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Previous: MCNEIL REAL ESTATE FUND XXIV LP, SC 14D1/A, 1995-10-11 |
Next: EVERGREEN INVESTMENT TRUST, 497, 1995-10-11 |
STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 25, 1995
Acquisition of the Assets of
FFB EQUITY FUND
OF
FFB FUNDS TRUST
237 Park Avenue
New York, New York 10017
1-800-437-8790
By and in Exchange for Shares of
EVERGREEN VALUE FUND
OF
EVERGREEN INVESTMENT TRUST
2500 Westchester Avenue
Purchase, NY 10577
1-800-807-2940
This Statement of Additional Information, relating specifically to the
proposed transfer of the assets of the FFB Equity Fund, a series of FFB Funds
Trust, in exchange for Class Y shares of Evergreen Value Fund, a series of
Evergreen Investment Trust, and the assumption by Evergreen Value Fund of
certain identified liabilities of the FFB Equity Fund, is not a prospectus. A
Prospectus/Proxy Statement dated September 25, 1995 relating to the
above-referenced matter may be obtained from Evergreen Value Fund, 2500
Westchester Avenue, Purchase, New York 10577 or by calling toll-free
1-800-807-2940. This Statement of Additional Information relates to and should
be read in conjunction with such Prospectus/Proxy Statement.
This Statement of Additional Information incorporates by reference the
following documents, a copy of each of which accompanies this Statement of
Additional Information:
1. The Prospectus of the Evergreen Value Fund dated July
7, 1995.
2. The Statement of Additional Information of the
Evergreen Value Fund dated July 7, 1995.
3. The Annual Report of the First Union Value Fund (now
known as Evergreen Value Fund) dated December 31, 1994.
4. The Semi-Annual Report of the First Union Value Fund
(now known as Evergreen Value Fund) dated June 30,
1995.
<PAGE>
5. The Prospectus of the FFB Equity Fund dated June
30, 1995.
6. The Statement of Additional Information of the FFB
Equity Fund dated June 30, 1995.
7. The Annual Report of the FFB Equity Fund dated February
28, 1995.
The following pro forma financial information relates to the FFB Equity
Fund and the Evergreen Value Fund:
-2-
<PAGE>
EVERGREEN VALUE FUND
Pro Forma Combining Financial Statements - June 30, 1995
<PAGE>
<TABLE>
<CAPTION>
Evergreen Lexicon FFB Equity Adjustments Pro-Forma
Value Fund Select Value Fund Combined
6/30/95 6/30/95 6/30/95 6/30/95
Security Description Shares Value Shares Value Shares Value Shares Value
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Common Stocks (90.6%)
Banking
& Finance (7.1%)
American Intl. Grp. 20,000 $2,280,000 20,000 $2,280,000
Baybanks Inc. 15,000 $1,188,750 15,000 1,188,750
Boatmen's Bancshrs. Inc. 410,000 14,452,500 410,000 14,452,500
Central Fidelity Banks, 541,200 16,506,600 541,200 16,506,600
Chemical Banking Corp. 49,700 2,348,325 49,700 2,348,325
Citicorp 55,800 3,229,425 5,000 $289,375 60,800 3,518,800
Dun & Bradstreet 20,000 1,050,000 20,000 1,050,000
Equifax Inc. 60,000 2,002,500 60,000 2,002,500
First Tennessee Nat. 337,700 15,660,838 337,700 15,660,838
Loews Corp. 6,200 750,200 6,200 750,200
National City Corp. 510,000 14,981,250 510,000 14,981,250
NationsBank Corp. 2,500 134,062 2,500 134,062
Pacificorp 103,300 1,936,875 103,300 1,936,875
Salomon Incorporated 89,750 3,601,219 89,750 3,601,219
UJB Financial Corp. 33,000 1,002,375 33,000 1,002,375
Wells Fargo and Comp. 10,950 1,973,738 10,950 1,973,738
66,933,688 16,030,907 423,437 83,388,032
Chemicals
/Plastics (7.2%)
Air Products &
Chemicals, Inc. 605,600 33,762,200 605,600 33,762,200
duPont (EI) deNemours 5,000 343,750 5,000 343,750
FMC Corp. 230,000 15,467,500 230,000 15,467,500
Monsanto Company 22,600 2,036,825 22,600 2,036,825
Rohm & Haas Co. 255,000 13,993,125 255,000 13,993,125
Tenneco Inc. 310,000 14,260,000 310,000 14,260,000
Union Carbide Corp. 68,000 2,269,500 74,800 2,496,450 142,800 4,765,950
79,752,325 4,533,275 343,750 0 1,571,000 84,629,350
Consumer Prod. (6.9%)
American Brands, Inc. 804,400 31,974,900 804,400 31,974,900
Chiquita Brands
International Inc. 121,000 1,694,000 121,000 1,694,000
Eastman Kodak Co. 35,000 2,121,875 35,000 2,121,875
Philip Morris Cos., Inc. 500,500 37,215,650 48,900 3,636,938 7,000 520,625 556,400 41,373,213
Universal
Corporation-Virginia 103,500 2,173,500 103,500 2,173,500
VF Corporation 24,000 1,290,000 24,000 1,290,000
71,312,425 8,794,438 520,625 0 80,627,488
Cosmetics/Healthcare/
Pharmaceuticals (4.3%)
Amgen Inc. 2,000 160,875 2,000 160,875
Avon Products Inc. 25,000 1,675,000 25,000 1,675,000
Bristol Meyers Squibb Co 243,200 16,568,000 243,200 16,568,000
Colgate-Palmolive Co. 4,000 292,500 4,000 292,500
Gillette Company 3,000 133,875 3,000 133,875
Mallinckrodt Group Inc. 40,000 1,420,000 40,000 1,420,000
Merck & Co. 7,000 343,000 7,000 343,000
Schering-Plough Corp. 320,000 14,120,000 320,000 14,120,000
Warner Lambert Co. 180,000 15,547,500 180,000 15,547,500
49,330,500 0 930,250 0 50,260,750
Durable Goods (3.7%)
Advanced Micro
Devices Incorporated 24,200 880,275 24,200 880,275
American Financial Group 59,397 1,544,322 59,397 1,544,322
Attwoods Contingent PLC 40,382 0 40,382 0
Banyan Systems Inc. 156,200 2,147,750 156,200 2,147,750
Comdisco Inc. 110,500 3,356,438 110,500 3,356,438
Comsat Corp. 164,100 3,220,463 164,100 3,220,463
Ford Motor Company 535,000 15,916,250 111,100 3,305,225 646,100 19,221,475
McDonnell Douglas Corp. 21,600 1,657,800 3,000 230,250 24,600 1,888,050
Motorola Inc. 30,000 2,013,750 30,000 2,013,750
Potash Corp. of
Saskatchewan, Inc. 46,400 2,592,600 46,400 2,592,600
Sun Healthcare Group Inc 217,300 3,422,475 217,300 3,422,475
YPF Sociedad Anonima ADR 156,800 2,959,600 156,800 2,959,600
15,916,250 27,100,698 230,250 0 43,247,198
Electrical
Equipment (3.2%)
Emerson Electric Co. 38,000 2,717,000 38,000 2,717,000
General Electric Co. 528,000 29,766,000 5,000 281,875 533,000 30,047,875
Phillips Electronics ADR 93,100 3,980,025 3,000 128,250 96,100 4,108,275
Texas Instruments 1,000 133,875 1,000 133,875
32,483,000 3,980,025 544,000 0 37,007,025
Energy-Oil/Gas,
Metals,
& Mining (9.4%)
Amoco Corp. 2,500 166,563 2,500 166,563
Amoco Corporation 27,100 1,805,538 27,100 1,805,538
Atlantic Richfield Co. 267,600 29,369,100 267,600 29,369,100
Barrick Gold Co. 45,000 1,136,250 45,000 1,136,250
British Petroleum 2,250 192,656 2,250 192,656
Chevron Corp. 575,000 26,809,375 575,000 26,809,375
Cyprus Amax
Minerals Company 20,000 570,000 26,000 741,000 46,000 1,311,000
Exxon Corp. 200,000 14,125,000 2,000 141,250 202,000 14,266,250
Mobil Corp. 2,500 240,000 2,500 240,000
Mobil Corporation 15,500 1,488,000 15,500 1,488,000
Peco Energy Co. 50,000 1,381,250 50,000 1,381,250
Royal Dutch Petro.-NY 1,500 182,813 1,500 182,813
Texaco Inc. 444,900 29,196,563 444,900 29,196,563
Unocal Corp. 48,000 1,326,000 48,000 1,326,000
YPF Sociedad Anonima
ADS class D 20,000 377,500 20,000 377,500
103,913,538 4,034,538 1,300,782 109,248,858
Entertainment
Walt Disney Co. 4,000 222,500 4,000 222,500
0 0 0 0 222,500 0 222,500
Food &
Beverages (4.0%)
Anheuser
Busch Cos., Inc. 545,600 31,031,000 545,600 31,031,000
Campbell Soup Co. 3,000 147,000 3,000 147,000
Coca-Cola Co. 4,000 255,000 4,000 255,000
Kellogg Co. 2,000 142,750 2,000 142,750
McCormick & Co. Inc. 637,500 13,706,250 637,500 13,706,250
Wendy's Interntl. Inc. 90,000 1,608,750 90,000 1,608,750
46,346,000 0 0 544,750 0 46,890,750
Industrial (3.2%)
Avery Dennison Corp. 35,000 1,409,000 35,000 1,409,000
Ball Corp. 450,000 15,693,750 450,000 15,693,750
Chemed Corp. 40,000 1,390,000 40,000 1,390,000
ITT Corp. 139,800 16,426,500 2,000 235,000 141,800 16,661,500
Kennametal Inc. 30,000 1,057,500 30,000 1,057,500
Wellman Inc. 25,200 689,850 25,200 689,850
36,666,600 0 0 235,000 0 36,901,600
Insurance Serv. (5.9%)
Aflac Inc. 4,000 175,000 4,000 175,000
American General Corp. 1,050,000 35,437,500 1,050,000 35,437,500
Providian Corp. 878,400 31,842,000 878,400 31,842,000
Reliastar Fin. Corp. 10,000 382,500 10,000 382,500
U.S. Healthcare Inc. 30,000 918,750 5,000 153,125 35,000 1,071,875
68,198,250 0 0 710,625 0 68,908,875
Machinery-
Diversified (0.0%)
Caterpillar Inc. 2,000 128,500 2,000 128,500
Deere & Co. 3,000 256,875 3,000 256,875
0 0 0 0 385,375 0 385,375
Retail (12.2%)
American Stores Co. 1,143,000 32,146,875 1,143,000 32,146,875
Dayton Hudson Corp. 187,500 13,453,125 187,500 13,453,125
Dillard Department
Stores, Inc. 565,000 16,596,875 565,000 16,596,875
Lowe's Companies 9,000 268,875 9,000 268,875
Mattel, Inc. 9,000 234,000 9,000 234,000
May Department
Stores Co. 660,000 27,472,500 660,000 27,472,500
Melville Corp. 428,200 14,665,850 428,200 14,665,850
Penney JC, Inc. 34,000 1,632,000 34,000 1,632,000
Pitney Bowes, Inc. 885,100 33,965,743 885,100 33,965,743
Sears Roebuck & Co. 25,000 1,496,875 25,000 1,496,875
St John Knits 10,000 448,750 10,000 448,750
Wal-Mart Stores, Inc. 9,000 240,750 9,000 240,750
141,878,593 0 0 743,625 0 142,622,218
Technology (2.7%)
Applied Materials 2,500 216,652 2,500 216,652
Automatic
Data Processing 13,000 817,375 13,000 817,375
Boeing Co. 336,800 21,092,108 336,800 21,092,108
Cisco Systems Inc. 5,000 252,812 5,000 252,812
Compaq Computer Corp. 15,000 680,625 15,000 680,625
DSC Comm. Corp. 5,000 232,500 5,000 232,500
EMC Corp. 25,000 606,250 25,000 606,250 50,000 1,212,500
Intel Corp. 25,000 1,582,813 5,000 316,562 30,000 1,899,375
International
Business Machines 35,000 3,360,000 35,000 3,360,000
LSI Logic Corp. 5,000 195,625 5,000 195,625
Medtronic Inc. 2,500 192,813 2,500 192,813
Micron Technology Inc. 5,000 274,375 5,000 274,375
Oracle Systems 6,000 231,750 6,000 231,750
Three Com Corp. 4,000 268,000 4,000 268,000
26,556,358 1,582,813 2,787,339 0 30,926,510
Telecommun. (0.8%)
Harris Corp. 150,000 7,743,750 150,000 7,743,750
MCI Communications 25,000 550,000 25,000 550,000
Telefonos de
Mexico 'L' ADR 9,000 266,625 9,000 266,625
U.S. Robotics 2,000 218,000 2,000 218,000
7,743,750 0 0 1,034,625 0 8,778,375
Transport (2.7%)
Atlantic
Southeast Air. 10,000 301,250 10,000 301,250
Norfolk
Southern Corp. 470,000 31,666,250 470,000 31,666,250
31,666,250 0 0 301,250 0 31,967,500
Utilities (11.5%)
BCF Incorporated 23,000 738,875 23,000 738,875
Carolina Power &
Lights Co. 480,000 14,520,000 480,000 14,520,000
Ericcson L M
Telephone Co. ADR 104,000 2,080,000 104,000 2,080,000
General Public
Utilities Corp. 1,088,400 32,379,900 1,088,400 32,379,900
GTE Corp. 865,000 29,518,125 865,000 29,518,125
Houston Ind. Inc. 12,500 526,562 12,500 526,562
Montana Power Co. 94,700 2,178,100 94,700 2,178,100
NICOR, Inc. 1,215,700 32,671,938 1,215,700 32,671,938
PacifiCorp 8,000 150,000 8,000 150,000
PECO Energy Co. 5,000 138,035 5,000 138,035
Southern Co. 710,000 15,886,250 710,000 15,886,250
Telefonos de Mexico,
Class L Spons. ADR 100,500 2,977,309 100,500 2,977,309
Ohio Edison Co. 20,000 452,500 20,000 452,500
125,428,713 8,500,846 288,035 134,217,594
Miscellaneous-
(5.8%)
AMP Inc. 20,000 845,000 20,000 845,000
Comerica Inc. 10,000 321,250 10,000 321,250
Cantor Fitzgerald 1,185,934 1,185,934 1,185,934 1,185,934
Florida Progress Corp. 15,000 468,750 15,000 468,750
Hanson PLC ADR 80,000 1,410,000 80,000 1,410,000
Houston Industries 50,000 2,106,250 50,000 2,106,250
Omnicon Group Inc. 20,000 1,212,500 1,212,500
Miscellaneous
Briggs & Stratton Corp. 300,000 10,350,000 300,000 10,350,000
Emprfsas Ica ADR 105,000 1,076,250 105,000 1,076,250
Nucor Corp. 10,000 535,000 10,000 535,000
Pittson Ser. Grp. 30,000 720,000 30,000 720,000
Raytheon Co. 431,200 33,471,900 431,200 33,471,900
Reuters
Holdings PLC-ADR 3,500 175,438 3,500 175,438
Textron, Inc. 235,000 13,659,375 235,000 13,659,375
65,030,959 1,796,250 710,438 0 67,537,647
Total Common Stocks
(Cost $923,918,738) 969,157,199 76,353,790 12,256,656 1,057,767,645
Convertible
Preferred Stocks (0.4%)
Glendale Federal Pfd.
Series E Conv. 60,000 2,040,000 60,000 2,040,000
AK Steel Holding Pfd. 45,000 1,293,750 45,000 1,293,750
Reynolds
Metals Co. CVTP 20,000 965,000 20,000 965,000
Total Convertible
Preferred Stocks
(Cost $3,937,061) $4,298,750 0 0 0 0 0 125,00 4,298,750
U.S. Treasury
Obligations (0.9%)
U.S. Treas. Bill 9/14/95 475,000 469,808 475,000 469,808
U.S. Treas. Bill 5/30/96 5,000 4,750 5,000 4,750
U.S. Treas. Notes
6.5% 11/30/96 10,000,000 10,096,860 10,000,000 10,096,860
Total U.S. Treasury
Obligations
(Cost $10,359,530) 10,096,860 0 0 474,558 10,571,418
Repurchase
Agreements (7.8%)
Donaldson, Lufkin,
and Jenrette
Securities Corp.
6.0% dated
6/30/95, due 7/3/95 82,166,000 82,166,000 82,166,00 82,166,000
J.P. Morgan Securities
6.2% 7/3/95 6,210,704 6,210,704 6,210,704 6,210,704
Total Repurchase
Agreements
(Cost $88,376,704)* 82,166,000 6,210,704 0 0 0 88,376,704
Total Investments
(Cost -
$1,026,592,033)**(99.4%) 1,065,718,809 82,564,494 12,731,214 1,161,014,517
Other Assets
& Liabilities (0.6%) 6,359,538 (56,978) 206,650 6,509,210
Total Net Assets (100.0%) $1,072,078,347 $82,507,516 $12,937,864 $1,167,523,727
</TABLE>
* The repurchase agreements are fully collateralized by U.S. government
and/or agency obligations based on market prices at the date of the
portfolio.
** Also represents cost for federal tax purposes.
(See Notes which are an integral part of the Pro-Forma Financial Statements)
<PAGE>
<TABLE>
<CAPTION>
Lexicon
Evergreen Select Value FFB Equity Pro Forma
Value Fund Fund Fund Adjustments Combined
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value
(Cost $ 1,026,592,033) $1,065,718,809 $82,564,494 $12,731,214 $1,161,014,517
Cash 0 14,329 247,408 261,737
Interest receivable 69,344 0 0 69,344
Dividends receivable 2,568,213 92,744 18,844 2,679,801
Receivable for investment securities sold 5,416,799 0 264,159 5,680,958
Receivable for fund shares sold 1,053,305 0 0 1,053,305
Prepaid expenses 0 0 152 152
TOTAL ASSETS 1,074,826,470 82,671,567 13,261,777 1,170,759,814
LIABILITIES:
Payable for investment securities purchased 1,160,924 85,993 309,416 1,556,333
Due to custodian bank 751,891 0 0 751,891
Payable for fund shares repurchased 597,153 0 0 597,153
Accrued advisory fee 144,913 50,011 14,497 209,421
Accrued expenses 93,242 28,047 0 121,289
TOTAL LIABILITIES 2,748,123 164,051 323,913 3,236,087
NET ASSETS 1,072,078,347 82,507,516 12,937,864 1,167,523,727
NET ASSETS CONSIST OF:
Paid in capital 925,498,906 68,326,919 10,773,908 1,004,599,733
Undistributed net investment income (664,108) 1,896 42,862 (619,350)
Accumulated realized gain on investments 23,262,949 5,658,527 199,384 29,120,860
Net unrealized appreciation of investments 123,980,600 8,520,174 1,921,710 134,422,484
NET ASSETS 1,072,078,347 82,507,516 12,937,864 1,167,523,727
Net asset value and offering price per share:
Class A $19.26 - - $19.26
Maximum offering price (4.75% sales charge) $20.22 - - $20.22
Class B $19.26 - - $19.26
Class C $19.24 - - $19.24
Class Y $19.26 13.40 13.10 $19.26
Net Assets:
Class A 273,746,370 273,746,370
Class B 121,178,524 121,178,524
Class C 626,156 626,156
Class Y 676,527,297 82,507,516 12,937,864 771,972,677
Shares outstanding:
Class A 14,214,559 14,214,559
Class B 6,292,129 6,292,129
Class C 32,541 32,541
Class Y 35,134,028 6,156,989 987,253 (2,188,615) 40,089,655
</TABLE>
(See Notes which are an integral part of the Pro Forma Financial Statements)
<PAGE>
<TABLE>
<CAPTION>
Lexicon FFB Equity
Evergreen Select Value Fund
Value Fund Fund
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income $34,420,099 $1,895,529 $163,370
EXPENSES:
Investment advisory fee 4,595,210 453,283 34,228
Trustees' fees 13,630 2,402 6,340
Administrative personnel and
service fees 765,514 102,744 17,114
Custodian and portfolio accounting
fees 252,644 1,888 9,843
Transfer and dividend
disbursing agent 513,913 140 9,958
fees 12B-1 Distribution &
Servicing Fees:
Class "A" 832,981 0 0
Class "B" 387,870 0 0
Class "C" 299,902 0 0
Class "Y" 2,099 0 0
Fund share registration costs 106,589 10,189 3,776
Professional fees 23,313 19,343 9,467
Printing and postage 13,542 14,126 13,615
Insurance premiums 17,766 867 198
Miscellaneous 6,666 2,682 9,141
TOTAL EXPENSES 7,831,639 607,664 113,680
Less fee waiver and expense
reimbursements 0 (153,332) (51,342)
NET EXPENSES 7,831,639 454,332 62,338
NET INVESTMENT INCOME 26,588,460 1,441,197 101,032
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on investments 37,097,646 6,467,067 157,896
Net increase (decrease) in
unrealized appreciation of
investments 111,438,800 8,645,928 2,006,657
Net gain (loss) on investments 148,536,446 15,112,995 2,164,553
Net increase in net assets
resulting from operations 175,124,906 16,554,192 2,265,585
Pro Forma
Adjustments Combined
<C> <C>
$0 $36,478,998
(159,280)(1) 4,923,441
(8,742)(2) 13,630
(469,243)(1) 416,129
(35,536)(3) 228,839
(68,359)(2) 455,652
0 832,981
0 387,870
(180)(4) 299,722
(2,099)(4) 0
(26,704)(2) 93,850
(22,982)(2) 29,141
(25,638)(5) 15,645
(1,935)(5) 20,766
(11,028)(5) 7,461
(827,856) 7,725,127
204,674 (6) 0
(623,182) 7,725,127
623,182 28,753,871
0 43,722,609
122,091,385
0 165,813,994
623,182 194,567,865
</TABLE>
(See Notes which are an integral part of the Pro Forma Financial Statements)
(1)Reflects an decrease in investment advisory fee and a decrease in
administrative personnel and service fees based on the surviving Fund's
fee schedul
(2)Reflects elimination of duplicate service fees.
(3)Based on surviving Fund's contract in effect for custodian and portfolio
accounting services
(4)Reflects a decrease in distribution service fees shares based on the
surviving Fund's fee schedule.
(5)Adjustment reflects the expected cost savings when the funds combine.
(6)Reflects an adjustment in waiver of investment advisory fee based on the
surviving Fund's voluntary advisory fee waiver in effect for the year
ended June 30, 1995
Evergreen Value Fund
Notes to Pro Forma Combining Financial Statements (Unaudited)
June 30, 1995
1. Basis of Combination - The Pro forma Statement of Assets and Liabilities,
including the Pro Forma Portfolio of Investments, and the related Pro forma
Statement of Operations ("Pro forma Statements") reflect the accounts of
Evergreen Value Fund ( Evergreen ), FFB Equity Fund ( FFB Equity ) and Lexicon
Select Value Fund ("Lexicon") at June 30, 1995 and for the year then ended.
The Pro forma Statements give effect to the proposed transfer of all
assets and liabilities of FFB Equity and Lexicon Value Fund
shares in exchange for shares of Evergreen. The Pro forma Statements
do not reflect the expense of each Fund in carrying out its
obligations under the Agreement and Plan of Reorganization. The actual
fiscal year end of the combined Fund will be December 31, the fiscal year
end of Evergreen.
The Reorganization will be accomplished through a series of
acquisitions of substantially all of the assets of the aforementioned
funds by Evergreen, and in addition assume certain identified
liabilities of the same. Thereafter there will be a distribution
of such shares of Evergreen to shareholders of the aforementioned
funds in liquidation and subsequent termination thereof. The
information contained herein is based on the experience of each fund
for the year ended June 30, 1995 and is designed to permit
shareholders of the consolidating mutual funds to evaluate the financial
effect of the proposed Reorganization. The expenses of Evergreen, FFB and
Lexicon in connection with the Reorganization (including the cost of
any proxy soliciting agents), will be borne by First Union National Bank
of North Carolina.
The amounts for the Evergreen Value Fund include the operations for the ABT
Growth and Income Fund, which combined with the Evergreen Value Fund on June
30, 1995.
The Pro forma Statements should be read in conjunction with the
historical financial statements of each Fund incorporated by reference
in the Statement of Additional Information.
2. Shares of Beneficial Interest - The pro forma net asset value per
share assumes the issuance of additional shares of Evergreen Class Y which
would have been issued at June 30, 1995 in connection with the
proposed reorganization. The amount of additional shares assumed to be
issued was calculated based on the net assets of the funds as of June
30, 1995 of $82,507,516 and $12,937,864 for Lexicon and FFB respectively, and
the net asset value per share of the respective share class of Evergreen of
$19.26. Additional shares issued were converted and distributed among
the aformentioned funds according to their relative share value
conversion ratio.
The pro forma shares outstanding of 14,214,559 Class A, 6,292,129
Class B, 32,541
<PAGE>
Class C, and 40,089,655 Class Y consist of 4,955,627 additional shares
of Class Y to be issued in the proposed reorganization, as calculated
above, in addition to shares of Evergreen outstanding as of June 30, 1995.
3. Pro Forma Operations - The Pro Forma Statement of Operations
assumes similar rates of gross investment income for the investments
of each Fund. Accordingly, the combined gross investment income is
equal to the sum of each Fund's gross investment income. Pro forma
operating expenses include the actual expenses of the Funds and the
combined Fund, with certain expenses adjusted to reflect the expected
expenses of the combined entity. The investment advisory,
administrative personnel and service fees and distribution service fees
have been charged to the combined Fund based on the fee schedule in
effect for Evergreen at the combined level of average net assets for the
year ended June 30, 1995.
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