendment and Termination.................... 28
Limitations on Liability..................... 29
EXPENSES OF THE TRUST.......................... 29
LEGAL OPINIONS................................. 30
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS....... 30
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS.................................. 31
STATEMENT OF CONDITION......................... 32
PORTFOLIO...................................... 33
</TABLE>
- --------------------------------------------------------------
This Prospectus does not contain all
of the information with respect to
the investment company set forth in
its registration statement and
exhibits relating thereto which have
been filed with the Securities and
Exchange Commission, Washington,
D.C. under the Securities Act of
1933 and the Investment Company Act
of 1940, and to which reference is
hereby made.
- --------------------------------------------------------------
No person is authorized to give any
information or to make any
representations with respect to this
investment company not contained in
this Prospectus; and any information
or representation not contained
herein must not be relied upon as
having been authorized by the Trust,
the Trustee, or the Sponsor. Such
registration does not imply that the
Trust or the Units have been
guaranteed, sponsored, recommended
or approved by the United States or
any state or any agency or officer
thereof.
- --------------------------------------------------------------
This Prospectus does not constitute
an offer to sell, or a solicitation
of an offer to buy, securities in
any state to any person to whom it
is not lawful to make such offer in
such state or country.
Kemper Unit Investment Trusts
77 West Wacker Drive, 5th Floor
Chicago, IL 60601-1994
01-RED-6-1.94
<PAGE> 39
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The following exhibits:
<TABLE>
<CAPTION>
<S> <C>
1.1 Form of Trust Indenture and Agreement for Kemper Equity Portfolio Trusts,
Series 6. Reference is made to Exhibit 1.1 to the Registration Statement
on Form S-6, with respect to Kemper Equity Portfolio Trust, Series 5
(Registration No. 33-51203) as filed on December 8, 1993.
1.1.1 Standard Terms and Conditions of Trust for Kemper Equity Portfolio
Trusts, Series 6.
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 being
registered and certain Missouri tax matters (to be filed by amendment).
4.1 Consent of Grant Thornton.
</TABLE>
S-1
<PAGE> 40
SIGNATURES
The Registrant, Kemper Equity Portfolio Trusts, Series 6 hereby identifies
Series 1 of the Kemper Equity Portfolio Trust for purposes of the
representations required by Rule 487 and represents the following:
(1) that the portfolio securities deposited in the series as to the
securities of which this Registration Statement is being filed do not
differ materially in type or quality from those deposited in such previous
series;
(2) that, except to the extent necessary to identify the specific
portfolio securities deposited in, and to provide essential financial
information for, the series with respect to the securities of which this
Registration Statement is being filed, this Registration Statement does not
contain disclosures that differ in any material respect from those
contained in the registration statements for such previous series as to
which the effective date was determined by the Commission or the Staff; and
(3) that it has complied with Rule 460 under the Securities Act of
1933.
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Kemper Equity Portfolio Trusts, Series 6 has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Chicago, and State of Illinois, on the 20th day
of January, 1994.
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 6
Registrant
By: KEMPER UNIT INVESTMENT TRUSTS
Depositor
By: /s/ MICHAEL J. THOMS
Michael J. Thoms
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON JANUARY 20, 1994 BY THE
FOLLOWING PERSONS, WHO CONSTITUTE A MAJORITY OF THE BOARD OF DIRECTORS OF KEMPER
UNIT INVESTMENT TRUSTS.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ----------------------------------------------
<S> <C>
JAMES R. BORIS Chairman and Chief Executive Officer
- ---------------------------------------------
James R. Boris
DONALD F. ELLER Senior Executive Vice President and Director
- ---------------------------------------------
Donald F. Eller
STANLEY R. FALLIS Senior Executive Vice President, Chief
- --------------------------------------------- Financial Officer and Director
Stanley R. Fallis
FRANK V. GEREMIA Senior Executive Vice President and Director
- ---------------------------------------------
Frank V. Geremia
</TABLE>
S-2
<PAGE> 41
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ----------------------------------------------
<S> <C>
DAVID B. MATHIS Director
- ---------------------------------------------
David B. Mathis
ROBERT T. JACKSON Director
- ---------------------------------------------
Robert T. Jackson
JAY B. WALTERS Senior Executive Vice President and Director
- ---------------------------------------------
Jay B. Walters
FREDERICK C. HOSKEN Senior Executive Vice President and Director
- ---------------------------------------------
Frederick C. Hosken
CHARLES M. KIERSCHT Director
- ---------------------------------------------
Charles M. Kierscht
ARTHUR J. MCGIVERN Director
- ---------------------------------------------
Arthur J. McGivern
</TABLE>
/s/ MICHAEL J. THOMS
------------------------------------
Michael J. Thoms
MICHAEL J. THOMS SIGNS THIS DOCUMENT PURSUANT TO POWER OF ATTORNEY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION WITH (A) AMENDMENT NO. 1 TO THE
REGISTRATION STATEMENT ON FORM S-6 FOR KEMPER TAX-EXEMPT INSURED INCOME TRUST,
SERIES A-70 AND MULTI-STATE SERIES 28 AND KEMPER TAX-EXEMPT INCOME TRUST,
MULTI-STATE SERIES 42 (REGISTRATION NO. 33-35425), AND (B) AMENDMENT NO. 1 TO
THE REGISTRATION STATEMENT ON FORM S-6 FOR KEMPER TAX-EXEMPT INSURED INCOME
TRUST, SERIES A-72 AND MULTI-STATE SERIES 30 (REGISTRATION NO. 33-37178), AND
(C) AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT ON FORM S-6 FOR KEMPER
TAX-EXEMPT INSURED INCOME TRUST, MULTI-STATE SERIES 51 (REGISTRATION NO.
33-48398).
S-3
<PAGE> 1
EXHIBIT 99
MEMORANDUM OF CHANGES
KEMPER EQUITY PORTFOLIO TRUSTS
SERIES 6
The Prospectus filed with Amendment No. 2 of the Registration
Statement on Form S-6 has been revised to reflect information regarding the
deposit of securities on January 21, 1994 and to set forth certain statistical
data based thereon. An effort has been made to set forth below each of the
changes and also to reflect such changes by blacklining the marked counterparts
of the Prospectus submitted with the Amendment.
The primary changes in the document from the document originally filed
with the Commission involve: (A) the deposit of the securities, (B) completion
of the Schedule of Investments and related information and (C) minor additions,
corrections and completions.
THE PROSPECTUS
<TABLE>
<S> <C>
S-6 Cover Page. The date has been set forth.
- --------------
Cover Page. The date of the Prospectus has been completed.
- ----------
Page 4. The fractional number of Units has been completed.
- ------
Page 4. "Essential Information" - Income, expense and distribution data
- ------ has been supplied for the Trust.
Page 4. The number of Units has been added.
- ------
Pages 5 - 8. Information about each of the Securities has been added.
- -----------
Pages 13 - 16. The tax section has been revised.
- -------------
Page 32. The "Statement of Condition" - has been completed.
- -------
Page 33. The "Portfolio" and related notes has been completed.
- -------
Pages S-1 - S-3. The list of exhibits, signature page and auditor's consent have been completed.
- ---------------
</TABLE>
<PAGE> 1
EXHIBIT 99.1.1
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 6
TRUST AGREEMENT
This Trust Agreement dated as of January 21, 1994 between Kemper Unit
Investment Trusts, a service of Kemper Securities, Inc., as Depositor, and
Investors Fiduciary Trust Company, as Trustee, sets forth certain provisions in
full and incorporates other provisions by reference to the document entitled
"Kemper Equity Portfolio Trusts, Series 5 and Subsequent Series, Standard Terms
and Conditions of Trust, Effective December 8, 1993" (herein called the
"Standard Terms and Conditions of Trust"), and such provisions as are set forth
in full and such provisions as are incorporated by reference constitute a
single instrument.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein incorporated
by reference in their entirety and shall be deemed to be a part of this
instrument as fully and to the same extent as though said provisions had been
set forth in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The equity securities listed in the Schedule hereto have
been deposited in trust under this Trust Agreement as indicated in
each Trust named on the attached Schedule.
(b) For the purposes of the definition of the term "Depositor"
in Article I, it is hereby specified that such term shall mean Kemper
Unit Investment Trusts, a service of Kemper Securities, Inc. or its
successors or any successor Depositor appointed.
(c) For the purposes of the definition of the term "Unit" in
Article I, it is hereby specified that the fractional undivided
interest in and ownership of a Trust is the amount set forth in the
section captioned "Essential Information" in the final
<PAGE> 2
Prospectus of the Trust (the "Prospectus") contained in Amendment No.
1 to the Trust's Registration Statement (Registration No. 33-51627)
as filed with the Securities and Exchange Commission on January 21,
1994. The fractional undivided interest may increase by the number of
any additional Units issued pursuant to Section 2.03, or decrease by
the number of Units redeemed pursuant to Section 5.02.
(d) For purposes of the definition of the term "Fund" and
"Trust Fund" in Article I, it is hereby specified that such term shall
mean the term "Trusts" as defined on page 2 of the Prospectus.
(e) The term "Record Date" shall mean the "Record Dates" set
forth under "Unitholders - Distributions to Unitholders" of the
Prospectus.
(f) The terms "Income Distribution Date" and "Capital
Distribution Date" shall mean the "Income Distribution Dates" and
"Capital Distribution Dates" set forth under "Unitholders -
Distributions to Unitholders" in the Prospectus.
(g) The term "Initial Date of Deposit" shall mean January 21,
1994.
(h) The term "Mandatory Termination Date" shall mean the
"Mandatory Termination Date" set forth in the section captioned
"Essential Information" in the Prospectus.
(i) The number of Units of a Trust referred to in Section 2.03
is as set forth in the section captioned "Essential Information" in
the Prospectus.
(j) For the purposes of Section 4.03, the Evaluator shall
receive for evaluation of the Bonds in a Trust that fee set forth in
the section captioned "Essential Information" in the Prospectus.
(k) For the purposes of Section 8.01(g), the liquidation
amount is hereby specified as the amount set forth under "Essential
Information - Minimum Value of Trust under which Trust Agreement may
be Terminated" in the Prospectus.
(l) For the purposes of Section 8.05, the compensation for the
Trustee shall be that fee set forth in the section captioned
"Essential Information" in the Prospectus.
(m) For the purposes on In Kind Distributions in Section 5.02,
the last date for which requests for In Kind Distributions can be made
to a Trust is that date stated in the Prospectus.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed.
KEMPER SECURITIES, INC.
through its Kemper Unit Investment Trusts
service
Depositor
By C. Perry Moore
Senior Vice President
INVESTORS FIDUCIARY TRUST
COMPANY
By Ron Puett
Operations Officer
<PAGE> 4
SCHEDULE A
SECURITIES INITIALLY DEPOSITED
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 6
(Note: Incorporated herein and made a part hereof is the "Portfolio"
as set forth in the Prospectus.)
<PAGE> 1
EXHIBIT 99.3.1
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
January 21, 1994
Kemper Unit Investment Trusts,
a service of Kemper Securities, Inc.
77 West Wacker Drive, 5th Floor
Chicago, Illinois 60601
Re: Kemper Equity Portfolio Trusts, Series 6
Gentlemen:
We have served as counsel for Kemper Unit Investment Trusts, a service
of Kemper Securities, Inc., as Sponsor and Depositor of Kemper Equity Portfolio
Trusts, Series 6 (the "Fund"), in connection with the preparation, execution
and delivery of the Trust Agreement and the Standard Terms and Conditions of
Trust, each dated the date of this opinion between Kemper Unit Investment
Trusts, a service of Kemper Securities, Inc., as Depositor, and Investors
Fiduciary Trust Company, as Trustee, pursuant to which the Depositor has
delivered to and deposited the Securities listed in the Schedule to the Trust
Agreement with the Trustee and pursuant to which the Trustee has issued to or
on the order of the Depositor a certificate or certificates representing all
the Units of fractional undivided interest in, and ownership of, the Fund,
created under said Trust Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable us
to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the
execution and issuance of certificates evidencing the Units of the
Fund have been duly authorized; and
2. The certificates evidencing the Units of the Fund, when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement and the Standard
Terms and Conditions of Trust, will constitute valid and binding
obligations of the Fund and the Depositor in accordance with the terms
thereof.
<PAGE> 2
-2-
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 33-51627) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
<PAGE> 3
Chapman and Cutler
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
January 21, 1994
Kemper Unit Investment Trusts,
a service of Kemper Securities, Inc.
77 West Wacker Drive, 5th Floor
Chicago, Illinois 60601
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
Re: Kemper Equity Portfolio Trusts, Series 6 (the "Trust")
Gentlemen:
We have acted as counsel for Kemper Unit Investment Trusts, a service
of Kemper Securities, Inc. as Sponsor and Depositor of Kemper Equity Portfolio
Trusts, Series 6 (the "Trust"), in connection with the issuance of Units of
fractional undivided interest in the Trust, under a Trust Agreement dated
January 21, 1994 (the "Indenture") between Kemper Unit Investment Trusts, a
service of Kemper Securities, Inc., as Depositor and Evaluator, and Investors
Fiduciary Trust Company as Trustee.
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we have
deemed pertinent.
The assets of the Trust will consist of a portfolio of equity
securities (the "Securities") as set forth in the Prospectus.
Based upon the foregoing and upon an investigation of such matters of
law as we consider to be applicable, we are of the opinion that, under existing
Federal income tax law:
(i) The Trust is not an association taxable as a corporation
but will be governed by the provisions of subchapter J (relating to
trusts) of chapter 1, Internal Revenue Code of 1986 (the "Code").
(ii) Each Unitholder will be considered as owning a pro rata
share of each asset of the Trust in the proportion that the number of
Units held by him bears to the total number of Units outstanding.
Under subpart E, subchapter J of chapter 1 of the Code, the income of
the Trust will be treated as income of each Unitholder in the
proportion
<PAGE> 4
-2-
described, and an item of Trust income will have the same character in
the hands of a Unitholder as it would have in the hands of the
Trustee. Each Unitholder will be considered to have received his pro
rata share of income derived from each Trust asset when such income is
received by the Trust. A Unitholder's pro rata portion of
distributions of cash or property by a corporation with respect to a
Security ("dividends" as defined by Section 316 of the Code) are
taxable as ordinary income to the extent of such corporation's current
and accumulated "earnings and profits". A Unitholder's pro rata
portion of dividends which exceed such current and accumulated
earnings and profits will first reduce the Unitholder's tax basis in
such Security, and to the extent that such dividends exceed a
Unitholder's tax basis in such Security, shall be treated as gain from
the sale or exchange of property. In addition, Unitholders may
recognize taxable income in an amount equal to their pro rata share of
any interest from U.S. Treasury obligations in which the Trustee is
authorized to invest between distribution dates as such interest
accrues.
(iii) The price a Unitholder pays for his Units, including sales
charges, is allocated among his pro rata portion of each Security held
by the Trust (in proportion to the fair market values thereof on the
date the Unitholder purchases his Units), in order to determine his
initial cost for his pro rata portion of each Security held by the
Trust.
(iv) Gain or loss will be recognized to a Unitholder upon
redemption or sale of his Units, except to the extent an in kind
distribution of stock is received by such Unitholder from the Trust as
discussed below. Such gain or loss is measured by comparing the
proceeds of such redemption or sale with the adjusted basis of his
Units. Before adjustment, such basis would normally be cost if the
Unitholder had acquired his units by purchase. Such basis will be
reduced, but not below zero, by the Unitholder's pro rata portion of
dividends with respect to each Security which are not taxable as
ordinary income.
(v) If the Trustee disposes of a Trust asset (whether by sale,
exchange, redemption, or otherwise) gain or loss will be recognized to
the Unitholder and the amount thereof will be measured by comparing
the Unitholder's aliquot share of the total proceeds from the
transaction with his basis for his fractional interest in the asset
disposed of. Such basis is ascertained by apportioning the tax basis
for his Units (as of the date on which his Units were acquired) among
each of the Trust's assets ratably according to their values as of the
valuation date nearest the date on which he purchased such Units. A
Unitholder's basis in his Units and of his fractional interest in each
Trust asset must be reduced, but not below zero, by the Unitholder's
pro rata portion of dividends with respect to each Security which are
not taxable as ordinary income.
(vi) Under the Indenture, under certain circumstances, a
Unitholder tendering Units for redemption may request an in kind
distribution of Securities upon the
<PAGE> 5
-3-
redemption of Units. As previously discussed, prior to the redemption
of Units, a Unitholder is considered as owning a pro rata portion of
each of the Trust's assets. The receipt of an in kind distribution
would be deemed an exchange of such Unitholder's pro rata portion of
each of the shares of stock and other assets held by the Trust in
exchange for an undivided interest in whole shares of stock and
possibly cash. In general, there are three different potential
federal income tax consequences which may occur under an in kind
distribution with respect to each Security owned by the Trust. A
"Security" for this purpose is a particular class of stock issued by a
particular corporation. If the Unitholder receives only whole shares
of a Security in exchange for his pro rata portion in each share of
such Security held by a Trust, there is no taxable gain or loss
recognized upon such deemed exchange pursuant to Section 1036 of the
Code. If the Unitholder receives whole shares of a particular
Security plus cash in lieu of a fractional share of such Security, and
if the fair market value of the Unitholder's pro rata portion of the
shares of such Security plus the cash received exceeds his tax basis
in his pro rata portion of such Security, taxable gain would be
recognized in an amount not to exceed the amount of such cash
received, pursuant to Section 1031(b) of the Code. No taxable loss
would be recognized upon such an exchange pursuant to Section 1031(c)
of the Code, whether or not cash is received in lieu of a fractional
share. Under either of these circumstances, special rules will be
applied under Section 1031(d) of the Code to determine the
Unitholder's tax basis in the shares of such particular Security which
he receives as part of the in kind distribution. Finally, if a
Unitholder's pro rata interest in a Security does not equal a whole
share, he may receive entirely cash in exchange for his pro rata
portion of a particular Security. In such case, taxable gain or loss
is measured by comparing the amount of cash received by the Unitholder
with his tax basis in such Security. The total amount of taxable
gains (or losses) recognized upon such redemption will generally equal
the sum of the gain (or loss) recognized under the rules described
above by the redeeming Unitholder with respect to each Security owned
by the Trust.
Section 67 of the Code provides that certain 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
such individual's adjusted gross income. Temporary regulations have been
issued which require Unitholders to treat certain expenses of the Trust as
miscellaneous itemized deductions subject to this limitation.
A Unitholder will recognize taxable gain (or loss) when all or part of
the pro rata interest in a Security is either sold by the Trust or redeemed or
when a Unitholder disposes of his Units in a taxable transaction, in each case
for an amount greater (or less) than his tax basis therefor.
Any gain recognized on a sale or exchange will, under current law,
generally be capital gain or loss. The scope of this opinion is expressly
limited to the matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes, including state
or local taxes or collateral tax consequences with respect to the purchase,
ownership and disposition of Units.
Very truly yours
CHAPMAN AND CUTLER
<PAGE> 1
EXHIBIT 99.4.1
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
We have issued our report dated January 21, 1994 on the statement of
condition and related bond portfolio of Kemper Equity Portfolio Trusts, Series 6
as of January 21, 1994 contained in the Registration Statement on Form S-6 and
in the Prospectus. We consent to the use of our report in the Registration
Statement and in the Prospectus and to the use of our name as it appears under
the caption "Independent Certified Public Accountants".
GRANT THORNTON
Chicago, Illinois
January 21, 1994
