File No. 33-53035 CIK #921463
Securities and Exchange CommissionWashington, D. C. 20549
Post-Effective
Amendment No. 2
to
Form S-6
For Registration under the Securities Act of 1933
of Securities of Unit Investment Trusts Registered
on Form N-8B-2
Kemper Equity Portfolio Trust, Series 7
Name and executive office address of Depositor:
EVEREN Unit Investment Trusts
(a division of EVEREN Securities, Inc.)
77 West Wacker - 29th Floor
Chicago, Illinois 60601
Name and complete address of agent for service:
Robert K. Burke
77 West Wacker - 29th Floor
Chicago, Illinois 60601
( X ) Check box if it is proposed that this filing will
become effective at 2:00 p.m. on April 29, 1996 pursuant to
paragraph (b) of Rule 485.
KEMPER EQUITY PORTFOLIO TRUSTSPART ONE
Kemper Equity Portfolio Trusts, were formed with the investment
objectives of obtaining maximum capital appreciation and, in
certain Trusts, dividend income through investment in a fixed
portfolio of equity securities of companies selected to achieve
the Trusts' objectives and in certain Trusts, the securities are
concentrated within a specific industry. Certain Trusts include
common stocks of foreign issuers which are in American Depositary
Receipt ("ADR") form. The Securities selected for each Trust are
considered by the Sponsor to have the potential to achieve the
Trust's objectives over the term of such Trust. See "Portfolio"
in Part Two for each Trust. There is no assurance that the Trusts
will achieve their objectives.
SPONSOR: EVEREN UNIT INVESTMENT TRUSTS, ASERVICE OF EVEREN
SECURITIES, INC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The investor is advised to read and retain both parts ofthis
Prospectus for future reference.
The date of this Part One is that date whichis set forth in Part
Two of the Prospectus
TABLE OF CONTENTS
PAGE
SUMMARY 3
THE TRUST FUNDS 4
PORTFOLIOS 5
SECURITIES SELECTION 5
RISK FACTORS 5
FEDERAL TAX STATUS 14
PUBLIC OFFERING OF UNITS 18
PUBLIC OFFERING PRICE 19
PUBLIC DISTRIBUTION OF UNITS 20
SPONSOR PROFITS 21
MARKET FOR UNITS 21
REDEMPTION 21
GENERAL 21
COMPUTATION OF REDEMPTION PRICE 24
RETIREMENT PLANS 24
INDIVIDUAL RETIREMENT ACCOUNT_IRA 24
QUALIFIED RETIREMENT PLANS 25
EXCESS DISTRIBUTIONS TAX 25
UNITHOLDERS 26
OWNERSHIP OF UNITS 26
DISTRIBUTIONS TO UNITHOLDERS 26
DISTRIBUTION REINVESTMENT 27
STATEMENTS TO UNITHOLDERS 28
RIGHTS OF UNITHOLDERS 29
INVESTMENT SUPERVISION 29
ADMINISTRATION OF THE TRUSTS 30
THE TRUSTEE 30
THE SPONSOR 31
THE EVALUATOR 31
AMENDMENT AND TERMINATION 31
LIMITATIONS ON LIABILITY 33
THE TRUSTEE 33
THE EVALUATOR 33
EXPENSES OF THE TRUSTS 33
LEGAL OPINIONS 35
INDEPENDENT AUDITORS 35
This Prospectus does not contain all of the information with
respect to the investment company set forth in its registration
statement and exhibits relating thereto which have been filed
with the Securities and Exchange Commission, Washington, D.C.
under the Securities Act of 1933 and the Investment Company Act
of 1940, and to which reference is hereby made.
No person is authorized to give any information or to make any
representations with respect to this investment company not
contained in this Prospectus; and any information or
representation not contained herein must not be relied upon as
having been authorized by the Trusts, the Trustee, or the
Sponsor. Such registration does not imply that the Trusts or the
Units have been guaranteed, sponsored, recommended or approved by
the United States or any state or any agency or officer thereof.
This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in any state to any
person to whom it is not lawful to make such offer in such state
or country.
SUMMARY
The Trust Funds. Kemper Equity Portfolio Trusts, (the "Trust
Funds" or "Trusts") are separate and distinct unit investment
trusts registered under the Investment Company Act of 1940.
The Trust Funds consist of common stocks issued by companies
which the Sponsor believes have the potential to achieve the
objectives of the respective Trust (the "Securities"). For the
criteria used by the Sponsor in selecting the Securities, see
"Portfolios_Securities Selection." The value of all portfolio
Securities and, therefore, the value of the Units may be expected
to fluctuate in value depending on the full range of economic and
market influences affecting corporate profitability, the
financial condition of issuers and the prices of equity
securities in general and the Securities in particular. Maximum
capital appreciation and, if applicable, dividend income are, of
course, dependent upon several factors including, among other
factors, the financial condition of the issuers of the Securities
(see "Portfolios").
Each Unit of a Trust offered represents that undivided interest
in that Trust indicated under "Essential Information" in Part Two
for each Trust. To the extent that any Units are redeemed by the
Trustee, the fractional undivided interest in a Trust represented
by each unredeemed Unit will increase accordingly, although the
actual interest in the Trust represented by such fraction will
remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the
Sponsor or the Underwriters, or until the termination of the
Trust Agreement.
Public Offering Price. The secondary market Public Offering
Price will be equal to the aggregate underlying bid value of the
Securities in a Trust Fund, plus or minus a pro rata share of
cash, if any, in the Capital Account held or owned by such Trust
Fund, plus a sales charge set forth under "Public Offering of
Units_Public Offering Price." The sales charge is reduced on a
graduated scale for sales involving at least 10,000 Units of a
Trust or $100,000 and will be applied on whichever basis is more
favorable to the investor.
Distributions of Income and Capital. Distributions of dividends
received by each Trust and any funds in the Capital Account will
be made quarterly. See "Unitholders_Distributions to
Unitholders."
Reinvestment. Each Unitholder of the Trust Funds may elect to
have distributions of income, capital gains and/or capital on
their Units automatically invested in shares of any Kemper
front-end load mutual fund (other than those funds sold with a
contingent deferred sales charge). Such distributions will be
reinvested without charge to the participant on each applicable
Distribution Date. See "Unitholders_Distribution Reinvestment."
A current prospectus for the reinvestment fund selected, if any,
will be furnished to any investor who desires additional
information with respect to reinvestment.
Market for Units. While under no obligation to do so, the
Sponsor intends to, and certain of the other dealers may,
maintain a market for the Units of the Trusts and offer to
repurchase such Units at prices subject to change at any time
which are based on the current underlying bid prices of the
Securities in the Trust Fund involved. If the supply of Units
exceeds demand or if some other business reason warrants it, the
Sponsor and/or the dealers may either discontinue all purchases
of Units or discontinue purchases of Units at such prices. A
Unitholder may also dispose of Units through redemption at the
Redemption Price on the date of tender to the Trustee. See
"Redemption_Computation of Redemption Price."
Redemption In Kind. Upon redemption of Units of a Trust Fund a
Unitholder generally may request to receive in lieu of cash his
share of each of the Securities then held by the Trust Fund, if
he would be entitled to receive at least $50,000 ($25,000 for
certain Trusts) of proceeds and he has tendered for redemption
prior to that date set forth in Part Two for each Trust (see
"Redemption" and "Administration of the Trusts_Amendment and
Termination").
Termination. No later than the date specified under the
Liquidation Period in "Essential Information" in Part Two,
Securities will begin to be sold in connection with the termination
of a Trust Fund and it is expected that all
Securities in such Trust Fund will be sold by the Mandatory
Termination Date set forth in "Essential Information" in Part Two
for each Trust. The Sponsor will determine the manner, timing and
execution of the sale of the underlying Securities. See
"Administration of the Trusts_Amendment and Termination."
Risk Factors. An investment in Units should be made with an
understanding of the risks associated therewith, including the
possible deterioration of either the financial condition of the
issuers or the general condition of the stock market. For
certain risk considerations related to the Trusts, see "Risk
Factors."
THE TRUST FUNDS
Kemper Equity Portfolio Trusts are unit investment trusts created
under the laws of the State of Missouri pursuant to a trust
indenture dated the Initial Date of Deposit (the "Trust
Agreements"). EVEREN Unit Investment Trusts, a service of EVEREN
Securities, Inc. acts as sponsor of the Trusts (the "Sponsor")
and The Bank of New York acts as trustee of the Trusts (the
"Trustee").*
The portfolio of each Trust contains common stocks issued by
different companies selected for the purpose of obtaining maximum
capital appreciation and, in certain Trusts, dividend income.
Certain Trusts include common stocks of foreign issuers in
American Depositary Receipt ("ADR") form. Certain Trusts are
concentrated within a specific industry. As used herein, the term
"Securities" means the common stocks initially deposited in each
Trust Fund and described in the portfolio and any additional
common stocks acquired and held by a Trust Fund pursuant to the
provisions of the Trust Agreement.
PORTFOLIOS
Securities Selection. At all times each Trust will hold at least
80% of its assets in equity securities. In selecting Securities
for the Trust, the following factors, among others, were
considered by the Sponsor: (a) the quality of the Securities, (b)
the yield and price of the Securities relative to other similar
securities, (c) the potential for capital appreciation and (d)
for certain Trusts, the likelihood that earnings and dividends
will continue or increase.
In connection with Kemper Equity Portfolio Trust, Series 4
(Utility Companies), the stability of utility stocks was also
considered. Utilities tend to be more stable than other companies
because they are monopolies that provide essential services. In
times of economic slowdown or recovery, people still need to use
the power of utility companies. Due to the expected slowdown of
nuclear construction programs and the decrease in excess energy
capacity, the Sponsor considered both the historical stability of
the utility sector as well as the potential for dividend growth
by specific companies in the sector.
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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.
In selecting securities for Kemper Equity Portfolio Trust, Series
8 (Banking Institutions), the Sponsor also considered the
potential benefit to the issuer of the Securities from the
continued consolidation within the banking industry and improving
industry fundamentals.
In selecting the Securities for each Trust, the Sponsor has
chosen equity securities that in its view have the potential for
capital appreciation. Although there can be no assurance that
such Securities will appreciate in value over the life of the
Trusts, over time stock investments have generally out-performed
most other asset classes. However, it should be remembered that
common stocks carry greater risks, including the risk that the
value of an investment can go down (see "Risk Factors_Certain
Investment Considerations"), and past performance is no guarantee
of future results.
For specific information and the market price of each Security as
of the date of this Part One Prospectus, see "Schedule of
Investments" in Part Two for such Trust.
RISK FACTORS
General. Each Trust Fund may be an appropriate investment
vehicle for investors who desire to participate in a portfolio of
equity securities with greater diversification than they might be
able to acquire individually. An investment in Units of the Trust
Funds should be made with an understanding of the risks inherent
in an investment in equity securities, including the risk that
the financial condition of the issuers of the Securities may
become impaired or that the general condition of the stock market
may worsen (both of which may contribute directly to a decrease
in the value of the Securities and thus in the value of the
Units) or the risk that holders of common stock have a right to
receive payments from the issuers of those stocks that is
generally inferior to that of creditors of, or holders of debt
obligations issued by, the issuers and that the rights of holders
of common stock generally rank inferior to the rights of holders
of preferred stock. Common stocks are especially susceptible to
general stock market movements and to volatile increases and
decreases in value as market confidence in and perceptions of the
issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates,
economic expansion or contraction, and global or regional
political, economic or banking crises.
Banking Institutions. Certain Trusts may be concentrated in
common stocks issued by companies in the banking industry. In
view of this, an investment in Units of such Trusts should be
made with an understanding of the problems and risks inherent in
the banking industry in general. Commercial banks and their
holding companies are especially subject to the adverse effects
of economic recession, volatile interest rates, portfolio
concentrations in geographic markets and in commercial and
residential real estate loans, and competition from new entrants
in their fields of business. Economic conditions in the real estate
markets, which have been weak in the recent past, can have
a significant effect upon banks because they generally have a
substantial percentage of their assets invested in loans secured
by real estate, as has recently been the case for a number of
banks with respect to commercial real estate in the northeastern
and southwestern regions of the United States. Commercial banks
and their holding companies are subject to extensive federal
regulation and, when such institutions are state-chartered, to
state regulation as well. Regulatory actions, such as increases
in the minimum capital requirements applicable to commercial
banks and increases in deposit insurance premiums required to be
paid by commercial banks to the FDIC, can negatively impact
earnings and the ability of a company to pay dividends. Neither
federal insurance of deposits nor governmental regulation,
however, ensures the solvency or profitability of commercial
banks or their holding companies, or insures against any risk of
investment in the securities issued by such institutions.
There has been much recent attention focused on the thrift and
banking industries regarding prospects for legislative and
regulatory changes which could have a material impact on
investments in banking institutions. In December 1991, the
Federal Deposit Insurance Corporation Improvement Act of 1991 was
enacted providing, among other things, for an increase of
supervisory authority over financial institutions. Additional
legislative and regulatory changes may be forthcoming. For
example, the deposit insurance system is under review by Congress
and federal regulators and proposed reforms of that system could,
among other things, restrict the ways in which deposited moneys
can be used by banks or reduce the dollar amount or number of
deposits insured for any depositor. Such reforms could reduce
profitability as investment opportunities available to banking
institutions become more limited and as consumers look more
actively for savings vehicles other than bank deposits.
Legislation broadening bank powers also is being studied by
Congress which, if enacted, could provide new earnings
opportunities for banks but would also further expose banks to
well-established competitors, such as securities firms and
insurance companies, as well as companies engaged in other areas
of business if Congress were to eliminate the historic barriers
between commerce and banking. Increased competition may result
from broadening national interstate banking powers, including
interstate branching, as has been recently proposed. The Sponsor
makes no prediction as to what, if any, manner of bank regulatory
reform might ultimately be adopted or what ultimate effect such
reform might have on a Trust's portfolio.
Utility Companies. Certain Trusts may be concentrated in common
stocks issued by companies in the public utilities industry. An
investment in Units of these Trusts should be made with an
understanding of the characteristics of the public utility
industry and the risks which such an investment may entail.
General problems of such issuers would include the difficulty in
financing large construction programs in an inflationary period,
the limitations on operations and increased costs and delays
attributable to environmental considerations, the difficulty of the
capital market in absorbing utility debt, the difficulty in
obtaining fuel at reasonable prices and the effect of energy
conservation. All of such issuers have been experiencing certain
of these problems in varying degrees. In addition, Federal, state
and municipal governmental authorities may from time to time
review existing, and impose additional, regulations governing the
licensing, construction and operation of nuclear power plants,
which may adversely affect the ability of the issuers of certain
of the Securities in the portfolio to make payments of principal
and/or interest on such Securities.
Utilities are generally subject to extensive regulation by state
utility commissions which, for example, establish the rates which
may be charged and the appropriate rate of return on an approved
asset base, which must be approved by the state commissions.
Certain utilities have had difficulty from time to time in
persuading regulators, who are subject to political pressures, to
grant rate increases necessary to maintain an adequate return on
investment and voters in many states have the ability to impose
limits on rate adjustments (for example, by initiative or
referendum). Any unexpected limitations could negatively affect
the profitability of utilities whose budgets are planned far in
advance. In addition, gas pipeline and distribution companies
have had difficulties in adjusting to short and surplus energy
supplies, enforcing or being required to comply with long-term
contracts and avoiding litigation from their customers, on the
one hand, or suppliers, on the other.
Certain of the issuers of the Securities in such a Trust may own
or operate nuclear generating facilities. Governmental
authorities may from time to time review existing, and impose
additional, requirements governing the licensing, construction
and operation of nuclear power plants. Nuclear generating
projects in the electric utility industry have experienced
substantial cost increases, construction delays and licensing
difficulties. These have been caused by various factors,
including inflation, high financing costs, required design
changes and rework, allegedly faulty construction, objections by
groups and governmental officials, limits on the ability to
finance, reduced forecasts of energy requirements and economic
conditions. This experience indicates that the risk of
significant cost increases, delays and licensing difficulties
remains present through to completion and achievement of
commercial operation of any nuclear project. Also, nuclear
generating units in service have experienced unplanned outages or
extensions of scheduled outages due to equipment problems or new
regulatory requirements sometimes followed by a significant delay
in obtaining regulatory approval to return to service. A major
accident at a nuclear plant anywhere, such as the accident at a
nuclear plant in Chernobyl, could cause the imposition of limits
or prohibitions on the operation, construction or licensing of
nuclear units in the United States.
Other general problems of the gas, water, telephone and electric
utility industry (including state and local joint action power
agencies) include difficulty in obtaining timely and adequate
rate increases, difficulty in financing large construction programs
to provide new or replacement facilities during an
inflationary period, rising costs of rail transportation to
transport fossil fuels, the uncertainty of transmission service
costs for both interstate and intrastate transactions, changes in
tax laws which adversely affect a utility's ability to operate
profitably, increased competition in service costs, recent
reductions in estimates of future demand for electricity and gas
in certain areas of the country, restrictions on operations and
increased cost and delays attributable to environmental
considerations, uncertain availability and increased cost of
capital, unavailability of fuel for electric generation at
reasonable prices, including the steady rise in fuel costs and
the costs associated with conversion to alternate fuel sources
such as coal, availability and cost of natural gas for resale,
technical and cost factors and other problems associated with
construction, licensing, regulation and operation of nuclear
facilities for electric generation, including among other
considerations the problems associated with the use of
radioactive materials and the disposal of radioactive wastes, and
the effects of energy conservation. Each of the problems referred
to could adversely affect the ability of the issuers of any
utility bonds in the Trust to make payments due on these bonds.
In view of the uncertainties discussed above, there can be no
assurance that any company's share of the full cost of nuclear
units under construction ultimately will be recovered in rates or
of the extent to which a company could earn an adequate return on
its investment in such units. The likelihood of a significantly
adverse event occurring in any of the areas of concern described
above varies, as does the potential severity of any adverse
impact. It should be recognized, however, that one or more of
such adverse events could occur and individually or collectively
could have a material adverse impact on the financial condition
or the results of operations of a company's ability to make
interest and principal payments on its outstanding debt.
Oil, Energy and Natural Resources Companies. Certain Trusts may
include 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 in future years 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 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 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
uncertainly. 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 costs 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 a Trust.
Certain Trusts 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 chemical products and plastics. The problems
faced by such companies are similar to those discussed with
regard to petroleum companies.
Certain Trusts 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.
Certain Trusts 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.
Certain Trusts 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.
Certain Trusts may also include securities which are issued by
companies engaged in the exploration for and mining of various
metals and minerals such as gold, platinum, aluminum, copper,
steel and coal. Mining operations and exploration activities are
subject to extensive federal, state and local laws and
regulations governing exploration, development, production,
exports, taxes, labor standards, occupational health, waste
disposal, protection and remediation of the environment,
reclamation, mine safety, toxic substances and other matters.
Compliance with such laws and regulations may increase the costs
of planning, designing, drilling, developing, constructing,
operating and closing the mines and other facilities of certain
companies. It is possible that the costs and delays associated
with compliance with such laws and regulations could become such
that certain companies would not proceed with the development or
operation of a mine and could have a significant adverse effect
on certain of the issuers of Securities. Mining and exploration
companies must also seek governmental permits for expansion and
advanced exploration activities. Obtaining the necessary
government permits is a complex and time-consuming process involving
numerous federal, state and local agencies. The
failure to obtain certain permits could have a material adverse
effect on an issuer's business, operations and prospects.
The United States House of Representatives and Senate have each
passed separate legislation that seeks to reform the General
Mining Law of 1872 (the "Mining Law"). Any reform of the Mining
Law based on these initiatives may have some degree of negative
economic effect on certain of the issuers of Securities and on
mining activities on federal lands generally. Until new reform
legislation is enacted, the ultimate effects and costs of
compliance on mining companies cannot be estimated, however,
adoption of the current version of either bill could have a
material adverse effect on the future profitability of mining
activities on federal land.
In addition, the profitability of precious metals companies is
significantly affected by changes in the market prices of
precious metals. Prices of precious metals can fluctuate widely
and are affected by numerous industry factors, such as demand for
precious metals, forward selling by producers, central bank sales
and purchases of gold, and production and cost levels in major
metals-producing regions. Although many companies have hedging
programs in place to reduce the risk associated with precious
metals price volatility, there is no assurance that an issuer's
hedging strategies will be successful. Furthermore, exploration
for all minerals, as well as gold and other precious metals, is
highly speculative in nature, involves many risks and frequently
is unsuccessful. There can be no assurance that any company's
exploration efforts will result in the discovery of
mineralization or that any mineralization discovered will result
in an increase of any company's reserves. In the event that new
reserves are not developed, an issuer may not be able to sustain
its current level of production which could adversely affect the
Securities in a Trust's portfolio.
Certain Investment Considerations. Holders of common stock incur
more risk than holders of preferred stocks and debt obligations
because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in
comparison with the rights of creditors of, or holders of debt
obligations or preferred stock issued by the issuer. Holders of
common stock of the type held by the portfolio have a right to
receive dividends only when and if, and in the amounts, declared
by the issuer's Board of Directors and to participate in amounts
available for distribution by the issuer only after all other
claims on the issuer have been paid or provided for. By contrast,
holders of preferred stock have the right to receive dividends at
a fixed rate when and as declared by the issuer's Board of
Directors, normally on a cumulative basis, but do not participate
in other amounts available for distribution by the issuing
corporation. Cumulative preferred stock dividends must be paid
before common stock dividends and any cumulative preferred stock
dividend omitted is added to future dividends payable to the
holders of cumulative preferred stock. Preferred stocks are also
entitled to rights on liquidation which are senior to those of
common stocks. Moreover, common stocks do not represent an obligation
of the issuer and therefore do not offer any assurance
of income or provide the degree of protection of capital of debt
securities. Indeed, the issuance of debt securities or even
preferred stock will create prior claims for payment of
principal, interest, liquidation preferences and dividends which
could adversely affect the ability and inclination of the issuer
to declare or pay dividends on its common stock or the rights of
holders of common stock with respect to assets of the issuer upon
liquidation or bankruptcy. Further, unlike debt securities which
typically have a stated principal amount payable at maturity
(whose value, however, will be subject to market fluctuations
prior thereto), common stocks have neither a fixed principal
amount nor a maturity and have values which are subject to market
fluctuations for as long as the stocks remain outstanding. The
value of the Securities in the portfolios thus may be expected to
fluctuate over the entire life of the Trust Funds to values
higher or lower than those prevailing on the date of this Part
One Prospectus.
Whether or not the Securities are listed on a national security
exchange, the principal trading market for the Securities may be
in the over-the-counter market. As a result, the existence of a
liquid trading market for the Securities may depend on whether
dealers will make a market in the Securities. There can be no
assurance that a market will be made for any of the Securities,
that any market for the Securities will be maintained or of the
liquidity of the Securities in any markets made. The
investigation by the Securities and Exchange Commission of
illegal insider trading in connection with corporate takeovers,
and possible congressional inquiries and legislation relating to
this investigation, may adversely affect the ability of certain
dealers to remain market makers. In addition, each Trust Fund is
restricted under the Investment Company Act of 1940 from selling
Securities to the Sponsor.
The price at which the Securities may be sold to meet redemptions
and the value of each Trust Fund will be adversely affected if
trading markets for the Securities are limited or absent.
Since certain Securities in certain Trusts consist of securities
of foreign issuers, an investment in such a 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
included in certain Trusts, 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 certain
Trusts 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 shapes, 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 a Trust of dividends due on, or
proceeds from the sale of, the Securities.
However, there can be no assurance that exchange control
regulations might not be adopted in the future which might
adversely affect payments to a 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 a Trust and on the ability of a Trust
to satisfy its obligation to redeem Units tendered to the Trustee
for redemption.
Litigation and Legislation. From time to time Congress considers
proposals to reduce the rate of the dividends-received deduction.
Enactment into law of a proposal to reduce the rate would
adversely affect the after-tax return to investors who can take
advantage of the deduction. Unitholders are urged to consult
their own tax advisers. Further, at any time after the date of
this Part One Prospectus, litigation may be initiated on a
variety of grounds, or legislation may be enacted with respect to
the Securities in a Trust Fund or the issuers of the Securities.
There can be no assurance that future litigation or legislation
will not have a material adverse effect on the Trust Funds or
will not impair the ability of issuers to achieve their business
goals.
FEDERAL TAX STATUS
Federal Taxation. 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.
In the opinion of Chapman and Cutler, special counsel for the
Sponsor, under existing law:
1. The Trust is not an association taxable as a
corporation for federal income tax purposes; each Unitholder will
be treated as the owner of a pro rata portion of each of the
assets of the Trust 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 the Trust asset when such
income is received by the Trust.
2. Each Unitholder will have a taxable event when the
Trust disposes of an Equity Security (whether by sale, exchange,
liquidation, redemption, or payment at maturity) or upon the sale
or redemption of Units by such Unitholder. The price a
Unitholder pays for his Units, including sales charges, is
allocated among his pro rata portion of each Equity 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 tax basis for his pro rata portion of each Equity
Security held by the Trust. For federal income tax purposes, a
Unitholder's pro rata portion of dividends as defined by Section
316 of the Code paid with respect to an Equity Security held by
the Trust 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 paid on such Equity
Security which exceeds such current and accumulated earnings and
profits will first reduce a Unitholder's tax basis in such Equity
Security, and to the extent that such dividends exceed a
Unitholder's tax basis in such Equity 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.
3. A Unitholder's portion of gain, if any, upon the sale
or redemption of Units or the disposition of Equity Securities
held by the Trust will generally be considered a capital gain
except in the case of a dealer or a financial institution and, in
general, will be long-term if the Unitholder has held his Units
for more than one year (the date on which the Units are acquired
(i.e., the "trade date") is excluded for purposes of determining
whether the Units have been held for more than one year). A
Unitholder's portion of loss, if any, upon the sale or redemption
of Units or the disposition of Equity Securities held by the
Trust will generally be considered a capital loss except in the
case of a dealer or a financial institution and, in general, will
be long-term if the Unitholder has held his Units for more than
one year. Unitholders should consult their tax advisers
regarding the recognition of such capital gains and losses for
federal income tax purposes.
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 (to the extent such dividends are taxable
as ordinary income, as discussed above) in the same manner as if
such corporation directly owned the Equity Securities paying such
dividends (other than corporate Unitholders, such as "S"
corporations, which are not eligible for the deduction because of
their special characteristics and other than for purposes of
special taxes such as the accumulated earnings tax and the
personal holding corporation tax). However, a corporation owning
Units should be aware that Sections 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
corporate Unitholder 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 with their tax
advisers with respect to the limitations on and possible
modifications to the dividends received deduction.
Limitations on Deductibility of Trust Expenses by Unitholders.
Each Unitholder's pro rata share of each expense paid by the
Trust 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 as miscellaneous itemized
deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Equity
Securities by the Trust or Disposition of Units. As discussed
above, a Unitholder may recognize taxable gain (or loss) when an
Equity Security is disposed of by the Trust or if the Unitholder
disposes of a Unit. For taxpayers other than corporations, net
capital gains are subject to a maximum marginal stated 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 differences at which ordinary income and capital
gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Act") raised tax
rates on ordinary income while capital gains remain subject to a
28% maximum stated rate for taxpayers other than corporations.
Because some or all capital gains are taxed at a comparatively
lower rate under the Act, the 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 and prospective investors should consult with their
tax advisers regarding the potential effect of this provision on
their investment in Units; if a Unitholder disposes of a Unit, he
is deemed thereby to have disposed of his entire pro rata
interest in all assets of the Trust involved including his pro
rata portion of all the Equity Securities represented by the
Unit.
Special Tax Consequences of In Kind Distributions Upon Redemption
of Units or Termination of the Trust. As discussed in "Rights of
Unitholders -- Redemption of Units," under certain circumstances
a Unitholder tendering Units for redemption may request an In
Kind Distribution. A Unitholder may also under certain
circumstances request an In Kind Distribution upon the termination of
the Trust. See "Rights of Unitholders --
Redemption of Units." As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder
is considered as owning a pro rata portion of each of the Trust
assets for federal income tax purposes. The receipt of an In
Kind Distribution will result in a Unitholder receiving an
undivided interest in whole shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind
Distribution will depend on whether or not a Unitholder receives
cash in addition to Equity Securities. An "Equity Security" for
this purpose is a particular class of stock issued by a
particular corporation. A Unitholder will not recognize gain or
loss if a Unitholder only receives Equity Securities in exchange
for his or her pro rata portion in the Equity Securities held by
the Trust. However, if a Unitholder also receives cash in
exchange for a fractional share of an Equity Security held by the
Trust, such Unitholder will generally recognize gain or loss
based upon the difference between the amount of cash received by
the Unitholder and his tax basis in such fractional share of an
Equity Securities held by the Trust.
Because the Trust will own many Equity Securities, a Unitholder
who requests an In Kind Distribution will have to analyze the tax
consequences with respect to each Equity Security owned by the
Trust. The amount of taxable gain (or loss) recognized upon such
exchange will generally equal the sum of the gain (or loss)
recognized under the rules described above by such Unitholder
with respect to each Equity Security owned by the Trust.
Unitholders who request an In Kind Distribution 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 Equity Securities held in the Trust
in accordance with the proportion of the fair market values of
such Equity Securities on the date the Units are purchased in
order to determine such Unitholder's tax basis for his pro rata
portion of each Equity Security.
A Unitholder's tax basis in his Units and his pro rata portion of
an Equity Security held by the Trust will be reduced to the
extent dividends paid with respect to such Equity Security are
received by the Trust 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 to such Unitholder (including amounts received upon the
redemption of Units) will be subject to back-up withholding.
Distributions by the Trust 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. On December 7, 1995, the U.S. Treasury Department
released proposed legislation that, if adopted, could affect the
United States federal income taxation of such non-United States
Unitholders and the portion of the Trust's income allocable to
non-United States Unitholders.
Unitholders will be notified annually of the amount of income
dividends includable in the Unitholder's gross income and amounts
of Trust expenses which may be claimed as itemized deductions.
Unitholders desiring to purchase Units for tax-deferred plans and
IRAs should consult their broker-dealers for details on
establishing such accounts. Units may also be purchased by
persons who already have self-directed plans established.
The foregoing discussion relates only to the tax treatment of
United States Unitholders with regard to United States federal
income taxes; Unitholders may be subject to state and local
taxation in other jurisdictions. Unitholders should consult their
tax advisers regarding potential state or local taxation with
respect to the Units.
PUBLIC OFFERING OF UNITS
Public Offering Price;. During the secondary market, Units are
offered at the Public Offering Price (which is based on the
aggregate underlying bid value of the Securities in the Trust
Fund and includes a sales charge set forth in the table below)
plus a pro rata share of any accumulated dividends. Such
underlying value shall also include the proportionate share of
any undistributed cash held in the Capital Account of the Trust
involved. Investors who purchase Units through brokers or
dealers pursuant to a current management agreement which by
contract or operation of law does not allow such broker or dealer
to earn an additional commission (other than any fee or
commission paid for maintenance of such investor's account under
the management agreement) on such transactions may purchase such
Units at the current Public Offering Price net of the applicable
broker or dealer concession. See "Public Distribution of Units"
below. The sales charge per Unit will be computed as follows:
REMAINING TERM PERCENT OF PERCENT OF NET
OF TRUST OFFERING PRICE AMOUNT INVESTED
2 or more years 4.00% 4.167%
Less than 2 years 3.00 3.093
The secondary market sales charge per Unit for Trusts with
remaining terms less than two years will be reduced pursuant to
the following graduated scale:
PERCENT PERCENT OF
OF OFFERING NET AMOUNT
NUMBER OF UNITS* PRICE INVESTED
Less than 10,000 3.00% 3.093%
10,000 but less than 25,000 2.75 2.828
25,000 but less than 50,000 2.25 2.302
50,000 but less than 75,000 2.00 2.041
75,000 or more 1.75 1.781
- --------------------
* 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 secondary market sales charge per Unit for Trusts with
remaining terms of two or more years will be reduced pursuant to
the following graduated scale:
PERCENT PERCENT OF
OF OFFERING NET AMOUNT
NUMBER OF UNITS* PRICE INVESTED
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
- --------------------
* 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 table above will apply
to all purchases of Units on any one day by the same purchaser
from the same Underwriter or dealer and for this purpose
purchases of Units of a Trust Fund will be aggregated with
concurrent purchases of units of any other unit investment trust
that may be offered by the Sponsor. Additionally, Units purchased
in the name of a spouse or child (under 21) of such purchaser
will be deemed to be additional purchases by such purchaser. The
reduced sales charges will also be applicable to a trust or other
fiduciary purchasing for a single trust estate or single
fiduciary account.
The Sponsor intends to permit officers, directors and employees
of the Sponsor and its affiliates and, in the discretion of the
Sponsor, registered representatives of selling firms to purchase
Units of the Trust Funds without a sales charge, although a
transaction processing fee may be imposed on such trades.
During the secondary market, the Evaluator will appraise or cause
to be appraised daily the value of the underlying Securities as
of 3:15 P.M. Central time on days the New York Stock Exchange is
open and will adjust the Public Offering Price of the Units
commensurate with such valuation. The 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 bid prices during the secondary
market and for redemptions on the day the valuation is made for
Securities listed on a national stock exchange or, if not so listed,
on the last offer (or bid as the case may be) prices on
the over-the-counter market or by taking into account the same
factors referred to under "Redemption_Computation of Redemption
Price."
The minimum purchase in the secondary market is 100 Units of a
particular Trust Fund.
Public Distribution of Units. During the secondary offering
period, Units of each Trust Fund will be distributed to the
public at the Public Offering Price determined in the manner
provided above.
The Sponsor has qualified Units of each Trust Fund for sale in a
number of states. Units will be sold through dealers who are
members of the National Association of Securities Dealers, Inc.
and through others. Sales may be made to or through dealers at
prices which represent discounts from the Public Offering Price
as set forth below. Certain commercial banks are making Units of
the Trust Funds available to their customers on an agency basis.
A portion of the sales charge paid by their customers is retained
by or remitted to the banks in the amounts shown in the table
below. Under the Glass-Steagall Act, banks are prohibited from
underwriting Trust Fund Units; however, the Glass-Steagall Act
does permit certain agency transactions and the banking
regulators have indicated that these particular agency
transactions are permitted under such Act. In addition, state
securities laws on this issue may differ from the interpretations
of Federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to
state law. The Sponsor reserves the right to change the discounts
set forth below from time to time. In addition to such discounts,
the Sponsor may, from time to time, pay or allow an additional
discount, in the form of cash or other compensation, to dealers
employing registered representatives who sell, during a specified
time period, a minimum dollar amount of Units of a Trust and
other unit investment trusts underwritten by the Sponsor. At
various times the Sponsor may implement programs under which the
sales force of a broker or dealer may be eligible to win nominal
awards for certain sales efforts, or under which the Sponsor will
reallow to any such broker or dealer that sponsors sales contests
or recognition programs conforming to criteria established by the
Sponsor, or participates in sales programs sponsored by the
Sponsor, an amount not exceeding the total applicable sales
charges on the sales generated by such person at the public
offering price during such programs. Also, the Sponsor in its
discretion may from time to time pursuant to objective criteria
established by the Sponsor pay fees to qualifying brokers or
dealers for certain services or activities which are primarily
intended to result in sales of Units of the Trust Funds. Such
payments are made by the Sponsor out of its own assets, and not
out of the assets of the Trust Funds. These programs will not
change the price Unitholders pay for their Units or the amount
that a Trust Fund will receive from the Units sold. The
difference between the discount and the sales charge will be
retained by the Sponsor.
REGULAR CONCESSION OR AGENCY COMMISSION
NUMBER OF UNITS* Less Than
Two Years Two or More Years
Less than 10,000 1.75% 2.75%
10,000 but less than 25,000 1.50 2.25
25,000 but less than 50,000 1.25 2.00
50,000 but less than 75,000 1.00 1.50
75,000 or more 1.00 1.25
- ---------------------
* The breakpoint discounts are also applied on a dollar basis
utilizing a breakpoint equivalent in the above table of $10 per
Unit.
The Sponsor reserves the right to reject, in whole or in part,
any order for the purchase of Units.
Sponsor Profits;. The Sponsor will receive gross sales charges
equal to the percentage of the Public Offering Price of the Units
of a Trust Fund as stated under "Public Offering Price."
MARKET FOR UNITS
While not obligated to do so, the Sponsor intends to, subject to
change at any time, maintain a market for Units of the Trust
Funds offered hereby and to continuously offer to purchase said
Units at prices, determined by the Evaluator, based on the bid
value of the underlying Securities. The aggregate bid prices of
the underlying Securities are expected to be less than the
related aggregate offering prices (which is the evaluation method
used during the initial public offering period). Accordingly,
Unitholders who wish to dispose of their Units should inquire of
their bank or broker as to current market prices in order to
determine whether there is in existence any price in excess of
the Redemption Price and, if so, the amount thereof. The
offering price of any Units resold by the Sponsor will be in
accord with that described in the currently effective prospectus
describing such Units. Any profit or loss resulting from the
resale of such Units will belong to the Sponsor. The Sponsor may
suspend or discontinue purchases of Units of the Trust Funds if
the supply of Units exceeds demand, or for other business
reasons.
REDEMPTION
General. A Unitholder who does not dispose of Units in the
secondary market described above may cause Units to be redeemed
by the Trustee by making a written request to the Trustee 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 as provided under
"Unitholders_Ownership of Units." A certificate should only be
sent by registered or certified mail for the protection of the
Unitholder. Since tender of the certificate is required for
redemption when one has been issued, Units represented by a
certificate cannot be redeemed until the certificate representing
such Units has been received by the purchasers.
Redemption shall be made by the Trustee on the third business day
following the day on which a tender for redemption is received
(the "Redemption Date") by payment of cash equivalent to the
Redemption Price for the Trust Fund involved, determined as set
forth below under "Computation of Redemption Price," as of the
evaluation time stated under "Essential Information," next
following such tender, multiplied by the number of Units being
redeemed. Any Units redeemed shall be cancelled and any undivided
fractional interest in such Trust Fund extinguished. The price
received upon redemption might be more or less than the amount
paid by the Unitholder depending on the value of the Securities
in a Trust Fund at the time of redemption.
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of the
principal amount of a Unit redemption if the Trustee has not been
furnished the redeeming Unitholder's tax identification number in
the manner required by such regulations. Any amount so withheld
is transmitted to the Internal Revenue Service and may be
recovered by the Unitholder only when filing a tax return. Under
normal circumstances the Trustee obtains the Unitholder's tax
identification number from the selling broker. However, any time
a Unitholder elects to tender Units for redemption, such
Unitholder should make sure that the Trustee has been provided a
certified tax identification number in order to avoid this
possible "back-up withholding." In the event the Trustee has not
been previously provided such number, one must be provided at the
time redemption is requested.
Any amounts paid on redemption representing unpaid dividends
shall be withdrawn from the Income Account of the Trust Fund
involved to the extent that funds are available for such purpose.
All other amounts paid on redemption shall be withdrawn from the
Capital Account for such Trust Fund. The Trustee is empowered to
sell Securities for a Trust Fund in order to make funds available
for the redemption of Units of such Trust Fund. Such sale may be
required when Securities would not otherwise be sold and might
result in lower prices than might otherwise be realized. To the
extent Securities are sold, the size and diversity of the
affected Trust Fund will be reduced.
The Trustee is irrevocably authorized in its discretion, if an
Underwriter does not elect to purchase any Unit tendered for
redemption, in lieu of redeeming such Units, to sell such Units
in the over-the-counter market for the account of tendering
Unitholders at prices which will return to the Unitholders
amounts in cash, net after brokerage commissions, transfer taxes
and other charges, equal to or in excess of the Redemption Price
for such Units. In the event of any such sale, the Trustee shall
pay the net proceeds thereof to the Unitholders on the day they would
otherwise be entitled to receive payment of the Redemption
Price.
Unitholders tendering Units for redemption may request a
distribution in kind (a "Distribution In Kind") from the Trustee
in lieu of cash redemption. A Unitholder may request a
Distribution In Kind of an amount and value of Securities per
Unit equal to the Redemption Price per Unit as determined as of
the evaluation time next following the tender, provided that the
tendering Unitholder is entitled to receive at least $50,000
($25,000 for certain Trusts) of proceeds as part of his or her
distribution and the Unitholder has elected to redeem prior to
the date specified in Part Two for each Trust. If the Unitholder
meets these requirements, a Distribution In Kind will be made by
the Trustee through the distribution of each of the Securities of
the Trust involved in book entry form to the account of the
Unitholder's bank or broker-dealer at Depository Trust Company.
The tendering Unitholder shall be entitled to receive whole
shares of each of the Securities comprising the portfolio of the
Trust involved and cash from the Capital Account equal to the
fractional shares to which the tendering Unitholder is entitled.
The Trustee shall make any adjustments necessary to reflect
differences between the Redemption Price of the Units and the
value of the Securities distributed in kind as of the date of
tender. If funds in the Capital Account are insufficient to cover
the required cash distribution to the tendering Unitholder, the
Trustee may sell Securities. The in kind redemption option may be
terminated by the Sponsor on a date other than that specified
under "Redemption in Kind" upon notice to the Unitholders prior
to the specified date.
To the extent that Securities are redeemed in kind or sold, the
size and diversity of the affected Trust Fund will be reduced but
each remaining Unit will continue to represent approximately the
same proportional interest in each Security. Sales may be
required at a time when Securities would not otherwise be sold
and may result in lower prices than might otherwise be realized.
The price received upon redemption may be more or less than the
amount paid by the Unitholder depending on the value of the
Securities in the portfolio at the time of redemption. Special
Federal income tax consequences will result if a Unitholder
requests a Distribution In Kind (see "Federal Tax Status").
The right of redemption may be suspended and payment postponed
(1) for any period during which the New York Stock Exchange is
closed, other than customary weekend and holiday closings, or
during which (as determined by the Securities and Exchange
Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result
of which disposal by the Trustee of Securities is not reasonably
practicable or it is not reasonably practicable to fairly
determine the value of the underlying Securities in accordance
with each Trust Agreement; or (3) for such other period as the
Securities and Exchange Commission may by order permit. The
Trustee is not liable to any person in any way for any loss or
damage which may result from any such suspension or postponement.
Computation of Redemption Price;. The Redemption Price per Unit
(as well as the secondary market Public Offering Price) will be
determined on the basis of the aggregate underlying bid value of
the Securities in the Trust Fund involved. On the Initial Date of
Deposit, the Public Offering Price per Unit (which is based on
the underlying offering prices of the Securities and includes the
sales charge) exceeded the value at which Units could have been
redeemed by the amount shown under "Essential Information." While
the Trustee has the power to determine the Redemption Price per
Unit when Units are tendered for redemption, such authority has
been delegated to the Evaluator which determines the price per
Unit on a daily basis. The Redemption Price per Unit is the pro
rata share of each Unit in a Trust Fund determined on the basis
of (i) the cash on hand in such Trust Fund or monies in the
process of being collected and (ii) the value of the Securities
in the Trust Fund less (a) amounts representing taxes or other
governmental charges payable out of the Trust, (b) any amount
owing to the Trustee for its advances and (c) the accrued
expenses of such Trust. The Evaluator may determine the value of
the Securities in a Trust Fund in the following manner: if the
Security is listed on a national securities exchange, the
evaluation will generally be based on the last bid price on the
exchange (unless the Evaluator deems the price inappropriate as a
basis for evaluation). If the Security is not so listed or, if so
listed and the principal market for the Security is other than on
the exchange, the evaluation will generally be made by the
Evaluator in good faith based on the last bid price on the
over-the-counter market (unless the Evaluator deems such price
inappropriate as a basis for evaluation) or, if a bid price is
not available, (1) on the basis of the current bid price for
comparable securities, (2) by the Evaluator's appraising the
value of the Securities in good faith at the bid side of the
market or (3) by any combination thereof. See "Public Offering of
Units_Public Offering Price."
RETIREMENT PLANS
Each Trust Fund may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other
qualified retirement plans, certain of which are briefly
described below.
Generally, capital gains and income received under each of the
foregoing plans are deferred from Federal taxation. All
distributions from such plans are generally treated as ordinary
income but may, in some cases, be eligible for special income
averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific
tax laws related thereto and should consult their attorneys or
tax advisers with respect to the establishment and maintenance of
any such plan. Such plans are offered by brokerage firms and
other financial institutions. Each Trust will waive the $1,000
minimum investment requirement for IRA accounts. The minimum
investment is $250 for tax-defined plans such as IRA accounts.
Fees and charges with respect to such plans may vary.
Individual Retirement Account_IRA. Any individual under age
70-1/2 may contribute the lesser of $2,000 or 100% of
compensation to an IRA annually. Such contributions are fully deductible
if the individual (and spouse if filing jointly) are
not covered by a retirement plan at work. The deductible amount
an individual may contribute to an IRA will be reduced $10 for
each $50 of adjusted gross income over $25,000 ($40,000 if
married, filing jointly or $0 if married, filing separately), if
either an individual or their spouse (if married, filing jointly)
is an active participant in an employer maintained retirement
plan. Thus, if an individual has adjusted gross income over
$35,000 ($50,000 if married, filing jointly or $0 if married,
filing separately) and if an individual or their spouse is an
active participant in an employer maintained retirement plan, no
IRA deduction is permitted. Under the Code, an individual may
make nondeductible contributions to the extent deductible
contributions are not allowed. All distributions from an IRA
(other than the return of certain excess contributions) are
treated as ordinary income for Federal income taxation purposes
provided that under the Code an individual need not pay tax on
the return of nondeductible contributions, the amount includable
in income for the taxable year is the portion of the amount
withdrawn for the taxable year as the individual's aggregate
nondeductible IRA contributions bear to the aggregate balance of
all IRAs of the individual.
A participant's interest in an IRA must be, or commence to be,
distributed to the participant not later than April 1 of the
calendar year following the year during which the participant
attains age 70-1/2. Distributions made before attainment of age
59-1/2, except in the case of the participant's death or
disability, or where the amount distributed is to be rolled over
to another IRA, or where the distributions are taken as a series
of substantially equal periodic payments over the participant's
life or life expectancy (or the joint lives or life expectancies
of the participant and the designated beneficiary) are generally
subject to a surtax in an amount equal to 10% of the
distribution. The amount of such periodic payments may not be
modified before the later of five years or attainment of age
59-1/2. Excess contributions are subject to an annual 6% excise
tax.
IRA applications, disclosure statements and trust agreements are
available from the Sponsor upon request.
Qualified Retirement Plans. Units of each Trust may be purchased
by qualified pension or profit sharing plans maintained by
corporations, partnerships or sole proprietors. The maximum
annual contribution for a participant in a money purchase pension
plan or to paired profit sharing and pension plans is the lesser
of 25% of compensation or $30,000. Prototype plan documents for
establishing qualified retirement plans are available from the
Sponsor upon request.
Excess Distributions Tax. In addition to the other taxes due by
reason of a plan distribution, a tax of 15% may apply to certain
aggregate distributions from IRAs, Keogh plans, and corporate
retirement plans to the extent such aggregate taxable
distributions exceed specified amounts (generally $150,000, as
adjusted) during a tax year. This 15% tax will not apply to
distributions on account of death, qualified domestic relations orders
or amounts rolled over to an eligible plan. In general,
for lump sum distributions the excess distribution over $750,000
(as adjusted) will be subject to the 15% tax.
The Trustee has agreed to act as custodian for certain retirement
plan accounts. An annual fee of $12.00 per account, if not paid
separately, will be assessed by the Trustee and paid through the
liquidation of shares of the reinvestment account. An individual
wishing the Trustee to act as custodian must complete an EVEREN
UIT/IRA application and forward it along with a check made
payable to the Trustee. Certificates for Individual Retirement
Accounts can not be issued.
UNITHOLDERS
Ownership of Units. Ownership of Units of a Trust Fund will not
be evidenced by certificates unless a Unitholder, the
Unitholder's registered broker/dealer or the clearing agent for
such broker/dealer makes a written request to the Trustee. Units
are transferable by making a written request to the Trustee and,
in the case of Units evidenced by a certificate, by presenting
and surrendering such certificate to the Trustee properly
endorsed or accompanied by a written instrument or instruments of
transfer which should be sent by registered or certified mail for
the protection of the Unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument,
exactly as their names appear on the records of the Trustee and
on any certificate representing the Units to be transferred. Such
signatures must be guaranteed by a participant in the Securities
Transfer Agents Medallion Program ("STAMP") or with such other
signature program in addition to, or in substitution for, STAMP,
as may be accepted by the Trustee.
Units may be purchased and certificates, if requested, will be
issued in denominations of one Unit or any multiple thereof,
subject to each Trust's minimum investment requirement of 100
Units or $1,000. Fractions of Units, if any, will be computed to
three decimal places. Any certificate issued will be numbered
serially for identification, issued in fully registered form and
will be transferable only on the books of the Trustee. The
Trustee may require a Unitholder to pay a reasonable fee, to be
determined in the sole discretion of the Trustee, for each
certificate re-issued or transferred and to pay any governmental
charge that may be imposed in connection with each such transfer
or interchange. The Trustee at the present time does not intend
to charge for the normal transfer or interchange of certificates.
Destroyed, stolen, mutilated or lost certificates will be
replaced upon delivery to the Trustee of satisfactory indemnity
(generally amounting to 3% of the market value of the Units),
affidavit of loss, evidence of ownership and payment of expenses
incurred.
Distributions to Unitholders. Income received by a Trust is
credited by the Trustee to the Income Account of such Trust.
Other receipts are credited to the Capital Account of such Trust.
Income received by a Trust will be distributed on or shortly
after the date set forth in Part Two for each Trust on a pro rata
basis to Unitholders of record as of the preceding record date
(which will be the first day of the related month). All distributions
will be net of applicable expenses. There is no
assurance that any actual distributions will be made since all
dividends received may be used to pay expenses. In addition,
amounts from the Capital Account of such Trust, if any, will be
distributed at least annually in December to the Unitholders then
of record. Proceeds received from the disposition of any of the
Securities after a record date and prior to the following
distribution date will be held in the Capital Account and not
distributed until the next distribution date applicable to such
Capital Account. The Trustee shall not be required to make a
distribution from the Capital Account unless the cash balance on
deposit therein available for distribution shall be sufficient to
distribute at least $1.00 per Unit. The Trustee is not required
to pay interest on funds held in the Capital or Income Accounts
(but may itself earn interest thereon and therefore benefits from
the use of such funds). The Trustee is authorized to reinvest any
funds held in the Capital or Income Accounts, pending
distribution, in U.S. Treasury obligations which mature on or
before the next applicable distribution date. Any obligations so
acquired must be held until they mature and proceeds therefrom
may not be reinvested.
The distribution to the Unitholders as of each record date will
be made on the following distribution date or shortly thereafter
and shall consist of an amount substantially equal to such
portion of the Unitholders' pro rata share of the dividend
distributions then held in the Income Account after deducting
estimated expenses. Because dividends are not received by a Trust
at a constant rate throughout the year, such distributions to
Unitholders are expected to fluctuate. Persons who purchase Units
will commence receiving distributions only after such person
becomes a record owner. Notification to the Trustee of the
transfer of Units is the responsibility of the purchaser, but in
the normal course of business such notice is provided by the
selling broker-dealer.
As of the first day of each month, the Trustee will deduct from
the Income Account of a Trust and, to the extent funds are not
sufficient therein, from the Capital Account of such Trust
amounts necessary to pay the expenses of the Trust (as determined
on the basis set forth under "Trust Operating Expenses"). The
Trustee also may withdraw from said accounts such amounts, if
any, as it deems necessary to establish a reserve for any
governmental charges payable out of such Trust. Amounts so
withdrawn shall not be considered a part of the Trust's assets
until such time as the Trustee shall return all or any part of
such amounts to the appropriate accounts. In addition, the
Trustee may withdraw from the Income and Capital Accounts of such
Trust such amounts as may be necessary to cover redemptions of
Units.
Distribution Reinvestment. Kemper Financial Services, Inc.
("KFS") is the investment manager and principal underwriter of
several front-end load mutual funds. Each Unitholder of a Trust
Fund may elect to have distributions of capital (including
capital gains, if any) or dividends or both automatically
invested without charge in shares of any one of these funds which are
registered in such Unitholder's state of residence, other
than those Kemper-advised mutual funds sold with a contingent
deferred sales charge. Since the portfolio securities and
investment objectives of such Kemper-advised mutual funds may
differ significantly from that of the Trust Funds, Unitholders
should carefully consider the consequences before selecting such
mutual funds for reinvestment. Detailed information with respect
to the investment objectives and the management of such mutual
funds is contained in their respective prospectuses, which can be
obtained from the Sponsor upon request. An investor should read
the prospectus of the reinvestment fund selected prior to making
the election to reinvest. Unitholders who desire to have such
distributions automatically reinvested should inform their broker
at the time of purchase or should file with the Program Agent
referred to below a written notice of election.
Unitholders who are receiving distributions in cash may elect to
participate in distribution reinvestment by filing with the
Program Agent an election to have such distributions reinvested
without charge. Such election must be received by the Program
Agent at least ten days prior to the Record Date applicable to
any distribution in order to be in effect for such Record Date.
Any such election shall remain in effect until a subsequent
notice is received by the Program Agent. See
"Unitholders_Distributions to Unitholders."
The Program Agent is the Trustee. All inquiries concerning
participation in distribution reinvestment should be directed to
the EVEREN Service Company, service agent for the Program Agent
at its unit investment trust office.
Statements to Unitholders;. With each distribution, the Trustee
will furnish or cause to be furnished to each Unitholder a
statement of the amount of income and the amount of other
receipts, if any, which are being distributed, expressed in each
case as a dollar amount per Unit.
The accounts of each Trust Fund are required to be audited
annually, at such Trust Fund's expense, by independent public
accountants designated by such Sponsor, unless the Trustee
determines that such an audit would not be in the best interest
of the Unitholders of such Trust Fund. The accountants' report
will be furnished by the Trustee to any Unitholder of a Trust
Fund upon written request. Within a reasonable period of time
after the end of each calendar year, the Trustee shall furnish to
each person who at any time during the calendar year was a
Unitholder of a Trust Fund a statement, covering the calendar
year, setting forth for such Trust Fund:
A. As to the Income Account:
1. Income received;
2. Deductions for applicable taxes and for fees and
expenses of the Trust and for redemptions of Units, if any; and
3. The balance remaining after such distributions and
deductions, expressed in each case both as a total dollar amount
and as a dollar amount representing the pro rata share of each
Unit outstanding on the last business day of such calendar year;
and
B. As to the Capital Account:
1. The dates of disposition of any Securities (other than
pursuant to Distribution In Kind) and the net proceeds received
therefrom;
2. The results of Distributions In Kind in connection with
redemptions of Units, if any;
3. Deductions for payment of applicable taxes and fees and
expenses of the Trust held for distribution to Unitholders of
record as of a date prior to the determination; and
4. The balance remaining after such distributions and
deductions expressed both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit
outstanding on the last business day of such calendar year; and
C. The following information:
1. A list of the Securities as of the last business day of
such calendar year;
2. The number of Units outstanding on the last business
day of such calendar year;
3. The Redemption Price based on the last evaluation made
during such calendar year;
4. The amount actually distributed during such calendar
year from the Income and Capital Accounts separately stated,
expressed both as total dollar amounts and as dollar amounts per
Unit outstanding on the Record Dates for each such distribution.
Rights of Unitholders;. A Unitholder may at any time tender
Units to the Trustee for redemption. The death or incapacity of
any Unitholder will not operate to terminate a Trust Fund nor
entitle legal representatives or heirs to claim an accounting or
to bring any action or proceeding in any court for partition or
winding up of a Trust Fund.
No Unitholder shall have the right to control the operation and
management of a Trust Fund in any manner, except to vote with
respect to the amendment of the Trust Agreement or termination of
a Trust Fund.
INVESTMENT SUPERVISION
The Trust Funds are unit investment trusts and are not "actively
managed" funds. Traditional methods of investment management for
a managed fund typically involve frequent changes in a portfolio
of securities on the basis of economic, financial and market
analyses. The portfolios of the Trust Funds, however, will not be
actively managed and therefore the adverse financial condition of
an issuer will not necessarily require the sale of its securities
from a portfolio. However, the Sponsor may direct the Trustee to
dispose of Securities upon default in payment of amounts due on
debt obligations of the issuer of the Securities or upon a
decline in price or the occurrence of other market or credit
factors that in the opinion of the Sponsor would make the
retention of such Securities in a Trust Fund detrimental to the
interest of the Unitholders. If the Trustee disposes of such
Securities, the Trustee cannot use the proceeds of the sale to
purchase additional Securities to be included in such Trust. Any
proceeds must be distributed directly to the Unitholders on a pro
rata basis.
The Trustee may sell Securities, designated by the Sponsor, from
a Trust Fund for the purpose of redeeming Units of such Trust Fund
tendered for redemption and the payment of expenses.
ADMINISTRATION OF THE TRUSTS
The Trustee. The Trustee is The Bank of New York, a trust
company organized under the laws of New York. The Bank of New
York has its officers at 101 Barclay Street, New York, New York
10286, telephone 1-800-701-8178. The Bank of New York is subject
to supervision and examination by the Superintendent of Banks of
the State of New York and the Board of Governors of the Federal
Reserve System, and its deposits are insured by the Federal
Deposit Insurance Corporation to the extent permitted by law.
The Trustee, whose duties are ministerial in nature, has not
participated in selecting the portfolios of the Trust Funds. For
information relating to the responsibilities of the Trustee under
the Trust Agreement, reference is made to the material set forth
under "Unitholders."
In accordance with the Trust Agreement, the Trustee shall keep
records of all transactions at its office. Such records shall
include the name and address of, and the number of Units held by,
every Unitholder of each Trust Fund. Such books and records shall
be open to inspection by any Unitholder of a Trust Fund at all
reasonable times during usual business hours. The Trustee shall
make such annual or other reports as may from time to time be
required under any applicable state or Federal statute, rule or
regulation. The Trustee shall keep a certified copy or duplicate
original of the Trust Agreement on file in its office available
for inspection at all reasonable times during usual business
hours by any Unitholder, together with a current list of the
Securities held in a Trust Fund. Pursuant to the Trust Agreement,
the Trustee may employ one or more agents for the purpose of
custody and safeguarding of Securities comprising each Trust
Fund.
Under the Trust Agreement, the Trustee or any successor trustee
may resign and be discharged of the trust created by the Trust
Agreement by executing an instrument in writing and filing the
same with the Sponsor.
The Trustee or successor trustee must mail a copy of the notice
of resignation to all Unitholders then of record, not less than
sixty days before the date specified in such notice when such
resignation is to take effect. The Sponsor upon receiving notice
of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has
been appointed and has accepted the appointment within thirty
days after notification, the retiring Trustee may apply to a
court of competent jurisdiction for the appointment of a
successor. The Sponsor may at any time remove the Trustee with
or without cause and appoint a successor trustee as provided in
the Trust Agreement. Notice of such removal and appointment
shall be mailed to each Unitholder by the Sponsor. Upon execution
of a written acceptance of such appointment by such successor
trustee, all the rights, powers, duties and obligations of the
original Trustee shall vest in the successor. The Trustee shall
be a corporation organized under the laws of the United States,
or any state thereof, which is authorized under such laws to
exercise trust powers. The Trustee shall have at all times an aggregate
capital, surplus and undivided profits of not less than
$5,000,000.
The Sponsor. The Sponsor, EVEREN Unit Investment Trusts, with an
office at 77 West Wacker Drive, 29th Floor, Chicago, Illinois
60601, (800) 621-5024, is a service of EVEREN Securities, Inc.
which is a wholly-owned subsidiary of EVEREN Capital Corporation.
The Sponsor acts as underwriter of a number of other EVEREN unit
investment trusts and will act as underwriter of any other unit
investment trust products developed by the Sponsor in the future.
As of December 31, 1995, the total stockholder's equity of EVEREN
Securities, Inc. was $261,286,862.
If at any time the Sponsor shall fail to perform any of its
duties under the Trust Agreement or shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or shall have
its affairs taken over by public authorities, then the Trustee
may (a) appoint a successor sponsor at rates of compensation
deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and
Exchange Commission, or (b) terminate the Trust Agreement and
liquidate the Trust Fund involved as provided therein, or (c)
continue to act as Trustee without terminating the Trust
Agreement.
The foregoing financial information with regard to the Sponsor
relates to the Sponsor only and not to the Trust Funds. Such
information is included in this Prospectus only for the purpose
of informing investors as to the financial responsibility of the
Sponsor and its ability to carry out its contractual obligations
with respect to the Trust Funds. More comprehensive financial
information can be obtained upon request from the Sponsor.
The Evaluator. EVEREN Unit Investment Trusts, the Sponsor, also
serves as Evaluator. The Evaluator may resign or be removed by
the Trustee in which even the Trustee is to use its best efforts
to appoint a satisfactory successor. Such resignation or removal
shall become effective upon acceptance of appointment by the
successor evaluator. If upon resignation of the Evaluator no
successor has accepted appointment within thirty days after
notice of resignation, the Evaluator may apply to a court of
competent jurisdiction for the appointment of a successor. Notice
of such resignation or removal and appointment shall be mailed by
the Trustee to each Unitholder.
Amendment and Termination. The Trust Agreement may be amended by
the Trustee and the Sponsor without the consent of any of the
Unitholders: (1) to cure any ambiguity or to correct or
supplement any provision which may be defective or inconsistent;
(2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental
agency; or (3) to make such provisions as shall not materially
adversely affect the interests of the Unitholders. The Trust
Amendment with respect to a Trust Fund may also be amended in any
respect by the Sponsor and the Trustee, or any of the provisions
thereof may be waived, with the consent of the holders of Units
representing 66-2/3% of the Units then outstanding of such Trust
Fund, provided that no such amendment or waiver will reduce the
interest of any Unitholder thereof without the consent of such
Unitholder or reduce the percentage of Units required to consent
to any such amendment or waiver without the consent of all
Unitholders of such Trust Fund. In no event shall the Trust
Agreement be amended to increase the number of Units of a Trust
Fund issuable thereunder or to permit, except in accordance with
the provisions of the Trust Agreement, the acquisition of any
Securities in addition to or in substitution for those initially
deposited in a Trust Fund. The Trustee shall promptly notify
Unitholders of the substance of any such amendment.
The Trust Agreement provides that a Trust Fund shall terminate
upon the liquidation, redemption or other disposition of the last
of the Securities held in such Trust Fund but in no event is it
to continue beyond the Mandatory Termination Date set forth under
"Essential Information." If the value of a Trust Fund shall be
less than the applicable minimum value stated under "Essential
Information" (40% of the aggregate value of the Securities_based
on the value at the date of deposit of such Securities into such
Trust Fund), the Trustee may, in its discretion, and shall, when
so directed by the Sponsor, terminate the Trust Fund. The Trust
Fund may be terminated at any time by the holders of Units
representing 66-2/3% of the Units thereof then outstanding.
No later than the date specified under "Liquidation Period" set
forth under "Essential Information," the Trustee will begin to
sell all of the underlying Securities on behalf of Unitholders in
connection with the termination of a Trust Fund. The Sponsor has
agreed to assist the Trustee in these sales. The sale proceeds
will be net of any incidental expenses involved in the sales.
The Sponsor will attempt to sell the Securities as quickly as it
can during the Liquidation Period without in its judgment
materially adversely affecting the market price of the
Securities, but it is expected that all of the Securities will in
any event be disposed of by the end of the Liquidation Period.
The Sponsor does not anticipate that the period will be longer
than one month, and it could be as short as one day, depending on
the liquidity of the Securities being sold. The liquidity of any
Security depends on the daily trading volume of the Security and
the amount that the Sponsor has available for sale on any
particular day.
It is expected (but not required) that the Sponsor will generally
follow the following guidelines in selling the Securities: for
highly liquid Securities, the Sponsor will generally sell
Securities on the first day of the Liquidation Period; for less
liquid Securities, on each of the first two days of the
Liquidation Period, the Sponsor will generally sell any amount of
any underlying Securities at a price no less than 1/2 of one
point under the last closing sale price of those Securities.
Thereafter, the price limit will increase to one point under the
last closing sale price. After four days, the Sponsor currently
intends to sell at least a fraction of the remaining underlying
Securities, the numerator of which is one and the denominator of
which is the total number of days remaining (including that day)
in the Liquidation Period without any price restrictions. Of
course, no assurances can be given that the market value of the
Securities will not be adversely affected during the Liquidation
Period.
Any Unitholder who wishes to receive a Distribution In Kind at
the termination of a Trust and who otherwise qualifies for such a
distribution (see "Redemption") must notify the Trustee no later
than the date indicated in Part Two for each Trust.
In the event of termination of a Trust Fund, written notice
thereof will be sent by the Trustee to all Unitholders of such
Trust Fund. Within a reasonable period after termination, the
Trustee will sell any Securities remaining in that Trust Fund
and, after paying all expenses and charges incurred by such Trust
Fund, will distribute to Unitholders thereof (upon surrender for
cancellation of certificates for Units, if issued) their pro rata
share of the balances remaining in the Income and Capital
Accounts of the Trust Fund.
Limitations on Liability;. The Sponsor: The Sponsor is liable
for the performance of its obligations arising from its
responsibilities under the Trust Agreement, but will be under no
liability to the Unitholders for taking any action or refraining
from any action in good faith pursuant to the Trust Agreement or
for errors in judgment, except in cases of its own gross
negligence, bad faith or willful misconduct. The Sponsor shall
not be liable or responsible in any way for depreciation or loss
incurred by reason of the sale of any Securities.
The Trustee: The Trust Agreement provides that the Trustee shall
be under no liability for any action taken in good faith in
reliance upon prima facie properly executed documents or for the
disposition of monies, Securities or certificates except by
reason of its own gross negligence, bad faith or willful
misconduct, nor shall the Trustee be liable or responsible in any
way for depreciation or loss incurred by reason of the sale by
the Trustee of any Securities. In the event that the Sponsor
shall fail to act, the Trustee may act and shall not be liable
for any such action taken by it in good faith. The Trustee shall
not be personally liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereof. In addition, the Trust Agreement contains other
customary provisions limiting the liability of the Trustee.
The Evaluator: The Trustee and Unitholders may rely on any
evaluation furnished by the Evaluator and shall have no
responsibility for the accuracy thereof. The Trust Agreement
provides that the determinations made by the Evaluator shall be
made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be
under no liability to the Trustee or Unitholders for errors in
judgment, but shall be liable only for its gross negligence, lack
of good faith or willful misconduct.
EXPENSES OF THE TRUSTS
The Sponsor will not charge the Trusts any fees for services
performed as Sponsor. The Sponsor will receive a portion of the
sale commissions paid in connection with the purchase of Units
and will share in profits, if any, related to the deposit of
Securities in the Trust Funds. The Sponsor has borne all the
expenses of creating and establishing the Trusts including the cost
of the initial preparation, printing and execution of the
Prospectus, Trust Agreement and certificates, legal and
accounting expenses, advertising and selling expenses, payment of
closing fees, the expenses of the Trustee and other out-of-pocket
expenses.
The Trustee receives for its services that fee set forth under
"Essential Information" in Part Two for each Trust. The Trustee's
fee which is calculated monthly is based on the largest number of
Units outstanding during the calendar year for which such
compensation relates. The Trustee's fees are payable monthly on
or before the fifteenth day of the month from the Income Account
to the extent funds are available and then from the Capital
Account. The Trustee benefits to the extent there are funds for
future distributions, payment of expenses and redemptions in the
Capital and Income Accounts since these Accounts are non-interest
bearing and the amounts earned by the Trustee are retained by the
Trustee. Part of the Trustee's compensation for its services to
the Trust Funds is expected to result from the use of these
funds.
For evaluation of Securities in the Trust Funds, the Evaluator
shall receive that fee set forth under "Essential Information" in
Part Two for each Trust, payable monthly, based upon the largest
number of Units outstanding during the calendar year for which
such compensation relates.
The Trustee's fees and the Evaluator's fees are deducted from the
Income Account of each Trust Fund to the extent funds are
available and then from the Capital Account. Each such fee may be
increased without approval of Unitholders by amounts not
exceeding a proportionate increase in the Consumer Price Index
entitled "All Services Less Rent of Shelter," published by the
United States Department of Labor, or any equivalent index
substituted therefor.
The following additional charges are or may be incurred by each
Trust Fund: (a) fees for the Trustee's extraordinary services;
(b) expenses of the Trustee (including legal and auditing
expenses, but not including any fees and expenses charged by an
agent for custody and safeguarding of Securities) and of counsel,
if any; (c) various governmental charges; (d) expenses and costs
of any action taken by the Trustee to protect a Trust or the
rights and interests of the Unitholders; (e) indemnification of
the Trustee for any loss, liability or expense incurred by it in
the administration of a Trust not resulting from gross
negligence, bad faith or willful misconduct on its part; (f)
indemnification of the Sponsor for any loss, liability or expense
incurred in acting in that capacity without gross negligence, bad
faith or willful misconduct; and (g) expenditures incurred in
contacting Unitholders upon termination of a Trust Fund. The fees
and expenses set forth herein are payable out of the Trust Fund
involved and, when owing to the Trustee, are secured by a lien on
that Trust Fund. The fees and expenses set forth herein are
payable out of the Trust involved. When such fees and expenses
are paid by or owing to the Trustee, they are secured by a lien
on the portfolio of such Trust Fund. Since the Securities are all
common stocks, and the income stream produced by dividend payments is
unpredictable, the Sponsor cannot provide any
assurance that dividends will be sufficient to meet any or all
expenses of a Trust Fund. If the balances in the Income and
Capital Accounts are insufficient to provide for amounts payable
by a Trust, the Trustee has the power to sell Securities to pay
such amounts. These sales may result in capital gains or losses
to Unitholders. See "Federal Tax Status."
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters
relating to Federal tax law have been passed upon by Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor.
INDEPENDENT AUDITORS
The statement of net assets, including the schedule of
investments, of each Trust appearing in Part Two for each
Prospectus and Registration Statement have been audited by Ernst
& Young LLP, independent auditors, as set forth in their reports
thereon appearing elsewhere therein and in the Registration
Statement, and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and
auditing.
<PAGE>
Kemper Equity Portfolio Trust
Series 7
(Utility Series)
Part Two
Dated April 29, 1996
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
NOTE: Part Two of this Prospectus May Not Be Distributed unless Accompanied by
Part One.
<PAGE>
Kemper Equity Portfolio Trust
Series 7
(Utility Series)
Essential Information
As of December 31, 1995
Sponsor and Evaluator: EVEREN Unit Investment Trusts(1)
Trustee: Investors Fiduciary Trust Company(2)
<TABLE>
<CAPTION>
General Information
<S> <C>
Aggregate Value of the Stocks in Trust $9,157,523
Number of Units 833,152
Fractional Undivided Interest in the Trust per Unit 1/833,152
Public Offering Price per Unit:
Aggregate Value of Securities in the Trust $9,157,523
Aggregate Value of Securities per Unit $10.99
Net Cash per Unit $.04
Sales Charge 4.0% (4.167% of the net amount invested)
per Unit $.46
Public Offering Price per Unit $11.49
Redemption Price per Unit $11.03
</TABLE>
Minimum Value of the Trust
under which Trust Agreement
may be Terminated Trust agreement may be terminated if
value of Trust Fund is less than 40%
of the value of the Securities when
deposited in the portfolio.
Date of Trust Agreement April 19, 1994
Mandatory Termination Date July 19, 1998
Evaluator's Annual Evaluation Fee Maximum of $.0045 per Unit
Trustee's Annual Fee $.008 per Unit
Record Dates First day of January, April, July
and October
Distribution Dates Fifteenth day of January, April,
July and October
Evaluations for purpose of sale, purchase or redemption of Units are made as
of 3:15 P.M. Central Time next following receipt of an order for a sale or
purchase of Units or receipt by Investors Fiduciary Trust Company of Units
tendered for redemption.
[FN]
1. See Note 1 to the accompanying financial statements of the Trust regarding
a change in ownership of Kemper Unit Investment Trusts and Kemper Securities,
Inc.
2. See Note 6 to the accompanying financial statements of the Trust regarding
the change in Trustee.
<PAGE>
Report of Independent Auditors
Unitholders
Kemper Equity Portfolio Trust
Series 7 (Utility Series)
We have audited the accompanying statement of assets and liabilities of Kemper
Equity Portfolio Trust Series 7 (Utility Series), including the schedule of
investments, as of December 31, 1995, and the related statements of operations
and changes in net assets for the year then ended and for the period from
April 19, 1994 (Date of Initial Deposit) to December 31, 1994. These
financial statements are the responsibility of the Trust's sponsor. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of investments owned as of December 31, 1995,
by correspondence with the custodial bank. An audit also includes assessing
the accounting principles used and significant estimates made by the sponsor,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kemper Equity Portfolio Trust
Series 7 (Utility Series) at December 31, 1995, and the results of its
operations and the changes in its net assets for the periods indicated above
in conformity with generally accepted accounting principles.
Ernst & Young LLP
Kansas City, Missouri
April 15, 1996
<PAGE>
Kemper Equity Portfolio Trust
Series 7
(Utility Series)
Statement of Assets and Liabilities
December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Investments, at value (cost $7,642,864) $9,157,523
Cash 125,181
Dividends receivable 38,233
----------
Total assets 9,320,937
Liabilities and net assets
Distributions payable 131,680
Accrued liabilities 1,153
----------
132,833
Net assets, applicable to 833,152 Units
outstanding:
Cost of Trust assets $7,642,864
Unrealized appreciation 1,514,659
Distributable funds 30,581
---------- ----------
Net assets $9,188,104
==========
Net asset value per Unit $11.03
==========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Equity Portfolio Trust
Series 7
(Utility Series)
Statements of Operations
<TABLE>
<CAPTION>
Period from
April 19,
Year ended 1994 to
December 31, December 31,
1995 1994
<S> <C> <C>
---------- ---------
Investment income - dividends $599,474 $370,041
Expenses:
Trustee's fees and related expenses 11,015 5,279
Evaluator's fees 4,185 2,065
---------- ---------
Total expenses 15,200 7,344
---------- ---------
Net investment income 584,274 362,697
Realized and unrealized gain (loss)
on investments:
Net realized gain 63,697 -
Unrealized appreciation (depreciation)
during the period 1,701,671 (187,012)
---------- ---------
Net gain (loss) on investments 1,765,368 (187,012)
---------- ---------
Net increase in net assets resulting
from operations $2,349,642 $175,685
========== =========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Equity Portfolio Trust
Series 7
(Utility Series)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Period from
April 19,
Year ended 1994 to
December 31, December 31,
1995 1994
<S> <C> <C>
----------- ----------
Operations:
Net investment income $584,274 $362,697
Net realized gain on investments 63,697 -
Unrealized appreciation (depreciation)
on investments during the period 1,701,671 (187,012)
----------- ----------
Net increase in net assets resulting
from operations 2,349,642 175,685
Distributions to Unitholders:
Net investment income (595,241) (321,491)
Capital transactions:
Issuance of 944,478 Units - 8,739,037
Issuance of 52,472 Units 493,263 -
Redemption of 163,798 Units (1,652,791) -
----------- ----------
Total increase in net assets 594,873 8,593,231
Net assets:
Beginning of the period 8,593,231 -
----------- ----------
End of the period (including distributable
funds applicable to Trust Units of $30,581
and $41,206 at December 31, 1995 and 1994,
respectively) $9,188,104 $8,593,231
=========== ==========
Trust Units outstanding at the end of the period 833,152 944,478
=========== ==========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Equity Portfolio Trust
Series 7
(Utility Series)
Schedule of Investments
December 31, 1995
<TABLE>
<CAPTION>
Market
Shares Name of Issuer Value
<S> <C> <C> <C>
------ --------------------------------------------- ----------
18,260 Allegheny Power System, Inc. $520,410
14,291 Boston Edison Company 419,798
18,260 Cinergy Corporation 556,930
13,497 Consolidated Edison Company of New York, Inc. 428,530
19,054 DPL, Inc. 471,586
15,878 Detroit Edison Company 547,791
9,526 Dominion Resources, Inc. 391,757
12,702 Entergy Corporation 369,946
11,908 FPL Group, Inc. 549,256
13,497 General Public Utilities Corporation 457,211
12,702 IPALCO Enterprises, Inc. 482,676
19,054 Kansas City Power & Light Company 497,786
19,054 Long Island Lighting Company 307,246
14,291 Minnesota Power & Light Company 405,507
13,497 Pacific Gas and Electric Company 381,290
23,023 Pacificorp 486,361
14,291 Peco Energy Company 428,730
14,291 Public Service Company of Colorado 503,758
25,406 SCEcorp 447,781
20,643 Southern Company 503,173
----------
$9,157,523
==========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Equity Portfolio Trust
Series 7
(Utility Series)
Notes to Financial Statements
1. Significant Accounting Policies
Trust Sponsor and Evaluator
From the Trust's date of deposit through September 14, 1995, the Trust's
sponsor and evaluator was Kemper Unit Investment Trusts, a division of Kemper
Securities, Inc. At that date, the members of certain Kemper Corporation
operating units acquired ownership of certain Kemper units, which included
Kemper Securities, Inc. In connection with the acquisition, Kemper
Securities, Inc. changed its name to EVEREN Securities, Inc., and Kemper Unit
Investment Trusts became EVEREN Unit Investment Trusts, which now serves as
the "Evaluator" and sponsor of the Trust. Subsequent to the date of
acquisition, neither EVEREN Securities, Inc. nor EVEREN Unit Investment Trusts
is affiliated with Kemper Financial Services, Inc. or Kemper Corporation.
Valuation of Investments
Stocks are valued at closing bid prices as determined by EVEREN Unit
Investment Trusts. If there are no appropriate prices available from a
national securities exchange, then the prices will be determined as follows:
(a) on the basis of current bid prices for comparable securities, (b)
appraisal of the value of the Stocks in good faith on the bid side of the
market or (c) by any combination of the above.
Cost of Investments
Cost of the Trust's Stocks is based on the offer prices of the Stocks on the
dates of deposits of such securities acquired during the primary sales period,
as determined by the Evaluator. Realized gain (loss) from investment
transactions is reported on a first-in, first-out basis.
Investment Income
Dividends are recorded on the ex-dividend date.
2. Unrealized Appreciation and Depreciation
Following is an analysis of net unrealized appreciation at December 31, 1995:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized depreciation $(50,031)
Gross unrealized appreciation 1,564,690
----------
Net unrealized appreciation $1,514,659
==========
</TABLE>
<PAGE>
Kemper Equity Portfolio Trust
Series 7
(Utility Series)
Notes to Financial Statements (continued)
3. Transactions with Affiliates
Investors Fiduciary Trust Company (IFTC), who served as Trustee through
February 29, 1996, was 50% owned by Kemper Financial Services, Inc., an
affiliate of Kemper Unit Investment Trusts until January 31, 1995, at which
time State Street Boston Corporation acquired IFTC. Payments to the Trustee
will be paid at the rate of approximately $.008 per annum per Unit. Such
compensation will be computed monthly on the basis of the largest number of
Units outstanding at any time during the calendar year. The Trustee also will
benefit to the extent that it holds funds in noninterest-bearing accounts. In
addition, the regular and recurring annual expenses of the Trust, including
without limitation certain mailing, printing and other miscellaneous expenses,
are estimated to be $.0035 per Unit. Actual expenses payable by the Trust may
be more or less than this estimate.
The annual Evaluator's fee, calculated monthly, is $.0045 per annum per Unit
based on the largest number of Units outstanding during the calendar year.
4. Federal Income Taxes and Dividends to Unitholders
The Trust is not an association taxable as a corporation for federal income
tax purposes. Each Unitholder is considered to be the owner of a pro rata
portion of the Trust under Subpart E, Subchapter J of Chapter 1 of the
Internal Revenue Code of 1986, as amended. Accordingly, no provision has been
made for federal income taxes.
5. Other Information
Cost to Investors
The cost to initial investors of Units of the Trust was based on the aggregate
value of the Stocks in the Trust valued at the closing prices on the offer
side of the market on the business day prior to the Date of Deposit, plus or
minus a pro rata share of any distributable funds, plus a sales charge of 4.0%
(4.167% of the net amount invested). The Public Offering Price for secondary
market transactions is based on the aggregate market value of the Securities
valued at the closing bid prices, plus or minus a pro rata share of any
distributable funds, plus a 4.0% sales charge (equivalent to 4.167% of the net
amount invested).
The sponsor intends to permit officers, directors and employees of the sponsor
and its affiliates and, in the discretion of the sponsor, registered
representatives of selling firms to purchase Units of the Trust without a
sales charge.
<PAGE>
<TABLE>
Kemper Equity Portfolio Trust
Series 7
(Utility Series)
Notes to Financial Statements (continued)
5. Other Information (continued)
Selected data per Unit of the Trust outstanding during each period (amounts
relating to net investment income are based on weighted average Units
outstanding) -
<CAPTION>
Period from
April 19,
Year ended 1994 to
December 31, December 31,
1995 1994
<S> <C> <C>
------ -----
Investment income - dividends $.64 $.45
Expenses .02 .01
------ -----
Net investment income .62 .44
Distribution to Unitholders:
Net investment income (.63) (.40)
Net gain (loss) on investments 1.94 (.54)
------ -----
Change in net asset value 1.93 (.50)
Net asset value:
Beginning of the period 9.10 9.60*
------ -----
End of the period, including
distributable funds $11.03 $9.10
====== =====
</TABLE>
[FN]
*Value at Date of Initial Deposit (April 19, 1994).
6. Change of Trustee
On March 1, 1996, The Bank of New York assumed all trustee responsibilities
from IFTC.
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our report dated April 15, 1996, in this Post-
Effective Amendment to the Registration Statement (Form S-6) and related
Prospectus of Kemper Equity Portfolio Trust Series 7 (Utility Series) dated
April 29, 1996.
Ernst & Young LLP
Kansas City, Missouri
April 29, 1996
<PAGE>
Contents of Post-Effective AmendmentTo Registration Statement
This Post-Effective amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933, The
Registrant, Kemper Equity Portfolio Trust, Series 7, certifies
that it meets all of the requirements for effectiveness of this
registration statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago,
and State of Illinois, on the 28th day of April, 1996.
Kemper Equity Portfolio Trust, Series 7
Registrant
By: EVEREN Unit Investment Trusts
(a division of EVEREN Securities, Inc.)
Depositor
By: Michael J. Thoms
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on
April 28, 1996 by the following persons, who constitute a
majority of the Board of Directors of EVEREN Securities, Inc.
Signature Title
James R. Boris Chairman and Chief Executive Officer
James R. Boris
Daniel D. Williams Senior Executive Vice President, Chief
Daniel D. Williams Financial Officer and Treasurer
Frank V. Geremia Senior Executive Vice President
Frank V. Geremia
Stephen G. McConahey President and Chief Operating Officer
Stephen G. McConahey
Stanley R. Fallis Senior Executive Vice President and Chief
Stanley R. Fallis Administrative Officer
David M. Greene Senior Executive Vice President and
David M. Greene Director of Client Services
Thomas R. Reedy Senior Executive Vice President and
Thomas R. Reedy Director of Capital Markets
Janet L. Reali Executive Vice President, Corporate Counsel
Janet L. Reali and Corporate Secretary
Michael J. Thoms
Michael J. Thoms signs this document pursuant to a Power of
Attorney filed with the Securities and Exchange Commission with
Amendment No. 1 to the Registration Statement on Form S-6 for
Kemper Defined Funds Series 28 (Registration No. 33-56779).
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Post-effective Amendment Number 2 to Form S-6 and is qualified in
its entirety by reference to such Post-effective Amendment to Form S-6.
</LEGEND>
<SERIES>
<NUMBER> 7
<NAME> KEMPER EQUITY PORTFOLIO TRUST
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 7,642,864
<INVESTMENTS-AT-VALUE> 9,157,523
<RECEIVABLES> 38,233
<ASSETS-OTHER> 125,181
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9,320,937
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 132,833
<TOTAL-LIABILITIES> 132,833
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,642,864
<SHARES-COMMON-STOCK> 833,152
<SHARES-COMMON-PRIOR> 944,478
<ACCUMULATED-NII-CURRENT> 30,581
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,514,659
<NET-ASSETS> 9,188,104
<DIVIDEND-INCOME> 599,474
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 15,200
<NET-INVESTMENT-INCOME> 584,274
<REALIZED-GAINS-CURRENT> 63,697
<APPREC-INCREASE-CURRENT> 1,701,671
<NET-CHANGE-FROM-OPS> 2,349,642
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (595,241)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 52,472
<NUMBER-OF-SHARES-REDEEMED> 163,798
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 594,873
<ACCUMULATED-NII-PRIOR> 41,206
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
