<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 4, 1994
REGISTRATION NO. 33-
CIK 922572
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
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REGISTRATION STATEMENT
ON
FORM S-6
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FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
A. EXACT NAME OF TRUST:
KEMPER EQUITY PORTFOLIO TRUSTS
SERIES 8 AND SERIES 9
B. NAME OF DEPOSITOR:
KEMPER UNIT INVESTMENT TRUSTS
(A SERVICE OF KEMPER SECURITIES, INC.)
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
KEMPER UNIT INVESTMENT TRUSTS
77 WEST WACKER DRIVE, 29TH FLOOR
CHICAGO, ILLINOIS 60601
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
Copy to:
C. Perry Moore MARK J. KNEEDY
Kemper Unit Investment Trusts c/o Chapman and Cutler
77 Wacker Drive, 29th floor 111 West Monroe Street
Chicago, Illinois 60601 Chicago, Illinois 60603
CALCULATION OF REGISTRATION FEE
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<TABLE>
<S> <C> <C> <C>
PROPOSED
MAXIMUM
TITLE AND AMOUNT AGGREGATE AMOUNT OF
OF SECURITIES OFFERING REGISTRATION
BEING REGISTERED PRICE FEE
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Series 8 and Series 9 An indefinite Indefinite $500
number of Units
of Beneficial
Interest pursuant
to Rule 24f-2 under
the Investment Company
Act of 1940
</TABLE>
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E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the Registration
Statement.
/ / Check box if it is proposed that this filing will become effective at
on , 199 pursuant to paragraph (b) of Rule 487.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
<PAGE> 2
CROSS-REFERENCE SHEET
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTIONS AS
TO THE PROSPECTUS IN FORM S-6)
<TABLE>
<CAPTION>
FORM S-6
FORM N-8B-2 ITEM NUMBER HEADING IN PROSPECTUS
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I. ORGANIZATION AND GENERAL INFORMATION
<S> <C>
1. (a) Name of trust................................. Prospectus front cover
(b) Title of securities issued.................... Essential Information
2. Name and address of each depositor................ \ Administration of the Trusts
3. Name and address of trustee....................... /
4. Name and address of principal underwriters........ *
5. State of organization of trust.................... The Trust Funds
6. Execution and termination of trust agreement...... The Trust Funds;
Administration of the Trusts
7. Changes of name................................... The Trust Funds
8. Fiscal year....................................... *
9. Litigation........................................ *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer securities............... Unitholders
(b) Cumulative or distributive securities......... The Trust Funds
(c) Redemption.................................... Redemption
(d) Conversion, transfer, etc. ................... Unitholders;
Market for Units
(e) Periodic payment plan......................... *
(f) Voting rights................................. Unitholders
/ Investment Supervision;
(g) Notice of certificateholders.................. < Administration of the Trusts;
\ Unitholders
(h) Consents required............................. Unitholders;
Administration of the Trusts
(i) Other provisions.............................. Federal Tax Status
11. Type of securities comprising units............... The Trust Funds; The Trust Portfolios; Portfolios
12. Certain information regarding periodic payment
certificates...................................... *
/ Essential Information;
13. (a) Load, fees, expenses, etc..................... < Public Offering of Units;
\ Expenses of the Trusts
(b) Certain information regarding periodic payment
certificates............................... *
(c) Certain percentages........................... Essential Information;
Public Offering of Units
(d) Certain other fees, etc. payable by holders... Unitholders
(e) Certain profits receivable by depositor, / Expenses of the Trusts;
principal, <
underwriters, writers, trustee or affiliated \ Public Offering of Units
persons....................................
(f) Ratio of annual charges to income............. *
14. Issuance of trust's securities.................... / The Trust Funds;
\ Unitholders
15. Receipt and handling of payments from
purchasers........................................ *
</TABLE>
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* Inapplicable, answer negative or not required.
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<TABLE>
<CAPTION>
FORM S-6
FORM N-8B-2 ITEM NUMBER HEADING IN PROSPECTUS
- ------------------------------------------------------ --------------------------------------------------
<S> <C>
/ The Trust Funds; The Trust Portfolios;
16. Acquisition and disposition of underlying / Investment Supervision;
securities........................................ \
\ Market for Units;
17. Withdrawal or redemption.......................... / Redemption;
\ Public Offering of Units
18. (a) Receipt, custody and disposition of income.... Unitholders
(b) Reinvestment of distributions................. Unitholders
(c) Reserves or special funds..................... Expenses of the Trusts
(d) Schedule of distributions..................... *
/ Unitholders;
19. Records, accounts and reports..................... < Redemption;
\ Administration of the Trusts
20. Certain miscellaneous provisions of trust
agreement
(a) Amendment..................................... \
(b) Termination................................... \ Administration of the Trusts
(c) and (d) Trustee, removal and successor........ /
(e) and (f) Depositor, removal and successor...... /
21. Loans to security holders......................... *
22. Limitations on liability.......................... Administration of the Trusts
23. Bonding arrangements.............................. *
24. Other material provisions of trust agreement...... *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor......................... Administration of the Trusts
26. Fees received by depositor........................ See Items 13(a) and 13(e)
27. Business of depositor............................. \
28. Certain information as to officials and affiliated \
persons > Administration of the Trusts
of depositor.................................... /
29. Voting securities of depositor.................... /
30. Persons controlling depositor..................... /
31. Payment by depositor for certain services rendered \
to trust........................................ \
32. Payment by depositor for certain other services \ *
rendered to trust............................... >
33. Remuneration of employees of depositor for certain /
services rendered to trust...................... /
34. Remuneration of other persons for certain services /
rendered to trust...............................
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of Trust's securities by states...... Public Offering of Units
36. Suspension of sales of trust's securities......... \
37. Revocation of authority to distribute............. / *
38. (a) Method of Distribution........................ \ Public Offering of Units;
(b) Underwriting Agreements....................... / Market for Units
(c) Selling Agreements............................ Public Offering of Units
39. (a) Organization of principal underwriters........ \ Administration of the Trusts
(b) N.A.S.D. membership of principal /
underwriters...............................
40. Certain fees received by principal underwriters... See Items 13(a) and 13(e)
</TABLE>
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* Inapplicable, answer negative or not required.
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<TABLE>
<CAPTION>
FORM S-6
FORM N-8B-2 ITEM NUMBER HEADING IN PROSPECTUS
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41. (a) Business of principal underwriters............ Administration of the Trusts
(b) Branch offices of principal underwriters......\
(c) Salesmen of principal underwriters............ > *
42. Ownership of trust's securities by certain /
persons.........................................
43. Certain brokerage commissions received by
principal underwriters.......................... Public Offering of Units
44. (a) Method of valuation........................... Public Offering of Units
(b) Schedule as to offering price................. *
(c) Variation in offering price to certain
persons.................................... Public Offering of Units
45. Suspension of redemption rights................... Redemption
/ Redemption;
46. (a) Redemption valuation..........................< Market for Units;
\ Public Offering of Units
(b) Schedule as to redemption price............... *
/ Market for Units;
47. Maintenance of position in underlying < Public Offering of Units;
securities...................................... \ Redemption
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of trustee............ / Administration of the Trusts
49. Fees and expenses of trustee...................... \ Expenses of the Trusts
50. Trustee's lien....................................
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Insurance of holders of trust's securities........ Cover Page;
Expenses of the Trusts
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust agreement with respect to
selection or /
elimination of underlying securities.......< The Trust Funds;
\ Investment Supervision
(b) Transactions involving elimination of
underlying securities...................... *
(c) Policy regarding substitution or elimination
of underlying securities...................
Investment Supervision
(d) Fundamental policy not otherwise covered...... *
/ Essential Information; The Trust
53. Tax status of Trust...............................< Portfolios;
\ Federal Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last ten years........ \
55.\ \
56. \ Certain information regarding periodic payment \ *
\ certificates.................................. \
57. > >
/ /
58. / /
59. Financial statements (Instruction 1(c) to Form
S-6)............................................ *
</TABLE>
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* Inapplicable, answer negative or not required.
<PAGE> 5
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
PRELIMINARY PROSPECTUS DATED MAY 4, 1994
SUBJECT TO CHANGE
KEMPER EQUITY PORTFOLIO TRUSTS
SERIES 8 (BANKING INSTITUTIONS) AND
SERIES 9 (HOTEL AND GAMING SERIES)
Kemper Equity Portfolio Trusts, Series 8 (Banking Institutions) ("Series 8") was
formed with the investment objective of obtaining maximum capital appreciation
and increasing dividend income through investment in a fixed portfolio of equity
securities of companies diversified within the banking industry which the
Sponsor believes are potential acquisition candidates of other banking
institutions. The Securities selected are considered by the Sponsor to have the
potential to achieve the Trust's objective over the approximate year term of
the Trust. Kemper Equity Portfolio Trusts, Series 9 (Hotel and Gaming Series)
("Series 9") was formed with the investment objective of obtaining maximum
capital appreciation through investment in a fixed portfolio of equity
securities of companies diversified within the hotel and gaming industry. The
Securities selected are considered by the Sponsor to have the potential to
achieve the Trust's objective over the approximate year term of the Trust. See
"The Trust Portfolios." There is no assurance that the Trusts will achieve their
objectives.
Units of the Trusts are not deposits or obligations of, or guaranteed by, any
bank, and Units are not federally insured or otherwise protected by the Federal
Deposit Insurance Corporation and involve investment risk including loss of
principal.
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SPONSOR: KEMPER UNIT INVESTMENT TRUSTS, a
service of Kemper Securities, Inc.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The investor is advised to read and retain this Prospectus for future reference.
THE DATE OF THIS PROSPECTUS IS MAY , 1994.
<PAGE> 6
SUMMARY
THE TRUST FUNDS. Kemper Equity Portfolio Trusts, Series 8 (Banking Institutions)
and Series 9 (Hotel and Gaming Series) (the "Trust Funds" or "Trusts") are
separate and distinct unit investment trusts registered under the Investment
Company Act of 1940.
The Trust Funds initially consist of securities and delivery statements (i.e.,
contracts) to purchase common stocks issued by companies which the Sponsor
believes have the potential to achieve the objective of the respective Trust
(the "Securities"). For the criteria used by the Sponsor in selecting the
Securities, see "The Trust 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 is, of course, dependent upon several factors including,
among other factors, the financial condition of the issuers of the Securities
(see "The Trust Portfolios").
Series 8 was formed with the investment objective of obtaining maximum capital
appreciation and increasing dividend income over the life of the Trust through
investment in a fixed portfolio of equity securities of companies diversified
within the banking industry which the Sponsor believes are potential acquisition
candidates of other banking institutions.
Series 9 was formed with the investment objective of obtaining maximum capital
appreciation over the life of the Trust through investment in a fixed portfolio
of equity securities of companies diversified within the hotel and gaming
industry.
Additional Units of each Trust may be issued at any time by depositing in the
Trust additional Securities or contracts to purchase additional Securities
together with irrevocable letters of credit or cash. As additional Units are
issued by a Trust as a result of the deposit of additional Securities by the
Sponsor, the aggregate value of the Securities in the Trust will be increased
and the fractional undivided interest in the Trust represented by each Unit will
be decreased. The Sponsor may continue to make additional deposits of Securities
into a Trust for a period of up to one year following the Initial Date of
Deposit, provided that such additional deposits will be in amounts which will
maintain, for the first 90 days, as closely as possible the same original
percentage relationship among the number of shares of each Security in the Trust
established by the initial deposit of Securities and, thereafter, the same
percentage relationship that existed on such 90th day. Thus, although additional
Units will be issued, each Unit will continue to represent approximately the
same number of shares of each Security, and the percentage relationship among
the shares of each Security in a Trust will remain the same. The required
percentage relationship among the Securities in the Trust will be adjusted to
reflect the occurrence of a stock dividend, a stock split or a similar event
which affects the capital structure of the issuer of a Security in the Trust but
which does not affect the Trust's percentage ownership of the common stock
equity of such issuer at the time of such event.
Each Unit of a Trust initially offered represents that undivided interest in
that Trust indicated under "Essential Information." To the extent that any Units
are redeemed by the Trustee or additional Units are issued as a result of
additional Securities being deposited by the Sponsor, the fractional undivided
interest in a Trust represented by each unredeemed Unit will increase or
decrease accordingly, although the actual interest in the Trust represented by
such fraction will remain unchanged. Units will remain outstanding until
redeemed upon tender to the Trustee by Unitholders, which may include the
Sponsor or the Underwriters, or until the termination of the Trust Agreement.
2
<PAGE> 7
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of a Trust Fund during
the initial offering period is based on the aggregate underlying offer value
(see "Public Offering of Units--Public Offering Price") of the Securities in a
Trust Fund plus or minus a pro rata share of cash, if any, in the Capital
Account held or owned by such Trust Fund, plus a sales charge of 4.0%
(equivalent to 4.167% of the net amount invested). After the initial public
offering period, the secondary market Public Offering Price will be equal to the
aggregate underlying bid value of the Securities in a Trust Fund, plus or minus
a pro rata share of cash, if any, in the Capital Account held or owned by such
Trust Fund, plus a sales charge of 4.0% of the Public Offering Price (equivalent
to 4.167% of the net amount invested). The sales charge is reduced on a
graduated scale for sales involving at least 10,000 Units of a Trust or $100,000
and will be applied on whichever basis is more favorable to the investor.
DISTRIBUTIONS OF INCOME AND CAPITAL. Distributions of dividends received by each
Trust and any funds in the Capital Account will be made quarterly. See
"Unitholders--Distributions to Unitholders."
REINVESTMENT. Each Unitholder of the Trust Funds may elect to have distributions
of income, capital gains and/or capital on their Units automatically invested in
shares of any Kemper front-end load mutual fund (other than those funds sold
with a contingent deferred sales charge). Such distributions will be reinvested
without charge to the participant on each applicable Distribution Date. See
"Unitholders--Distribution Reinvestment." A current prospectus for the
reinvestment fund selected, if any, will be furnished to any investor who
desires additional information with respect to reinvestment.
MARKET FOR UNITS. While under no obligation to do so, the Sponsor intends to,
and certain of the other dealers may, maintain a market for the Units of the
Trusts and offer to repurchase such Units at prices subject to change at any
time which are based on the current underlying bid prices of the Securities in
the Trust Fund involved. If the supply of Units exceeds demand or if some other
business reason warrants it, the Sponsor and/or the dealers may either
discontinue all purchases of Units or discontinue purchases of Units at such
prices. A Unitholder may also dispose of Units through redemption at the
Redemption Price on the date of tender to the Trustee. See
"Redemption--Computation of Redemption Price."
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 (1) he would be entitled to receive
at least $25,000 of proceeds or if he paid at least $25,000 to acquire the units
being tendered and (2) he has tendered for redemption prior to
(see "Redemption" and "Administration of the Trusts--Amendment and
Termination").
TERMINATION. No later than the date specified under the Liquidation Period in
"Essential Information," Securities will begin to be sold in connection with the
termination of a Trust Fund and it is expected that all Securities in such Trust
Fund will be sold by the Mandatory Termination Date. The Sponsor will determine
the manner, timing and execution of the sale of the underlying Securities. See
"Administration of the Trusts--Amendment and Termination."
RISK FACTORS. For certain risk considerations related to the Trust Funds, see
"Risk Factors."
3
<PAGE> 8
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 8 (BANKING INSTITUTIONS) AND
SERIES 9 (HOTEL AND GAMING SERIES)
ESSENTIAL INFORMATION
AS OF , 1994*
SPONSOR AND EVALUATOR: KEMPER UNIT INVESTMENT TRUSTS, A SERVICE OF KEMPER
SECURITIES, INC.
TRUSTEE: INVESTORS FIDUCIARY TRUST COMPANY
<TABLE>
<CAPTION>
SERIES 8 SERIES 9
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<S> <C> <C>
Number of Units..............................................
Fractional Undivided Interest Per Unit.......................
Public Offering Price:
Aggregate Value of Securities in Portfolio (1)...........
Aggregate Value of Securities per Unit...................
Plus Sales Charge of 4.0%
(4.167% of the net amount invested)....................
Public Offering Price Per Unit (2).......................
Redemption Price Per Unit....................................
Sponsor's Initial Repurchase Price Per Unit..................
Excess of Public Offering Price Per Unit over Redemption
Price Per Unit.............................................
Excess of Public Offering Price Per Unit over Sponsor's
Initial
Repurchase Price Per Unit..................................
Calculation of Estimated Net Annual Dividends Per Unit:
Estimated Gross Annual Dividends per Unit(3).............
Less: Estimated Annual Expense per Unit..................
Estimated Net Annual Dividends per Unit..................
Minimum Value of the Trust under which Trust Agreement may be Trust Agreement may be
Terminated................................................. terminated if value of a Trust
Fund is less than 40% of the
value of the Securities when
deposited in the portfolio
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units of a Trust
Fund are made as of 3:15 p.m. Central Time next following receipt of an order
for a sale or purchase of Units or receipt by Investors Fiduciary Trust Company
of Units tendered for redemption.
<TABLE>
<S> <C>
Initial Date of Deposit...................................... , 1994
Mandatory Termination Date................................... , 1998
Liquidation Period........................................... Beginning on until no later than the
related Mandatory Termination Date
Evaluator's Annual Evaluation Fee............................ Maximum of $0.0045 per Unit
Trustee's Annual Fee......................................... $0.008 per Unit
Record and Computation Dates................................. FIRST day of January, April, July and October
Distribution Dates........................................... FIFTEENTH day of January, April, July and October
* The business day prior to the Initial Date of Deposit
</TABLE>
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(1) Each Security listed on a national securities exchange is valued at the last
offer price, or if the Security is not listed on a national securities
exchange, at the last offer price on the over-the-counter market.
(2) On the Initial Date of Deposit there will be no accumulated dividends in the
Income Account. Anyone ordering Units after such date will pay his pro rata
share of any accumulated dividends in such Income Account.
(3) The estimated annual dividends are based on the most recent quarterly or
semi-annual dividend declarations. Actual net annual dividends per unit may
be greater than or less than the amount shown depending on the actual
dividends collected and expenses incurred by the Trust.
4
<PAGE> 9
THE TRUST FUNDS
Kemper Equity Portfolio Trusts, Series 8 (Banking Institutions) and Series 9
(Hotel and Gaming Series) are separate and distinct unit investment trusts
created under the laws of the State of Missouri pursuant to a trust indenture
dated the Initial Date of Deposit (the "Trust Agreements") between Kemper Unit
Investment Trusts, a service of Kemper Securities, Inc. (the "Sponsor") and
Investors Fiduciary Trust Company (the "Trustee").*
The portfolio of Series 8 contains common stocks issued by companies diversified
within the banking industry. The portfolio of Series 9 contains common stocks
issued by companies diversified within the hotel and gaming industry. As used
herein, the term "Securities" means the common stocks initially deposited in
each Trust Fund and described in the portfolios and any additional common stocks
acquired and held by a Trust Fund pursuant to the provisions of the Trust
Agreement.
With the deposit of the Securities in each Trust Fund on the Initial Date of
Deposit, the Sponsor has established a proportionate relationship among the
number of shares of each stock deposited in the respective portfolios. For a
period of up to one year following the Initial Date of Deposit, the Sponsor may
deposit additional Securities or contracts to purchase additional Securities
along with cash (or a bank letter of credit in lieu of cash) to pay for such
contracted Securities, maintaining, for the first 90 days, as closely as
possible the same original proportionate relationship among the number of shares
of each stock in the portfolio and, thereafter, the same percentage relationship
that existed on such 90th day. Thus, although additional Units will be issued,
each Unit will continue to represent approximately the same number of shares of
each Security, and the percentage relationship among the shares of each Security
in a Trust Fund will remain approximately the same. The required percentage
relationship among the Securities in each Trust Fund will be adjusted to reflect
the occurrence of a stock dividend, a stock split or a similar event which
affects the capital structure of the issuer of a Security in the Trust Fund
involved but which does not affect such Trust Fund's percentage ownership of the
common stock equity of such issuer at the time or such event.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee Securities
or contracts for the purchase thereof for deposit in a Trust Fund. For the
Securities so deposited, the Trustee delivered to the Sponsor documentation
evidencing the ownership of that number of Units of each Trust Fund set forth
under "Essential Information."
THE TRUST PORTFOLIOS
Securities Selection. At all times each Trust will hold at least 80% of its
assets in equity securities. In selecting Securities for Series 8, the following
factors, among others, were considered by the Sponsor: (a) the quality of the
Securities, (b) the price of the Securities relative to other similar
securities, (c) the potential for capital appreciation and (d) the potential
benefit to the issuer of the Securities from the continued consolidation within
the banking industry and improving industry fundamentals. In selecting
Securities for Series 9, the following factors, among others, were considered by
the Sponsor: (a) the quality of the Securities, (b) the price of the Securities
relative to other similar securities, (c) the potential for capital
appreciation, (d) the potential for the Securities to benefit from expansion of
legalized gaming into additional jurisdictions and (e) the potential for the
Securities to benefit from the projected increase in tourism in Las Vegas,
Nevada resulting from the
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*Reference is made to the Trust Agreement and any statement contained herein is
qualified in its entirety by the provisions of the Trust Agreement.
5
<PAGE> 10
development of family-oriented entertainment enterprises. In selecting
Securities for Series 9, the Sponsor targeted casino operators and gaming
equipment manufacturers.
In selecting the Securities for each Trust, the Sponsor has chosen equity
securities that in its view have the potential for capital appreciation.
Although there can be no assurance that such Securities will appreciate in value
over the life of the Trusts, over time stock investments have generally
outperformed most other asset classes. However, it should be remembered that
common stocks carry greater risks, including the risk that the value of an
investment can decrease (see "Certain Investment Considerations" in this
section), and past performance is no guarantee of future results.
The following information provides a brief summary for each of the Securities in
the Trusts. For specific information and the market price of each Security as of
the Initial Date of Deposit, see "Portfolios."
SERIES 8 (BANKING INSTITUTIONS)
AMSOUTH BANCORPORATION, through its banking subsidiaries, operates about 230
banking offices in Alabama, Florida, Tennessee and Georgia. The bank offers
various financial services to retail and commercial clients. AmSouth also
operates about 44 offices through AmSouth Mortgage Company.
ASSOCIATED BANC-CORP through its subsidiaries, provides a range of retail
banking services to individuals and small to medium-size businesses. The bank
owns 10 commercial banks with more than 80 banking locations in Wisconsin and
Illinois. Associated Banc-Corp also offers a variety of financially related
products and services.
BARNETT BANKS, INC. through its affiliates, provides a full range of commercial
banking and related financial services to the retail, wholesale, manufacturing,
real estate and financial sectors. These services include international banking
activities in connection with foreign trade financing and cash management for
corporate customers. Barnett operates 621 offices in Florida and Georgia.
CENTRAL FIDELITY BANKS, INC. is a holding company for Central Fidelity Bank,
which owns and operates branches throughout Virginia. The company manages
banking offices, supermarket full-service offices, which are offices inside of
"Farm Fresh Supermarkets" and automatic teller machines.
FIRSTIER FINANCIAL, INC. is a bank holding company. The company's subsidiary
banks attract deposits and conduct commercial banking businesses, offering
residential real estate mortgage, construction, agricultural and industrial
loans. Firstier's subsidiaries serve the state of Nebraska.
FIRST BANCORPORATION OF OHIO is a bank holding company. The company's subsidiary
banks attract deposits and offer real estate mortgage, commercial, financial,
agricultural and installment loans. First Bancorporation serves northeastern
Ohio through seven banks with approximately 139 offices.
FIRST OF AMERICA BANK CORPORATION is a bank holding company. The company's
subsidiary banks attract deposits and offer real estate mortgage, consumer,
commercial and agricultural loans. First of America serves Michigan, Indiana and
Illinois from approximately 572 offices.
FIRST TENNESSEE NATIONAL CORPORATION is a bank holding company. The company's
subsidiary banks attract deposits and offer real estate mortgage, construction,
commercial and consumer loans. First Tennessee serves customers from
approximately 200 offices throughout Tennessee.
6
<PAGE> 11
FIRST VIRGINIA BANKS, INC. is a bank holding company. The company's subsidiary
banks attract deposits and offer real estate mortgage, construction, commercial,
agricultural and consumer loans. The banks serve Virginia, Tennessee and
Maryland from approximately 326 offices.
FORT WAYNE NATIONAL CORPORATION is a bank holding company. The company has six
subsidiary banks that attract deposits and conduct commercial banking businesses
that offer real estate mortgage, commercial, industrial and consumer loans, and
trust services. The banks serve Fort Wayne, Bluffton, Warsaw, Huntington, Auburn
and Churubsco, Indiana.
FOURTH FINANCIAL CORPORATION is a bank holding company. The company's subsidiary
banks attract deposits and conduct commercial banking businesses, offering real
estate mortgage, agricultural, commercial, consumer and educational loans and
trust services. The banks serve Kansas from 77 offices and Oklahoma from 31
offices. Fourth Financial also owns and operates an insurance company.
HAWKEYE BANCORPORATION is a bank holding company. The subsidiary banks attract
deposits and offer real estate mortgage, commercial, agricultural and consumer
loans. The company owns approximately 24 banking subsidiaries in Iowa, one
non-banking unit and a credit life reinsurance company.
HUNTINGTON BANCSHARES, INC. is a multistate bank holding company. The company's
banking subsidiaries attract deposits and offer real estate, mortgage, consumer
and commercial loans. The banks serve Ohio, Kentucky, Indiana, Michigan, West
Virginia, Florida, Pennsylvania and Illinois from approximately 352 branches.
Huntington also has trust, mortgage and investment banking subsidiaries.
MAGNA GROUP, INC. is a bank holding company. The company's subsidiary banks
attract deposits and conduct commercial and retail banking businesses, offering
real estate mortgage, commercial, agricultural and construction loans. The banks
serve Illinois and Missouri through some 101 locations.
MERCANTILE BANCORPORATION is a bank holding company with banks throughout MO,
southern IL and eastern KS. The Company owns 41 banks, including Mercantile
Bank, N.A.
OLD KENT FINANCIAL CORPORATION is a bank holding company for 16 commercial banks
which have their principal offices in various cities in Michigan and Illinois.
The business is concentrated in a single industry segment -- commercial banking.
Old Kent banks offer individuals, businesses, institutions and government
agencies a full range of commercial banking services.
SOUTHTRUST CORPORATION, a regional bank holding company, has subsidiary banks,
as well as bank-related affiliates located in the states of Alabama, Florida,
Georgia, North Carolina, South Carolina and Tennessee. Through its subsidiary
banks and affiliates, the company offers general banking services, as well as
mortgage banking, credit life and securities brokerage to commercial and retail
customers.
STAR BANC CORPORATION, through its various banking subsidiaries, provides
commercial and retail banking services. Customers are located throughout Ohio,
northern Kentucky and eastern Indiana. The company, through its non-banking
subsidiaries, also issues credit life and accident and health insurance in
connection with the lending activities of Star Banc's Ohio bank subsidiaries.
US BANCORP is a bank holding company. The company's subsidiary banks attract
deposits and conduct commercial banking businesses, offering real estate
mortgage, commercial and consumer loans, international banking, insurance,
discount brokerage services, venture capital and export trading. The company
primarily serves US states located in the Pacific Northwest and throughout the
Far West.
WEST ONE BANCORP, through West One Bank, Idaho and other subsidiaries, provides
a wide variety of financial services to corporate and institutional customers,
government, individuals and other financial institutions. The company operates
more than 200 offices throughout Idaho, Utah, Oregon and Washington.
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SERIES 9 (HOTEL AND GAMING SERIES)
Casino Operators
BOOMTOWN, INC. owns and operates a western-themed casino/hotel located near
Reno, Nevada. The company offers a 40,000 square foot casino, including 1,450
slot machines, 47 table games, 122 hotel rooms and many other features. Boomtown
is also developing a Louisiana riverboat casino, casino/resort in Las Vegas and
a dockside casino project in Biloxi, Mississippi.
CAESARS WORLD, INC. operates casino/hotels and resorts in the US. The resorts
include Caesars Palace and Caesars Tahoe located in Nevada and Caesars Atlantic
City located in New Jersey. Non-casino interests include Cove Haven, Paradise
Stream, Pocono Palace and Caesars Brookdale, all of which are located in the
Pocono Mountains, Pennsylvania.
CIRCUS CIRCUS ENTERPRISES owns and operates approximately seven gaming
facilities in Las Vegas, two hotels and an RV park that accommodates
recreational vehicles. The facilities are operated under the names of Excalibur
Hotel/Casino, Circus Circus-Las Vegas, Circus Circus-Reno, Silver City Casino,
Slots-a-Fun, Colorado Belle and Edgewater Hotel and Casino.
GRAND CASINOS, INC. develops and manages land-based and dockside casinos and
bingo facilities. The company owns and operates Grand Casino Gulfport and Grand
Casino Biloxi on the Mississippi Gulf Coast. Grand Casinos also manages
Indian-owned Casino Mille Lacs and Grand Casino Hinckley in Minnesota.
HARVEYS CASINO RESORTS owns and operates "Harvey's Resort Hotel/Casino."
"Harvey's Resort" offers 740 hotel rooms, a theater, a wedding chapel, a pool,
eight restaurants, a health club, a video arcade and the casino. The resort is
located on the South Shore of Lake Tahoe. The company is also developing
"Harvey's Wagon Wheel Hotel & Casino" and the "Hard Rock Hotel" in Colorado.
HILTON HOTELS CORPORATION owns, operates and manages hotels. The company also
owns five gambling casinos in Nevada and franchises the Hilton name to other
hotel operators. Hilton owns and manages approximately 55 hotels in the United
States and franchises 179. The company has two riverboat casinos in development
that will be located in New Orleans and Kansas City.
HOLLYWOOD PARK, INC. owns the Hollywood Park Race Track for thoroughbred races.
The company also uses the race track as an inter-track wagering site for races
simulcast from the Del Mar, Santa Anita, Los Alamitos and Fairplex Park race
tracks.
MGM GRAND, INC. owns and operates the MGM Grand Hotel and Theme Park complex
located on the strip in Las Vegas, NV. The complex includes 5,000 hotel rooms, a
casino and a theme park with movie related attractions. The company also
operates MGM Air, a charter-only airline. The airline targets professional
sports teams, touring entertainers and upscale tour operators and travelers.
MIRAGE RESORTS, INC. owns and operates a hotel-casino and destination resort on
the Las Vegas Strip, a hotel-casino in downtown Las Vegas, Nevada and a
hotel-casino in Laughlin, Nevada. The company recently opened a pirate-themed
casino-hotel adjacent to its Las Vegas Strip property.
PLAYERS INTERNATIONAL, INC., through its subsidiaries, owns and operates the
Metropolis Riverboat Casino that serves the Southern Illinois, Southeastern
Missouri, Western Kentucky, Western Tennessee and Southwestern Indiana region.
The casino has over 20,000 square feet of gaming space, 634 slot machines, and
38 table games. The Riverboat docks in Metropolis, Illinois.
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PRIMADONNA RESORTS, INC. operates two casino-hotels on the border of Nevada and
California. These properties are "Whiskey Pete's Hotel and Casino" and the
"Primadonna Resort and Casino." Primadonna plans to build a third casino complex
with 46,000 square feet of space, 1,500 slot machines and 31 gaming tables.
PROMUS COMPANIES, INC.'S primary business operations include casino gaming and
hotels. Through its subsidiary, Harrahs, Promus is involved in casino gaming in
Nevada and New Jersey. The company's nongaming businesses include Embassy
Suites, Hampton Inn and Homewood Suites Hotels as well as interest in Friendly
Ice Cream and Perkins Family Restaurants.
RIO HOTEL AND CASINO, INC. owns approximately 95.75%, as well as operates, the
Rio Suite Hotel & Casino, located on a 44-acre site in Las Vegas, Nevada. The
Rio is an all-suite hotel/casino with 424 suites and a 44,000 square foot
casino.
STATION CASINOS, INC. is a multi-jurisdictional gaming enterprise that owns and
operates the Palace Station Hotel and Casino in Las Vegas, Nevada. The company
also operates slot route management, vending and payphone service businesses
located in southern Nevada and Louisiana. In addition, Station Casinos plans to
develop another hotel/casino in Las Vegas and a riverboat gaming complex in St.
Louis, Missouri.
Gaming Equipment
GTECH HOLDINGS CORPORATION provides lottery services and products to government
lottery authorities and licensees worldwide. The company designs, assembles,
installs and maintains lottery networks, which consist of numerous lottery
terminals located in retail outlets, computer systems and communications
equipment.
INTERNATIONAL GAME TECHNOLOGY designs and manufactures video game and slot
machines and gaming-monitoring systems. The company also operates a gaming
machine route in Nevada, Atlantic City, Macau, Mississippi and Deadwood, South
Dakota.
SCIENTIFIC GAMES HOLDINGS CORPORATION manufactures instant lottery tickets for
domestic and international government lottery authorities and licensees. The
company also provides a full range of instant lottery services including the
design and installation of game management software, field sales, accounting and
ticket security advisory services. The company also has operations in Greece.
UNITED GAMING, INC. is an operator of contract gaming devices in the state of
Nevada. The company also operates video poker devices in Southern Louisiana,
including New Orleans, and operates a casino and three gaming arcades in Nevada.
VIDEO LOTTERY TECHNOLOGIES, INC. designs, manufactures and markets video
terminals, central control systems software and related services for the video
lottery market. The video lottery operations include poker, blackjack, bingo and
keno games and are located throughout Montana, South Dakota, Oregon, Louisiana
and five Canadian provinces.
WMS INDUSTRIES, INC. designs, manufactures and sells coin-operated amusement
games and video lottery terminals. The company produces pinball, video and
bowling simulation machines under the "Bally", "Midway" and "Williams" brand
names. WMS also owns interest in and operates casino/hotels in Puerto Rico.
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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 a Trust Fund should be made with an understanding of the risks
inherent in an investment in equity securities, including the risk that the
financial condition of the issuers of the Securities may become impaired or that
the general condition of the stock market may worsen (both of which may
contribute directly to a decrease in the value of the Securities and thus in the
value of the Units) or the risk that holders of common stock have a right to
receive payments from the issuers of those stocks that is generally inferior to
that of creditors of, or holders of debt obligations issued by, the issuers and
that the rights of holders of common stock generally rank inferior to the rights
of holders of preferred stock. Common stocks are especially susceptible to
general stock market movements and to volatile increases and decreases in value
as market confidence in and perceptions of the issuers change. These perceptions
are based on unpredictable factors including expectations regarding government,
economic, monetary and fiscal policies, inflation and interest rates, economic
expansion or contraction, and global or regional political, economic or banking
crises.
Banking Institutions. Series 8 is concentrated in common stocks issued by
companies in the banking industry. In view of this, an investment in Units of
Series 8 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. Such regulations impose strict capital requirements
and limitations on the nature and extent of business activities that banks may
pursue. Furthermore, bank regulators have a wide range of discretion in
connection with their supervisory and enforcement authority and may
significantly restrict the permissible activities of a particular institution if
deemed to pose significant risks to the soundness of such institution or the
safety of the federal deposit insurance fund. Regulatory actions, such as
increases in the minimum capital requirements applicable to commercial banks and
currently proposed 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 regulations, 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. The Federal
Deposit Insurance Corporation Improvement Act of 1991 and the Resolution Trust
Corporation Refinancing, Restructuring, and Improvement Act of 1991 imposed many
new limitations on the way in which banks, savings banks and thrifts may conduct
their business and mandated early and aggressive regulatory intervention for
unhealthy institutions. Periodic efforts
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by recent Administrations to introduce legislation broadening the ability of
commercial banks to compete with new products have not been successful, but if
enacted could lead to more failures as a result of increased competition and
added risks. Failure to enact such legislation, on the other hand, may lead to
declining earnings and an inability to compete with unregulated financial
institutions. Efforts to expand the ability of federal thrifts to branch on an
interstate basis have been initially successful through promulgation of
regulations, but legislation to liberalize interstate branching for banks has
stalled in Congress. Consolidation is likely to continue in both cases. The
Securities and Exchange Commission is attempting to require the expanded use of
market value accounting by commercial banks, and has imposed rules requiring
market accounting for investment securities held for sale. Adoption of
additional such rules may result in increased volatility in the reported health
of the industry, and mandated regulatory intervention to correct such problems.
Recently, the United States Treasury Department proposed a restructuring of the
banks regulatory agencies which, if implemented, may adversely affect the
Securities in the Trust's portfolio. 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, further restrict the ways in which deposited moneys
can be used by commercial banks or reduce the dollar amount or number of
deposits insured for any depositor. Such reforms could reduce profitability as
investment opportunities available to commercial bank institutions become more
limited and as consumers look for savings vehicles other than bank deposits.
Commercial banks face significant competition from other financial institutions
such as mutual funds, credit unions, mortgage banking companies and insurance
companies, and increased competition may result from legislative broadening of
regional and national interstate banking powers as has been recently proposed.
The Sponsor makes no prediction as to what, if any, manner of regulatory reform
might ultimately be adopted or what ultimate effect such reform might have on
the Trust's portfolio.
Hotel and Gaming Companies. An investment in Units of Series 9 should be made
with an understanding of the characteristics of the hotel and gaming industry
and the risks which such an investment may entail. Since the 1980's, legalized
gaming operations have proliferated throughout the United States. Riverboat,
dockside or land-based gaming is currently legal in nine states, full-scale
gaming on Indian-owned land is legal in at least 14 states and at least 40
states now sponsor lotteries. The most significant growth has occurred in the
riverboat and Indian land gaming segments. Casinos have also benefited from new
gambling and family entertainment ventures in Las Vegas and emerging markets
such as the Gulf Coast.
Certain of the Securities are issued by companies which conduct hotel and/or
gaming operations. Gaming operations are subject to extensive federal, state and
local regulations. State and local authorities require various licenses, permits
and approvals to be held by companies that conduct gaming operations. Generally,
regulatory authorities have broad discretion in granting, renewing, suspending
and revoking gaming licenses. Federal, state and local regulatory authorities
impose restrictions on gaming operations including, among other things,
licensing of gaming companies, restrictions on the manner of operation of
casinos, licensing or approval of owners, officers, directors and certain key
employees, investigation of casinos and their owners, officers, directors and
employees, and submission of extensive financial and operating reports.
Additionally, casino operations are often subject to regulatory restrictions on
the length of time that customers may remain at a particular casino, limitations
on the amount of losses a customer may incur on each visit to a casino, and
limitations on the number of gaming licenses an entity may obtain in a
particular state. State gaming authorities also have discretion to approve
gaming license applications for moored (dockside)
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riverboat casinos and cruising powered riverboat casinos. Liquor licensing
authorities may also have jurisdiction to license and investigate hotel and
gaming companies. Substantial fines for violations of gaming laws or regulations
may be levied against a company and the persons involved in such violations. The
suspension, revocation or denial of any of the licenses, permits or approvals
required under applicable gaming laws or the imposition of any fines in the
future may have an adverse effect on the business and financial condition of the
issuers of Securities in the portfolio.
The level and profitability of hotel and gaming operations can vary
significantly as a result of a number of factors, including the competitive
environment, weather conditions, seasonality of hotel and gaming operations,
general economic conditions and government regulation. Additionally, hotel and
gaming enterprises are subject to the imposition of special taxes, assessments
and license fees by regulatory bodies which may have an adverse effect on
operations. The market prices of securities of companies whose future operating
results are highly dependent on specific developments, such as passage or defeat
of relevant legislation, are often highly volatile. Announcements concerning
legislation approving or defeating gaming, other governmental actions,
developments in the gaming industry and general economic conditions may have a
significant impact on the market price of Securities in the portfolio.
Certain of the Securities included in the portfolio may be issued by companies
which develop, manufacture, distribute and market gaming equipment. Such
companies and their products are subject to gaming regulations in each
jurisdiction, including Indian lands, in which their products are sold or are
used by persons licensed to conduct gaming activities. Such gaming regulations
vary from jurisdiction to jurisdiction and the classification and level of the
regulatory licensing, approvals and compliance with which such companies and
their products must conform also vary by jurisdiction. Failure of gaming
equipment manufacturers to obtain, or the loss or suspension of, any necessary
licenses, approvals, or suitability findings, in most jurisdictions would
prevent or restrict such companies from operating, selling or distributing their
products in such jurisdiction and possibly other jurisdictions. Such results
could have a material adverse effect on issuers of Securities in the portfolio.
In the event gaming authorities determine that an officer, director, key
employee or stockholder of a company is unsuitable to act in such capacity, this
could also have an adverse effect on an issuer of Securities in the portfolio.
Gaming equipment manufacturers may have entered into, and may continue to enter
into, contracts with casino operators that may not have received all of the
necessary regulatory approvals or whose proposed casinos are located in
jurisdictions in which the status of legalized gaming is uncertain. To the
extent that the customers of gaming equipment manufacturers cannot operate
casinos, the parties may not be able to perform their respective obligations
under such contracts. Such a result could have a material adverse impact on an
issuer of Securities included in the portfolio.
The gaming industry is characterized by rapidly changing technology and frequent
new product introductions and enhancements. The success of gaming equipment
manufacturers will depend on their ability to continue to enhance existing
products and to introduce in a timely manner new products that meet evolving
customer requirements and achieve market acceptance. There can be no assurance
that issuers of the Securities will be successful in identifying, developing and
marketing new products or enhancing existing products.
The Sponsor has not independently investigated the validity of any license or
the status of any issuer under applicable gaming laws. There can be no assurance
that any issuer, or any owner, director, officer or employee of any issuer will
receive or maintain the necessary gaming licenses or other
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regulatory approval required to own or operate such a business under applicable
law or that more restrictive gaming laws will not be adopted in the future which
could adversely effect the business of the issuers of Securities.
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 Initial Date of Deposit.
Whether or not the Securities are listed on a national security exchange, the
principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. 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.
Investors should note that additional Units may be offered to the public. This
may have an effect upon the value of previously existing Units. To create
additional Units the Sponsor will purchase additional Securities. Brokerage fees
incurred in purchasing such Securities will be an expense of the Trust involved.
Thus, payment of brokerage fees by such Trust will affect the value of every
Unit and the net income per Unit received by the Trust. In particular,
Unitholders who purchase Units during the primary offering period of the Units
would experience a dilution of their investment as a result of any brokerage
fees paid by a Trust during subsequent deposits of additional Securities.
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Litigation and Legislation. From time to time Congress considers proposals to
reduce the rate of the dividends-received deduction. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return to
investors who can take advantage of the deduction. Unitholders are urged to
consult their own tax advisers. Further, at any time after the Initial Date of
Deposit, litigation may be initiated on a variety of grounds, or legislation may
be enacted with respect to the Securities in a Trust Fund or the issuers of the
Securities. There can be no assurance that future litigation or legislation will
not have a material adverse effect on the Trust Funds or will not impair the
ability of issuers to achieve their business goals.
FEDERAL TAX STATUS
Federal Income Taxes. The following is a general discussion of certain of the
Federal income tax consequences of the purchase, ownership and disposition of
the Units. The summary is limited to investors who hold the Units as "capital
assets" (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986, as amended (the "Code"). Unitholders
should consult their tax advisers in determining the Federal, state, local and
any other tax consequences of the purchase, ownership and disposition of Units
in the Trust Funds.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. Each Trust Fund is not an association taxable as a corporation for
Federal income tax purposes.
2. Each Unitholder will be considered the owner of a pro rata portion of
each of the respective Trust's assets for Federal income tax purposes
under the Code, and the income of such Trust will be treated as income
of the Unitholders thereof under the Code. Each Unitholder will be
considered to have received his pro rata share of income derived from
each Security of the respective Trust Fund when such income is received
by such Trust Fund.
3. Each Unitholder will have a taxable event when a Security is disposed of
(whether by sale, exchange, liquidation, redemption or otherwise) or
when the Unitholder redeems or sells his Units. The cost of the Units to
a Unitholder on the date such Units are purchased is allocated among the
Securities held in a Trust Fund (in accordance with the proportion of
the fair market values of such Securities), subject to the adjustments
discussed below, in order to determine his tax basis for his pro rata
portion in each Security.
Taxation of Dividends Received by a Trust Fund. For Federal income tax purposes,
a Unitholder's pro rata portion of dividends as defined by Section 316 of the
Code paid by a corporation with respect to a Security are taxable as ordinary
income to the extent of such corporation's current and accumulated "earnings and
profits." A Unitholder's pro rata portion of dividends paid on such Security
which exceed such current and accumulated earnings and profits will first reduce
a Unitholder's tax basis in such Security, and to the extent that such dividends
exceed a Unitholder's tax basis in such Security shall generally be treated as
capital gain. In general, any such capital gain will be short-term unless a
Unitholder has held his Units for more than one year.
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 a Trust Fund (to the extent such
dividends are taxable as ordinary income, as discussed above), in the same
manner as if such corporation directly owned the Securities paying such
dividends.
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However, a corporation owning Units should be aware that Section 246 and 246A of
the Code impose additional limitations on the eligibility of dividends for the
70% dividends received deduction. These limitations include a requirement that
stock (and therefore Units) must generally be held at least 46 days (as
determined under Section 246(c) of the Code). Proposed regulations have been
issued which address special rules that must be considered in determining
whether the 46 day holding requirement is met. Moreover, the allowable
percentage of the deduction will be reduced from 70% if a 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 their tax advisers with respect to
the limitations on and possible modifications to the dividends received
deduction.
Limitations on Deductibility of Trust Fund Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by a Trust Fund is deductible
by the Unitholder to the same extent as though the expense had been paid
directly by him, subject to the following limitation. It should be noted that as
a result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to the
extent they exceed 2% of such individual's adjusted gross income. Unitholders
may be required to treat some or all of the expenses of a Trust Fund as
miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a Trust
Fund or Disposition of Units. A Unitholder's portion of gain, if any, upon the
sale or redemption of Units or the disposition of Securities held by a Trust
Fund will generally be considered a capital gain except in the case of a dealer
or a financial institution and will be long-term if the Unitholder has held his
Units for more than one year. A Unitholder's portion of loss, if any, upon the
sale or redemption of Units or the disposition of Securities held by a Trust
Fund will generally be considered a capital loss (except in the case of a dealer
or a financial institution) and, in general, will be long-term if the Unitholder
has held his Units for more than one year. For taxpayers other than
corporations, net capital gains are subject to a maximum stated marginal tax
rate of 28%. However, it should be noted that legislative proposals are
introduced from time to time that affect tax rates and could affect relative
difference at which ordinary income and capital gains are taxed. Unitholders
should consult their tax advisers regarding the recognition of such capital
gains and losses for Federal income tax purposes.
The Revenue Reconciliation Act of 1993 (the "Tax Act") raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated rate.
Because some or all capital gains are taxed at a comparatively lower rate under
the Tax Act, the Tax Act includes a provision that would recharacterize capital
gains as ordinary income in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into after April
30, 1993. Unitholders should consult their tax advisers regarding the potential
effect of this provision on their investment in Units.
If the Unitholder disposes of a Unit, he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust Fund involved including
his pro rata portion of all of the Securities represented by the Unit.
Special Tax Consequences of Distributions In Kind Upon Redemption of Units. As
discussed in "Redemption," under certain circumstances a Unitholder tendering
Units for redemption may request
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a Distribution In Kind of Securities upon the redemption of Units. As previously
discussed, prior to the redemption of Units, a Unitholder is considered as
owning a pro rata portion of each of a Trust Fund's assets for Federal income
tax purposes. The receipt of a Distribution In Kind upon the redemption of Units
would be deemed an exchange of such redeeming Unitholder's pro rata portion of
each of the shares of stock and other assets held by a Trust Fund in exchange
for an undivided interest in whole shares of stock and possibly cash.
There are generally three different potential tax consequences which may occur
under a Distribution In Kind with respect to each Security owned by a Trust
Fund. A "Security" for this purpose is a particular class of stock issued by a
particular corporation. If the Unitholder receives only whole shares of a
Security in exchange for his or her pro rata portion in each share of such
Security held by a Trust Fund, there is no taxable gain or loss recognized upon
such deemed exchange pursuant to Section 1036 of the Code. If the Unitholder
receives whole shares of a particular Security plus cash in lieu of a fractional
share of such Security, and if the fair market value of the Unitholder's pro
rata portion of the shares of such Security exceeds his tax basis in his pro
rata portion of such Security, taxable gain would be recognized in an amount not
to exceed the amount of such cash received, pursuant to Section 1031(b) of the
Code. No taxable loss would be recognized upon such an exchange pursuant to
Section 1031(c) of the Code, whether or not cash is received in lieu of a
fractional share. Under either of these circumstances, special rules will be
applied under Section 1031(d) of the Code to determine the Unitholder's tax
basis in the shares of such particular Security which he receives as part of the
Distribution In Kind. Finally, if a Unitholder's pro rata interest in a Security
does not equal a whole share, he may receive entirely cash in exchange for his
pro rata portion of a particular Security. In such case, taxable gain or loss is
measured by comparing the amount of cash received by the Unitholder with his tax
basis in such Security.
Because each Trust Fund will own many Securities, a Unitholder who requests a
Distribution In Kind will have to analyze the tax consequences with respect to
each Security owned by the Trust Fund involved. The amount of taxable gain (or
loss) recognized upon such redemption will generally equal the sum of the gain
(or loss) recognized under the rules described above by the redeeming Unitholder
with respect to each Security owned by a Trust Fund. Redeeming Unitholders who
request a Distribution In Kind are advised to consult their tax advisers in this
regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among the Securities held in a Trust
Fund in accordance with the proportion of the fair market values of such
Securities on the date the Units are purchased in order to determine such
Unitholder's tax basis for his pro rata portion of each Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by a Trust Fund will be reduced to the extent dividends paid with respect
to such Security are received by a Trust Fund which are not taxable as ordinary
income as described above.
General. Each Unitholder will be requested to provide the Unitholder's taxpayer
identification number to the Trustee and to certify that the Unitholder has not
been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by a Trust Fund to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding. Distributions by a Trust Fund will generally
be subject to United States income taxation
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<PAGE> 21
and withholding in the case of Units held by non-resident alien individuals,
foreign corporations or other non-United States persons. Such persons should
consult their tax advisers.
The foregoing discussion relates only to United States Federal income taxes;
Unitholders may be subject to state and local taxation in other jurisdictions.
Unitholders should consult their tax advisers regarding potential state or local
taxation with respect to the Units.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. During the initial offering period, Units of each Trust
Fund are offered at the Public Offering Price (which is based on the aggregate
underlying offer value of the Securities in the respective Trust Fund and
includes a sales charge of 4.0% of the Public Offering Price which charge is
equivalent to 4.167% of the net amount invested) plus a pro rata share of any
accumulated dividends in the Income Account of the Trust involved. In the
secondary market, Units are offered at the Public Offering Price (which is based
on the aggregate underlying bid value of the Securities in the respective Trust
Fund and includes a sales charge of 4.0% of the Public Offering Price which
charge is equivalent to 4.167% of the net amount invested) plus a pro rata share
of any accumulated dividends. Such underlying value shall also include the
proportionate share of any undistributed cash held in the Capital Account of the
Trust involved.
The sales charge per Unit of a Trust Fund in both the primary and secondary
market will be reduced pursuant to the following graduated scale:
<TABLE>
<CAPTION>
PERCENT
PERCENT OF
OF NET
OFFERING AMOUNT
NO. OF UNITS* PRICE INVESTED
- ------------------------------------------------------------------------ ---- -----
<S> <C> <C>
Less than 10,000........................................................ 4.00% 4.167%
10,000 but less than 25,000............................................. 3.50 3.627
25,000 but less than 50,000............................................. 3.00 3.093
50,000 but less than 75,000............................................. 2.50 2.564
75,000 or more.......................................................... 2.25 2.302
</TABLE>
- ---------------
* The breakpoint sales charges are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied on
whichever basis is more favorable to the investor.
The reduced sales charges as shown on the tables above will apply to all
purchases of Units on any one day by the same purchaser from the same
Underwriter or dealer and for this purpose purchases of Units of 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 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.
As indicated above, the initial Public Offering Price of the Units was
established by adding to the determination of the aggregate underlying value of
the Securities an amount equal to 4.167% of such value and dividing the sum so
obtained by the number of Units outstanding. Such underlying value shall include
the proportionate share of any cash held in the Capital Account. This
computation
17
<PAGE> 22
produced a gross underwriting profit equal to 4.0% of the Public Offering Price.
Such price determination as of the opening of business on the Initial Date of
Deposit was made on the basis of an evaluation of the Securities in the Trust
involved prepared by the Trustee. After the opening of business on the Initial
Date of Deposit, the Evaluator will appraise or cause to be appraised daily the
value of the underlying Securities as of 3:15 P.M. Central time on days the New
York Stock Exchange is open and will adjust the Public Offering Price of the
Units commensurate with such valuation. Such Public Offering Price will be
effective for all orders received at or prior to the close of trading on the New
York Stock Exchange on each such day. Orders received by the Trustee, Sponsor or
any dealer for purchases, sales or redemptions after that time, or on a day when
the New York Stock Exchange is closed, will be held until the next determination
of price.
The value of the Securities is determined on each business day by the Evaluator
based on the last offer prices during the initial offering period and on the
last bid prices during the secondary market and for redemptions on the day the
valuation is made for Securities listed on a national stock exchange or, if not
so listed, on the last offer (or bid as the case may be) prices on the
over-the-counter market or by taking into account the same factors referred to
under "Redemption--Computation of Redemption Price."
The minimum purchase in both the primary and secondary markets is 100 Units of a
particular Trust Fund.
PUBLIC DISTRIBUTION OF UNITS. During the initial offering period, Units of each
Trust Fund will be distributed to the public at the Public Offering Price
thereof. Upon the completion of the initial offering, Units which remain unsold
or which may be acquired in the secondary market (see "Market for Units") may be
offered at the Public Offering Price determined in the manner provided above.
The Sponsor intends to qualify Units of 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 in the table 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
18
<PAGE> 23
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.
<TABLE>
<CAPTION>
FIRM
SALES
OR
REGULAR SALE
CONCESSION ARRANGEMENTS
OR ($250,000
AGENCY OR
NUMBER OF UNITS* COMMISSION MORE)**
- --------------------------------------------------------------------- ---- ----
<S> <C> <C>
Less than 10,000..................................................... 2.75% 3.00%
10,000 but less than 25,000.......................................... 2.25 2.50
25,000 but less than 50,000.......................................... 2.00 2.25
50,000 but less than 75,000.......................................... 1.50 1.75
75,000 or more....................................................... 1.25 1.50
</TABLE>
- ---------------
* The breakpoint discounts are also applied on a dollar basis utilizing a
breakpoint equivalent in the above table of $10 per Unit.
** Volume concessions of up to the amount shown can be earned as a marketing
allowance at the discretion of the Sponsor during the initial one month
period after the Initial Date of Deposit by firms who reach cumulative firm
sales arrangement levels of at least $250,000 of a particular Trust. After a
firm has met the minimum $250,000 volume level, volume concessions may be
given on all trades originated from or by that firm, including those placed
prior to reaching the $250,000 level, and may continue to be given during the
entire initial offering period. Firm sales of any Kemper Equity Portfolio
Trusts series issued simultaneously can be combined for the purposes of
achieving the volume discount. Only sales through Kemper qualify for volume
discounts and secondary purchases do not apply. Kemper Unit Investment Trusts
reserves the right to modify or change those parameters at any time and make
the determination of which firms qualify for the marketing allowance and the
amount paid.
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." In addition, the Sponsor may realize a profit (or
sustain a loss) as of the Initial Date of Deposit resulting from the difference
between the purchase prices of the Securities to the Sponsor and the cost of
such Securities to such Trust Fund, which is based on the evaluation of the
Securities on the Initial Date of Deposit. Thereafter, on subsequent deposits
the Sponsor may realize profits or sustain losses from such deposits. See
"Portfolios." The Sponsor may realize additional profits or losses during the
initial offering period on unsold Units as a result of changes in the daily
market value of the Securities in a Trust Fund.
MARKET FOR UNITS
After the initial offering period, while not obligated to do so, the Sponsor
intends to, subject to change at any time, maintain a market for Units of the
Trust 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. To the extent that a market is maintained during the initial
offering period, the prices at which Units will be repurchased will be based
upon the aggregate offering side evaluation of the Securities in the respective
Trust. The aggregate bid prices of the underlying Securities are expected to be
less than the related aggregate offering prices (which is the evaluation method
used during the initial public offering period). Accordingly, Unitholders who
wish to dispose of their Units should inquire of their broker as to current
market prices in order to determine whether there is in existence any price in
excess of the Redemption Price and, if so, the amount thereof. The offering
price of any Units resold by the Sponsor will be in accord with that described
in the currently effective prospectus describing such Units. Any profit or loss
resulting from the resale of such Units will belong to the
19
<PAGE> 24
Sponsor. The Sponsor may suspend or discontinue purchases of Units of the Trust
Funds if the supply of Units exceeds demand, or for other business reasons.
REDEMPTION
GENERAL. A Unitholder who does not dispose of Units in the secondary market
described above may cause Units to be redeemed by the Trustee by making a
written request to the Kemper Service Company, service agent for the Trustee at
P.O. Box 419430, Kansas City, Missouri 64141-6430 and, in the case of Units
evidenced by a certificate, by tendering such certificate to the Trustee,
properly endorsed or accompanied by a written instrument or instruments of
transfer in form satisfactory to the Trustee. Unitholders must sign the request,
and such certificate or transfer instrument, exactly as their names appear on
the records of the Trustee and on any certificate representing the Units to be
redeemed. If the amount of the redemption is $25,000 or less and the proceeds
are payable to the Unitholder(s) of record at the address of record, no
signature guarantee is necessary for redemptions by individual account owners
(including joint owners). Additional documentation may be requested, and a
signature guarantee is always required, from corporations, executors,
administrators, trustees, guardians or associations. The signatures must be
guaranteed by a participant in the Securities Transfer Agents Medallion Program
("STAMP") or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. A certificate should
only be sent by registered or certified mail for the protection of the
Unitholder. Since tender of the certificate is required for redemption when one
has been issued, Units represented by a certificate cannot be redeemed until the
certificate representing such Units has been received by the purchasers.
Redemption shall be made by the Trustee on the seventh calendar day following
the day on which a tender for redemption is received, or if the seventh calendar
day is not a business day, on the first business day prior thereto (the
"Redemption Date") by payment of cash equivalent to the Redemption Price for the
Trust Fund, determined as set forth below under "Computation of Redemption
Price," as of the evaluation time stated under "Essential Information," next
following such tender, multiplied by the number of Units being redeemed. Any
Units redeemed shall be cancelled and any undivided fractional interest in 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
20
<PAGE> 25
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.
Unitholders tendering Units for redemption may request a distribution in kind (a
"Distribution In Kind") from the Trustee in lieu of cash redemption. A
Unitholder may request a Distribution In Kind of an amount and value of
Securities per Unit equal to the Redemption Price per Unit as determined as of
the evaluation time next following the tender, provided that the tendering
Unitholder is (1) entitled to receive at least $25,000 of proceeds as part of
his or her distribution or if he paid at least $25,000 to acquire the units
being tendered and (2) the Unitholder has elected to redeem prior to the date
specified under "Redemption In Kind" on page 3 of this Prospectus. If the
Unitholder meets these requirements, a Distribution In Kind will be made by the
Trustee through the distribution of each of the Securities of the Trust involved
in book entry form to the account of the Unitholder's bank or broker-dealer at
Depository Trust Company. The tendering Unitholder shall be entitled to receive
whole shares of each of the Securities comprising the portfolio of the Trust
involved and cash from the Capital Account equal to the fractional shares to
which the tendering Unitholder is entitled. The Trustee shall make any
adjustments necessary to reflect differences between the Redemption Price of the
Units and the value of the Securities distributed in kind as of the date of
tender. If funds in the Capital Account are insufficient to cover the required
cash distribution to the tendering Unitholder, the Trustee may sell Securities.
The in kind redemption option may be terminated by the Sponsor on a date other
than that specified under "Redemption In Kind" on page 3 of this Prospectus upon
notice to the Unitholders prior to the specified date.
To the extent that Securities are redeemed in kind or sold, the size and
diversity of the affected Trust Fund will be reduced but each remaining Unit
will continue to represent approximately the same proportional interest in each
Security. Sales may be required at a time when Securities would not otherwise be
sold and may result in lower prices than might otherwise be realized. The price
received upon redemption may be more or less than the amount paid by the
Unitholder depending on the value of the Securities in the portfolio at the time
of redemption. Special Federal income tax consequences will result if a
Unitholder requests a Distribution In Kind (see "Federal Tax Status").
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which (as determined by the Securities
and Exchange Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result of which
disposal by the Trustee of Securities is not reasonably practicable or it is not
reasonably practicable to fairly determine the value of the underlying
Securities in accordance with the Trust Agreement; or (3) for such other period
as the Securities and Exchange Commission may by order permit. The Trustee is
not liable to any person in any way for any loss or damage which may result from
any such suspension or postponement.
COMPUTATION OF REDEMPTION PRICE. The Redemption Price per Unit (as well as the
secondary market Public Offering Price) will be determined on the basis of the
aggregate underlying bid value of the Securities in the Trust Fund 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
21
<PAGE> 26
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 the 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 such
Trust, (b) any amount owing to the Trustee for its advances and (c) the accrued
expenses of the Trust. The Evaluator may determine the value of the Securities
in 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.
22
<PAGE> 27
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, Investors Fiduciary Trust Company ("IFTC"), has agreed to act as
custodian for certain retirement plan accounts. An annual fee of $12.00 per
account, if not paid separately, will be assessed by the Trustee and paid
through the liquidation of shares of the reinvestment account. An individual
wishing IFTC to act as custodian must complete a Kemper UIT/IRA application and
forward it along with a check made payable to Investors Fiduciary Trust Company.
Certificates for Individual Retirement Accounts can not be issued.
UNITHOLDERS
OWNERSHIP OF UNITS. Ownership of Units of a Trust Fund will not be evidenced by
certificates unless a Unitholder, the Unitholder's registered broker/dealer or
the clearing agent for such broker/dealer makes a written request to the
Trustee. Units are transferable by making a written request to the Trustee and,
in the case of Units evidenced by a certificate, by presenting and surrendering
such certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent by registered or
certified mail for the protection of the Unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate representing
the Units to be transferred. Such signatures must be guaranteed as stated under
"Redemption -- General."
Units may be purchased and certificates, if requested, will be issued in
denominations of one Unit or any multiple thereof, subject to 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
23
<PAGE> 28
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 15th day of January, April, July and October of each year
on a pro rata basis to Unitholders of record as of the preceding record date
(which will be the first day of the related month). All distributions will be
net of applicable expenses. There is no assurance that any actual distributions
will be made since all dividends received may be used to pay expenses. In
addition, amounts from the Capital Account of 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 such Capital
Account and not distributed until the next distribution date applicable to the
Capital Account. The Trustee shall not be required to make a distribution from
the Capital Account unless the cash balance on deposit therein available for
distribution shall be sufficient to distribute at least $1.00 per 100 Units. The
Trustee is not required to pay interest on funds held in the Capital or Income
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 "Expenses of the Trusts"). 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.
24
<PAGE> 29
DISTRIBUTION REINVESTMENT. Kemper Financial Services, Inc. ("KFS"), an affiliate
of the Sponsor, is the investment manager and principal underwriter of several
front-end load mutual funds. Each Unitholder of the Trust Fund may elect to have
distributions of capital (including capital gains, if any) or dividends or both
automatically invested without charge in shares of any one of these funds, other
than those Kemper-advised mutual funds sold with a contingent deferred sales
charge. Since the portfolio securities and investment objectives of such
Kemper-advised mutual funds generally will differ significantly from those of
the Trust 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 Investors Fiduciary Trust Company. All inquiries concerning
participation in distribution reinvestment should be directed to the Kemper
Service Company, service agent for the Program Agent at P.O. Box 419430, Kansas
City, Missouri 64141-6430, telephone (800) 422-2848.
STATEMENTS TO UNITHOLDERS. With each distribution, the Trustee will furnish or
cause to be furnished to each Unitholder a statement of the amount of income and
the amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit.
The accounts of each Trust Fund are required to be audited annually, at such
Trust Fund's expense, by independent public accountants designated by such
Sponsor, unless the Sponsor 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
25
<PAGE> 30
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 the 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.
26
<PAGE> 31
ADMINISTRATION OF THE TRUSTS
THE TRUSTEE. The Trustee, Investors Fiduciary Trust Company, is a trust company
specializing in investment related services, organized and existing under the
laws of Missouri, having its trust office at 127 West 10th Street, Kansas City,
Missouri 64105. The Trustee is subject to supervision and examination by the
Division of Finance of the State of Missouri and the Federal Deposit Insurance
Corporation. Investors Fiduciary Trust Company is jointly owned by DST Systems,
Inc. and Kemper Financial Services, Inc., an affiliate of the Sponsor.
The Trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolios of the Trust Funds. For information relating to the
responsibilities of the Trustee under the Trust Agreement, reference is made to
the material set forth under "Unitholders."
In accordance with the Trust Agreement, the Trustee shall keep records of all
transactions at its office. Such records shall include the name and address of,
and the number of Units held by, every Unitholder of each Trust Fund. Such books
and records shall be open to inspection by any Unitholder of a Trust Fund at all
reasonable times during usual business hours. The Trustee shall make such annual
or other reports as may from time to time be required under any applicable state
or Federal statute, rule or regulation. The Trustee shall keep a certified copy
or duplicate original of the Trust Agreement on file in its office available for
inspection at all reasonable times during usual business hours by any
Unitholder, together with a current list of the Securities held in a Trust Fund.
Pursuant to the Trust Agreement, the Trustee may employ one or more agents for
the purpose of custody and safeguarding of Securities comprising each Trust
Fund.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of the trust created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor.
The Trustee or successor trustee must mail a copy of the notice of resignation
to all Unitholders then of record, not less than sixty days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within thirty days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. In case the Trustee becomes
incapable of acting or is adjudged a bankrupt or is taken over by public
authorities, the Sponsor may remove the Trustee and appoint a successor trustee
as provided in the Trust Agreement. Notice of such removal and appointment shall
be mailed to each Unitholder by the Sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original Trustee shall vest in the
successor. The Trustee must be a corporation organized under the laws of the
United States, or any state thereof, be authorized under such laws to exercise
trust powers and have at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
THE SPONSOR. The Sponsor, Kemper Unit Investment Trusts, with an office at 77
West Wacker Drive, 29th Floor, Chicago, Illinois 60601, (800) 621-5024, is a
service of Kemper Securities, Inc. which is a wholly-owned subsidiary of Kemper
Financial Companies, Inc. which, in turn, is a wholly-owned subsidiary of Kemper
Corporation. The Sponsor acts as underwriter of a number of other Kemper unit
investment trusts and will act as underwriter of any other unit investment trust
products developed by
27
<PAGE> 32
the Sponsor in the future. As of January 31, 1994, the total stockholder's
equity of Kemper Securities, Inc. was $261,673,436 (unaudited).
If at any time the Sponsor shall fail to perform any of its duties under the
Trust Agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the Trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the Trust Agreement and liquidate the Trust Fund
involved as provided therein, or (c) continue to act as Trustee without
terminating the Trust Agreement.
The foregoing financial information with regard to the Sponsor relates to the
Sponsor only and not to the Trust Funds. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations with respect to the Trust Funds. More comprehensive financial
information can be obtained upon request from the Sponsor.
THE EVALUATOR. Kemper Unit Investment Trusts, the Sponsor, also serves as
Evaluator. The Evaluator may resign or be removed by the Trustee in which even
the Trustee is to use its best efforts to appoint a satisfactory successor. Such
resignation or removal shall become effective upon acceptance of appointment by
the successor evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within thirty days after notice of resignation, the
Evaluator may apply to a court of competent jurisdiction for the appointment of
a successor. Notice of such resignation or removal and appointment shall be
mailed by the Trustee to each Unitholder.
AMENDMENT AND TERMINATION. The Trust Agreement may be amended by the Trustee and
the Sponsor without the consent of any of the Unitholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective or
inconsistent; (2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental agency; or (3)
to make such provisions as shall not adversely affect the interests of the
Unitholders. The Trust Agreement 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 a 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 the
acquisition of any Securities in addition to or in substitution for those
initially deposited in a Trust Fund, except in accordance with the provisions of
the Trust Agreement. The Trustee shall promptly notify Unitholders of the
substance of any such amendment.
The Trust Agreement provides that 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
28
<PAGE> 33
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 a termination of
a Trust and who otherwise qualifies for such a distribution (see "Redemption")
must notify the Trustee no later than the date indicated under "Redemption In
Kind" on page 3 of this Prospectus.
In the event of termination of 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 the Trust
Fund and, after paying all expenses and charges incurred by the Trust Fund, will
distribute to Unitholders thereof (upon surrender for cancellation of
certificates for Units, if issued) their pro rata share of the balances
remaining in the Income and Capital Accounts of the Trust Fund.
LIMITATIONS ON LIABILITY. The Sponsor: The Sponsor is liable for the performance
of its obligations arising from its responsibilities under the Trust Agreement,
but will be under no liability to the Unitholders for taking any action or
refraining from any action in good faith pursuant to the Trust Agreement or for
errors in judgment, except in cases of its own gross negligence, bad faith or
willful misconduct or its reckless disregard for its duties thereunder. The
Sponsor shall not be liable or responsible in any way for depreciation or loss
incurred by reason of the sale of any Securities.
The Trustee: The Trust Agreement provides that the Trustee shall be under no
liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of monies, Securities or
certificates except by reason of its own gross negligence, bad faith or willful
misconduct, or its reckless disregard for its duties under the Trust Agreement,
nor shall the Trustee be
29
<PAGE> 34
liable or responsible in any way for depreciation or loss incurred by reason of
the sale by the Trustee of any Securities. In the event that the Sponsor shall
fail to act, the Trustee may act and shall not be liable for any such action
taken by it in good faith. The Trustee shall not be personally liable for any
taxes or other governmental charges imposed upon or in respect of the Securities
or upon the interest thereof. In addition, the Trust Agreement contains other
customary provisions limiting the liability of the Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation furnished
by the Evaluator and shall have no responsibility for the accuracy thereof. The
Trust Agreement provides that the determinations made by the Evaluator shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the Trustee
or Unitholders for errors in judgment, but shall be liable only for its gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the Trust Agreement.
EXPENSES OF THE 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." 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", 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 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
30
<PAGE> 35
from gross negligence, bad faith or willful misconduct on its part or its
reckless disregard for its obligations under the Trust Agreement; (f)
indemnification of the Sponsor for any loss, liability or expense incurred in
acting in that capacity without gross negligence, bad faith or willful
misconduct or its reckless disregard for its obligations under the Trust
Agreement; and (g) expenditures incurred in contacting Unitholders upon
termination of 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. Since the Securities are all common stocks, and the
income stream produced by dividend payments, if any, is unpredictable, the
Sponsor cannot provide any assurance that dividends will be sufficient to meet
any or all expenses of 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 CERTIFIED PUBLIC ACCOUNTANTS
The statements of condition and the related portfolios at the Initial Date of
Deposit included in this Prospectus have been audited by Grant Thornton,
independent certified public accountants, as set forth in their report in the
Prospectus, and are included herein in reliance upon the authority of said firm
as experts in accounting and auditing.
------------------
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<PAGE> 36
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
UNITHOLDERS
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 8 (BANKING INSTITUTIONS) AND
SERIES 9 (HOTEL AND GAMING SERIES)
We have audited the accompanying statements of condition and the related
portfolios of Kemper Equity Portfolio Trusts, Series 8 (Banking Institutions)
and Series 9 (Hotel and Gaming Series), as of May , 1994. The statements of
condition and portfolios are the responsibility of the Sponsor. Our
responsibility is to express an opinion on such financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of a letter of credit deposited to purchase Securities by
correspondence with the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Sponsor, as well as
evaluating the overall financial statement presentation. We believe our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kemper Equity Portfolio Trusts,
Series 8 (Banking Institutions) and Series 9 (Hotel and Gaming Series) as of May
, 1994, in conformity with generally accepted accounting principles.
GRANT THORNTON
Chicago, Illinois
May , 1994
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<PAGE> 37
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 8 (BANKING INSTITUTIONS) AND
SERIES 9 (HOTEL AND GAMING SERIES)
STATEMENTS OF CONDITION
AT THE OPENING OF BUSINESS ON MAY , 1994, THE INITIAL DATE OF DEPOSIT
TRUST PROPERTY
<TABLE>
<CAPTION>
SERIES 8 SERIES 9
----------- -----------
<S> <C> <C>
Contracts to purchase Securities (1)(2)............................ $ $
----------- -----------
Total.............................................................. $ $
----------- -----------
----------- -----------
NUMBER OF UNITS....................................................
----------- -----------
----------- -----------
INTEREST OF UNITHOLDERS
Cost to investors (3).............................................. $ $
Less: Gross underwriting commission (3)............................
----------- -----------
Net interest to unitholders (1)(2)(3).............................. $ $
----------- -----------
----------- -----------
</TABLE>
- ---------------
NOTES:
(1) Aggregate cost of the Securities listed in the Portfolios is based on
offering side evaluations as determined by the Trustee.
(2) An irrevocable letter of credit issued by Chemical Bank has been deposited
with the Trustee covering the funds (aggregating $ ) necessary for
the purchase of the Securities in the Trust Funds represented by purchase
contracts.
(3) The aggregate cost to investors includes a sales charge computed at the rate
of 4.0% of the Public Offering Price (equivalent to 4.167% of the net
amount invested) assuming no reduction of sales charges for quantity
purchases.
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<PAGE> 38
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 8 (BANKING INSTITUTIONS)
PORTFOLIO AS OF THE INITIAL DATE OF DEPOSIT:
, 1994
<TABLE>
<CAPTION>
ANNUALIZED
AGGREGATE FOUR-YEAR HISTORY CURRENT
NAME OF ISSUER PERCENTAGE NUMBER PRICE COST OF OF DIVIDENDS PAID DIVIDEND CURRENT
OF SECURITIES DEPOSITED OF OF PER SECURITIES ------------------------------ PER DIVIDEND
OR CONTRACTED FOR(1) PORTFOLIO(1) SYMBOL SHARES SHARE TO TRUST(2) 1990 1991 1992 1993 SHARE(3) YIELD(3)
- ----------------------- ------------ ------ ------ ------- ----------- ------ ------ ------ ------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AmSouth
Bancorporation....... ASO $0.940 $0.980 $1.070 $1.220
Associated Banc-Corp... ASBC 0.529 0.625 0.709 0.764
Barnett Banks, Inc. ... BBI 1.290 1.320 1.320 1.410
Central Fidelity Banks,
Inc. ................ CFBS 0.542 0.618 0.729 0.807
FirsTier Financial,
Inc. ................ FRST 0.600 0.600 0.630 0.705
First Bancorporation of
Ohio................. FBOH 0.763 0.803 0.823 0.900
First of America Bank
Corporation.......... FOA 1.150 1.240 0.990 1.500
First Tennessee
National
Corporation.......... FTEN 1.080 1.140 1.260 1.500
First Virginia
Banks, Inc. ......... FVB 0.853 0.907 0.990 1.130
Fort Wayne National
Corporation.......... FWNC 0.970 1.060 1.140 1.220
Fourth Financial
Corporation.......... FRTH 0.880 0.880 0.880 0.980
Hawkeye
Bancorporation....... HWKB 0.000 0.150 0.330 0.420
Huntington Bancshares,
Inc. ................ HBAN 0.510 0.568 0.618 0.745
Mercantile
Bancorporation....... MTL 0.933 0.933 0.933 0.987
Magna Group, Inc. ..... MAGI 0.617 0.648 0.680 0.680
Old Kent Financial
Corporation.......... OKEN 0.723 0.787 0.903 1.070
Southtrust
Corporation.......... SOTR 0.462 0.480 0.520 0.597
Star Banc
Corporation.......... STRZ 0.960 1.000 1.040 1.160
US Bancorp............. USBC 0.611 0.713 0.760 0.850
West One Bancorp....... WEST 0.440 0.480 0.520 0.645
------------ -----------
% $
------------ -----------
------------ -----------
</TABLE>
NOTES TO PORTFOLIO
(1) All or a portion of the Securities have been deposited in the Trust. Any
undelivered Securities are represented by "regular way" contracts for the
performance of which an irrevocable letter of credit has been deposited with
the Trustee. At the Initial Date of Deposit, the Sponsor has assigned to the
Trustee all of its rights, title and interest in and to such undelivered
Securities. Contracts to purchase Securities were entered into on
, 1994 and all have expected settlement dates on , 1994
(see "The Trust Funds"). Percentages are based on the cost of Securities to
the Trust Fund.
(2) The market value of each Security is based on the closing offer price on a
national securities exchange if the Security is listed thereon or, if not so
listed, then on the over-the-counter market, in each case, on the day prior
to the Initial Date of Deposit. As of the Initial Date of Deposit the
aggregate cost of the Securities to the Sponsor was $ and its gross
profit (loss) was $ .
(3) The Annualized Current Dividend per Share for each Security was calculated
by annualizing the latest quarterly or semi-annual common stock dividend
declaration on that Security. The Current Dividend Yield for each Security
was calculated by dividing the Annualized Current Dividend per Share by that
Security's market value as of the close of trading on the day prior to the
Initial Date of Deposit. There can be no assurance that the future dividend
payments, if any, will be maintained in an amount equal to the dividend
listed above.
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<PAGE> 39
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 9 (HOTEL AND GAMING SERIES)
PORTFOLIO AS OF THE INITIAL DATE OF DEPOSIT:
, 1994
<TABLE>
<CAPTION>
AGGREGATE
NAME OF ISSUER PERCENTAGE NUMBER PRICE COST OF MARKET
OF SECURITIES DEPOSITED OF OF PER SECURITIES CAPITALIZATION
OR CONTRACTED FOR(1) PORTFOLIO(1) SYMBOL SHARES SHARE TO TRUST(2) MILLIONS OF $(3)
- ----------------------------------------------------- ------ ------ ------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C>
CASINO OPERATORS
Boomtown, Inc............................ BMTN $ $ $
Caesars World, Inc....................... CAW
Circus Circus Enterprises, Inc........... CIR
Grand Casinos Inc........................ GRND
Harvey's Casinos Resorts................. HVY
Hilton Hotels Corporation................ HLT
Hollywood Park, Inc...................... HPRK
MGM Grand, Inc........................... MGG
Mirage Resorts, Inc...................... MIR
Players International, Inc............... PLAY
Primadonna Resorts, Inc.................. PRMA
Promus Companies, Inc.................... PRI
Rio Hotel and Casino, Inc................ RIOH
Station Casinos, Inc..................... STCI
GAMING EQUIPMENT
GTECH Holdings Corporation............... GTK
International Gaming Technology.......... IGT
Scientific Games Holdings Corporation.... SGIH
United Gaming, Inc....................... UGAM
Video Lottery Technologies, Inc.......... VLTS
WMS Industries, Inc...................... WMS
------------ ------ -----------
% $
------------ ------ -----------
------------ ------ -----------
</TABLE>
NOTES TO PORTFOLIO
(1) All or a portion of the Securities have been deposited in the Trust. Any
undelivered Securities are represented by "regular way" contracts for the
performance of which an irrevocable letter of credit has been deposited with
the Trustee. At the Initial Date of Deposit, the Sponsor has assigned to the
Trustee all of its rights, title and interest in and to such undelivered
Securities. Contracts to purchase Securities were entered into on
, 1994 and all have expected settlement dates on
, 1994 (see "The Trust Funds"). Percentages are based on the
cost of Securities to the Trust Fund.
(2) The market value of each Security is based on the closing offer price on a
national securities exchange if the Security is listed thereon or, if not so
listed, then on the over-the-counter market, in each case, on the day prior
to the Initial Date of Deposit. As of the Initial Date of Deposit the
aggregate cost of the Securities to the Sponsor was $ and its gross
profit (loss) was $ .
(3) Source: Bloomberg L.P.
35
<PAGE> 40
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
CONTENTS
SUMMARY........................................ 2
ESSENTIAL INFORMATION.......................... 4
THE TRUST FUNDS................................ 5
THE TRUST PORTFOLIOS........................... 5
RISK FACTORS................................... 10
FEDERAL TAX STATUS............................. 14
PUBLIC OFFERING OF UNITS....................... 17
Public Offering Price........................ 17
Public Distribution of Units................. 18
Sponsor Profits.............................. 19
MARKET FOR UNITS............................... 19
REDEMPTION..................................... 20
General...................................... 20
Computation of Redemption Price.............. 21
RETIREMENT PLANS............................... 22
UNITHOLDERS.................................... 23
Ownership of Units........................... 23
Distributions to Unitholders................. 24
Distribution Reinvestment.................... 25
Statements to Unitholders.................... 25
Rights of Unitholders........................ 26
INVESTMENT SUPERVISION......................... 26
ADMINISTRATION OF THE TRUSTS................... 27
The Trustee.................................. 27
The Sponsor.................................. 27
The Evaluator................................ 28
Amendment and Termination.................... 28
Limitations on Liability..................... 29
EXPENSES OF THE TRUSTS......................... 30
LEGAL OPINIONS................................. 31
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS....... 31
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS.................................. 32
STATEMENTS OF CONDITION........................ 33
PORTFOLIOS..................................... 34
</TABLE>
- --------------------------------------------------------------
This Prospectus does not contain all
of the information with respect to
the investment company set forth in
its registration statement and
exhibits relating thereto which have
been filed with the Securities and
Exchange Commission, Washington,
D.C. under the Securities Act of
1933 and the Investment Company Act
of 1940, and to which reference is
hereby made.
- --------------------------------------------------------------
No person is authorized to give any
information or to make any
representations with respect to this
investment company not contained in
this Prospectus; and any information
or representation not contained
herein must not be relied upon as
having been authorized by the
Trusts, the Trustee, or the Sponsor.
Such registration does not imply
that the Trusts or the Units have
been guaranteed, sponsored,
recommended or approved by the
United States or any state or any
agency or officer thereof.
- --------------------------------------------------------------
This Prospectus does not constitute
an offer to sell, or a solicitation
of an offer to buy, securities in
any state to any person to whom it
is not lawful to make such offer in
such state or country.
Kemper Unit Investment Trusts
77 West Wacker Drive, 29th Floor
Chicago, IL 60601-1994
01-RED-6-1.94
<PAGE> 41
- -----------------------------------------------------------------------
- ---------------------------------------------------------------------
KEMPER
EQUITY
PORTFOLIO
TRUSTS.
- ---------------------------------------------------------------------
- -----------------------------------------------------------------------
----------------------------------------------------------------------
--------------------------------------------------------------------
PROSPECTUS
--------------------------------------------------------------------
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BANKING INSTITUTIONS
SERIES 8
HOTEL AND GAMING
SERIES 9
MAY , 1994
------------------------------------------------------------------------------
KEMPER UNIT INVESTMENT TRUSTS
------------------------------------------------------------------------------
<PAGE> 42
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The following exhibits:
<TABLE>
<CAPTION>
<S> <C>
1.1 Form of Trust Indenture and Agreement for Kemper Equity Portfolio Trusts,
Series 8 and Series 9 (to be filed by amendment).
1.1.1 Standard Terms and Conditions of Trust for Kemper Equity Portfolio
Trusts, Series 8 and Series 9. Reference is made to Exhibit 1.1.1 to the
Registration Statement on Form S-6, with respect to Kemper Equity
Portfolio Trust, Series 5 (Registration No. 33-51203) as filed on
December 8, 1993.
1.2 Certificate of Incorporation of Kemper Unit Investment Trusts. Reference
is made to Exhibit 1.2 to the Registration Statement on Form S-6, with
respect to Kemper Government Securities Trust (Registration No. 33-26754)
as filed on February 14, 1989.
1.3 By-laws of Kemper Capital Markets, Inc. Reference is made to Exhibit 1.3
to the Registration Statement on Form S-6, with respect to Kemper
Government Securities Trust (Registration No. 33-26754) as filed on
February 14, 1989.
2.1 Form of Certificate of Ownership (pages three to four, inclusive, of the
Standard Terms and Conditions of Trust included as Exhibit 1.1.1.)
3.1 Opinion of counsel to the Sponsor as to legality of the securities being
registered including a consent to the use of its name under the headings
"Tax Status" and "Legal Opinions" in the Prospectus and opinion of
counsel as to Federal income tax status of the securities being
registered and certain Missouri tax matters (to be filed by amendment).
4.1 Consent of Grant Thornton (to be filed by amendment).
</TABLE>
S-1
<PAGE> 43
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Kemper Equity Portfolio Trusts, Series 8 and Series 9 has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Chicago, and State of Illinois, on the 4th day
of May, 1994.
KEMPER EQUITY PORTFOLIO TRUSTS,
SERIES 8 AND SERIES 9
Registrant
By: KEMPER UNIT INVESTMENT TRUSTS
Depositor
By: /s/ C. PERRY MOORE
C. Perry Moore
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON MAY 4, 1994 BY THE FOLLOWING
PERSONS, WHO CONSTITUTE A MAJORITY OF THE BOARD OF DIRECTORS OF KEMPER UNIT
INVESTMENT TRUSTS.
<TABLE>
<CAPTION>
<S> <C>
SIGNATURE TITLE
- --------------------------------------------- ----------------------------------------------
JAMES R. BORIS Chairman and Chief Executive Officer
- ---------------------------------------------
James R. Boris
DONALD F. ELLER Senior Executive Vice President and Director
- ---------------------------------------------
Donald F. Eller
STANLEY R. FALLIS Senior Executive Vice President, Chief
- --------------------------------------------- Financial Officer and Director
Stanley R. Fallis
FRANK V. GEREMIA Senior Executive Vice President and Director
- ---------------------------------------------
Frank V. Geremia
DAVID B. MATHIS Director
- ---------------------------------------------
David B. Mathis
ROBERT T. JACKSON Director
- ---------------------------------------------
Robert T. Jackson
JAY B. WALTERS Senior Executive Vice President and Director
- ---------------------------------------------
Jay B. Walters
</TABLE>
S-2
<PAGE> 44
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ----------------------------------------------
<S> <C>
CHARLES M. KIERSCHT Director
- ---------------------------------------------
Charles M. Kierscht
ARTHUR J. MCGIVERN Director
- ---------------------------------------------
Arthur J. McGivern
</TABLE>
/s/ C. PERRY MOORE
------------------------------------
C. Perry Moore
C. PERRY MOORE SIGNS THIS DOCUMENT PURSUANT TO POWER OF ATTORNEY FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION WITH (A) AMENDMENT NO. 1 TO THE
REGISTRATION STATEMENT ON FORM S-6 FOR KEMPER TAX-EXEMPT INSURED INCOME TRUST,
SERIES A-70 AND MULTI-STATE SERIES 28 AND KEMPER TAX-EXEMPT INCOME TRUST,
MULTI-STATE SERIES 42 (REGISTRATION NO. 33-35425), AND (B) AMENDMENT NO. 1 TO
THE REGISTRATION STATEMENT ON FORM S-6 FOR KEMPER TAX-EXEMPT INSURED INCOME
TRUST, SERIES A-72 AND MULTI-STATE SERIES 30 (REGISTRATION NO. 33-37178), AND
(C) AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT ON FORM S-6 FOR KEMPER
TAX-EXEMPT INSURED INCOME TRUST, MULTI-STATE SERIES 51 (REGISTRATION NO.
33-48398).
S-3
