FFB FUNDS TRUST
FFB U.S. TREASURY FUND
FFB 100% TREASURY FUND AND THE
FFB U.S. GOVERNMENT FUND
237 PARK AVENUE
NEW YORK, NEW YORK 10017
September 28 October 2, 1995
Dear Shareholders:
On June 18, 1995, First Fidelity Bancorporation agreed to merge
(the "Merger") with and into a wholly-owned subsidiary of First Union
Corporation. First Fidelity Bancorporation is the parent of First
Fidelity Bank, N.A. ("First Fidelity"), the investment adviser to a
group of mutual funds with assets of $2.55 billion as of June 30, 1995.
The FFB U.S. Treasury Fund, FFB 100% Treasury Fund and the FFB U.S.
Government Fund are money market funds included within the First
Fidelity family of mutual funds as series of the FFB Funds Trust.
First Union National Bank of North Carolina ("FUNB") is a
subsidiary of First Union Corporation. The Capital Management Group
("CMG") of FUNB and Evergreen Asset Management Corp. ("Evergreen
Asset"), a wholly-owned subsidiary of FUNB, manage or otherwise oversee
the investment of over $29.1 billion in assets belonging to a wide-range
of clients, including the Evergreen family of mutual funds with assets
of $8.7 billion as of June 30, 1995.
To facilitate the investment management of assets and the delivery
of shareholder services to the First Fidelity and Evergreen family of
mutual funds, the Trustees of the FFB Funds Trust are proposing your
approval is sought to combine certain of the investment companies in the
First Fidelity family of mutual funds with investment companies in the
Evergreen family of mutual funds which have similar investment
objectives and policies.
The proposals contained in the accompanying Prospectus/Proxy
Statement provide following the Merger for the combination of the FFB
U.S. Treasury Fund, the FFB 100% U.S. Treasury Fund and the FFB U.S.
Government Fund (the "FFB Funds") and the Evergreen Treasury Money
Market Fund (the "Evergreen Fund"), following the Merger. The Evergreen
Fund, a money market mutual fund advised by CMG, will be the surviving
fund. The FFB Funds and the Evergreen Fund have substantially similar
investment objectives and policies of investing in U.S. Treasury
obligations and each seeks to maintain a stable net asset value of $1.00
per share. The FFB U.S. Government Fund may invest in obligations of
the agencies and instrumentalities of the U.S. Government, as well as
obligations of the U.S. Treasury.
Under each proposed Agreement and Plan of Reorganization (the
"Plan"), the Evergreen Fund will acquire substantially all of the assets
of each of the three FFB Funds in exchange for shares of the Evergreen<PAGE>
Fund (the "Reorganization"). As of June 30, 1995, the FFB U.S. Treasury
Fund, the FFB 100% U.S. Treasury Fund and the FFB U.S. Government Fund
had net assets of approximately $1 billion, $15.3 million and $227.6
million, respectively, and the Evergreen Fund had approximately $1.4
billion of net assets. If the Reorganizations had taken place as of
June 30, 1995, the Evergreen Fund's net assets would have been
approximately $2.6 billion. I believe that the combinations will
achieve the goal of efficient investment management and delivery of
shareholder services.
Since Assuming the Merger is consummated, it will take place prior
to the closing date for the Reorganization and because the Merger by law
terminates the investment advisory contract between First Fidelity and
each of the FFB Funds, the Trustees of the FFB Funds Trust are also
seeking your approval is sought of an Interim Investment Advisory
Agreement for each FFB Fund with CMG. The Interim Investment Advisory
Agreement will have the same terms and fees as the current investment
advisory agreement between each FFB Fund and First Fidelity and will be
in effect for the period of time between the effective date of the
Merger and the closing date for the Reorganization. The Reorganization
is scheduled to take place on or about January 19, 1996.
If shareholders of the FFB Funds approve the Plan, upon
consummation of the transactions contemplated in the Plan, shareholders
will receive Class A shares of the Evergreen Fund. The proposed
transactions will not result in any federal income tax liability for you
or for the FFB Funds. As a shareholder of the Evergreen Fund you will
have the ability to exchange your shares for shares of the other funds
in the Evergreen family of mutual funds comparable to your present right
to exchange among funds of the First Fidelity family of mutual funds.
Following completion of the Reorganization, your Fund will be
liquidated.
The Trustees of FFB Funds Trust have called a special meeting of
shareholders of each of the FFB Funds to be held on November 13 21, 1995
to consider the proposed transaction. I STRONGLY INVITE YOUR
PARTICIPATION BY ASKING YOU TO REVIEW, COMPLETE AND RETURN YOUR PROXY AS
SOON AS POSSIBLE.
Detailed information about the proposed transaction is described in
the enclosed Prospectus/Proxy Statement. I thank you for your
participation as a shareholder and urge you to please exercise your
right to vote by completing, dating and signing the enclosed proxy card.
A self-addressed, postage-paid envelope has been enclosed for your
convenience.
A copy of the Evergreen Fund Prospectus accompanies the
Prospectus/Proxy Statement. I urge you to read the Prospectus and
retain it for future reference.
-2- <PAGE>
If you have any questions regarding the proposed transaction or if
you would like additional information about the Evergreen family of
mutual funds, please telephone 1-800-437-8790.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED AS
SOON AS POSSIBLE.
Sincerely,
_________________________
Edmund A. Hajim, President
FFB Funds Trust
-3- <PAGE>
[SUBJECT TO COMPLETION, AUGUST 25, 1995 PRELIMINARY COPY]
FFB FUNDS TRUST
FFB U.S. TREASURY FUND
FFB 100% U.S. TREASURY FUND
FFB U.S. GOVERNMENT FUND
237 PARK AVENUE
NEW YORK, NEW YORK 10017
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 13 21, 1995
Notice is hereby given that a Special Meeting (the "Meeting") of
Shareholders of each of the FFB U.S. Treasury Fund, FFB 100% U.S.
Treasury Fund, and FFB U.S. Government Fund (each an "FFB Fund"), series
of FFB Funds Trust, will be held at the offices of FFB Funds Trust, 237
Park Avenue, New York, New York 10017 on November 13, 1995 at 10 First
Fidelity Bank, N.A., 123 South Broad Street, 5th Floor, Philadelphia,
Pennsylvania 19109 on November 21, 1995 at 11:00 a.m. for the following
purposes:
1. To consider and act upon approve or disapprove the Agreement and
Plan of Reorganization (the "Plan") dated as of _______________September
19 , 1995, providing for the acquisition of substantially all of the
assets of the FFB Fund by the Evergreen Treasury Money Market Fund (the
"Evergreen Fund") in exchange for Class A shares of the Evergreen Fund,
and the assumption by the Evergreen Fund of certain identified
liabilities of the FFB Fund. The Plan also provides for distribution of
such shares of the Evergreen Fund to shareholders of the FFB Fund in
liquidation and subsequent termination of the FFB Fund. A vote in favor
of the Plan is a vote in favor of the liquidation and dissolution of the
FFB Fund.
2. To consider and act upon approve or disapprove the Interim
Investment Advisory Agreement between the FFB Fund and the Capital
Management Group of First Union National Bank of North Carolina.
3. To transact any other business which may properly come before the
Meeting or any adjournment or adjournments thereof.
The Trustees of FFB Funds Trust have fixed the close of business on
September 8, 1995 as the record date for the determination of
shareholders of each of the FFB Funds entitled to notice of and to vote
at the Meeting or any adjournment thereof.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO
DO NOT EXPECT TO ATTEND IN PERSON ARE URGED WITHOUT DELAY TO SIGN AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE, SO THAT THEIR SHARES MAY BE REPRESENTED AT THE MEETING. YOUR
PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF
FURTHER SOLICITATION.
By Order of the Board of Trustees <PAGE>
Joan V. Fiore
Secretary
September 28 October 2, 1995
-2-<PAGE>
INSTRUCTIONS FOR EXECUTING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and may help to avoid the time and expense involved in
validating your vote if you fail to sign your proxy card(s) properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in
the Registration on the proxy card(s).
2. JOINT ACCOUNTS: Either party may sign, but the name of the
party signing should conform exactly to a name shown in the Registration
on the proxy card(s).
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the
proxy card(s) should be indicated unless it is reflected in the form of
Registration. For example:
REGISTRATION VALID SIGNATURE
CORPORATE
ACCOUNTS
(1) ABC Corp. (1) ABC Corp.
John Doe, Treasurer
(2) ABC Corp. (2) John Doe, Treasurer
c/o John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan (3) John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust (1) Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee (2) Jane B. Doe
u/t/d 12/28/78
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. (1) John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith, Jr. (2) John B. Smith, Jr., Executor
-3-<PAGE>
PROSPECTUS/PROXY STATEMENT DATED SEPTEMBER 25, 1995
Acquisition of Assets of
FFB U.S. TREASURY FUND
FFB 100% U.S. TREASURY FUND
FFB U.S. GOVERNMENT FUND
OF
FFB FUNDS TRUST
237 Park Avenue
New York, New York 10017
By and in Exchange for Shares of
EVERGREEN TREASURY MONEY MARKET FUND
OF
EVERGREEN INVESTMENT TRUST
2500 Westchester Avenue
Purchase, New York 10577
This Prospectus/Proxy Statement is being furnished to shareholders
of FFB U.S. Treasury Fund, FFB 100% U.S. Treasury Fund, and FFB U.S.
Government Fund (individually the "FFB Fund" or collectively the "FFB
Funds"), series of FFB Funds Trust, in connection with a proposed
Agreement and Plan of Reorganization (the "Plan"), to be submitted to
shareholders of each of the FFB Funds for consideration at a Special
Meeting of Shareholders to be held on November 13, 21, 1995 at 10 11:00
a.m. Eastern Time, at the offices of FFB Funds Trust, 237 Park Avenue,
New York, New York 10017 First Fidelity Bank, N.A., 123 South Broad
Street, 5th Floor, Philadelphia, Pennsylvania 19109, and any
adjournments thereof (the "Meeting"). Each Plan provides for
substantially all of the assets of the FFB Fund to be acquired by the
Evergreen Treasury Money Market Fund (the "Evergreen Fund"), a series of
Evergreen Investment Trust, in exchange for Class A shares of the
Evergreen Fund and the assumption by the Evergreen Fund of certain
identified liabilities of the FFB Fund (hereinafter referred to
individually as the "Reorganization" or collectively as the
"Reorganizations"). Following the Reorganizations, Class A shares of the
Evergreen Fund will be distributed to shareholders of the FFB Funds in
liquidation of the FFB Funds and the FFB Funds will be terminated. As a
result of the proposed Reorganizations, shareholders of each of the FFB
Funds will receive that number of full and fractional Class A shares of
the Evergreen Fund determined by dividing the value of the assets of
each of the FFB Funds to be acquired by the ratio of multiplying the
shares outstanding of each class of the particular FFB Fund by the ratio
computed by dividing the net asset value per share of the Evergreen Fund
and each such class of the particular FFB Fund by the net asset value
per share of the Evergreen Fund. Each Reorganization is being
structured as a tax-free reorganization for federal income tax purposes. <PAGE>
Shareholders of the FFB Fund Funds are also being asked to approve
the Interim Investment Advisory Agreement with the Capital Management
Group of First Union National Bank of North Carolina (the "Interim
Advisory Agreement") with the same terms and fees as the current
advisory agreement between each FFB Fund and First Fidelity Bank, N.A.
The Interim Advisory Agreement will be in effect for the period of time
between the date on which the merger of First Fidelity Bancorporation
with and into a wholly-owned subsidiary of First Union Corporation is
effected (currently anticipated to be by January 1, 1996) and the date
on which the Evergreen Fund and the FFB Fund are combined together
(scheduled for on or about January 19, 1996).
The FFB Funds Trust currently consists of the FFB Fund Funds and
nine seven other series with shares outstanding. As is the case with
the FFB Fund Funds, the shareholders of certain of these series are
being asked to approve similar Agreements and Plans of Reorganization
providing for the combination of such series with other Evergreen Funds
having similar investment objectives and policies. The FFB New Jersey
Tax-Free Income Fund and the FFB Pennsylvania Tax-Free Money Market Fund
will not be combined with any of the funds in the Evergreen family of
mutual funds and therefore shareholders of those Funds will vote on the
approval of new investment advisory agreements between the Funds and the
Capital Management Group of First Union National Bank of North Carolina
and the election of new Trustees for the FFB Funds Trust. The vote on
the election of new Trustees will take place after all the combinations
of the FFB Funds and the Evergreen Funds are effective.
Evergreen Investment Trust is an open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act"). Evergreen Investment Trust is comprised of 17 series,
one of which, the Evergreen Fund, is a party to the Reorganizations.
The Evergreen Fund is a money market fund which seeks to achieve
stability of principal and current income consistent with stability of
principal. The Evergreen Fund seeks to maintain a stable net asset
value of $1.00 per share.
This Prospectus/Proxy Statement, which should be retained for
future reference, sets forth concisely the information about the
Evergreen Fund that shareholders of the FFB Funds should know before
voting on the Reorganizations. Certain relevant documents listed below,
which have been filed with the Securities and Exchange Commission
("SEC"), are incorporated in whole or in part by reference. A Statement
of Additional Information dated September 25, 1995, relating to this
Prospectus/Proxy Statement and the Reorganizations, incorporating by
reference the financial statements of the Evergreen Fund dated December
31, 1994 and June 30, 1995 and the financial statements of the FFB Funds
dated February 28, 1995 has been filed with the SEC and is incorporated
by reference in its entirety into this Prospectus/Proxy Statement. A
copy of such Statement of Additional Information is available upon
request and without charge by writing to the Evergreen Fund at 2500
Westchester Avenue, Purchase, New York 10577 or by calling toll-free
1-800-807-2940.
-2-<PAGE>
The Prospectuses of the Evergreen Fund dated July 7, 1995, its
Annual Report for the fiscal year ended December 31, 1994 and its Semi-
Annual Report for the six months ended June 30, 1995 are incorporated
herein by reference in their entirety, insofar as they relate to the
Evergreen Fund only, and not to any other fund described therein. The
two Prospectuses, which pertain (i) to Class Y shares and (ii) to Class
A and Class B shares, differ only insofar as they describe the separate
distribution and shareholder servicing arrangements applicable to the
Classes. Shareholders of the FFB Funds will receive, with this
Prospectus/Proxy Statement, copies of the Prospectus pertaining to the
Class A shares of the Evergreen Fund that they will receive as a result
of the consummation of each Reorganization. Additional information about
the Evergreen Fund is contained in its Statement of Additional
Information of the same date which has been filed with the SEC and which
is available upon request and without charge by writing to the Evergreen
Fund at the address listed in the preceding paragraph or by calling
toll-free 1-800-807-2940.
The two Prospectuses of each of the FFB Funds (which pertain to (i)
Institutional Class shares and (ii) Service Class shares) each dated
June 30, 1995 (October 7, 1994 with respect to FFB 100% U.S. Treasury
Fund), insofar as they relate to the FFB Funds only, and not to any
other funds described therein, are incorporated herein in their entirety
by reference. Copies of the Prospectuses and a Statement of Additional
Information dated the same date are available upon request without
charge by writing to the FFB Fund of which you are a shareholder at the
address listed on the cover page of this Prospectus/Proxy Statement or
by calling toll-free 1-800-437-8790.
Included as Exhibit A of this Prospectus/Proxy Statement is a form
of the Plan.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT
DEPOSITS OR OBLIGATIONS OF FIRST UNION CORPORATION ("FIRST UNION") OR
ANY OF ITS SUBSIDIARIES, ARE NOT ENDORSED OR GUARANTEED BY FIRST UNION
OR ANY OF ITS SUBSIDIARIES, AND ARE NOT INSURED OR OTHERWISE PROTECTED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
AN INVESTMENT IN THE EVERGREEN TREASURY MONEY MARKET FUND IS
NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE
NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE.
-3-<PAGE>
TABLE OF CONTENTS
COMPARISON OF FEES AND EXPENSES.......................................
SUMMARY...............................................................
PROPOSED PLAN OF REORGANIZATION.................................
TAX CONSEQUENCES................................................
INVESTMENT OBJECTIVES AND POLICIES OF THE
EVERGREEN FUND AND THE FFB FUNDS...........................
COMPARATIVE PERFORMANCE INFORMATION OF EACH FUND................
MANAGEMENT OF THE FUNDS.........................................
INVESTMENT ADVISERS AND ADMINISTRATORS..........................
DISTRIBUTION OF SHARES..........................................
DISTRIBUTION-RELATED AND SHAREHOLDER
SERVICING-RELATED EXPENSES.................................
PURCHASE AND REDEMPTION PROCEDURES..............................
EXCHANGE PRIVILEGES.............................................
DIVIDEND POLICY.................................................
RISKS.................................................................
INFORMATION ABOUT THE REORGANIZATION..................................
DESCRIPTION OF THE MERGER.......................................
REASONS FOR THE REORGANIZATION..................................
AGREEMENT AND PLAN OF REORGANIZATION............................
FEDERAL INCOME TAX CONSEQUENCES.................................
PRO-FORMA CAPITALIZATION........................................
SHAREHOLDER INFORMATION.........................................
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES......................
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS.......................
FORM OF ORGANIZATION............................................
CAPITALIZATION..................................................
SHAREHOLDER LIABILITY...........................................
SHAREHOLDER MEETINGS AND VOTING RIGHTS..........................
LIQUIDATION OR DISSOLUTION......................................
LIABILITY AND INDEMNIFICATION OF TRUSTEES.......................
RIGHTS OF INSPECTION............................................
INFORMATION REGARDING THE PROPOSED INTERIM ADVISORY AGREEMENTS........
INTRODUCTION....................................................
COMPARISON OF THE INTERIM ADVISORY AGREEMENTS
AND THE EXISTING ADVISORY AGREEMENTS.......................
INFORMATION ABOUT THE FFB FUNDS' CURRENT
AND PROPOSED INTERIM INVESTMENT ADVISERS...................
ADDITIONAL INFORMATION................................................
VOTING INFORMATION CONCERNING THE MEETING.............................
-4-<PAGE>
FINANCIAL STATEMENTS AND EXPERTS......................................
LEGAL MATTERS.........................................................
OTHER BUSINESS........................................................
-5- <PAGE>
COMPARISON OF FEES AND EXPENSES
The amounts for Class A shares of the Evergreen Fund set forth in
the following tables and examples are based on the expenses for the
fiscal year period ended December August 31, 1995. The amounts for
Service Class and Institutional Class shares of the FFB U.S. Treasury
and U.S. Government Funds set forth in the following tables and in the
examples are based on the experience of the FFB Fund Service Class and
Institutional Class shares for the fiscal year ended February 28, 1995,
in each case adjusted for voluntary expense waivers. The FFB 100% U.S.
Treasury Fund Institutional Class shares commenced operations on April
10, 1995. The amounts set forth in the following tables and in the
examples are based on the experience of the FFB 100% U.S. Treasury Fund
Institutional Class shares for the period April 10, 1995 through August
31, 1995. The Service Class shares of the FFB Funds commenced
operations on July 14, 1995 and August 24, 1995 for the FFB U.S.
Treasury Fund and FFB U.S. Government Fund, respectively. The Service
Class shares of the FFB 100% U.S. Treasury had not commenced operations
as of August 31, 1995. The amounts for the Service Class are based on
each Institutional Class for the periods noted above. The amounts for
the Evergreen Fund Pro Forma are based on the combined expenses expected
for the twelve month period ended June 30, 1995.
The following tables show for the Evergreen Fund and the FFB Funds
the shareholder transaction expenses and annual fund operating expenses
associated with an investment in the Class A shares of the Evergreen
Fund and Service Class and Institutional Class shares of the FFB Funds,
and such costs and expenses associated with an investment in Class A
shares of the Evergreen Fund assuming consummation of the
Reorganizations.
COMPARISON OF CLASS A SHARES OF THE EVERGREEN FUND WITH SERVICE CLASS
SHARES OF THE FFB FUNDS
<TABLE>
<CAPTION>
FFB Funds EVERGREEN
SHAREHOLDER TRANSACTION EVERGREEN 100% U.S. U.S. U.S. FUND
EXPENSES FUND TREASURY TREASURY GOVERNMENT PRO FORMA
<S> <C> <C> <C> <C> <C>
Maximum Sales Load
Imposed on Purchases
(as a percentage of
offering price).......... None None None None None
Maximum Sales Load
Imposed on Reinvested
Dividends (as a
percentage of
offering price)....... None None None None None
-6- <PAGE>
Contingent Deferred Sales
Charge................ None None None None None
Exchange Fee ............. None None None None None
Redemption Fees........... None None None None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average
daily net assets)
Management Fees........... 0.35%(2) 0.00%(3) 0.50%(3) 0.50%(3) 0.35%
12b-1 Fees................ 0.30%(1) ---- 0.25%(4) 0.25%(4) 0.30%(1)
Other Expenses............ 0.14% 0.50%(5) 0.40%(5) 0.44%(5) 0.09%
Annual Fund Operating
Expenses................ 0.79%(2) 0.50% 1.15%(5) 1.19%(5) 0.74%(6)(7)
</TABLE>
(1) Evergreen Fund Class A shares can pay up to 0.75% of Class A shares'
average daily net assets as a 12b-1 fee. For at least one year, the
Class A shares' 12b-1 fee will be limited to 0.30% of Class A shares'
average net assets. If Class A shares were to pay 0.75% in 12b-1 fees,
long-term shareholders may pay more than the equivalent of the maximum
front-end sales charges otherwise permitted by the Rules of the National
Association of Securities Dealers.
(2)(2) The Evergreen Fund Class A shares Annual Fund Operating Expenses
were 0.78% for the fiscal year ended December 31, 1994. Class A shares'
Annual Fund Operating Expenses for the Evergreen Fund, absent after the
voluntary advisory fee waiver of 0.28% 0.16% of average net assets,
would have been 1.06% for the fiscal year ended December 31, 1994. The
Class A shares' Annual Fund Operating Expenses for the Evergreen Fund
have been adjusted to reflect current fee arrangements. were 0.63% for
the fiscal period ended August 31, 1995.
(3) Includes(3) For the FFB U.S. Treasury Fund and FFB U.S. Government
Fund, includes Administrative Expenses of 0.15% payable to the
administrator. Certain Advisory Fees and Administrative Expenses will
be waived or reimbursed for the FFB 100% U.S. Treasury Fund's first year
of operations. Absent these waivers, Advisory Fees and Administrative
Expenses would be 0.22%.
(4) Investor Service Class shares of the FFB U.S. Treasury Fund and FFB
U.S. Government Fund can each pay up to 0.25% of Investor Service Class
shares' average daily net assets as a 12b-1 fee. (5) Other Expenses
include a shareholder servicing charge of 0.25%. Absent voluntary
waivers for For the FFB U.S. Treasury Fund and FFB U.S. Government Fund,
shareholder servicing charges would be 0.35% for the FFB U.S. 0.03% of
average daily net assets was incurred as a 12b-1 fee.
(5) Other Expenses for the FFB U.S. Treasury Fund and FFB U.S.
Government Fund include a shareholder servicing charge of 0.35%. After
voluntary waivers for the FFB U.S. Treasury Fund and FFB U.S. Government
Fund of 0.32%, shareholder servicing charges would be 0.03% for the FFB
U.S. Treasury Fund and the FFB U.S. Government Fund. Absent After
voluntary waivers, Other Expenses and Annual Fund Operating Expenses
-7- <PAGE>
would be 0.38% 0.08% and 1.13% 0.58%, respectively, for the FFB U.S.
Treasury Fund and 0.40% 0.12% and 1.15% 0.62%, respectively, for the
FFB U.S. Government Fund. For the FFB 100% U.S. Treasury Fund, Other
Expenses include a shareholder servicing charge of 0.25%. After
voluntary fee waivers, no shareholder servicing fees would be incurred.
After voluntary waivers, Other Expenses and Annual Fund Operating
Expenses would have been 0.25% and 0.25%, respectively.
(6) The Evergreen Fund Pro Forma Operating Expenses after voluntary fee
waivers of 0.15% of average net assets would have been 0.59% for the
twelve months ended June 30, 1995.
(7) The Evergreen Fund Pro Forma Annual Fund Operating Expenses assume
the consummation of the Reorganization of the FFB 100% Treasury Money
Market Fund, FFB U.S. Government Fund and FFB U.S. Treasury Fund with
the Evergreen Fund. If one or more of these Reorganizations are not
approved, the effect on the Evergreen Fund's Pro Forma Annual Fund
Operating Expenses would not be greater than 0.02%.
COMPARISON OF CLASS A SHARES OF THE EVERGREEN FUND WITH INSTITUTIONAL
CLASS SHARES OF THE FFB FUNDS
FFB Funds EVERGREEN
SHAREHOLDER TRANSACTION EVERGREEN 100% U.S. U.S. U.S. FUND
EXPENSES FUND TREASURY TREASURY GOVERNMENT PRO FORMA
Maximum Sales Load
Imposed on Purchases
(as a percentage of
offering price).......... None None None None None
Maximum Sales Load
Imposed on Reinvested
Dividends (as a
percentage of offering
price)................... None None None None None
Contingent Deferred
Sales Charge............. None None None None None
Exchange Fee............... None None None None None
Redemption Fees............ None None None None None
ANNUAL FUND OPERATING
EXPENSES
(as a percentage of
average daily net
assets)
Management Fees........... 0.35%(2) 0.00%(3) 0.50%(3) 0.50%(3) 0.35%
-8- <PAGE>
12b-1 Fees............... 0.30%(1) ---- 0.25%(4) 0.25%(4) 0.30%(1)
Other Expenses........... 0.14% 0.50%(5) 0.30%(5) 0.34%(5) 0.09%
Annual Fund Operating
Expenses................. 0.79%(2) 0.50% 1.05%(5) 1.09%(5) 0.74%(6)(7)
(1) Evergreen Fund Class A shares can pay up to 0.75% of Class A shares'
average daily net assets as a Rule 12b-1 fee. For at least one year,
the Class A shares' 12b-1 fee will be limited to 0.30% of Class A
shares' average daily net assets. If Class A shares were to pay 0.75%
in 12b-1 fees, long-term shareholders may pay more than the equivalent
of the maximum front-end sales charges permitted by the Rules of the
National Association of Securities Dealers.
(2) The Evergreen Fund Class A shares' Annual Fund Operating Expenses
were 0.78% for the fiscal year ended December 31, 1994. Class A shares'
Annual Fund Operating Expenses for the Evergreen Fund, absent after the
voluntary advisory fee waiver of 0.28% 0.16% of average daily net
assets would have been 1.06% were 0.63% for the fiscal year period ended
December 31, 1994. Class A shares' Annual Fund Operating Expenses for
the Evergreen Fund have been adjusted to reflect current fee
arrangements. August 31, 1995.
(3) Includes(3) For the FFB U.S. Treasury Fund and FFB U.S. Government
Fund includes Administrative Expenses of 0.15% payable to the
administrator. Certain Advisory Fees and Administrative Expenses will
be waived or reimbursed for the FFB 100% U.S. Treasury Fund's first year
of operations. Absent these waivers, Advisory Fees and Administrative
Expenses would be 0.22%.
(4) Institutional Class shares of the FFB U.S. Treasury Fund and FFB
U.S. Government Fund can each pay up to 0.25% of Institutional Class
shares' average daily net assets as a 12b-1 fee.
(5) Other Expenses include a shareholder servicing charge of 0.05% 0.25%
for each of the FFB U.S. Treasury Fund and FFB U.S. Government Fund.
Absent After voluntary waivers, shareholder servicing charges would be
0.25% 0.03% for the FFB U.S. Treasury Fund and FFB U.S. Government Fund.
Absent After voluntary waivers, Other Expenses and Annual Fund Operating
Expenses would be 0.28% 0.08% and 1.03% 0.58%, respectively, for the FFB
U.S. Treasury Fund and 0.32% 0.12% and 1.07% 0.62%, respectively, for
the FFB U.S. Government Fund. After voluntary waivers, no shareholder
servicing fees were incurred by the FFB 100% U.S. Treasury Fund. After
voluntary waivers. Other Expenses and Annual Fund Operating Expenses
would be 0.25% and 0.25%, respectively.
(6) The Evergreen Fund Pro Forma Operating Expenses after voluntary fee
waivers of 0.15% of average net assets would have been 0.59% for the
twelve months ended June 30, 1995.
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(7) The Evergreen Fund Pro Forma Annual Fund Operating Expenses assume
the consummation of the Reorganization of the FFB 100% Treasury Money
Market Fund, FFB U.S. Government Fund and FFB U.S. Treasury Fund with
the Evergreen Fund. If one or more of these Reorganizations are not
approved, the effect on the Evergreen Fund's Pro Forma Annual Fund
Operating Expenses would not be greater than 0.02%.
EXAMPLES. The following tables show for each FFB Fund, and for the
Evergreen Fund, assuming consummation of the Reorganizations, examples
of the cumulative effect of shareholder transaction expenses and annual
fund operating expenses indicated above on a $1,000 investment in Class
A shares of the Evergreen Fund and Service Class and Institutional Class
shares of the FFB Funds for the periods specified, assuming (i) a 5%
annual return, and (ii) redemption at the end of such period.
EVERGREEN
EVERGREEN FFB Funds FUND
FUND U.S. 100% U.S. U.S. CLASS A
CLASS A TREASURY TREASURY GOVERNMENT SHARES
SHARES SERVICE CLASS SHARES PRO FORMA
After 1 year.......... $8 $12 $5 $12 $8
After 3 years......... $25 $37 $16 $38 $24
After 5 years......... $44 $63 N/A $65 $41
After 10 years........ $98 $140 N/A $144 $92
EVERGREEN
EVERGREEN FFB Funds FUND
FUND U.S. 100% U.S. U.S. CLASS A
CLASS A TREASURY TREASURY GOVERNMENT SHARES
SHARES INSTITUTIONAL CLASS SHARES PRO FORMA
After 1 year....... $8 $11 $5 $11 $8
After 3 year....... $25 $33 $16 $35 $24
After 5 years...... $44 $58 N/A $60 $41
After 10 years..... $98 $128 N/A $133 $92
The purpose of the foregoing examples is to assist an FFB Fund
shareholder in understanding the various costs and expenses that an
investment in the Class A shares of the Evergreen Fund as a result of
the Reorganizations would bear directly and indirectly, as compared with
the various direct and indirect expenses currently borne by a
shareholder in the FFB Fund. These examples should not be considered a
representation of past or future expenses or annual return. Actual
expenses may be greater or less than those shown.
-10- <PAGE>
SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
ADDITIONAL INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS/PROXY
STATEMENT, AND, TO THE EXTENT NOT INCONSISTENT WITH SUCH ADDITIONAL
INFORMATION, THE PROSPECTUSES OF THE EVERGREEN FUND DATED JULY 7, 1995
AND THE PROSPECTUSES OF THE FFB FUNDS DATED JUNE 30, 1995 AND OCTOBER 7,
1994 (WHICH ARE INCORPORATED HEREIN BY REFERENCE), THE PLAN AND THE
INTERIM ADVISORY AGREEMENT, FORMS OF WHICH ARE ATTACHED TO THIS
PROSPECTUS/PROXY STATEMENT AS EXHIBITS A AND B, RESPECTIVELY.
PROPOSED PLAN OF REORGANIZATION
Each Plan provides for the transfer of substantially all of the
assets of the FFB Fund in exchange for Class A shares of the Evergreen
Fund and the assumption by the Evergreen Fund of certain identified
liabilities of the FFB Fund. (The FFB Funds and the Evergreen Fund each
may also be referred to in this Prospectus/Proxy Statement as a "Fund"
and together, as the "Funds"). "Funds".) Each Plan also calls for the
distribution of Class A shares of the Evergreen Fund to FFB Fund's
shareholders in liquidation of the FFB Fund as part of the
Reorganization. As a result of the Reorganizations, the shareholders of
the FFB Funds will become the owners of that number of full and
fractional Class A shares of the Evergreen Fund determined by dividing
the value of the assets of each of the FFB Funds to be acquired by the
ratio of multiplying the shares outstanding of each class of the
particular FFB Fund by the ratio computed by dividing the net asset
value per share of the Evergreen Fund and each such class of the
particular FFB Fund by the net asset value per share of the Evergreen
Fund as of the close of business on the date that the FFB Funds' assets
are exchanged for shares of the Evergreen Fund. See "Information About
the Reorganization."
The Trustees of FFB Funds Trust, including the Trustees who are not
"interested persons," as such term is defined in the 1940 Act (the
"Independent Trustees"), have concluded that the Reorganizations would
be in the best interests of shareholders of the FFB Funds and that the
interests of the shareholders of the FFB Funds will not be economically
diluted as a result of the transactions contemplated by the
Reorganizations. Accordingly, the Trustees have submitted the Plan for
the approval of FFB Funds' shareholders.
THE BOARD OF TRUSTEES OF FFB FUNDS TRUST RECOMMENDS APPROVAL BY
SHAREHOLDERS OF EACH FFB FUND OF THE PLAN EFFECTING THE REORGANIZATION.
The Trustees of Evergreen Investment Trust have also approved the
Plan, and accordingly, the Evergreen Fund's participation in the
Reorganizations.
Approval of the Reorganization Plan on the part of each FFB Fund
will require the affirmative vote of more than 50% of the outstanding
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voting securities of that FFB Fund, with shares of both classes voting
together as one class. See "Voting Information Concerning the Meeting."
Since Assuming the merger (the "Merger") of First Fidelity
Bancorporation ("FFB") with and into a wholly-owned subsidiary of First
Union Corporation ("First Union") is consummated, it will take place
prior to the closing date for the Reorganization and because the Merger
by law terminates the investment advisory contract between First
Fidelity Bank, N.A. ("First Fidelity") and each FFB Fund, arrangements
have been made to enter into the Interim Advisory Agreement with the
Capital Management Group of First Union National Bank of North Carolina.
Each Interim Advisory Agreement will have the same terms and fees as the
current investment advisory agreement between each FFB Fund and First
Fidelity and will be in effect for the period of time between the
effective date of the Merger and the closing date for the
Reorganization. The Reorganization is scheduled to take place on or
about January 19, 1996.
Approval of the Interim Advisory Agreement requires the affirmative
vote of (i) 67% or more of the shares of the FFB Fund present in person
or by proxy at the Meeting, if holders of more than 50% of the shares of
the FFB Fund outstanding on the record date are present, in person or by
proxy, or (ii) more than 50% of the outstanding shares of the FFB Fund,
whichever is less. See "Voting Information Concerning the Meeting."
If the shareholders of any FFB Fund do not vote to approve the
Reorganization, the Trustees of FFB Funds Trust will consider other
possible courses of action in the best interests of shareholders. If
the Merger is not completed, the Reorganizations of the FFB Funds and
the Evergreen Fund will not be completed regardless of the vote of the
FFB Funds' shareholders.
TAX CONSEQUENCES
Prior to or at the completion of the Reorganization, each FFB Fund
will have received an opinion of counsel that the Reorganization has
been structured so that no gain or loss will be recognized by the FFB
Fund or its shareholders for federal income tax purposes as a result of
the receipt of shares of the Evergreen Fund in the Reorganization. The
holding period and aggregate tax basis of Class A shares of the
Evergreen Fund that are received by FFB Fund shareholders will be the
same as the holding period and aggregate tax basis of shares of the FFB
Fund previously held by such shareholders, provided that shares of the
FFB Fund are held as capital assets. In addition, the holding period and
tax basis of the assets of the FFB Fund in the hands of the Evergreen
Fund as a result of the Reorganization will be the same as in the hands
of the FFB Fund immediately prior to the Reorganization and no gain or
loss will be recognized by the Evergreen Fund upon the receipt of the
assets of the FFB Fund in exchange for Class A shares of the Evergreen
Fund and the assumption by the Evergreen Fund of certain identified
liabilities.
-12-<PAGE>
INVESTMENT OBJECTIVES AND POLICIES OF THE EVERGREEN FUND AND THE FFB
FUNDS
Both the Evergreen Fund and the FFB Funds have substantially
similar investment objectives. The investment objective of the
Evergreen Fund is to seek to achieve stability of principal and current
income consistent with stability of principal. The FFB Funds seek to
achieve as high a level of current income as is consistent with
preserving capital and providing liquidity. Each Fund seeks to maintain
a stable net asset value of $1.00 per share.
The Evergreen Fund and the FFB U.S. Treasury Fund invest in short-
term direct obligations of the U.S. Treasury. The FFB 100% Treasury
Fund invests in the same securities, but, unlike the Evergreen Fund and
the FFB U.S. Treasury Fund, the FFB 100% Treasury Fund cannot invest in
repurchase agreements or when-issued securities. Neither the FFB U.S.
Treasury Fund nor the FFB U.S. Government Fund invests in when-issued
securities. The FFB U.S. Government Fund invests in short-term
obligations of the U.S. Treasury and, in addition, unlike the Evergreen
Fund, invests in obligations issued or guaranteed by agencies or
instrumentalities of the U.S. Government. See "Comparison of Investment
Objectives and Policies" below.
COMPARATIVE PERFORMANCE INFORMATION OF EACH FUND
Discussions of the manner of calculation of total return and yield
are contained in the respective Prospectuses and Statements of
Additional Information of the Funds. The following table sets forth the
current yield and effective yield of the Class A Shares of the Evergreen
Fund and the Service Class and Institutional Class Shares of the FFB
Funds for the 7 day period ended June 30, 1995 and the total return of
each such Class of the FFB Fund Funds and Class A shares of the
Evergreen Fund for the one and five year periods ended June 30, 1995 and
the period from inception through June 30, 1995. The calculations of
total return assume the reinvestment of all dividends and capital gains
distributions on the reinvestment date and the deduction of all
recurring expenses (including sales charges) that were charged to
shareholders' accounts.
EFFECTIVE YIELD-
CURRENT YIELD-7 DAYS 7 DAYS ENDED
ENDED 6/30/95* 6/30/95*
Evergreen Fund
Class A shares.............. 5.44% 5.56%
FFB Funds
U.S. Treasury
Service Class shares.... N/A N/A
Institutional Class
shares............... 5.38% 5.52%
100% U.S. Treasury
-13- <PAGE>
Service Class shares... N/A N/A
Institutional Class
shares.............. 5.52% 5.67%
U.S. Government
Service Class shares... N/A N/A
Institutional Class
shares.............. 5.21% 5.35%
AVERAGE ANNUALIZED COMPOUNDED TOTAL RETURN*
SINCE INCEPTION
1 YEAR 5 YEAR INCEPTION DATE
Evergreen Fund
Class A shares.............. 4.89% N/A 3.94% 3/6/91
FFB Funds
U.S. Treasury
Service Class shares.... N/A N/A N/A N/A
Institutional Class
shares.............. 4.88% 4.33% 5.56% 9/30/86
100% U.S. Treasury
Service Class shares.... N/A N/A N/A N/A
Institutional Class
shares............. N/A N/A 3.17% 4/10/95
U.S. Government
Service Class shares.... N/A N/A N/A N/A
Institutional Class
shares............. 4.90% 4.35% 5.68% 7/16/86
* Reflects waiver of advisory fees and reimbursements and/or waivers of
expenses. Without such reimbursements and/or waivers, the yield and
average annual total return during the period would have been lower.
MANAGEMENT OF THE FUNDS
The overall management of the Evergreen Investment Trust and of FFB
Funds Trust is the responsibility of, and is supervised by, their
respective Board of Trustees.
INVESTMENT ADVISERS AND ADMINISTRATORS
Evergreen Fund. The Capital Management Group ("CMG"), a division
of the First Union National Bank of North Carolina ("FUNB"), serves as
investment adviser to the Evergreen Fund. The address of FUNB is One
First Union Center, 301 S. College Street, Charlotte, North Carolina
28288. FUNB is a subsidiary of First Union, one of the ten largest
banking holding companies in the United States.
First Union is a bank holding company headquartered in Charlotte,
North Carolina, which had $83.1 billion in consolidated assets as of
-14- <PAGE>
June 30, 1995. First Union and its subsidiaries provide a broad range
of financial services to individuals and businesses through offices in
36 37 states. CMG and Evergreen Asset Management Corp. ("Evergreen
Asset"), a wholly-owned subsidiary of FUNB, manage or otherwise oversee
the investment of over $29.1 billion in assets belonging to a wide range
of clients, including the Evergreen family of mutual funds. First Union
Brokerage Services, Inc., a wholly-owned subsidiary of FUNB, is a
registered broker-dealer that is principally engaged in providing retail
brokerage services consistent with its federal banking authorizations.
First Union Capital Markets Corp., a wholly-owned subsidiary of First
Union, is a registered broker-dealer principally engaged in providing,
consistent with its federal banking authorizations, private placement,
securities dealing, and underwriting services.
CMG manages investments and supervises the daily business affairs
of the Evergreen Fund. As compensation therefor, CMG is entitled to
receive an annual fee from the Evergreen Fund equal to 0.35% of the
average daily net assets.
Evergreen Asset serves as administrator to the Evergreen Fund.
Evergreen Asset, with its predecessors, has served as investment adviser
and administrator to the Evergreen family of mutual funds since 1971.
In its capacity as administrator, Evergreen Asset is entitled to
receive a fee based on the average daily net assets of the Evergreen
Fund at a rate based on the total assets of the mutual funds
administered by Evergreen Asset for which CMG or Evergreen Asset also
serve as investment adviser, calculated in accordance with the following
schedule: 0.050% of the first $7 billion; 0.035% on the next $3
billion; 0.030% on the next $5 billion; 0.020% on the next $10 billion;
0.015% on the next $5 billion; and 0.010% on assets in excess of $30
billion. Furman Selz Incorporated ("Furman Selz"), an affiliate of
Evergreen Funds Distributor, Inc., distributor for the Evergreen family
of mutual funds, serves as sub-administrator to the Evergreen Fund and
is entitled to receive a fee from the Fund calculated on the average
daily net assets of the Fund at a rate based on the total assets of the
mutual funds administered by Evergreen Asset for which CMG or Evergreen
Asset also serve as investment adviser, calculated in accordance with
the following schedule: 0.0100% of the first $7 billion; 0.0075% on the
next $3 billion; 0.0050% on the next $15 billion; and 0.0040% on assets
in excess of $25 billion. The total assets of the mutual funds
administered by Evergreen Asset for which CMG or Evergreen Asset serve
as investment adviser as of June 30, 1995 were approximately $8.7
billion. For further information regarding Evergreen Asset, FUNB and
First Union, see "Management of the Funds --Investment Advisers" in the
Prospectus of the Evergreen Fund.
FFB Fund. First Fidelity Bank, N.A. ("First Fidelity") serves as
the investment adviser for the FFB Funds and provides investment
guidance consistent with each Fund's investment objective and policies
and provides administrative assistance in connection with the operation
of the FFB Funds. First Fidelity also acts as transfer agent, custodian
-15- <PAGE>
and dividend disbursing agent for the FFB Funds. Furman Selz acts as
administrator of the FFB Funds. Furman Selz provides personnel, office
space and all management and administrative services reasonably
necessary for the operation of the FFB Funds Trust and the FFB Funds
(such as maintaining the FFB Funds' books and records, monitoring
compliance with various state and Federal federal laws and assisting the
Trustees in the execution of their duties) other than those services
which are provided by First Fidelity.
As compensation for their investment advisory, administrative or
management services to the FFB U.S. Treasury Fund and U.S. Government
Fund, First Fidelity and Furman Selz are each paid a monthly fee at the
following annual rates:
Portion of Average Daily Fee Rate
Net Assets of First Furman
each FFB Fund Fidelity Selz
Not exceeding $500 million................... 0.350% 0.150%
In excess of $500 million
but not exceeding $1 billion............... 0.315% 0.135%
In excess of $1 billion
but not exceeding $1.5 billion............. 0.280% 0.120%
In excess of $1.5 billion.................... 0.245% 0.105%
As compensation for their investment advisory, administrative or
management services to the FFB 100% Treasury Fund, First Fidelity and
Furman Selz are paid a monthly fee at an annual rate of 0.14% and 0.08%,
respectively.
DISTRIBUTION OF SHARES
Evergreen Funds Distributor, Inc. ("EFD"), an affiliate of Furman
Selz, acts as underwriter of the Evergreen Fund's shares. EFD
distributes the Evergreen Fund shares directly or through
broker-dealers, including an affiliate of FUNB, banks, including FUNB,
or other financial intermediaries. The Evergreen Fund offers three
classes of shares, Class A, Class B and Class Y. Each Class has
separate distribution arrangements. (See "Distribution-Related and
Shareholder Servicing-Related Expenses" below.) No Class bears the
distribution expenses relating to the shares of any other Class.
Class A shares of the Evergreen Fund, which will be received by the
FFB Funds' shareholders if the Reorganizations are approved consummated,
can be purchased at net asset value without an initial sales charge.
Certain broker-dealers or other financial institutions may, however,
impose a fee in connection with purchases at net asset value. For a
description of the Class A and Class B shares issued by the Evergreen
Fund see "Purchase and Redemption of Shares" and "General Information -
Organization; Other Classes of Shares" in the Evergreen Fund's
Prospectus. Class Y shares of the Evergreen Fund are sold without a
-16- <PAGE>
sales load or distribution fee only to certain eligible investors as
described in a separate Evergreen Fund Prospectus.
Shares of the FFB Funds are offered in two classes, Service Class
and Institutional Class. Service Class shares are offered to investors
who are not purchasing shares of the FFB Funds through the Trust
Department or Wholesale Bank Division of First Fidelity or other banks
or financial institutions and may be subject to shareholder servicing
charges of up to 0.35% of average daily net assets of the FFB Fund of
which the customer is a shareholder. Investors who purchase and redeem
shares of the FFB Funds through a customer account maintained at a
Participating Organization may be charged additional fees by such
Participating Organization not to exceed 0.35% on an annualized basis of
the average daily value during the month of FFB Fund shares in the
subaccounts of for which the Participating Organization is record owner
as nominee for its customers. To date, no fees have been charged. Each
FFB Fund other than the FFB 100% U.S. Treasury Fund has adopted for its
Service Class and Institutional Class shares a Rule 12b-1 distribution
plan as described in "Distribution-Related and Shareholder Servicing-
Related Expenses" below.
Institutional Class shares are offered to investors who are
customers of the Trust Department and Wholesale Bank Division of First
Fidelity or other banks or financial institutions and are identical to
Service Class shares but include fewer individual shareholder
communication services at a lower servicing fee. Institutional Class
shares may be subject to shareholder servicing charges of up to 0.25% of
average daily net assets of the FFB Fund of which the customer is a
shareholder. Currently, 0.05% is being charged. Investors who purchase
and redeem shares of the FFB Funds through a Participating Organization
may be charged additional fees as described above by such Participating
Organization.
DISTRIBUTION-RELATED AND SHAREHOLDER SERVICING-RELATED EXPENSES
.
Evergreen Fund. The Evergreen Fund has adopted for its Class A
shares a Rule 12b-1 plan (the "12b-1 Plan"). Pursuant to the 12b-1
Plan, the Evergreen Fund may incur distribution-related and shareholder
servicing-related expenses which may not exceed an annual rate of 0.75%
of the Fund's aggregate average daily net assets attributable to Class A
shares. Payments with respect to Class A shares under the 12b-1 Plan
are currently voluntarily limited to 0.30% of the Evergreen Fund's
aggregate average daily net assets attributable to Class A shares. The
12b-1 Plan provides that a portion of the fee payable thereunder may
constitute a service fee to be used for providing ongoing personal
services and/or the maintenance of shareholder accounts. Service fee
payments to financial intermediaries for such purposes will not exceed
0.25% of the aggregate average daily net assets attributable to any
Class of shares of the Evergreen Fund.
The Evergreen Fund has also entered into a distribution agreement
(the "Distribution Agreement") with EFD. Pursuant to the Distribution
-17-<PAGE>
Agreement, the Evergreen Fund will compensate EFD for its services at a
rate which may not exceed an annual rate of 0.30% of the Evergreen
Fund's aggregate average daily net assets attributable to Class A
shares.
The Evergreen Fund may not pay any distribution or services fees
during any fiscal period in excess of the amounts set forth above.
Since EFD's compensation under the Distribution Agreement is not
directly tied to the expenses incurred by EFD (unlike the FFB Fund's
plan described below which is a "reimbursement" type plan), the amount
of compensation received by it under the Distribution Agreement during
any year may be more or less than its actual expenses and may result in
a profit to EFD. Distribution expenses incurred by EFD in one fiscal
year that exceed the level of compensation paid to EFD for that year may
be paid from distribution fees received from a the Fund in subsequent
fiscal years.
FFB Funds. The FFB U.S. Treasury Fund and the FFB U.S. Government
Fund have each adopted a Master Distribution Plan (the "FFB Plan") for
both the Service Class and the Institutional Class pursuant to Rule 12b-
1 of the 1940 Act. The FFB Plan provides for a monthly payment by the
FFB Fund to its distributor, FFB Funds Distributor, Inc. ("FFB Funds
Distributor"), an affiliate of Furman Selz, in such amounts that FFB
Funds Distributor may request for direct and indirect distribution
expenses, subject to periodic Board approval and to an overall expense
limitation. Each such payment is based on the average daily value of
each FFB Fund's net assets during the preceding month and is calculated
at an annual rate not to exceed 0.25% per annum. Payments under the FFB
Plan are currently at the annual rate of 0.03% of each Fund's average
daily net assets.
PURCHASE AND REDEMPTION PROCEDURES
Information concerning applicable sales charges,
distribution-related fees and shareholder servicing-related fees are is
described above. Class A shares of the Evergreen Fund and shares of the
FFB Funds are offered at net asset value without an initial sales charge
by their respective distributors. Investments in the Funds are not
insured. The minimum initial purchase requirement for each Class of
shares of each Fund is $1,000. There is no minimum for subsequent
purchases of Evergreen Fund shares. The minimum for subsequent
investments of in FFB Fund shares is $100. Each Fund provides for
telephone, mail or wire redemption of shares at net asset value as next
determined after receipt of a redemption request on each day the New
York Stock Exchange is open for trading. Additional information
concerning purchases and redemptions of shares, including how each
Fund's net asset value is determined, is contained in the respective
Prospectuses for each Fund. The Evergreen Fund and the FFB Funds may
involuntarily redeem shareholders' accounts that have less than $1,000
and $500, respectively, of invested funds. For the FFB Funds, there are
no minimum investment requirements with respect to investments effected
through certain automatic purchase and redemption arrangements on behalf
-18-<PAGE>
of customer accounts maintained at Participating Organizations. The
minimum investment requirements in the FFB Funds may be waived or
lowered for investments effected on a group basis by certain other
institutions and their employees. All funds invested in each Fund are
invested in full and fractional shares. The Funds reserve the right to
reject any purchase order.
EXCHANGE PRIVILEGES
The FFB Funds currently permit shareholders to exchange shares for
shares of the same Class of other funds managed by First Fidelity.
Holders of shares of a Class of the Evergreen Fund generally may
exchange their shares for shares of the same Class of any other funds of
the Evergreen mutual fund family. FFB Fund shareholders will be
receiving Class A shares of the Evergreen Fund in the Reorganizations
and, accordingly, with respect to shares of the Evergreen Fund received
by FFB Fund shareholders in the Reorganizations, the exchange privilege
is limited to the Class A shares of other funds of the Evergreen mutual
fund family. In addition, exchanges in the Evergreen mutual fund family
may be limited to five exchanges per calendar year, with a maximum of
three per calendar quarter. No sales charge is imposed on an exchange.
An exchange which represents an initial investment in another fund of
the Evergreen mutual fund family must amount to at least $1,000. The
current exchange privileges, and the requirements and limitations
attendant thereto, are described in the Funds' respective Prospectuses
and Statements of Additional Information.
DIVIDEND POLICY
Each Fund declares income dividends daily and pays such dividends
monthly. Dividends and distributions are reinvested in additional shares
of the same Class of the respective Fund, or paid in cash, as a
shareholder has elected. See the respective Prospectuses of the Funds
for further information concerning dividends and distributions.
After the Reorganizations, shareholders of the FFB Funds that have
elected (or that so elect no later than November 13 21, 1995), to have
their dividends and/or distributions reinvested, will have dividends
and/or distributions received from the FFB Funds Evergreen Fund
reinvested in shares of the Evergreen Fund. Shareholders of the FFB
Funds that have elected (or that so elect no later than November 13 21,
1995) to receive dividends and/or distributions in cash will receive
dividends and/or distributions from the Evergreen Fund in cash after the
Reorganizations, although they may, after the Reorganization
Reorganizations, elect to have such dividends and/or distributions
reinvested in additional shares of the Evergreen Fund.
Each Fund has qualified and intends to continue to qualify to be
treated as a regulated investment company under the Internal Revenue
Code of 1986, as amended (the "Code"). While so qualified, so long as
each Fund distributes all of its investment company taxable income and
any net realized gains to shareholders, it is expected that a Fund will
-19-<PAGE>
not be required to pay any federal income taxes on the amounts so
distributed. A 4% nondeductible excise tax will be imposed on amounts
not distributed if a Fund does not meet certain distribution
requirements by the end of each calendar year. Each Fund anticipates
meeting such distribution requirements.
RISKS
In general, an investment in the Funds entails substantially the
same risks. The Evergreen Fund invests only in securities that have
remaining maturities of 397 days (thirteen months) or less at the date
of purchase. The Funds maintain a dollar-weighted average portfolio
maturity of ninety days or less. The Evergreen Fund, as a matter of
investment strategy, intends to maintain a dollar-weighted average
maturity of 60 days or less. The Funds follow these policies to
maintain a stable net asset value of $1.00 per share, although there is
no assurance they can do so on a continuing basis.
The FFB U.S. Government Fund may invest in obligations issued by
agencies or instrumentalities of the United States Government. Some of
these obligations may not be supported by the full faith and credit of
the United States Government and, therefore, may be subject to certain
risks. In addition, the available yields on such agency or
instrumentality obligations are usually greater than direct obligations
of the United States Treasury. See "Comparison Of of Investment
Objectives And and Policies."
Unlike certain of the FFB Funds, the Evergreen Fund may invest in
when-issued securities and repurchase agreements. See "Comparison of
Investment Objectives and Policies." The seller's failure to complete a
when-issued securities transaction may cause the Fund to miss a price or
yield considered to be advantageous. Since the settlement date of such
transactions are in the future, the Fund may pay more or less than the
market values of the securities on the settlement date. With respect to
repurchase agreements, in the event a vendor defaults on its repurchase
obligation, the Fund might suffer a loss to the extent that the proceeds
from the sale of the collateral securing the repurchase obligation were
less than the repurchase price.
Although the FFB Funds may not invest in when-issued securities and
the FFB 100% U.S. Treasury Fund may not invest in repurchase agreements,
management of the Evergreen Fund does not believe its ability to make
these types of investments results in increased risk. Transactions
entered into by the Evergreen Fund on a when-issued basis are limited to
short-term U.S. Treasury securities which are not generally subject to
significant fluctuations in value. Similarly, any repurchase
transactions entered into by the Evergreen Fund will be collateralized
only by U.S. Treasury securities.
-20- <PAGE>
INFORMATION ABOUT THE REORGANIZATION
DESCRIPTION OF THE MERGER
On June 18, 1995, First Union entered into an Agreement and Plan of
Merger (the "Merger Agreement") with FFB, the corporate parent of First
Fidelity, which provides, among other things, for the Merger of FFB with
and into a wholly-owned subsidiary of First Union, subject to the terms
and conditions contained in the Merger Agreement. It is currently
expected that the Merger will be consummated by January 1, 1996, subject
to the satisfaction of various conditions of closing set forth in the
Merger Agreement. Consummation of the Merger is expected to result in
the nation's sixth largest bank holding company, with assets of
approximately $118.5 billion based on total assets. Currently, First
Union is the nation's ninth largest bank holding company, with assets of
$83.1 billion as of June 30, 1995, and FFB is the 25th 27th largest,
having $35.4 billion in assets as of June 30, 1995.
Consummation of the Merger is subject to receipt of regulatory and
stockholder approvals, as well as other conditions set forth in the
Merger Agreement. No assurance can be given that the Merger will be
consummated. In connection with the execution of the Merger Agreement,
Banco Santander, S.A. ("Santander"), the owner of approximately 30
percent of the outstanding shares of FFB's common stock, agreed, among
other things, to vote such shares in favor of the Merger Agreement. It
is anticipated that subsequent to the Merger, Santander will own
approximately 11% of First Union's outstanding shares of common stock.
The Merger is not in any way conditioned upon the approval by
shareholders of any mutual fund currently managed by First Fidelity, and
it is expected that the Merger will take place whether or not the
transaction described herein is approved by such shareholders.
As a result of the Merger, it is expected that FUNB and Evergreen
Asset will succeed to the investment advisory and administrative
functions currently performed for the FFB Funds by various units of
First Fidelity. It is also expected that First Fidelity, or its
successors, will no longer provide investment advisory or administrative
services to investment companies.
REASONS FOR THE REORGANIZATION
The Board of Trustees of FFB Funds Trust has considered and
approved each Reorganization, including entry by FFB Funds Trust on
behalf of each FFB Fund into the Plan, as in the best interests of the
shareholders. In addition, the Trustees have approved the Interim
Advisory Agreement with respect to each FFB Fund.
As noted above, FFB has agreed to merge with and into a wholly-
owned subsidiary of First Union. FFB is the parent company of First
Fidelity, investment adviser to the mutual funds which comprise FFB
-21- <PAGE>
Funds Trust. The Merger will cause, as a matter of law, termination of
the investment advisory agreement between each of the First Fidelity
portfolio of FFB Funds Trust and First Fidelity. Accordingly, the
Trustees have considered the recommendation of First Fidelity that the
Trustees approve the proposed Reorganizations.
In making their recommendation to the Trustees, the representatives
of the respective banks First Fidelity and FUNB reviewed with the
Trustees various factors about the Funds and the proposed
Reorganizations. Except for the FFB U.S. Government Fund's ability to
invest in obligations of agencies and instrumentalities of the U.S.
Government, there are substantial similarities between the Evergreen
Fund and the FFB Funds. Specifically, the Evergreen Fund and the FFB
Funds have substantially similar investment objectives and policies, and
comparable risk profiles. See, "Comparison of Investment Objectives and
Policies" below. In terms of total net assets, the FFB Fund, U.S.
Treasury Fund, FFB 100% U.S. Treasury Fund and FFB U.S. Government Fund
at June 30, 1995, had net assets of approximately $1 billion, $15.3
million and $227.6 million, respectively. The Evergreen Fund's net
assets at such date were approximately $1.4 billion. If the
Reorganization Reorganizations had taken place as of June 30, 1995, the
Evergreen Fund's net assets would have been approximately $2.6 billion
and. First Fidelity and FUNB expect that the substantially increased
assets of the Evergreen Fund will result in economies of scale and the
delivery of more efficient investment management and shareholder
services.
In addition, assuming that an alternative to the Reorganizations
would be to propose that the FFB Funds be separately managed by
Evergreen Asset CMG or another affiliate of FUNB following the
consummation of the Merger, the FFB Funds would thereafter share the
same investment management resources and be offered through common
distribution channels with the substantially identical Evergreen Fund.
Each FFB Fund would also have to bear the cost of maintaining its
separate existence. First Fidelity and FUNB believe that the prospect
of dividing the resources of the FUNB/Evergreen mutual fund organization
between four substantially identical funds Funds could result in each
fund Fund being disadvantaged due to an inability to achieve optimum
size, performance levels and the greatest possible economies of scale.
Accordingly, for the reasons noted above and recognizing that there can
be no assurance that any economies of scale or other benefits will be
realized, both First Fidelity and FUNB believe that the proposed
Reorganizations would be in the best interest of each Fund and its
shareholders.
The Board of Trustees of FFB Funds Trust met and considered the
recommendation of First Fidelity and FUNB, and, in addition, considered
among other things, (i) the terms and conditions of the Reorganizations;
(ii) whether the Reorganizations would result in the economic dilution
of shareholder interests; (iii) expense ratios, fees and expenses of
each FFB Fund and the Evergreen Fund and of similar funds; the
comparative performance records of each of the Funds; compatibility of
-22-<PAGE>
their investment objectives and policies; service features available to
shareholders in the respective funds Funds; the investment experience,
expertise and resources of Evergreen Asset CMG; the service and
distribution resources available to the Evergreen family of mutual funds
and the broad array of investment alternatives available to shareholders
of the Evergreen family of mutual funds, including the future marketing
plans and resources expected to be used in connection with the Evergreen
family of mutual funds; and the personnel and financial resources of
First Union and its affiliates; (iv) the fact that FUNB will bear the
expenses incurred by each FFB Fund in connection with the
Reorganizations; (v) the fact that the Evergreen Fund will assume
certain identified liabilities of each FFB Fund; and (vi) the expected
federal income tax consequences of the Reorganizations.
The Trustees also considered the benefits to be derived by
shareholders of the FFB Funds from the sale of its assets to the
Evergreen Fund. In this regard, the Trustees considered the potential
benefits of being associated with a larger entity and the economies of
scale that could be realized by the participation by shareholders of the
FFB Funds in the combined fund. In addition, the Trustees considered
that there are alternatives available to shareholders of the FFB Funds,
including the ability to redeem their shares, as well as the option to
vote against a Reorganization.
During their consideration of the Reorganizations, the Trustees met
with FFB Fund counsel as well as counsel to the Independent Trustees
regarding the legal issues involved. The Trustees of the Evergreen
Investment Trust also concluded at a regular meeting on July 27, 1995
that the proposed Reorganizations would be in the best interests of
shareholders of the Evergreen Fund and that the interests of the
shareholders of the Evergreen Fund will not be diluted as a result of
the transactions contemplated by the Reorganizations.
The Trustees have voted to retain their ability to make claims
under their existing Directors and Officers Errors and Omissions
Liability Insurance Policy for a period of three years following the
consummation of the Reorganization. FFB and First Union have agreed to
take appropriate steps to insure that the cost of extending such
coverage will not be borne by the FFB Fund's shareholders.
THE TRUSTEES OF FFB FUNDS TRUST RECOMMEND THAT THE SHAREHOLDERS OF
THE FFB FUNDS APPROVE THE PROPOSED REORGANIZATIONS.
AGREEMENT AND PLAN OF REORGANIZATION
The following summary is qualified in its entirety by reference to
the Plan (Exhibit A hereto).
Each Plan provides that the Evergreen Fund will acquire
substantially all of the assets of the FFB Fund in exchange for Class A
shares of the Evergreen Fund and the assumption by the Evergreen Fund of
-23-<PAGE>
certain identified liabilities of the FFB Fund on or about January 19,
1996 or such other date as may be agreed upon by the parties (the
"Closing Date"). Prior to the Closing Date, the FFB Fund will endeavor
to discharge all of its known liabilities and obligations. The Evergreen
Fund will not assume any liabilities or obligations of the FFB Fund
other than those reflected in an unaudited statement of assets and
liabilities of the FFB Fund prepared as of the close of regular trading
on the New York Stock Exchange, Inc. (the "NYSE"), currently 4:00 p.m.
Eastern Time, on the Closing Date. The number of full and fractional
Class A shares of the Evergreen Fund to be received by the shareholders
of the FFB Fund will be determined on the basis of the relative by
multiplying the shares outstanding of each class of the particular FFB
Fund by the ratio computed by dividing the net asset value per share of
Class A shares each such class of the Evergreen particular FFB Fund and
by the net asset values attributable to each Class of shares of each FFB
value per share of the Evergreen Fund, computed as of the close of
regular trading on the NYSE on the Closing Date. The net asset value per
share of each Class class will be determined by dividing assets, less
liabilities, in each case attributable to the respective Class class, by
the total number of outstanding shares. Since the Evergreen Fund and
the FFB Funds each maintain a value of $1.00 per share, the number of
full and fractional Class A shares which will be received by an FFB Fund
shareholder will equal the number of FFB Fund shares owned by such
shareholder.
State Street Bank and Trust Company, the custodian for the
Evergreen Fund, will compute the value of the Funds' each Fund's
respective portfolio securities. The method of valuation employed will
be consistent with the procedures set forth in the Prospectuses and
Statement of Additional Information of the Evergreen Fund, Rule 22c-1
under the 1940 Act, and with the interpretations of such rule by the
SEC's Division of Investment Management.
At or prior to the Closing Date, the each FFB Funds Fund shall have
declared a dividend or dividends and distribution or distributions
which, together with all previous dividends and distributions, shall
have the effect of distributing to the FFB Fund's shareholders (in
shares of each FFB Fund, or in cash, as the shareholder has previously
elected) all of each FFB Fund's investment company taxable income for
the taxable year ending on or prior to the Closing Date (computed
without regard to any deduction for dividends paid) and all of its net
capital gains realized in all taxable years ending on or prior to the
Closing Date (after reductions for any capital loss carryforward).
As soon after the Closing Date as conveniently practicable, each
FFB Fund will liquidate and distribute pro rata to shareholders of
record as of the close of business on the Closing Date the full and
fractional Class A shares of the Evergreen Fund received by each FFB
Fund. Such liquidation and distribution will be accomplished by the
establishment of accounts in the names of the FFB Funds' shareholders on
the share records of the Evergreen Fund's transfer agent. Each account
will represent the respective pro rata number of full and fractional
-24- <PAGE>
Class A shares of the Evergreen Fund due to the FFB Funds' shareholders.
All issued and outstanding shares of the FFB Funds, including those
represented by certificates, will be canceled. The Evergreen Fund does
not issue share certificates to shareholders. The shares of the
Evergreen Fund to be issued will have no preemptive or conversion
rights. After such distribution and the winding up of its affairs, each
FFB Fund will be terminated. In connection with such termination, each
FFB Fund will file with the SEC an application for termination as a
registered investment company.
The consummation of the Reorganization is subject to the conditions
set forth in the Plan for each FFB Fund, including approval by each FFB
Fund's shareholders, accuracy of various representations and warranties
and receipt of opinions of counsel, including opinions with respect to
those matters referred to in "Federal Income Tax Consequences" below.
Notwithstanding approval of the FFB Funds' Fund's shareholders, each
Plan may be terminated (a) by the mutual agreement of the FFB Fund and
the Evergreen Fund; or (b) at or prior to the Closing Date by either
party (i) because of a breach by the other party of any representation,
warranty, or agreement contained therein to be performed at or prior to
the Closing Date if not cured within 30 days, or (ii) because a
condition to the obligation of the terminating party has not been met
and it reasonably appears that it cannot be met.
The expenses of the FFB Funds in connection with the
Reorganizations (including the cost of any proxy soliciting agents) and
the expenses of the Evergreen Fund (other than securities registration
fees) will be borne by FUNB. No portion of such expenses shall be borne
directly or indirectly by the FFB Funds or their shareholders.
Following the Reorganizations, the Evergreen Fund will not be assuming
any liabilities or making any reimbursements in connection with the
12b-1 Plan or shareholder servicing arrangements of the FFB Funds. No
portion of such expenses shall be borne directly or indirectly by the
FFB Funds or their shareholders. If the Merger is not completed, First
Fidelity will bear the expenses of the FFB Fund Funds and FUNB will bear
the expenses of the Evergreen Fund.
If the Reorganization is not approved by shareholders of an FFB
Fund, the Board of Trustees of the FFB Funds Trust will consider other
possible courses of action in the best interests of shareholders. If
the Merger is not completed, the Reorganizations will not be completed
regardless of the vote of the FFB Funds' shareholders.
FEDERAL INCOME TAX CONSEQUENCES
Each Reorganization is intended to qualify for federal income tax
purposes as a tax-free reorganization under section 368(a) of the Code.
As a condition to the closing of a Reorganization, each FFB Fund will
receive an opinion of counsel to the effect that, on the basis of the
existing provisions of the Code, U.S. Treasury regulations issued
thereunder, current administrative rules, pronouncements and court
-25-<PAGE>
decisions, for federal income tax purposes, upon consummation of the
Reorganization:
(1) The transfer of substantially all of the assets of the FFB
Fund solely in exchange for shares of the Evergreen Fund and the
assumption by the Evergreen Fund of certain identified liabilities,
followed by the distribution of the Evergreen Fund's shares by the FFB
Fund in dissolution and liquidation of the FFB Fund, will constitute a
"reorganization" within the meaning of section 368(a)(1)(C) of the Code,
and the Evergreen Fund and the FFB Fund will each be a "party to a
reorganization" within the meaning of section 368(b) of the Code;
(2) No gain or loss will be recognized by the FFB Fund on the
transfer of substantially all of its assets to the Evergreen Fund solely
in exchange for the Evergreen Fund's shares and the assumption by the
Evergreen Fund of certain identified liabilities of the FFB Fund or upon
the distribution of the Evergreen Fund's shares to the FFB Fund's
shareholders in exchange for their shares of the FFB Fund;
(3) The tax basis of the assets transferred will be the same
to the Evergreen Fund as the tax basis of such assets to the FFB Fund
immediately prior to the Reorganization, and the holding period of such
assets in the hands of the Evergreen Fund will include the period during
which the assets were held by the FFB Fund;
(4) No gain or loss will be recognized by the Evergreen Fund
upon the receipt of the assets from the FFB Fund solely in exchange for
the shares of the Evergreen Fund and the assumption by the Evergreen
Fund of certain identified liabilities of the FFB Fund;
(5) No gain or loss will be recognized by the FFB Fund's
shareholders upon the issuance of the shares of the Evergreen Fund to
them, provided they receive solely such shares (including fractional
shares) in exchange for their shares of the FFB Fund; and
(6) The aggregate tax basis of the shares of the Evergreen
Fund, including any fractional shares, received by each of the
shareholders of the FFB Fund pursuant to the Reorganization will be the
same as the aggregate tax basis of the shares of the FFB Fund held by
such shareholder immediately prior to the Reorganization, and the
holding period of the shares of the Evergreen Fund, including fractional
shares, received by each such shareholder will include the period during
which the shares of the FFB Fund exchanged therefor were held by such
shareholder (provided that the shares of the FFB Fund were held as a
capital asset on the date of the Reorganization).
Opinions of counsel are not binding upon the Internal Revenue
Service or the courts. If a Reorganization is consummated but does not
qualify as a tax-free reorganization under the Code, each FFB Fund
shareholder would recognize a taxable gain or loss equal to the
difference between his or her tax basis in his or her FFB Fund shares
and the fair market value of the Evergreen Fund shares he or she
-26-<PAGE>
received. Shareholders of each FFB Fund should consult their tax
advisers regarding the effect, if any, of the proposed Reorganization in
light of their individual circumstances. Since the foregoing discussion
relates only to the federal income tax consequences of the
Reorganization, shareholders of each FFB Fund should also consult their
tax advisers as to state and local tax consequences, if any, of the
Reorganization.
It is not expected that the securities of the combined portfolio
will be sold in significant amounts in order to comply with the policies
and investment practices of the Evergreen Fund.
PRO-FORMA CAPITALIZATION
The following tables show the capitalization of the Evergreen Fund
and the FFB Funds as of August 31, 1995 individually and on a pro forma
basis as of that date, giving effect to the proposed acquisition of
assets at net asset value:
CAPITALIZATION OF THE FFB FUNDS AND THE EVERGREEN FUND
<TABLE>
<CAPTION>
FFB FUNDS
CLASS A
SERVICE INSTITUTIONAL SHARES
CLASS SHARES CLASS SHARES EVERGREEN PRO-FORMA
100% U.S. U.S. 100% U.S. U.S. FUND CLASS FOR REOR-
Treasury Treasury Government Treasury Treasury Government A SHARES GANIZATION
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets......N/A $201,000 $17,200 $25,425,094 $887,079,161 $237,320,229 $1,178,477,440 $2,328,520,124
Shares
Outstanding*..N/A 201,000 17,200 25,425,094 887,079,161 237,320,229 1,178,477,440 2,328,520,124
Net Asset Value
per Share......N/A $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
</TABLE>
* Had the Reorganizations been consummated on August 31, 1995, the FFB
U.S. Treasury Fund, FFB 100% U.S. Treasury Fund and FFB U.S. Government
Fund would have received respectively _____, _____, and
_____887,280,161, 25,425,094 and 237,337,429 Class A shares of the
Evergreen Fund, which would then be available for distribution to
shareholders. No assurance can be given as to how many Class A shares of
the Evergreen Fund FFB Fund shareholders will receive on the date that
the Reorganizations take place, and the foregoing should not be relied
upon to reflect the number of Class A shares of the Evergreen Fund that
will actually be received on or after such date.
SHAREHOLDER INFORMATION
.
-27-<PAGE>
As of September 8, 1995 (the "Record Date"), there were the
following number of each Class of shares of beneficial interest of the
FFB Funds outstanding:
U.S. Treasury
Service Class - 171,178
Institutional Class - 907,446,357
100% U.S. Treasury
Service Class - N/A
Institutional Class - 27,355,734
U.S. Government
Service Class - 17,220
Institutional Class - 257,461,490
As of the Record Date, the officers and Trustees of FFB Funds Trust
beneficially owned as a group less than 1% of the outstanding shares of
each FFB Fund. To the FFB Funds Trust's knowledge, the following
persons owned beneficially or of record more than 5% of each FFB Fund's
total outstanding shares as of the Record Date:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER PERCENTAGE TOTAL SHARES
NAME AND ADDRESS CLASS OF SHARES OF CLASS OUTSTANDING
<S> <C> <C> <C> <C>
First Fidelity Bank, U.S. Treasury/ 618,440,266 68.02% 68.02%
N.A., N.J.* Institutional
c/o Asset Management
Attn: Joanne Monteiro
Broad & Walnut Streets
Philadelphia, PA 19109
First Fidelity Bank, 100% U.S. Treasury/ 5,463,533 19.97% 19.97%
N.A., N.J.* Institutional
c/o Asset Management
Attn: Joanne Monteiro
Broad & Walnut Streets
Philadelphia, PA 19109
Trustmark National Bank 100% U.S. Treasury/ 7,615,883 27.84% 27.84%
Trust Dept. Institutional
248 E. Capital Street
Jackson, MI 39201
Capital Network Services 100% U.S. Treasury/ 5,976,200 21.85% 21.85%
One Bush Street, 11th Fl. Institutional
San Francisco, CA 94104
Leo W. Borellis 100% U.S. Treasury/ 1,546,454 5.65% 5.65%
13 Grove Terrace Institutional
Sparta, NJ 07871
-28-<PAGE>
First Fidelity Bank, U.S. Government/ 184,575,677 71.69% 71.69%
N.A., N.J.* Institutional
c/o Asset Management
Attn: Joanne Monteiro
Broad & Walnut Streets
Philadelphia, PA 19109
National Financial U.S. Government/ 18,361,275 7.13% 7.13%
Services Corp. Institutional
For the Exclusive
Benefit of our
Customers
Attn: Mike McLaughlin
200 Liberty Street
New York, NY 10281
</TABLE>
-----------------------------
* Most of the shares held by First Fidelity are in accounts for the
Bank's fiduciary, agency or custodial customers.
As of September 8, 1995, the following number of each Class of the
shares of the Evergreen Fund were outstanding: Class A -- _____________
1,229,413,639; Class B -- ___________0 and Class Y -- _____________
269,484,860.
As of the Record Date, the officers and Trustees of the Evergreen
Fund beneficially owned as a group less than 1% of the outstanding
shares of the Evergreen Fund. To the Evergreen Fund's knowledge, the
following persons owned beneficially or of record more than 5% of the
Evergreen Fund's total outstanding shares as of the Record Date:
PERCENTAGE OF
NUMBER OF PERCENTAGE TOTAL SHARES
NAME AND ADDRESS CLASS SHARES OF CLASS OUTSTANDING
First Union National
Bank of NC A 217,801,127 17.75% 14.53%
Attn: Cap Account Dept.
One First Union Center
301 S. College Street
Charlotte, NC 28202
First Union National
Bank of GA A 91,614,862 7.47% 6.11%
Attn: Cap Account Dept.
One First Union Center
Charlotte, NC 28288
First Union National
Bank of FL A 403,853,753 32.91% 26.94%
Attn: Cap Account Dept.
One First Union Center
-29- <PAGE>
Charlotte, NC 28288
First Union National
Bank of VA A 136,107,546 11.09% 9.08%
Attn: Cap Account Dept.
One First Union Center
Charlotte, NC 28288
First Union National Bank Y 269,335,354 99.93% 7.97%
Trust Accounts
Attn: Ginny Batten
11th Floor
CMG-1151
301 S. Tryon Street
Charlotte, NC 28288
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion is based upon and qualified in its
entirety by the descriptions of the respective investment objectives,
policies and restrictions set forth in the respective Prospectuses and
Statements of Additional Information of the Funds. The investment
objectives, policies and restrictions of the Evergreen Fund can be found
in the Prospectus of the Evergreen Fund under the caption "Investment
Objectives and Policies." The Evergreen Fund's Prospectus also offers
additional funds advised by Evergreen Asset or CMG. These additional
funds are not involved in the Reorganizations, their investment
objectives, policies and restrictions are not discussed in this
Prospectus/Proxy Statement and their shares are not offered hereby. The
investment objectives, policies and restrictions of the FFB Funds can be
found in the Prospectuses of the FFB Funds under the caption "Investment
Objective and Policies."
Evergreen Treasury Money Market Fund
The investment objective of the Evergreen Fund, which is a matter
of fundamental policy that may not be changed without shareholder
approval, is to maintain stability of principal while earning current
income. However, the Fund will only attempt to seek income to the
extent consistent with stability of principal and, therefore,
investments will only be made in short-term United States Treasury
obligations with an average dollar-weighted maturity of 90 days or less.
As a matter of investment strategy, the Fund's investment adviser
intends to maintain a dollar-weighted average maturity for the Fund of
60 days or less.
The Evergreen Fund is suitable for conservative investors seeking
high current yields plus relative safety. The Fund provides a
reasonable means of maximizing opportunities and minimizing risks
resulting from changing interest rates.
-30-<PAGE>
The short-term United States Treasury obligations in which the
Evergreen Fund invests are issued by the U.S. Government and are fully
guaranteed as to principal and interest by the United States. Such
securities will have a maturity date that is 397 days or less from the
date of acquisition unless they are purchased under an agreement that
provides for repurchase of the securities from the Evergreen Fund within
397 days from the date of acquisition. The Evergreen Fund may also
retain Fund assets in cash.
The Evergreen Fund may employ certain additional investment strategies
which are discussed in the "Investment Practices and Restrictions"
section of the Evergreen Fund's Prospectus.
FFB 100% Treasury Fund
The investment objective of the FFB 100% Treasury Fund is to
achieve as high a level of current income as is consistent with
preservation of capital and liquidity by investing exclusively in the
short-term, direct obligations of the United States Treasury. The Fund
does not invest in repurchase agreements or when-issued securities,
investment techniques available to the Evergreen Fund. For a discussion
of the Evergreen Fund's policy of engaging in repurchase agreements and
when-issued securities see its Prospectus under the caption "Investment
Practices and Restrictions".
FFB U.S. Treasury Fund
The investment objective of the FFB U.S. Treasury Fund is to
achieve as high a level of current income as is consistent with
preservation of capital and liquidity by investing exclusively in short-
term, direct obligations of the United States Treasury. The Fund seeks
to achieve this objective by investing in the same type of securities as
the Evergreen Fund except that the Fund may not purchase when-issued
securities.
FFB U.S. Government Fund
The FFB U.S. Government Fund invests in obligations issued or
guaranteed by the United States Government and, in addition, (unlike the
FFB U.S. Treasury Fund, the FFB 100% U.S. Treasury Fund and the
Evergreen Fund) may also invest in obligations issued by agencies or
instrumentalities of the United States Government. The FFB U.S.
Government Fund may not purchase when-issued securities. If
shareholders of the FFB U.S. Government Fund vote to approve the Plan
and the Plan is consummated, the Evergreen Fund, the surviving Fund,
will not be able to invest in obligations issued by the agencies or
instrumentalities of the United States Government.
The characteristics of each investment policy and the associated
risks are described in the Prospectus and Statement of Additional
Information of each Fund. the Evergreen Fund and the FFB Funds have
-31- <PAGE>
other investment policies and restrictions which are also set forth in
the Prospectus and Statement of Additional Information of each Fund.
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS
FORM OF ORGANIZATION
FFB Funds Trust and Evergreen Investment Trust are open-end
management investment companies registered with the SEC under the 1940
Act which continuously offer shares to the public. Each is organized as
a Massachusetts business trust and is governed by a Declaration of
Trust, By-Laws and Board of Trustees. Both are also governed by
applicable Massachusetts and Federal law. The FFB Funds are each a
series of FFB Funds Trust. The Evergreen Fund is a series of Evergreen
Investment Trust.
CAPITALIZATION
The beneficial interests in the Evergreen Fund are represented by
an unlimited number of transferable shares of beneficial interest with
no par value per share. The beneficial interests in the FFB Funds are
represented by an unlimited number of transferable shares of beneficial
interest with a $0.001 par value. The respective Declarations of Trust
under which each Fund has been established permit the respective
Trustees to allocate shares into an unlimited number of series, and
classes thereof, with rights determined by the Trustees, all without
shareholder approval. Fractional shares may be issued. Each Fund's
shares have equal voting rights with respect to matters affecting
shareholders of all classes of each Fund, and each series of the Trust
under which the Fund has been established, and represent equal
proportionate interests in the assets belonging to the Funds.
Shareholders of each Fund are entitled to receive dividends and other
amounts as determined by FFB Funds Trust's Trustees or Evergreen
Investment Trust's Trustees. Shareholders of each Fund vote separately,
by class, as to matters, such as approval or amendments of Rule 12b-1
distribution plans, that affect only their particular class and by
series as to matters, such as approval or amendments of investment
advisory agreements or proposed reorganizations, that affect only their
particular series.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders of a business trust could,
under certain circumstances, be held personally liable for the
obligations of the business trust. However, the respective Declarations
of Trust under which the Funds were established disclaim shareholder
liability for acts or obligations of the portfolio or series and require
that notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by the Funds or the Trustees. The
Declarations of Trust provide for indemnification out of the series'
property for all losses and expenses of any shareholder held personally
liable for the obligations of the series. Thus, the risk of a
-32-<PAGE>
shareholder incurring financial loss on account of shareholder liability
is considered remote since it is limited to circumstances in which a
disclaimer is inoperative and the series itself would be unable to meet
its obligations. A substantial number of mutual funds in the United
States are organized as Massachusetts business trusts.
SHAREHOLDER MEETINGS AND VOTING RIGHTS
Neither the Evergreen Investment Trust nor FFB Funds Trust, on
behalf of the Funds or any of their other series, is required to hold
annual meetings of shareholders. However, a meeting of shareholders for
the purpose of voting upon the question of removal of a Trustee must be
called when requested in writing by the holders of at least 10% (25% in
the case of Evergreen Investment Trust) of the outstanding shares. In
addition, each is required to call a meeting of shareholders for the
purpose of electing Trustees if, at any time, less than a majority of
the Trustees then holding office were elected by shareholders. If
Trustees of the Evergreen Investment Trust fail or refuse to call a
meeting as required by its Declaration of Trust for a period of 14 days
after a request in writing by shareholders holding an aggregate of at
least 25% of the shares outstanding, then shareholders holding said 25%
may call and give notice of such meeting. Evergreen Investment Trust
and FFB Funds Trust currently do not intend to hold regular shareholder
meetings. Neither permits cumulative voting. A majority of shares
entitled to vote on a matter constitutes a quorum for consideration of
such matter. In either case, a majority of the shares voting is
sufficient to act on a matter (unless otherwise specifically required by
the applicable governing documents or other law, including the 1940
Act).
LIQUIDATION OR DISSOLUTION
In the event of the liquidation of a Fund the shareholders are
entitled to receive, when, and as declared by the Trustees, the excess
of the assets belonging to such Fund or attributable to the class over
the liabilities belonging to the Fund or attributable to the class. In
either case, the assets so distributable to shareholders of the Fund
will be distributed among the shareholders in proportion to the number
of shares of the Fund held by them and recorded on the books of the
Fund.
LIABILITY AND INDEMNIFICATION OF TRUSTEES
The Declaration of Trust of Evergreen Investment Trust provides
that no Trustee or officer shall be liable to the Fund or to any
shareholder, Trustee, officer, employee or agent of the Fund for any
action or failure to act except for his or her own bad faith, willful
misfeasance, gross negligence or reckless disregard of his or her
duties. The Declaration of Trust provides that a Trustee or officer is
entitled to indemnification against liabilities and expenses with
respect to claims related to his or her position with Evergreen
Investment Trust unless such Trustee or officer shall have been
-33-<PAGE>
adjudicated to have acted with bad faith, willful misfeasance, gross
negligence or reckless disregard of his or her duties, or not to have
acted in good faith that his or her action was in the best interest of
the Trust. The Declaration of Trust also provides that a Trustee or
officer is not entitled to indemnification against liabilities in the
event of settlement unless there has been a determination that such
Trustee or officer has not engaged in willful misfeasance, bad faith,
gross negligence, or reckless disregard of his or her duties.
The Declaration of Trust of FFB Funds Trust provides that no
Trustee, officer or agent shall be personally liable to any person for
any action or failure to act, except for his or her own bad faith,
willful misfeasance, or gross negligence, or reckless disregard of his
or her duties. The Declaration of Trust provides that a Trustee or
officer is entitled to indemnification against liabilities and expenses
with respect to claims related to his or her position with FFB Funds
Trust, unless such Trustee or officer shall have been adjudicated to
have acted with bad faith, willful misfeasance, or gross negligence, or
in reckless disregard of his or her duties, or not to have acted in good
faith in the reasonable belief that his or her action was in the best
interest of FFB Funds Trust, or, in the event of settlement, unless
there has been a determination that such Trustee or officer has not
engaged in willful misfeasance, bad faith, gross negligence, or reckless
disregard of his or her duties.
RIGHTS OF INSPECTION
Shareholders of the respective Funds have the same right to inspect
in Massachusetts the governing documents, records of meetings of
shareholders, shareholder lists, share transfer records, accounts and
books of the Fund as are permitted shareholders of a corporation under
the Massachusetts corporation law. The purpose of inspection must be for
interests of shareholders relative to the affairs of the Fund.
The foregoing is only a summary of certain characteristics of the
operations of the Declarations of Trust, By-Laws and Massachusetts law
and is not a complete description of those documents or law.
Shareholders should refer to the provisions of such respective
Declarations of Trust, By-Laws, and Massachusetts law directly for more
complete information.
INFORMATION REGARDING THE PROPOSED INTERIM
ADVISORY AGREEMENT
INTRODUCTION
In view of the Merger Agreement discussed above, and the factors
discussed below, the Board of Trustees of FFB Funds Trust recommends
that shareholders of each FFB Fund approve the proposed Interim Advisory
Agreement. The Interim Advisory Agreement would become effective as of
-34-<PAGE>
the consummation of the Merger which, as noted earlier, is currently
anticipated to occur by January 1, 1996. The Interim Advisory Agreement
would remain in effect until the closing date Closing Date for the
Reorganization. The terms of the Interim Advisory Agreement are
essentially the same as the Existing Advisory Agreement (as defined
below). The only differences between the Existing Advisory Agreement
and the Interim Advisory Agreement, if approved by shareholders, are
that the investment adviser would be CMG instead of First Fidelity and
the length of time each Agreement is in effect. A description of the
Interim Advisory Agreement pursuant to which CMG would become the
investment adviser to each FFB Fund, as well as the services to be
provided by CMG pursuant thereto is set forth below under "Advisory
Services" ." The description of the Interim Advisory Agreement in this
Prospectus/Proxy Statement is qualified in its entirety by reference to
a Form form of the Interim Advisory Agreement, which will be used for
each FFB Fund, attached hereto as Exhibit B.
First Fidelity, 765 Broad Street, Newark, New Jersey 07102, has
served as investment adviser to each FFB Fund since the commencement of
operations of the FFB Fund pursuant to a Master Advisory Contract, dated
February 10, 1988 and Advisory Contract Supplement dated February 10,
1988, February 10, 1988 and October 13, 1994 for the FFB U.S. Treasury
Fund, FFB U.S. Government Fund and FFB 100% U.S. Treasury Fund,
respectively. As used herein, the Master Advisory Contract and the
Advisory Contract Supplement for each FFB Fund, taken together, are
referred to as the FFB Fund's "Existing Advisory Agreement." At a
meeting of the Board of Trustees of the FFB Funds Trust held on August
9, 1995, the Trustees, including all of the Independent Trustees,
approved the proposed Interim Advisory Agreement for each FFB Fund.
The Trustees have authorized FFB Funds Trust, on behalf of each FFB
Fund and subject to shareholder approval of the Interim Advisory
Agreement, to enter into the Interim Advisory Agreement with Evergreen
Asset CMG to become effective upon consummation of the Merger. If the
Interim Advisory Agreement for each FFB Fund is not approved by
shareholders, the Trustees will consider appropriate actions to be taken
with respect to the FFB Fund's investment advisory arrangements at that
time. Each Existing Advisory Agreement for the FFB U.S. Treasury Fund
and the FFB U.S. Government Fund was approved by each Fund's sole
shareholder on June 11, 1987. The Existing Advisory Agreements for the
FFB U.S. Treasury Fund and the FFB U.S. Government Fund were last
approved by the Trustees, including a majority of the Independent
Trustees, on December 8, 1994. The Existing Advisory Agreement for the
FFB 100% U.S. Treasury Fund was last approved by the Trustees, including
a majority of the Independent Trustees, on October 13, 1994.
COMPARISON OF THE INTERIM ADVISORY AGREEMENT AND THE EXISTING ADVISORY
AGREEMENT
Advisory Services. The management and advisory services to be
provided by Evergreen Asset under the Interim Advisory Agreement are
identical to those currently provided by First Fidelity under the
-35- <PAGE>
Existing Advisory Agreement. Under the Existing Advisory Agreement,
First Fidelity manages the FFB Fund and furnishes to the FFB Fund
investment guidance and policy direction in connection therewith. First
Fidelity provides to the FFB Fund, among other things, information
relating to portfolio composition, credit conditions and average
maturity of the portfolio of the FFB Fund. First Fidelity also
furnishes to the Trustees periodic reports on the investment performance
of the FFB Fund.
Pursuant to the Existing Advisory Agreement, First Fidelity
provides administrative assistance in connection with the operations of
the FFB Fund. Administrative services provided by First Fidelity
include, among other things, (i) data processing, clerical and
bookkeeping services required in connection with maintaining the
financial accounts and records for the Fund, (ii) compiling statistical
and research data required for the preparation of reports and statements
which are periodically distributed to the FFB Funds Trust's officers and
the Trustees, (iii) handling general shareholder relations with
investors, such as advice as to the status of their accounts, the
current yield and dividends declared to date and assistance with other
questions related to their accounts and (iv) compiling information
required in connection with The the FFB Lexicon Fund's Funds Trust's
filings with the SEC.
Furman Selz currently acts as administrator of the FFB Fund.
Furman Selz has its offices at 237 Park Avenue, New York, New York
10017. If the Interim Advisory Agreement is approved by shareholders of
the FFB Fund, Furman Selz will continue during the term of the Interim
Advisory Agreement as the FFB Fund's administrator for the same
compensation as currently received. See "Summary-Investment Advisers,
Sub-Adviser and Administrators."
Fees and Expenses. The investment advisory fees and expense
limitations for each FFB Fund under the Existing Advisory Agreement and
the proposed Interim Advisory Agreement are identical. See "Summary-
Investment Advisers, Sub-Adviser and Administrators."
Expense Reimbursement. The Existing Advisory Agreement includes a
provision calling for expense limitations equal to the most restrictive
limitation imposed from time to time by states where the FFB Fund's
shares are qualified for sale. Currently, the most restrictive state
expense limitation provision applicable to the FFB Fund limits the
Fund's annual expenses to 2.5% of the first $30 million of average net
assets, 2.0% of the next $70 million of such assets and 1.5% of any such
assets in excess of $100 million. The Interim Advisory Agreement
contains an identical provision.
Payment of Expenses and Transaction Charges. Under the Existing
Advisory Agreement, the FFB Fund is responsible for all of its expenses
and liabilities, including compensation of the Independent Trustees of
FFB Funds Trust; taxes and governmental fees; interest charges; fees and
expenses of the Fund's independent accountants and legal counsel; trade
-36-<PAGE>
association membership dues; fees and expenses of any custodian
(including fees and expenses for keeping books and accounts and
calculating the net asset value of shares of the Fund), transfer agent,
registrar and dividend disbursing agent of the Fund; expenses of
issuing, redeeming, registering and qualifying for sale the Fund's
shares; expenses of preparing and printing share certificates,
prospectuses, shareholders' reports, notices, proxy statements and
reports to regulatory agencies; the cost of office supplies; travel
expenses of all officers, Trustees and employees; insurance premiums;
brokerage and other expenses of executing portfolio transactions;
expenses of shareholders' meetings; organizational expenses; and
extraordinary expenses.
The Interim Advisory Agreement contains an identical provision.
Limitation of Liability. The Existing Advisory Agreement provides
that First Fidelity shall not be liable to the FFB Fund for any mistake
in judgment or in any other event whatsoever except for lack of good
faith, provided that nothing in the Existing Advisory Agreement shall be
deemed to protect or purport to protect First Fidelity against the
liability to FFB Funds Trust or its shareholders to which First Fidelity
would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of First Fidelity's duties under
the Agreement or by reason of First Fidelity's reckless disregard of its
obligations and duties.
The Interim Advisory Agreement contains an identical provision in
terms of CMG's liability.
Term. If approved by the shareholders of a FFB Fund, the Interim
Advisory Agreement between the FFB Fund and CMG will become effective on
the consummation of the Merger. The Interim Advisory Agreement will be
in effect for the period of time between the effective date of the
Merger and the Closing Date for the Reorganization. The Existing
Advisory Agreement provides for an initial term of two years.
Thereafter, the Existing Advisory Agreement will be continued from year
to year, provided that its continuation is specifically approved at
least annually (a) by the vote of a majority of the outstanding voting
securities of the FFB Fund (as defined in the 1940 Act) or by the Board
of Trustees and (b) by the vote, cast in person at a meeting called for
the purpose, of a majority of the Independent Trustees. The Interim
Advisory Agreement for the FFB Fund contains an identical provision.
Termination; Assignment. The Interim Advisory Agreement provides
that it may be terminated without penalty by vote of a majority of the
outstanding voting securities of the FFB Fund (as defined in the 1940
Act) or by a vote of a majority of FFB Fund Trust's entire Board of
Trustees on 60 days' written notice to CMG or by CMG on 60 days' written
notice to FFB Funds Trust. Also, the Interim Advisory Agreement will
automatically terminate in the event of its assignment (as defined in
the 1940 Act). The Existing Advisory Agreement for the FFB Fund
contains identical provisions as to termination and assignment.
-37-<PAGE>
INFORMATION ABOUT THE FFB FUNDS' CURRENT AND PROPOSED INTERIM INVESTMENT
ADVISERS
First Fidelity. First Fidelity currently serves as the investment
adviser for each FFB Fund. First Fidelity is a national banking
association which provides commercial banking and trust business
services throughout New Jersey and in Pennsylvania, Maryland and New
York. It is a wholly-owned subsidiary of First Fidelity Incorporated,
originally established in 1812, which, as a result of a reorganization
with Fidelcor, Inc., a Pennsylvania bank holding company, is now a
wholly-owned subsidiary of FFB. FFB, a New Jersey corporation, provides
financial and related services through its subsidiary organizations.
The investment advisory services of First Fidelity are provided through
the Asset Management Group of the Trust Division which, as of June 30,
1995, had approximately $15 billion of client assets under management.
First Fidelity has provided investment advisory services to investment
companies since 1986 and currently acts as investment adviser to the
First Fidelity family of mutual funds.
For the fiscal year ended August 31 February 28, 1995, First
Fidelity received an aggregate of $ , $ $1,251,171 and $ $730,462 in
management fees from the FFB U.S. Treasury Fund, and the FFB U.S.
Government Fund and FFB 100% U.S. Treasury Fund, respectively, which is
equal to an annual fee of %, % and %, respectively, 0.35% of each FFB
Fund's average daily net assets. Absent voluntary waivers, First
Fidelity, for such period would have received $ , $ , and $ ,
respectively, in management fees ( %, % and %, respectively, of each FFB
Fund's average daily net assets) For the period April 10, 1995
(commencement of operations) through August 31, 1995, First Fidelity
waived management fees of $8,931 from the FFB 100% U.S. Treasury Fund.
Absent such waiver, First Fidelity's management fee would be 0.14% of
average daily net assets of the Fund.
First Fidelity also acts as custodian and transfer agent for each
FFB Fund. For these services, First Fidelity received custodian fees of
$ and transfer agent fees of $ $135,889 and $69,460, respectively, from
the FFB U.S. Treasury Fund ; custodian fees of $ and transfer agent fees
of $ from the FFB U.S. Government Fund ; and custodian fees of $ and
transfer agent fees of $ for the fiscal year ended February 28, 1995.
For the period April 10, 1995 (commencement of operations) through
August 31, 1995, First Fidelity waived custodian fees of $1,199 from the
FFB 100% U.S. Treasury Fund.
Absent voluntary waivers, First Fidelity would have received
custodian fees of $ and transfer agent fees of $ First Fidelity also
acts as transfer agent for each FFB Fund. No fees have been paid to
First Fidelity in such capacity. Furman Selz serves as sub-transfer
agent for the FFB Funds. Furman Selz received $1,020 and $2,075 from
the FFB U.S. Treasury Fund ; custodian fees of $ and transfer agent fees
of $ from the FFB U.S. Government Fund; and custodian fees of $ and
transfer agent fees of $, respectively for the fiscal year ended
February 28, 1995. For the period April 10, 1995 (commencement of
-38- <PAGE>
operations) through August 31, 1995, Furman Selz waived sub-transfer
agent charges of $121 from the FFB 100% U.S. Treasury Fund. First
Fidelity will continue to act as the FFB Fund's custodian and transfer
agent and Furman Selz will continue to act as sub-transfer agent during
the term of the Interim Advisory Agreement.
CMG. For information about CMG, FUNB, Evergreen Asset and First
Union, see "Summary-Investment Advisers, Sub-Adviser and
Administrators." The name, address and principal occupation of the
principal executive officers and directors of FUNB are set forth in
Appendix A to this Prospectus/Proxy Statement.
During the term of the Interim Advisory Agreement, Evergreen Asset
CMG will receive compensation for managing each FFB Fund at the same
effective annual rate ( %(0.35% for the FFB U.S. Treasury Fund, % 0.35%
for the FFB U.S. Government Fund and % 0% for the FFB 100% U.S. Treasury
Fund) as received by First Fidelity, pursuant to the Existing Advisory
Agreement (net of any waivers). Evergreen Asset CMG is the investment
adviser to the Evergreen Fund which, if approved by shareholders of the
FFB Fund, will acquire substantially all of the assets of the FFB Fund.
Evergreen Asset CMG is entitled to receive an annual management fee
equal to 0.35% of the Evergreen Fund's average daily net assets. For
the fiscal year ended December 31, 1994, Evergreen Asset, CMG received
$2,547,955 in management fees (0.20% of the Evergreen Fund's average
daily net assets). Absent voluntary waivers, Evergreen Asset, for such
period, would have received $4,498,232 in management fees(0.35% of the
Evergreen Fund's average daily net assets). See "Summary-Investment
Advisers, Sub-Adviser and Administrators."
The Board of Trustees considered the Interim Advisory Agreement as
part of its overall approval of the Plan. The Board of Trustees
considered, among other things, the factors set forth above in
"Information about the Reorganization - Reasons for the Reorganization."
The Board of Trustees also considered the fact that there were no
material differences between the terms of the Interim Advisory Agreement
and the terms of the Existing Advisory Agreement.
ADDITIONAL INFORMATION
Evergreen Fund. Information concerning the operation and
management of the Evergreen Fund is incorporated herein by reference
from the Prospectus dated July 7, 1995, a copy of which is enclosed, and
Statement of Additional Information dated July 7, 1995. A copy of such
Statement of Additional Information is available upon request and
without charge by writing to the Evergreen Fund, at the address listed
on the cover page of this Prospectus/Proxy Statement or by calling toll-
free 1-800-807-2940.
FFB Fund. Information about each FFB Fund is included in its
current Prospectuses each dated June 30, 1995 (October 7, 1994 with
respect to the FFB 100% U.S. Treasury Fund), and in the Statement of
-39- <PAGE>
Additional Information of the same date that have been filed with the
SEC, all of which are incorporated herein by reference. A copy Copies
of each Prospectus and Statement of Additional Information and each
Fund's the Annual Report dated February 28, 1995 of the FFB U.S.
Treasury Fund and FFB U.S. Government Fund are available upon request
and without charge by writing to the FFB Fund at the address listed on
the cover page of this Prospectus/Proxy Statement or by calling toll-
free 1-800-437-8790.
Evergreen Investment Trust and FFB Funds Trust are each subject to
the informational requirements of the Securities Exchange Act of 1934
and the 1940 Act, and in accordance therewith file reports and other
information, including proxy material, and charter documents, with the
SEC. These items can be inspected and copies obtained at the Public
Reference Facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's Regional Offices located at
Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois
60661-2511 and Seven World Trade Center, Suite 1300, New York, New York
10048.
VOTING INFORMATION CONCERNING THE MEETING
This Prospectus/Proxy Statement is furnished in connection with a
solicitation of proxies by the Board of Trustees of FFB Funds Trust to
be used at each Special Meeting of Shareholders to be held at 10 11:00
a.m. November 13 21, 1995, at the offices of the FFB Funds, 237 Park
Avenue, New York, New York 10017 First Fidelity Bank, N.A., 123 South
Broad Street, 5th Floor, Philadelphia, Pennsylvania 19109 and at any
adjournments thereof. This Prospectus/Proxy Statement, along with a
Notice of the Meeting and a proxy card, is are first being mailed to
shareholders on or about September 28 October 2, 1995. Only
shareholders of record as of the close of business on the Record Date
will be entitled to notice of, and to vote at, the Meeting or any
adjournment thereof. The holders of a majority of the shares outstanding
at the close of business on the Record Date present in person or
represented by proxy will constitute a quorum for the Meeting. If the
enclosed form of proxy is properly executed and returned in time to be
voted at the Meeting, the proxies named therein will vote the shares
represented by the proxy in accordance with the instructions marked
thereon. Unmarked proxies will be voted FOR the proposed Reorganization
Plan, FOR the Interim Advisory Agreement and FOR any other matters
deemed appropriate. Proxies that reflect abstentions and "broker
non-votes" (i.e., shares held by brokers or nominees as to which (i)
instructions have not been received from the beneficial owners or the
persons entitled to vote or (ii) the broker or nominee does not have
discretionary voting power on a particular matter) will be counted as
shares that are present and entitled to vote for purposes of determining
the presence of a quorum, but will have the effect of being counted as
votes against the Plan and the Interim Advisory Agreement. A proxy may
be revoked at any time on or before the Meeting by written notice to the
Secretary of FFB Funds Trust, 237 Park Avenue, New York, New York 10017.
Unless revoked, all valid proxies will be voted in accordance with the
-40-<PAGE>
specifications thereon or, in the absence of such specifications, FOR
approval of the Plan and the Reorganization contemplated thereby and FOR
approval of the Interim Advisory Agreement.
Approval of each Plan will require the affirmative vote of more
than 50% of the outstanding voting securities, with all classes voting
together as one class. Approval of the Interim Advisory Agreement will
require the affirmative vote of (i) 67% or more of the outstanding
voting securities if holders of more than 50% of the outstanding voting
securities are present, in person or by proxy, at the Meeting, or (ii)
more than 50% of the outstanding voting securities, whichever is less,
with all classes voting together as one class. Each full share
outstanding is entitled to one vote and each fractional share
outstanding is entitled to a proportionate share of one vote.
Proxy solicitations will be made primarily by mail, but proxy
solicitations may also be made by telephone, telegraph or personal
solicitations conducted by officers and employees of FUNB or First
Fidelity, their affiliates or other representatives of FFB Funds Trust
(who will not be paid for their solicitation activities). Shareholder
Communications Corp. ("SCC") has been engaged by First Fidelity to
assist in soliciting proxies, and may contact certain shareholders of
the FFB Funds over the telephone. Shareholders that are contacted by
SCC may be asked to cast their vote by telephonic proxy. Such proxies
will be recorded in accordance with the procedures set forth below.
First Fidelity believes these procedures are reasonably designed to
ensure that the identity of the shareholder casting the vote is
accurately determined and that the voting instructions of the
shareholder are accurately reflected. SCC has received an opinion of
Dechert Price & Rhoads that addresses the validity, under the applicable
law of the Commonwealth of Massachusetts, of a proxy given orally. The
opinion given by Dechert Price & Rhoads concludes that a Massachusetts
court would find that there is no Massachusetts law or Massachusetts
public policy against the acceptance of proxies signed by an orally-
authorized agent.
In all cases where a telephonic proxy is solicited, the SCC
representative will ask you for your full name, address, social security
or employer identification number, title (if you are authorized to act
on behalf of an entity, such as a corporation), and number of shares
owned. If the information solicited agrees with the information
provided to SCC by First Fidelity, then the SCC representative will
explain the process, read the proposals listed on the proxy card and ask
for your instructions on each proposal. The SCC representative,
although he or she will answer questions about the process, will not
recommend to the shareholder how he or she should vote, other than to
read any recommendations set forth in the proxy statement this
Prospectus/Proxy Statement. Within 72 hours, SCC will send you a letter
or mailgram to confirm your vote and asking you to call SCC immediately
if your instructions are not correctly reflected in the confirmation.
-41- <PAGE>
If you wish to participate in the Meeting, but do not wish to give
your proxy by telephone, you may still submit the proxy card included
with this Prospectus/Proxy Statement or attend in person. Any proxy
given by you, whether in writing or by telephone, is revocable.
In the event that sufficient votes to approve a Reorganization Plan
are not received by November 13 21, 1995, the persons named as proxies
may propose one or more adjournments of the Meeting to permit further
solicitation of proxies. In determining whether to adjourn the Meeting,
the following factors may be considered: the percentage of votes
actually cast, the percentage of negative votes actually cast, the
nature of any further solicitation and the information to be provided to
shareholders with respect to the reasons for the solicitation. Any such
adjournment will require an affirmative vote by the holders of a
majority of the shares present in person or by proxy and entitled to
vote at the Meeting. The persons named as proxies will vote upon such
adjournment after consideration of all circumstances which may bear upon
a decision to adjourn the Meeting.
A shareholder who objects to the proposed Reorganization Plan will
not be entitled under either Massachusetts law or the Declaration of
Trust of FFB Funds Trust to demand payment for, or an appraisal of, his
or her shares. However, shareholders should be aware that the
Reorganization as proposed is not expected to result in recognition of
gain or loss to shareholders for federal income tax purposes and that,
if the Reorganization is consummated, shareholders will be free to
redeem the shares of the Evergreen Fund which they receive in the
transaction at their then-current net asset value. Shares of the FFB
Funds may be redeemed at any time prior to the consummation of the
Reorganizations. FFB Fund shareholders may wish to consult their tax
advisers as to any differing consequences of redeeming FFB Fund shares
prior to the Reorganization or exchanging such shares in the
Reorganization.
FFB Funds Trust does not hold annual shareholder meetings. If a
Reorganization Plan is not approved, shareholders wishing to submit
proposals for consideration for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to
the Secretary of FFB Funds Trust at the address set forth on the cover
of this Prospectus/Proxy Statement such that they will be received by
FFB Funds Trust in a reasonable period of time prior to any such
meeting.
The votes of the shareholders of the Evergreen Fund are not being
solicited by this Prospectus/Proxy Statement and are not required to
carry out the Reorganizations.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR
NOMINEES. Please advise the FFB Fund Funds whether other persons are
beneficial owners of shares for which proxies are being solicited and,
if so, the number of copies of this Prospectus/Proxy Statement needed to
supply copies to the beneficial owners of the respective shares.
-42- <PAGE>
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of each of the FFB Funds as of
February 28, 1995 and financial highlights for the periods indicated
therein have been incorporated by reference into this Prospectus/Proxy
Statement in reliance on the reports of KPMG Peat Marwick LLP,
independent accountants for the FFB Funds, given on the authority of
said firm as experts in accounting and auditing.
The audited financial statements of the Evergreen Fund as of
December 31, 1994 and the financial highlights for the periods indicated
therein have been incorporated by reference into this Prospectus/Proxy
Statement in reliance on the report of KPMG Peat Marwick LLP,
independent accountants for the Evergreen Fund, given on the authority
of said firm as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the
Evergreen Fund will be passed upon by Sullivan & Worcester, Washington,
D.C.
OTHER BUSINESS
The Trustees of FFB Funds Trust do not intend to present any other
business at each Meeting. If, however, any other matters are properly
brought before each Meeting, the persons named in the accompanying form
of proxy will vote thereon in accordance with their judgment.
THE BOARD OF TRUSTEES OF FFB FUNDS TRUST, INCLUDING THE INDEPENDENT
TRUSTEES, RECOMMENDS APPROVAL OF THE PLANS AND THE INTERIM ADVISORY
AGREEMENTS, AND ANY UNMARKED PROXIES WITHOUT INSTRUCTIONS TO THE
CONTRARY WILL BE VOTED IN FAVOR OF APPROVAL OF THE PLANS AND THE INTERIM
ADVISORY AGREEMENTS.
September 28 October 2, 1995
-43-<PAGE>
APPENDIX A
The name, address and principal occupation of the principal
executive officers and directors of First Union National Bank of North
Carolina are as follows:
Principal Occupation
Name and Address During Past 5 Years
Directors:
Daniel T. Blue, Jr. Partner of Thigpen,
Thigpen, Blue, Stephens & Blue, Stephens &
Fellows Fellows
Legislative Bldg., Room 2304
Raleigh, NC 27601-1096
Ben Mayo Boddie Chairman & CEO of
Boddie-Noell Enterprises, Inc. Boddie-Noell
P.O. Box 1908 Enterprises, Inc.
Rocky Mount, NC 27802
John F.A.V. Cecil President of Biltmore
Biltmore Dairy Farms, Inc. Dairy Farms, Inc.
P.O. Box 5355
Asheville, NC 28813
John Crosland, Jr. Chairman of the Board
The Crosland Group, Inc. of The Crosland Group
135 Scaleybark Road
Charlotte, NC 28209
James F. Goodmon President & Chief
Capitol Broadcasting Company, Executive Officer of
Inc. Capitol Broadcasting
2619 Eastern Blvd. Company, Inc.
Raleigh, NC 27605
Charles L. Grace President of Cummins
Cummins Atlantic, Inc. Atlantic, Inc.
P.O. Box 240729
Charlotte, NC 28224-0729
Raymond A. Bryan, Jr. Chairman & CEO of
T.A. Loving Company T.A. Loving Company
P.O. Drawer 919
Goldsboro, NC 27530
John W. Copeland President of Ruddick
Ruddick Corporation Corporation
2000 Two First Union Center
Charlotte, NC 28282 <PAGE>
Principal Occupation
Name and Address During Past 5 Years
J. William Disher Chairman & CEO of Lance
Lance Incorporated Incorporated
P.O. Box 32368
Charlotte, NC 28232
Malcolm E. Everett, III Chairman & CEO of FUNB
First Union National Bank of
North Carolina
310 S. Tryon Street
Charlotte, NC 28288-0156
Shelton Gorelick President of SGIC, Inc.
SGIC, Inc.
741 Kenilworth Ave.
Suite 200
Charlotte, NC 28204
James E.S. Hynes Chairman of Hynes Sales
Hynes Sales Company, Inc. Company, Inc.
P.O. Box 220948
Charlotte, NC 28222
Mackey J. McDonald President & CEO of VF
VF Corporation Corporation
P.O. Box 1022
Reading, PA 19603
Earl N. Phillips, Jr. President & CEO of
First Factors Corporation First Factors
P.O. Box 2730 Corporation
High Point, NC 27261
J. Gregory Poole, Jr. Chairman & President of
Gregory Poole Equipment Company Gregory Poole Equipment
P.O. Box 469 Company
Raleigh, NC 27602
Nelson Schwab, III Chairman & CEO of
Paramount Parks Paramount Parks
8720 Red Oak Boulevard
Suite 315
Charlotte, NC 28217
George Shinn Chairman of Shinn
Shinn Enterprises, Inc. Enterprises, Inc.
One Hive Drive
Charlotte, NC 28217
-2- <PAGE>
Principal Occupation
Name and Address During Past 5 Years
John P. Rostan, III General Partner of
Heritage Investments Heritage Investments
P.O. Box 220
Valdese, NC 28690
Charles M. Shelton, Sr. General Partner of The
The Shelton Companies, Inc. Shelton Companies, Inc.
3600 One First Union Center
Charlotte, NC 28202
Harley F. Shuford, Jr. President & CEO of
Century Furniture Industries Century Furniture
P.O. Box 608 Industries
Hickory, NC 28603
Principal Executive
Officers:
Austin A. Adams Executive Vice
President
Robert T. Atwood Executive Vice
President and Chief
Financial Officer
Marion A. Cowell, Jr. Executive Vice
President and General
Counsel
Edward E. Crutchfield, Jr. Chairman, CEO of First
Union Corporation, Vice
Chairman of FUNB
Malcolm E. Everett, III President
John R. Georgius President of First
Union Corporation
James Hatch Senior Vice President
and Corporate
Controller
Richard C. Highfield Senior Vice President
of First Union
Corporation
-3- <PAGE>
Principal Occupation
Name and Address During Past 5 Years
Don R. Johnson Executive Vice
President
Ben C. Maffitt Executive Vice
President
Barbara K. Massa Senior Vice President
Donald A. McMullen Executive Vice
President
H. Burt Melton Executive Vice
President
Malcolm T. Murray, Jr. Executive Vice
President
Alvin T. Sale Executive Vice
President
Ken Stancliff Senior Vice President
and Corporate Treasurer
Richard K. Wagoner Executive Vice
President and General
Fund Officer
B. J. Walker Vice Chairman
Fred Winkler Senior Vice President
James B. Wolf Senior Vice President
of First Union
Corporation
Unless otherwise indicated, the address of each person listed above
is First Union National Bank of North Carolina, One First Union Center,
Charlotte, NC 28288.
-4-<PAGE>
VOTE THIS PROXY CARD TODAY
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
................................................................
FFB FUNDS TRUST - FFB 100% U.S. TREASURY FUND
SPECIAL MEETING OF SHAREHOLDERS -- NOVEMBER 13 21, 1995
The undersigned hereby appoints, and Joseph Ready, Ben L. Jones and
Mark Sipe and each of them, attorneys and proxies for the undersigned,
with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the
FFB 100% U.S. Treasury Fund (the "Fund"), which the undersigned is
entitled to vote at a Meeting of Shareholders of the Fund to be held at
237 Park Avenue, New York, New York, 10017 on November 13, 1995, at 10
123 South Broad Street, 5th Floor, Philadelphia, Pennsylvania 19109 on
November 21, 1995, at 11:00 a.m. and any adjournments thereof (the
"Meeting"). The undersigned hereby acknowledges receipt of the Notice
of Meeting and Prospectus/Proxy Statement, and hereby instructs said
attorneys and proxies to vote said shares as indicated hereon. In their
discretion, the proxies are authorized to vote upon such other matters
as may properly come before the Meeting. A majority of the proxies
present and acting at the Meeting in person or by substitute (or, if
only one shall be so present, then that one) shall have and may exercise
all of the powers and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
NOTE: Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian, or corporate officer, please give your
full title.
DATE:______________, 1995 _____________________________
______________________________
Signature(s)
______________________________
Title(s), if applicable
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.<PAGE>
PLEASE INDICATE YOUR VOTE BY AN "X" IN THE APPROPRIATE BOX BELOW. THIS
PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION,
THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS.
1. To approve the proposed Agreement and Plan of Reorganization with
the Evergreen Treasury Money Market Fund.
[ ] YES [ ] NO [ ] ABSTAIN
2. To approve the proposed Interim Investment Advisory Agreement with
the Capital Management Group of First Union National Bank of North
Carolina.
[ ] YES [ ] NO [ ] ABSTAIN
3. To consider and vote upon such other matters as In their
discretion, the Proxies, and each of them, are authorized to vote upon
any other business that may properly come before the Meeting, or any
adjournment(s) thereof, including any adjournment(s) necessary to obtain
the requisite quorums and for approvals. said meeting or any
adjournments thereof.
[ ] YES [ ] NO [ ] ABSTAIN
These items are discussed in greater detail in the attached
Prospectus/Proxy Statement. The Board of Trustees of the FFB Funds
Trust has fixed the close of business on September 8, 1995, as the
record date for the determination of shareholders entitled to notice of
and to vote at the meeting Meeting.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE
REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON THE
INSIDE COVER OF THE PROSPECTUS/PROXY STATEMENT.
Joan V. Fiore
Secretary
September 28, 1995
In their discretion, the Proxies, and each of them, are authorized to
vote upon any other business that may properly come before the meeting,
or any adjournment(s) thereof, including any adjournment(s) necessary to
obtain the requisite quorums and for approvals.
-2-<PAGE>
VOTE THIS PROXY CARD TODAY
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
................................................................
FFB FUNDS TRUST - FFB U.S. GOVERNMENT FUND
SPECIAL MEETING OF SHAREHOLDERS -- NOVEMBER 13 21, 1995
The undersigned hereby appoints, and Joseph Ready, Ben L. Jones and
Mark Sipe and each of them, attorneys and proxies for the undersigned,
with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the
FFB U.S. Government Fund (the "Fund"), which the undersigned is entitled
to vote at a Meeting of Shareholders of the Fund to be held at 237 Park
Avenue, New York, New York, 10017 on November 13, 1995, at 10 123 South
Broad Street, Philadelphia, Pennsylvania 19109 on November 21, 1995, at
11:00 a.m. and any adjournments thereof (the "Meeting"). The
undersigned hereby acknowledges receipt of the Notice of Meeting and
Prospectus/Proxy Statement, and hereby instructs said attorneys and
proxies to vote said shares as indicated hereon. In their discretion,
the proxies are authorized to vote upon such other matters as may
properly come before the Meeting. A majority of the proxies present and
acting at the Meeting in person or by substitute (or, if only one shall
be so present, then that one) shall have and may exercise all of the
powers and authority of said proxies hereunder. The undersigned hereby
revokes any proxy previously given.
NOTE: Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian, or corporate officer, please give your
full title.
DATE:______________, 1995 _____________________________
______________________________
Signature(s)
______________________________
Title(s), if applicable
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.<PAGE>
PLEASE INDICATE YOUR VOTE BY AN "X" IN THE APPROPRIATE BOX BELOW. THIS
PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION,
THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS.
1. To approve the proposed Agreement and Plan of Reorganization with
the Evergreen Treasury Money Market Fund.
[ ] YES [ ] NO [ ] ABSTAIN
2. To approve the proposed Interim Investment Adivsory Agreement with
the Capital Management Group of First Union National Bank of North
Carolina.
[ ] YES [ ] NO [ ] ABSTAIN
3. To consider and vote upon such other matters as In their
discretion, the Proxies, and each of them, are authorized to vote upon
any other business that may properly come before the Meeting, or any
adjournment(s) thereof, including any adjournment(s) necessary to obtain
the requisite quorums and for approvals. said meeting or any
adjournments thereof.
[ ] YES [ ] NO [ ] ABSTAIN
These items are discussed in greater detail in the attached
Prospectus/Proxy Statement. The Board of Trustees of the FFB Funds
Trust has fixed the close of business on September 8, 1995, as the
record date for the determination of shareholders entitled to notice of
and to vote at the meeting Meeting.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE
REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON THE
INSIDE COVER OF THE PROSPECTUS/PROXY STATEMENT.
Joan V. Fiore
Secretary
September 28, 1995
In their discretion, the Proxies, and each of them, are authorized to
vote upon any other business that may properly come before the meeting,
or any adjournment(s) thereof, including any adjournment(s) necessary to
obtain the requisite quorums and for approvals.
-2- <PAGE>
VOTE THIS PROXY CARD TODAY
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
................................................................
FFB FUNDS TRUST - FFB U.S. TREASURY FUND
SPECIAL MEETING OF SHAREHOLDERS -- NOVEMBER 13 21, 1995
The undersigned hereby appoints, and Joseph Ready, Ben L. Jones and
Mark Sipe and each of them, attorneys and proxies for the undersigned,
with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the
FFB U.S. Treasury Fund (the "Fund"), which the undersigned is entitled
to vote at a Meeting of Shareholders of the Fund to be held at 237 Park
Avenue, New York, New York, 10017 on November 13, 1995, at 10 123 South
Broad Street, 5th Floor, Philadelphia, Pennsylvania 19109 on November
21, 1995, at 11:00 a.m. and any adjournments thereof (the "Meeting").
The undersigned hereby acknowledges receipt of the Notice of Meeting and
Prospectus/Proxy Statement, and hereby instructs said attorneys and
proxies to vote said shares as indicated hereon. In their discretion,
the proxies are authorized to vote upon such other matters as may
properly come before the Meeting. A majority of the proxies present and
acting at the Meeting in person or by substitute (or, if only one shall
be so present, then that one) shall have and may exercise all of the
powers and authority of said proxies hereunder. The undersigned hereby
revokes any proxy previously given.
NOTE: Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian, or corporate officer, please give your
full title.
DATE:______________, 1995 _____________________________
______________________________
Signature(s)
______________________________
Title(s), if applicable
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.<PAGE>
PLEASE INDICATE YOUR VOTE BY AN "X" IN THE APPROPRIATE BOX BELOW. THIS
PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION,
THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS.
1. To approve the proposed Agreement and Plan of Reorganization with
the Evergreen Treasury Money Market Fund.
[ ] YES [ ] NO [ ] ABSTAIN
2. To Approve the Proposed Interim Investment Advisory Agreement with
the Capital Management Group of First Union National Bank of North
Carolina.
[ ] YES [ ] NO [ ] ABSTAIN
3. To consider and vote upon such other matters as In their
discretion, the Proxies, and each of them, are authorized to vote upon
any other business that may properly come before the Meeting, or any
adjournment(s) thereof, including any adjournment(s) necessary to obtain
the requisite quorums and for approvals. said meeting or any
adjournments thereof.
[ ] YES [ ] NO [ ] ABSTAIN
These items are discussed in greater detail in the attached
Prospectus/Proxy Statement. The Board of Trustees of FFB Funds Trust
has fixed the close of business on September 8, 1995, as the record date
for the determination of shareholders entitled to notice of and to vote
at the meeting Meeting.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE
REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON THE
INSIDE COVER OF THE PROSPECTUS/PROXY STATEMENT.
Joan V. Fiore
Secretary
September 28, 1995
In their discretion, the Proxies, and each of them, are authorized to
vote upon any other business that may properly come before the meeting,
or any adjournment(s) thereof, including any adjournment(s) necessary to
obtain the requisite quorums and for approvals.
-2- <PAGE>
Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this 19th day of September, 1995, by and between Evergreen Investment
Trust, a Massachusetts business trust (the "Evergreen Trust"), with its
principal place of business at 2500 Westchester Avenue, Purchase, New York
10577, with respect to its Evergreen Treasury Money Market Fund series (the
"Acquiring Fund"), and FFB Funds Trust (the "FFB Trust"), a Massachusetts
business trust, with respect to its FFB 100% U.S. Treasury Fund series,
with its principal place of business at 237 Park Avenue, New York, New York
10017 (the "Selling Fund").
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368 (a)(1)(C) of the United
States Internal Revenue Code of 1986 (the "Code"). The reorganization
(the "Reorganization") will consist of the transfer of substantially all of
the assets of the Selling Fund in exchange solely for Class A shares of
beneficial interest, without par value, of the Acquiring Fund (the
"Acquiring Fund Shares") and the assumption by the Acquiring Fund of
certain stated liabilities of the Selling Fund and the distribution, after
the Closing Date hereinafter referred to, of the Acquiring Fund Shares to
the shareholders of the Selling Fund in liquidation of the Selling Fund as
provided herein, all upon the terms and conditions hereinafter set forth in
this Agreement.
WHEREAS, the Selling Fund and the Acquiring Fund are separate investment
series of open-end, registered investment companies of the management type
and the Selling Fund owns securities which generally are assets of the
character in which the Acquiring Fund is permitted to invest;
WHEREAS, both Funds are authorized to issue their shares of beneficial
interest;
WHEREAS, the Trustees of the Evergreen Trust have determined that the
exchange of substantially all of the assets of the Selling Fund for
Acquiring Fund Shares and the assumption of certain stated liabilities by
the Acquiring Fund on the terms and conditions hereinafter set forth is are
in the best interests of the Acquiring Fund shareholders and that the
interests of the existing shareholders of the Acquiring Fund will not be
diluted as a result of the transactions contemplated herein;
WHEREAS, the Trustees of the FFB Trust have determined that the Selling
Fund should exchange substantially all of its assets and certain of its
liabilities for Acquiring Fund Shares and that the interests of the
existing shareholders of the Selling Fund will not be diluted as a result
of the transactions contemplated herein;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
TRANSFER OF ASSETS OF THE SELLING FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES AND ASSUMPTION OF SELLING FUND LIABILITIES AND LIQUIDATION OF
THE SELLING FUND
1.1 The Exchange. Subject to the terms and conditions herein set forth and
on the basis of the representations and warranties contained herein, the
Selling Fund agrees to transfer substantially all of the Selling Fund's
assets as set forth in paragraph 1.2 to the Acquiring Fund, and the
Acquiring Fund agrees in exchange therefor (i) to deliver to the Selling
Fund the number of Acquiring Fund Shares, including fractional Acquiring
Fund Shares, determined by multiplying the shares outstanding of each class
of the Selling Fund by the ratio computed by dividing the net asset value
per share of each such class of the Selling Fund by the net asset value per
share of the Acquiring Fund Shares computed in the manner and as of the
time and date set forth in paragraph 2.2 and (ii) to assume certain
liabilities of the Selling Fund, as set forth in paragraph 1.3. Such
transactions shall take place at the closing provided for in paragraph 3.1
(the "Closing Date").
1.2 Assets to be Acquired. The assets of the Selling Fund to be acquired by
the Acquiring Fund shall consist of all property, including without
limitation all cash, securities, commodities and futures interests and
dividends or interest receivable, which are owned by the Selling Fund and
any deferred or prepaid expenses shown as an asset on the books of the
Selling Fund on the Closing Date. The Selling Fund has provided the
Acquiring Fund with its most recent audited financial statements which
contain a list of all of Selling Fund's assets as of the date thereof. The
Selling Fund hereby represents that as of the date of the execution of this
Agreement there have been no changes in its financial position as
reflected in said financial statements other than those occurring in the
ordinary course of its business in connection with the purchase and sale of
securities and the payment of its normal operating expenses. The Selling
Fund reserves the right to sell any of such securities but will not,
without the prior written approval of the Acquiring Fund, acquire any
additional securities other than securities of the type in which the
Acquiring Fund is permitted to invest. The Acquiring Fund will, within a
reasonable time prior to the Closing Date, furnish the Selling Fund with a
statement of the Acquiring Fund's investment objectives, policies and
restrictions and a list of the securities, if any, on the Selling Fund's
list referred to in the second sentence of this paragraph which do not
conform to the Acquiring Fund's investment objectives, policies, and
restrictions. In the event that the Selling Fund holds any investments
which the Acquiring Fund may not hold, the Selling Fund will dispose of
such securities prior to the Closing Date. In addition, if it is determined
that the Selling Fund and the Acquiring Fund portfolios, when aggregated,
would contain investments exceeding certain percentage limitations imposed
upon the Acquiring Fund with respect to such investments, the Selling Fund
if requested by the Acquiring Fund will dispose of a sufficient amount of
such investments as may be necessary to avoid violating such limitations as
of the Closing Date.
1.3 Liabilities to be Assumed. The Selling Fund will endeavor to discharge
all of its known liabilities and obligations prior to the Closing Date.
The Acquiring Fund shall assume only those liabilities, expenses, costs,
charges and reserves reflected on a Statement of Assets and Liabilities of
the Selling Fund prepared by Furman Selz Incorporated, the administrator of
the Selling Fund, as of the Valuation Date (as defined in paragraph 2.1),
in accordance with generally accepted accounting principles consistently
applied from the prior audited period. The Acquiring Fund shall assume
only those liabilities of the Selling Fund reflected in such Statement of
Assets and Liabilities and shall not assume any other liabilities, whether
absolute or contingent, known or unknown, accrued or unaccrued, all of
which shall remain the obligation of the Selling Fund.
1.4 Liquidation and Distribution. As soon after the Closing Date as is
conveniently practicable (the "Liquidation Date"), (a) the Selling Fund
will liquidate and distribute pro rata to the Selling Fund's shareholders
of record, determined as of the close of business on the Closing Date (the
"Selling Fund Shareholders"), the Acquiring Fund Shares received by the
Selling Fund pursuant to paragraph 1.1. and (b) the Selling Fund will
thereupon proceed to dissolve as set forth in paragraph 1.8 below. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Selling Fund on
the books of the Acquiring Fund, to open accounts on the share records of
the Acquiring Fund in the names of the Selling Fund Shareholders and
representing the respective pro rata number of the Acquiring Fund Shares
due such shareholders. All issued and outstanding shares of the Selling
Fund will simultaneously be canceled on the books of the Selling Fund. The
Acquiring Fund shall not issue certificates representing the Acquiring Fund
Shares in connection with such exchange.
1.5 Ownership of Shares. Ownership of Acquiring Fund Shares will be shown
on the books of the Acquiring Fund's transfer agent. Shares of the
Acquiring Fund will be issued in the manner described in the combined
Prospectus and Proxy Statement on Form N-14 to be distributed to
shareholders of the Selling Fund as described in Section 5 paragraph 5.7.
1.6 Transfer Taxes. Any transfer taxes payable upon issuance of the
Acquiring Fund Shares in a name other than the registered holder of the
Selling Fund shares on the books of the Selling Fund as of that time shall,
as a condition of such issuance and transfer, be paid by the person to whom
such Acquiring Fund Shares are to be issued and transferred.
1.7 Reporting Responsibility. Any reporting responsibility of the Selling
Fund is and shall remain the responsibility of the Selling Fund up to and
including the Closing Date and such later date on which the Selling Fund is
terminated.
1.8 Termination. The Selling Fund shall be terminated promptly following
the Closing Date and the making of all distributions pursuant to paragraph
1.4.
ARTICLE II
VALUATION
2.1 Valuation of Assets. The value of the Selling Fund's assets to be
acquired by the Acquiring Fund hereunder shall be the value of such assets
computed as of the close of business on the New York Stock Exchange on the
Closing Date (such time and date being hereinafter called the "Valuation
Date"), using the valuation procedures set forth in the Evergreen Trust's
Declaration of Trust and the Acquiring Fund's then current prospectus and
statement of additional information or such other valuation procedures as
shall be mutually agreed upon by the parties.
2.2 Valuation of Shares. The net asset value per share of the Acquiring
Fund Shares shall be the net asset value per share computed as of the close
of business on the New York Stock Exchange on the Valuation Date, using the
valuation procedures set forth in the Evergreen Trust's Declaration of
Trust and the Acquiring Fund's then current prospectus and statement of
additional information.
2.3 Shares to be Issued. The number of the Acquiring Fund Shares of each
class to be issued (including fractional shares, if any) in exchange for
the Selling Fund's assets shall be determined by multiplying the shares
outstanding of each class of the Selling Fund by the ratio computed by
dividing the net asset value per share of the Selling Fund attributable to
each of its classes by the net asset value per share of the respective
classes of the Acquiring Fund determined in accordance with paragraph 2.2.
2.4 Determination of Value. All computations of value shall be made by
State Street Bank and Trust Company in accordance with its regular practice
in pricing the shares and assets of the Acquiring Fund.
ARTICLE III
CLOSING AND CLOSING DATE
3.1 Closing Date. The Closing (the "Closing") shall take place on January
12 19, 1996 or such other date as the parties may agree to in writing (the
"Closing Date"). All acts taking place at the Closing shall be deemed to
take place simultaneously as of the close of business on the Closing Date
unless otherwise provided. The Closing shall be held as of 9:00 o'clock
a.m. at the offices of Evergreen Asset Management Corp., 2500 Westchester
Avenue, Purchase, New York 10577, or at such other time and/or place as
the parties may agree.
3.2 Custodian's Certificate. First Fidelity Bank, N.A., as custodian for
the Selling Fund (the "Custodian"), shall deliver at the Closing a
certificate of an authorized officer stating that: (a) the Selling Fund's
portfolio securities, cash, and any other assets shall have been delivered
in proper form to the Acquiring Fund on the Closing Date and (b) all
necessary taxes including all applicable Federal and state stock transfer
stamps, if any, shall have been paid, or provision for payment shall have
been made, in conjunction with the delivery of portfolio securities by the
Selling Fund.
3.3 Effect of Suspension in Trading. In the event that on the Valuation
Date (a) the New York Stock Exchange or another primary trading market for
portfolio securities of the Acquiring Fund or the Selling Fund shall be
closed to trading or trading thereon shall be restricted, or (b) trading or
the reporting of trading on said Exchange or elsewhere shall be disrupted
so that accurate appraisal of the value of the net assets of the Acquiring
Fund or the Selling Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when trading shall
have been fully resumed and reporting shall have been restored.
3.4 Transfer Agent's Certificate. First Fidelity Bank, N.A., as transfer
agent for the Selling Fund shall deliver at the Closing a certificate of an
authorized officer stating that its records contain the names and addresses
of the Selling Fund Shareholders and the number and percentage ownership of
outstanding shares owned by each such shareholder immediately prior to the
Closing. The Acquiring Fund shall issue and deliver or cause its transfer
agent to issue and deliver a confirmation evidencing the Acquiring Fund
Shares to be credited on the Closing Date to the Secretary of the FFB Trust
, or provide evidence satisfactory to the Selling Fund that such Acquiring
Fund Shares have been credited to the Selling Fund's account on the books
of the Acquiring Fund. At the Closing each party shall deliver to the other
such bills of sale, checks, assignments, share certificates, if any,
receipts and other documents as such other party or its counsel may
reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations of the Selling Fund. The Selling Fund represents and
warrants to the Acquiring Fund as follows:
(a) The Selling Fund is a separate investment series of a Massachusetts
business trust duly organized, validly existing and in good standing under
the laws of the Commonwealth of Massachusetts;
(b) The Selling Fund is a separate investment series of a registered
investment company classified as a management company of the open-end type
and its registration with the Securities and Exchange Commission (the
"Commission") as an investment company under the Investment Company Act of
1940, as amended (the "1940 Act") is in full force and effect;
(c) The current prospectus and statement of additional information of the
Selling Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933, as amended (the "1933 Act") and
the 1940 Act and the rules and regulations of the Commission thereunder and
do not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not materially misleading;
(d) The Selling Fund is not, and the execution, delivery and performance of
this Agreement (subject to shareholder approval) will not, result in a
violation of any provision of the FFB Trust's Declaration of Trust or
By-Laws or of any agreement, indenture, instrument, contract, lease or
other undertaking to which the Selling Fund is a party or by which it is
bound;
(e) The Selling Fund has no material contracts or other commitments (other
than this Agreement) which will be terminated with liability to it prior to
the Closing Date;
(f) Except as otherwise disclosed in writing to and accepted by the
Acquiring Fund, no litigation, administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Selling Fund or any of its properties or
assets which, if adversely determined, would materially and adversely
affect its financial condition, the conduct of its business or the ability
of the Selling Fund to carry out the transactions contemplated by this
Agreement. The Selling Fund knows of no facts which might form the basis
for the institution of such proceedings and is not a party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or
its ability to consummate the transactions herein contemplated;
(g) The financial statements of the Selling Fund at June 30, 1995 are in
accordance with generally accepted accounting principles consistently
applied, and such statements (copies of which have been furnished to the
Acquiring Fund) fairly reflect the financial condition of the Selling Fund
as of such date, and there are no known contingent liabilities of the
Selling Fund as of such date not disclosed therein;
(h) Since June 30, 1995 there has not been any material adverse change in
the Selling Fund's financial condition, assets, liabilities or business
other than changes occurring in the ordinary course of business, or any
incurrence by the Selling Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquiring Fund. For the purposes of this
subparagraph (h), a decline in the net asset value of the Selling Fund
shall not constitute a material adverse change;
(i) At the Closing Date, all Federal and other tax returns and reports of
the Selling Fund required by law to have been filed by such dates shall
have been filed, and all Federal and other taxes shown due on said returns
and reports shall have been paid, or provision shall have been made for the
payment thereof and to the best of the Selling Fund's knowledge no such
return is currently under audit and no assessment has been asserted with
respect to such returns;
(j) For each fiscal year of its operation, the Selling Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and has distributed in each such year all
net investment income and realized capital gains;
(k) All issued and outstanding shares of the Selling Fund are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by the Selling Fund (except that, under Massachusetts
law, Selling Fund Shareholders could, under certain circumstances be held
personally liable for obligations of the Selling Fund). All of the issued
and outstanding shares of the Selling Fund will, at the time of the Closing
Date, be held by the persons and in the amounts set forth in the records of
the transfer agent as provided in paragraph 3.4. The Selling Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of the Selling Fund shares, nor is there outstanding any
security convertible into any of the Selling Fund shares;
(l) At the Closing Date, the Selling Fund will have good and marketable
title to the Selling Fund's assets to be transferred to the Acquiring Fund
pursuant to paragraph 1.2 and full right, power, and authority to sell,
assign, transfer and deliver such assets hereunder, and upon delivery and
payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act,
other than as disclosed to the Acquiring Fund and accepted by the Acquiring
Fund;
(m) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Selling Fund
and, subject to approval by the Selling Fund Shareholders, this Agreement
constitutes a valid and binding obligation of the Selling Fund, enforceable
in accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(n) The information to be furnished by the Selling Fund for use in
no-action letters, applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with Federal
securities and other laws and regulations thereunder applicable thereto;
(o) The proxy statement of the Selling Fund to be included in the
Registration Statement referred to in paragraph 5.7 (other than information
therein that relates to the Acquiring Fund) will, on the effective date of
the Registration Statement and on the Closing Date, not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which such statements were made, not misleading.
4.2 Representations of the Acquiring Fund. The Acquiring Fund represents
and warrants to the Selling Fund as follows:
(a) The Acquiring Fund is a separate investment series of a Massachusetts
business trust duly organized, validly existing and in good standing under
the laws of the Commonwealth of Massachusetts.;
(b) The Acquiring Fund is a separate investment series of a Massachusetts
business trust that is registered as an investment company classified as a
management company of the open-end type and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect;
(c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations
of the Commission thereunder and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(d) The Acquiring Fund is not, and the execution, delivery and performance
of this Agreement will not, result in a violation of Evergreen Trust's
Declaration of Trust or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquiring Fund is a party
or by which it is bound;
(e) Except as otherwise disclosed in writing to the Selling Fund and
accepted by the Selling Fund, no litigation, administrative proceeding or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against the Acquiring Fund or any of
its properties or assets which, if adversely determined, would materially
and adversely affect its financial condition and the conduct of its
business or the ability of the Acquiring Fund to carry out the transactions
contemplated by this Agreement. The Acquiring Fund knows of no facts which
might form the basis for the institution of such proceedings and is not a
party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely affects its
business or its ability to consummate the transactions contemplated herein;
(f) The financial statements of the Acquiring Fund at December 31, 1994,
have been audited by KPMG Peat Marwick LLP, certified public accountants,
and are in accordance with generally accepted accounting principles
consistently applied, and such statements (copies of which have been
furnished to the Selling Fund) fairly reflect the financial condition of
the Acquiring Fund as of such date, and there are no known contingent
liabilities affecting the Acquiring Fund as of such date not disclosed
therein;
(g) Since December 31, 1994 there has not been any material adverse change
in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquiring Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Fund. For the purposes of this
subparagraph (g), a decline in the net asset value of the Acquiring Fund
shall not constitute a material adverse change;
(h) At the Closing Date, all Federal and other tax returns and reports of
the Acquiring Fund required by law then to be filed by such dates shall
have been filed, and all Federal and other taxes shown due on said returns
and reports shall have been paid or provision shall have been made for the
payment thereof and to the best of the Acquiring Fund's knowledge, no such
return is currently under audit and no assessment has been asserted with
respect to such returns;
(i) For each fiscal year of its operation the Acquiring Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and has distributed in each such year all
net investment income and realized capital gains;
(j) All issued and outstanding Acquiring Fund Shares are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable (except that, under Massachusetts law, shareholders of
the Acquiring Fund could, under certain circumstances, be held personally
liable for obligations of the Acquiring Fund). The Acquiring Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any Acquiring Fund Shares, nor is there outstanding any security
convertible into any Acquiring Fund Shares;
(k) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Acquiring Fund,
and this Agreement constitutes a valid and binding obligation of the
Acquiring Fund enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights and to general equity
principles;
(l) The Acquiring Fund Shares to be issued and delivered to the Selling
Fund, for the account of the Selling Fund Shareholders, pursuant to the
terms of this Agreement will at the Closing Date have been duly authorized
and, when so issued and delivered, will be duly and validly issued
Acquiring Fund Shares, and will be fully paid and non-assessable (except
that, under Massachusetts law, shareholders of the Acquiring Fund could,
under certain circumstances, be held personally liable for obligations of
the Acquiring Fund);
(m) The information to be furnished by the Acquiring Fund for use in no-
action letters, applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with Federal
securities and other laws and regulations applicable thereto;
(n) The Prospectus and Proxy Statement to be included in the Registration
Statement (only insofar as it relates to the Acquiring Fund ) will, on the
effective date of the Registration Statement and on the Closing Date, not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements were
made, not misleading; and
(o) The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and
such of the state Blue Sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE SELLING FUND
5. 1 Operation in Ordinary Course. The Acquiring Fund and the Selling Fund
each will operate its business in the ordinary course between the date
hereof and the Closing Date, it being understood that such ordinary course
of business will include customary dividends and distributions.
5.2 Approval of Shareholders. The FFB Trust will call a meeting of the
Selling Fund Shareholders to consider and act upon this Agreement and to
take all other action necessary to obtain approval of the transactions
contemplated herein.
5.3 Investment Representation. The Selling Fund covenants that the
Acquiring Fund Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof other than in accordance with
the terms of this Agreement.
5.4 Additional Information. The Selling Fund will assist the Acquiring
Fund in obtaining such information as the Acquiring Fund reasonably
requests concerning the beneficial ownership of the Selling Fund shares.
5.5 Further Action. Subject to the provisions of this Agreement, the
Acquiring Fund and the Selling Fund will each take, or cause to be taken,
all action, and do or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, including any actions required to be taken
after the Closing Date.
5.6 Statement of Earnings and Profits. As promptly as practicable, but in
any case within sixty days after the Closing Date, the Selling Fund shall
furnish the Acquiring Fund, in such form as is reasonably satisfactory to
the Acquiring Fund, a statement of the earnings and profits of the Selling
Fund for Federal income tax purposes which will be carried over by the
Acquiring Fund as a result of Section 381 of the Code, and which will be
certified by the FFB Trust's President, its Treasurer and its independent
auditors.
5.7 Preparation of Form N-14 Registration Statement. The Selling Fund will
provide the Acquiring Fund with information reasonably necessary for the
preparation of a prospectus which will include the proxy statement,
referred to in paragraph 4.1(o) (the "Prospectus and Proxy Statement"), all
to be included in a Registration Statement on Form N-14 of the Acquiring
Fund (the "Registration Statement"), in compliance with the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act") and the 1940
Act in connection with the meeting of the Selling Fund Shareholders to
consider approval of this Agreement and the transactions contemplated
herein.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING FUND
The obligations of the Selling Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance
by the Acquiring Fund of all the obligations to be performed by it
hereunder on or before the Closing Date, and, in addition thereto, the
following further conditions:
6.1 All representations, covenants and warranties of the Acquiring Fund
contained in this Agreement shall be true and correct as of the date hereof
and as of the Closing Date with the same force and effect as if made on and
as of the Closing Date, and the Acquiring Fund shall have delivered to the
Selling Fund a certificate executed in its name by the Evergreen Trust's
President or Vice President and its Treasurer or Assistant Treasurer, in
form and substance reasonably satisfactory to the Selling Fund and dated as
of the Closing Date, to such effect and as to such other matters as the
Selling Fund shall reasonably request; and
6.2 The Selling Fund shall have received on the Closing Date an opinion
from Sullivan & Worcester, counsel to the Acquiring Fund, dated as of the
Closing Date, in a form reasonably satisfactory to the Selling Fund,
covering the following points:
That (a) the Acquiring Fund is a separate investment series of a
Massachusetts business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has the
power to own all of its properties and assets and to carry on its business
as presently conducted; (b) this Agreement has been duly authorized,
executed and delivered by the Acquiring Fund, and, assuming that the
Prospectus and Proxy Statement, and Registration Statement comply with the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder and, assuming due authorization, execution and delivery of this
Agreement by the Selling Fund, is a valid and binding obligation of the
Acquiring Fund enforceable against the Acquiring Fund in accordance with
its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and to general equity principles; (c) assuming
that a consideration therefor not less than the net asset value thereof has
been paid, the Acquiring Fund Shares to be issued and delivered to the
Selling Fund on behalf of the Selling Fund Shareholders as provided by this
Agreement are duly authorized and upon such delivery will be legally issued
and outstanding and fully paid and non-assessable (except that, under
Massachusetts law, shareholders of the Acquiring Fund could, under certain
circumstances, be held personally liable for obligations of the Acquiring
Fund), and no shareholder of the Acquiring Fund has any preemptive rights
in respect thereof; (d) the execution and delivery of this Agreement did
not, and the consummation of the transactions contemplated hereby will not,
result in a violation of the Evergreen Trust's Declaration of Trust or By-
Laws or any provision of any material agreement, indenture, instrument,
contract, lease or other undertaking (in each case known to such counsel)
to which the Acquiring Fund is a party or by which it or any of its
properties may be bound or to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any penalty, under any
agreement, judgment, or decree to which the Acquiring Fund is a party or by
which it is bound; (e) to the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental authority of
the United States or the Commonwealth of Massachusetts, is required for the
consummation by the Acquiring Fund of the transactions contemplated herein,
except such as have been obtained under the 1933 Act, the 1934 Act and the
1940 Act, and such as may be required under state securities laws; (f) only
insofar as they relate to the Acquiring Fund, the descriptions in the
Prospectus and Proxy Statement of statutes, legal and governmental
proceedings and material contracts, if any, are accurate and fairly present
the information required to be shown; (g) such counsel does not know of any
legal or governmental proceedings, only insofar as they relate to the
Acquiring Fund, existing on or before the effective date of the
Registration Statement or the Closing Date required to be described in the
Registration Statement or to be filed as exhibits to the Registration
Statement which are not described or filed as required; (h) the Acquiring
Fund is a separate investment series of a Massachusetts business trust
registered as an investment company under the 1940 Act and to such
counsel's best knowledge, such registration with the Commission as an
investment company under the 1940 Act is in full force and effect; and (i)
to the knowledge of such counsel, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to the Acquiring Fund or any of its
properties or assets and the Acquiring Fund is not a party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body, which materially and adversely affects its business,
other than as previously disclosed in the Registration Statement. In
addition, such counsel shall also state that they have participated in
conferences with officers and other representatives of the Acquiring Fund
at which the contents of the Prospectus and Proxy Statement and related
matters were discussed and, although they are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus and Proxy Statement (except to the
extent indicated in paragraph (f) of their above opinion), on the basis of
the foregoing (relying as to materiality to a large extent upon the
opinions of the Evergreen Trust's officers and other representatives of the
Acquiring Fund), no facts have come to their attention that lead them to
believe that the Prospectus and Proxy Statement as of its date, as of the
date of the Selling Fund Shareholders' meeting, and as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein regarding the Acquiring Fund or
necessary, in the light of the circumstances under which they were made, to
make the statements therein regarding the Acquiring Fund not misleading.
Such opinion may state that such counsel does not express any opinion or
belief as to the financial statements or any financial or statistical
data, or as to the information relating to the Selling Fund, contained in
the Prospectus and Proxy Statement or the Registration Statement, and that
such opinion is solely for the benefit of the FFB Trust and the Selling
Fund. Such opinion shall contain such other assumptions and limitations as
shall be in the opinion of Sullivan & Worcester appropriate to render the
opinions expressed therein.
In this paragraph 6.2, references to Prospectus and Proxy Statement
include and relate to only the text of such Prospectus and Proxy Statement
and not to any exhibits or attachments thereto or to any documents
incorporated by reference therein.
6.3 The merger between First Union Corporation and First Fidelity
Corporation Bancorporation shall be completed prior to the Closing Date.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance
by the Selling Fund of all the obligations to be performed by it hereunder
on or before the Closing Date and, in addition thereto, the following
conditions:
7.1 All representations, covenants and warranties of the Selling Fund
contained in this Agreement shall be true and correct as of the date hereof
and as of the Closing Date with the same force and effect as if made on and
as of the Closing Date, and the Selling Fund shall have delivered to the
Acquiring Fund on the Closing Date a certificate executed in its name by
the FFB Trust's President or Vice President and its Treasurer or Assistant
Treasurer, in form and substance satisfactory to the Acquiring Fund and,
dated as of the Closing Date, to such effect and as to such other matters
as the Acquiring Fund shall reasonably request;
7.2 The Selling Fund shall have delivered to the Acquiring Fund a statement
of the Selling Fund's assets and liabilities, together with a list of the
Selling Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the
Closing Date, certified by the Treasurer of the FFB Trust; and
7.3 The Acquiring Fund shall have received on the Closing Date an opinion
of Baker & McKenzie, counsel to the Selling Fund, in a form satisfactory to
the Acquiring Fund covering the following points:
That (a) the Selling Fund is a separate investment series of a
Massachusetts business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has the
power to own all of its properties and assets and to carry on its business
as presently conducted; (b) this Agreement has been duly authorized,
executed and delivered by the Selling Fund, and, assuming that the
Prospectus and Proxy Statement, and Registration Statement comply with the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder and, assuming due authorization, execution and delivery of this
Agreement by the Acquiring Fund, is a valid and binding obligation of the
Selling Fund enforceable against the Selling Fund in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights
generally and to general equity principles; (c) the execution and delivery
of this Agreement did not, and the consummation of the transactions
contemplated hereby will not, result in a violation of the FFB Trust's
Declaration of Trust or By-laws, or any provision of any material
agreement, indenture, instrument, contract, lease or other undertaking (in
each case known to such counsel) to which the Selling Fund is a party or by
which it or any of its properties may be bound or, to the knowledge of such
counsel, result in the acceleration of any obligation or the imposition of
any penalty, under any agreement, judgment, or decree to which the Selling
Fund is a party or by which it is bound; (d) to the knowledge of such
counsel, no consent, approval, authorization or order of any court or
governmental authority of the United States or the Commonwealth of
Massachusetts is required for the consummation by the Selling Fund of the
transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act, and such as may be required
under state securities laws; (e) only insofar as they relate to the Selling
Fund, the descriptions in the Prospectus and Proxy Statement of statutes,
legal and governmental proceedings and material contracts, if any, are
accurate and fairly present the information required to be shown; (f) such
counsel does not know of any legal or governmental proceedings, only
insofar as they relate to the Selling Fund existing on or before the date
of mailing of the Prospectus and Proxy Statement and the Closing Date,
required to be described in the Prospectus and Proxy Statement or to be
filed as an exhibit to the Registration Statement which are not described
or filed as required; (g) the Selling Fund is a separate investment series
of a Massachusetts business trust registered as an investment company under
the 1940 Act and to such counsel's best knowledge, such registration with
the Commission as an investment company under the 1940 Act is in full force
and effect; (h) to the knowledge of such counsel, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to the Selling Fund
or any of its respective properties or assets and the Selling Fund is
neither a party to nor subject to the provisions of any order, decree or
judgment of any court or governmental body, which materially and adversely
affects its business other than as previously disclosed in the Prospectus
and Proxy Statement; (i) assuming that a consideration therefor not less
than the net asset value thereof has been paid, and assuming that such
shares were issued in accordance with the terms of the Selling Fund's
registration statement, or any amendment thereto, in effect at the time of
such issuance, all issued and outstanding shares of the Selling Fund are
legally issued and fully paid and non-assessable (except that, under
Massachusetts law, Selling Fund Shareholders could, under certain
circumstances be held personally liable for obligations of the Selling
Fund). Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Selling Fund at
which the contents of the Prospectus and Proxy Statement and related
matters were discussed and, although they are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus and Proxy Statement (except to the
extent indicated in paragraph (e) of their above opinion ), on the basis of
the foregoing (relying as to materiality to a large extent upon the
opinions of the FFB Trust's officers and other representatives of the
Selling Fund ), no facts have come to their attention that lead them to
believe that the Prospectus and Proxy Statement as of its date, as of the
date of the Selling Fund Shareholders' meeting, and as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein regarding the Selling Fund or
necessary, in the light of the circumstances under which they were made, to
make the statements therein regarding the Selling Fund not misleading. Such
opinion may state that such counsel does not express any opinion or belief
as to the financial statements or any financial or statistical data, or as
to the information relating to the Acquiring Fund, contained in the
Prospectus and Proxy Statement or Registration Statement, and that such
opinion is solely for the benefit of the Evergreen Trust and the Acquiring
Fund. Such opinion shall contain such other assumptions and limitations as
shall be in the opinion of Baker & McKenzie appropriate to render the
opinions expressed therein and shall indicate, with respect to matters of
Massachusetts law, that as Baker & McKenzie are not admitted to the bar of
Massachusetts, such opinions are based either upon the review of published
statutes, case cases and rules and regulations of the Commonwealth of
Massachusetts or upon an opinion of Massachusetts counsel.
In this paragraph 7.3, references to Prospectus and Proxy Statement
include and relate to only the text of such Prospectus and Proxy Statement
and not to any exhibits or attachments thereto or to any documents
incorporated by reference therein.
7.4 The merger between First Union Corporation and First Fidelity
Bancorporation shall be completed prior to the Closing Date.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE SELLING FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Selling Fund or the Acquiring Fund, the
other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of
the Selling Fund in accordance with the provisions of the FFB Trust's
Declaration of Trust and By-Laws and certified copies of the resolutions
evidencing such approval shall have been delivered to the Acquiring Fund.
Notwithstanding anything herein to the contrary, neither the Acquiring Fund
nor the Selling Fund may waive the conditions set forth in this paragraph
8.1;
8.2 On the Closing Date, the Commission shall not have issued an
unfavorable report under Section 25(b) of the 1940 Act, nor instituted any
proceeding seeking to enjoin the consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940 Act and no
action, suit or other proceeding shall be threatened or pending before any
court or governmental agency in which it is sought to restrain or prohibit,
or obtain damages or other relief in connection with, this Agreement or the
transactions contemplated herein;
8.3 All required consents of other parties and all other consents, orders
and permits of Federal, state and local regulatory authorities (including
those of the Commission and of state Blue Sky securities authorities.
including any necessary "no-action" positions of and exemptive orders from
such Federal and state authorities) to permit consummation of the
transactions contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve a
risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Selling Fund, provided that either party hereto may
for itself waive any of such conditions;
8.4 The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation
or proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act;
8.5 The Selling Fund shall have declared a dividend or dividends which,
together with all previous such dividends, shall have the effect of
distributing to the Selling Fund Shareholders all of the Selling Fund's
investment company taxable income for all taxable years ending on or prior
to the Closing Date (computed without regard to any deduction for dividends
paid) and all of its net capital gain realized in all taxable years ending
on or prior to the Closing Date (after reduction for any capital loss
carryforward);
8.6 The parties shall have received a favorable opinion of Sullivan &
Worcester, addressed to the Acquiring Fund and the Selling Fund
substantially to the effect that for Federal income tax purposes:
(a) The transfer of substantially all of the Selling Fund assets in
exchange for the Acquiring Fund Shares and the assumption by the Acquiring
Fund of certain identified liabilities of the Selling Fund followed by the
distribution of the Acquiring Fund Shares to the Selling Fund in
dissolution and liquidation of the Selling Fund, will constitute a
"reorganization" within the meaning of Section 368(a)(1)(C) of the Code and
the Acquiring Fund and the Selling Fund will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code; (b) no
gain or loss will be recognized by the Acquiring Fund upon the receipt of
the assets of the Selling Fund solely in exchange for the Acquiring Fund
Shares and the assumption by the Acquiring Fund of certain identified
liabilities of the Selling Fund; (c) no gain or loss will be recognized by
the Selling Fund upon the transfer of the Selling Fund assets to the
Acquiring Fund in exchange for the Acquiring Fund Shares and the assumption
by the Acquiring Fund of certain identified liabilities of the Selling Fund
or upon the distribution ( whether actual or constructive ) of the
Acquiring Fund Shares to Selling Fund Shareholders in exchange for their
shares of the Selling Fund; (d) no gain or loss will be recognized by
Selling Fund Shareholders upon the exchange of their Selling Fund shares
for the Acquiring Fund Shares in liquidation of the Selling Fund; (e) the
aggregate tax basis for the Acquiring Fund Shares received by each Selling
Fund Shareholder pursuant to the Reorganization will be the same as the
aggregate tax basis of the Selling Fund shares held by such shareholder
immediately prior to the Reorganization, and the holding period of the
Acquiring Fund Shares to be received by each Selling Fund Shareholder will
include the period during which the Selling Fund shares exchanged therefor
were held by such shareholder (provided the Selling Fund shares were held
as capital assets on the date of the Reorganization); and (f) the tax basis
of the Selling Fund assets acquired by the Acquiring Fund will be the same
as the tax basis of such assets to the Selling Fund immediately prior to
the Reorganization, and the holding period of the assets of the Selling
Fund in the hands of the Acquiring Fund will include the period during
which those assets were held by the Selling Fund. Notwithstanding anything
herein to the contrary, neither the Acquiring Fund nor the Selling Fund may
waive the conditions set forth in this paragraph 8.6.
8.7 The Acquiring Fund shall have received from KPMG Peat Marwick LLP a
letter addressed to the Acquiring Fund, in form and substance satisfactory
to the Acquiring Fund, to the effect that (i) they are independent
certified public accountants with respect to the Selling Fund within the
meaning of the 1933 Act and the applicable published rules and regulations
thereunder; (ii) on the basis of limited procedures agreed upon by the
Acquiring Fund and described in such letter (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of any unaudited pro forma financial statements included in the
Registration Statement and Prospectus and Proxy Statement, and inquiries of
appropriate officials of the FFB Trust responsible for financial and
accounting matters, nothing came to their attention which caused them to
believe that such unaudited pro forma financial statements do not comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act and the published rules and regulations
thereunder; or (iii) on the basis of limited procedures agreed upon by the
Acquiring Fund and described in such letter (but not an examination in
accordance with generally accepted auditing standards), the Capitalization
Table appearing in the Registration Statement and Prospectus and Proxy
Statement, has been obtained from and is consistent with the accounting
records of the Selling Fund; (iv) on the basis of limited procedures agreed
upon by the Acquiring Fund and described in such letter (but not an
examination in accordance with generally accepted auditing standards), the
pro forma financial statements which are included in the Registration
Statement and Prospectus and Proxy Statement, were prepared based on the
valuation of the Selling Fund's assets in accordance with the Evergreen
Trust's Declaration of Trust and the Acquiring Fund's then current
prospectus and statement of additional information pursuant to procedures
customarily utilized by the Acquiring Fund in valuing its own assets (such
procedures having been previously described to KPMG Peat Marwick LLP in
writing by the Acquiring Fund); and (v) on the basis of limited procedures
agreed upon by the Acquiring Fund and described in such letter (but not an
examination in accordance with generally accepted auditing standards) the
data utilized in the calculations of the projected expense ratio appearing
in the Registration Statement and Prospectus and Proxy Statement agree with
underlying accounting records of the Selling Fund or to written estimates
by Selling Fund's management and were found to be mathematically correct.
In addition, the Acquiring Fund shall have received from KPMG Peat
Marwick LLP a letter addressed to the Acquiring Fund dated on the Closing
Date, in form and substance satisfactory to the Acquiring Fund, to the
effect that on the basis of limited procedures agreed upon by the Acquiring
Fund (but not an examination in accordance with generally accepted auditing
standards) the calculation of net asset value per share of the Selling Fund
as of the Valuation Date was determined in accordance with generally
accepted accounting practices and the portfolio valuation practices of the
Acquiring Fund.
8.8 The Selling Fund shall have received from KPMG Peat Marwick LLP a
letter addressed to the Selling Fund, in form and substance satisfactory to
the Selling Fund, to the effect that (i) they are independent certified
public accountants with respect to the Acquiring Fund within the meaning of
the 1933 Act and the applicable published rules and regulations thereunder;
(ii) on the basis of limited procedures agreed upon by the Selling Fund and
described in such letter (but not an examination in accordance with
generally accepted auditing standards) consisting of a reading of any
unaudited pro forma financial statements included in the Registration
Statement and Prospectus and Proxy Statement, and inquiries of appropriate
officials of the Evergreen Trust responsible for financial and accounting
matters, nothing came to their attention which caused them to believe that
such unaudited pro forma financial statements do not comply as to form in
all material respects with the applicable accounting requirements of the
1933 Act and the published rules and regulations thereunder; (iii) on the
basis of limited procedures agreed upon by the Selling Fund and described
in such letter (but not an examination in accordance with generally
accepted auditing standards), the Capitalization Table appearing in the
Registration Statement and Prospectus and Proxy Statement, has been
obtained from and is consistent with the accounting records of the
Acquiring Fund; and (iv) on the basis of limited procedures agreed upon by
the Selling Fund (but not an examination in accordance with generally
accepted auditing standards) the data utilized in the calculations of the
projected expense ratio appearing in the Registration Statement and
Prospectus and Proxy Statement agree with underlying accounting records of
the Acquiring Fund or to written estimates by each Fund's management and
were found to be mathematically correct.
8.9 The Acquiring Fund and the Selling Fund shall also have received from
KPMG Peat Marwick LLP a letter addressed to the Acquiring Fund and the
Selling Fund, dated on the Closing Date in form and substance satisfactory
to the Funds, setting forth the Federal income tax implications relating to
capital loss carryforwards (if any) of the Selling Fund and the related
impact, if any, of the proposed transfer of all or substantially all of the
assets of the Selling Fund to the Acquiring Fund and the ultimate
dissolution of the Selling Fund, upon the shareholders of the Selling Fund.
ARTICLE IX
BROKERAGE FEES AND EXPENSES
9.1 The Acquiring Fund and the Selling Fund each represents and warrants to
the other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
9.2 Except as otherwise provided for herein, all expenses of the
transactions contemplated by this Agreement incurred by the Selling Fund
and the Acquiring Fund will be borne by First Union National Bank of North
Carolina ("FUNB"). Such expenses include, without limitation, (i)
expenses incurred in connection with the entering into and the carrying out
of the provisions of this Agreement; (ii) expenses associated with the
preparation and filing of the Registration Statement under the 1933 Act
covering the Acquiring Fund Shares to be issued pursuant to the provisions
of this Agreement; (iii) registration or qualification fees and expenses of
preparing and filing such forms as are necessary under applicable state
securities laws to qualify the Acquiring Fund Shares to be issued in
connection herewith in each state in which the Selling Fund Shareholders
are resident as of the date of the mailing of the Prospectus and Proxy
Statement to such shareholders; (iv) postage; (v) printing; (vi) accounting
fees; (vii) legal fees; and (viii) solicitation cost of the transaction.
Not withstanding Notwithstanding the foregoing, the Acquiring Fund shall
pay its own Federal and state registration fees. In the event that the
merger of First Fidelity Bancorporation and First Union Corporation is not
completed, this Agreement shall terminate. In such event, all expenses of
the transactions contemplated by this Agreement incurred by the Acquiring
Fund will be borne by FUNB and all expenses of the transactions
contempleted contemplated by this Agreement incurred by the Selling Fund
will be borne by First Fidelity Bank, N.A.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Fund and the Selling Fund agree that neither party has
made any representation, warranty or covenant not set forth herein and that
the this Agreement constitutes the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated
hereunder.
ARTICLE XI
TERMINATION
11.1 In addition to the termination provisions set forth in paragraph 9.2,
this Agreement may be terminated by the mutual agreement of the Acquiring
Fund and the Selling Fund. In addition, either the Acquiring Fund or the
Selling Fund may at its option terminate this Agreement at or prior to the
Closing Date because:
(a) of a breach by the other of any representation, warranty or agreement
contained herein to be performed at or prior to the Closing Date, if not
cured within 30 days; or
(b) a condition herein expressed to be precedent to the obligations of the
terminating party has not been met and it reasonably appears that it will
not or cannot be met.
11.2 In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of either the
Acquiring Fund or the Selling Fund, the Evergreen Trust or the FFB Trust or
their respective Trustees or officers, to the other party or its, Trustees
or officers, but each shall bear the expenses incurred by it incidental to
the preparation and carrying out of this Agreement as provided in paragraph
9.2.
ARTICLE XII
AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Selling Fund and the Acquiring Fund; provided, however, that following the
meeting of the Selling Fund Shareholders called by the FFB Trust pursuant
to paragraph 5.2 of this Agreement, no such amendment may have the effect
of changing the provisions for determining the number of the Acquiring Fund
Shares to be issued to the Selling Fund Shareholders under this Agreement
to the detriment of such shareholders without their further approval.
ARTICLE XIII
NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy, overnight courier or certified mail addressed
to:
the Acquiring Fund
Evergreen Investment Trust
2500 Westchester Avenue
Purchase, New York 10577
Attention: Joseph J. McBrien, Esq.
or to the Selling Fund
FFB Funds Trust
237 Park Avenue
New York, New York 10017
Attention: Edmund A. Hajim
ARTICLE XIV
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
14.1 The Article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties hereto and
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
14.5 It is expressly agreed to that the obligations of the Selling Fund and
the Acquiring Fund hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents, or employees of the FFB Trust or
the Evergreen Trust, personally, but bind only the trust property of the
Selling Fund and the Acquiring Fund, as provided in the Declarations of
Trust of the FFB Trust and the Evergreen Trust. The execution and delivery
of this Agreement have been authorized by the Trustees of the FFB Trust on
behalf of the Selling Fund, and the Evergreen Trust on behalf of the
Acquiring Fund and signed by authorized officers of the FFB Trust and the
Evergreen Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officers shall be deemed
to have been made by any of them individually or to impose any liability on
any of them personally, but shall bind only the trust property of the FFB
Trust and the Evergreen Trust as provided in their Declarations of Trust.
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed and sealed this
Agreement, all as of the date first written above.
EVERGREEN INVESTMENT TRUST
on behalf of Evergreen Treasury Money Market Fund
By:/s/ John J. Pileggi
Name: John J. Pileggi
Title: President
(Seal)
FFB FUNDS TRUST
on behalf of FFB 100% U.S. Treasury Fund
By: /s/ Edmund A. Hajim
Name: Edmund A. Hajim
Title: President
<PAGE>
Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this 19th day of September, 1995, by and between Evergreen Investment
Trust, a Massachusetts business trust (the "Evergreen Trust"), with its
principal place of business at 2500 Westchester Avenue, Purchase, New York
10577, with respect to its Evergreen Treasury Money Market series(the
"Acquiring Fund"), and FFB Funds Trust (the "FFB Trust"), a Massachusetts
business trust, with respect to its FFB U.S. Treasury Fund series, with its
principal place of business at 237 Park Avenue, New York, New York 10017
(the "Selling Fund").
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368 (a)(1)(C) of the United
States Internal Revenue Code of 1986 (the "Code"). The reorganization
(the "Reorganization") will consist of the transfer of substantially all of
the assets of the Selling Fund in exchange solely for Class A shares of
beneficial interest, without par value, of the Acquiring Fund (the
"Acquiring Fund Shares") and the assumption by the Acquiring Fund of
certain stated liabilities of the Selling Fund and the distribution, after
the Closing Date hereinafter referred to, of the Acquiring Fund Shares to
the shareholders of the Selling Fund in liquidation of the Selling Fund as
provided herein, all upon the terms and conditions hereinafter set forth in
this Agreement.
WHEREAS, the Selling Fund and the Acquiring Fund are separate investment
series of open-end, registered investment companies of the management type
and the Selling Fund owns securities which generally are assets of the
character in which the Acquiring Fund is permitted to invest;
WHEREAS, both Funds are authorized to issue their shares of beneficial
interest;
WHEREAS, the Trustees of the Evergreen Trust have determined that the
exchange of substantially all of the assets of the Selling Fund for
Acquiring Fund Shares and the assumption of certain stated liabilities by
the Acquiring Fund on the terms and conditions hereinafter set forth is are
in the best interests of the Acquiring Fund shareholders and that the
interests of the existing shareholders of the Acquiring Fund will not be
diluted as a result of the transactions contemplated herein;
WHEREAS, the Trustees of the FFB Trust have determined that the Selling
Fund should exchange substantially all of its assets and certain of its
liabilities for Acquiring Fund Shares and that the interests of the
existing shareholders of the Selling Fund will not be diluted as a result
of the transactions contemplated herein;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
TRANSFER OF ASSETS OF THE SELLING FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES AND ASSUMPTION OF SELLING FUND LIABILITIES AND LIQUIDATION OF
THE SELLING FUND
1.1 The Exchange. Subject to the terms and conditions herein set forth and
on the basis of the representations and warranties contained herein, the
Selling Fund agrees to transfer substantially all of the Selling Fund's
assets as set forth in paragraph 1.2 to the Acquiring Fund, and the
Acquiring Fund agrees in exchange therefor (i) to deliver to the Selling
Fund the number of Acquiring Fund Shares, including fractional Acquiring
Fund Shares, determined by multiplying the shares outstanding of each class
of the Selling Fund by the ratio computed by dividing the net asset value
per share of each such class of the Selling Fund by the net asset value per
share of the Acquiring Fund Shares computed in the manner and as of the
time and date set forth in paragraph 2.2 and (ii) to assume certain
liabilities of the Selling Fund, as set forth in paragraph 1.3. Such
transactions shall take place at the closing provided for in paragraph 3.1
(the "Closing Date").
1.2 Assets to be Acquired. The assets of the Selling Fund to be acquired by
the Acquiring Fund shall consist of all property, including without
limitation all cash, securities, commodities and futures interests and
dividends or interest receivable, which are owned by the Selling Fund and
any deferred or prepaid expenses shown as an asset on the books of the
Selling Fund on the Closing Date. The Selling Fund has provided the
Acquiring Fund with its most recent audited financial statements which
contain a list of all of Selling Fund's assets as of the date thereof. The
Selling Fund hereby represents that as of the date of the execution of this
Agreement there have been no changes in its financial position as
reflected in said financial statements other than those occurring in the
ordinary course of its business in connection with the purchase and sale of
securities and the payment of its normal operating expenses. The Selling
Fund reserves the right to sell any of such securities but will not,
without the prior written approval of the Acquiring Fund, acquire any
additional securities other than securities of the type in which the
Acquiring Fund is permitted to invest. The Acquiring Fund will, within a
reasonable time prior to the Closing Date, furnish the Selling Fund with a
statement of the Acquiring Fund's investment objectives, policies and
restrictions and a list of the securities, if any, on the Selling Fund's
list referred to in the second sentence of this paragraph which do not
conform to the Acquiring Fund's investment objectives, policies, and
restrictions. In the event that the Selling Fund holds any investments
which the Acquiring Fund may not hold, the Selling Fund will dispose of
such securities prior to the Closing Date. In addition, if it is determined
that the Selling Fund and the Acquiring Fund portfolios, when aggregated,
would contain investments exceeding certain percentage limitations imposed
upon the Acquiring Fund with respect to such investments, the Selling Fund
if requested by the Acquiring Fund will dispose of a sufficient amount of
such investments as may be necessary to avoid violating such limitations as
of the Closing Date.
1.3 Liabilities to be Assumed. The Selling Fund will endeavor to discharge
all of its known liabilities and obligations prior to the Closing Date.
The Acquiring Fund shall assume only those liabilities, expenses, costs,
charges and reserves reflected on a Statement of Assets and Liabilities of
the Selling Fund prepared by Furman Selz Incorporated, the administrator of
the Selling Fund, as of the Valuation Date (as defined in paragraph 2.1),
in accordance with generally accepted accounting principles consistently
applied from the prior audited period. The Acquiring Fund shall assume
only those liabilities of the Selling Fund reflected in such Statement of
Assets and Liabilities and shall not assume any other liabilities, whether
absolute or contingent, known or unknown, accrued or unaccrued, all of
which shall remain the obligation of the Selling Fund.
1.4 Liquidation and Distribution. As soon after the Closing Date as is
conveniently practicable (the "Liquidation Date"), (a) the Selling Fund
will liquidate and distribute pro rata to the Selling Fund's shareholders
of record, determined as of the close of business on the Closing Date (the
"Selling Fund Shareholders"), the Acquiring Fund Shares received by the
Selling Fund pursuant to paragraph 1.1. and (b) the Selling Fund will
thereupon proceed to dissolve as set forth in paragraph 1.8 below. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Selling Fund on
the books of the Acquiring Fund, to open accounts on the share records of
the Acquiring Fund in the names of the Selling Fund Shareholders and
representing the respective pro rata number of the Acquiring Fund Shares
due such shareholders. All issued and outstanding shares of the Selling
Fund will simultaneously be canceled on the books of the Selling Fund. The
Acquiring Fund shall not issue certificates representing the Acquiring Fund
Shares in connection with such exchange.
1.5 Ownership of Shares. Ownership of Acquiring Fund Shares will be shown
on the books of the Acquiring Fund's transfer agent. Shares of the
Acquiring Fund will be issued in the manner described in the combined
Prospectus and Proxy Statement on Form N-14 to be distributed to
shareholders of the Selling Fund as described in Section 5 paragraph 5.7.
1.6 Transfer Taxes. Any transfer taxes payable upon issuance of the
Acquiring Fund Shares in a name other than the registered holder of the
Selling Fund shares on the books of the Selling Fund as of that time shall,
as a condition of such issuance and transfer, be paid by the person to whom
such Acquiring Fund Shares are to be issued and transferred.
1.7 Reporting Responsibility. Any reporting responsibility of the Selling
Fund is and shall remain the responsibility of the Selling Fund up to and
including the Closing Date and such later date on which the Selling Fund is
terminated.
1.8 Termination. The Selling Fund shall be terminated promptly following
the Closing Date and the making of all distributions pursuant to paragraph
1.4.
ARTICLE II
VALUATION
2.1 Valuation of Assets. The value of the Selling Fund's assets to be
acquired by the Acquiring Fund hereunder shall be the value of such assets
computed as of the close of business on the New York Stock Exchange on the
Closing Date (such time and date being hereinafter called the "Valuation
Date"), using the valuation procedures set forth in the Evergreen Trust's
Declaration of Trust and the Acquiring Fund's then current prospectus and
statement of additional information or such other valuation procedures as
shall be mutually agreed upon by the parties.
2.2 Valuation of Shares. The net asset value per share of the Acquiring
Fund Shares shall be the net asset value per share computed as of the close
of business on the New York Stock Exchange on the Valuation Date, using the
valuation procedures set forth in the Evergreen Trust's Declaration of
Trust and the Acquiring Fund's then current prospectus and statement of
additional information.
2.3 Shares to be Issued. The number of the Acquiring Fund Shares of each
class to be issued (including fractional shares, if any) in exchange for
the Selling Fund's assets shall be determined by multiplying the shares
outstanding of each class of the Selling Fund by the ratio computed by
dividing the net asset value per share of the Selling Fund attributable to
each of its classes by the net asset value per share of the respective
classes of the Acquiring Fund determined in accordance with paragraph 2.2.
2.4 Determination of Value. All computations of value shall be made by
State Street Bank and Trust Company in accordance with its regular practice
in pricing the shares and assets of the Acquiring Fund.
ARTICLE III
CLOSING AND CLOSING DATE
3.1 Closing Date. The Closing (the "Closing") shall take place on January
12 19, 1996 or such other date as the parties may agree to in writing (the
"Closing Date"). All acts taking place at the Closing shall be deemed to
take place simultaneously as of the close of business on the Closing Date
unless otherwise provided. The Closing shall be held as of 9:00 o'clock
a.m. at the offices of Evergreen Asset Management Corp., 2500 Westchester
Avenue, Purchase, New York 10577, or at such other time and/or place as
the parties may agree.
3.2 Custodian's Certificate. First Fidelity Bank, N.A., as custodian for
the Selling Fund (the "Custodian"), shall deliver at the Closing a
certificate of an authorized officer stating that: (a) the Selling Fund's
portfolio securities, cash, and any other assets shall have been delivered
in proper form to the Acquiring Fund on the Closing Date and (b) all
necessary taxes including all applicable Federal and state stock transfer
stamps, if any, shall have been paid, or provision for payment shall have
been made, in conjunction with the delivery of portfolio securities by the
Selling Fund.
3.3 Effect of Suspension in Trading. In the event that on the Valuation
Date (a) the New York Stock Exchange or another primary trading market for
portfolio securities of the Acquiring Fund or the Selling Fund shall be
closed to trading or trading thereon shall be restricted, or (b) trading or
the reporting of trading on said Exchange or elsewhere shall be disrupted
so that accurate appraisal of the value of the net assets of the Acquiring
Fund or the Selling Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when trading shall
have been fully resumed and reporting shall have been restored.
3.4 Transfer Agent's Certificate. First Fidelity Bank, N.A., as transfer
agent for the Selling Fund shall deliver at the Closing a certificate of an
authorized officer stating that its records contain the names and addresses
of the Selling Fund Shareholders and the number and percentage ownership of
outstanding shares owned by each such shareholder immediately prior to the
Closing. The Acquiring Fund shall issue and deliver or cause its transfer
agent to issue and deliver a confirmation evidencing the Acquiring Fund
Shares to be credited on the Closing Date to the Secretary of the FFB Trust
, or provide evidence satisfactory to the Selling Fund that such Acquiring
Fund Shares have been credited to the Selling Fund's account on the books
of the Acquiring Fund. At the Closing each party shall deliver to the other
such bills of sale, checks, assignments, share certificates, if any,
receipts and other documents as such other party or its counsel may
reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations of the Selling Fund. The Selling Fund represents and
warrants to the Acquiring Fund as follows:
(a) The Selling Fund is a separate investment series of a Massachusetts
business trust duly organized, validly existing and in good standing under
the laws of the Commonwealth of Massachusetts;
(b) The Selling Fund is a separate investment series of a registered
investment company classified as a management company of the open-end type
and its registration with the Securities and Exchange Commission (the
"Commission") as an investment company under the Investment Company Act of
1940, as amended (the "1940 Act") is in full force and effect;
(c) The current prospectus and statement of additional information of the
Selling Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933, as amended (the "1933 Act") and
the 1940 Act and the rules and regulations of the Commission thereunder and
do not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not materially misleading;
(d) The Selling Fund is not, and the execution, delivery and performance of
this Agreement (subject to shareholder approval) will not, result in a
violation of any provision of the FFB Trust's Declaration of Trust or
By-Laws or of any agreement, indenture, instrument, contract, lease or
other undertaking to which the Selling Fund is a party or by which it is
bound;
(e) The Selling Fund has no material contracts or other commitments (other
than this Agreement) which will be terminated with liability to it prior to
the Closing Date;
(f) Except as otherwise disclosed in writing to and accepted by the
Acquiring Fund, no litigation, administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Selling Fund or any of its properties or
assets which, if adversely determined, would materially and adversely
affect its financial condition, the conduct of its business or the ability
of the Selling Fund to carry out the transactions contemplated by this
Agreement. The Selling Fund knows of no facts which might form the basis
for the institution of such proceedings and is not a party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or
its ability to consummate the transactions herein contemplated;
(g) The financial statements of the Selling Fund at February 28, 1995 have
been audited by KPMG Peat Marwick LLP, certified public accountants, and
are in accordance with generally accepted accounting principles
consistently applied, and such statements (copies of which have been
furnished to the Acquiring Fund) fairly reflect the financial condition of
the Selling Fund as of such date, and there are no known contingent
liabilities of the Selling Fund as of such date not disclosed therein;
(h) Since February 28, 1995 there has not been any material adverse change
in the Selling Fund's financial condition, assets, liabilities or business
other than changes occurring in the ordinary course of business, or any
incurrence by the Selling Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquiring Fund. For the purposes of this
subparagraph (h), a decline in the net asset value of the Selling Fund
shall not constitute a material adverse change;
(i) At the Closing Date, all Federal and other tax returns and reports of
the Selling Fund required by law to have been filed by such dates shall
have been filed, and all Federal and other taxes shown due on said returns
and reports shall have been paid, or provision shall have been made for the
payment thereof and to the best of the Selling Fund's knowledge no such
return is currently under audit and no assessment has been asserted with
respect to such returns;
(j) For each fiscal year of its operation, the Selling Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and has distributed in each such year all
net investment income and realized capital gains;
(k) All issued and outstanding shares of the Selling Fund are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by the Selling Fund (except that, under Massachusetts
law, Selling Fund Shareholders could, under certain circumstances be held
personally liable for obligations of the Selling Fund). All of the issued
and outstanding shares of the Selling Fund will, at the time of the Closing
Date, be held by the persons and in the amounts set forth in the records of
the transfer agent as provided in paragraph 3.4. The Selling Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of the Selling Fund shares, nor is there outstanding any
security convertible into any of the Selling Fund shares;
(l) At the Closing Date, the Selling Fund will have good and marketable
title to the Selling Fund's assets to be transferred to the Acquiring Fund
pursuant to paragraph 1.2 and full right, power, and authority to sell,
assign, transfer and deliver such assets hereunder, and upon delivery and
payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act,
other than as disclosed to the Acquiring Fund and accepted by the Acquiring
Fund;
(m) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Selling Fund
and, subject to approval by the Selling Fund Shareholders, this Agreement
constitutes a valid and binding obligation of the Selling Fund, enforceable
in accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(n) The information to be furnished by the Selling Fund for use in
no-action letters, applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with Federal
securities and other laws and regulations thereunder applicable thereto;
(o) The proxy statement of the Selling Fund to be included in the
Registration Statement referred to in paragraph 5.7 (other than information
therein that relates to the Acquiring Fund) will, on the effective date of
the Registration Statement and on the Closing Date, not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which such statements were made, not misleading.
4.2 Representations of the Acquiring Fund. The Acquiring Fund represents
and warrants to the Selling Fund as follows:
(a) The Acquiring Fund is a separate investment series of a Massachusetts
business trust duly organized, validly existing and in good standing under
the laws of the Commonwealth of Massachusetts.;
(b) The Acquiring Fund is a separate investment series of a Massachusetts
business trust that is registered as an investment company classified as a
management company of the open-end type and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect;
(c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations
of the Commission thereunder and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(d) The Acquiring Fund is not, and the execution, delivery and performance
of this Agreement will not, result in a violation of Evergreen Trust's
Declaration of Trust or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquiring Fund is a party
or by which it is bound;
(e) Except as otherwise disclosed in writing to the Selling Fund and
accepted by the Selling Fund, no litigation, administrative proceeding or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against the Acquiring Fund or any of
its properties or assets which, if adversely determined, would materially
and adversely affect its financial condition and the conduct of its
business or the ability of the Acquiring Fund to carry out the transactions
contemplated by this Agreement. The Acquiring Fund knows of no facts which
might form the basis for the institution of such proceedings and is not a
party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely affects its
business or its ability to consummate the transactions contemplated herein;
(f) The financial statements of the Acquiring Fund at December 31, 1994,
have been audited by KPMG Peat Marwick LLP, certified public accountants,
and are in accordance with generally accepted accounting principles
consistently applied, and such statements (copies of which have been
furnished to the Selling Fund) fairly reflect the financial condition of
the Acquiring Fund as of such date, and there are no known contingent
liabilities affecting the Acquiring Fund as of such date not disclosed
therein;
(g) Since December 31, 1994 there has not been any material adverse change
in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquiring Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Fund. For the purposes of this
subparagraph (g), a decline in the net asset value of the Acquiring Fund
shall not constitute a material adverse change;
(h) At the Closing Date, all Federal and other tax returns and reports of
the Acquiring Fund required by law then to be filed by such dates shall
have been filed, and all Federal and other taxes shown due on said returns
and reports shall have been paid or provision shall have been made for the
payment thereof and to the best of the Acquiring Fund's knowledge, no such
return is currently under audit and no assessment has been asserted with
respect to such returns;
(i) For each fiscal year of its operation the Acquiring Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and has distributed in each such year all
net investment income and realized capital gains;
(j) All issued and outstanding Acquiring Fund Shares are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable (except that, under Massachusetts law, shareholders of
the Acquiring Fund could, under certain circumstances, be held personally
liable for obligations of the Acquiring Fund). The Acquiring Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any Acquiring Fund Shares, nor is there outstanding any security
convertible into any Acquiring Fund Shares;
(k) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Acquiring Fund,
and this Agreement constitutes a valid and binding obligation of the
Acquiring Fund enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights and to general equity
principles;
(l) The Acquiring Fund Shares to be issued and delivered to the Selling
Fund, for the account of the Selling Fund Shareholders, pursuant to the
terms of this Agreement will at the Closing Date have been duly authorized
and, when so issued and delivered, will be duly and validly issued
Acquiring Fund Shares, and will be fully paid and non-assessable (except
that, under Massachusetts law, shareholders of the Acquiring Fund could,
under certain circumstances, be held personally liable for obligations of
the Acquiring Fund);
(m) The information to be furnished by the Acquiring Fund for use in no-
action letters, applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with Federal
securities and other laws and regulations applicable thereto;
(n) The Prospectus and Proxy Statement to be included in the Registration
Statement (only insofar as it relates to the Acquiring Fund) will, on the
effective date of the Registration Statement and on the Closing Date, not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements were
made, not misleading; and
(o) The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and
such of the state Blue Sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE SELLING FUND
5. 1 Operation in Ordinary Course. The Acquiring Fund and the Selling Fund
each will operate its business in the ordinary course between the date
hereof and the Closing Date, it being understood that such ordinary course
of business will include customary dividends and distributions.
5.2 Approval of Shareholders. The FFB Trust will call a meeting of the
Selling Fund Shareholders to consider and act upon this Agreement and to
take all other action necessary to obtain approval of the transactions
contemplated herein.
5.3 Investment Representation. The Selling Fund covenants that the
Acquiring Fund Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof other than in accordance with
the terms of this Agreement.
5.4 Additional Information. The Selling Fund will assist the Acquiring
Fund in obtaining such information as the Acquiring Fund reasonably
requests concerning the beneficial ownership of the Selling Fund shares.
5.5 Further Action. Subject to the provisions of this Agreement, the
Acquiring Fund and the Selling Fund will each take, or cause to be taken,
all action, and do or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, including any actions required to be taken
after the Closing Date.
5.6 Statement of Earnings and Profits. As promptly as practicable, but in
any case within sixty days after the Closing Date, the Selling Fund shall
furnish the Acquiring Fund, in such form as is reasonably satisfactory to
the Acquiring Fund, a statement of the earnings and profits of the Selling
Fund for Federal income tax purposes which will be carried over by the
Acquiring Fund as a result of Section 381 of the Code, and which will be
certified by the FFB Trust's President, its Treasurer and its independent
auditors.
5.7 Preparation of Form N-14 Registration Statement. The Selling Fund will
provide the Acquiring Fund with information reasonably necessary for the
preparation of a prospectus which will include the proxy statement,
referred to in paragraph 4.1(o) (the "Prospectus and Proxy Statement"), all
to be included in a Registration Statement on Form N-14 of the Acquiring
Fund (the "Registration Statement"), in compliance with the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act") and the 1940
Act in connection with the meeting of the Selling Fund Shareholders to
consider approval of this Agreement and the transactions contemplated
herein.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING FUND
The obligations of the Selling Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance
by the Acquiring Fund of all the obligations to be performed by it
hereunder on or before the Closing Date, and, in addition thereto, the
following further conditions:
6.1 All representations, covenants and warranties of the Acquiring Fund
contained in this Agreement shall be true and correct as of the date hereof
and as of the Closing Date with the same force and effect as if made on and
as of the Closing Date, and the Acquiring Fund shall have delivered to the
Selling Fund a certificate executed in its name by the Evergreen Trust's
President or Vice President and its Treasurer or Assistant Treasurer, in
form and substance reasonably satisfactory to the Selling Fund and dated as
of the Closing Date, to such effect and as to such other matters as the
Selling Fund shall reasonably request; and
6.2 The Selling Fund shall have received on the Closing Date an opinion
from Sullivan & Worcester, counsel to the Acquiring Fund, dated as of the
Closing Date, in a form reasonably satisfactory to the Selling Fund,
covering the following points:
That (a) the Acquiring Fund is a separate investment series of a
Massachusetts business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has the
power to own all of its properties and assets and to carry on its business
as presently conducted; (b) this Agreement has been duly authorized,
executed and delivered by the Acquiring Fund, and, assuming that the
Prospectus and Proxy Statement, and Registration Statement comply with the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder and, assuming due authorization, execution and delivery of this
Agreement by the Selling Fund, is a valid and binding obligation of the
Acquiring Fund enforceable against the Acquiring Fund in accordance with
its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and to general equity principles; (c) assuming
that a consideration therefor not less than the net asset value thereof has
been paid, the Acquiring Fund Shares to be issued and delivered to the
Selling Fund on behalf of the Selling Fund Shareholders as provided by this
Agreement are duly authorized and upon such delivery will be legally issued
and outstanding and fully paid and non-assessable (except that, under
Massachusetts law, shareholders of the Acquiring Fund could, under certain
circumstances, be held personally liable for obligations of the Acquiring
Fund), and no shareholder of the Acquiring Fund has any preemptive rights
in respect thereof; (d) the execution and delivery of this Agreement did
not, and the consummation of the transactions contemplated hereby will not,
result in a violation of the Evergreen Trust's Declaration of Trust or By-
Laws or any provision of any material agreement, indenture, instrument,
contract, lease or other undertaking (in each case known to such counsel)
to which the Acquiring Fund is a party or by which it or any of its
properties may be bound or to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any penalty, under any
agreement, judgment, or decree to which the Acquiring Fund is a party or by
which it is bound; (e) to the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental authority of
the United States or the Commonwealth of Massachusetts, is required for the
consummation by the Acquiring Fund of the transactions contemplated herein,
except such as have been obtained under the 1933 Act, the 1934 Act and the
1940 Act, and such as may be required under state securities laws; (f) only
insofar as they relate to the Acquiring Fund, the descriptions in the
Prospectus and Proxy Statement of statutes, legal and governmental
proceedings and material contracts, if any, are accurate and fairly present
the information required to be shown; (g) such counsel does not know of any
legal or governmental proceedings, only insofar as they relate to the
Acquiring Fund, existing on or before the effective date of the
Registration Statement or the Closing Date required to be described in the
Registration Statement or to be filed as exhibits to the Registration
Statement which are not described or filed as required; (h) the Acquiring
Fund is a separate investment series of a Massachusetts business trust
registered as an investment company under the 1940 Act and to such
counsel's best knowledge, such registration with the Commission as an
investment company under the 1940 Act is in full force and effect; and (i)
to the knowledge of such counsel, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to the Acquiring Fund or any of its
properties or assets and the Acquiring Fund is not a party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body, which materially and adversely affects its business,
other than as previously disclosed in the Registration Statement. In
addition, such counsel shall also state that they have participated in
conferences with officers and other representatives of the Acquiring Fund
at which the contents of the Prospectus and Proxy Statement and related
matters were discussed and, although they are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus and Proxy Statement (except to the
extent indicated in paragraph (f) of their above opinion), on the basis of
the foregoing (relying as to materiality to a large extent upon the
opinions of the Evergreen Trust's officers and other representatives of the
Acquiring Fund), no facts have come to their attention that lead them to
believe that the Prospectus and Proxy Statement as of its date, as of the
date of the Selling Fund Shareholders' meeting, and as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein regarding the Acquiring Fund or
necessary, in the light of the circumstances under which they were made, to
make the statements therein regarding the Acquiring Fund not misleading.
Such opinion may state that such counsel does not express any opinion or
belief as to the financial statements or any financial or statistical
data, or as to the information relating to the Selling Fund, contained in
the Prospectus and Proxy Statement or the Registration Statement, and that
such opinion is solely for the benefit of the FFB Trust and the Selling
Fund. Such opinion shall contain such other assumptions and limitations as
shall be in the opinion of Sullivan & Worcester appropriate to render the
opinions expressed therein.
In this paragraph 6.2, references to Prospectus and Proxy Statement
include and relate to only the text of such Prospectus and Proxy Statement
and not to any exhibits or attachments thereto or to any documents
incorporated by reference therein.
6.3 The merger between First Union Corporation and First Fidelity
Corporation Bancorporation shall be completed prior to the Closing Date.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance
by the Selling Fund of all the obligations to be performed by it hereunder
on or before the Closing Date and, in addition thereto, the following
conditions:
7.1 All representations, covenants and warranties of the Selling Fund
contained in this Agreement shall be true and correct as of the date hereof
and as of the Closing Date with the same force and effect as if made on and
as of the Closing Date, and the Selling Fund shall have delivered to the
Acquiring Fund on the Closing Date a certificate executed in its name by
the FFB Trust's President or Vice President and its Treasurer or Assistant
Treasurer, in form and substance satisfactory to the Acquiring Fund and,
dated as of the Closing Date, to such effect and as to such other matters
as the Acquiring Fund shall reasonably request;
7.2 The Selling Fund shall have delivered to the Acquiring Fund a statement
of the Selling Fund's assets and liabilities, together with a list of the
Selling Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the
Closing Date, certified by the Treasurer of the FFB Trust; and
7.3 The Acquiring Fund shall have received on the Closing Date an opinion
of Baker & McKenzie, counsel to the Selling Fund, in a form satisfactory to
the Acquiring Fund covering the following points:
That (a) the Selling Fund is a separate investment series of a
Massachusetts business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has the
power to own all of its properties and assets and to carry on its business
as presently conducted; (b) this Agreement has been duly authorized,
executed and delivered by the Selling Fund, and, assuming that the
Prospectus and Proxy Statement, and Registration Statement comply with the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder and, assuming due authorization, execution and delivery of this
Agreement by the Acquiring Fund, is a valid and binding obligation of the
Selling Fund enforceable against the Selling Fund in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights
generally and to general equity principles; (c) the execution and delivery
of this Agreement did not, and the consummation of the transactions
contemplated hereby will not, result in a violation of the FFB Trust's
Declaration of Trust or By-laws, or any provision of any material
agreement, indenture, instrument, contract, lease or other undertaking (in
each case known to such counsel) to which the Selling Fund is a party or by
which it or any of its properties may be bound or, to the knowledge of such
counsel, result in the acceleration of any obligation or the imposition of
any penalty, under any agreement, judgment, or decree to which the Selling
Fund is a party or by which it is bound; (d) to the knowledge of such
counsel, no consent, approval, authorization or order of any court or
governmental authority of the United States or the Commonwealth of
Massachusetts is required for the consummation by the Selling Fund of the
transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act, and such as may be required
under state securities laws; (e) only insofar as they relate to the Selling
Fund, the descriptions in the Prospectus and Proxy Statement of statutes,
legal and governmental proceedings and material contracts, if any, are
accurate and fairly present the information required to be shown; (f) such
counsel does not know of any legal or governmental proceedings, only
insofar as they relate to the Selling Fund existing on or before the date
of mailing of the Prospectus and Proxy Statement and the Closing Date,
required to be described in the Prospectus and Proxy Statement or to be
filed as an exhibit to the Registration Statement which are not described
or filed as required; (g) the Selling Fund is a separate investment series
of a Massachusetts business trust registered as an investment company under
the 1940 Act and to such counsel's best knowledge, such registration with
the Commission as an investment company under the 1940 Act is in full force
and effect; (h) to the knowledge of such counsel, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to the Selling Fund
or any of its respective properties or assets and the Selling Fund is
neither a party to nor subject to the provisions of any order, decree or
judgment of any court or governmental body, which materially and adversely
affects its business other than as previously disclosed in the Prospectus
and Proxy Statement; (i) assuming that a consideration therefor not less
than the net asset value thereof has been paid, and assuming that such
shares were issued in accordance with the terms of the Selling Fund's
registration statement, or any amendment thereto, in effect at the time of
such issuance, all issued and outstanding shares of the Selling Fund are
legally issued and fully paid and non-assessable (except that, under
Massachusetts law, Selling Fund Shareholders could, under certain
circumstances be held personally liable for obligations of the Selling
Fund). Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Selling Fund at
which the contents of the Prospectus and Proxy Statement and related
matters were discussed and, although they are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus and Proxy Statement (except to the
extent indicated in paragraph (e) of their above opinion), on the basis of
the foregoing (relying as to materiality to a large extent upon the
opinions of the FFB Trust's officers and other representatives of the
Selling Fund), no facts have come to their attention that lead them to
believe that the Prospectus and Proxy Statement as of its date, as of the
date of the Selling Fund Shareholders' meeting, and as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein regarding the Selling Fund or
necessary, in the light of the circumstances under which they were made, to
make the statements therein regarding the Selling Fund not misleading. Such
opinion may state that such counsel does not express any opinion or belief
as to the financial statements or any financial or statistical data, or as
to the information relating to the Acquiring Fund, contained in the
Prospectus and Proxy Statement or Registration Statement, and that such
opinion is solely for the benefit of the Evergreen Trust and the Acquiring
Fund. Such opinion shall contain such other assumptions and limitations as
shall be in the opinion of Baker & McKenzie appropriate to render the
opinions expressed therein and shall indicate, with respect to matters of
Massachusetts law, that as Baker & McKenzie are not admitted to the bar of
Massachusetts, such opinions are based either upon the review of published
statutes, case cases and rules and regulations of the Commonwealth of
Massachusetts or upon an opinion of Massachusetts counsel.
In this paragraph 7.3, references to Prospectus and Proxy Statement
include and relate to only the text of such Prospectus and Proxy Statement
and not to any exhibits or attachments thereto or to any documents
incorporated by reference therein.
7.4 The merger between First Union Corporation and First Fidelity
Bancorporation shall be completed prior to the Closing Date.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE SELLING FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Selling Fund or the Acquiring Fund, the
other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of
the Selling Fund in accordance with the provisions of the FFB Trust's
Declaration of Trust and By-Laws and certified copies of the resolutions
evidencing such approval shall have been delivered to the Acquiring Fund.
Notwithstanding anything herein to the contrary, neither the Acquiring Fund
nor the Selling Fund may waive the conditions set forth in this paragraph
8.1;
8.2 On the Closing Date, the Commission shall not have issued an
unfavorable report under Section 25(b) of the 1940 Act, nor instituted any
proceeding seeking to enjoin the consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940 Act and no
action, suit or other proceeding shall be threatened or pending before any
court or governmental agency in which it is sought to restrain or prohibit,
or obtain damages or other relief in connection with, this Agreement or the
transactions contemplated herein;
8.3 All required consents of other parties and all other consents, orders
and permits of Federal, state and local regulatory authorities (including
those of the Commission and of state Blue Sky securities authorities.
including any necessary "no-action" positions of and exemptive orders from
such Federal and state authorities) to permit consummation of the
transactions contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve a
risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Selling Fund, provided that either party hereto may
for itself waive any of such conditions;
8.4 The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation
or proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act;
8.5 The Selling Fund shall have declared a dividend or dividends which,
together with all previous such dividends, shall have the effect of
distributing to the Selling Fund Shareholders all of the Selling Fund's
investment company taxable income for all taxable years ending on or prior
to the Closing Date (computed without regard to any deduction for dividends
paid) and all of its net capital gain realized in all taxable years ending
on or prior to the Closing Date (after reduction for any capital loss
carryforward);
8.6 The parties shall have received a favorable opinion of Sullivan &
Worcester, addressed to the Acquiring Fund and the Selling Fund
substantially to the effect that for Federal income tax purposes:
(a) The transfer of substantially all of the Selling Fund assets in
exchange for the Acquiring Fund Shares and the assumption by the Acquiring
Fund of certain identified liabilities of the Selling Fund followed by the
distribution of the Acquiring Fund Shares to the Selling Fund in
dissolution and liquidation of the Selling Fund, will constitute a
"reorganization" within the meaning of Section 368(a)(1)(C) of the Code and
the Acquiring Fund and the Selling Fund will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code; (b) no
gain or loss will be recognized by the Acquiring Fund upon the receipt of
the assets of the Selling Fund solely in exchange for the Acquiring Fund
Shares and the assumption by the Acquiring Fund of certain identified
liabilities of the Selling Fund; (c) no gain or loss will be recognized by
the Selling Fund upon the transfer of the Selling Fund assets to the
Acquiring Fund in exchange for the Acquiring Fund Shares and the assumption
by the Acquiring Fund of certain identified liabilities of the Selling Fund
or upon the distribution ( whether actual or constructive ) of the
Acquiring Fund Shares to Selling Fund Shareholders in exchange for their
shares of the Selling Fund; (d) no gain or loss will be recognized by
Selling Fund Shareholders upon the exchange of their Selling Fund shares
for the Acquiring Fund Shares in liquidation of the Selling Fund; (e) the
aggregate tax basis for the Acquiring Fund Shares received by each Selling
Fund Shareholder pursuant to the Reorganization will be the same as the
aggregate tax basis of the Selling Fund shares held by such shareholder
immediately prior to the Reorganization, and the holding period of the
Acquiring Fund Shares to be received by each Selling Fund Shareholder will
include the period during which the Selling Fund shares exchanged therefor
were held by such shareholder (provided the Selling Fund shares were held
as capital assets on the date of the Reorganization); and (f) the tax basis
of the Selling Fund assets acquired by the Acquiring Fund will be the same
as the tax basis of such assets to the Selling Fund immediately prior to
the Reorganization, and the holding period of the assets of the Selling
Fund in the hands of the Acquiring Fund will include the period during
which those assets were held by the Selling Fund. Notwithstanding anything
herein to the contrary, neither the Acquiring Fund nor the Selling Fund may
waive the conditions set forth in this paragraph 8.6.
8.7 The Acquiring Fund shall have received from KPMG Peat Marwick LLP a
letter addressed to the Acquiring Fund, in form and substance satisfactory
to the Acquiring Fund, to the effect that (i) they are independent
certified public accountants with respect to the Selling Fund within the
meaning of the 1933 Act and the applicable published rules and regulations
thereunder; (ii) on the basis of limited procedures agreed upon by the
Acquiring Fund and described in such letter (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of any unaudited pro forma financial statements included in the
Registration Statement and Prospectus and Proxy Statement, and inquiries of
appropriate officials of the FFB Trust responsible for financial and
accounting matters, nothing came to their attention which caused them to
believe that such unaudited pro forma financial statements do not comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act and the published rules and regulations
thereunder; or (iii) on the basis of limited procedures agreed upon by the
Acquiring Fund and described in such letter ( but not an examination in
accordance with generally accepted auditing standards), the Capitalization
Table appearing in the Registration Statement and Prospectus and Proxy
Statement, has been obtained from and is consistent with the accounting
records of the Selling Fund; (iv) on the basis of limited procedures agreed
upon by the Acquiring Fund and described in such letter (but not an
examination in accordance with generally accepted auditing standards), the
pro forma financial statements which are included in the Registration
Statement and Prospectus and Proxy Statement, were prepared based on the
valuation of the Selling Fund's assets in accordance with the Evergreen
Trust's Declaration of Trust and the Acquiring Fund's then current
prospectus and statement of additional information pursuant to procedures
customarily utilized by the Acquiring Fund in valuing its own assets (such
procedures having been previously described to KPMG Peat Marwick LLP in
writing by the Acquiring Fund); and (v) on the basis of limited procedures
agreed upon by the Acquiring Fund and described in the letter (but not an
examination in accordance with generally accepted auditing standards) the
data utilized in the calculations of the projected expense ratio appearing
in the Registration Statement and Prospectus and Proxy Statement agree with
underlying accounting records of the Selling Fund or to written estimates
by Selling Fund's management and were found to be mathematically correct.
In addition, the Acquiring Fund shall have received from KPMG Peat
Marwick LLP a letter addressed to the Acquiring Fund dated on the Closing
Date, in form and substance satisfactory to the Acquiring Fund, to the
effect that on the basis of limited procedures agreed upon by the Acquiring
Fund (but not an examination in accordance with generally accepted auditing
standards) the calculation of net asset value per share of the Selling Fund
as of the Valuation Date was determined in accordance with generally
accepted accounting practices and the portfolio valuation practices of the
Acquiring Fund.
8.8 The Selling Fund shall have received from KPMG Peat Marwick LLP a
letter addressed to the Selling Fund, in form and substance satisfactory to
the Selling Fund, to the effect that (i) they are independent certified
public accountants with respect to the Acquiring Fund within the meaning of
the 1933 Act and the applicable published rules and regulations thereunder;
(ii) on the basis of limited procedures agreed upon by the Selling Fund and
described in such letter (but not an examination in accordance with
generally accepted auditing standards) consisting of a reading of any
unaudited pro forma financial statements included in the Registration
Statement and Prospectus and Proxy Statement, and inquiries of appropriate
officials of the Evergreen Trust responsible for financial and accounting
matters, nothing came to their attention which caused them to believe that
such unaudited pro forma financial statements do not comply as to form in
all material respects with the applicable accounting requirements of the
1933 Act and the published rules and regulations thereunder; (iii) on the
basis of limited procedures agreed upon by the Selling Fund and described
in such letter (but not an examination in accordance with generally
accepted auditing standards), the Capitalization Table appearing in the
Registration Statement and Prospectus and Proxy Statement, has been
obtained from and is consistent with the accounting records of the
Acquiring Fund; and (iv) on the basis of limited procedures agreed upon by
the Selling Fund (but not an examination in accordance with generally
accepted auditing standards) the data utilized in the calculations of the
projected expense ratio appearing in the Registration Statement and
Prospectus and Proxy Statement agree with underlying accounting records of
the Acquiring Fund or to written estimates by each Fund's management and
were found to be mathematically correct.
8.9 The Acquiring Fund and the Selling Fund shall also have received from
KPMG Peat Marwick LLP a letter addressed to the Acquiring Fund and the
Selling Fund, dated on the Closing Date in form and substance satisfactory
to the Funds, setting forth the Federal income tax implications relating to
capital loss carryforwards (if any) of the Selling Fund and the related
impact, if any, of the proposed transfer of all or substantially all of the
assets of the Selling Fund to the Acquiring Fund and the ultimate
dissolution of the Selling Fund, upon the shareholders of the Selling Fund.
ARTICLE IX
BROKERAGE FEES AND EXPENSES
9.1 The Acquiring Fund and the Selling Fund each represents and warrants to
the other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
9.2 Except as otherwise provided for herein, all expenses of the
transactions contemplated by this Agreement incurred by the Selling Fund
and the Acquiring Fund will be borne by First Union National Bank of North
Carolina ("FUNB"). Such expenses include, without limitation, (i)
expenses incurred in connection with the entering into and the carrying out
of the provisions of this Agreement; (ii) expenses associated with the
preparation and filing of the Registration Statement under the 1933 Act
covering the Acquiring Fund Shares to be issued pursuant to the provisions
of this Agreement; (iii) registration or qualification fees and expenses of
preparing and filing such forms as are necessary under applicable state
securities laws to qualify the Acquiring Fund Shares to be issued in
connection herewith in each state in which the Selling Fund Shareholders
are resident as of the date of the mailing of the Prospectus and Proxy
Statement to such shareholders; (iv) postage; (v) printing; (vi) accounting
fees; (vii) legal fees; and (viii) solicitation cost of the transaction.
Not withstanding Notwithstanding the foregoing, the Acquiring Fund shall
pay its own Federal and state registration fees. In the event that the
merger of First Fidelity Bancorporation and First Union Corporation is not
completed, this Agreement shall terminate. In such event, all expenses of
the transactions contemplated by this Agreement incurred by the Acquiring
Fund will be borne by FUNB and all expenses of the transactions
contemplated by this Agreement incurred by the Selling Fund will be borne
by First Fidelity Bank, N.A.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Fund and the Selling Fund agree that neither party has
made any representation, warranty or covenant not set forth herein and that
the this Agreement constitutes the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated
hereunder.
ARTICLE XI
TERMINATION
11.1 In addition to the termination provisions set forth in paragraph 9.2,
this Agreement may be terminated by the mutual agreement of the Acquiring
Fund and the Selling Fund. In addition, either the Acquiring Fund or the
Selling Fund may at its option terminate this Agreement at or prior to the
Closing Date because:
(a) of a breach by the other of any representation, warranty or agreement
contained herein to be performed at or prior to the Closing Date, if not
cured within 30 days; or
(b) a condition herein expressed to be precedent to the obligations of the
terminating party has not been met and it reasonably appears that it will
not or cannot be met.
11.2 In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of either the
Acquiring Fund or the Selling Fund, the Evergreen Trust or the FFB Trust or
their respective Trustees or officers, to the other party or its, Trustees
or officers, but each shall bear the expenses incurred by it incidental to
the preparation and carrying out of this Agreement as provided in paragraph
9.2.
ARTICLE XII
AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Selling Fund and the Acquiring Fund; provided, however, that following the
meeting of the Selling Fund Shareholders called by the FFB Trust pursuant
to paragraph 5.2 of this Agreement, no such amendment may have the effect
of changing the provisions for determining the number of the Acquiring Fund
Shares to be issued to the Selling Fund Shareholders under this Agreement
to the detriment of such shareholders without their further approval.
ARTICLE XIII
NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy, overnight courier or certified mail addressed
to:
the Acquiring Fund
Evergreen Investment Trust
2500 Westchester Avenue
Purchase, New York 10577
Attention: Joseph J. McBrien, Esq.
or to the Selling Fund
FFB Funds Trust
237 Park Avenue
New York, New York 10017
Attention: Edmund A. Hajim
ARTICLE XIV
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
14.1 The Article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties hereto and
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
14.5 It is expressly agreed to that the obligations of the Selling Fund and
the Acquiring Fund hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents, or employees of the FFB Trust or
the Evergreen Trust, personally, but bind only the trust property of the
Selling Fund and the Acquiring Fund, as provided in the Declarations of
Trust of the FFB Trust and the Evergreen Trust. The execution and delivery
of this Agreement have been authorized by the Trustees of the FFB Trust on
behalf of the Selling Fund, and the Evergreen Trust on behalf of the
Acquiring Fund and signed by authorized officers of the FFB Trust and the
Evergreen Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officers shall be deemed
to have been made by any of them individually or to impose any liability on
any of them personally, but shall bind only the trust property of the FFB
Trust and the Evergreen Trust as provided in their Declarations of Trust.
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed and sealed this
Agreement, all as of the date first written above.
EVERGREEN INVESTMENT TRUST
on behalf of Evergreen Treasury Money Market Fund
By:/s/ John J. Pileggi
Name: John J. Pileggi
Title: President
(Seal)
FFB FUNDS TRUST
on behalf of FFB U.S. Treasury Fund
By: /s/ Edmund A. Hajim
Name: Edmund A. Hajim
Title: President
<PAGE>
Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this 19th day of September, 1995, by and between Evergreen Investment
Trust, a Massachusetts business trust (the "Evergreen Trust"), with its
principal place of business at 2500 Westchester Avenue, Purchase, New York
10577, with respect to its Evergreen Treasury Money Market Fund series (the
"Acquiring Fund"), and FFB Funds Trust (the "FFB Trust"), a Massachusetts
business trust, with respect to its FFB U.S. Government Fund series, with
its principal place of business at 237 Park Avenue, New York, New York
10017 (the "Selling Fund").
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368 (a)(1)(C) of the United
States Internal Revenue Code of 1986 (the "Code"). The reorganization
(the "Reorganization") will consist of the transfer of substantially all of
the assets of the Selling Fund in exchange solely for Class A shares of
beneficial interest, without par value, of the Acquiring Fund (the
"Acquiring Fund Shares") and the assumption by the Acquiring Fund of
certain stated liabilities of the Selling Fund and the distribution, after
the Closing Date hereinafter referred to, of the Acquiring Fund Shares to
the shareholders of the Selling Fund in liquidation of the Selling Fund as
provided herein, all upon the terms and conditions hereinafter set forth in
this Agreement.
WHEREAS, the Selling Fund and the Acquiring Fund are separate investment
series of open-end, registered investment companies of the management type
and the Selling Fund owns securities which generally are assets of the
character in which the Acquiring Fund is permitted to invest;
WHEREAS, both Funds are authorized to issue their shares of beneficial
interest;
WHEREAS, the Trustees of the Evergreen Trust have determined that the
exchange of substantially all of the assets of the Selling Fund for
Acquiring Fund Shares and the assumption of certain stated liabilities by
the Acquiring Fund on the terms and conditions hereinafter set forth is are
in the best interests of the Acquiring Fund shareholders and that the
interests of the existing shareholders of the Acquiring Fund will not be
diluted as a result of the transactions contemplated herein;
WHEREAS, the Trustees of the FFB Trust have determined that the Selling
Fund should exchange substantially all of its assets and certain of its
liabilities for Acquiring Fund Shares and that the interests of the
existing shareholders of the Selling Fund will not be diluted as a result
of the transactions contemplated herein;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
TRANSFER OF ASSETS OF THE SELLING FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES AND ASSUMPTION OF SELLING FUND LIABILITIES AND LIQUIDATION OF
THE SELLING FUND
1.1 The Exchange. Subject to the terms and conditions herein set forth and
on the basis of the representations and warranties contained herein, the
Selling Fund agrees to transfer substantially all of the Selling Fund's
assets as set forth in paragraph 1.2 to the Acquiring Fund, and the
Acquiring Fund agrees in exchange therefor (i) to deliver to the Selling
Fund the number of Acquiring Fund Shares, including fractional Acquiring
Fund Shares, determined by multiplying the shares outstanding of each class
of the Selling Fund by the ratio computed by dividing the net asset value
per share of each such class of the Selling Fund by the net asset value per
share of the Acquiring Fund Shares computed in the manner and as of the
time and date set forth in paragraph 2.2 and (ii) to assume certain
liabilities of the Selling Fund, as set forth in paragraph 1.3. Such
transactions shall take place at the closing provided for in paragraph 3.1
(the "Closing Date").
1.2 Assets to be Acquired. The assets of the Selling Fund to be acquired by
the Acquiring Fund shall consist of all property, including without
limitation all cash, securities, commodities and futures interests and
dividends or interest receivable, which are owned by the Selling Fund and
any deferred or prepaid expenses shown as an asset on the books of the
Selling Fund on the Closing Date. The Selling Fund has provided the
Acquiring Fund with its most recent audited financial statements which
contain a list of all of Selling Fund's assets as of the date thereof. The
Selling Fund hereby represents that as of the date of the execution of this
Agreement there have been no changes in its financial position as
reflected in said financial statements other than those occurring in the
ordinary course of its business in connection with the purchase and sale of
securities and the payment of its normal operating expenses. The Selling
Fund reserves the right to sell any of such securities but will not,
without the prior written approval of the Acquiring Fund, acquire any
additional securities other than securities of the type in which the
Acquiring Fund is permitted to invest. The Acquiring Fund will, within a
reasonable time prior to the Closing Date, furnish the Selling Fund with a
statement of the Acquiring Fund's investment objectives, policies and
restrictions and a list of the securities, if any, on the Selling Fund's
list referred to in the second sentence of this paragraph which do not
conform to the Acquiring Fund's investment objectives, policies, and
restrictions. In the event that the Selling Fund holds any investments
which the Acquiring Fund may not hold, the Selling Fund will dispose of
such securities prior to the Closing Date. In addition, if it is determined
that the Selling Fund and the Acquiring Fund portfolios, when aggregated,
would contain investments exceeding certain percentage limitations imposed
upon the Acquiring Fund with respect to such investments, the Selling Fund
if requested by the Acquiring Fund will dispose of a sufficient amount of
such investments as may be necessary to avoid violating such limitations as
of the Closing Date.
1.3 Liabilities to be Assumed. The Selling Fund will endeavor to discharge
all of its known liabilities and obligations prior to the Closing Date.
The Acquiring Fund shall assume only those liabilities, expenses, costs,
charges and reserves reflected on a Statement of Assets and Liabilities of
the Selling Fund prepared by Furman Selz Incorporated, the administrator of
the Selling Fund, as of the Valuation Date (as defined in paragraph 2.1),
in accordance with generally accepted accounting principles consistently
applied from the prior audited period. The Acquiring Fund shall assume
only those liabilities of the Selling Fund reflected in such Statement of
Assets and Liabilities and shall not assume any other liabilities, whether
absolute or contingent, known or unknown, accrued or unaccrued, all of
which shall remain the obligation of the Selling Fund.
1.4 Liquidation and Distribution. As soon after the Closing Date as is
conveniently practicable (the "Liquidation Date"), (a) the Selling Fund
will liquidate and distribute pro rata to the Selling Fund's shareholders
of record, determined as of the close of business on the Closing Date (the
"Selling Fund Shareholders"), the Acquiring Fund Shares received by the
Selling Fund pursuant to paragraph 1.1. and (b) the Selling Fund will
thereupon proceed to dissolve as set forth in paragraph 1.8 below. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Selling Fund on
the books of the Acquiring Fund, to open accounts on the share records of
the Acquiring Fund in the names of the Selling Fund Shareholders and
representing the respective pro rata number of the Acquiring Fund Shares
due such shareholders. All issued and outstanding shares of the Selling
Fund will simultaneously be canceled on the books of the Selling Fund. The
Acquiring Fund shall not issue certificates representing the Acquiring Fund
Shares in connection with such exchange.
1.5 Ownership of Shares. Ownership of Acquiring Fund Shares will be shown
on the books of the Acquiring Fund's transfer agent. Shares of the
Acquiring Fund will be issued in the manner described in the combined
Prospectus and Proxy Statement on Form N-14 to be distributed to
shareholders of the Selling Fund as described in Section 5 paragraph 5.7.
1.6 Transfer Taxes. Any transfer taxes payable upon issuance of the
Acquiring Fund Shares in a name other than the registered holder of the
Selling Fund shares on the books of the Selling Fund as of that time shall,
as a condition of such issuance and transfer, be paid by the person to whom
such Acquiring Fund Shares are to be issued and transferred.
1.7 Reporting Responsibility. Any reporting responsibility of the Selling
Fund is and shall remain the responsibility of the Selling Fund up to and
including the Closing Date and such later date on which the Selling Fund is
terminated.
1.8 Termination. The Selling Fund shall be terminated promptly following
the Closing Date and the making of all distributions pursuant to paragraph
1.4.
ARTICLE II
VALUATION
2.1 Valuation of Assets. The value of the Selling Fund's assets to be
acquired by the Acquiring Fund hereunder shall be the value of such assets
computed as of the close of business on the New York Stock Exchange on the
Closing Date (such time and date being hereinafter called the "Valuation
Date"), using the valuation procedures set forth in the Evergreen Trust's
Declaration of Trust and the Acquiring Fund's then current prospectus and
statement of additional information or such other valuation procedures as
shall be mutually agreed upon by the parties.
2.2 Valuation of Shares. The net asset value per share of the Acquiring
Fund Shares shall be the net asset value per share computed as of the close
of business on the New York Stock Exchange on the Valuation Date, using the
valuation procedures set forth in the Evergreen Trust's Declaration of
Trust and the Acquiring Fund's then current prospectus and statement of
additional information.
2.3 Shares to be Issued. The number of the Acquiring Fund Shares of each
class to be issued (including fractional shares, if any) in exchange for
the Selling Fund's assets shall be determined by multiplying the shares
outstanding of each class of the Selling Fund by the ratio computed by
dividing the net asset value per share of the Selling Fund attributable to
each of its classes by the net asset value per share of the respective
classes of the Acquiring Fund determined in accordance with paragraph 2.2.
2.4 Determination of Value. All computations of value shall be made by
State Street Bank and Trust Company in accordance with its regular practice
in pricing the shares and assets of the Acquiring Fund.
ARTICLE III
CLOSING AND CLOSING DATE
3.1 Closing Date. The Closing (the "Closing") shall take place on January
12 19, 1996 or such other date as the parties may agree to in writing (the
"Closing Date"). All acts taking place at the Closing shall be deemed to
take place simultaneously as of the close of business on the Closing Date
unless otherwise provided. The Closing shall be held as of 9:00 o'clock
a.m. at the offices of Evergreen Asset Management Corp., 2500 Westchester
Avenue, Purchase, New York 10577, or at such other time and/or place as
the parties may agree.
3.2 Custodian's Certificate. First Fidelity Bank, N.A., as custodian for
the Selling Fund (the "Custodian"), shall deliver at the Closing a
certificate of an authorized officer stating that: (a) the Selling Fund's
portfolio securities, cash, and any other assets shall have been delivered
in proper form to the Acquiring Fund on the Closing Date and (b) all
necessary taxes including all applicable Federal and state stock transfer
stamps, if any, shall have been paid, or provision for payment shall have
been made, in conjunction with the delivery of portfolio securities by the
Selling Fund.
3.3 Effect of Suspension in Trading. In the event that on the Valuation
Date (a) the New York Stock Exchange or another primary trading market for
portfolio securities of the Acquiring Fund or the Selling Fund shall be
closed to trading or trading thereon shall be restricted, or (b) trading or
the reporting of trading on said Exchange or elsewhere shall be disrupted
so that accurate appraisal of the value of the net assets of the Acquiring
Fund or the Selling Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when trading shall
have been fully resumed and reporting shall have been restored.
3.4 Transfer Agent's Certificate. First Fidelity Bank, N.A., as transfer
agent for the Selling Fund shall deliver at the Closing a certificate of an
authorized officer stating that its records contain the names and addresses
of the Selling Fund Shareholders and the number and percentage ownership of
outstanding shares owned by each such shareholder immediately prior to the
Closing. The Acquiring Fund shall issue and deliver or cause its transfer
agent to issue and deliver a confirmation evidencing the Acquiring Fund
Shares to be credited on the Closing Date to the Secretary of the FFB Trust
, or provide evidence satisfactory to the Selling Fund that such Acquiring
Fund Shares have been credited to the Selling Fund's account on the books
of the Acquiring Fund. At the Closing each party shall deliver to the other
such bills of sale, checks, assignments, share certificates, if any,
receipts and other documents as such other party or its counsel may
reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations of the Selling Fund. The Selling Fund represents and
warrants to the Acquiring Fund as follows:
(a) The Selling Fund is a separate investment series of a Massachusetts
business trust duly organized, validly existing and in good standing under
the laws of the Commonwealth of Massachusetts;
(b) The Selling Fund is a separate investment series of a registered
investment company classified as a management company of the open-end type
and its registration with the Securities and Exchange Commission (the
"Commission") as an investment company under the Investment Company Act of
1940, as amended (the "1940 Act") is in full force and effect;
(c) The current prospectus and statement of additional information of the
Selling Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933, as amended (the "1933 Act") and
the 1940 Act and the rules and regulations of the Commission thereunder and
do not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not materially misleading;
(d) The Selling Fund is not, and the execution, delivery and performance of
this Agreement (subject to shareholder approval) will not, result in a
violation of any provision of the FFB Trust's Declaration of Trust or
By-Laws or of any agreement, indenture, instrument, contract, lease or
other undertaking to which the Selling Fund is a party or by which it is
bound;
(e) The Selling Fund has no material contracts or other commitments (other
than this Agreement) which will be terminated with liability to it prior to
the Closing Date;
(f) Except as otherwise disclosed in writing to and accepted by the
Acquiring Fund, no litigation, administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Selling Fund or any of its properties or
assets which, if adversely determined, would materially and adversely
affect its financial condition, the conduct of its business or the ability
of the Selling Fund to carry out the transactions contemplated by this
Agreement. The Selling Fund knows of no facts which might form the basis
for the institution of such proceedings and is not a party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or
its ability to consummate the transactions herein contemplated;
(g) The financial statements of the Selling Fund at February 28, 1995 have
been audited by KPMG Peat Marwick LLP, certified public accountants, and
are in accordance with generally accepted accounting principles
consistently applied, and such statements (copies of which have been
furnished to the Acquiring Fund) fairly reflect the financial condition of
the Selling Fund as of such date, and there are no known contingent
liabilities of the Selling Fund as of such date not disclosed therein;
(h) Since February 28, 1995 there has not been any material adverse change
in the Selling Fund's financial condition, assets, liabilities or business
other than changes occurring in the ordinary course of business, or any
incurrence by the Selling Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquiring Fund. For the purposes of this
subparagraph (h), a decline in the net asset value of the Selling Fund
shall not constitute a material adverse change;
(i) At the Closing Date, all Federal and other tax returns and reports of
the Selling Fund required by law to have been filed by such dates shall
have been filed, and all Federal and other taxes shown due on said returns
and reports shall have been paid, or provision shall have been made for the
payment thereof and to the best of the Selling Fund's knowledge no such
return is currently under audit and no assessment has been asserted with
respect to such returns;
(j) For each fiscal year of its operation, the Selling Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and has distributed in each such year all
net investment income and realized capital gains;
(k) All issued and outstanding shares of the Selling Fund are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by the Selling Fund (except that, under Massachusetts
law, Selling Fund Shareholders could, under certain circumstances be held
personally liable for obligations of the Selling Fund). All of the issued
and outstanding shares of the Selling Fund will, at the time of the Closing
Date, be held by the persons and in the amounts set forth in the records of
the transfer agent as provided in paragraph 3.4. The Selling Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of the Selling Fund shares, nor is there outstanding any
security convertible into any of the Selling Fund shares;
(l) At the Closing Date, the Selling Fund will have good and marketable
title to the Selling Fund's assets to be transferred to the Acquiring Fund
pursuant to paragraph 1.2 and full right, power, and authority to sell,
assign, transfer and deliver such assets hereunder, and upon delivery and
payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act,
other than as disclosed to the Acquiring Fund and accepted by the Acquiring
Fund;
(m) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Selling Fund
and, subject to approval by the Selling Fund Shareholders, this Agreement
constitutes a valid and binding obligation of the Selling Fund, enforceable
in accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(n) The information to be furnished by the Selling Fund for use in
no-action letters, applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with Federal
securities and other laws and regulations thereunder applicable thereto;
(o) The proxy statement of the Selling Fund to be included in the
Registration Statement referred to in paragraph 5.7 (other than information
therein that relates to the Acquiring Fund) will, on the effective date of
the Registration Statement and on the Closing Date, not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which such statements were made, not misleading.
4.2 Representations of the Acquiring Fund. The Acquiring Fund represents
and warrants to the Selling Fund as follows:
(a) The Acquiring Fund is a separate investment series of a Massachusetts
business trust duly organized, validly existing and in good standing under
the laws of the Commonwealth of Massachusetts.
(b) The Acquiring Fund is a separate investment series of a Massachusetts
business trust that is registered as an investment company classified as a
management company of the open-end type and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect;
(c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations
of the Commission thereunder and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(d) The Acquiring Fund is not, and the execution, delivery and performance
of this Agreement will not, result in a violation of Evergreen Trust's
Declaration of Trust or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquiring Fund is a party
or by which it is bound;
(e) Except as otherwise disclosed in writing to the Selling Fund and
accepted by the Selling Fund, no litigation, administrative proceeding or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against the Acquiring Fund or any of
its properties or assets which, if adversely determined, would materially
and adversely affect its financial condition and the conduct of its
business or the ability of the Acquiring Fund to carry out the transactions
contemplated by this Agreement. The Acquiring Fund knows of no facts which
might form the basis for the institution of such proceedings and is not a
party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely affects its
business or its ability to consummate the transactions contemplated herein;
(f) The financial statements of the Acquiring Fund at December 31, 1994,
have been audited by KPMG Peat Marwick LLP, certified public accountants,
and are in accordance with generally accepted accounting principles
consistently applied, and such statements (copies of which have been
furnished to the Selling Fund) fairly reflect the financial condition of
the Acquiring Fund as of such date, and there are no known contingent
liabilities affecting the Acquiring Fund as of such date not disclosed
therein;
(g) Since December 31, 1994 there has not been any material adverse change
in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquiring Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Fund. For the purposes of this
subparagraph (g), a decline in the net asset value of the Acquiring Fund
shall not constitute a material adverse change;
(h) At the Closing Date, all Federal and other tax returns and reports of
the Acquiring Fund required by law then to be filed by such dates shall
have been filed, and all Federal and other taxes shown due on said returns
and reports shall have been paid or provision shall have been made for the
payment thereof and to the best of the Acquiring Fund's knowledge, no such
return is currently under audit and no assessment has been asserted with
respect to such returns;
(i) For each fiscal year of its operation the Acquiring Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and has distributed in each such year all
net investment income and realized capital gains;
(j) All issued and outstanding Acquiring Fund Shares are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable (except that, under Massachusetts law, shareholders of
the Acquiring Fund could, under certain circumstances, be held personally
liable for obligations of the Acquiring Fund). The Acquiring Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any Acquiring Fund Shares, nor is there outstanding any security
convertible into any Acquiring Fund Shares;
(k) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Acquiring Fund,
and this Agreement constitutes a valid and binding obligation of the
Acquiring Fund enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights and to general equity
principles;
(l) The Acquiring Fund Shares to be issued and delivered to the Selling
Fund, for the account of the Selling Fund Shareholders, pursuant to the
terms of this Agreement will at the Closing Date have been duly authorized
and, when so issued and delivered, will be duly and validly issued
Acquiring Fund Shares, and will be fully paid and non-assessable (except
that, under Massachusetts law, shareholders of the Acquiring Fund could,
under certain circumstances, be held personally liable for obligations of
the Acquiring Fund);
(m) The information to be furnished by the Acquiring Fund for use in no-
action letters, applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with Federal
securities and other laws and regulations applicable thereto;
(n) The Prospectus and Proxy Statement to be included in the Registration
Statement (only insofar as it relates to the Acquiring Fund ) will, on the
effective date of the Registration Statement and on the Closing Date, not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements were
made, not misleading; and
(o) The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and
such of the state Blue Sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE SELLING FUND
5. 1 Operation in Ordinary Course. The Acquiring Fund and the Selling Fund
each will operate its business in the ordinary course between the date
hereof and the Closing Date, it being understood that such ordinary course
of business will include customary dividends and distributions.
5.2 Approval of Shareholders. The FFB Trust will call a meeting of the
Selling Fund Shareholders to consider and act upon this Agreement and to
take all other action necessary to obtain approval of the transactions
contemplated herein.
5.3 Investment Representation. The Selling Fund covenants that the
Acquiring Fund Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof other than in accordance with
the terms of this Agreement.
5.4 Additional Information. The Selling Fund will assist the Acquiring
Fund in obtaining such information as the Acquiring Fund reasonably
requests concerning the beneficial ownership of the Selling Fund shares.
5.5 Further Action. Subject to the provisions of this Agreement, the
Acquiring Fund and the Selling Fund will each take, or cause to be taken,
all action, and do or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, including any actions required to be taken
after the Closing Date.
5.6 Statement of Earnings and Profits. As promptly as practicable, but in
any case within sixty days after the Closing Date, the Selling Fund shall
furnish the Acquiring Fund, in such form as is reasonably satisfactory to
the Acquiring Fund, a statement of the earnings and profits of the Selling
Fund for Federal income tax purposes which will be carried over by the
Acquiring Fund as a result of Section 381 of the Code, and which will be
certified by the FFB Trust's President, its Treasurer and its independent
auditors.
5.7 Preparation of Form N-14 Registration Statement. The Selling Fund will
provide the Acquiring Fund with information reasonably necessary for the
preparation of a prospectus which will include the proxy statement,
referred to in paragraph 4.1(o) (the "Prospectus and Proxy Statement"), all
to be included in a Registration Statement on Form N-14 of the Acquiring
Fund (the "Registration Statement"), in compliance with the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act") and the 1940
Act in connection with the meeting of the Selling Fund Shareholders to
consider approval of this Agreement and the transactions contemplated
herein.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING FUND
The obligations of the Selling Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance
by the Acquiring Fund of all the obligations to be performed by it
hereunder on or before the Closing Date, and, in addition thereto, the
following further conditions:
6.1 All representations, covenants and warranties of the Acquiring Fund
contained in this Agreement shall be true and correct as of the date hereof
and as of the Closing Date with the same force and effect as if made on and
as of the Closing Date, and the Acquiring Fund shall have delivered to the
Selling Fund a certificate executed in its name by the Evergreen Trust's
President or Vice President and its Treasurer or Assistant Treasurer, in
form and substance reasonably satisfactory to the Selling Fund and dated as
of the Closing Date, to such effect and as to such other matters as the
Selling Fund shall reasonably request; and
6.2 The Selling Fund shall have received on the Closing Date an opinion
from Sullivan & Worcester, counsel to the Acquiring Fund, dated as of the
Closing Date, in a form reasonably satisfactory to the Selling Fund,
covering the following points:
That (a) the Acquiring Fund is a separate investment series of a
Massachusetts business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has the
power to own all of its properties and assets and to carry on its business
as presently conducted; (b) this Agreement has been duly authorized,
executed and delivered by the Acquiring Fund, and, assuming that the
Prospectus and Proxy Statement, and Registration Statement comply with the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder and, assuming due authorization, execution and delivery of this
Agreement by the Selling Fund, is a valid and binding obligation of the
Acquiring Fund enforceable against the Acquiring Fund in accordance with
its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and to general equity principles; (c) assuming
that a consideration therefor not less than the net asset value thereof has
been paid, the Acquiring Fund Shares to be issued and delivered to the
Selling Fund on behalf of the Selling Fund Shareholders as provided by this
Agreement are duly authorized and upon such delivery will be legally issued
and outstanding and fully paid and non-assessable (except that, under
Massachusetts law, shareholders of the Acquiring Fund could, under certain
circumstances, be held personally liable for obligations of the Acquiring
Fund), and no shareholder of the Acquiring Fund has any preemptive rights
in respect thereof; (d) the execution and delivery of this Agreement did
not, and the consummation of the transactions contemplated hereby will not,
result in a violation of the Evergreen Trust's Declaration of Trust or By-
Laws or any provision of any material agreement, indenture, instrument,
contract, lease or other undertaking (in each case known to such counsel)
to which the Acquiring Fund is a party or by which it or any of its
properties may be bound or to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any penalty, under any
agreement, judgment, or decree to which the Acquiring Fund is a party or by
which it is bound; (e) to the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental authority of
the United States or the Commonwealth of Massachusetts, is required for the
consummation by the Acquiring Fund of the transactions contemplated herein,
except such as have been obtained under the 1933 Act, the 1934 Act and the
1940 Act, and such as may be required under state securities laws; (f) only
insofar as they relate to the Acquiring Fund, the descriptions in the
Prospectus and Proxy Statement of statutes, legal and governmental
proceedings and material contracts, if any, are accurate and fairly present
the information required to be shown; (g) such counsel does not know of any
legal or governmental proceedings, only insofar as they relate to the
Acquiring Fund, existing on or before the effective date of the
Registration Statement or the Closing Date required to be described in the
Registration Statement or to be filed as exhibits to the Registration
Statement which are not described or filed as required; (h) the Acquiring
Fund is a separate investment series of a Massachusetts business trust
registered as an investment company under the 1940 Act and to such
counsel's best knowledge, such registration with the Commission as an
investment company under the 1940 Act is in full force and effect; and (i)
to the knowledge of such counsel, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to the Acquiring Fund or any of its
properties or assets and the Acquiring Fund is not a party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body, which materially and adversely affects its business,
other than as previously disclosed in the Registration Statement. In
addition, such counsel shall also state that they have participated in
conferences with officers and other representatives of the Acquiring Fund
at which the contents of the Prospectus and Proxy Statement and related
matters were discussed and, although they are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus and Proxy Statement (except to the
extent indicated in paragraph (f) of their above opinion), on the basis of
the foregoing (relying as to materiality to a large extent upon the
opinions of the Evergreen Trust's officers and other representatives of the
Acquiring Fund), no facts have come to their attention that lead them to
believe that the Prospectus and Proxy Statement as of its date, as of the
date of the Selling Fund Shareholders' meeting, and as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein regarding the Acquiring Fund or
necessary, in the light of the circumstances under which they were made, to
make the statements therein regarding the Acquiring Fund not misleading.
Such opinion may state that such counsel does not express any opinion or
belief as to the financial statements or any financial or statistical
data, or as to the information relating to the Selling Fund, contained in
the Prospectus and Proxy Statement or the Registration Statement, and that
such opinion is solely for the benefit of the FFB Trust and the Selling
Fund. Such opinion shall contain such other assumptions and limitations as
shall be in the opinion of Sullivan & Worcester appropriate to render the
opinions expressed therein.
In this paragraph 6.2, references to Prospectus and Proxy Statement
include and relate to only the text of such Prospectus and Proxy Statement
and not to any exhibits or attachments thereto or to any documents
incorporated by reference therein.
6.3 The merger between First Union Corporation and First Fidelity
Corporation Bancorporation shall be completed prior to the Closing Date.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance
by the Selling Fund of all the obligations to be performed by it hereunder
on or before the Closing Date and, in addition thereto, the following
conditions:
7.1 All representations, covenants and warranties of the Selling Fund
contained in this Agreement shall be true and correct as of the date hereof
and as of the Closing Date with the same force and effect as if made on and
as of the Closing Date, and the Selling Fund shall have delivered to the
Acquiring Fund on the Closing Date a certificate executed in its name by
the FFB Trust's President or Vice President and its Treasurer or Assistant
Treasurer, in form and substance satisfactory to the Acquiring Fund and,
dated as of the Closing Date, to such effect and as to such other matters
as the Acquiring Fund shall reasonably request;
7.2 The Selling Fund shall have delivered to the Acquiring Fund a statement
of the Selling Fund's assets and liabilities, together with a list of the
Selling Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the
Closing Date, certified by the Treasurer of the FFB Trust; and
7.3 The Acquiring Fund shall have received on the Closing Date an opinion
of Baker & McKenzie, counsel to the Selling Fund, in a form satisfactory to
the Acquiring Fund covering the following points:
That (a) the Selling Fund is a separate investment series of a
Massachusetts business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has the
power to own all of its properties and assets and to carry on its business
as presently conducted; (b) this Agreement has been duly authorized,
executed and delivered by the Selling Fund, and, assuming that the
Prospectus and Proxy Statement, and Registration Statement comply with the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder and, assuming due authorization, execution and delivery of this
Agreement by the Acquiring Fund, is a valid and binding obligation of the
Selling Fund enforceable against the Selling Fund in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights
generally and to general equity principles; (c) the execution and delivery
of this Agreement did not, and the consummation of the transactions
contemplated hereby will not, result in a violation of the FFB Trust's
Declaration of Trust or By-laws, or any provision of any material
agreement, indenture, instrument, contract, lease or other undertaking (in
each case known to such counsel) to which the Selling Fund is a party or by
which it or any of its properties may be bound or, to the knowledge of such
counsel, result in the acceleration of any obligation or the imposition of
any penalty, under any agreement, judgment, or decree to which the Selling
Fund is a party or by which it is bound; (d) to the knowledge of such
counsel, no consent, approval, authorization or order of any court or
governmental authority of the United States or the Commonwealth of
Massachusetts is required for the consummation by the Selling Fund of the
transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act, and such as may be required
under state securities laws; (e) only insofar as they relate to the Selling
Fund, the descriptions in the Prospectus and Proxy Statement of statutes,
legal and governmental proceedings and material contracts, if any, are
accurate and fairly present the information required to be shown; (f) such
counsel does not know of any legal or governmental proceedings, only
insofar as they relate to the Selling Fund existing on or before the date
of mailing of the Prospectus and Proxy Statement and the Closing Date,
required to be described in the Prospectus and Proxy Statement or to be
filed as an exhibit to the Registration Statement which are not described
or filed as required; (g) the Selling Fund is a separate investment series
of a Massachusetts business trust registered as an investment company under
the 1940 Act and to such counsel's best knowledge, such registration with
the Commission as an investment company under the 1940 Act is in full force
and effect; (h) to the knowledge of such counsel, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to the Selling Fund
or any of its respective properties or assets and the Selling Fund is
neither a party to nor subject to the provisions of any order, decree or
judgment of any court or governmental body, which materially and adversely
affects its business other than as previously disclosed in the Prospectus
and Proxy Statement; (i) assuming that a consideration therefor not less
than the net asset value thereof has been paid, and assuming that such
shares were issued in accordance with the terms of the Selling Fund's
registration statement, or any amendment thereto, in effect at the time of
such issuance, all issued and outstanding shares of the Selling Fund are
legally issued and fully paid and non-assessable (except that, under
Massachusetts law, Selling Fund Shareholders could, under certain
circumstances be held personally liable for obligations of the Selling
Fund). Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Selling Fund at
which the contents of the Prospectus and Proxy Statement and related
matters were discussed and, although they are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus and Proxy Statement (except to the
extent indicated in paragraph (e) of their above opinion), on the basis of
the foregoing (relying as to materiality to a large extent upon the
opinions of the FFB Trust's officers and other representatives of the
Selling Fund), no facts have come to their attention that lead them to
believe that the Prospectus and Proxy Statement as of its date, as of the
date of the Selling Fund Shareholders' meeting, and as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein regarding the Selling Fund or
necessary, in the light of the circumstances under which they were made, to
make the statements therein regarding the Selling Fund not misleading. Such
opinion may state that such counsel does not express any opinion or belief
as to the financial statements or any financial or statistical data, or as
to the information relating to the Acquiring Fund, contained in the
Prospectus and Proxy Statement or Registration Statement, and that such
opinion is solely for the benefit of the Evergreen Trust and the Acquiring
Fund. Such opinion shall contain such other assumptions and limitations as
shall be in the opinion of Baker & McKenzie appropriate to render the
opinions expressed therein and shall indicate, with respect to matters of
Massachusetts law, that as Baker & McKenzie are not admitted to the bar of
Massachusetts, such opinions are based either upon the review of published
statutes, case cases and rules and regulations of the Commonwealth of
Massachusetts or upon an opinion of Massachusetts counsel.
In this paragraph 7.3, references to Prospectus and Proxy Statement
include and relate to only the text of such Prospectus and Proxy Statement
and not to any exhibits or attachments thereto or to any documents
incorporated by reference therein.
7.4 The merger between First Union Corporation and First Fidelity
Bancorporation shall be completed prior to the Closing Date.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE SELLING FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Selling Fund or the Acquiring Fund, the
other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of
the Selling Fund in accordance with the provisions of the FFB Trust's
Declaration of Trust and By-Laws and certified copies of the resolutions
evidencing such approval shall have been delivered to the Acquiring Fund.
Notwithstanding anything herein to the contrary, neither the Acquiring Fund
nor the Selling Fund may waive the conditions set forth in this paragraph
8.1;
8.2 On the Closing Date, the Commission shall not have issued an
unfavorable report under Section 25(b) of the 1940 Act, nor instituted any
proceeding seeking to enjoin the consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940 Act and no
action, suit or other proceeding shall be threatened or pending before any
court or governmental agency in which it is sought to restrain or prohibit,
or obtain damages or other relief in connection with, this Agreement or the
transactions contemplated herein;
8.3 All required consents of other parties and all other consents, orders
and permits of Federal, state and local regulatory authorities (including
those of the Commission and of state Blue Sky securities authorities.
including any necessary "no-action" positions of and exemptive orders from
such Federal and state authorities) to permit consummation of the
transactions contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve a
risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Selling Fund, provided that either party hereto may
for itself waive any of such conditions;
8.4 The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation
or proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act;
8.5 The Selling Fund shall have declared a dividend or dividends which,
together with all previous such dividends, shall have the effect of
distributing to the Selling Fund Shareholders all of the Selling Fund's
investment company taxable income for all taxable years ending on or prior
to the Closing Date (computed without regard to any deduction for dividends
paid) and all of its net capital gain realized in all taxable years ending
on or prior to the Closing Date (after reduction for any capital loss
carryforward);
8.6 The parties shall have received a favorable opinion of Sullivan &
Worcester, addressed to the Acquiring Fund and the Selling Fund
substantially to the effect that for Federal income tax purposes:
(a) The transfer of substantially all of the Selling Fund assets in
exchange for the Acquiring Fund Shares and the assumption by the Acquiring
Fund of certain identified liabilities of the Selling Fund followed by the
distribution of the Acquiring Fund Shares to the Selling Fund in
dissolution and liquidation of the Selling Fund, will constitute a
"reorganization" within the meaning of Section 368(a)(1)(C) of the Code and
the Acquiring Fund and the Selling Fund will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code; (b) no
gain or loss will be recognized by the Acquiring Fund upon the receipt of
the assets of the Selling Fund solely in exchange for the Acquiring Fund
Shares and the assumption by the Acquiring Fund of certain identified
liabilities of the Selling Fund; (c) no gain or loss will be recognized by
the Selling Fund upon the transfer of the Selling Fund assets to the
Acquiring Fund in exchange for the Acquiring Fund Shares and the assumption
by the Acquiring Fund of certain identified liabilities of the Selling Fund
or upon the distribution ( whether actual or constructive ) of the
Acquiring Fund Shares to Selling Fund Shareholders in exchange for their
shares of the Selling Fund; (d) no gain or loss will be recognized by
Selling Fund Shareholders upon the exchange of their Selling Fund shares
for the Acquiring Fund Shares in liquidation of the Selling Fund; (e) the
aggregate tax basis for the Acquiring Fund Shares received by each Selling
Fund Shareholder pursuant to the Reorganization will be the same as the
aggregate tax basis of the Selling Fund shares held by such shareholder
immediately prior to the Reorganization, and the holding period of the
Acquiring Fund Shares to be received by each Selling Fund Shareholder will
include the period during which the Selling Fund shares exchanged therefor
were held by such shareholder (provided the Selling Fund shares were held
as capital assets on the date of the Reorganization); and (f) the tax basis
of the Selling Fund assets acquired by the Acquiring Fund will be the same
as the tax basis of such assets to the Selling Fund immediately prior to
the Reorganization, and the holding period of the assets of the Selling
Fund in the hands of the Acquiring Fund will include the period during
which those assets were held by the Selling Fund. Notwithstanding anything
herein to the contrary, neither the Acquiring Fund nor the Selling Fund may
waive the conditions set forth in this paragraph 8.6.
8.7 The Acquiring Fund shall have received from KPMG Peat Marwick LLP a
letter addressed to the Acquiring Fund, in form and substance satisfactory
to the Acquiring Fund, to the effect that (i) they are independent
certified public accountants with respect to the Selling Fund within the
meaning of the 1933 Act and the applicable published rules and regulations
thereunder; (ii) on the basis of limited procedures agreed upon by the
Acquiring Fund and described in such letter (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of any unaudited pro forma financial statements included in the
Registration Statement and Prospectus and Proxy Statement, and inquiries of
appropriate officials of the FFB Trust responsible for financial and
accounting matters, nothing came to their attention which caused them to
believe that such unaudited pro forma financial statements do not comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act and the published rules and regulations
thereunder; or (iii) on the basis of limited procedures agreed upon by the
Acquiring Fund and described in such letter (but not an examination in
accordance with generally accepted auditing standards), the Capitalization
Table appearing in the Registration Statement and Prospectus and Proxy
Statement, has been obtained from and is consistent with the accounting
records of the Selling Fund; (iv) on the basis of limited procedures agreed
upon by the Acquiring Fund and described in such letter (but not an
examination in accordance with generally accepted auditing standards), the
pro forma financial statements which are included in the Registration
Statement and Prospectus and Proxy Statement, were prepared based on the
valuation of the Selling Fund's assets in accordance with the Evergreen
Trust's Declaration of Trust and the Acquiring Fund's then current
prospectus and statement of additional information pursuant to procedures
customarily utilized by the Acquiring Fund in valuing its own assets (such
procedures having been previously described to KPMG Peat Marwick LLP in
writing by the Acquiring Fund); and (v) on the basis of limited procedures
agreed upon by the Acquiring Fund and described in such letter (but not an
examination in accordance with generally accepted auditing standards) the
data utilized in the calculations of the projected expense ratio appearing
in the Registration Statement and Prospectus and Proxy Statement agree with
underlying accounting records of the Selling Fund or to written estimates
by Selling Fund's management and were found to be mathematically correct.
In addition, the Acquiring Fund shall have received from KPMG Peat
Marwick LLP a letter addressed to the Acquiring Fund dated on the Closing
Date, in form and substance satisfactory to the Acquiring Fund, to the
effect that on the basis of limited procedures agreed upon by the Acquiring
Fund (but not an examination in accordance with generally accepted auditing
standards) the calculation of net asset value per share of the Selling Fund
as of the Valuation Date was determined in accordance with generally
accepted accounting practices and the portfolio valuation practices of the
Acquiring Fund.
8.8 The Selling Fund shall have received from KPMG Peat Marwick LLP a
letter addressed to the Selling Fund, in form and substance satisfactory to
the Selling Fund, to the effect that (i) they are independent certified
public accountants with respect to the Acquiring Fund within the meaning of
the 1933 Act and the applicable published rules and regulations thereunder;
(ii) on the basis of limited procedures agreed upon by the Selling Fund and
described in such letter (but not an examination in accordance with
generally accepted auditing standards) consisting of a reading of any
unaudited pro forma financial statements included in the Registration
Statement and Prospectus and Proxy Statement, and inquiries of appropriate
officials of the Evergreen Trust responsible for financial and accounting
matters, nothing came to their attention which caused them to believe that
such unaudited pro forma financial statements do not comply as to form in
all material respects with the applicable accounting requirements of the
1933 Act and the published rules and regulations thereunder; (iii) on the
basis of limited procedures agreed upon by the Selling Fund and described
in such letter (but not an examination in accordance with generally
accepted auditing standards), the Capitalization Table appearing in the
Registration Statement and Prospectus and Proxy Statement, has been
obtained from and is consistent with the accounting records of the
Acquiring Fund; and (iv) on the basis of limited procedures agreed upon by
the Selling Fund (but not an examination in accordance with generally
accepted auditing standards) the data utilized in the calculations of the
projected expense ratio appearing in the Registration Statement and
Prospectus and Proxy Statement agree with underlying accounting records of
the Acquiring Fund or to written estimates by each Fund's management and
were found to be mathematically correct.
8.9 The Acquiring Fund and the Selling Fund shall also have received from
KPMG Peat Marwick LLP a letter addressed to the Acquiring Fund and the
Selling Fund, dated on the Closing Date in form and substance satisfactory
to the Funds, setting forth the Federal income tax implications relating to
capital loss carryforwards (if any) of the Selling Fund and the related
impact, if any, of the proposed transfer of all or substantially all of the
assets of the Selling Fund to the Acquiring Fund and the ultimate
dissolution of the Selling Fund, upon the shareholders of the Selling Fund.
ARTICLE IX
BROKERAGE FEES AND EXPENSES
9.1 The Acquiring Fund and the Selling Fund each represents and warrants to
the other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
9.2 Except as otherwise provided for herein, all expenses of the
transactions contemplated by this Agreement incurred by the Selling Fund
and the Acquiring Fund will be borne by First Union National Bank of North
Carolina ("FUNB"). Such expenses include, without limitation, (i)
expenses incurred in connection with the entering into and the carrying out
of the provisions of this Agreement; (ii) expenses associated with the
preparation and filing of the Registration Statement under the 1933 Act
covering the Acquiring Fund Shares to be issued pursuant to the provisions
of this Agreement; (iii) registration or qualification fees and expenses of
preparing and filing such forms as are necessary under applicable state
securities laws to qualify the Acquiring Fund Shares to be issued in
connection herewith in each state in which the Selling Fund Shareholders
are resident as of the date of the mailing of the Prospectus and Proxy
Statement to such shareholders; (iv) postage; (v) printing; (vi) accounting
fees; (vii) legal fees; and (viii) solicitation cost of the transaction.
Not withstanding Notwithstanding the foregoing, the Acquiring Fund shall
pay its own Federal and state registration fees. In the event that the
merger of First Fidelity Bancorporation and First Union Corporation is not
completed, this Agreement shall terminate. In such event, all expenses of
the transactions contemplated by this Agreement incurred by the Acquiring
Fund will be borne by FUNB and all expenses of the transactions
contempleted contemplated by this Agreement incurred by the Selling Fund
will be borne by First Fidelity Bank, N.A.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Fund and the Selling Fund agree that neither party has
made any representation, warranty or covenant not set forth herein and that
the this Agreement constitutes the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated
hereunder.
ARTICLE XI
TERMINATION
11.1 In addition to the termination provisions set forth in paragraph 9.2,
this Agreement may be terminated by the mutual agreement of the Acquiring
Fund and the Selling Fund. In addition, either the Acquiring Fund or the
Selling Fund may at its option terminate this Agreement at or prior to the
Closing Date because:
(a) of a breach by the other of any representation, warranty or agreement
contained herein to be performed at or prior to the Closing Date, if not
cured within 30 days; or
(b) a condition herein expressed to be precedent to the obligations of the
terminating party has not been met and it reasonably appears that it will
not or cannot be met.
11.2 In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of either the
Acquiring Fund or the Selling Fund, the Evergreen Trust or the FFB Trust or
their respective Trustees or officers, to the other party or its, Trustees
or officers, but each shall bear the expenses incurred by it incidental to
the preparation and carrying out of this Agreement as provided in paragraph
9.2.
ARTICLE XII
AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Selling Fund and the Acquiring Fund; provided, however, that following the
meeting of the Selling Fund Shareholders called by the FFB Trust pursuant
to paragraph 5.2 of this Agreement, no such amendment may have the effect
of changing the provisions for determining the number of the Acquiring Fund
Shares to be issued to the Selling Fund Shareholders under this Agreement
to the detriment of such shareholders without their further approval.
ARTICLE XIII
NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy, overnight courier or certified mail addressed
to:
the Acquiring Fund
Evergreen Investment Trust
2500 Westchester Avenue
Purchase, New York 10577
Attention: Joseph J. McBrien, Esq.
or to the Selling Fund
FFB Funds Trust
237 Park Avenue
New York, New York 10017
Attention: Edmund A. Hajim
ARTICLE XIV
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
14.1 The Article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties hereto and
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
14.5 It is expressly agreed to that the obligations of the Selling Fund and
the Acquiring Fund hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents, or employees of the FFB Trust or
the Evergreen Trust, personally, but bind only the trust property of the
Selling Fund and the Acquiring Fund, as provided in the Declarations of
Trust of the FFB Trust and the Evergreen Trust. The execution and delivery
of this Agreement have been authorized by the Trustees of the FFB Trust on
behalf of the Selling Fund, and the Evergreen Trust on behalf of the
Acquiring Fund and signed by authorized officers of the FFB Trust and the
Evergreen Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officers shall be deemed
to have been made by any of them individually or to impose any liability on
any of them personally, but shall bind only the trust property of the FFB
Trust and the Evergreen Trust as provided in their Declarations of Trust.
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed and sealed this
Agreement, all as of the date first written above.
EVERGREEN INVESTMENT TRUST
on behalf of Evergreen Treasury Money Market Fund
By:/s/ John J. Pileggi
Name: John J. Pileggi
Title: President
(Seal)
FFB FUNDS TRUST
on behalf of FFB U.S. Government Fund
By: /s/ Edmund A. Hajim
Name: Edmund A. Hajim
Title: President
EXHIBIT B
INTERIM MASTER ADVISORY CONTRACT
FFB FUNDS TRUST
237 Park Avenue
New York, New York l0l69
December __, 1995
First Union National Bank of
North Carolina
One First Union Center
Charlotte, North Carolina 28288
Dear Sirs:
This will confirm the agreement between the undersigned
(the "Trust") and First Union National Bank of North Carolina
(the "Adviser") as follows:
1. The Trust is an open-end investment company
organized as a Massachusetts business trust, and consists of one
or more separate investment portfolios as may be established and
designated by the Trustees from time to time (the "Funds"). This
contract shall pertain to any Fund as shall be designated in a
Supplement to this contract ("Supplement"), as further agreed
between the Trust and the Adviser. A separate class of shares
of beneficial interest of the Trust is offered to investors with
respect to each Fund. The Trust engages in the business of
investing and reinvesting the assets of the Funds in the manner
and in accordance with the investment objective and restrictions
specified in the Trust's Declaration of Trust and the currently
effective Prospectus or Prospectuses (the "Prospectus") relating
to the Trust and the Funds included in the Trust's Registration
Statement, as amended from time to time (the "Registration
Statement"), filed by the Trust under the Investment Company Act
of 1940 (the "1940 Act") and the Securities Act of 1933 (the
"1933 Act"). Copies of the documents referred to in the
preceding sentence have been furnished to the Adviser. Any
amendments to those documents shall be furnished to the Adviser
promptly.
2. The Trust employs the Adviser to provide the
investment advisory and administrative services specified
elsewhere in this contract, and the Adviser hereby accepts such
employment. Pursuant to a Master Distribution Contract (the
"Master Distribution Contract") and a Master Administrative
Services Contract (the "Master Administrative Services Contract")
between the Trust and Furman Selz Mager Dietz & Birney
Incorporated (the "Sponsor"), the Trust has employed the Sponsor
to act as distributor for the Funds and to provide to the Trust
management and other services.
3. (a) The Adviser shall, at its expense, (i) employ
or associate with itself such persons as it believes appropriate
to assist it in performing its obligations under this contract
and (ii) provide all advisory, administrative, management and
shareholder services, equipment, facilities and personnel
necessary to perform its obligations under this contract. The
Trust recognizes that in those cases where the Adviser makes
arrangements with its correspondent banks to maintain a
subaccount for certain of their customers who invest in shares
of the Funds, such correspondent banks may also agree to provide
services to subaccount holders of the type provided by the
Adviser to shareholders of record. The Adviser shall obtain the
Trust's prior written approval to each arrangement whereby a
correspondent bank agrees to provide such services. Such
correspondent banks will be compensated for such services
exclusively by the Adviser.
(b) Except as provided in subparagraph (a) in the
Master Administrative Services Contract, the Trust shall be
responsible for all of its expenses and liabilities, including
compensation of its trustees who are not affiliated with the
Sponsor; taxes and governmental fees; interest charges; fees and
expenses of the Trust's independent accountants and legal
counsel; trade association membership dues; fees and expenses of
any custodian (including fees and expenses for keeping books and
accounts and calculating the net asset value of shares of the
Funds), transfer agent, registrar and dividend disbursing agent
of the Trust; expenses of issuing, redeeming, registering and
qualifying for sale the Trust's shares; expenses of preparing and
printing share certificates, prospectuses, shareholders' reports,
notices, proxy statements and reports to regulatory agencies; the
cost of office supplies; travel expenses of all officers,
trustees and employees; insurance premiums; brokerage and other
expenses of executing portfolio transactions; expenses of
shareholders' meetings; organizational expenses; and
extraordinary expenses.
4. (a) The Adviser shall provide to the Trust
investment guidance and policy direction in connection with the
management of the portfolios of the Funds, including oral and
written research analysis, advice, statistical and economic data
and information and judgments, of both a macroeconomic and
microeconomic character, concerning, among other things, interest
rate trends, portfolio composition, credit conditions of both a
general and specific nature and, where applicable, the average
maturity of the portfolio of the Fund.
(b) The Adviser shall also provide to the Trust's
officers administrative assistance in connection with the
operation of the Trust for the account of the Funds.
Administrative services provided by the Adviser shall include (i)
data processing, clerical and bookkeeping services required in
connection with maintaining the financial accounts and records
for the Trust and the Funds, (ii) the compilation of statistical
and research data required for the preparation of periodic
reports and statements of the Fund which are distributed to the
Trust's officers and Board of Trustees, (iii) handling, or
causing to be handled, general shareholder relations with Fund
investors, such as advice as to the status of their accounts, the
current yield and dividends declared to date and assistance with
other questions related to their accounts, (iv) the compilation
of information required in connection with the Trust's filings
with the Securities and Exchange Commission and (v) such other
services as the Adviser shall from time to time determine, upon
consultation with the Sponsor, to be necessary or useful to the
administration of the Trust and the Funds.
(c) As manager of the assets of the Funds, the
Adviser shall make investments for the account of the Funds in
accordance with the Adviser's best judgment and within the
investment objective and restrictions set forth in the Trust's
Declaration of Trust, the Prospectus, the 1940 Act and the
provisions of the Internal Revenue Code relating to regulated
investment companies, subject to policy decisions adopted by the
Trust's Board of Trustees. The Adviser shall advise the Trust's
officers and Board of Trustees, at such times as the Trust's
Board of Trustees may specify, of investments made for the Funds
and shall, when requested by the Trust's officers or Board of
Trustees, supply the reasons for making particular investments.
It is understood that the Adviser will not use any inside
information pertinent to investment decisions undertaken in
connection with this contract that may be in its possession or
in the possession of any of its affiliates, nor will the Adviser
seek to obtain any such information.
(d) The Adviser shall furnish to the Trust's Board
of Trustees periodic reports on the investment performance of the
Funds and on the performance of its obligations under this
contract and shall supply such additional reports and information
as the Trust's officers or Board of Trustees shall reasonably
request.
(e) On occasions when the Adviser deems the
purchase or sale of a security to be in the best interest of the
Fund as well as other customers, the Adviser, to the extent
permitted by applicable law, may aggregate the securities to be
so sold or purchased in order to obtain the best execution or
lower brokerage commissions, if any. The Adviser may also on
occasion purchase or sell a particular security for one or more
customers in different amounts. On either occasion, and to the
extent permitted by applicable law and regulations, allocation
of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Adviser in the
manner it considers to be the most equitable and consistent with
its fiduciary obligations to the Funds and to such other
customers.
(f) The Adviser may cause the Funds to pay a
broker which provides brokerage and research services to the
Adviser a commission for effecting a securities transaction in
excess of the amount another broker might have charged. Such
higher commissions may not be paid unless the Adviser determines
in good faith that the amount paid is reasonable in relation to
the services received in terms of the particular transaction or
the Adviser's overall responsibilities to the Fund and any other
of the Adviser's clients.
5. The Adviser shall give the Trust the benefit of the
Adviser's best judgment and efforts in rendering services under
this contract. As an inducement to the Adviser's undertaking to
render these services, the Trust agrees that the Adviser shall
not be liable under this contract for any mistake in judgment or
in any other event whatsoever except for lack of good faith,
provided that nothing in this contract shall be deemed to protect
or purport to protect the Adviser against the liability to the
Trust or its shareholders to which the Adviser would otherwise
be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Adviser's duties under this
contract or by reason of the Adviser's reckless disregard of its
obligations and duties hereunder.
6. In consideration of the services to be rendered by
the Adviser under this contract, the Trust shall pay the Adviser
a monthly fee ("fee") with respect to each Fund on the first
business day of each month, based upon the average daily value
(as determined on each business day at the time set forth in the
Prospectus for determining net asset value per share) of the net
assets of the Fund during the preceding month, at annual rates
set forth in a Supplement to this contract with respect to the
Fund, provided, that no fee shall accrue or be payable hereunder
with respect to a Fund until the first day after the day (the
"Approval Date") on which this contract has been approved by the
vote of a majority of the outstanding voting securities of that
Fund (as defined in the 1940 Act). If the fees payable to the
Adviser pursuant to this paragraph 6 begin to accrue before the
end of any month or if this contract terminates before the end
of any month, the fees for the period from that date to the end
of that month or from the beginning of that month to the date of
termination, as the case may be, shall be prorated according to
the proportion which the period bears to the full month in which
the effectiveness or termination occurs. For purposes of
calculating the monthly fees, the value of the net assets of a
Fund shall be computed in the manner specified in the Prospectus
for the computation of net asset value. For purposes of this
contract, a "business day" is any day the New York Stock Exchange
is open for trading.
7. If the aggregate expenses of every character
incurred by, or allocated to, a Fund in any fiscal year, other
than interest, taxes, brokerage commissions and other portfolio
transaction expenses, other expenditures which are capitalized
in accordance with generally accepted accounting principles and
any extraordinary expenses, but including the fees payable under
the Distribution Contract and the fees provided for in paragraph
6 ("includable expenses") shall exceed the expense limitations
applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or
lowered from time to time, the Adviser shall pay the Fund an
amount equal to 70% of that excess. With respect to portions of
a fiscal year in which this contract shall be in effect, the
foregoing limitations shall be prorated according to the
proportion which that portion of the fiscal year bears to the
full fiscal year. At the end of each month of the Trust's fiscal
year, the Sponsor will review the includable expenses accrued
during that fiscal year to the end of the period and shall
estimate the contemplated includable expenses for the balance of
that fiscal year. If as a result of that review and estimation
it appears likely that the includable expenses will exceed the
limitations referred to in this paragraph 7 for a fiscal year
with respect to the Fund, the monthly fees relating to the Fund
payable to the Adviser under this contract for such month shall
be reduced, subject to a later adjustment, by an amount equal to
70% of a pro rata portion (prorated on the basis of the remaining
months of the fiscal year, including the month just ended) of the
amount by which the includable expenses for the fiscal year (less
an amount equal to the aggregate of actual reductions made
pursuant to this provision with respect to prior months of the
fiscal year) are expected to exceed the limitations provided for
in this paragraph 7. For purposes of the foregoing, the value
of the net assets of the Fund shall be computed in the manner
specified in the penultimate sentence of paragraph 6, and any
payments required to be made by the Adviser shall be made once
a year promptly after the end of the Trust's fiscal year.
8. This contract and any Supplement shall become
effective with respect to a Fund on the date specified in the
Supplement, and shall thereafter continue in effect with respect
to the Fund until the earlier of the Closing Date defined in the
Agreement and Plan of Reorganization dated as of September 19,
1995 approved by shareholders of the Fund or two years from such
date only so long as the continuance is specifically approved at
least annually (a) by the vote of a majority of the outstanding
voting securities of the Fund (as defined in the 1940 Act) or by
the Trust's Board of Trustees and (b) by the vote, cast in person
at a meeting called for the purpose, of a majority of the Trust's
Trustees who are not parties to this contract or "interested
persons" (as defined in the 1940 Act) of any such party.
This contract and any Supplement thereto may be
terminated with respect to a Fund at any time, without the
payment of any penalty, by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940
Act) or by a vote of a majority of the Trust's entire Board of
Trustees on 60 days' written notice to the Adviser or by the
Adviser on 60 days' written notice to the Trust. This contract
shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).
9. Except to the extent necessary to perform the
Adviser's obligations under this contract, nothing herein shall
be deemed to limit or restrict the right of the Adviser, or any
affiliate of the Adviser, or any employee of the Adviser, to
engage in any other business, whether of a similar or dissimilar
nature, or to render services of any kind to any other
corporation, firm, individual or association.
10. This contract shall be construed and its
provisions interpreted in accordance with the laws of the state
of New York.
11. This contract may be executed in counterparts, but
all of the copies, together, shall constitute one contract.
12. Any notice given by a party to this Agreement
shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth
above or at such other address as such party may from time to
time specify in writing to the other party.
13. The Declaration of Trust establishing the Trust,
filed on March 25, 1987, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the Office
of the Secretary of the Commonwealth of Massachusetts, provides
that the name "FFB Funds Trust" refers to the trustees under the
Declaration collectively as trustees and not as individuals or
personally, and that no shareholder, trustee, officer, employee
or agent of the Trust shall be subject to claims against or
obligations of the Trust to any extent whatsoever, but that the
Trust estate only shall be liable.
If the foregoing correctly sets forth the agreement
between the Trust and the Adviser, please so indicate by signing
and returning to the Trust the enclosed copy hereof.
Very truly yours,
FFB FUNDS TRUST
By: __________________________
Title:
ACCEPTED:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: ________________________
Title:
<PAGE>
INTERIM ADVISORY CONTRACT SUPPLEMENT
FFB Funds Trust
237 Park Avenue
New York, NY 10017
December __, 1995
First Union National Bank of
North Carolina
One First Union Center
Charlotte, North Carolina 28288
Re: FFB 100% U.S. Treasury Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Trust") and First Union National Bank of North Carolina (the
"Adviser") as follows:
1. The Trust is an open-end management investment company
organized as a Massachusetts business trust and consists of such
separate investment portfolios as have been or may be established
by the Trustees of the Trust from time to time. A separate class
of shares of beneficial interest of the Trust is offered to
investors with respect to each investment portfolio. FFB 100%
U.S. Treasury Fund (the "Fund") is a separate investment
portfolio of the Trust.
2. The Trust and the Adviser have entered into an Interim
Master Advisory Contract (the "Interim Master Advisory Contract")
pursuant to which the Trust has employed the Adviser to provide
investment advisory and other services specified in that
contract, and the Adviser has accepted such employment.
3. As provided for in paragraph 1 of the Interim Master
Advisory Contract, the Trust hereby adopts the Interim Master
Advisory Contract with respect to the Fund, and the Adviser
hereby acknowledges that the Interim Master Advisory Contract
shall pertain to the Fund, the terms and conditions of such
Interim Master Advisory Contract being hereby incorporated herein
by reference.
4. The term "Fund" as used in the Interim Master Advisory
Contract shall for purposes of this Supplement pertain to the
Fund.
5. As provided for in paragraph 6 of the Interim Master
Advisory Contract and subject to further conditions as set forth
therein, the Trust shall with respect to the Fund pay the Adviser
a monthly fee on the first business day of each month based upon
the average daily value (as determined on each business day at
the time set forth in the Prospectus for determining net asset
value per share) of the net assets of the Fund during the
preceding month, at the following annual rates:
Portion of Average Daily Value of
Net Assets of the Fund Fee Rate
Assets up to $500 million 0.350%
Assets over $500 million up to $1 billion 0.315%
Assets over $1 billion up to $1.5 billion 0.280%
Assets over $1.5 billion 0.245%
6. (a) If the aggregate expenses of every character
incurred by, or allocated to, the Fund in any fiscal year, other
than interest, taxes, expenses under the Plan, brokerage
commissions and other portfolio transaction expenses, other
expenditures which are capitalized in accordance with generally
accepted accounting principles and any extraordinary expenses,
(including, without limitation, litigation and indemnification
expenses), but including the fees payable under the
Administrative Services Contract and the fees provided for in
paragraph 6 of the Interim Master Advisory Contract ("includable
expenses"), shall exceed the expense limitations applicable to
the Fund imposed by state securities laws or regulations
thereunder, as these limitations may be raised or lowered from
time to time, the Adviser shall pay the Fund an amount equal to
77% of that excess.
(b) With respect to portions of a fiscal year in
which this Contract shall be in effect, the limitation specified
in paragraph 6(a) above shall be prorated according to the
proportion which that portion of the fiscal year bears to the
full fiscal year. At the end of each month of the Trust's fiscal
year, the Sponsor will review the includable expenses accrued
during that fiscal year to the end of the period and shall
estimate the contemplated includable expenses for the balance of
that fiscal year. If, as a result of that review and estimation,
it appears likely that the includable expenses will exceed such
limitation for a fiscal year with respect to the Fund, the
monthly fees relating to the Fund payable to the Adviser under
this Contract for such month shall be reduced, subject to later
adjustments at the end of each month through the end of the
fiscal year to reflect actual expenses, by an amount equal to 77%
of a pro rata portion (prorated on the basis of the remaining
months of the fiscal year, including the month just ended) of the
amount by which the includable expenses for the fiscal year (less
an amount equal to the aggregate of actual reductions made
pursuant to this provision with respect to prior months of the
fiscal year) are expected to exceed such limitation. For
purposes of the foregoing, the value of the net assets of the
Fund shall be computed in the manner specified in the penultimate
sentence of paragraph 6 of the Interim Master Advisory Contract,
and any payments required to be made by the Adviser shall be made
once a year promptly after the end of the Trust's fiscal year.
7. This Supplement and the Interim Master Advisory Contract
(together, the "Contract") shall become effective with respect
to the Fund on December __, 1995 and shall thereafter continue
in effect with respect to the Fund until the earlier of the
Closing Date defined in the Agreement and Plan of Reorganization
dated as of September 19, 1995, approved by shareholders of the
Fund or two years from such date only so long as the continuance
is specifically approved at least annually (a) by the vote of a
majority of the outstanding voting securities of the Fund (as
defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), or by the Trust's Board of Trustees and (b) by the
vote, cast in person at a meeting called for that purpose, of a
majority of the Trust's Trustees who are not parties to this
Contract or "interested persons" (as defined in the 1940 Act) of
any such party. This Contract may be terminated with respect to
the Fund at any time, without the payment of any penalty, by vote
of a majority of the outstanding voting securities of the Fund
(as defined in the 1940 Act) or by a vote of a majority of the
Trust's entire Board of Trustees on 60 days' written notice to
the Adviser or by the Adviser on 60 days' written notice to the
Trust. This Contract shall terminate automatically in the event
of its assignment (as defined in the 1940 Act).
If the foregoing correctly sets forth the agreement between
the Trust and the Adviser, please so indicate by signing and
returning to the Trust the enclosed copy hereof.
Very truly yours,
FFB FUNDS TRUST
By:______________________
Accepted:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By:___________________________
<PAGE>
INTERIM ADVISORY CONTRACT SUPPLEMENT
FFB Funds Trust
237 Park Avenue
New York, NY 10017
December __, 1995
First Union National Bank of
North Carolina
One First Union Center
Charlotte, North Carolina 28288
Re: FFB U.S. Treasury Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Trust") and First Union National Bank of North Carolina (the
"Adviser") as follows:
1. The Trust is an open-end management investment company
organized as a Massachusetts business trust and consists of such
separate investment portfolios as have been or may be established
by the Trustees of the Trust from time to time. A separate class
of shares of beneficial interest of the Trust is offered to
investors with respect to each investment portfolio. FFB U.S.
Treasury Fund (the "Fund") is a separate investment portfolio of
the Trust.
2. The Trust and the Adviser have entered into an Interim
Master Advisory Contract (the "Interim Master Advisory Contract")
pursuant to which the Trust has employed the Adviser to provide
investment advisory and other services specified in that
contract, and the Adviser has accepted such employment.
3. As provided for in paragraph 1 of the Interim Master
Advisory Contract, the Trust hereby adopts the Interim Master
Advisory Contract with respect to the Fund, and the Adviser
hereby acknowledges that the Interim Master Advisory Contract
shall pertain to the Fund, the terms and conditions of such
Interim Master Advisory Contract being hereby incorporated herein
by reference.
4. The term "Fund" as used in the Interim Master Advisory
Contract shall for purposes of this Supplement pertain to the
Fund.
5. As provided for in paragraph 6 of the Interim Master
Advisory Contract and subject to further conditions as set forth
therein, the Trust shall with respect to the Fund pay the Adviser
a monthly fee on the first business day of each month based upon
the average daily value (as determined on each business day at
the time set forth in the Prospectus for determining net asset
value per share) of the net assets of the Fund during the
preceding month, at the following annual rates:
Portion of Average Daily Value of
Net Assets of the Fund Fee Rate
Assets up to $500 million 0.350%
Assets over $500 million up to $1 billion 0.315%
Assets over $1 billion up to $1.5 billion 0.280%
Assets over $1.5 billion 0.245%
6. This Supplement and the Interim Master Advisory Contract
(together, the "Contract") shall become effective with respect
to the Fund on December __, 1995 and shall thereafter continue
in effect with respect to the Fund until the earlier of the
Closing Date defined in the Agreement and Plan of Reorganization
dated as of September 19, 1995, approved by shareholders of the
Fund or two years from the date hereof only so long as the
continuance is specifically approved at least annually (a) by the
vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act), or by the Trust's Board of
Trustees and (b) by the vote, cast in person at a meeting called
for that purpose, of a majority of the Trust's Trustees who are
not parties to this Contract or "interested persons" (as defined
in the 1940 Act) of any such party. This Supplement and the
Interim Master Advisory Contract may be terminated with respect
to the Fund at any time, without the payment of any penalty, by
vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act) or by a vote of a majority of
the Trust's entire Board of Trustees on 60 days' written notice
to the Adviser or by the Adviser on 60 days' written notice to
the Trust. This Contract shall terminate automatically in the
event of its assignment (as defined in the 1940 Act).
If the foregoing correctly sets forth the agreement between
the Trust and the Adviser, please so indicate by signing and
returning to the Trust the enclosed copy hereof.
Very truly yours,
FFB FUNDS TRUST
By:____________________
Accepted:
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By:__________________________
<PAGE>
INTERIM ADVISORY CONTRACT SUPPLEMENT
FFB Funds Trust
237 Park Avenue
New York, NY 10017
December __, 1995
First Union National Bank of
North Carolina
One First Union Center
Charlotte, North Carolina 28288
Re: FFB U.S. Government Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Trust") and First Union National Bank of North Carolina (the
"Adviser") as follows:
1. The Trust is an open-end management investment company
organized as a Massachusetts business trust and consists of such
separate investment portfolios as have been or may be established
by the Trustees of the Trust from time to time. A separate class
of shares of beneficial interest of the Trust is offered to
investors with respect to each investment portfolio. FFB U.S.
Government Fund (the "Fund") is a separate investment portfolio
of the Trust.
2. The Trust and the Adviser have entered into an Interim
Master Advisory Contract (the "Interim Master Advisory Contract")
pursuant to which the Trust has employed the Adviser to provide
investment advisory and other services specified in that
contract, and the Adviser has accepted such employment.
3. As provided for in paragraph 1 of the Interim Master
Advisory Contract, the Trust hereby adopts the Interim Master
Advisory Contract with respect to the Fund, and the Adviser
hereby acknowledges that the Interim Master Advisory Contract
shall pertain to the Fund, the terms and conditions of such
Interim Master Advisory Contract being hereby incorporated herein
by reference.
4. The term "Fund" as used in the Interim Master Advisory
Contract shall for purposes of this Supplement pertain to the
Fund.
5. As provided for in paragraph 6 of the Interim Master
Advisory Contract and subject to further conditions as set forth
therein, the Trust shall with respect to the Fund pay the Adviser
a monthly fee on the first business day of each month based upon
the average daily value (as determined on each business day at
the time set forth in the Prospectus for determining net asset
value per share) of the net assets of the Fund during the
preceding month, at the following annual rates:
Portion of Average Daily Value of
Net Assets of the Fund Fee Rate
Assets up to $500 million 0.350%
Assets over $500 million up to $1 billion 0.315%
Assets over $1 billion up to $1.5 billion 0.280%
Assets over $1.5 billion 0.245%
6. This Supplement and the Interim Master Advisory Contract
(together, the "Contract") shall become effective with respect
to the Fund on December __, 1995 and shall thereafter continue
in effect with respect to the Fund until the earlier of the
Closing Date defined in the Agreement and Plan of Reorganization
dated as of September 19, 1995, approved by shareholders of the
Fund or than two years from the date hereof only so long as the
continuance is specifically approved at least annually (a) by the
vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act), or by the Trust's Board of
Trustees and (b) by the vote, cast in person at a meeting called
for that purpose, of a majority of the Trust's Trustees who are
not parties to this Contract or "interested persons" (as defined
in the 1940 Act) of any such party. This Supplement and the
Interim Master Advisory Contract may be terminated with respect
to the Fund at any time, without the payment of any penalty, by
vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act) or by a vote of a majority of
the Trust's entire Board of Trustees on 60 days' written notice
to the Adviser or by the Adviser on 60 days' written notice to
the Trust. This Contract shall terminate automatically in the
event of its assignment (as defined in the 1940 Act).
If the foregoing correctly sets forth the agreement between
the Trust and the Adviser, please so indicate by signing and
returning to the Trust the enclosed copy hereof.
Very truly yours,
FFB FUNDS TRUST
By:_______________________
Accepted:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By:____________________________
