1933 Act No. 333-37227
1940 Act No. 811-08405
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 9 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 10 [X]
EVERGREEN SELECT MONEY MARKET TRUST
(As successor to certain series of Mentor Institutional Trust)
(Exact Name of Registrant as Specified in Charter)
200 Berkeley Street, Boston, Massachusetts 02116-5034
(Address of Principal Executive Offices)
(617) 210-3200
(Registrant's Telephone Number)
The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)
[X] on October 29, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(11
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
<PAGE>
EVERGREEN SELECT MONEY MARKET TRUST
CONTENTS OF
POST-EFFECTIVE AMENDMENT NO. 9
to
REGISTRATION STATEMENT
This Post-Effective Amendment No. 9 to Registrant's Registration Statement
No. 333-37227/811-08405 consists of the following pages, items of information
and documents:
The Facing Sheet
The Contents Page
PART A
------
Prospectus for SNAP Fund contained herein.
Prospectuses for Evergreen Select Money Market Fund, Evergreen Select
Municipal Money Market Fund, Evergreen Select Treasury Money Market Fund,
Evergreen Select U.S. Government Money Market Fund and Evergreen Select 100%
Treasury Money Market Fund are contained in Post-Effective Amendment No. 8 to
Registration Statement Nos. 333-37227/811-08405 filed on September 29, 1999 and
are incorporated by reference herein.
Supplement to the Prospectuses of Mentor Funds, Mentor Institutional Trust
and America's Utility Fund, Inc. is contained in Post-Effective Amendment No. 7
to Registration Statement No. 333-37227/811-08405 filed on August 17, 1999 and
is incorporated by reference herein.
PART B
------
Statement of Additional Information for SNAP Fund contained herein.
Statement of Additional Information for Evergreen Select Money Market Fund,
Evergreen Select Municipal Money Market Fund, Evergreen Select Treasury Money
Market Fund, Evergreen Select U.S. Government Money Market Fund and Evergreen
Select 100% Treasury Money Market Fund is contained in Post-Effective Amendment
No. 8 to Registration Statement Nos. 333-37227/811-08405 filed on September 29,
1999 and are incorporated by reference herein.
Supplement to Statement of Additional Information of Mentor Funds, Mentor
Institutional Trust and America's Utility Fund, Inc. is contained in
Post-Effective Amendment No. 7 to Registration Statement No. 333-37227/811-08405
filed on August 17, 1999 and is incorporated by reference herein.
PART C
------
Exhibits
Indemnification
Business and Other Connections of Investment Adviser
Principal Underwriter
Location of Accounts and Records
Undertakings
Signatures
<PAGE>
EVERGREEN SELECT MONEY MARKET TRUST
PART A
PROSPECTUS
<PAGE>
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% 5.53%
</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
<TABLE>
<CAPTION>
YEAR
- -----------------------
<S> <C>
1 ................ $ 11
3 ................. $ 35
5 ................. $ 62
10 ................. $141
</TABLE>
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 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 of shares, 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 $0.05 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 811-08484.
811-08484
SNAP(SM) FUND
P.O. BOX 1357,
RICHMOND, VIRGINIA
23286-0109
(800) 570-SNAP
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EVERGREEN SELECT MONEY MARKET TRUST
PART B
STATEMENT OF ADDITIONAL INFORMATION
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SNAP(SM) FUND
FORM N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 1, 1999
SNAP(SM) Fund (the "Fund") is a series of shares of beneficial interest of
Evergreen Select Money Market Trust (the "Trust"), a series investment 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
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CAPTION PAGE
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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
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1
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GENERAL
Evergreen Select Money Market Trust (the "Trust") is a Delaware business
trust organized on September 18, 1997. The Fund is a series of shares 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 Trust is a series management investment company with an unlimited
number of authorized shares of beneficial interest. Shares of the Trust may,
without shareholder approval, be divided into two or more series of shares
representing separate investment portfolios. Any such series of shares may be
further divided without shareholder approval into two or more classes of shares
having such preferences and special or relative rights and privileges as the
Trustees determine. The Trust's shares are currently divided into six series,
one representing the Fund, the others representing other funds with varying
investment objectives and policies. Each share has one vote, with fractional
shares voting proportionally. Shares of each class will vote together as a
single class except when required by law or determined by the Trustees. Shares
of the Fund are freely transferable, are entitled to dividends as declared by
the Trustees, and, if the Fund were liquidated, would receive the net assets of
the Fund. The Trust may suspend the sale of shares at any time and may refuse
any order to purchase shares. Although the Trust is not required to hold annual
meetings of its shareholders, shareholders have the right to call a meeting to
elect or remove Trustees, or to take other actions as provided in the Agreement
and Declaration of Trust.
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.)
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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.
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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.
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POSITION HELD
NAME AND ADDRESS AND AGE WITH THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
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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).
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POSITION HELD
NAME AND ADDRESS AND AGE WITH THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- --------------------------- ------------------ -----------------------------------------------------
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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 Representative 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
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5
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POSITION HELD
NAME AND ADDRESS AND AGE WITH THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- -------------------------- ---------------- --------------------------------------------------
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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.
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* 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
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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.
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TOTAL COMPENSATION
AGGREGATE FROM TRUST AND FUND
COMPENSATION FROM COMPLEX PAID TO
TRUSTEE TRUST** TRUSTEES***
- -------------------------------- ------------------- --------------------
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Laurence B. Ashkin ............. $ $75,000
Charles A. Austin, III ......... $ $75,000
K. Dun Gifford ................. $ $74,250
James S. Howell* ............... $ $98,000
Leroy Keith Jr. ................ $ $74,250
Gerald M. McDonnell ............ $ $75,000
Thomas L. McVerry .............. $ $86,500
William Walt Pettit ............ $ $74,250
David M. Richardson ............ $ $74,250
Russell A. Salton, III ......... $ $78,000
Michael S. Scofield* ........... $ $90,502
Richard J. Shima ............... $ $74,250
</TABLE>
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* 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:
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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.
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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:
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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 $230 billion in consolidated assets as of 6/30/99.
First Union Corporation ("First Union") is located at 301 South College Street,
Charlotte, North Carolina 28288-0013. Mentor Perpetual, an investment advisory
firm organized in 1995, is owned equally by Perpetual plc, a diversified
financial services holding company, and Mentor Advisors. The Perpetual
organization currently serves as investment advisor for assets of more than $14
billion. Its clients include 29 unit and
8
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investment trusts and other public investment pools including private
individuals, charities, pension plans, and life assurance companies.
As compensation for Mentor Advisor's services, the fund pays a fee, accrued
daily and paid monthly, at the following annual rate: .09% of the first $500
million of average net assets; .08% of the next $250 million; .07% of the next
$250 million; .06% of the next $250 million; and .05% of any amount over $1.25
billion. Mentor Advisors has agreed to waive a portion of its management fee so
that, through June 30, 2000, the Fund will pay a management fee, calculated
daily, at an annual rate as follows: 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
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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
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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
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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.
13
<PAGE>
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
14
<PAGE>
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 could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Agreement
and Declaration of Trust disclaims shareholder liability for acts or obligations
of the Trust and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by the Trust or
the Trustees. The Agreement and Declaration of Trust provides for
indemnification out of the Fund's property for all loss and expense of any
shareholder held personally liable for the obligations of the Fund. Thus the
risk of a shareholder's incurring financial loss on account of shareholder
liability is limited to circumstances in which the Fund would be unable to meet
its obligations.
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;
15
<PAGE>
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: 11-0845
16
<PAGE>
EVERGREEN SELECT MONEY MARKET TRUST
PART C
OTHER INFORMATION
Item 23 Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description Location
- ------- ----------- -----------
<S> <C> <C>
(a) Declaration of Trust Incorporated by reference to
Registrant's Pre-Effective Amendment No. 1
Filed on October 8, 1997
(b) By-laws Incorporated by reference to
Registrant's Pre-Effective Amendment No. 1
Filed on October 8, 1997
(c) Provisions of instruments defining the rights Included as part of Exhibits 1 and 2 of
of holders of the securities being registered Registrant's Pre-Effective Amendment No. 1
are contained in the Declaration of Trust filed on October 8, 1997
Articles II, III.(6)(c), VI.(3), IV.(8), V, VI,
VII, VIII and By-laws Articles II, III and VIII
(d)(1) Investment Advisory and Management Incorporated by reference to Registrant's
Agreement between the Registrant and First Post-Effective Amendment No. 8
Union National Bank Filed on September 29, 1999
(d)(2) Form of Investment Advisory and Management Incorporated by reference to Registrant's
Agreement between the Registrant and Mentor Post-Effective Amendment No. 7
Investment Advisors, LLC Filed on August 17, 1999
(e) Principal Underwriting Agreement between the Contained herein
Registrant and Evergreen Distributor, Inc.
(f) Deferred Compensation Plan Incorporated by reference to
Registrant's Pre-Effective Amendment No. 1
Filed on November 20, 1997
(g)(1) Custodian Agreement between the Registrant Incorporated by reference to
and State Street Bank and Trust Company Registrant's Post-Effective Amendment No. 2
Filed on May 29, 1998
(g)(2) Letter Amendment to Custodian Agreement between Incorporated by reference to Registrant's
Registrant and State Street Bank and Trust Post-Effective Amendment No. 8
Company (Select U.S. Government Fund) Filed on September 29, 1999
(h)(1) Administrative Services Agreement between Incorporated by reference to Registrant's
the Registrant and Evergreen Investment Post-Effective Amendment No. 8
Services, Inc. Filed on September 29, 1999
(h)(2) Transfer Agent Agreement between the Incorporated by reference to
Registrant and Evergreen Service Company Registrant's Post-Effective Amendment No. 2
Filed on May 29, 1998
(h)(3) Form of Administration Agreement between the Contained herein
Registrant and Evergreen Investment Services, Inc.
(10/15/99 Agreement) (SNAP Fund only)
(h)(4) Letter Amendment to Transfer Agent Agreement Incorporated by reference to Registrant's
between the Registrant and Evergreen Service Post-Effective Amendment No. 8
Company (Select U.S. Government Fund) Filed on September 29, 1999
(h)(5) Form of Accounting Services Agreement between State Contained herein
Street Bank and Trust Company and the Registrant
(SNAP Fund)
(i)(1) Opinion and Consent of Sullivan & Worcester LLP Incorporated by reference to
Registrant's Post-Effective Amendment No. 1
Filed on December 12, 1997
(i)(2) Opinion and Consent of Sullivan & Worcester LLP Incorporated by reference to Registrant's
(re: Mentor Funds) Post-Effective Amendment No. 7
Filed on August 17, 1999
(j)(1) Consent of PricewaterhouseCoopers LLP Incorporated by reference to Registrant's
Post-Effective Amendment No. 5
Filed on June 28, 1999
(j)(2) Consent of KPMG LLP Incorporated by reference to Registrant's
Post-Effective Amendment No. 7 Filed on
August 17, 1999
(j)(3) Consent of KPMG LLP (SNAP Fund only) Contained herein.
(k) Not applicable
(l) Not applicable
(m) 12b-1 Distribution Plan for Incorporated by reference to Registrant's
Institutional Service Shares Post-Effective Amendment No. 8
Filed on September 29, 1999
(n) Not applicable
(o) Multiple Class Plan Incorporated by reference to
Registrant's Post-Effective Amendment No. 4
Filed on April 28, 1999
</TABLE>
Item 24. Persons Controlled by or Under Common Control with Registrant.
None
Item 25. Indemnification.
Registrant has obtained from a major insurance carrier a trustees and
officers liability policy covering certain types of errors and omissions.
Provisions for the indemnification of the Registrant's Trustees and officers are
contained the Registrant's Declaration of Trust.
Provisions for the indemnification of Registrant's Investment Advisor are
contained in their Investment Advisory and Management Agreement.
Provisions for the indemnification of Evergreen Distributor, Inc., the
Registrant's principal underwriter, are contained in the Principal Underwriting
Agreement between Evergreen Distributor, Inc. and the Registrant.
Provisions for the indemnification of Evergreen Service Company, the
Registrant's transfer agent, are contained in the Master Transfer and Record
keeping Agreement between Evergreen Service Company and the Registrant.
Provision for the indemnification of State Street Bank & Trust Co., the
Registrant's custodian, are contained in the Custodian Agreement between State
Street Bank & Trust Co. and the Registrant.
Item 26. Business or Other Connections of Investment Adviser.
The Directors and principal executive officers of First Union National Bank
are:
Edward E. Crutchfield, Jr. Chairman and Chief Executive Officer,
First Union Corporation; Chief Executive
Officer and Chairman, First Union National
Bank
Anthony Terracciano President, First Union Corporation;
President, First Union National Bank
John R. Georgius Vice Chairman, First Union Corporation; Vice
Chairman, First Union National Bank
Mark C. Treanor Executive Vice President, Secretary &
General Counsel, First Union Corporation;
Secretary and Executive Vice President,
First Union National Bank
Robert T. Atwood Executive Vice President and Chief Financial
Officer, First Union Corporation; Chief
Financial Officer and Executive Vice
President, First Union National Bank
All of the above persons are located at the following address: First Union
National Bank, One First Union Center, Charlotte, NC 28288.
The information required by this item with respect to Mentor Investment
Advisors, LLC is incorporated by reference to the Form ADV (File No. 801-40384)
of Mentor Investment Advisors, LLC.
Item 27. Principal Underwriters.
Evergreen Distributor, Inc. acts as principal underwriter for each
registered investment company or series thereof that is a part of the Evergreen
"fund complex" as such term is defined in Item 22(a) of Schedule 14A
under the Securities Exchange Act of 1934.
The Directors and principal executive officers of Evergreen Distributor,
Inc. are:
Lynn C. Mangum Director, Chairman and Chief Executive
Officer
Dennis Sheehan Director, Chief Financial Officer
J. David Huber President
Kevin J. Dell Vice President, General Counsel and Secretary
All of the above persons are located at the following address: Evergreen
Distributor, Inc., 90 Park Avenue, New York, New York 10016. The Registrant has
not paid, directly or indirectly, any commissions or other compensation to the
principal underwriter in the last fiscal year.
Item 28. Location of Accounts and Records.
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Evergreen Investment Services, Inc., Evergreen Service Company and
Evergreen Investment Management Company (formerly known as Keystone Investment
Management Company), all located at 200 Berkeley Street, Boston, Massachusetts
02110
First Union National Bank, One First Union Center, 301 S. College Street,
Charlotte, North Carolina 28288
Mentor Investment Advisors, LLC 901 East Byrd Street, Richmond, Virginia
23219.
Iron Mountain, 3431 Sharp Slot Road, Swansea, Massachusetts 02777
State Street Bank and Trust Company, 2 Heritage Drive, North Quincy,
Massachusetts 02171
Item 29. Management Services.
Not Applicable
Item 30. Undertakings.
The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of New York, and State of New York, on the 29th day of
October, 1999.
EVERGREEN SELECT MONEY MARKET TRUST
By: /s/ Anthony J. Fischer
-----------------------------
Name: Anthony J. Fischer
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 29th day of October, 1999.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Anthony J. Fischer /s/ Laurence B. Ashkin /s/ Charles A. Austin, III
- ------------------------- ----------------------------- --------------------------------
Anthony J. Fischer Laurence B. Ashkin* Charles A. Austin III*
President and Treasurer Trustee Trustee
/s/ K. Dun Gifford /s/ James S. Howell /s/ William Walt Pettit
- ---------------------------- ---------------------------- --------------------------------
K. Dun Gifford* James S. Howell* William Walt Pettit*
Trustee Chairman of the Board Trustee
and Trustee
/s/Gerald M. McDonnell /s/ Thomas L. McVerry /s/ Michael S. Scofield
- ------------------------------- ----------------------------- --------------------------------
Gerald M. McDonell* Thomas L. McVerry* Michael S. Scofield*
Trustee Trustee Vice Chairman of the Board
and Trustee
/s/ David M. Richardson /s/ Russell A. Salton, III MD /s/ Leroy Keith, Jr.
- ------------------------------ ------------------------------- --------------------------------
David M. Richardson* Russell A. Salton, III MD* Leroy Keith, Jr.*
Trustee Trustee Trustee
/s/ Richard J. Shima
- ------------------------------
Richard J. Shima*
Trustee
</TABLE>
*By: /s/ Maureen E. Towle
- -------------------------------
Maureen E. Towle
Attorney-in-Fact
*Maureen E. Towle, by signing her name hereto, does hereby sign this
document on behalf of each of the above-named individuals pursuant to powers of
attorney duly executed by such persons.
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------- -------
(e) Principal Underwriting Agreement between the
Registrant and Evergreen Distributor, Inc.
(h)(3) Form of Administration Agreement between the
Registrant and Evergreen Investment Services, Inc.
(SNAP Fund only)
(h)(5) Form of Accounting Services Agreement between State
Street Bank and Trust Company and the Registrant
(SNAP Fund)
(j)(3) Consent of KPMG LLP (SNAP Fund only)
PRINCIPAL UNDERWRITING AGREEMENT
EVERGREEN SELECT MONEY MARKET TRUST
INSTITUTIONAL SERVICE SHARES
AGREEMENT made this 18th day of September, 1997 by and between
Evergreen Select Money Market Trust on behalf of its series listed on Exhibit A
attached hereto and made a part hereof (such Trust and series referred to herein
as "Fund" individually or "Funds" collectively) and Evergreen Distributor, Inc.,
a Delaware corporation ("Principal Underwriter").
It is hereby mutually agreed as follows:
1. The Fund hereby appoints Principal Underwriter a principal
underwriter of the Institutional Service shares of beneficial interest of the
Fund ("Shares") as an independent contractor upon the terms and conditions
hereinafter set forth. Except as the Fund may from time to time agree, Principal
Underwriter will act as agent for the Fund and not as principal.
2. Principal Underwriter will use its best efforts to find purchasers
for the Shares, to promote distribution of the Shares and may obtain orders from
brokers, dealers or other persons for sales of Shares to them. No such broker,
dealer or other person shall have any authority to act as agent for the Fund;
such dealer, broker or other person shall act only as principal in the sale of
Shares.
3. Sales of Shares by Principal Underwriter shall be at the applicable
public offering price determined in the manner set forth in the prospectus
and/or statement of additional information of the Fund current at the time of
the Fund's acceptance of the order for Shares; provided that Principal
Underwriter also shall have the right to sell Shares at net asset value, if such
sale is permissible under and consistent with applicable statutes, rules,
regulations and orders. All orders shall be subject to acceptance by the Fund,
and the Fund reserves the right in its sole discretion to reject any order
received. The Fund shall not be liable to anyone for failure to accept any
order.
4. On all sales of Shares, the Fund shall receive the current net asset
value, and Principal Underwriter shall be entitled to receive commission
payments for sales of the Shares (as set forth on Exhibit B attached hereto and
made a part hereof).
5. The payment provisions of this Agreement shall be applicable to the
extent necessary to enable the Fund to comply with the obligation of the Fund to
pay Principal Underwriter in accordance with this Agreement with respect to the
Shares and shall remain in effect so long as any payments are required to be
made by the Fund pursuant to the irrevocable payment instruction under the
Master Sale Agreement between Principal Underwriter and Mutual Fund Funding
1994-1 dated as of December 6, 1996 (the "Master Sale Agreement").
6. Payment to the Fund for Shares shall be in New York or Boston
Clearing House funds received by Principal Underwriter within (3) business days
after notice of acceptance of the purchase order and the amount of the
applicable public offering price has been given to the purchaser. If such
payment is not received within such 3-day period, the Fund reserves the right,
without further notice, forthwith to cancel its acceptance of any such order.
The Fund shall pay such issue taxes as may be required by law in connection with
the issue of the Shares.
7. Principal Underwriter shall not make in connection with any sale or
solicitation of a sale of the Shares any representations concerning the Shares
except those contained in the then current prospectus and/or statement of
additional information covering the Shares and in printed information approved
by the Fund as information supplemental to such prospectus and statement of
additional information. Copies of the then current prospectus and statement of
additional information will be supplied by the Fund to Principal Underwriter in
reasonable quantities upon request.
8. Principal Underwriter agrees to comply with the Business Conduct
Rules of the National Association of Securities Dealers, Inc.
9. The Fund appoints Principal Underwriter as its agent to accept
orders for redemptions and repurchases of Shares at values and in the manner
determined in accordance with the then current prospectus and/or statement of
additional information of the Fund.
10. The Fund agrees to indemnify and hold harmless the Principal
Underwriter, its officers and Directors and each person, if any, who controls
the Principal Underwriter within the meaning of Section 15 of the Securities Act
of 1933 ("1933 Act"), against any losses, claims, damages, liabilities and
expenses (including the cost of any legal fees incurred in connection therewith)
which the Principal Underwriter, its officers, Directors or any such controlling
person may incur under the 1933 Act, under any other statute, at common law or
otherwise, arising out of or based upon
a) any untrue statement or alleged untrue statement of a material
fact contained in the Fund's registration statement,
prospectus or statement of additional information (including
amendments and supplements thereto), or
b) any omission or alleged omission to state a material fact
required to be stated in the Fund's registration statement,
prospectus or statement of additional information necessary to
make the statements therein not misleading, provided, however,
that insofar as losses, claims, damages, liabilities or
expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission
made in reliance and in conformity with information furnished
to the Fund by the Principal Underwriter for use in the Fund's
registration statement, prospectus or statement of additional
information, such indemnification is not applicable. In no
case shall the Fund indemnify the Principal Underwriter or its
controlling person as to any amounts incurred for any
liability arising out of or based upon any action for which
the Principal Underwriter, its officers and Directors or any
controlling person would otherwise be subject to liability by
reason of willful misfeasance, bad faith or gross negligence
in the performance of its duties or by reason of the reckless
disregard of its obligations and duties under this Agreement.
11. The Principal Underwriter agrees to indemnify and hold harmless the
Fund, its officers, Trustees and each person, if any, who controls the Fund
within the meaning of Section 15 of the 1933 Act against any loss, claims,
damages, liabilities and expenses (including the cost of any legal fees incurred
in connection therewith) which the Fund, its officers, Trustees or any such
controlling person may incur under the 1933 Act, under any other statute, at
common law or otherwise arising out of the acquisition of any Shares by any
person which
a) may be based upon any wrongful act by the Principal
Underwriter or any of its employees or representatives, or
b) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in the Fund's
registration statement, prospectus or statement of additional
information (including amendments and supplements thereto), or
any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished or
confirmed in writing to the Fund by the Principal Underwriter.
12. The Fund agrees to execute such papers and to do such acts and
things as shall from time to time be reasonably requested by Principal
Underwriter for the purpose of qualifying the Shares for sale under the
so-called "blue sky" laws of any state or for registering Shares under the 1933
Act or the Fund under the Investment Company Act of 1940 ("1940 Act"). Principal
Underwriter shall bear the expense of preparing, printing and distributing
advertising, sales literature, prospectuses and statements of additional
information. The Fund shall bear the expense of registering Shares under the
1933 Act and the Fund under the 1940 Act, qualifying Shares for sale under the
so-called "blue sky" laws of any state, the preparation and printing of
prospectuses, statements of additional information and reports required to be
filed with the Securities and Exchange Commission and other authorities, the
preparation, printing and mailing of prospectuses and statements of additional
information to shareholders of the Fund and the direct expenses of the issue of
Shares.
13. To the extent required by the Fund's 12b-1 Plans, Principal
Underwriter shall provide to the Board of Trustees of the Fund in connection
with such 12b-1 Plans, not less than quarterly, a written report of the amounts
expended pursuant to such 12b-1 Plans and the purposes for which such
expenditures were made.
14. This Agreement shall become effective as of the date of the
commencement of operations of the Fund and shall remain in force for two years
unless sooner terminated or continued as provided below. This Agreement shall
continue in effect after such term if its continuance is specifically approved
by a majority of the Trustees of the Fund and a majority of the 12b-1 Trustees
referred to in the 12b-1 Plans of the Fund ("Rule 12b-1 Trustees") at least
annually in accordance with the 1940 Act and the rules and regulations
thereunder.
This Agreement may be terminated at any time, without payment of any
penalty, by vote of a majority of any Rule 12b-1 Trustees or by a vote of a
majority of the Fund's outstanding Shares on not more than sixty (60) days
written notice to any other party to the Agreement; and shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).
15. This Agreement shall be construed in accordance with the laws of
The Commonwealth of Massachusetts. All sales hereunder are to be made and title
to the Shares shall pass, in Boston, Massachusetts.
16. The Fund is a series of a Delaware business trust established under
a Declaration of Trust, as it may be amended from time to time. The obligations
of the Fund are not personally binding upon, nor shall recourse be had against,
the private property of any of the Trustees, shareholders, officers, employees
or agents of the Fund, but only the property of the Fund shall be bound.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized at Boston,
Massachusetts, as of the day and year first written above.
EVERGREEN SELECT MONEY MARKET TRUST
By: /s/ John J. Pileggi
--------------------
Name: John J. Pileggi
Title: President
EVERGREEN DISTRIBUTOR, INC.
By: /s/ William J. Tomko
----------------------
Name: William J. Tomko
Title: President
<PAGE>
EXHIBIT A
As revised July 27, 1999
EVERGREEN SELECT MONEY MARKET TRUST
Evergreen Select Money Market Trust
Evergreen Select Municipal Money Market Trust
Evergreen Select Treasury Money Market Trust
Evergreen Select 100% Treasury Money Market Trust
Evergreen Select U.S. Government Money Market Trust
<PAGE>
EXHIBIT B
TO
PRINCIPAL UNDERWRITING AGREEMENT
FOR INSTITUTIONAL SERVICE SHARES
DATED
SEPTEMBER 18, 1997
Schedule of Commissions
Institutional Shares pay up to 0.25% annually of the average daily net asset
shares of a Fund
[FORM OF ADMINISTRATIVE SERVICES AGREEMENT]
This Administrative Services Agreement is made as of this 10th day of June,
1999 between Evergreen Select Money Market Trust, a Delaware business trust
(herein called the "Trust"), and Evergreen Investment Services, Inc., a Delaware
corporation (herein called "EIS").
W I T N E S S E T H:
WHEREAS, Trust is a Massachusetts business trust consisting of one or
more portfolios which operates as an open-end management investment company and
is so registered under the Investment Company Act of 1940; and
WHEREAS, the Trust desires to retain EIS as its Administrator to
provide it with administrative services and EIS is willing to render such
services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereto agree as follows:
1. APPOINTMENT OF ADMINISTRATOR. The Trust hereby appoints EIS as Administrator
of the Trust and each of its portfolios listed on SCHEDULE A attached hereto on
the terms and conditions set forth in this Agreement; and EIS hereby accepts
such appointment and agrees to perform the services and duties set forth in
Section 2 of this Agreement in consideration of the compensation provided for in
Section 4 hereof.
2. SERVICES AND DUTIES. As Administrator, and subject to the supervision and
control of the Trustees of the Trust, EIS will hereafter provide facilities,
equipment and personnel to carry out the following administrative services for
operation of the business and affairs of the Trust and each of its portfolios:
(a) Prepare, file and maintain the Trust's governing documents,
including the Declaration of Trust (which has previously been prepared
and filed), the By laws, minutes of meetings of Trustees and
shareholders, and proxy statements for meetings of shareholders;
(b) Prepare and file with the Securities and Exchange Commission and
the appropriate state securities authorities the registration
statements for the Trust and the Trust's shares and all amendments
thereto, reports to regulatory authorities and shareholders,
prospectuses, proxy statements, and such other documents as may be
necessary or convenient to enable the Trust to make a continuous
offering of its shares;
(c) Prepare, negotiate and administer contracts on behalf of the Trust
with, among others, the Trust's distributor, and custodian and transfer
agent;
(d) Supervise the Trust's fund accounting agent in the maintenance of
the Trust's general ledger and in the preparation of the Trust's
financial statements, including oversight of expense accruals and
payments and the determination of the net asset value of the Trust's
assets and of the Trust's shares, and of the declaration and payment of
dividends and other distributions to shareholders;
(e) Calculate performance data of the Trust for dissemination to
information services covering the investment company industry;
(f) Prepare and file the Trust's tax returns;
(g) Examine and review the operations of the Trust's custodian and
transfer agent;
(h) Coordinate the layout and printing of publicly disseminated
prospectuses and reports;
(i) Prepare various shareholder reports;
(j) Assist with the design, development and operation of
new portfolios of the Trust;
(k) Coordinate shareholder meetings;
(l) Provide general compliance services; and
(m) Advise the Trust and its Trustees on matters concerning the
Trust and its affairs.
The foregoing, along with any additional services that EIS shall agree
in writing to perform for the Trust hereunder, shall hereafter be referred to as
"Administrative Services." Administrative Services shall not include any duties,
functions, or services to be performed for the Trust by the Trust's investment
adviser, distributor, custodian or transfer agent pursuant to their agreements
with the Trust.
3. EXPENSES. EIS shall be responsible for expenses incurred in providing office
space, equipment and personnel as may be necessary or convenient to provide the
Administrative Services to the Trust. The Trust shall be responsible for all
other expenses incurred by EIS on behalf of the Trust, including without
limitation postage and courier expenses, printing expenses, registration fees,
filing fees, fees of outside counsel and independent auditors, insurance
premiums, fees payable to Trustees who are not EIS employees, and trade
association dues.
4. COMPENSATION. For the Administrative Services provided, the Trust hereby
agrees to pay and EIS hereby agrees to accept as full compensation for its
services rendered hereunder an administrative fee, calculated daily and payable
monthly, at an annual rate determined in accordance with Schedule B attached
hereto.
Each portfolio of the Trust shall pay a portion of the administrative
fee equal to the rate determined above times that portfolio's average annual
daily net assets.
5. RESPONSIBILITY OF ADMINISTRATOR. EIS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. EIS shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Trust) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice. Any person, even though also an officer, director, partner,
employee or agent of EIS, who may be or become an officer, trustee, employee or
agent of the Trust, shall be deemed, when rendering services to the Trust or
acting on any business of the Trust (other than services or business in
connection with the duties of EIS hereunder) to be rendering such services to or
acting solely for the Trust and not as an officer, director, partner, employee
or agent or one under the control or direction of EIS even though paid by EIS.
6. DURATION AND TERMINATION.
(a) This Agreement shall be in effect until December 31, 1999, and
shall continue in effect from year to year thereafter, provided it is
approved, at least annually, by a vote of a majority of Trustees of the
Trust including a majority of the disinterested Trustees.
(b) This Agreement may be terminated at any time, without payment of
any penalty, on sixty (60) day's prior written notice by a vote of a
majority of the Trust's Trustees or by EIS.
7. AMENDMENT. No provision of this Agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
8. NOTICES. Notices of any kind to be given to the Trust hereunder by
EIS shall be in writing and shall be duly given if delivered to the Trust
at: 200 Berkeley Street, Boston, MA 02116, Attention: Secretary. Notices
of any kind to be given to EIS hereunder by the Trust shall be in writing and
shall be duly given if delivered to EIS at 200 Berkeley Street, Boston,
Massachusetts 02116. Attention: Chief Administrative Officer.
9. LIMITATION OF LIABILITY. EIS is hereby expressly put on notice of the
limitation of liability as set forth in the Declaration of Trust and agrees that
the obligations pursuant to this Agreement of a particular portfolio and of the
Trust with respect to that particular portfolio be limited solely to the assets
of that particular portfolio, and EIS shall not seek satisfaction of any such
obligation from the assets of any other portfolio, the shareholders of any
portfolio, the Trustees, officers, employees or agents of the Trust, or any of
them.
10. MISCELLANEOUS. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court or regulatory agency
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. Subject to the provisions of Section 5 hereof, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and shall be governed by Delaware law;
provided, however, that nothing herein shall be construed in a manner
inconsistent with the Investment Company Act of 1940 or any rule or regulation
promulgated by the Securities and Exchange Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Administrative
Services Agreement to be executed by their officers designated below as of the
day and year first above written.
EVERGREEN SELECT MONEY MARKET TRUST
ATTEST: __________________________ By: _______________________________
NAME:
TITLE:
EVERGREEN INVESTMENT SERVICES, INC.
ATTEST: __________________________ By: _______________________________
NAME:
TITLE:
<PAGE>
SCHEDULE A
Dated: October 15, 1999
SNAP Fund
<PAGE>
SCHEDULE B
Dated: October 15, 1999
SNAP Fund 0.00%
FORM OF
ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT made between Mentor Institutional Trust, a business
trust organized and existing under the laws of The Commonwealth of Massachusetts
having its principal place of business at 200 Berkeley Street, Boston,
Massachusetts 02116-5034 (the "Fund") and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts 02110, ("State Street").
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, the Fund intends that this Agreement be applicable only to its
series known as SNAP Fund (the "Portfolio");
WHEREAS, the Fund desires to retain State Street to perform certain
accounting and recordkeeping duties for and on behalf of the Portfolio; and
WHEREAS, State Street is willing to perform such services on the terms
provided herein.
NOW, THEREFORE, the parties agree as follows:
Section 1. Duties of State Street.
1.1 Books of Account.
State Street shall maintain the books of account of the Portfolio and
shall perform the following duties in the manner prescribed by the Fund's
currently effective prospectus, statement of additional information or other
governing document, certified copies of which have been supplied to State Street
(a "governing document"):
- Record general ledger entries.
- Calculate daily expenses.
- Calculate daily income.
- Reconcile daily activity to the trial balance.
- Calculate daily dividend rate.
- Calculate net asset value.
- Calculate preliminary daily cash availability and periodic
adjustments thereto, if any.
- Prepare account balances.
The Fund shall provide timely prior notice to State Street of any
modification in the manner in which such calculations are to be performed as
prescribed in any revision to the Fund's governing document. State Street shall
not be responsible for any revisions to calculations unless such revisions are
communicated in writing to State Street.
1.2 Records.
State Street shall create and maintain all records relating to its
activities and obligations under this Agreement in such a manner as will meet
the obligations of the Fund, but only with respect to the Portfolio, under the
Investment Company Act of 1940, specifically Section 31 thereof and Rules 31a-1
and 31a-2 thereunder. All such records shall be the property of the Fund and
shall at all times during the regular business hours of State Street be open for
inspection by duly authorized officers, employees or agents of the Fund and
employees and agents of the Securities and Exchange Commission. Subject to
Section 3 below, State Street shall preserve for the period required by law the
records required to be maintained thereunder.
Section 2. Duties of the Fund.
2.1 Delivery of Information.
The Fund shall provide, or shall cause a third party to provide, timely
notice to State Street of certain data as a condition to State Street's
performance described in Section 1 above. The data required to be provided
pursuant to this section is set forth in Schedule A hereto, which schedule may
be separately amended or supplemented by the parties from time to time.
State Street is authorized and instructed to rely upon the information
it receives from the Fund or any third party. State Street shall have no
responsibility to review, confirm or otherwise assume any duty with respect to
the accuracy or completeness of any data supplied to it by or on behalf of the
Fund.
2.2 Proper Instructions.
The Fund shall communicate to State Street by means of Proper
Instructions. Proper Instructions shall mean (i) a writing signed or initialed
by one or more persons as the Board of Trustees shall have from time to time
authorized or (ii) communication effected directly between the Fund or its
third-party agent and State Street by electro-mechanical or electronic devices,
provided that the Fund and State Street have approved such procedures. State
Street may rely upon any Proper Instruction believed by it to be genuine and to
have been properly issued by or on behalf of the Fund. Oral instructions shall
be considered Proper Instructions if State Street reasonably believes them to
have been given by a person authorized to give such instructions. The Fund shall
cause all oral instructions to be confirmed in accordance with clauses (i) or
(ii) above, as appropriate. The Fund shall give timely Proper Instructions to
State Street in regard to matters affecting accounting practices and State
Street's performance pursuant to this Agreement.
Section 3. Successor Agent.
If a successor agent for the Portfolio shall be appointed by the Fund,
State Street shall upon termination deliver to such successor agent at the
office of State Street all properties of the Portfolio held by it hereunder. If
no such successor agent shall be appointed, State Street shall at its office
upon receipt of Proper Instructions deliver such properties in accordance with
such instructions.
In the event that no written order designating a successor agent or
Proper Instructions shall have been delivered to State Street on or before the
date when such termination shall become effective, then State Street shall have
the right to deliver to a bank or trust company, which is a "bank" as defined in
the Investment Company Act of 1940, doing business in Boston, Massachusetts, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $2,000,000, all
properties held by State Street under this Agreement. Thereafter, such bank or
trust company shall be the successor of State Street under this Agreement.
Section 4. Warranties.
If the Fund promptly notifies State Street that any of its accounting
services are erroneous in any material respect, State Street shall endeavor in a
timely manner to correct such failure. Organizations from which State Street may
obtain certain data included in the accounting services are solely responsible
for the contents of such data and the Fund agrees to make no claim against State
Street arising out of the contents of such third-party data including, but not
limited to, the accuracy thereof. State Street makes no warranties with respect
to the calculations and data processing it provides the Fund and/or any third
party agent of the Fund insofar as it relates to the qualification of the Fund
as a regulated investment company under state or federal securities and tax
laws, or any requirements or obligations thereunder.
Section 5. Limitation of Liability.
State Street shall not be liable to the Fund, the Portfolio or any
third-party for any loss or damage claimed to have resulted from the use of the
accounting services except for the direct loss or damage resulting from the
negligence or willful misconduct of State Street. STATE STREET SHALL NOT BE
LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY
KIND WHATSOEVER (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) IN ANY WAY DUE
TO THE USE OF THE ACCOUNTING SERVICES OR THE PERFORMANCE OF OR FAILURE TO
PERFORM STATE STREET'S OBLIGATIONS UNDER THIS AGREEMENT. This disclaimer applies
without limitation to claims regardless of the form of action, whether in
contract, tort (including negligence), strict liability, or otherwise and
regardless of whether such damages are foreseeable. Further, in no event shall
State Street be liable for any claims that arise more than one (1) year prior to
the institution of suit therefor or any claim arising from causes beyond State
Street's control.
Section 6. Force Majeure.
State Street shall have no liability for cessation of services
hereunder or any damages resulting therefrom to the Fund as a result of work
stoppage, power or other mechanical failure, natural disaster, governmental
action, communication disruption or other impossibility of performance.
Section 7. Year 2000
State Street will take reasonable steps to ensure that its products
(and those of its third-party suppliers) reflect the available state of the art
technology to offer products that are Year 2000 compliant, including, but not
limited to, century recognition of dates, calculations that correctly compute
same century and multi-century formulas and date values, and interface values
that reflect the date issues arising between now and the next one hundred years.
If any changes are required, State Street will make the changes to its products
at no cost to the Fund and in a commercially reasonable time frame and will
require third-party suppliers to do likewise.
Section 8. Exclusive Remedy.
In consideration of the fees charged hereunder, the Fund's exclusive
recovery regardless of the basis of the claim asserted by it against State
Street shall not exceed six (6) times the average monthly fees billed by State
Street hereunder and computed by averaging the monthly billing for each of the
twelve months preceding the month in which the damage or injury is alleged to
have occurred, but if this Agreement has not been in effect for twelve months
preceding such date, then by averaging the monthly billings for each of the
preceding months that this Agreement has been in effect.
Section 9. Indemnification.
The Fund agrees to indemnify and hold State Street free and harmless
from any expense, loss, damage or claim, including reasonable attorney's fees,
suffered by State Street and caused by or resulting from the acts or omissions
of the Fund or any third-party whose services State Street must rely upon in
performing accounting services hereunder.
Section 10. General.
10.1 Term of Agreement.
This Agreement shall become effective as of the date of its execution
and shall remain in full force and effect until terminated as hereinafter
provided. Either party may, in its discretion, terminate this Agreement for any
reason by giving the other party at least sixty (60) days prior written notice
of termination. In addition, either party may terminate this Agreement for
failure of the other party to comply with any of its terms and conditions by
giving the other party written notice of termination.
10.2 Fees.
The Fund agrees to pay State Street such reasonable compensation for
its services and expenses as is agreed upon from time to time. Payments for
services shall be due thirty (30) days from the Fund's receipt of State Street's
invoice therefor. The Fund shall reimburse State Street for all costs and
expenses, including reasonable attorney's fees, incurred by State Street to
collect any charges due under this Agreement.
10.3 Notices.
All notices shall be in writing and deemed given when delivered in
person, by facsimile, by overnight delivery through a commercial courier
service, or by registered or certified mail, return receipt requested. Notices
shall be addressed to each party at its address set forth below, or such other
address as the recipient may have specified by earlier notice to the sender.
If to State Street: Lafayette Corporate Center, LCC/3SW
2 Avenue de Lafayette
Boston, MA 02111
Attention: William E. Monaghan, II
Vice President
Telephone: 617-662-2401
Facsimile: 617-662-2198
If to the Fund: c/o Evergreen Funds
200 Berkeley Street
Boston, Massachusetts 02116-5034
Attention: Sally Ganem, Esq.
Telephone: 617-210-3691
Facsimile: 617-210-3468
10.4 Assignment; Successors.
This Agreement shall not be assigned by either party without the prior
written consent of the other party, except that either party may assign to a
successor all of or a substantial portion of its business, or to a party
controlling, controlled by, or under common control with such party.
10.5 Entire Agreement.
This Agreement (including all schedules and attachments hereto)
constitutes the entire Agreement between the parties with respect to its subject
matter; all prior Agreements, representations, statements, negotiations and
undertakings with respect to such subject matter are terminated and superseded
hereby.
10.6 Amendments.
No amendment to this Agreement shall be effective unless it is in
writing and signed by a duly authorized representative of each party. The term
"Agreement", as used herein, includes all schedules and attachments hereto and
any future written amendments, modifications, or supplements made in accordance
herewith.
10.7 Headings Not Controlling.
Headings used in this Agreement are for reference purposes only and
shall not be deemed a part of this Agreement.
10.8 Survival.
After expiration or termination of this Agreement, all provisions
relating to payment shall survive until completion of required payments. In
addition to those provisions which specifically provide for survival beyond
expiration or termination, all provisions regarding indemnification, warranty,
liability and limits thereon shall survive, unless and until the expiration of
any time period specified elsewhere in this Agreement with respect to the
provision in question.
10.9 Severability.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
10.10 Governing Law; Jurisdiction.
This Agreement shall be deemed to have been made in The Commonwealth of
Massachusetts and shall be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts. The parties agree that any dispute arising
herefrom shall be subject to the exclusive jurisdiction of courts sitting in The
Commonwealth of Massachusetts.
<PAGE>
SIGNATURE PAGE
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of July 9, 1999.
MENTOR INSTITUTIONAL TRUST
Fund signature attested to by:
_______________________ By:
Name: Name:
Title: Title:
STATE STREET BANK AND TRUST COMPANY
Signature attested to by:
_______________________ By:
Stephanie L. Poster Ronald E. Logue, Vice Chairman
Vice President
<PAGE>
SCHEDULE A
to
Accounting Services Agreement
by and between
Mentor Institutional Trust and State Street Bank and Trust Company
Information Required to be Supplied Responsible Party
Portfolio Trade Authorizations Investment Adviser
Currency Transactions Investment Adviser
Cash Transaction Report Custodian
Cash Reconciliation Custodian
Transaction Schedule Report Custodian
Connection Fax Custodian via Transfer Agent
Fund Activity Statement/Summary Report Transfer Agent
(prior day)
Fund Activity Statement/Summary Report Transfer Agent
(current day)
Portfolio Prices Third Party Vendors/Investment Adviser
Exchange Rates Third Party Vendors/Investment Adviser
Capital Stock Activity Report Transfer Agent
Dividend/Distribution Schedule Investment Adviser/Administrator
Dividend/Distribution Declaration Investment Adviser/Administrator
Dividend Reconciliation/Confirmation Transfer Agent
Corporate Actions Third Party Vendors/Custodian
Service Provider Fee Schedules Investment Adviser/Administrator
Expense Budget Investment Adviser/Administrator
Amortization Policy Investment Adviser/Administrator
Accounting Policy/Complex Investments Investment Adviser/Administrator
Audit Management Letter Auditor
Annual Shareholder Letter Investment Adviser
Annual/Semi-Annual Reports Investment Adviser/Administrator
W:\POSTER\40act\mentor\meninstru\acctserv2.DOC
CONSENT OF INDEPENDENT AUDITORS
To the Trustees and Shareholders of
Evergreen Select Money Market Trust
We consent to the use of our report dated August 6, 1999 for the SNAP Fund, a
portfolio of Evergreen Select Money Market Trust, incorporated herein by
reference and to the references to our firm under the captions "FINANCIAL
HIGHLIGHTS" in the prospectus and "INDEPENDENT ACCOUNTANTS" in the Statement of
Additional Information.
/s/ KPMG LLP
KPMG LLP
Boston, Massachusetts
October 28, 1999
