EVERGREEN SELECT MONEY MARKET TRUST, 497, 1999-11-03

EVERGREEN SELECT MONEY MARKET TRUST
497, 1999-11-03

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PROSPECTUS NOVEMBER 1, 1999

SNAP(SM) FUND

EVERGREEN FAMILY OF FUNDS

THIS PROSPECTUS CONTAINS INFORMATION YOU SHOULD KNOW BEFORE YOU INVEST. PLEASE
READ IT CAREFULLY AND KEEP
IT WITH YOUR INVESTMENT RECORDS. THE FUND IS A MONEY MARKET FUND.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED
UPON THE ADEQUACY OF THIS PROSPECTUS. ANY STATEMENT TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
CONTENTS

<TABLE>
<S> <C>
FUND SUMMARY ............................................................. 3
I. Objective, Principal Investment Strategies, and Principal Risks ..... 3
Objective .................................................... ...... 3
Principal Investment Strategies .............................. ...... 3
Principal Risks .............................................. ...... 3
II. Performance Information, Fees, and Expenses ........................ 4
Performance Information ...................................... ...... 4
Fees and Expenses ............................................ ...... 4
III. Other Investment Strategies and Risks .............................. 5
GENERAL INFORMATION ...................................................... 7
Integration with Evergreen Family of Funds .............................. 7
Year 2000 Issues ........................................................ 7
HOW TO PARTICIPATE IN THE FUND ........................................... 7
Pricing of Fund Shares .................................................. 7
Purchasing Shares ....................................................... 7
Redeeming Shares ........................................................ 8
Redemptions by Check .................................................... 8
FUND DISTRIBUTIONS AND TAXES ............................................. 9
Distributions ........................................................... 9
Taxes ................................................................... 9
FINANCIAL HIGHLIGHTS ..................................................... 10
CUSTODIAN AND TRANSFER AND DIVIDEND AGENT ................................ 10
</TABLE>

2
<PAGE>
FUND SUMMARY

I. OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES, AND PRINCIPAL RISKS.

OBJECTIVE. SNAP(SM) Fund seeks as high a rate of current income as Mentor
Investment Advisors, LLC, the Fund's investment adviser ("Mentor Advisors"),
believes is consistent with preservation of capital and maintenance of
liquidity.

PRINCIPAL INVESTMENT STRATEGIES. The Fund attempts to maximize yields,
consistent with its investment objective, by buying and selling portfolio
investments in anticipation of or in response to changing economic and money
market conditions and trends. The Fund may also invest to take advantage of what
Mentor Advisors believes to be temporary disparities in yields either in those
segments of the securities markets in which the Fund invests or among particular
instruments within those segments.

The Fund is a money market fund and follows investment and valuation
policies designed to maintain a stable net asset value of $1.00 per share,
although there is no assurance that these policies will be successful. The Fund
will maintain a dollar-weighted average maturity of 90 days or less and will not
invest in securities with remaining maturities of more than one year.

In order to meet its investment objective, the Fund will invest in a
portfolio of high-quality short-term instruments consisting of any or all of the
following: U.S. Government securities; high quality debt instruments of the
Commonwealth of Virginia, and obligations of any county, city, town, district,
authority, or other public body of the Commonwealth of Virginia; high quality
obligations of any other state or of any county, city, town, district located in
any other state; bankers' acceptances issued by a bank organized in the U.S. or
a foreign bank with an agency domiciled in the U.S.; certificates of deposit and
interest bearing time deposits of U.S. banks or U.S. branches of foreign banks
if the issuer has outstanding short-term debt obligations rated not lower than
P-1 by Moody's Investors Service, Inc. and A-1 by Standard & Poor's Ratings
Services; prime commercial paper consisting of high quality, short-term
obligations issued by banks, corporations, and other issuers organized under
U.S. law; other high-quality, short-term obligations of corporate issuers; and
repurchase agreements with respect to U.S. Government securities.

PRINCIPAL RISKS. While money market funds are designed to be relatively low
risk investments, they are not entirely free of risk. The main risks that could
adversely affect the value of the Fund's shares and the total return on your
investment include:

oINTEREST RATE RISK. The value of bonds and other debt instruments generally
rise and fall in response to changes in interest rates. The value of the
Fund's investments in such securities can be expected to vary inversely to
the changes in prevailing interest rates. Thus, as market interest rates
rise, there is a risk that the value of the Fund's investments in debt
instruments may fall. Interest rate risk is generally lower for investments
with short maturities, and the short-term nature of money market investments
is designed to reduce interest rate risk.

oCREDIT RISK. The values of many of the Fund's investments, including debt
instruments and repurchase agreements, may depend in part on the credit
quality of issuers and counterparties. While the Fund invests only in
high-quality debt instruments and transacts with parties which Mentor
Advisors believes to be of high creditworthiness, there is always a risk
that issuers and counterparties may be unable or unwilling to honor their
obligations to the Fund.

3
<PAGE>

oCONCENTRATION RISK. The Fund's investments in securities of issuers located
in Virginia are subject to the risk that regional economic and other factors
could cause a general decline in the values of such securities.

AN INVESTMENT IN THE FUND IS NOT A DEPOSIT IN A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.

II. PERFORMANCE INFORMATION, FEES, AND EXPENSES.

PERFORMANCE INFORMATION. The following information provides some indication
of the Fund's risks. The bar chart shows changes in the Fund's performance for
the last three calendar years. The Fund's past performance is not an indication
of future performance.

CALENDAR YEAR TOTAL RETURNS

[BAR CHART APPEARS HERE]

1996 1997 1998
5.47% 5.61% 5.62%

The year-to-date return through 9/30/99 was 3.81%. During the periods shown
in the bar chart, the highest return for a quarter was 1.44% (quarter ending
12/95), and the lowest return for a quarter was 1.31% (quarter ending 6/96).

AVERAGE ANNUAL TOTAL RETURNS
(FOR PERIODS ENDING DECEMBER 31, 1998)

<TABLE>
<CAPTION>
SINCE INCEPTION
PAST ONE YEAR (7/24/95)
--------------- ----------------
<S> <C> <C>
SNAP(SM) Fund ......... 5.62% 5.61%
</TABLE>

FEES AND EXPENSES. The information in the expense table below is designed
to give you an idea of what you should expect to pay in expenses as an investor
in the Fund. Shares of the Fund are currently being offered only to investors
through the Commonwealth of Virginia State Non-Arbitrage Program (the "SNAP(SM)
Program"). Only expenses incurred by the Fund are reflected in the table and
Example below; other expenses incurred by the SNAP(SM) Program, or by
participants in the SNAP(SM) Program, are not reflected.

4
<PAGE>
SHAREHOLDER FEES (fees paid directly from your investment)

None

ANNUAL FUND EXPENSES (expenses deducted from Fund assets as a percentage of
average net assets)

<TABLE>
<S> <C>
Management Fee .......................... 0.08%
Other Expenses .......................... 0.03%
----
Total Annual Operating Expenses ......... 0.11%
</TABLE>

The Examples below translate the "Total Annual Operating Expenses" shown in
the preceding table into dollar amounts. This allows you to more easily compare
the costs of investing in the Fund with those of other mutual funds. The example
assumes that you invested $10,000 in the Fund for the time periods indicated,
reinvested all dividends and distributions, and earned a hypothetical 5% annual
return.

Investors should keep in mind that the examples are for comparison purposes
only. The Fund's actual performance and expenses may be higher or lower.
Expenses are based on the Fund's last fiscal year.

EXAMPLES

III. OTHER INVESTMENT STRATEGIES AND RISKS

This Section provides greater detail with regard to the Fund's principal
investment strategies and risks that are summarized in Section I. As a matter of
policy, the Trustees will not change the Fund's investment objective without
shareholder approval.

The Fund will invest only in high quality money market instruments and
other U.S. dollar-denominated instruments of issuers that Mentor Advisors
believes present minimal credit risk. With regard to certificates of deposit and
time deposits, this means that the Fund will only invest where the issuer has
outstanding short-term debt obligations rated not lower than P-1 by Moody's and
A-1 by Standard & Poor's. The Fund will only invest in commercial paper or other
short-term obligations with a similar rating and will only invest in other
obligations rated AAA or AA by Standard & Poor's and Aaa or Aa by Moody's. All
ratings will be evaluated at the time of the investment by the Fund.

The Fund will not purchase securities of any issuer (other than U.S.
Government securities) if, immediately thereafter, more than 5% of the Fund's
total assets would be invested in securities of that issuer (or 1% of the Fund's
total assets, or $1 million, whichever is greater, if the securities of such
issuer owned by the Fund are not rated in the highest rating category by a
nationally recognized statistical rating organization), nor will the Fund make
an investment in commercial paper if, immediately thereafter, more than 35% of
its total assets would be invested in commercial paper. All percentage
limitations on investments will apply at the time of investment

5
<PAGE>
and shall not be considered violated unless an excess or deficiency occurs or
exists immediately after and as a result of such investment.

The Fund will not lend money, other than by investment in the instruments
described above and through entry into repurchase agreements, nor will it borrow
money or pledge, hypothecate, or mortgage its assets. The Fund will not invest
in securities of an issuer if any employee of the Fund or Mentor Advisors (or,
to the knowledge of the Fund or Mentor Advisors, any affiliated person of the
Fund or Mentor Advisors) is an officer or director of that issuer or holds 10%
of the outstanding voting securities of that issuer, unless the investment is
approved or ratified by the Trustees.

The Fund's investment strategies may involve the following risks:

oINTEREST RATE RISK AND CREDIT RISK. Fixed-income debt securities such as
bonds and notes are obligations of the issuer to make payments of principal
and/or interest on future dates. The values of the Fund's investments in such
securities can be expected to vary inversely to changes in prevailing
interest rates. For example, as market interest rates rise, the Fund's
fixed-income debt security investments are likely to be worth less. This risk
is generally greater for debt securities with longer maturities. Fixed income
investments also carry the risk that the issuer or the guarantor of a
security will be unable or unwilling to make timely principal and/or interest
payments, or otherwise to honor its obligations.

oVARIABLE OR FLOATING-RATE SECURITIES INVESTMENT RISK. Variable or
floating-rate securities bear interest at rates subject to periodic
adjustment or provide for periodic recovery of principal on demand. The value
of the Fund's investment in certain of these securities may depend on the
Fund's right to demand that a specified bank, broker-dealer, or other
financial institution either purchase such securities from the Fund at par or
make payment on short notice to the Fund of unpaid principal and/or interest
on the securities. These securities are subject to the risk that the
financial institution in question may be unable or unwilling to make timely
payments, or otherwise to honor its obligations.

oREPURCHASE AGREEMENT INVESTMENT RISK. Although the Fund will enter into
repurchase agreements with respect to U.S. Government securities only with
commercial banks having assets of more than $1 billion and with "primary
dealers" in U.S. Government securities, the value of such investments may be
diminished in the case of the default, insolvency, or bankruptcy of the
Fund's counterparty to the agreement. Mentor Advisors will monitor repurchase
agreement transactions to ensure that they will be fully collateralized at
all times. Nevertheless, the Fund bears a risk of loss if its counterparty
defaults on its obligations and the Fund is delayed or prevented from
exercising its rights to dispose of the collateral. If the Fund's
counterparty should become involved in bankruptcy or insolvency proceedings,
it is possible that the Fund may be treated as an unsecured creditor and be
required to return the underlying collateral to the counter-party's estate.

oGENERAL RISKS. Consistent with its investment objective, and in
consideration of liquidity and the preservation of capital, the Fund may not
necessarily invest in money market instruments paying the highest available
yield at a particular time. Because the Fund is an open-end fund, its
shareholders have the right to redeem their shares in the Fund at any time.
Withdrawals by shareholders could require the sale of portfolio investments
by the Fund at a time when such a sale might not otherwise be desirable.

6
<PAGE>
GENERAL INFORMATION

INVESTMENT ADVISER. The Trustees of Evergreen Select Money Market Trust, a
Delaware business trust of which the Fund is a series, are responsible for
generally overseeing the conduct of the Fund's business. The Trustees have hired
Mentor Investment Advisors, LLC, located at 901 East Byrd Street, Richmond,
Virginia 23219, to act as investment adviser to the Fund. Mentor Advisors is an
affiliate of First Union National Bank; Mentor Advisors and other affiliates of
First Union National Bank serve as investment advisers to the Evergreen Family
of Funds. Mentor Advisors currently has over $15 billion in assets under
management.

Subject to the general oversight of the Trustees, Mentor Advisors manages
the Fund's portfolio in accordance with the stated policies of the Fund, makes
investment decisions for the Fund, and places the purchase and sale orders for
the Fund's portfolio transactions. A team of investment professionals manages
the Fund for Mentor Advisors. For the fiscal year ended June 30, 1999, the Fund
paid Mentor Advisors an aggregate fee, accrued daily and paid monthly, of .08%
of the Fund's average net assets.

INTEGRATION WITH EVERGREEN FAMILY OF FUNDS. At a special meeting of
shareholders held in October 1999, shareholders approved a conversion of the
Fund from a series of Mentor Institutional Trust, into a series of Evergreen
Select Money Market Trust, a Delaware business trust. This change was proposed
in connection with efforts to integrate the Mentor Family of Funds and the
Evergreen Family of Funds, both of which are managed by affiliates of First
Union National Bank.

YEAR 2000 ISSUES. The Fund receives services from a number of providers
which rely on the smooth functioning of their respective systems and the systems
of others to perform those services. It is generally recognized that certain
systems in use today may not perform their intended functions adequately after
the Year 1999 because of the inability of the software to distinguish the Year
2000 from the Year 1900. Mentor Advisors is taking steps that it believes are
reasonably designed to address this potential "Year 2000" problem and has
obtained assurances that comparable steps are being taken by the Fund's other
major service providers. There can be no assurance, however, that these steps
will be sufficient to avoid any adverse impact on the Fund from this problem. To
the extent this potential "Year 2000" problem affects issuers of securities held
by the Fund, it could cause a decline in the values of such securities.

HOW TO PARTICIPATE IN THE FUND

PRICING OF FUND SHARES. The Fund offers its shares continuously at a price
of $1.00 per share. Shares of the Fund are sold at the net asset value next
determined after a purchase order is received in good order by the Fund from the
SNAP(SM) Program. The Fund determines its net asset value twice each day the New
York Stock Exchange is open, at 12:00 noon and as of the close of the Exchange.
The Fund's investments are valued at amortized cost. The Fund will not normally
have unrealized gains or losses so long as it values its investments by the
amortized cost method.

PURCHASING SHARES. Shares of the Fund are currently being offered only to
participants in the Commonwealth of Virginia State Non-Arbitrage Program (the
"SNAP(SM) Program"). Participants in the SNAP(SM) Program wishing to purchase
shares of the Fund should consult the Information Statement of the SNAP(SM)
Program, as it may be amended from time to time (the "Information Statement"),
or should contact the SNAP(SM) Program directly, for information as to the
procedures they should follow in order to purchase shares of the Fund through
the Program.

7
<PAGE>

All Fund shares owned beneficially by participants in the SNAP(SM) Program
are owned of record by the Treasury Board, an agency of the Commonwealth of
Virginia, for the benefit of participants. Because the Treasury Board will be
the record owner of all shares of the Fund owned beneficially by SNAP(SM)
Program participants, a Program participant should follow the procedures
described in the Information Statement to ensure that all instructions as to any
investment by it in the Fund -- including instructions as to the purchase or
sale of shares of the Fund -- are timely carried out by the SNAP(SM) Program.

In the interest of economy and convenience, the Fund will not issue
certificates for its shares except at the shareholder's request.

Because the Fund seeks to be fully invested at all times, investments must
be in Same Day Funds to be accepted. "Same Day Funds" are funds credited by the
applicable regional Federal Reserve Bank to the account of the Fund at Wachovia
Bank. A participant in the SNAP(SM) Program wishing to invest in the Fund must
ensure that Wachovia Bank, as Depository for the SNAP(SM) Program, receives Same
Day Funds at or prior to the time the participant wishes to invest in the Fund.

REDEEMING SHARES. Shares of the Fund may be redeemed on any day when the
New York Stock Exchange is open. Redemptions will be effected at the net asset
value per share of the Fund next determined after receipt of the redemption
request in good order. Shares redeemed at the Fund's 12:00 noon price do not
earn the income dividend declared on the day of redemption. Participants should
consult the Information Statement or contact the SNAP(SM) Program directly to
ensure that all necessary steps are taken to effect the timely redemption of
their shares. Under unusual circumstances, the Fund may suspend repurchases, or
postpone payment for more than seven days, as permitted by federal securities
laws.

The Fund will normally redeem shares for cash; however, the Fund reserves
the right to pay the redemption price wholly or partly in kind if the Trustees
determine it to be advisable in the interest of the remaining shareholders. If
portfolio securities are distributed in lieu of cash, the shareholder will
normally incur brokerage commissions upon subsequent disposition of any such
securities.

If shares of the Fund to be redeemed represent an investment made by check,
the Fund reserves the right not to transmit the redemption proceeds to the
shareholder until the check has been collected which may take up to 15 days
after the purchase date.

REDEMPTIONS BY CHECK. SNAP(SM) Program participants may elect to have a
special checking account with Wachovia Bank. Checks may be drawn on the account
for any amount. Upon receipt of a completed signature card, Wachovia Bank will
provide the participant with a supply of checks which can be drawn on the
account. Additional supplies of checks are available, upon request. When a check
is presented to Wachovia Bank, a number of shares in the Fund owned beneficially
by the check writer will be redeemed in order to pay the full amount of the
check.

Redemption by check is not appropriate for a complete liquidation of an
account. If the amount of a redemption check is greater than the value of the
shares owned beneficially by the check writer, the check will be returned to the
depositor due to an insufficient account balance. The check writing privilege
may be suspended at any time.

8
<PAGE>
FUND DISTRIBUTIONS AND TAXES

DISTRIBUTIONS. The Fund declares all of its net interest income as a
distribution on each day the New York Stock Exchange is open for business, as a
dividend to shareholders of record immediately prior to the close of regular
trading on the Exchange. Shareholders who purchase shares of the Fund as of
12:00 noon on any day will receive the dividend declared by the Fund for that
day; shareholders who purchase shares after 12:00 noon will begin earning
dividends on the day after the Fund accepts their order. The Fund's net income
for Saturdays, Sundays, and holidays is declared as a dividend on the preceding
business day.

Dividends for any month will be paid on the last day of that month (or, if
that day is not a business day, on the preceding business day), except that the
Fund's schedule for payment of dividends during the month of December may be
adjusted to assist in the Fund's tax reporting and distribution requirements.
All distributions will be reinvested automatically in Fund shares as of the
payment date, unless the shareholder instructs the Fund to pay out distributions
to it in cash. To change your distribution arrangements, call 1-800-570-SNAP.
Since the net income of the Fund is declared as dividend income each time it is
determined, the net asset value per share of the Fund normally remains at $1 per
share immediately after each determination and dividend declaration.

TAXES. The Fund intends to qualify as a "regulated investment company" for
federal income tax purposes to be relieved of federal taxes on income and gains
it distributes to shareholders. The Fund will distribute substantially all of
its net investment income and capital gain net income on a current basis.
Distributions from the Fund will be taxable to a shareholder whether received in
cash or additional shares. Such distributions that are designated as capital
gains distributions will be taxable as such, regardless of how long Fund shares
are held, while other taxable distributions will be taxed as ordinary income.
Loss on the sale of Fund shares held for less than six months will be treated as
a long term capital loss to the extent of any capital gain distribution received
with respect to such shares. Early in each year, the Fund will notify
shareholders of the amount and tax status of distributions paid to the
shareholders by the Fund for the preceding year.

The Fund will not be responsible for determining whether income or gains
from any investment by the Fund will be excludable from the income of
participants in the SNAP(SM) Program for tax purposes, or will otherwise be
subject to or exempt from taxation under federal or state law or be subject to
rebate by participants under federal law.

The foregoing is a summary of certain federal income tax consequences of
investing in the Fund. Shareholders should consult with their tax advisers for
more information concerning the federal, state, and local tax consequences of
investing in, redeeming, or exchanging Fund shares.

9
<PAGE>
FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the
Fund's financial performance for the past four years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by KPMG LLP. KPMG LLP's report
and the Fund's financial statements are included in the Fund's annual report,
which is available upon request.

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 1999 JUNE 30, 1998 JUNE 30, 1997 JUNE 30, 1996(B)
--------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS ................
Net investment income ........................... 0.05** 0.06** 0.05** 0.05 **
---------- ---------- ---------- ---------------
Distributions to shareholders from
net investment income ........................... (0.05)** (0.06)** (0.05)** (0.05 )**
---------- ---------- ---------- ---------------
NET ASSET VALUE, END OF PERIOD ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== =============
Total Return ..................................... 5.30% 5.71% 5.51% 5.29 %
========== ========== ========== ===============
RATIOS / SUPPLEMENTAL DATA
Net assets, end of period (in thousands) ......... $1,265,137 $1,083,364 $1,045,583 $ 954,777
Ratio of expenses to average net assets .......... 0.11% 0.11% 0.11% 0.12 %(a)
Ratio of net investment income to average net
assets .......................................... 5.17% 5.56% 5.38% 5.53 %(a)
========== ========== ========== ===============
</TABLE>

- ----------
(a) Annualized.

(b) For the period from July 24, 1995 (commencement of operations as a
registrant under the Investment Company Act of 1940) to June 30, 1996.

** Includes net realized capital gains (losses) which were less than $0.005 per
share.

See notes to financial statements.

CUSTODIAN AND TRANSFER AND DIVIDEND AGENT

Wachovia Bank serves as the Fund's custodian and transfer and dividend
agent. The address of Wachovia Bank is 1021 East Cary Street, P.O. Box 27602,
Richmond, Virginia 23261.

10
<PAGE>

THE FUND'S STATEMENT OF ADDITIONAL INFORMATION (SAI) AND ANNUAL AND
SEMI-ANNUAL REPORTS TO SHAREHOLDERS INCLUDE ADDITIONAL INFORMATION ABOUT THE
FUND. THE SAI AND THE FINANCIAL STATEMENTS INCLUDED IN THE FUND'S MOST RECENT
ANNUAL REPORT TO SHAREHOLDERS ARE INCORPORATED BY REFERENCE INTO THIS
PROSPECTUS, WHICH MEANS THEY ARE PART OF THIS PROSPECTUS FOR LEGAL PURPOSES. THE
FUND'S ANNUAL REPORT DISCUSSES THE MARKET CONDITIONS AND INVESTMENT STRATEGIES
THAT SIGNIFICANTLY AFFECTED ITS PERFORMANCE DURING ITS LAST FISCAL YEAR. YOU MAY
OBTAIN FREE COPIES OF THESE MATERIALS, REQUEST OTHER INFORMATION ABOUT THE
FUND, OR MAKE SHAREHOLDER INQUIRIES BY CALLING MENTOR ADVISORS AT
1-800-570-SNAP.

YOU MAY REVIEW AND COPY INFORMATION ABOUT THE FUND, INCLUDING ITS SAI, AT
THE SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE ROOM IN WASHINGTON,
D.C. YOU MAY CALL THE COMMISSION AT 1-800-SEC-0330 FOR INFORMATION ABOUT THE
OPERATION OF THE PUBLIC REFERENCE ROOM. YOU MAY ALSO ACCESS REPORTS AND OTHER
INFORMATION ABOUT THE FUND ON THE COMMISSION'S INTERNET SITE AT
HTTP://WWW.SEC.GOV. YOU MAY OBTAIN COPIES OF THIS INFORMATION, WITH PAYMENT OF A
DUPLICATION FEE, BY WRITING THE PUBLIC REFERENCE SECTION OF THE COMMISSION,
WASHINGTON, D.C. 20549-6009. YOU MAY NEED TO REFER TO THE FUND'S FILE NUMBER
UNDER THE INVESTMENT COMPANY ACT, WHICH IS 811-08405.

(SEC File No. 811-08405)

SNAP(SM) FUND
P.O. BOX 1357,
RICHMOND, VIRGINIA
23286-0109
(800) 570-SNAP

<PAGE>

SNAP(SM) FUND

FORM N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION

NOVEMBER 1, 1999

SNAP(SM) Fund (the "Fund") is a series of Evergreen Select Money Market
Trust (the "Trust"), a diversified open-end investment management company. This
Statement of Additional Information is not a prospectus and should be read in
conjunction with the prospectus of the Fund dated November 1, 1999. A copy of
the prospectus can be obtained upon request made to Mentor Investment Advisors,
LLC ("Mentor Advisors") at P.O. Box 1357, Richmond, Virginia 23286-0109, or by
calling Mentor Advisors at 1-800-570-SNAP.

Certain disclosure has been incorporated by reference from the Fund's
annual report, a free copy of which can be obtained by calling Mentor Advisors
at 1-800-570-SNAP.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
CAPTION PAGE
- --------- -----
<S> <C>
General ......................................... 2
Investment Restrictions ......................... 2
Management of the Trust ......................... 4
Principal Holders of Securities ................. 8
Investment Advisory and Other Services .......... 8
Brokerage ....................................... 10
Determination of Net Asset Value ................ 11
Tax Status ...................................... 13
Independent Accountants ......................... 14
Custodian ....................................... 14
Fund Accounting Agent ........................... 14
Performance Information ......................... 14
Shareholder Liability ........................... 15
Ratings ......................................... 15
Financial Statements ............................ 16
</TABLE>

1
<PAGE>
GENERAL

Evergreen Select Money Market Trust (the "Trust") is a Delaware business
trust organized on September 18, 1997. The Fund is a series of the Trust. The
Fund is a diversified, open-end money-market fund. It commenced operations as a
registered investment company on July 24, 1995.

The Declaration of Trust authorizes the issuance of an unlimited number of
shares of beneficial interest of series and classes of shares. Each share of the
Fund represents an equal proportionate interest with each other share of that
series and/or class. Upon liquidation, shares are entitled to a pro rata share
of the Trust based on the relative net assets of each series and/or class.
Shareholders have no preemptive or conversion rights. Shares are redeemable and
transferable.

Under the terms of the Declaration of Trust, the Trust is not required to
hold annual meetings. At meetings called for the initial election of Trustees or
to consider other matters, each share is entitled to one vote for each dollar of
"NAV" applicable to such share. Shares generally vote together as one class on
all matters. Classes of shares of the Fund have equal voting rights. No
amendment may be made to the Declaration of Trust that adversely affects any
class of shares without the approval of a majority of the votes applicable to
the shares of that class. Shares have non-cumulative voting rights, which means
that the holders of more than 50% of the votes applicable to shares voting for
the election of Trustees can elect 100% of the Trustees to be elected at a
meeting and, in such event, the holders of the remaining shares voting will not
be able to elect any Trustees.

After the initial meeting as described above, no further meetings of
shareholders for the purpose of electing Trustees will be held, unless required
by law (for such reasons as electing or removing Trustees, changing fundamental
policies, and approving advisory agreements of 12b-1 plans), unless and until
such time as less than a majority of the Trustees holding office have been
elected by shareholders, at which time, the Trustees then in office will call a
shareholders' meeting for the election of Trustees.

The Declaration of Trust provides that a Trustee will not be liable for
errors of judgment or mistakes of fact or law, but nothing in the Declaration
of Trust protects a Trustee against any liability to which he would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of his duties involved in the conduct of his office.

INVESTMENT RESTRICTIONS

As fundamental investment restrictions, which may not be changed with
respect to the Fund without approval by the holders of a majority of the
outstanding shares of the Fund, the Fund may not:

1. Purchase any security (other than U.S. Government securities) if as a
result: (i) as to 75% of the Fund's total assets, more than 5% of the Fund's
total assets (taken at current value) would then be invested in securities of a
single issuer, or (ii) more than 25% of the Fund's total assets would be
invested in a single industry, except that the Fund may invest up to 100% of its
assets in securities of issuers in the banking industry.

2. Acquire more than 10% of the voting securities of any issuer.

3. Act as underwriter of securities of other issuers except to the extent
that, in connection with the disposition of portfolio securities, it may be
deemed to be an underwriter under certain federal securities laws.

4. Issue any class of securities which is senior to the Fund's shares of
beneficial interest.

5. Purchase or sell securities on margin (but the Fund may obtain such
short-term credits as may be necessary for the clearance of transactions).
(Margin payments in connection with transactions in futures contracts, options,
and other financial instruments are not considered to constitute the purchase of
securities on margin for this purpose.)

6. Purchase or sell real estate or interests in real estate, including real
estate mortgage loans, although it may purchase and sell securities which are
secured by real estate and securities of companies that invest or deal in real
estate or real estate limited partnership interests. (For purposes of this
restriction, investments by the Fund in mortgage-backed securities and other
securities representing interests in mortgage pools shall not constitute the
purchase or sale of real estate or interests in real estate or real estate
mortgage loans.)

2
<PAGE>
7. Borrow money in excess of 5% of the value (taken at the lower of cost or
current value) of its total assets (not including the amount borrowed) at the
time the borrowing is made, and then only from banks as a temporary measure to
facilitate the meeting of redemption requests (not for leverage) which might
otherwise require the untimely disposition of portfolio investments or for
extraordinary or emergency purposes.

8. Pledge, hypothecate, mortgage, or otherwise encumber its assets in
excess of 15% of its total assets (taken at the lower of cost or current value)
and then only to secure borrowings permitted by these investment restrictions.

9. Purchase or sell commodities or commodity contracts, except that the
Fund may purchase or sell financial futures contracts, options on futures
contracts, and futures contracts, forward contracts, and options with respect to
foreign currencies, and may enter into swap transactions.

10. Make loans, except by purchase of debt obligations or other instruments
in which the Fund may invest consistent with its investment policies or by
entering into repurchase agreements.

In addition, it is contrary to the current policy of the Fund, which policy
may be changed without shareholder approval, to:

1. Invest in (a) securities which at the time of such investment are not
readily marketable, (b) securities restricted as to resale, and (c) repurchase
agreements maturing in more than seven days, if, as a result, more than 10% of
the Fund's net assets (taken at current value) would then be invested in
securities described in (a), (b), and (c).

2. Invest in securities of other registered investment companies, except by
purchases in the open market involving only customary brokerage commissions and
as a result of which not more than 5% of its total assets (taken at current
value) would be invested in such securities, or except as part of a merger,
consolidation, or other acquisition.

All percentage limitations on investments will apply at the time of
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment. Except
for the investment restrictions listed above as fundamental or to the extent
designated as such in a prospectus with respect to the Fund, the other
investment policies described in this Statement or in a prospectus are not
fundamental and may be changed by approval of the Trustees. As a matter of
policy, the Trustees would not materially change the Fund's investment objective
without shareholder approval.

The Investment Company Act of 1940, as amended (the "1940 Act"), provides
that a "vote of a majority of the outstanding voting securities" of the Fund
means the affirmative vote of the lesser of (1) more than 50% of the outstanding
shares of the Fund, and (2) 67% or more of the shares present at a meeting if
more than 50% of the outstanding shares are represented at the meeting in person
or by proxy.

3
<PAGE>
MANAGEMENT OF THE TRUST

The Trust is supervised by a Board of Trustees that is responsible for
representing the interest of the shareholders. The Trustees meet periodically
throughout the year to oversee the Fund's activities, reviewing, among other
things, the Fund's performance and its contractual arrangements with various
service providers. Each Trustee is paid a fee for his or her services. See
"Expenses-Trustee Compensation" in Part 1 of this SAI.

The Trust has an Executive Committee which consists of the Chairman of the
Board, James Howell, the Vice Chairman of the Board, Michael Scofield, and
Russell Salton, each of whom is an Independent Trustee. The Executive Committee
recommends Trustees to fill vacancies, prepares the agenda for Board Meetings
and acts on routine matters between scheduled Board meetings.

Set forth below are the Trustees and officers of the Trust and their
principal occupations and affiliations over the last five years. Unless
otherwise indicated, the address for each Trustee and officer is 200 Berkeley
Street, Boston, Massachusetts 02116. Each Trustee is also a Trustee of each of
the other Trusts in the Evergreen Fund complex.

<TABLE>
<CAPTION>
POSITION HELD
NAME AND ADDRESS AND AGE WITH THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- -------------------------- ------------------- ---------------------------------------------------
<S> <C> <C>
Laurence B. Ashkin Trustee Real estate developer and construction consultant;
(DOB: 2/2/28) and President of Centrum Equities (real estate
development) and Centrum Properties, Inc. (real
estate development).

Charles A. Austin III Trustee Investment Counselor to Appleton Partners, Inc.;
(DOB: 10/23/34) former Director, Executive Vice President and
Treasurer, State Street Research & Management
Company (investment advice); Director, The
Andover Companies (Insurance); and Trustee,
Arthritis Foundation of New England

K. Dun Gifford Trustee Trustee, Treasurer and Chairman of the Finance
(DOB: 10/12/38) Committee, Cambridge College; Chairman
Emeritus and Director, American Institute of Food
and Wine; Chairman and President, Oldways
Preservation and Exchange Trust (education);
former Chairman of the Board, Director, and
Executive Vice President, The London Harness
Company (leather goods purveyor); former
Managing Partner, Roscommon Capital Corp.;
former Chief Executive Officer, Gifford Gifts of
Fine Foods; former Chairman, Gifford, Drescher
& Associates (environmental consulting).

James S. Howell* Chairman of the Former Chairman of the Distribution Foundation
(DOB: 8/13/24) Board of Trustees for the Carolinas; and former Vice President of
Lance Inc. (food manufacturing).
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
POSITION HELD
NAME AND ADDRESS AND AGE WITH THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- --------------------------- ------------------ -----------------------------------------------------
<S> <C> <C>
Leroy Keith, Jr. Trustee Chairman of the Board and Chief Executive
(DOB: 2/14/39) Officer, Carson Products Company; Director of
Phoenix Total Return Fund and Equifax, Inc.;
Trustee of Phoenix Series Fund, Phoenix
Multi-Portfolio Fund, and The Phoenix Big Edge
Series Fund; and former President, Morehouse
College; Manufacturer, Worldwide Information
Management, Co.

Gerald M. McDonnell Trustee Sales and Marketing Management with Nucor-Yamoto, Inc.
(DOB: 7/14/39) (steel producer).

Thomas L. McVerry Trustee Former Vice President and Director of Rexham
(DOB: 8/2/39) Corporation (manufacturing); and former Director
of Carolina Cooperative Federal Credit Union.

William Walt Pettit Trustee Partner in the law firm of William Walt Pettit, P.A.
(DOB: 8/26/55)

David M. Richardson Trustee Vice Chair and former Executive Vice President,
(DOB: 9/14/41) DHR International, Inc. (executive recruitment);
former Senior Vice President, Boyden International
Inc. (executive recruitment); and Director,
Commerce and Industry Association of New
Jersey, 411 International, Inc. (communications),
and J&M Cumming Paper Co.

Russell A. Salton, III MD Trustee Medical Director, U.S. Health Care/Aetna Health
(DOB: 6/2/47) Services; former Managed Health Care Consultant;
and former President, Primary Physician Care.

Michael S. Scofield* Vice Chairman of Attorney, Law Offices of Michael S. Scofield.
(DOB: 2/20/43) the Board of
Trustees
</TABLE>

5
<PAGE>

<TABLE>
<CAPTION>
POSITION HELD
NAME AND ADDRESS AND AGE WITH THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- -------------------------- ---------------- --------------------------------------------------
<S> <C> <C>
Richard J. Shima Trustee Former Chairman, Environmental Warranty, Inc.
(DOB: 8/11/39) (insurance agency); Executive Consultant, Drake
Beam Morin, Inc. (executive outplacement);
Director of Connecticut Natural Gas Corporation,
Hartford Hospital, Old State House Association,
Middlesex Mutual Assurance Company (property/
casualty insurance), and Enhance Financial
Services, Inc. (financial guaranty insurance);
Chairman, Board of Trustees, Hartford Graduate
Center; Trustee, Greater Hartford YMCA; former
Director, Vice Chairman and Chief Investment
Officer, The Travelers Corporation; former
Trustee, Kingswood-Oxford School; and former
Managing Director and Consultant, Russell Miller,
Inc. (investment banking, specializing in the
insurance industry)

Anthony J. Fischer** President and Vice President/Client Services, BISYS Fund
(DOB:2/10/59) Treasurer Services.

Nimish S. Bhatt*** Vice President Vice President, Tax, BISYS Fund Services; former
(DOB: 6/6/63) and Assistant Assistant Vice President, EAMC/First Union
Treasurer National Bank; former Senior Tax
Consulting/Acting Manager, Investment
Companies Group, PricewaterhouseCoopers LLP,
New York.

Bryan Haft*** Vice President Team Leader, Fund Administration, BISYS Fund
(DOB: 1/23/65) Services.

Michael H. Koonce Secretary Senior Vice President and Assistant General
(DOB: 4/20/60) Counsel, First Union Corporation; former Senior
Vice President and General Counsel, Colonial
Management Associates, Inc.
</TABLE>

- ----------
* As of January 1, 2000, Michael S. Scofield will become Chairman of the Board
and James S. Howell will become Trustee of Emeritis
** Address: BISYS Fund Services, 90 Park Avenue, New York, New York 10016
*** Address: BISYS, 3435 Stelzer Road, Columbus, Ohio 43219-8001

6
<PAGE>

TRUSTEE COMPENSATION

Listed below is the Trustee compensation paid by the Trust individually and
by the Trust and the eight other trusts in the Evergreen Fund complex for the
fiscal period ended June 30, 1999. The Trustees do not receive pension or
retirement benefits from the Funds. For more information, see Management of the
Trust in Part 2 of this SAI.

<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE FROM TRUST AND FUND
COMPENSATION FROM COMPLEX PAID TO
TRUSTEE TRUST** TRUSTEES***
- -------------------------------- ------------------- --------------------
<S> <C> <C>
Laurence B. Ashkin ............. $12,587 $75,000
Charles A. Austin, III ......... $12,725 $75,500
K. Dun Gifford ................. $12,570 $74,250
James S. Howell* ............... $16,651 $98,000
Leroy Keith Jr. ................ $12,570 $74,250
Gerald M. McDonnell ............ $12,587 $75,000
Thomas L. McVerry .............. $14,495 $86,500
William Walt Pettit ............ $12,570 $74,250
David M. Richardson ............ $12,570 $74,250
Russell A. Salton, III ......... $13,432 $78,000
Michael S. Scofield* ........... $15,909 $90,502
Richard J. Shima ............... $12,570 $74,250
</TABLE>

- ----------
* As of January 1, 2000 James S. Howell will become Chairman of the Board and
Michael S. Scofield will become Trustee of Emeritis
** SNAP Fund does not pay Trustee compensation.
*** Certain Trustees have elected to defer all or part of their total
compensation for the fiscal period ended September 30, 1998. The amounts
listed below will be payable in later years to the respective Trustees:

<TABLE>
<S> <C>
Austin $11,325
McVerry $86,500
Howell $78,400
Salton $78,000
Pettit $74,250
McDonnell $75,000
Scofield $30,900
</TABLE>

The Agreement and Declaration of Trust of the Trust provides that the Trust
will indemnify its Trustees and officers against liabilities and expenses
incurred in connection with litigation in which they may be involved because of
their offices with the Trust, except if it is determined in the manner specified
in the Agreement and Declaration of Trust that they have not acted in good faith
in the reasonable belief that their actions were in the best interests of the
Trust or that such indemnification would relieve any officer or Trustee of any
liability to the Trust or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of his or her duties. The Trust,
at its expense, provides liability insurance for the benefit of its Trustees and
officers.

7
<PAGE>
PRINCIPAL HOLDERS OF SECURITIES

As of October 1, 1999, the officers and Trustees of the Trust owned as a
group less than one percent of the outstanding shares of the Fund. To the
knowledge of the Fund, no person owned beneficially more than 5% of the
outstanding shares of the Fund as of that date, except as follows:

<TABLE>
<S> <C>
Commonwealth of Virginia Percentage of Ownership: 12.88 %
Department of Treasury
P.O. Box 1879
Richmond, VA 23218-1879

City of Chesapeake Percentage of Ownership: 5.68 %
P.O. Box 12345
Chesapeake, VA 23328-5245

County of Chesterfield Percentage of Ownership: 6.42 %
P.O. Box 70
Chesterfield, VA 23832

County of Arlington Percentage of Ownership: 8.86 %
2100 Clarendon Blvd.
Suite 201
Arlington, VA 22201

Medical College of Virginia Percentage of Ownership: 10.46 %
Henrico County
P.O. Box 27032
Richmond, VA 23273
</TABLE>

INVESTMENT ADVISORY AND OTHER SERVICES

Mentor Advisors acts as investment adviser to the Fund pursuant to a
Management Contract with the Trust. Subject to the supervision and direction of
the Trustees, Mentor Advisors, as investment adviser, manages the Fund's
portfolio in accordance with the stated policies of the Fund and of the Trust.
Mentor Advisors makes investment decisions for the Fund and places the purchase
and sale orders for portfolio transactions. Mentor Advisors bears all expenses
in connection with the performance of its services. In addition, Mentor Advisors
pays the salaries of all officers and employees who are employed by it and the
Trust.

Until November 1, 1996, Commonwealth Investment Counsel, Inc. served as
investment advisor to the Fund. On that date, Commonwealth Investment Counsel,
Inc. was reorganized as Mentor Investment Advisors, LLC, which thereupon became
investment advisor to the Fund.

Mentor Advisors has over $15 billion in assets under management and is a
subsidiary of First Union Corporation, the sixth largest bank holding company in
the United States, with over $234 billion in consolidated assets as of 9/30/99.
First Union Corporation ("First Union") is located at 301 South College Street,
Charlotte, North Carolina 28288-0013.

8
<PAGE>

As compensation for Mentor Advisor's services, the Fund pays a fee, accrued
daily and paid monthly, at the following annual rate: for the first $1 billion
of assets under management, .08% of the average daily net assets in the Fund;
for the next $1 billion under management, .06% of the average daily net assets
in the Fund; and for any amounts over $2 billion under management, .04% of the
average daily net assets in the Fund.

For the fiscal years ended June 30, 1999, June 30, 1998, and June 30, 1997,
the Fund paid Mentor Advisors $869,437, $837,768, and $784,372, respectively,
pursuant to the Management Contract.

Mentor Advisors provides the Trust on behalf of the Fund with investment
officers who are authorized to execute purchases and sales of securities.
Investment decisions for the Fund and for the other investment advisory clients
of Mentor Advisors and its affiliates are made with a view to achieving their
respective investment objectives. Investment decisions are the product of many
factors in addition to basic suitability for the particular client involved.
Thus, a particular security may be bought or sold for certain clients even
though it could have been bought or sold for other clients at the same time.
Likewise, a particular security may be bought for one or more clients when one
or more other clients are selling the security. In some instances, one client
may sell a particular security to another client. It also sometimes happens that
two or more clients simultaneously purchase or sell the same security, in which
event each day's transactions in such security are, insofar as possible,
averaged as to price and allocated between such clients in a manner which in
Mentor Advisors' opinion is equitable to each and in accordance with the amount
being purchased or sold by each. There may be circumstances when purchases or
sales of portfolio securities for one or more clients will have an adverse
effect on other clients. Mentor Advisors employs professional staffs of
portfolio managers who draw upon a variety of resources for research information
for the Fund.

The proceeds received by the Fund for each issue or sale of its shares, and
all income, earnings, profits, and proceeds thereof, subject only to the rights
of creditors, will be specifically allocated to the Fund, and constitute the
underlying assets of the Fund. The underlying assets of the Fund will be
segregated on the Trust's books of account, and will be charged with the
liabilities in respect of the Fund and with a share of the general liabilities
of the Trust. Expenses with respect to any two or more series of the Trust,
including the Fund, may be allocated in proportion to the net asset values of
the respective series except where allocations of direct expenses can otherwise
be fairly made.

Expenses incurred in the operation of the Fund or otherwise allocated to
the Fund, including but not limited to taxes, interest, brokerage fees and
commissions, fees to Trustees who are not officers, directors, stockholders, or
employees of First Union Securities, Inc. (formerly known as Wheat First Union)
and subsidiaries, SEC fees and related expenses, state Blue Sky notification and
filing fees, charges of the custodian and transfer and dividend disbursing
agents, outside auditing, accounting, and legal services, investor servicing
fees and

9
<PAGE>
expenses, charges for the printing of prospectuses and statements of additional
information for regulatory purposes or for distribution to shareholders, certain
shareholder report charges, and charges relating to corporate matters, are borne
by the Fund.

The Management Contract entered into by the Trust in respect of the Fund is
subject to annual approval commencing in 2000 by (i) the Trustees or (ii) vote
of a majority (as defined in the 1940 Act) of the outstanding voting securities
of the Fund, provided that in either event the continuance is also approved by a
majority of the Trustees who are not "interested persons" (as defined in the
1940 Act) of the Trust or Mentor Advisors, by vote cast in person at a meeting
called for the purpose of voting on such approval. The Management Contract is
terminable without penalty, on not more than sixty days' notice and not less
than thirty days' notice, by the Trustees, by vote of the holders of a majority
of the Fund's shares, or by Mentor Advisors, as applicable.

Evergreen Distributors, Inc. ("EDI"), an affiliate of BISYS, located at 90
Park Avenue, New York, New York 10016, serves as the principal underwriter to
the Fund.

Evergreen Investment Services, Inc. ("EIS"), 200 Berkeley Street, Boston,
Massachusetts 02116, serves as Administrator to the Fund pursuant to an
agreement dated June 9, 1999. Under the terms of the agreement, EIS provides
administrative services to the funds within the Mentor Family of Funds, but
does not receive a fee from the SNAP(SM) Fund.

BROKERAGE

Transactions on U.S. stock exchanges, commodities markets, and futures
markets and other agency transactions involve the payment by the Fund of
negotiated brokerage commissions. Such commissions vary among different brokers.
A particular broker may charge different commissions according to such factors
as the difficulty and size of the transaction. Transactions in foreign
investments often involve the payment of fixed brokerage commissions, which may
be higher than those in the United States. There is generally no stated
commission in the case of securities traded in the over-the-counter markets, but
the price paid by the Fund usually includes an undisclosed dealer commission or
mark-up. In underwritten offerings, the price paid by the Fund includes a
disclosed, fixed commission or discount retained by the underwriter or dealer.
It is anticipated that most purchases and sales of securities by the Fund will
be with the issuer or with underwriters of or dealers in those securities,
acting as principal. Accordingly, the Fund would not ordinarily pay significant
brokerage commissions with respect to securities transactions.

Mentor Advisors places all orders for the purchase and sale of portfolio
investments for the Fund and buys and sells investments for the Fund through a
substantial number of brokers and dealers. Mentor Advisors seeks the best
overall terms available for the Fund, except to the extent Mentor Advisors may
be permitted to pay higher brokerage commissions as described below. In doing
so, Mentor Advisors, having in mind the Fund's best interests, considers all
factors it deems relevant, including, by way of illustration, price, the size of
the transaction, the nature of the market for the security or other investment,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience, and financial stability of
the broker-dealer involved, and the quality of service rendered by the
broker-dealer in other transactions.

It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive brokerage and research services (as defined in the

10
<PAGE>
Securities Exchange Act of 1934, as amended (the "1934 Act")), from
broker-dealers that execute portfolio transactions for the clients of such
advisers and from third parties with which such broker-dealers have
arrangements. Consistent with this practice, Mentor Advisors receives brokerage
and research services and other similar services from many broker-dealers with
which it places the Fund's portfolio transactions and from third parties with
which these broker-dealers have arrangements. These services include such
matters as general economic and market reviews, industry and company reviews,
evaluations of investments, recommendations as to the purchase and sale of
investments, newspapers, magazines, pricing services, quotation services, news
services, and personal computers utilized by Mentor Advisors' managers and
analysts. Where the services referred to above are not used exclusively by
Mentor Advisors for research purposes, Mentor Advisors, based upon its own
allocations of expected use, bears that portion of the cost of these services
which directly relates to its non-research use. Some of these services are of
value to Mentor Advisors and its affiliates in advising various of its clients
(including the Fund), although not all of these services are necessarily useful
and of value in managing the Fund.

As permitted by Section 28(e) of the 1934 Act, and by the Management
Contract, Mentor Advisors may cause the Fund to pay a broker-dealer which
provides "brokerage and research services" (as defined in the 1934 Act) to
Mentor Advisors an amount of disclosed commission for effecting securities
transactions on stock exchanges and other transactions for the Fund on an agency
basis in excess of the commission which another broker-dealer would have charged
for effecting that transaction. Mentor Advisors' authority to cause the Fund to
pay any such greater commissions is also subject to such policies as the
Trustees may adopt from time to time. Mentor Advisors does not currently intend
to cause the Fund to make such payments. It is the position of the staff of the
Securities and Exchange Commission that Section 28(e) does not apply to the
payment of such greater commissions in "principal" transactions. Accordingly,
Mentor Advisors will use its best efforts to obtain the best overall terms
available with respect to such transactions, as described above.

Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to such other policies as the Trustees may
determine, Mentor Advisors may consider sales of shares of the Fund (and, if
permitted by law, of other Mentor funds) as a factor in the selection of
broker-dealers to execute portfolio transactions for the Fund.

DETERMINATION OF NET ASSET VALUE

The Trust determines net asset value per share of the Fund twice each day
the New York Stock Exchange (the "Exchange") is open, once at 12:00 noon and
again at the close of regular trading on the New York Stock Exchange. Currently,
the Exchange is closed Saturdays, Sundays, and the following holidays: New
Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, the Fourth of July, Labor Day, Thanksgiving, and Christmas.

The valuation of the Fund's portfolio securities is based upon amortized
cost, which does not take into account unrealized securities gains or losses.
This method involves initially valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. By using amortized cost valuation, the Fund seeks to maintain a
constant net asset value of $1.00 per share, despite minor shifts in the market
value of its portfolio securities. While this method provides certainty in
valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Fund would receive if it
sold the instrument. During periods of declining interest rates, the quoted
yield on shares of the Fund may tend to be

11
<PAGE>
higher than a like computation made by a fund with identical investments
utilizing a method of valuation based on market prices and estimates of market
prices for all of its portfolio instruments. Thus, if the use of amortized cost
by the Fund resulted in a lower aggregate portfolio value on a particular day, a
prospective investor in the Fund would be able to obtain a somewhat higher yield
if he purchased shares of the Fund on that day, than would result from
investment in a fund utilizing solely market values, and existing investors in
the Fund would receive less investment income. The converse would apply on a day
when the use of amortized cost by the Fund resulted in a higher aggregate
portfolio value. However, as a result of certain procedures adopted by the
Trust, the Trust believes any difference will normally be minimal.

The valuation of the Fund's portfolio instruments at amortized cost is
permitted in accordance with Securities and Exchange Commission Rule 2a-7 and
certain procedures adopted by the Trustees. Under these procedures, the Fund
must maintain a dollar-weighted average portfolio maturity of 90 days or less,
purchase only instruments having remaining maturities of 397 days or less, and
invest in securities determined by the Trustees to be of high quality with
minimal credit risks. The Trustees have also established procedures designed to
stabilize, to the extent reasonably possible, the Fund's price per share as
computed for the purpose of distribution, redemption and repurchase at $1.00.
These procedures include review of the Fund's portfolio holdings by the
Trustees, at such intervals as they may deem appropriate, to determine whether
the Fund's net asset value calculated by using readily available market
quotations deviates from $1.00 per share, and, if so, whether such deviation may
result in material dilution or is otherwise unfair to existing shareholders. In
the event the Trustees determine that such a deviation may result in material
dilution or is otherwise unfair to existing shareholders, they will take such
corrective action as they regard as necessary and appropriate, including the
sale of portfolio instruments prior to maturity to realize capital gains or
losses or to shorten the average portfolio maturity; withholding dividends;
redemption of shares in kind; or establishing a net asset value per share by
using readily available market quotations.

Since the net income of the Fund is declared as a dividend each time it is
determined, the net asset value per share of the Fund remains at $1.00 per share
immediately after such determination and dividend declaration. Any increase in
the value of a shareholder's investment in the Fund representing the
reinvestment of dividend income is reflected by an increase in the number of
shares of the Fund in the shareholder's account on the last day of each month
(or, if that day is not a business day, on the preceding business day). It is
expected that the Fund's net income will be positive each time it is determined.
However, if because of realized losses on sales of portfolio investments, a
sudden rise in interest rates, or for any other reason the net income of the
Fund determined at any time is a negative amount, the Fund will offset such
amount allocable to each then shareholder's account from dividends accrued
during the month with respect to such account. If at the time of payment of a
dividend by the Fund (either at the regular monthly dividend payment date, or,
in the case of a shareholder who is withdrawing all or substantially all of the
shares in an account, at the time of withdrawal), such negative amount exceeds a
shareholder's accrued dividends, the Fund will reduce the number of outstanding
shares by treating the shareholder as having contributed to the capital of the
Fund that number of full and fractional shares which represent the amount of the
excess. Each shareholder is deemed to have agreed to such contribution in these
circumstances by its investment in the Fund.

Should the Fund incur or anticipate any unusual or unexpected significant
expense or loss which would affect disproportionately the Fund's income for a
particular period, the Trustees would at that time consider

12
<PAGE>
whether to adhere to the dividend policy described above or to revise it in
light of the then prevailing circumstances in order to ameliorate to the extent
possible the disproportionate effect of such expense or loss on then existing
shareholders. Such expenses or losses may nevertheless result in a shareholder's
receiving no dividends for the period during which the shares are held and
receiving upon redemption a price per share lower than that which was paid.

TAX STATUS

The Fund intends to qualify each year and elect to be taxed as a regulated
investment company under Subchapter M of the United States Internal Revenue Code
of 1986, as amended (the "Code").

As a regulated investment company qualifying to have its tax liability
determined under Subchapter M, the Fund will not be subject to federal income
tax on any of its net investment income or net capital gains that are
distributed to shareholders. As a series of a Delaware business trust, the Fund
will not under present law be subject to any excise or income taxes in Delaware.

In order to qualify as a "regulated investment company," the Fund must,
among other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other dispositions of stock, securities, or foreign currencies, and other income
(including but not limited to gains from options, futures, or forward contracts)
derived with respect to its business of investing in such stock, securities, or
currencies; and (b) diversify its holdings so that, at the close of each quarter
of its taxable year, (i) at least 50% of the value of its total assets consists
of cash, cash items, U.S. Government securities, securities of other regulated
investment companies, and other securities limited generally with respect to any
one issuer to not more than 5% of the value of the total assets of the Fund and
not more than 10% of the outstanding voting securities of such issuer, and (ii)
not more than 25% of the value of its total assets is invested in the securities
of any issuer (other than U.S. Government securities). In order to receive the
favorable tax treatment accorded regulated investment companies and their
shareholders, moreover, the Fund must in general distribute annually at least
90% of the sum of its taxable net investment income, its net tax-exempt income,
and the excess, if any, of net short-term capital gains over net long-term
capital losses for such year. To satisfy these requirements, the Fund may engage
in investment techniques that affect the amount, timing, and character of its
income and distributions.

An excise tax at the rate of 4% will be imposed on the excess, if any, of
the Fund's "required distribution" over its actual distributions in any calendar
year. Generally, the "required distribution" is 98% of the Fund's ordinary
income for the calendar year plus 98% of its capital gain net income recognized
during the one-year period ending on October 31 plus undistributed amounts from
prior years. The Fund intends to make distributions sufficient to avoid
imposition of the excise tax. Distributions declared by the Fund during October,
November, or December to shareholders of record on a date in any such month and
paid by the Fund during the following January will be treated for federal tax
purposes as paid by the Fund and received by shareholders on December 31 of the
year in which declared.

The Fund is required to withhold 31% of all income dividends and capital
gain distributions, and 31% of the gross proceeds of all redemptions of Fund
shares, in the case of any shareholder who does not provide a correct taxpayer
identification number, about whom the Fund is notified that the shareholder has
under reported income in the past, or who fails to certify to the Fund that the
shareholder is not subject to such withholding.

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Tax-exempt shareholders are not subject to these back-up withholding rules so
long as they furnish the Fund with a proper certification.

The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and related regulations currently in effect. For the
complete provisions, reference should be made to the pertinent Code sections and
regulations. The Code and regulations are subject to change by legislative or
administrative actions. Dividends and distributions also may be subject to
state, local, foreign, and other taxes. Shareholders are urged to consult their
tax advisers regarding specific questions as to federal, state, local, or
foreign taxes. The foregoing discussion relates solely to U.S. federal income
tax law.

INDEPENDENT ACCOUNTANTS

KPMG LLP, located at 99 High Street, Boston, Massachusetts 02110, are the
Trust's independent auditors, providing audit services, tax return review, and
other tax consulting services. The audited financial statements incorporated by
reference into the Statement of Additional Information have been so incorporated
in reliance upon the report of KPMG LLP, the independent auditors, given on the
authority of said firm as experts in auditing and accounting.

CUSTODIAN

The custodian of the Fund, Wachovia Bank, is located at 1021 East Cary
Street, P.O. Box 27602, Richmond, Virginia 23261. Its responsibilities include
generally safeguarding and controlling the Fund's cash and securities, handling
the receipt and delivery of securities, and collecting interest and dividends on
the Fund's investments.

FUND ACCOUNTING AGENT

State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, maintains the books and records of the Fund.

PERFORMANCE INFORMATION

The yield of the Fund is computed by determining the percentage net change,
excluding capital changes, in the value of an investment in one share of the
Fund over the base period, and multiplying the net change by 365/7 (or
approximately 52 weeks). The Fund's effective yield represents a compounding of
the yield by adding 1 to the number representing the percentage change in value
of the investment during the base period, raising that sum to a power equal to
365/7, and subtracting 1 from the result. Based on the seven-day period ended
June 30, 1999, the Fund's yield was 4.94% its effective yield was 5.06%.

All data for the Fund is based on past performance and does not predict
future results. Investment performance, which will vary, is based on many
factors, including market conditions, the composition of the Fund's portfolio,
and the Fund's operating expenses. Investment performance also often reflects
the risks associated with the Fund's investment objective and policies. These
factors should be considered when comparing the Fund's investment results to
those of other mutual funds and other investment vehicles. The Fund's yield does

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not reflect any expenses incurred by the Commonwealth of Virginia State
Non-Arbitrage Program, through which shares of the Fund are currently being
offered (the "SNAP(SM) Program"), or by participants in the SNAP(SM) program.

SHAREHOLDER LIABILITY

Under Delaware law, shareholders of a Delaware business trust are entitled
to the same limitation of personal liability extended to stockholders of
Delaware corporations. As a result, to the extent that the Trust or a
shareholder is subject to the jurisdiction of courts in other states, the courts
may not apply Delaware law, and may thereby subject shareholders of a Delaware
trust to liability. To guard against this risk, the Declaration of Trust:(a)
provides that any written obligation of the Trust may contain a statement that
such obligation may only be enforced against the assets of the Trust; however,
the omission of such a disclaimer will not operate to create personal liability
for any shareholder; and (b) provides for indemnification out of trust property
of any shareholder held personally liable for the obligations of the Trust.
Accordingly, the risk of a shareholder of the Trust incurring financial loss
beyond that shareholder's investment because of shareholder liability is
limited to circumstances in which: (i) a court refuses to apply Delaware law;
(ii) no contractual limitation of liability was in effect; and (iii) the Trust
itself would be unable to meet its obligations. In view of Delaware law, the
nature of the Trust's business, and the nature of its assets, the risk of
personal liability to a shareholder of the Trust is remote.

The Declaration of Trust of the Trust contains an express disclaimer of
shareholder liability and requires that notice of such disclaimer be given in
each agreement entered into or executed by the Trust or the Trustees of the
Trust. The Declaration of Trust also provides for shareholder indemnification
out of the assets of the Fund.

RATINGS

A-1 AND PRIME-1 COMMERCIAL PAPER RATINGS

The rating A-1 (including A-1+) is the highest commercial paper rating
assigned by S&P. Commercial paper rated A-1 by S&P has the following
characteristics:

o liquidity ratios are adequate to meet cash requirements;

o long-term senior debt is rated "A" or better;

o the issuer has access to at least two additional channels of borrowing;

o basic earnings and cash flow have an upward trend with allowance made for
unusual circumstances;

o typically, the issuer's industry is well established and the issuer has a
strong position within the industry; and

o the reliability and quality of management are unquestioned.

Relative strength or weakness of the above factors determines whether the
issuer's commercial paper is rated A-1, A-2 or A-3. Issues rated A-1 that are
determined by S&P to have overwhelming safety characteristics are designated
A-1+.

The rating Prime-1 is the highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning ratings are the following:

o evaluation of the management of the issuer;

o economic evaluation of the issuer's industry or industries and an appraisal
of speculative-type risks which may be inherent in certain areas;

o evaluation of the issuer's products in relation to competition and
customer acceptance;

o liquidity;

o amount and quality of long-term debt;

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o trend of earnings over a period of ten years;

o financial strength of parent company and the relationships which exist
with the issuer; and

o recognition by the management of obligations which may be present or may
arise as a result of public interest questions and preparations to meet
such obligations.

FINANCIAL STATEMENTS

The Independent Auditors' Report, financial highlights, and financial
statements with respect to the Fund are incorporated by reference to the Fund's
Annual Report for the fiscal year ended June 30, 1999, a copy of which may be
obtained without charge from Mentor Advisors at 1-800-570-SNAP.

(SEC File No: 11-08405)