1933 Act File No. 33-16706
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 11 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 11 X
EVERGREEN MONEY MARKET FUND
(formerly Evergreen Money Market Trust)
(Exact Name of Registrant as Specified in Charter)
2500 WESTCHESTER AVENUE, PURCHASE, NEW YORK 10577
(Address of Principal Executive Offices)
(914) 694-2020
(Registrant's Telephone Number)
Joseph J. McBrien, Esquire,
2500 Westchester Avenue
Purchase, New York 10577
(Name and Address of Agent for Service)
Copies to:
John A. Dudley, Esquire
Sullivan & Worcester
1025 Connecticut Ave., N.W.
Washington, D.C. 20036
It is proposed that this filing will become effective (check appropriate box)
/X/ Immediately upon filing pursuant to paragraph (b) or
/ / on (date) pursuant to paragraph (b) or
/ / 60 days after filing pursuant to paragraph (a)(i) or
/ / on (date) pursuant to paragraph (a)(i) or
/ / 75 days after filing pursuant to paragraph (a)(ii) or
/ / on (date) pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on (date) pursuant to paragraph (a)(i)
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
/X/ filed the Notice required by that Rule on or about October 31, 1995; or
/ / intends to file the Notice required by that Rule on or about (date); or
/ / during the most recent fiscal year did not sell any securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and,
pursuant to Rule 24f-2(b)(2), need not file the Notice.
CROSS REFERENCE SHEET
(as required by Rule 481(a))
N-1A Item No. Location in Prospectus(es)
Part A
Item 1. Cover Page Cover Page
Item 2. Synopsis and Fee Table Overview of the Fund(s);
Expense Information
Item 3. Condensed Financial Information Financial Highlights
Item 4. General Description of Registrant Cover Page; Description of
the Funds; General
Information
Item 5. Management of the Fund Management of the Fund(s);
General Information
Item 5A. Management's Discussion Management's Discussion of
Fund Performance
Item 6. Capital Stock and Other Securities Dividends, Distributions and
Taxes; General
Information
Item 7. Purchase of Securities Being Offered Purchase and Redemption of
Shares
Item 8. Redemption or Repurchase Purchase and Redemption of
Shares
Item 9. Pending Legal Proceedings Not Applicable
Location in Statement of
Part B Additional Information
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History Not Applicable
Item 13. Investment Objectives and Policies Investment Objectives and
Policies;Investment
Restrictions; Other
Restrictions and
Operating Policies
Item 14. Management of the Fund Management
Item 15. Control Persons and Principal Management
Holders of Securities
Item 16. Investment Advisory and Other Services Investment Adviser;
Purchase of Shares
Item 17. Brokerage Allocation Allocation of Brokerage
Item 18. Capital Stock and Other Securities Purchase of Shares
Item 19. Purchase, Redemption and Pricing of Distribution Plans; Purchase
Securities Being Offered of Shares; Net Asset Value
Item 20. Tax Status Additional Tax Information
Item 21. Underwriters Distribution Plans; Purchase
of Shares
Item 22. Calculation of Performance Data Performance Information
Item 23. Financial Statements Financial Statements
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.
******************************************************************************
<PAGE>
PROSPECTUS October 31, 1995
(Evergreen tree logo appears here)
EVERGREEN(SM) MONEY MARKET FUNDS
EVERGREEN MONEY MARKET FUND
EVERGREEN TAX EXEMPT MONEY MARKET FUND
EVERGREEN TREASURY MONEY MARKET FUND
CLASS A SHARES
CLASS B SHARES
The EVERGREEN MONEY MARKET FUNDS (the "Funds") are designed to
provide investors with current income, stability of principal and
liquidity. This Prospectus provides information regarding the Class A
offered by the Funds and the Class B shares offered by the EVERGREEN MONEY
MARKET FUND. Each Fund is, or is a series of, an open-end, diversified,
management investment company. This Prospectus sets forth concise
information about the Funds that a prospective investor should know before
investing. The address of the Funds is 2500 Westchester Avenue, Purchase,
New York 10577.
A "Statement of Additional Information" for the Funds dated
October 31, 1995 has been filed with the Securities and Exchange Commission
and is incorporated by reference herein. The Statement of Additional
Information provides information regarding certain matters discussed in
this Prospectus and other matters which may be of interest to investors,
and may be obtained without charge by calling the Funds at (800) 807-2940.
There can be no assurance that the investment objective of any Fund will be
achieved. Investors are advised to read this Prospectus carefully.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, ARE NOT INSURED OR
OTHERWISE PROTECTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY AND
INVOLVE INVESTMENT RISKS.
AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
KEEP THIS PROSPECTUS FOR FUTURE REFERENCE
EVERGREEN(SM) is a Service Mark of Evergreen Asset Management Corp.
Copyright 1995, Evergreen Asset Management Corp.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
OVERVIEW OF THE FUNDS 2
EXPENSE INFORMATION 3
FINANCIAL HIGHLIGHTS 5
DESCRIPTION OF THE FUNDS
Investment Objectives and Policies 10
Investment Practices and Restrictions 13
MANAGEMENT OF THE FUNDS
Investment Advisers 14
Sub-Adviser 15
Distribution Plans and Agreements 16
PURCHASE AND REDEMPTION OF SHARES
How to Buy Shares 16
How to Redeem Shares 18
Exchange Privilege 20
Shareholder Services 20
Effect of Banking Laws 21
OTHER INFORMATION
Dividends, Distributions and Taxes 21
General Information 22
</TABLE>
OVERVIEW OF THE FUNDS
The following summary is qualified in its entirety by the more detailed
information contained elsewhere in this Prospectus. See "Description of the
Funds" and "Management of the Funds".
The investment adviser to EVERGREEN MONEY MARKET FUND and EVERGREEN TAX
EXEMPT MONEY MARKET FUND is Evergreen Asset Management Corp. ("Evergreen Asset")
which, with its predecessors, has served as an investment adviser to the
Evergreen Funds since 1971. Evergreen Asset is a wholly-owned subsidiary of
First Union National Bank of North Carolina ("FUNB"), which in turn is a
subsidiary of First Union Corporation, one of the ten largest bank holding
companies in the United States. The Capital Management Group of FUNB ("CMG")
serves as investment adviser to EVERGREEN TREASURY MONEY MARKET FUND.
EVERGREEN MONEY MARKET FUND seeks as high a level of current income as is
consistent with preserving capital and providing liquidity. The Fund will invest
only in high quality money market instruments.
EVERGREEN TAX EXEMPT MONEY MARKET FUND seeks as high a level of current
income exempt from Federal income tax as is consistent with preserving capital
and providing liquidity. The Fund invests substantially all of its assets in
short-term municipal securities, the interest from which is exempt from Federal
income tax.
EVERGREEN TREASURY MONEY MARKET FUND (formerly First Union Treasury Money
Market Portfolio) seeks to achieve stability of principal and current income
consistent with stability of principal.
Each Fund seeks to maintain a stable net asset value of $1.00 per share
although no assurances can be given that such a stable net asset value will be
maintained.
THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVE OF ANY FUND WILL BE
ACHIEVED.
2
<PAGE>
EXPENSE INFORMATION
The table set forth below summarizes the shareholder transaction costs
associated with an investment in Class A shares of each Fund, and in the case of
EVERGREEN MONEY MARKET FUND, Class B Shares. For further information see
"Purchase and Redemption of Shares" and "General Information -- Other Classes of
Shares".
<TABLE>
<CAPTION>
Class B Shares
SHAREHOLDER TRANSACTION EXPENSES Class A Shares (Evergreen Money Market Fund only)
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases None None
Sales Charge on Dividend Reinvestments None None
Contingent Deferred Sales Charge (as a % of None 5% during the first year, 4% during the
original purchase price or redemption second year, 3% during the third and fourth
proceeds, whichever is lower) years, 2% during the fifth year, 1% during
the sixth and seventh years and 0% after the
seventh year
Redemption Fee None None
Exchange Fee None None
</TABLE>
The following tables show for each Fund the estimated annual operating
expenses (as a percentage of average net assets) attributable to each Class of
Shares, together with examples of the cumulative effect of such expenses on a
hypothetical $1,000 investment in each Class for the periods specified assuming
(i) a 5% annual return, and (ii) redemption at the end of each period and,
additionally for Class B shares, no redemption at the end of each period.
In the following examples (i) the expenses for Class B Shares assume
deduction at the time of redemption (if applicable) of the maximum contingent
deferred sales charge applicable for that time period and (ii) the expenses for
Class B Shares reflect the conversion to Class A Shares eight years after
purchase (years eight through ten, therefore, reflect Class A expenses).
EVERGREEN MONEY MARKET FUND
<TABLE>
<CAPTION>
EXAMPLES
Assuming Assuming
ANNUAL OPERATING Redemption no
EXPENSES* at End of Period Redemption
Class A Class B Class A Class B Class B
<S> <C> <C> <C> <C> <C> <C>
Management Fees .50% .50%
After 1 Year $ 10 $ 67 $ 17
12b-1 Fees ** .30% 1.00%
After 3 Years $ 32 $ 84 $ 54
Other Expenses .22% .22%
After 5 Years $ 56 $ 113 $ 93
After 10 Years $ 125 $ 176 $176
Total 1.02% 1.72%
</TABLE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
EXAMPLES
ANNUAL OPERATING Assuming Redemption
EXPENSES* at End of Period
Class A Class A
<S> <C> <C> <C> <C>
Management Fees .50%
After 1 Year $ 9
12b-1 Fees ** .30%
After 3 Years $ 29
Other Expenses .10%
After 5 Years $ 50
After 10 Years $111
Total .90%
</TABLE>
EVERGREEN TREASURY MONEY MARKET FUND
<TABLE>
<CAPTION>
EXAMPLES
ANNUAL OPERATING Assuming Redemption
EXPENSES* at End of Period
Class A Class A
<S> <C> <C> <C> <C>
Management Fees .35%
After 1 Year $ 8
12b-1 Fees** .30%
After 3 Years $ 25
Other Expenses 12%
After 5 Years $ 43
After 10 Years $ 95
Total .77%
</TABLE>
3
<PAGE>
Evergreen Asset has agreed to reimburse Evergreen Money Market Fund and
Evergreen Tax Exempt Money Market Fund to the extent that the Fund's aggregate
annual operating expenses (including the investment adviser's fee, but excluding
taxes, interest, brokerage commissions, Rule 12b-1 distribution fees and
shareholder services fees and extraordinary expenses) exceed 1% of the average
net assets for any fiscal year.
*The annual operating expenses and examples do not reflect the voluntary fee
waivers of .21 of 1% and .88 of 1% of average net assets for Evergreen Money
Market Fund Class A Shares and Class B Shares, respectively and .12 of 1% of
Class A Shares' average net assets for Evergreen Tax Exempt Money Market Fund
for the fiscal year ended August 31, 1995, and .16 of 1% of average net assets
for Evergreen Treasury Money Market Fund for the fiscal period ended August 31,
1995.
**Class A Shares can pay up to .75 of 1% of average net assets as a 12b-1 Fee.
For the foreseeable future, the Class A Share's 12b-1 Fees will be limited to
.30 of 1% of average net assets. For Class B Shares of Evergreen Money Market
Fund, a portion of the 12b-1 Fees equivalent to .25 of 1% of average net assets
will be shareholder servicing related. Distribution related 12b-1 fees will be
limited to .75 of 1% of average net assets as permitted under the rules of the
National Association of Securities Dealers, Inc.
From time to time, each Fund's investment adviser may, at its discretion, waive
its fee or reimburse a Fund for certain of its expenses in order to reduce a
Fund's expense ratio. The investment adviser may cease these voluntary waivers
or reimbursements at any time.
The purpose of the foregoing table is to assist an investor in
understanding the various costs and expenses that an investor in each Class of
Shares of the Funds will bear directly or indirectly. The amounts set forth both
in the tables and in the examples are estimated amounts based on the experience
of each Fund for the most recent fiscal period. Such expenses have been restated
to reflect current fee arrangements. THE EXAMPLES SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR ANNUAL RETURN. ACTUAL EXPENSES AND
ANNUAL RETURN MAY BE GREATER OR LESS THAN THOSE SHOWN. For a more complete
description of the various costs and expenses borne by the Funds see "Management
of the Funds". As a result of asset-based sales charges, long-term shareholders
may pay more than the economic equivalent of the maximum front-end sales charges
permitted under the rules of the National Association of Securities Dealers,
Inc.
4
<PAGE>
FINANCIAL HIGHLIGHTS
The tables on the following pages present, for each Fund, financial
highlights for a share outstanding throughout each period indicated. The
information in the tables for the five most recent fiscal years or the life of
the fund if shorter for EVERGREEN TREASURY MONEY MARKET FUND has been audited by
KPMG Peat Marwick LLP, the Fund's independent auditors; for EVERGREEN MONEY
MARKET FUND and EVERGREEN TAX EXEMPT MONEY MARKET FUND has been audited by Price
Waterhouse LLP, each Fund's independent auditors. A report of KPMG Peat Marwick
LLP or Price Waterhouse LLP, as the case may be, on the audited information with
respect to each Fund is incorporated by reference in the Fund's Statement of
Additional Information. The following information for each Fund should be read
in conjunction with the financial statements and related notes which are
incorporated by reference in the Fund's Statement of Additional Information.
Further information about a Fund's performance is contained in the Fund's
annual report to shareholders, which may be obtained without charge.
EVERGREEN MONEY MARKET FUND -- Y SHARES
<TABLE>
<CAPTION>
NOVEMBER 2,
TEN MONTHS 1987*
YEAR ENDED ENDED THROUGH
AUGUST 31, AUGUST 31, YEAR ENDED OCTOBER 31, OCTOBER 31,
1995 1994 # 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of period..................... $1.00 $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income.................................... .05 .03 .03 .04 .07 .08 .09 .07
Less distributions to shareholders from net investment
income................................................. (.05) (.03) (.03) (.04) (.07) (.08) (.09) (.07)
Net asset value, end of period........................... $1.00 $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+............................................ 5.4% 2.9% 3.2% 4.2% 6.7% 8.4% 9.4% 7.4%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions).................. $283 $273 $299 $358 $438 $458 $408 $161
Ratios to average net assets:
Expenses **............................................ .53% .32%++ .39% .36% .30% .35% .38% .43%++
Net investment income **............................... 5.26% 3.46%++ 3.19% 4.18% 6.53% 8.08% 9.42% 7.26%++
</TABLE>
# On September 21, 1994, the Fund changed its fiscal year end from October 31
to August 31.
* Commencement of operations.
+ Total return is calculated for the periods indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all
expenses that were reimbursed or waived by the investment adviser, the
annualized ratios of expenses and net investment income to average net
assets would have been the following:
<TABLE>
<CAPTION>
TEN MONTHS
YEAR ENDED ENDED NOVEMBER 2, 1987*
AUGUST 31, AUGUST 31, YEAR ENDED OCTOBER 31, THROUGH
1995 1994 # 1993 1992 1991 1990 1989 OCTOBER 31, 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses............................... .73% .71% .71% .72% .70% .69% .75% .93%
Net investment income.................. 5.06% 3.07% 2.87% 3.82% 6.13% 7.74% 9.05% 6.76%
</TABLE>
5
<PAGE>
EVERGREEN MONEY MARKET FUND -- CLASS A AND B SHARES
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
JANUARY 4, JANUARY 26,
1995* 1995*
THROUGH THROUGH
AUGUST 31, 1995 AUGUST 31, 1995
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period..................................................... $ 1.000 $ 1.000
Income from investment operations:
Net investment income.................................................................. .03 .03
Less distributions to shareholders from net investment income............................ (.03) (.03)
Net asset value, end of period........................................................... $ 1.00 $ 1.00
TOTAL RETURN+............................................................................ 3.5% 2.8%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................................ $685,155 $7,927
Ratios to average net assets:
Expenses **............................................................................ .81%++ 1.51%++
Net investment income **............................................................... 5.26%++ 4.54%++
</TABLE>
* Commencement of class operations.
+ Total return is calculated on net asset value. Contingent deferred sales
charge is not reflected. Total return is calculated for the periods indicated
and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all
expenses that were reimbursed or waived by the investment adviser, the
annualized ratios of expenses and net investment income to average net
assets would have been the following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
JANUARY 4, JANUARY 26,
1995* 1995*
THROUGH THROUGH
AUGUST 31, 1995 AUGUST 31, 1995
<S> <C> <C>
Expenses.............................................................................. 1.02% 2.39%
Net investment income................................................................. 5.05% 3.66%
</TABLE>
6
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND -- CLASS Y SHARES
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income......................... .04 .02 .03 .04 .05 .06
Less distributions to shareholders from net
investment income............................. (.04) (.02) (.03) (.04) (.05) (.06)
Net asset value, end of period.................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+................................... 3.6% 2.5% 2.6% 3.7% 5.5% 6.2%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions)......... $421 $402 $401 $417 $510 $311
Ratios to average net assets:
Expenses **................................... .50% .34% .34% .32% .28% .31%
Net investment income **...................... 3.53% 2.47% 2.58% 3.72% 5.23% 5.94%
<CAPTION>
NOVEMBER 2,
1988* THROUGH
AUGUST 31, 1989
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period $1.00
Income from investment operations:
Net investment income......................... .05
Less distributions to shareholders from net
investment income............................. (.05)
Net asset value, end of period.................. $1.00
TOTAL RETURN+................................... 5.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions)......... $109
Ratios to average net assets:
Expenses **................................... .24%
Net investment income **...................... 6.77%++
</TABLE>
* Commencement of operations.
+ Total return is calculated for the periods indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all
expenses that were reimbursed or waived by the investment adviser, the
annualized ratios of expenses and net investment income to average net
assets would have been the following:
<TABLE>
<CAPTION>
NOVEMBER 2, 1988*
YEAR ENDED AUGUST 31, THROUGH AUGUST 31,
1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C>
Expenses.......................................... .63% .64% .63% .63% .66% .71% .79%
Net investment income............................. 3.40% 2.17% 2.29% 3.41% 4.85% 5.54% 6.22%
</TABLE>
7
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
JANUARY 5, 1995*
THROUGH
AUGUST 31, 1995
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period....................................................................... $ 1.00
Income from investment operations:
Net investment income.................................................................................... .02
Distributions to shareholders from net investment income................................................... (.02)
Net asset value, end of period............................................................................. $ 1.00
TOTAL RETURN+.............................................................................................. 2.2%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).................................................................. $554,924
Ratios to average net assets:
Expenses **.............................................................................................. .78%++
Net investment income **................................................................................. 3.28%++
</TABLE>
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the period
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all
expenses that were reimbursed or waived by the investment adviser, the
annualized ratios of expenses and net investment income to average net
assets would have been the following:
<TABLE>
<CAPTION>
JANUARY 5, 1995*
THROUGH
AUGUST 31, 1995
<S> <C>
Expenses.......................................................................... .90%
Net investment income............................................................. 3.16%
</TABLE>
8
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
<TABLE>
<CAPTION>
CLASS A SHARES CLASS Y SHARES
EIGHT MARCH 6, EIGHT MARCH 6,
MONTHS 1991* MONTHS 1991*
ENDED YEAR ENDED DECEMBER THROUGH ENDED YEAR ENDED DECEMBER THROUGH
AUGUST 31, 31, DECEMBER 31, AUGUST 31, 31, DECEMBER 31,
1995# 1994 1993 1992 1991 1995# 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
period......................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment
income......................... .03 .04 .03 .03 .04 .04 .04 .03 .04 .05
Less distributions to
shareholders from net
investment income.............. (.03) (.04) (.03) (.03) (.04) (.04) (.04) (.03) (.04) (.05)
Net asset value, end
of period...................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+................... 3.6% 3.8% 2.7% 3.4% 4.5% 3.8% 4.1% 3.0% 3.7% 4.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(In millions).................. $1,178 $755 $261 $209 $100 $277 $163 $366 $286 $265
Ratios to average net assets:
Expenses **................... .63%++ .50% .48% .48% .47%++ .33%++ .20% .18% .17% .20%++
Net investment income **...... 5.30%++ 3.91% 2.70% 3.22% 4.95%++ 5.60%++ 3.78% 3.00% 3.61% 5.53%++
</TABLE>
# The Fund changed its fiscal year-end from December 31 to August 31.
* Commencement of operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all
expenses that were reimbursed or waived by the investment adviser, the
annualized ratios of expenses and net investment income to average net
assets would have been the following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS Y SHARES
EIGHT MARCH 6, EIGHT MARCH 6,
MONTHS 1991* MONTHS 1991*
ENDED YEAR ENDED THROUGH ENDED YEAR ENDED THROUGH
AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31, DECEMBER 31, DECEMBER 31,
1995# 1994 1993 1992 1991 1995 # 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses.............. .79% .78% .82% .82% 1.08% .49% .48% .52% .52% .52%
Net investment
income.............. 5.14% 3.63% 2.36% 2.88% 4.34% 5.44% 3.50% 2.66% 3.26% 5.21%
</TABLE>
9
<PAGE>
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVES AND POLICIES
In addition to the investment policies detailed below, each Fund may
employ certain additional investment strategies which are discussed in
"Investment Practices and Restrictions".
EVERGREEN MONEY MARKET FUND
The investment objective of EVERGREEN MONEY MARKET FUND is to achieve as
high a level of current income as is consistent with preserving capital and
providing liquidity. This objective is a fundamental policy and may not be
changed without shareholder approval. The Fund invests in high quality money
market instruments, which are determined to be of eligible quality under
Securities and Exchange Commission ("SEC") rules and to present minimal credit
risk. Under SEC rules, eligible securities include First Tier Securities (i.e.,
securities rated in the highest short-term rating category) and Second Tier
Securities (i.e., securities which are otherwise eligible but not in the First
Tier). The rules prohibit the Fund from holding more than 5% of its value in
Second Tier Securities. The Fund's permitted investments include:
1. Marketable obligations of, or guaranteed by, the United States
Government, its agencies or instrumentalities, including issues of the United
States Treasury, such as bills, certificates of indebtedness, notes and bonds,
and issues of agencies and instrumentalities established under the authority of
an act of Congress. Some of these securities are supported by the full faith and
credit of the United States Government, others are supported by the right of the
issuer to borrow from the Treasury, and still others are supported only by the
credit of the agency or instrumentality. Agencies or instrumentalities whose
securities are supported by the full faith and credit of the United States
include, but are not limited to, the Federal Housing Administration, Farmers
Home Administration, Export-Import Bank of the United States, Small Business
Administration and Government National Mortgage Association. Examples of
agencies or instrumentalities whose securities are supported by the right of the
issuer to borrow from the Treasury include, but are not limited to, the Federal
Home Loan Bank, Federal Intermediate Credit Banks, Federal National Mortgage
Association and Tennessee Valley Authority. Agencies or instrumentalities whose
securities are supported only by the credit of the agency or instrumentality
include the Interamerican Development Bank and the International Bank for
Reconstruction and Development. These obligations are supported by appropriated
but unpaid commitments of its member countries. There are no assurances that the
commitments will be undertaken in the future.
2. Commercial paper, including variable amount master demand notes, that
is rated in one of the two highest short-term rating categories by any two of
Standard & Poor's Ratings Group ("S&P") or Moody's Investors Service, Inc.
("Moody's") or any other nationally recognized statistical rating organization
("SRO") (or by a single rating agency if only one of these agencies has assigned
a rating). The Fund will not invest more than 10% of its total assets, at the
time of the investment in question, in variable amount master demand notes. For
a description of these ratings see the Statement of Additional Information.
3. Corporate debt securities and bank obligations that are rated in one
of the two highest short-term rating categories by any two of S&P, Moody's and
any other SRO (or by a single rating agency if only one of these agencies has
assigned a rating).
4. Unrated corporate debt securities, commercial paper and bank
obligations that are issued by an issuer that has outstanding a class of
short-term debt instruments (i.e., instruments having a maturity of 366 days or
less) that (A) is comparable in priority and security to the unrated securities
and (B) meets the rating requirements of paragraphs 2 or 3 above.
5. Unrated corporate debt securities, commercial paper and bank
obligations issued by domestic and foreign companies which have an outstanding
long-term debt issue rated in the top two rating categories by a SRO and
determined by the Trustees to be of comparable quality.
6. Unrated corporate debt securities, commercial paper and bank
obligations otherwise determined by the Trustees to be of comparable quality.
7. Repurchase agreements with respect to the securities described in
paragraphs 1 through 6 above.
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The Fund may invest up to 30% of its total assets in bank certificates of
deposit and bankers' acceptances payable in U.S. dollars and issued by foreign
banks (including U.S. branches of foreign banks) or by foreign branches of U.S.
banks. These investments involve risks that are different from investments in
domestic securities. These risks may include future unfavorable political and
economic developments, possible withholding taxes, seizure of foreign deposits,
currency controls, interest limitations or other governmental restrictions which
might affect the payment of principal or interest on the securities in the
Fund's portfolio. Additionally, there may be less publicly available information
about foreign issuers.
The Fund may invest in commercial paper and other short-term corporate
obligations which meet the rating criteria specified in paragraphs 3 and 4 above
which are issued in private placements pursuant to Section 4(2) of the
Securities Act of 1933 (the "Act"). Such securities are not registered for
purchase and sale by the public under the Act. The Fund has been informed that
the staff of the SEC does not consider such securities to be readily marketable.
The Fund will not invest more than 10% of its total assets in securities which
are not readily marketable (including private placement securities) and in
repurchase agreements maturing in more than seven days.
EVERGREEN TAX EXEMPT MONEY MARKET FUND
The investment objective of EVERGREEN TAX EXEMPT MONEY MARKET FUND is to
achieve as high a level of current income exempt from Federal income tax, as is
consistent with preserving capital and providing liquidity. This objective is a
fundamental policy and may not be changed without shareholder approval. The Fund
will seek to achieve its objective by investing substantially all of its assets
in a diversified portfolio of short-term (i.e., with remaining maturities not
exceeding 397 days) debt obligations issued by states, territories and
possessions of the United States and by the District of Columbia, and their
political subdivisions and duly constituted authorities, the interest from which
is exempt from Federal income tax. Such securities are generally known as
Municipal Securities. (See "Municipal Securities" below.)
The Fund will invest in Municipal Securities only if they are determined
to be of eligible quality under SEC rules and to present minimum credit risk.
Municipal Securities in which the Fund may invest include: (i) municipal
securities that are rated in one of the top two short-term rating categories by
any two of S&P, Moody's or any other nationally recognized SRO (or by a single
rating agency if only one of these agencies has assigned a rating); (ii)
municipal securities that are issued by an issuer that has outstanding a class
of short-term debt instruments (i.e., having a maturity of 366 days or less)
that (A) is comparable in priority and security to such instruments and (B)
meets the rating requirements above; and (iii) bonds with a remaining maturity
of 397 days or less that are rated no lower than one of the top two long-term
rating categories by any SRO and determined by the Trustees to be of comparable
quality. For a description of such ratings see the Statement of Additional
Information. The Fund may also purchase Municipal Securities which are unrated
at the time of purchase up to a maximum of 20% of its total assets, if such
securities are determined by the Fund's Trustees to be of comparable quality.
Certain Municipal Securities (primarily variable rate demand notes) may be
entitled to the benefit of standby letters of credit or similar commitments
issued by banks or other financial institutions and, in such instances, the
Trustees will take into account the obligation of the bank in assessing the
quality of such security. The ability of the Fund to meet its investment
objective is necessarily subject to the ability of municipal issuers to meet
their payment obligations.
Interest income on certain types of bonds issued after August 7, 1986 to
finance nongovernmental activities is an item of "tax-preference" subject to the
Federal alternative minimum tax for individuals and corporations. To the extent
the Fund invests in these "private activity" bonds (some of which were formerly
referred to as "industrial development" bonds), individual and corporate
shareholders, depending on their status, may be subject to the alternative
minimum tax on the part of the Fund's distributions derived from the bonds. As a
matter of fundamental policy, which may not be changed without shareholder
approval, the Fund will invest at least 80% of its net assets in Municipal
Securities, the interest from which is not subject to the Federal alternative
minimum tax.
Municipal Securities. As noted above, the Fund will invest substantially all of
its assets in Municipal Securities. These include municipal bonds, short-term
municipal notes and tax exempt commercial paper. "Municipal bonds"are debt
obligations issued to obtain funds for various public purposes that are exempt
from Federal income tax in the opinion of issuer's counsel. The two principal
classifications of municipal bonds are "general obligation" and "revenue" bonds.
General obligation bonds are secured by the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest. Revenue bonds
are payable only from the revenues derived from a particular facility or class
of facilities or, in some cases, from the proceeds of a special excise tax or
other specific source such as from the user of the facility being financed. The
term "municipal bonds" also includes "moral
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<PAGE>
obligation" issues which are normally issued by special purpose authorities.
Industrial development bonds ("IDBs") and private activity bonds ("PABs") are in
most cases revenue bonds and are not payable from the unrestricted revenues of
the issuer. The credit quality of IDBs and PABs is usually directly related to
the credit standing of the corporate user of the facilities being financed.
Participation interests are interests in municipal bonds, including IDBs and
PABs, and floating and variable rate obligations that are owned by banks. These
interests carry a demand feature permitting the holder to tender them back to
the bank, which demand feature is backed by an irrevocable letter of credit or
guarantee of the bank. A put bond is a municipal bond which gives the holder the
unconditional right to sell the bond back to the issuer at a specified price and
exercise date, which is typically well in advance of the bond's maturity date.
"Short-term municipal notes" and "tax exempt commercial paper" include tax
anticipation notes, bond anticipation notes, revenue anticipation notes and
other forms of short-term loans. Such notes are issued with a short-term
maturity in anticipation of the receipt of tax funds, the proceeds of bond
placements and other revenues.
Floating Rate and Variable Rate Obligations. Municipal Securities also include
certain variable rate and floating rate municipal obligations with or without
demand features. These variable rate securities do not have fixed interest
rates; rather, those rates fluctuate based upon changes in specified market
rates, such as the prime rate, or are adjusted at predesignated periodic
intervals. Such securities must comply with conditions established by the SEC
under which they may be considered to have remaining maturities of 397 days or
less. Certain of these obligations may carry a demand feature that gives the
Fund the right to demand prepayment of the principal amount of the security
prior to its maturity date. The demand obligation may or may not be backed by
letters of credit or other guarantees of banks or other financial institutions.
Such guarantees may enhance the quality of the security. As a matter of
fundamental policy, which may not be changed without shareholder approval, the
Fund will limit the value of its investments in any floating or variable rate
securities which are not readily marketable and in all other not readily
marketable securities to 10% or less of its total assets.
Stand-by Commitments. The Fund may also acquire "stand-by commitments" with
respect to Municipal Securities held in its portfolio. Under a stand-by
commitment, a dealer agrees to purchase, at the Fund's option, specified
Municipal Securities at a specified price. The Fund expects that stand-by
commitments generally will be available without the payment of direct or
indirect consideration. However, if necessary and advisable, the Fund may pay
for stand-by commitments either separately in cash or by paying a higher price
for portfolio securities which are acquired subject to such a commitment (thus
reducing the yield to maturity otherwise available for the same securities). The
total amount paid in either manner for outstanding stand-by commitments held in
the Fund's portfolio will not exceed 10% of the value of the Fund's total assets
calculated immediately after each stand-by commitment is acquired. The Fund will
enter into stand-by commitments only with banks and broker-dealers that, in the
judgment of the Fund's investment adviser, present minimal credit risks.
Taxable Investments. The Fund may temporarily invest up to 20% of the Fund's net
assets in taxable securities under any one or more of the following
circumstances: (a) pending investment of proceeds of sale of Fund shares or of
portfolio securities, (b) pending settlement of purchases of portfolio
securities, and (c) to maintain liquidity for the purpose of meeting anticipated
redemptions. In addition, the Fund may temporarily invest more than 20% of its
total assets in taxable securities for defensive purposes. The Fund may invest
for defensive purposes during periods when the Fund's assets available for
investment exceed the available Municipal Securities that meet the Fund's
quality and other investment criteria. Taxable securities in which the Fund may
invest on a short-term basis include obligations of the United States
Government, its agencies or instrumentalities, including repurchase agreements
with banks or securities dealers involving such securities; time deposits
maturing in not more than seven days; other debt securities rated within the two
highest ratings assigned by an SRO; commercial paper rated in the highest grade
by Moody's or S&P; and certificates of deposit issued by United States branches
of United States banks with assets of $1 billion or more.
EVERGREEN TREASURY MONEY MARKET FUND
The investment objective of EVERGREEN TREASURY MONEY MARKET 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.
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EVERGREEN TREASURY MONEY MARKET 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.
The short-term United States Treasury obligations in which the 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 Fund within 397 days from the date of acquisition. The Fund may also
retain Fund assets in cash.
INVESTMENT PRACTICES AND RESTRICTIONS
General. The Funds invest only in securities that have remaining maturities of
397 days (thirteen months) or less at the date of purchase. For this purpose,
floating rate or variable rate obligations (described under EVERGREEN TAX EXEMPT
MONEY MARKET FUND, above), which are payable on demand, but which may otherwise
have a stated maturity in excess of this period, will be deemed to have
remaining maturities of less than 397 days pursuant to conditions established by
the SEC. The Funds maintain a dollar-weighted average portfolio maturity of
ninety 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 market value of the obligations in a Fund's portfolio
can be expected to vary inversely to changes in prevailing interest rates. If a
portfolio security is no longer of eligible quality, a Fund shall dispose of
such security in an orderly fashion as soon as reasonably practicable, unless
the Trustees determine, in light of market conditions or other factors, that
disposal of the instrument would not be in the best interests of the Fund and
its shareholders.
The ability of each Fund to meet its investment objective is necessarily
subject to the ability of the issuers of securities in which the Funds invest to
meet their payment obligations. In addition, the portfolio of each Fund will be
affected by general changes in interest rates which will result in increases or
decreases in the value of the obligations held by the Fund. Investors should
recognize that, in periods of declining interest rates, the yield of a Fund will
tend to be somewhat higher than prevailing market rates, and in periods of
rising interest rates, the yield of a Fund will tend to be somewhat lower. Also,
when interest rates are falling, the inflow of net new money to a Fund from the
continuous sale of its shares will likely be invested in portfolio instruments
producing lower yields than the balance of the Fund's portfolio, thereby
reducing the current yield of the Fund. In periods of rising interest rates, the
opposite can be expected to occur.
Repurchase Agreements. The Funds may enter into repurchase agreements. A
repurchase agreement is an arrangement pursuant to which a buyer purchases a
security and simultaneously agrees to resell it to the vendor at a price that
results in an agreed-upon market rate of return which is effective for the
period of time (which is normally one to seven days, but may be longer) the
buyer's money is invested in the security. The arrangement results in a fixed
rate of return that is not subject to market fluctuations during a Fund's
holding period. Repurchase agreements may be entered into with member banks of
the Federal Reserve System, including, the Fund's custodian or "primary dealers"
(as designated by the Federal Reserve Bank of New York) in United States
Government securities. Each Fund will require continued maintenance of
collateral with its Custodian in an amount equal to, or in excess of, the
repurchase price (including accrued interest). In the event a vendor defaults on
its repurchase obligation, a Fund might suffer a loss to the extent that the
proceeds from the sale of the collateral were less than the repurchase price. If
the vendor becomes the subject of bankruptcy proceedings, a Fund might be
delayed in selling the collateral. Each Fund's investment adviser will review
and continually monitor the creditworthiness of each institution with which the
Fund enters into a repurchase agreement to evaluate these risks. A Fund may not
enter into repurchase agreements if, as a result, more than 10% of a Fund's
total assets would be invested in repurchase agreements maturing in more than
seven days and in other securities that are not readily marketable.
Securities Lending. In order to generate income and to offset expenses,
EVERGREEN TAX EXEMPT MONEY MARKET FUND and EVERGREEN MONEY MARKET FUND may lend
portfolio securities to brokers, dealers and other financial organizations. Each
Fund's investment adviser will monitor the creditworthiness of such borrowers.
Loans of securities by EVERGREEN TAX EXEMPT MONEY MARKET FUND or EVERGREEN MONEY
MARKET FUND, if and when made, may not exceed 30% of a Fund's total assets and
will be collateralized by cash, letters of credit or United States Government
securities that are maintained at all times in an amount equal to at least 100%
of the current market value of the loaned securities, including accrued
interest. While such securities are on loan, the borrower will pay a Fund any
income accruing thereon, and the Fund may invest the cash collateral in
portfolio securities,
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<PAGE>
thereby increasing its return. A Fund will have the right to call any such loan
and obtain the securities loaned at any time on five days' notice. Any gain or
loss in the market price of the loaned securities which occurs during the term
of the loan would affect a Fund and its investors. A Fund may pay reasonable
fees in connection with such loans.
When-Issued Securities. EVERGREEN TAX EXEMPT MONEY MARKET FUND and EVERGREEN
TREASURY MONEY MARKET FUND may purchase securities on a "when-issued" basis
(i.e., for delivery beyond the normal settlement date at a stated price and
yield). A Fund generally would not pay for such securities or start earning
interest on them until they are received. However, when a Fund purchases
securities on a when-issued basis, it assumes the risks of ownership at the time
of purchase, not at the time of receipt. Failure of the issuer to deliver a
security purchased by a Fund on a when-issued basis may result in the Fund
incurring a loss or missing an opportunity to make an alternative investment.
EVERGREEN TAX EXEMPT MONEY MARKET FUND does not expect that commitments to
purchase when-issued securities will normally exceed 25% of its total assets and
EVERGREEN TREASURY MONEY MARKET FUND does not expect that such commitments will
exceed 20% of its total assets. The Funds do not intend to purchase when-issued
securities for speculative purposes but only in furtherance of their investment
objective.
Illiquid Securities. The Funds may invest up to 10% of their net assets in
illiquid securities and other securities which are not readily marketable,
including repurchase agreements with maturities longer than seven days. In the
case of EVERGREEN TAX EXEMPT MONEY MARKET FUND and EVERGREEN MONEY MARKET FUND,
securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933, which have been determined to be liquid, will not be considered by each
Fund's investment adviser to be illiquid or not readily marketable and,
therefore, are not subject to the aforementioned 10% limit. The inability of a
Fund to dispose of illiquid or not readily marketable investments readily or at
a reasonable price could impair the Fund's ability to raise cash for redemptions
or other purposes. The liquidity of securities purchased by a Fund which are
eligible for resale pursuant to Rule 144A will be monitored by each Fund's
investment adviser on an ongoing basis, subject to the oversight of the
Trustees. In the event that such a security is deemed to be no longer liquid, a
Fund's holdings will be reviewed to determine what action, if any, is required
to ensure that the retention of such security does not result in a Fund having
more than 10% of its assets invested in illiquid or not readily marketable
securities.
Other Investment Policies. The Funds may borrow money for temporary or emergency
purposes in amounts not in excess of 10% of the value of a Fund's total assets
in the case of EVERGREEN TAX EXEMPT MONEY MARKET FUND and EVERGREEN MONEY MARKET
FUND and one-third of the value of EVERGREEN TREASURY MONEY MARKET FUND'S total
assets, including the amount borrowed. As another means of borrowing both
EVERGREEN TAX EXEMPT MONEY MARKET FUND and EVERGREEN MONEY MARKET FUND may agree
to sell portfolio securities to financial institutions such as banks and
broker-dealers and to repurchase them at a mutually agreed upon date and price
(a "reverse repurchase agreement") at the time of such borrowing in amounts up
to 5% of the value of their total assets. A Fund will not purchase any
securities whenever any borrowings (including reverse repurchase agreements) are
outstanding. If either EVERGREEN TAX EXEMPT MONEY MARKET FUND or EVERGREEN MONEY
MARKET FUND enter into a reverse repurchase agreement, they will place in a
segregated custodial account cash, United States Government securities or liquid
high grade debt obligations having a value equal to the repurchase price
(including accrued interest) and will subsequently monitor the account to ensure
that such equivalent value is maintained. Reverse repurchase agreements involve
the risk that the market value of the securities sold by a Fund may decline
below the repurchase price of those securities.
Other Investment Restrictions. Each Fund has adopted additional investment
restrictions that are set forth in the Statement of Additional Information.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISERS
The management of each Fund is supervised by the Trustees of the Trust
under which each Fund has been established ("Trustees"). Evergreen Asset
Management Corp. ("Evergreen Asset") has been retained to serve as investment
adviser to EVERGREEN MONEY MARKET FUND and EVERGREEN TAX EXEMPT MONEY MARKET
FUND. Evergreen Asset succeeded on June 30, 1994 to the advisory business of a
corporation with the same name, but under different ownership, which was
organized in 1971. Evergreen Asset, with its predecessors, has served as
investment adviser to the Evergreen Group of Mutual Funds since 1971. Evergreen
Asset is a wholly-owned subsidiary of First Union National Bank of North
Carolina ("FUNB"). The address of Evergreen Asset is 2500 Westchester Avenue,
Purchase, New York 10577. FUNB is a subsidiary of First Union Corporation
("First
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Union"), one of the ten largest bank holding companies in the United States.
Stephen A. Lieber and Nola Maddox Falcone serve as the chief investment officers
of Evergreen Asset and, along with Theodore J. Israel, Jr., were the owners of
Evergreen Asset's predecessor and the former general partners of Lieber &
Company, which, as described below, provides certain subadvisory services to
Evergreen Asset in connection with its duties as investment adviser to the
aforementioned Funds. The Capital Management Group of FUNB ("CMG") serves as
investment adviser to EVERGREEN TREASURY MONEY MARKET FUND.
First Union is headquartered in Charlotte, North Carolina, and had $83
billion in consolidated assets as of September 30, 1995. First Union and its
subsidiaries provide a broad range of financial services to individuals and
businesses through offices in 36 states. The Capital Management Group of FUNB
manages or otherwise oversees the investment of over $36 billion in assets
belonging to a wide range of clients, including all the series of Evergreen
Investment Trust (formerly known as First Union 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.
Evergreen Asset manages investments, provides various administrative
services and supervises the daily business affairs of EVERGREEN MONEY MARKET
FUND and EVERGREEN TAX EXEMPT MONEY MARKET FUND, subject to the authority of the
Trustees. Evergreen Asset is entitled to receive from each Fund an annual fee
equal to .50 of 1% of average daily net assets of each Fund on the first $1
billion in assets and .45 of 1% of average daily net assets in excess of $1
billion. However, Evergreen Asset has in the past, and may in the future,
voluntarily waived all or a portion of its fee for the purpose of reducing each
Fund's expense ratio. For the fiscal year ended August 31, 1995 Evergreen Asset
waived a portion of the advisory fee payable by the EVERGREEN MONEY MARKET FUND
and EVERGREEN TAX EXEMPT MONEY MARKET FUND as set forth in the section entitled
"Financial Highlights". The total expenses as a percentage of average daily net
assets on an annualized basis for EVERGREEN MONEY MARKET FUND and EVERGREEN TAX
EXEMPT MONEY MARKET FUND for the fiscal year ended August 31, 1995 are also set
forth in the section entitled "Financial Highlights". CMG manages investments
and supervises the daily business affairs of EVERGREEN TREASURY MONEY MARKET
FUND and, as compensation therefor, is entitled to receive an annual fee equal
to .35 of 1% of average daily net assets of EVERGREEN TREASURY MONEY MARKET
FUND. For the fiscal year ended August 31, 1995 CMG waived a portion of the
advisory fee payable by the EVERGREEN TREASURY MONEY MARKET FUND as set forth in
the section entitled "Financial Highlights". The total annualized operating
expenses of EVERGREEN TREASURY MONEY MARKET FUND for its fiscal year ended
August 31, 1995 are also set forth in the section entitled "Financial
Highlights". Evergreen Asset serves as administrator to EVERGREEN TREASURY MONEY
MARKET FUND and is entitled to receive a fee based 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: .050%
of the first $7 billion; .035% on the next $3 billion; .030% on the next $5
billion; .020% on the next $10 billion; .015% on the next $5 billion; and .010%
on assets in excess of $30 billion. Furman Selz Incorporated, an affiliate of
Evergreen Funds Distributor, Inc., distributor for the Evergreen group of mutual
funds, serves as sub-administrator to EVERGREEN TREASURY MONEY MARKET 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: .0100%
of the first $7 billion; .0075% on the next $3 billion; .0050% on the next $15
billion; and .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 were approximately $10.1 billion as of September 30,
1995.
SUB-ADVISER
Evergreen Asset has entered into sub-advisory agreements with Lieber &
Company which provide that Lieber & Company's research department and staff will
furnish Evergreen Asset with information, investment recommendations, advice and
assistance, and will be generally available for consultation on the portfolios
of EVERGREEN MONEY MARKET FUND and EVERGREEN TAX EXEMPT MONEY MARKET FUND.
Lieber & Company will be reimbursed by Evergreen Asset in connection with the
rendering of services on the basis of the direct and indirect costs of
performing such services. There is no additional charge to EVERGREEN MONEY
MARKET FUND and EVERGREEN TAX EXEMPT MONEY MARKET FUND for the services provided
by Lieber & Company. The address of Lieber & Company is 2500 Westchester Avenue,
Purchase, New York 10577. Lieber & Company is an indirect, wholly-owned,
subsidiary of First Union.
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DISTRIBUTION PLANS AND AGREEMENTS
Rule 12b-1 under the Investment Company Act of 1940 permits an investment
company to pay expenses associated with the distribution of its shares in
accordance with a duly adopted plan. Each Fund has adopted for its Class A
shares and EVERGREEN MONEY MARKET FUND for its Class B shares, a "Rule 12b-1
plan" (each, a "Plan"or collectively the "Plans"). Pursuant to each Plan, a Fund
may incur distribution-related and shareholder servicing-related expenses which
may not exceed an annual rate of .75 of 1% of the Fund's aggregate average daily
net assets attributable to Class A shares and 1.00% of the Fund's aggregate
average daily net assets attributable to the Class B shares. Payments with
respect to Class A shares under the Plan are currently voluntarily limited to
.30 of 1% of each Fund's aggregate average daily net assets attributable to
Class A shares. The Plans provide 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 .25 of 1% of the
aggregate average daily net assets attributable to each Class of shares of each
Fund.
Each Fund has also entered into a distribution agreement (each a
"Distribution Agreement" or collectively the "Distribution Agreements") with
Evergreen Funds Distributor, Inc. ("EFD"). Pursuant to the Distribution
Agreements, each Fund will compensate EFD for its services as distributor at a
rate which may not exceed an annual rate of .30 of 1% of a Fund's aggregate
average daily net assets attributable to Class A shares, and .75 of 1% of
aggregate average daily net assets attributable to the Class B shares of the
EVERGREEN MONEY MARKET FUND. The Distribution Agreements provide that EFD will
use the distribution fee received from a Fund for payments (i) to compensate
broker-dealers or other persons for distributing shares of the Funds, including
interest and principal payments made in respect of amounts paid to
broker-dealers or other persons that have been financed (EFD may assign its
rights to receive compensation under the Plans to secure such financings), (ii)
to otherwise promote the sale of shares of the Fund, and (iii) to compensate
broker-dealers, depository institutions and other financial intermediaries for
providing administrative, accounting and other services with respect to the
Fund's shareholders. The financing of payments made by EFD to compensate
broker-dealers or other persons for distributing shares of the Funds may be
provided by First Union or its affiliates. The EVERGREEN MONEY MARKET FUND may
also make payments under its Class B Plan, in amounts up to .25 of 1% of the
Fund's aggregate average daily net assets on an annual basis attributable to
Class B shares, to compensate organizations, which may include EFD and Evergreen
Asset or its affiliates, for personal services rendered to shareholders and/or
the maintenance of shareholder accounts or for engaging others to render such
services.
The Funds 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 Agreements is not directly tied to the expenses incurred by
EFD, the amount of compensation received by it under the Distribution Agreements
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 Fund in subsequent fiscal years.
The Plans are in compliance with rules of the National Association of
Securities Dealers, Inc. which effectively limit the annual asset-based sales
charges and service fees that a mutual fund may pay on a class of shares to .75
of 1% and .25 of 1%, respectively, of the average annual net assets attributable
to that class. The rules also limit the aggregate of all front-end, deferred and
asset-based sales charges imposed with respect to a class of shares by a mutual
fund that also charges a service fee to 6.25% of cumulative gross sales of
shares of that class, plus interest at the prime rate plus 1% per annum.
PURCHASE AND REDEMPTION OF SHARES
HOW TO BUY SHARES
You can purchase shares of any of the Funds through broker-dealers, banks
or other financial intermediaries, or directly through EFD. The minimum initial
investment is $1,000, which may be waived in certain situations. There is no
minimum for subsequent investments. Share certificates are not issued. In states
where EFD is not registered as a broker-dealer shares of a Fund will only be
sold through other broker-dealers or other financial institutions that are
registered. See the Share Purchase Application and Statement of Additional
Information for more information. Only Class A shares of EVERGREEN MONEY MARKET
FUND, EVERGREEN TREASURY MONEY MARKET FUND and EVERGREEN TAX EXEMPT MONEY MARKET
FUND, and Class B shares of EVERGREEN
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MONEY MARKET FUND are offered through this Prospectus. (See "General
Information" -- "Other Classes of Shares".)
Class A Shares. Class A shares of the Evergreen Money Market Funds can be
purchased at net asset value without an initial sales charge. Certain
broker-dealers or other financial institutions may impose a fee in connection
with purchases at net asset value.
Class B Shares-Deferred Sales Charge Alternative. You can purchase Class B
shares of the EVERGREEN MONEY MARKET FUND at net asset value without an initial
sales charge. However, you may pay a contingent deferred sales charge ("CDSC")
if you redeem shares within seven years after purchase. Shares obtained from
dividend or distribution reinvestment are not subject to the CDSC. The amount of
the CDSC (expressed as a percentage of the lesser of the current net asset value
or original cost) will vary according to the number of years from the purchase
of Class B shares as set forth below.
<TABLE>
<CAPTION>
Year Since
Purchase Contingent Deferred Sales Charge
<S> <C>
FIRST 5%
SECOND 4%
THIRD and FOURTH 3%
FIFTH 2%
SIXTH and SEVENTH 1%
</TABLE>
The CDSC is deducted from the amount of the redemption and is paid to EFD. The
CDSC will be waived on redemptions of shares following the death or disability
of a shareholder, to meet distribution requirements for certain qualified
retirement plans or in the case of certain redemptions made under a Fund's
Systematic Cash Withdrawal Plan, and may be waived in other situations. Class B
shares are subject to higher distribution and/or shareholder service fees than
Class A shares for a period of seven years (after which they convert to Class A
shares). The higher fees mean a higher expense ratio, so Class B shares pay
correspondingly lower dividends and may have a lower net asset value than Class
A shares. See the Statement of Additional Information for further details.
With respect to Class B shares, no CDSC will be imposed on: (1) the
portion of redemption proceeds attributable to increases in the value of the
account due to increases in the net asset value per share, (2) shares acquired
through reinvestment of dividends and capital gains, (3) shares held for more
than seven years after the end of the calendar month of acquisition, (4)
accounts following the death or disability of a shareholder, or (5) minimum
required distributions to a shareholder over the age of 70 1/2 from an IRA or
other retirement plan.
How the Funds Value Their Shares. The net asset value of each Fund's shares for
purposes of both purchases and redemptions is determined twice daily, at 12 noon
(Eastern time) and promptly after the regular close of the New York Stock
Exchange (the "Exchange") (currently 4:00 p.m. Eastern time) each business day
(i.e., any weekday exclusive of days on which the Exchange or State Street is
closed). The Exchange is closed on New Year's Day, Presidents Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The net asset value per share is calculated by taking the sum of the values of a
Fund's investments and any cash and other assets, subtracting liabilities, and
dividing by the total number of shares outstanding. All expenses, including the
fees payable to each Fund's investment adviser, are accrued daily. The
securities in a Fund's portfolio are valued on an amortized cost basis. Under
this method of valuation, a security is initially valued at its acquisition
cost, and thereafter, a constant straight-line amortization of any discount or
premium is assumed each day regardless of the impact of fluctuating interest
rates on the market value of the security. The market value of the obligations
in a Fund's portfolio can be expected to vary inversely to changes in prevailing
interest rates. As a result, the market value of the obligations in a Fund's
portfolio may vary from the value determined using the amortized cost method.
Securities which are not rated are normally valued on the basis of valuations
provided by a pricing service when such prices are believed to reflect the fair
value of such securities. Other assets and securities for which no quotations
are readily available are valued at the fair value as determined in good faith
by the Trustees.
Each Fund attempts to maintain its net asset value at $1.00 per share.
Under most conditions, management believes this will be possible, although there
can be no assurance that this will be achieved. Calculations are periodically
made to compare the value of a Fund's portfolio valued at amortized cost with
market values. If a deviation of 1/2 of 1% or more were to occur between the net
asset value calculated by reference to market values and a Fund's $1.00 per
share net asset value, or if there were other deviations which the Trustees
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<PAGE>
believed would result in a material dilution to shareholders or purchasers, the
Trustees would promptly consider what action, if any, should be initiated.
Additional Purchase Information. As a condition of this offering, if a purchase
is canceled due to nonpayment or because an investor's check does not clear, the
investor will be responsible for any loss a Fund or the Fund's investment
adviser incurs. If such investor is an existing shareholder, a Fund may redeem
shares from his or her account to reimburse a Fund or the Fund's investment
adviser for any loss. In addition, such investors may be prohibited or
restricted from making further purchases in any of the Evergreen mutual funds.
Shares of the Funds are sold at the net asset value per share next
determined after a shareholder's investment has been converted to Federal funds.
Investments by federal funds wire will be effective upon receipt. Qualified
institutions may telephone orders for the purchase of Fund shares. Shares
purchased by institutions via telephone will receive the dividend declared on
that day if the telephone order is placed by 12 noon (Eastern time), and federal
funds are received the same day by 4:00 p.m. (Eastern time). Institutions should
telephone the Fund at the phone number on the front page of this Prospectus for
additional information on same day purchases by telephone. Investment checks
received at State Street will be invested on the date of receipt. Shareholders
will begin earning dividends the following business day.
The Share Purchase Application may not be used to invest in any of the
prototype retirement plans for which the EVERGREEN MONEY MARKET FUND is an
available investment. For information about the requirements to make such
investments, including copies of the necessary application forms, please call
the telephone number set forth on the cover page of this Prospectus. A Fund
cannot accept investments specifying a certain price or date and reserves the
right to reject any specific purchase order, including orders in connection with
exchanges from the other Evergreen Funds. Although not currently anticipated,
each Fund reserves the right to suspend the offer of shares for a period of
time.
General. The decision as to which Class of shares of EVERGREEN MONEY MARKET FUND
is more beneficial to you depends primarily on whether or not you wish to
exchange all or part of any Class B shares you purchase for Class B shares of
another Evergreen mutual fund at some future date. If you are not contemplating
such an exchange, it would probably be in your best interest to purchase Class A
shares. Consult your financial intermediary for further information. The
compensation received by dealers and agents may differ depending on whether they
sell Class A or Class B shares. There is no size limit on purchases of Class A
shares.
In addition to any discount or commission paid to dealers, EFD will from
time to time pay to dealers additional cash or other incentives that are
conditioned upon the sale of a specified minimum dollar amount of shares of a
Fund and/or other Evergreen mutual funds. Such incentives will take the form of
payment for attendance at seminars, lunches, dinners, sporting events or theater
performances, or payment for travel, lodging and entertainment incurred in
connection with travel by persons associated with a dealer and their immediate
family members to urban or resort locations within or outside the United States.
Such a dealer may elect to receive cash incentives of equivalent amount in lieu
of such payments.
HOW TO REDEEM SHARES
You may "redeem", i.e., sell your shares in a Fund to the Fund on any day
the Exchange is open, either directly or through your financial intermediary.
The price you will receive is the net asset value (less any applicable CDSC for
Class B shares) next calculated after the Fund receives your request in proper
form. Proceeds generally will be sent to you within seven days. However, for
shares recently purchased by check, a Fund will not send proceeds until it is
reasonably satisfied that the check has been collected (which may take up to ten
days). Once a redemption request has been telephoned or mailed, it is
irrevocable and may not be modified or cancelled.
Redeeming Shares Through Your Financial Intermediary. A Fund must receive
instructions from your financial intermediary before 4:00 p.m. (Eastern time)
for you to receive that day's net asset value (less any applicable CDSC for
Class B shares). Your financial intermediary is responsible for furnishing all
necessary documentation to a Fund and may charge you for this service. Certain
financial intermediaries may require that you give instructions earlier than
4:00 p.m.
Redeeming Shares Directly by Mail or Telephone. Send a signed letter of
instruction or stock power form to State Street Bank and Trust Company ("State
Street") which is the registrar, transfer agent and dividend-disbursing agent
for each Fund. Stock power forms are available from your financial intermediary,
State Street, and many commercial banks. Additional documentation is required
for the sale of shares by corporations, financial
18
<PAGE>
intermediaries, fiduciaries and surviving joint owners. Signature guarantees are
required for all redemption requests for shares with a value of more than
$10,000 or where the redemption proceeds are to be mailed to an address other
than that shown in the account registration. A signature guarantee must be
provided by a bank or trust company (not a Notary Public), a member firm of a
domestic stock exchange or by other financial institutions whose guarantees are
acceptable to State Street.
Shareholders may withdraw amounts of $1,000 or more from their accounts
by calling the telephone number on the front page of this Prospectus between the
hours of 8:00 a.m. to 5:30 p.m. (Eastern time) each business day (i.e., any
weekday exclusive of days on which the Exchange or State Street's offices are
closed). The Exchange is closed on New Year's Day, Presidents Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Redemption requests made after 4:00 p.m. (Eastern time) will be processed using
the net asset value determined on the next business day. Such redemption
requests must include the shareholder's account name, as registered with a Fund,
and the account number. During periods of drastic economic or market changes,
shareholders may experience difficulty in effecting telephone redemptions.
Shareholders who are unable to reach a Fund or State Street by telephone should
follow the procedures outlined above for redemption by mail.
The telephone redemption service is not made available to shareholders
automatically. Shareholders wishing to use the telephone redemption service must
indicate this on the Share Purchase Application and choose how the redemption
proceeds are to be paid. Redemption proceeds will either (i) be mailed by check
to the shareholder at the address in which the account is registered or (ii) be
wired to an account with the same registration as the shareholder's account in a
Fund at a designated commercial bank. State Street currently deducts a $5.00
wire charge from all redemption proceeds wired. This charge is subject to change
without notice. Redemption proceeds will be wired on the same day if the request
is made prior to 12 noon (Eastern time). Such shares, however, will not earn
dividends for that day. Redemption requests received after 12 noon will earn
dividends for that day, and the proceeds will be wired on the following business
day. A shareholder who decides later to use this service, or to change
instructions already given, should fill out a Shareholder Services Form and send
it to State Street Bank and Trust Company, P.O. Box 9021, Boston, Massachusetts
02205-9827, with such shareholder's signature guaranteed by a bank or trust
company (not a Notary Public), a member firm of a domestic stock exchange or by
other financial institutions whose guarantees are acceptable to State Street.
Shareholders should allow approximately ten days for such form to be processed.
The Funds will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. These procedures include requiring some
form of personal identification prior to acting upon instructions and tape
recording of telephone instructions. If a Fund fails to follow such procedures,
it may be liable for any losses due to unauthorized or fraudulent instructions.
The Funds will not be liable for following telephone instructions reasonably
believed to be genuine. The Funds reserve the right to refuse a telephone
redemption if it is believed advisable to do so. Financial intermediaries may
charge a fee for handling telephonic requests. Procedures for redeeming Fund
shares by telephone may be modified or terminated without notice at any time.
Redemptions by Check. Upon request, each Fund will provide holders of Class A
shares, without charge, with checks drawn on the Fund that will clear through
State Street. Class B shares cannot be redeemed by check. Shareholders will be
subject to State Street's rules and regulations governing such checking
accounts. Checks will be sent usually within ten business days following the
date the account is established. Checks may be made payable to the order of any
payee in an amount of $250 or more. The payee of the check may cash or deposit
it like a check drawn on a bank. (Investors should be aware that, as in the case
with regular bank checks, certain banks may not provide cash at the time of
deposit, but will wait until they have received payment from State Street.) When
such a check is presented to State Street for payment, State Street, as the
shareholder's agent, causes the Fund to redeem a sufficient number of full and
fractional shares in the shareholder's account to cover the amount of the check.
Checks will be returned by State Street if there are insufficient or
uncollectable shares to meet the withdrawal amount. The check writing procedure
for withdrawal enables shareholders to continue earning income on the shares to
be redeemed up to but not including the date the redemption check is presented
to State Street for payment.
Shareholders wishing to use this method of redemption, should fill out
the appropriate part of the Share Purchase Application (including the Signature
Card) and mail the completed form to State Street Bank and Trust Company, P.O.
Box 9021, Boston, Massachusetts 02205-9827. Shareholders requesting this service
after an account has been opened must contact State Street since additional
documentation will be required. Currently, there is no charge either for checks
or for the clearance of any checks. This service may be terminated or altered at
any time.
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<PAGE>
General. Under unusual circumstances, a Fund may suspend redemptions or postpone
payment for up to seven days or longer, as permitted by Federal securities law.
The Funds reserve the right to close an account that through redemption has
remained below $1,000 for thirty days. Shareholders will receive sixty days'
written notice to increase the account value before the account is closed. The
Funds have elected to be governed by Rule 18f-1 under the Investment Company Act
of 1940 pursuant to which each Fund is obligated to redeem shares solely in
cash, up to the lesser of $250,000 of 1% of a Fund's total net assets during any
ninety day period for any one shareholder. See the Statement of Additional
Information for further details.
EXCHANGE PRIVILEGE
How To Exchange Shares. You may exchange some or all of your shares for shares
of the same Class of the other Evergreen mutual funds through your financial
intermediary, or by telephone or mail as described below. An exchange which
represents an initial investment in another Evergreen mutual fund must amount to
at least $1,000. Once an exchange request has been telephoned or mailed, it is
irrevocable and may not be modified or canceled. Exchanges will be made on the
basis of the relative net asset values of the shares exchanged next determined
after an exchange request is received. Exchanges are subject to minimum
investment and suitability requirements.
Each of the Evergreen mutual funds has different investment objectives
and policies. For complete information, a prospectus of the fund into which an
exchange will be made should be read prior to the exchange. An exchange is
treated for Federal income tax purposes as a redemption and purchase of shares
and may result in the realization of a capital gain or loss. Shareholders are
limited to five exchanges per calendar year, with a maximum of three per
calendar quarter. This exchange privilege may be materially modified or
discontinued at any time by the Fund upon sixty days' notice to shareholders and
is only available in states in which shares of the fund being acquired may
lawfully be sold.
No CDSC will be imposed in the event Class B shares of the EVERGREEN
MONEY MARKET FUND are exchanged for Class B shares of other Evergreen mutual
funds. If you redeem shares, the CDSC applicable to the Class B shares of the
Evergreen mutual fund originally purchased for cash is applied. Also, Class B
shares will continue to age following an exchange for purposes of conversion to
Class A shares. An exchange of Class A shares of the Funds for Class A shares of
other Evergreen mutual funds not offered in this Prospectus would, to the extent
a waiver or reduction were not available, require the payment of the applicable
front-end sales charge.
Exchanges Through Your Financial Intermediary. A Fund must receive exchange
instructions from your financial intermediary before 4:00 p.m. (Eastern time)
for you to receive that day's net asset value. Your financial intermediary is
responsible for furnishing all necessary documentation to a Fund and may charge
you for this service.
Exchanges by Telephone and Mail. You may exchange shares by telephone by calling
the telephone number on the front page of this Prospectus. Exchange requests
made after 4:00 p.m. (Eastern time) will be processed using the net asset value
determined on the next business day. During periods of drastic economic or
market changes, shareholders may experience difficulty in effecting telephone
exchanges. You should follow the procedures outlined below for exchanges by mail
if you are unable to reach State Street by telephone. If you wish to use the
telephone exchange service you should indicate this on the Share Purchase
Application. As noted above, each Fund will employ reasonable procedures to
confirm that instructions for the redemption or exchange of shares communicated
by telephone are genuine. A telephone exchange may be refused by a Fund or State
Street if it is believed advisable to do so. Procedures for exchanging Fund
shares by telephone may be modified or terminated at any time. Written requests
for exchanges should follow the same procedures outlined for written redemption
requests in the section entitled "How to Redeem Shares", however, no signature
guarantee is required.
SHAREHOLDER SERVICES
The Funds offer the following shareholder services. For more information
about these services or your account, contact EFD or the toll-free number on the
front page of this Prospectus. Some services are described in more detail in the
Share Purchase Application.
Systematic Investment Plan. You may make monthly or quarterly investments into
an existing account automatically in amounts of not less than $25.
Telephone Investment Plan. You may make investments into an existing account
electronically in amounts of not less than $100 or more than $25,000 per
investment. Telephone investment requests received by 3:00 p.m. (Eastern time)
will be credited to a shareholder's account two business days after the request
is received.
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<PAGE>
Systematic Cash Withdrawal Plan. When an account of $10,000 or more is opened or
when an existing account reaches that size, you may participate in the Funds
Systematic Cash Withdrawal Plan by filling out the appropriate part of the Share
Purchase Application. Under this plan, you may receive (or designate a third
party to receive) a monthly or quarterly check in a stated amount of not less
than $100. Fund shares will be redeemed as necessary to meet withdrawal
payments. All participants must elect to have their dividends and capital gain
distributions reinvested automatically. Any applicable Class B CDSC will be
waived with respect to redemptions occurring under a Systematic Cash Withdrawal
Plan during a calendar year to the extent that such redemptions do not exceed
10% of (i) the initial value of the account plus (ii) the value, at the time of
purchase, of any subsequent investments.
Investments Through Employee Benefit and Savings Plans. Certain qualified and
non-qualified benefit and savings plans may make shares of the Funds and the
other Evergreen mutual funds available to their participants. Each Fund's
investment adviser may provide compensation to organizations providing
administrative and recordkeeping services to plans which make shares of the
Evergreen mutual funds available to their participants.
Automatic Reinvestment Plan. For the convenience of investors, all dividends and
distributions are automatically reinvested in full and fractional shares of the
Fund at the net asset value per share at the close of business on the last
business day of each month, unless otherwise requested by a shareholder in
writing. If the transfer agent does not receive a written request for subsequent
dividends and/or distributions to be paid in cash at least three full business
days prior to a given record date, the dividends and/or distributions to be paid
to a shareholder will be reinvested. If you elect to receive dividends and
distributions in cash and the U.S. Postal Service cannot deliver the checks, or
if the checks remain uncashed for six months, the checks will be reinvested into
your account at the then current net asset value.
Tax Sheltered Retirement Plans. You may open a pension and profit sharing
account in any Evergreen mutual fund (except those funds having an objective of
providing tax free income), including: (i) Individual Retirement Accounts
("IRAs") and Rollover IRAs; (ii) Simplified Employee Pension (SEP) for sole
proprietors, partnerships and corporations; and (iii) Profit-Sharing and Money
Purchase Pension Plans for corporations and their employees.
EFFECT OF BANKING LAWS
The Glass-Steagall Act and other banking laws and regulations presently
prohibit member banks of the Federal Reserve System ("Member Banks") or their
non-bank affiliates from sponsoring, organizing, controlling, or distributing
the shares of registered open-end investment companies such as the Funds. Such
laws and regulations also prohibit banks from issuing, underwriting or
distributing securities in general. However, under the Glass-Steagall Act and
such other laws and regulations, a Member Bank or an affiliate thereof may act
as investment adviser, transfer agent or custodian to a registered open-end
investment company and may also act as agent in connection with the purchase of
shares of such an investment company upon the order of their customer. Evergreen
Asset, since it is a subsidiary of FUNB, and CMG are subject to and in
compliance with the aforementioned laws and regulations.
Changes to applicable laws and regulations or future judicial or
administrative decisions could result in CMG or Evergreen Asset being prevented
from continuing to perform the services required under the investment advisory
contract or from acting as agent in connection with the purchase of shares of a
Fund by its customers. If CMG or Evergreen Asset were prevented from continuing
to provide the services called for under the investment advisory agreement, it
is expected that the Trustees would identify, and call upon each Fund's
shareholders to approve, a new investment adviser. If this were to occur, it is
not anticipated that the shareholders of any Fund would suffer any adverse
financial consequences.
OTHER INFORMATION
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Funds declare substantially all of their net income as dividends on
each business day. Such dividends are paid monthly. Net income, for dividend
purposes, includes accrued interest and any market discount or premium that day,
less the estimated expenses of a Fund. Gains or losses realized upon the sale of
portfolio securities are not included in net income, but are reflected in the
net asset value of a Fund's shares. Distributions of any net realized capital
gains will be made annually or more frequently as required by the provisions of
the Internal Revenue Code of 1986, as amended (the "Code"). The amount of
dividends may fluctuate from day to day,
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and the dividend may be omitted on a day where Fund expenses exceed net
investment income. Dividends and distributions generally are taxable in the year
in which they are paid, except any dividends paid in January that were declared
in the previous calendar quarter may be treated as paid in the immediately
preceding December.
Such dividends will be automatically reinvested in full and fractional
shares of a Fund on the last business day of each month. However, shareholders
who so inform the transfer agent in writing may have their dividends paid out in
cash monthly. Shareholders who invest by check will be credited with a dividend
on the business day following initial investment. Shareholders will receive
dividends on investments made by federal funds bank wire the same day the wire
is received provided that wire purchases are received by State Street by 12 noon
(Eastern time). Shares purchased by qualified institutions via telephone as
described in "How to Purchase Shares" will receive the dividend declared on that
day if the telephone order is placed by 12 noon (Eastern time), and federal
funds are received by 4:00 p.m. (Eastern time). All other wire purchases
received after 12 noon (Eastern time) will earn dividends beginning the
following business day. Dividends accruing on the day of redemption will be paid
to redeeming shareholders except for redemptions by check and where proceeds are
wired the same day. (See "How to Redeem Shares".)
Each Fund has qualified and intends to continue to qualify to be treated
as a regulated investment company under the Code. While so qualified, it is
expected that each Fund will not be required to pay any Federal income taxes on
that portion of its investment company taxable income and any net realized
capital gains it distributes to shareholders. The Code imposes a 4%
nondeductible excise tax on regulated investment companies, such as the Funds,
to the extent they do not meet certain distribution requirements by the end of
each calendar year. Each Fund anticipates meeting such distribution
requirements. The excise tax generally does not apply to the tax exempt income
of a regulated investment company (such as EVERGREEN TAX EXEMPT MONEY MARKET
FUND) that pays exempt interest dividends. Except as noted below with respect to
EVERGREEN TAX EXEMPT MONEY MARKET FUND, most shareholders of the Funds normally
will have to pay Federal income taxes and any state or local taxes on the
dividends and distributions they receive from a Fund.
EVERGREEN TAX EXEMPT MONEY MARKET FUND will designate and pay
exempt-interest dividends derived from interest earned on qualifying tax exempt
obligations. Such exempt-interest dividends may be excluded by shareholders of
the Fund from their gross income for Federal income tax purposes, however, (1)
all or a portion of such exempt-interest dividends may be a specific preference
item for purposes of the Federal individual and corporate alternative minimum
taxes to the extent that they are derived from certain types of private activity
bonds issued after August 7, 1986, and (2) all exempt-interest dividends will be
a component of "adjusted current earnings" for purposes of the Federal corporate
alternative minimum tax. Dividends paid from taxable income, if any, and
distributions of any net realized short-term capital gains (whether from tax
exempt or taxable obligations) are taxable as ordinary income, even though
received in additional Fund shares. Market discount recognized on taxable and
tax-free bonds is taxable as ordinary income, not as excludable income.
Following the end of each calendar year, every shareholder of the Funds
will be sent applicable tax information and information regarding the dividends
and capital gain distributions made during the calendar year. Under current law,
the highest Federal income tax rate applicable to net long-term capital gains
realized by individuals is 28%. The rate applicable to corporations is 35%.
Since the Funds' gross income is ordinarily expected to be interest income, it
is not expected that the 70% dividends-received deduction for corporations will
be applicable. Specific questions should be addressed to the investor's own tax
adviser.
Each Fund is required by Federal law to withhold 31% of reportable
payments (which may include dividends, capital gain distributions and
redemptions) paid to certain shareholders. In order to avoid this backup
withholding requirement, you must certify on the Share Purchase Application, or
on a separate form supplied by State Street, that the investor's social security
or taxpayer identification number is correct and that the investor is not
currently subject to backup withholding or is exempt from backup withholding.
GENERAL INFORMATION
Portfolio Transactions. Consistent with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., and subject to seeking best
price and execution, a Fund may consider sales of its shares as a factor in the
selection of dealers to enter into portfolio transactions with the Fund.
Organization. The EVERGREEN MONEY MARKET FUND (formerly Evergreen Money Market
Trust) is a Massachusetts business trust organized in 1987. The EVERGREEN TAX
EXEMPT MONEY MARKET FUND is a separate investment series of The Evergreen
Municipal Trust, a Massachusetts business trust organized in 1988. The EVERGREEN
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TREASURY MONEY MARKET FUND is a separate investment series of Evergreen
Investment Trust (formerly First Union Funds), a Massachusetts business trust
organized in 1984.
The Funds do not intend to hold annual shareholder meetings; shareholder
meetings will be held only when required by applicable law. Shareholders have
available certain procedures for the removal of Trustees.
A shareholder in each class of a Fund will be entitled to his or her
share of all dividends and distributions from a Fund's assets, based upon the
relative value of such shares to those of other Classes of the Fund, and, upon
redeeming shares, will receive the then current net asset value of the Class of
shares of the Fund represented by the redeemed shares less any applicable CDSC.
The Trusts are empowered to establish, without shareholder approval, additional
investment series, which may have different investment objectives, and
additional classes of shares for any existing or future series. If an additional
series or class were established in a Fund, each share of the series or class
would normally be entitled to one vote for all purposes. Generally, shares of
each series and class would vote together as a single class on matters, such as
the election of Trustees, that affect each series and class in substantially the
same manner. Class A, B and Y shares have identical voting, dividend,
liquidation and other rights, except that each class bears, to the extent
applicable, its own distribution and transfer agency expenses as well as any
other expenses applicable only to a specific class. Each class of shares votes
separately with respect to Rule 12b-1 distribution plans and other matters for
which separate class voting is appropriate under applicable law. Shares are
entitled to dividends as determined by the Trustees and, in liquidation of a
Fund, are entitled to receive the net assets of the Fund.
Registrar, Transfer Agent And Dividend-Disbursing Agent. State Street Bank and
Trust Company, P.O. Box 9021, Boston, Massachusetts 02205-9827 acts as each
Fund's registrar, transfer agent and dividend-disbursing agent for a fee based
upon the number of shareholder accounts maintained for the Funds. The transfer
agency fee with respect to the Class B shares will be higher than the transfer
agency fee with respect to the Class A shares.
Principal Underwriter. EFD, an affiliate of Furman Selz Incorporated, located
237 Park Avenue, New York, New York 10017, is the principal underwriter of the
Funds. Furman Selz Incorporated also acts as sub-administrator to EVERGREEN
TREASURY MONEY MARKET FUND and provides certain sub-administrative services to
Evergreen Asset in connection with its role as investment adviser to EVERGREEN
TAX EXEMPT MONEY MARKET FUND and EVERGREEN MONEY MARKET FUND, including
providing personnel to serve as officers of the Funds.
Other Classes of Shares. EVERGREEN MONEY MARKET FUND offers three classes of
shares, Class A, Class B and Class Y. EVERGREEN TAX EXEMPT MONEY MARKET FUND and
EVERGREEN TREASURY MONEY MARKET FUND each offer two classes of shares, Class A
and Class Y. Class Y shares are not offered by this Prospectus and are only
available to (i) persons who at or prior to December 31, 1994, owned shares in a
mutual fund advised by Evergreen Asset, (ii) certain institutional investors and
(iii) investment advisory clients of CMG, Evergreen Asset or their affiliates.
The dividends payable with respect to Class A and Class B shares will be less
than those payable with respect to Class Y shares due to the distribution and
distribution and shareholder servicing related expenses borne by Class A and
Class B shares and the fact that such expenses are not borne by Class Y shares.
Performance Information. From time to time, a Fund may quote its yield in
advertisements or in reports to shareholders. Yield information may be useful in
reviewing the performance of a Fund and for providing a basis for comparison
with other investment alternatives. However, since net investment income of a
Fund changes in response to fluctuations in interest rates and Fund expenses,
any given yield quotation should not be considered representative of a Fund's
yields for any future period.
The method of calculating each Fund's yield is set forth in the Statement
of Additional Information. Before investing in the EVERGREEN TAX EXEMPT MONEY
MARKET FUND, the investor may want to determine which investment -- tax-free or
taxable -- will result in a higher after-tax return. To do this, the yield on
the tax-free investment should be divided by the decimal determined by
subtracting from 1 the highest Federal tax rate to which the investor currently
is subject. For example, if the tax-free yield is 6% and the investor's maximum
tax bracket is 36%, the computation is:
6% Tax-Free Yield /(1 - .36 Tax Rate) = 6/.64 = 9.38% Taxable Yield.
In this example, the investor's after-tax return will be higher from the
6% tax-free investment if available taxable yields are below 9.38%. Conversely,
the taxable investment will provide a higher return when taxable yields exceed
9.38%. This is only an example and is not necessarily reflective of a Fund's
yield. The tax equivalent yield will be lower for investors in the lower income
brackets.
23
<PAGE>
Comparative performance information may also be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., IBC/Donoghue's Money Fund Report, Bank Rate Monitor
and other industry publications.
Liability Under Massachusetts Law. Under Massachusetts law, trustees and
shareholders of a business trust may, in certain circumstances, be held
personally liable for its obligations. The Declarations of Trust under which
Funds operate provide that no trustee or shareholder will be personally liable
for the obligations of the trust and that every written contract made by the
trust contain a provision to that effect. If any trustee or shareholder were
required to pay any liability of the trust, that person would be entitled to
reimbursement from the general assets of the trust.
Additional Information. This Prospectus and the Statement of Additional
Information, which have been incorporated by reference herein, do not contain
all the information set forth in the Registration Statements filed by the Trusts
with the Commission under the Securities Act. Copies of the Registration
Statements may be obtained at a reasonable charge from the Commission or may be
examined, without charge, at the offices of the Commission in Washington, D.C.
24
<PAGE>
INVESTMENT ADVISER
Evergreen Asset Management Corp., 2500 Westchester Avenue, Purchase, New York
10577
EVERGREEN MONEY MARKET FUND, EVERGREEN TAX EXEMPT MONEY MARKET FUND
Capital Management Group of First Union National Bank of North Carolina, 201
South College Street, Charlotte, North Carolina 28288
EVERGREEN TREASURY MONEY MARKET FUND
CUSTODIAN & TRANSFER AGENT
State Street Bank & Trust Company, Box 9021, Boston, Massachusetts 02205-9827
LEGAL COUNSEL
Sullivan & Worcester, 1025 Connecticut Avenue, N.W., Washington, D.C. 20036
INDEPENDENT AUDITORS
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York 10036
EVERGREEN MONEY MARKET FUND, EVERGREEN TAX EXEMPT MONEY MARKET FUND
KPMG Peat Marwick, LLP One Mellon Bank Center Pittsburgh, Pennsylvania 15219
EVERGREEN TREASURY MONEY MARKET FUND
DISTRIBUTOR
Evergreen Funds Distributor, Inc., 237 Park Avenue, New York, New York 10017
******************************************************************************
<PAGE>
PROSPECTUS October 31, 1995
EVERGREEN(SM) MONEY MARKET FUNDS (Evergreen Tree Logo)
EVERGREEN MONEY MARKET FUND
EVERGREEN TAX EXEMPT MONEY MARKET FUND
EVERGREEN TREASURY MONEY MARKET FUND
CLASS Y SHARES
The Evergreen Money Market Funds (the "Funds") are designed to
provide investors with current income, stability of principal and
liquidity. This Prospectus provides information regarding the Class Y
shares offered by the Funds. Each Fund is, or is a series of, an open-end,
diversified, management investment company. This Prospectus sets forth
concise information about the Funds that a prospective investor should know
before investing. The address of the Funds is 2500 Westchester Avenue,
Purchase, New York 10577.
A "Statement of Additional Information" for the Funds dated
October 31, 1995 has been filed with the Securities and Exchange Commission
and is incorporated by reference herein. The Statement of Additional
Information provides information regarding certain matters discussed in
this Prospectus and other matters which may be of interest to investors,
and may be obtained without charge by calling the Funds at (800) 235-0064.
There can be no assurance that the investment objective of any Fund will be
achieved. Investors are advised to read this Prospectus carefully.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, ARE NOT INSURED OR
OTHERWISE PROTECTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY, AND
INVOLVE INVESTMENT RISKS.
AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
KEEP THIS PROSPECTUS FOR FUTURE REFERENCE
EVERGREEN(SM) is a Service Mark of Evergreen Asset Management Corp.
Copyright 1995, Evergreen Asset Management Corp.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
OVERVIEW OF THE FUNDS 2
EXPENSE INFORMATION 3
FINANCIAL HIGHLIGHTS 5
DESCRIPTION OF THE FUNDS
Investment Objectives and Policies 10
Investment Practices and Restrictions 13
MANAGEMENT OF THE FUNDS
Investment Advisers 14
Sub-Adviser 15
PURCHASE AND REDEMPTION OF SHARES
How to Buy Shares 16
How to Redeem Shares 17
Exchange Privilege 18
Shareholder Services 19
Effect of Banking Laws 19
OTHER INFORMATION
Dividends, Distributions and Taxes 20
General Information 21
</TABLE>
OVERVIEW OF THE FUNDS
The following summary is qualified in its entirety by the more detailed
information contained elsewhere in this Prospectus. See "Description of the
Funds" and "Management of the Funds".
The investment adviser to EVERGREEN MONEY MARKET FUND and EVERGREEN TAX
EXEMPT MONEY MARKET FUND is Evergreen Asset Management Corp. ("Evergreen Asset")
which, with its predecessors, has served as an investment adviser to the
Evergreen mutual funds since 1971. Evergreen Asset is a wholly-owned subsidiary
of First Union National Bank of North Carolina ("FUNB"), which in turn is a
subsidiary of First Union Corporation, one of the ten largest bank holding
companies in the United States. The Capital Management Group of FUNB ("CMG")
serves as investment adviser to EVERGREEN TREASURY MONEY MARKET FUND.
EVERGREEN MONEY MARKET FUND seeks as high a level of current income as is
consistent with preserving capital and providing liquidity. The Fund will invest
only in high quality money market instruments.
EVERGREEN TAX EXEMPT MONEY MARKET FUND seeks as high a level of current
income exempt from Federal income tax as is consistent with preserving capital
and providing liquidity. The Fund invests substantially all of its assets in
short-term municipal securities, the interest from which is exempt from Federal
income tax.
EVERGREEN TREASURY MONEY MARKET FUND (formerly First Union Treasury Money
Market Portfolio) seeks to achieve stability of principal and current income
consistent with stability of principal.
Each Fund seeks to maintain a stable net asset value of $1.00 per share
although no assurances can be given that such a stable net asset value will be
maintained.
THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVE OF ANY FUND WILL BE
ACHIEVED.
2
<PAGE>
EXPENSE INFORMATION
The table set forth below summarizes the shareholder transaction costs
associated with an investment in the Class Y Shares of the Fund. For further
information see "Purchase and Redemption of Shares".
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Charge Imposed on Purchases None
Sales Charge on Dividend Reinvestments None
Contingent Deferred Sales Charge None
Redemption Fee None
Exchange Fee (only applies after 4 exchanges per
year) $ 5.00
</TABLE>
The following table shows for the Fund the estimated annual operating
expenses (as a percentage of average net assets) attributable to Class Y Shares,
together with examples of the cumulative effect of such expenses on a
hypothetical $1,000 investment for the periods specified assuming (i) a 5%
annual return and (ii) redemption at the end of each period.
EVERGREEN MONEY MARKET FUND
<TABLE>
<CAPTION>
ANNUAL OPERATING EXAMPLE
EXPENSES Class Y
<S> <C> <C> <C>
Management Fees .50%
After 1 Year $ 7
12b-1 Fees -- After 3 Years
After 3 Years $23
Other Expenses .23%
After 5 Years $41
After 10 Years $91
Total .73%
</TABLE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
ANNUAL OPERATING EXAMPLE
EXPENSES Class Y
<S> <C> <C> <C>
Management Fees .50%
After 1 Year $ 6
12b-1 Fees --
After 3 Years $20
Other Expenses .13%
After 5 Years $35
After 10 Years $79
Total .63%
</TABLE>
EVERGREEN TREASURY MONEY MARKET FUND
<TABLE>
<CAPTION>
ANNUAL OPERATING EXAMPLE
EXPENSES Class Y
<S> <C> <C> <C>
Management Fees .35%
After 1 Year $ 5
12b-1 Fees --
After 3 Years $15
Other Expenses .12%
After 5 Years $26
After 10 Years $59
Total .47%
</TABLE>
3
<PAGE>
Evergreen Asset has agreed to reimburse EVERGREEN MONEY MARKET FUND and
EVERGREEN TAX EXEMPT MONEY MARKET FUND to the extent that the Fund's aggregate
annual operating expenses (including the investment adviser's fee, but excluding
interest, taxes, brokerage commissions, Rule 12b-1 distribution fees and
shareholder services fees, and extraordinary expenses) exceed 1% of the Fund's
average net assets.
The estimated operating expenses and examples do not reflect fee waivers
and expense reimbursements for the most recent fiscal period. Actual expenses,
net of fee waivers and expense reimbursements for the fiscal period ended August
31, 1995 for Class Y Shares were as follows:
<TABLE>
<S> <C>
EVERGREEN MONEY MARKET FUND .53%
EVERGREEN TAX EXEMPT MONEY MARKET FUND .50%
EVERGREEN TREASURY MONEY MARKET FUND .33%
</TABLE>
From time to time, each Fund's investment adviser may, at its discretion,
waive its fee or reimburse a Fund for certain of its expenses in order to reduce
a Fund's expense ratio. The investment adviser may cease these voluntary waivers
or reimbursements at any time.
The purpose of the foregoing table is to assist an investor in
understanding the various costs and expenses that an investor in Class Y Shares
of the Funds will bear directly or indirectly. The amounts set forth under
"Other Expenses" as well as the amounts set forth in the examples are estimated
amounts based on historical experience for the most recent fiscal period. Such
expenses have been restated to reflect current fee arrangements. THE EXAMPLES
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR ANNUAL
RETURN. ACTUAL EXPENSES AND ANNUAL RETURN MAY BE GREATER OR LESS THAN THOSE
SHOWN. For a more complete description of the various costs and expenses borne
by the Funds see "Management of the Funds".
4
<PAGE>
FINANCIAL HIGHLIGHTS
The tables on the following pages present, for each Fund, financial
highlights for a share outstanding throughout each period indicated. The
information in the tables for the five most recent fiscal years or the life of
the fund if shorter for EVERGREEN TREASURY MONEY MARKET FUND has been audited by
KPMG Peat Marwick LLP, the Fund's independent auditors; for EVERGREEN MONEY
MARKET FUND and EVERGREEN TAX EXEMPT MONEY MARKET FUND has been audited by Price
Waterhouse LLP, each Fund's independent auditors. A report of KPMG Peat Marwick
LLP or Price Waterhouse LLP, as the case may be, on the audited information with
respect to each Fund is incorporated by reference in the Fund's Statement of
Additional Information. The following information for each Fund should be read
in conjunction with the financial statements and related notes which are
incorporated by reference in the Fund's Statement of Additional Information.
Further information about a Fund's performance is contained in the Fund's
annual report to shareholders, which may be obtained without charge.
EVERGREEN MONEY MARKET FUND -- Y SHARES
<TABLE>
<CAPTION>
TEN MONTHS
YEAR ENDED ENDED NOVEMBER 2, 1987*
AUGUST 31, AUGUST 31, YEAR ENDED OCTOBER 31, THROUGH
1995 1994# 1993 1992 1991 1990 1989 OCTOBER 31, 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
period........................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income.............. .05 .03 .03 .04 .07 .08 .09 .07
Less distributions to shareholders
from net investment income....... (.05) (.03) (.03) (.04) (.07) (.08) (.09) (.07)
Net asset value, end of period..... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+...................... 5.4% 2.9% 3.2% 4.2% 6.7% 8.4% 9.4% 7.4%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(in millions).................... $283 $273 $299 $358 $438 $458 $408 $161
Ratios to average net assets:
Expenses **...................... .53% .32%++ .39% .36% .30% .35% .38% .43%++
Net investment income **......... 5.26% 3.46%++ 3.19% 4.18% 6.53% 8.08% 9.42% 7.26%++
</TABLE>
# On September 21, 1994, the Fund changed its fiscal year end from October 31
to August 31.
* Commencement of operations.
+ Total return is calculated for the periods indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
TEN MONTHS
YEAR ENDED ENDED YEAR ENDED NOVEMBER 2, 1987*
AUGUST 31, AUGUST 31, OCTOBER 31, THROUGH
1995 1994 # 1993 1992 1991 1990 1989 OCTOBER 31, 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses....................... .73% .71% .71% .72% .70% .69% .75% .93%
Net investment income.......... 5.06% 3.07% 2.87% 3.82% 6.13% 7.74% 9.05% 6.76%
</TABLE>
5
<PAGE>
EVERGREEN MONEY MARKET FUND -- CLASS A AND B SHARES
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
JANUARY 4, 1995* JANUARY 26, 1995*
THROUGH THROUGH
AUGUST 31, 1995 AUGUST 31, 1995
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period................................................... $ 1.00 $ 1.00
Income from investment operations:
Net investment income.................................................................. .03 .03
Less distributions to shareholders from net investment income.......................... (.03) (.03)
Net asset value, end of period......................................................... $ 1.00 $ 1.00
TOTAL RETURN+.......................................................................... 3.5% 2.8%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).............................................. $685,155 $7,927
Ratios to average net assets:
Expenses **.......................................................................... .81%++ 1.51%++
Net investment income **............................................................. 5.26%++ 4.54%++
</TABLE>
* Commencement of class operations.
+ Total return is calculated on net asset value. Contingent deferred sales
charge is not reflected. Total return is calculated for the periods indicated
and is not annualized.
++ Annualized.
* Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
JANUARY 4, 1995* JANUARY 26, 1995*
THROUGH THROUGH
AUGUST 31, 1995 AUGUST 31, 1995
<S> <C> <C>
Expenses................................................................... 1.02% 2.39%
Net investment income...................................................... 5.05% 3.66%
</TABLE>
6
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND -- CLASS Y SHARES
<TABLE>
<CAPTION>
NOVEMBER 2,
YEAR ENDED AUGUST 31, 1988* THROUGH
1995 1994 1993 1992 1991 1990 AUGUST 31, 1989
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income.......................... .04 .02 .03 .04 .05 .06 .05
Less distributions to shareholders from net
investment income.............................. (.04) (.02) (.03) (.04) (.05) (.06) (.05)
Net asset value, end of period................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+.................................... 3.6% 2.5% 2.6% 3.7% 5.5% 6.2% 5.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions).......... $421 $402 $401 $417 $510 $311 $109
Ratios to average net assets:
Expenses **.................................... .50 .34% .34% .32% .28% .31% .24%++
Net investment income **....................... 3.53 2.47% 2.58% 3.72% 5.23% 5.94% 6.77%++
</TABLE>
* Commencement of operations.
+ Total return is calculated on net asset value for the periods indicated and
is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
NOVEMBER 2, 1988*
YEAR ENDED AUGUST 31, THROUGH AUGUST 31,
1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C>
Expenses......................................... .63% .64% .63% .63% .66% .71% .79%
Net investment income............................ 3.40% 2.17% 2.29% 3.41% 4.85% 5.54% 6.22%
</TABLE>
7
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
JANUARY 5, 1995*
THROUGH
AUGUST 31, 1995
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period........................................................................ $ 1.00
Income from investment operations:
Net investment income....................................................................................... .02
Total from investment operations.......................................................................... .02
Distributions to shareholders from net investment income.................................................... (.02)
Net asset value, end of period.............................................................................. $ 1.00
TOTAL RETURN+............................................................................................... 2.2%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................................................... $554,924
Ratios to average net assets:
Expenses **............................................................................................... .78%++
Net investment income **.................................................................................. 3.28%++
</TABLE>
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the period
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
JANUARY 5, 1995*
THROUGH
AUGUST 31, 1995
<S> <C>
Expenses............................................................................ .90%
Net investment income............................................................... 3.16%
</TABLE>
8
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
<TABLE>
<CAPTION>
CLASS A SHARES CLASS Y SHARES
MARCH 6,
EIGHT MONTHS 1991* EIGHT MONTHS
ENDED THROUGH ENDED
AUGUST 31, YEAR ENDED DECEMBER 31, DECEMBER 31, AUGUST 31, YEAR ENDED DECEMBER 31,
1995 # 1994 1993 1992 1991 1995 # 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
period..................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment income........ .03 .04 .03 .03 .04 .04 .04 .03 .04
Less distributions to
shareholders from net
investment income.......... (.03) (.04) (.03) (.03) (.04) (.04) (.04) (.03) (.04)
Net asset value,
end of period.............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+................ 3.6% 3.8% 2.7% 3.4% 4.5% 3.8% 4.1% 3.0% 3.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
in millions................ $1,178 $755 $261 $209 $100 $277 $163 $366 $286
Ratios to average net assets:
Expenses **................ .63%++ .50% .48% .48% .47%++ .33%++ .20% .18% .17%
Net investment income **... 5.30%++ 3.91% 2.70% 3.22% 4.95%++ 5.60%++ 3.78% 3.00% 3.61%
<CAPTION>
MARCH 6,
1991*
THROUGH
DECEMBER 31,
1991
<S> <C>
PER SHARE DATA:
Net asset value, beginning of
period..................... $1.00
Income from investment
operations:
Net investment income........ .05
Less distributions to
shareholders from net
investment income.......... (.05)
Net asset value,
end of period.............. $1.00
TOTAL RETURN+................ 4.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
in millions................ $265
Ratios to average net assets:
Expenses **................ .20%++
Net investment income **... 5.53%++
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all
expenses that were reimbursed or waived by the investment adviser, the
annualized ratios of expenses and net investment income to average net
assets would have been the following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS Y SHARES
EIGHT MONTHS EIGHT MONTHS
ENDED YEAR ENDED MARCH 6, 1991* ENDED YEAR ENDED
AUGUST 31, DECEMBER 31, THROUGH DECEMBER 31, AUGUST 31, DECEMBER 31,
1995 # 1994 1993 1992 1991 1995 # 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses................ .79% .78% .82% .82% 1.08% .49% .48% .52% .52%
Net investment income... 5.14% 3.63% 2.36% 2.88% 4.34% 5.44% 3.50% 2.66% 3.26%
<CAPTION>
MARCH 6, 1991*
THROUGH DECEMBER 31,
1991
<S> <C>
Expenses................ .52%
Net investment income... 5.21%
</TABLE>
9
<PAGE>
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVES AND POLICIES
In addition to the investment policies detailed below, each Fund may
employ certain additional investment strategies, which are discussed in
"Investment Practices and Restrictions".
EVERGREEN MONEY MARKET FUND
The investment objective of EVERGREEN MONEY MARKET FUND is to achieve as
high a level of current income as is consistent with preserving capital and
providing liquidity. This objective is a fundamental policy and may not be
changed without shareholder approval. The Fund invests in high quality money
market instruments, which are determined to be of eligible quality under
Securities and Exchange Commission ("SEC") rules and to present minimal credit
risk. Under SEC rules, eligible securities include First Tier Securities (i.e.,
securities rated in the highest short-term rating category) and Second Tier
Securities (i.e., securities which are otherwise eligible but not in the First
Tier). The rules prohibit the Fund from holding more than 5% of its value in
Second Tier Securities. The Fund's permitted investments include:
1. Marketable obligations of, or guaranteed by, the United States
Government, its agencies or instrumentalities, including issues of the United
States Treasury, such as bills, certificates of indebtedness, notes and bonds,
and issues of agencies and instrumentalities established under the authority of
an act of Congress. Some of these securities are supported by the full faith and
credit of the United States Government, others are supported by the right of the
issuer to borrow from the Treasury, and still others are supported only by the
credit of the agency or instrumentality. Agencies or instrumentalities whose
securities are supported by the full faith and credit of the United States
include, but are not limited to, the Federal Housing Administration, Farmers
Home Administration, Export-Import Bank of the United States, Small Business
Administration and Government National Mortgage Association. Examples of
agencies or instrumentalities whose securities are supported by the right of the
issuer to borrow from the Treasury include, but are not limited to, the Federal
Home Loan Bank, Federal Intermediate Credit Banks, Federal National Mortgage
Association and Tennessee Valley Authority. Agencies or instrumentalities whose
securities are supported only by the credit of the agency or instrumentality
include the Interamerican Development Bank and the International Bank for
Reconstruction and Development. These obligations are supported by appropriated
but unpaid commitments of its member countries. There are no assurances that the
commitments will be undertaken in the future.
2. Commercial paper, including variable amount master demand notes,
that is rated in one of the two highest short-term rating categories by any two
of Standard & Poor's Ratings Group ("S&P") or Moody's Investors Service, Inc.
("Moody's") or any other nationally recognized statistical rating organization
("SRO") (or by a single rating agency if only one of these agencies has assigned
a rating). The Fund will not invest more than 10% of its total assets, at the
time of the investment in question, in variable amount master demand notes. For
a description of these ratings see the Statement of Additional Information.
3. Corporate debt securities and bank obligations that are rated in
one of the two highest short-term rating categories by any two of S&P, Moody's
and any other SRO (or by a single rating agency if only one of these agencies
has assigned a rating).
4. Unrated corporate debt securities, commercial paper and bank
obligations that are issued by an issuer that has outstanding a class of
short-term debt instruments (i.e., instruments having a maturity of 366 days or
less) that (A) is comparable in priority and security to the unrated securities
and (B) meets the rating requirements of paragraphs 2 or 3 above.
5. Unrated corporate debt securities, commercial paper and bank
obligations issued by domestic and foreign companies which have an outstanding
long-term debt issue rated in the top two rating categories by a SRO and
determined by the Trustees to be of comparable quality.
6. Unrated corporate debt securities, commercial paper and bank
obligations otherwise determined by the Trustees to be of comparable quality.
7. Repurchase agreements with respect to the securities described
in paragraphs 1 through 6 above.
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The Fund may invest up to 30% of its total assets in bank certificates of
deposit and bankers' acceptances payable in U.S. dollars and issued by foreign
banks (including U.S. branches of foreign banks) or by foreign branches of U.S.
banks. These investments involve risks that are different from investments in
domestic securities. These risks may include future unfavorable political and
economic developments, possible withholding taxes, seizure of foreign deposits,
currency controls, interest limitations or other governmental restrictions which
might affect the payment of principal or interest on the securities in the
Fund's portfolio. Additionally, there may be less publicly available information
about foreign issuers.
The Fund may invest in commercial paper and other short-term corporate
obligations which meet the rating criteria specified in paragraphs 3 and 4 above
which are issued in private placements pursuant to Section 4(2) of the
Securities Act of 1933 (the "Act"). Such securities are not registered for
purchase and sale by the public under the Act. The Fund has been informed that
the staff of the SEC does not consider such securities to be readily marketable.
The Fund will not invest more than 10% of its total assets in securities which
are not readily marketable (including private placement securities) and in
repurchase agreements maturing in more than seven days.
EVERGREEN TAX EXEMPT MONEY MARKET FUND
The investment objective of EVERGREEN TAX EXEMPT MONEY MARKET FUND is to
achieve as high a level of current income exempt from Federal income tax, as is
consistent with preserving capital and providing liquidity. This objective is a
fundamental policy and may not be changed without shareholder approval. The Fund
will seek to achieve its objective by investing substantially all of its assets
in a diversified portfolio of short-term (i.e., with remaining maturities not
exceeding 397 days) debt obligations issued by states, territories and
possessions of the United States and by the District of Columbia, and their
political subdivisions and duly constituted authorities, the interest from which
is exempt from Federal income tax. Such securities are generally known as
Municipal Securities. (See "Municipal Securities" below.)
The Fund will invest in Municipal Securities only if they are determined
to be of eligible quality under SEC rules and to present minimum credit risk.
Municipal Securities in which the Fund may invest include: (i) municipal
securities that are rated in one of the top two short-term rating categories by
any two of S&P, Moody's or any other nationally recognized SRO (or by a single
rating agency if only one of these agencies has assigned a rating); (ii)
municipal securities that are issued by an issuer that has outstanding a class
of short-term debt instruments (i.e., having a maturity of 366 days or less)
that (A) is comparable in priority and security to such instruments and (B)
meets the rating requirements above; and (iii) bonds with a remaining maturity
of 397 days or less that are rated no lower than one of the top two long-term
rating categories by any SRO and determined by the Trustees to be of comparable
quality. For a description of such ratings see the Statement of Additional
Information. The Fund may also purchase Municipal Securities which are unrated
at the time of purchase up to a maximum of 20% of its total assets, if such
securities are determined by the Fund's Trustees to be of comparable quality.
Certain Municipal Securities (primarily variable rate demand notes) may be
entitled to the benefit of standby letters of credit or similar commitments
issued by banks or other financial institutions and, in such instances, the
Trustees will take into account the obligation of the bank in assessing the
quality of such security. The ability of the Fund to meet its investment
objective is necessarily subject to the ability of municipal issuers to meet
their payment obligations.
Interest income on certain types of bonds issued after August 7, 1986 to
finance nongovernmental activities is an item of "tax-preference" subject to the
Federal alternative minimum tax for individuals and corporations. To the extent
the Fund invests in these "private activity" bonds (some of which were formerly
referred to as "industrial development" bonds), individual and corporate
shareholders, depending on their status, may be subject to the alternative
minimum tax on the part of the Fund's distributions derived from the bonds. As a
matter of fundamental policy, which may not be changed without shareholder
approval, the Fund will invest at least 80% of its net assets in Municipal
Securities, the interest from which is not subject to the Federal alternative
minimum tax.
Municipal Securities. As noted above, the Fund will invest substantially all of
its assets in Municipal Securities. These include municipal bonds, short-term
municipal notes and tax exempt commercial paper. "Municipal bonds"are debt
obligations issued to obtain funds for various public purposes that are exempt
from Federal income tax in the opinion of issuer's counsel. The two principal
classifications of municipal bonds are "general obligation" and "revenue" bonds.
General obligation bonds are secured by the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest. Revenue bonds
are payable only from the revenues derived from a particular facility or class
of facilities or, in some cases, from the proceeds of a special excise tax or
other specific source such as from the user of the facility being financed. The
term "municipal bonds" also includes "moral
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<PAGE>
obligation" issues which are normally issued by special purpose authorities.
Industrial development bonds ("IDBs") and private activity bonds ("PABs") are in
most cases revenue bonds and are not payable from the unrestricted revenues of
the issuer. The credit quality of IDBs and PABs is usually directly related to
the credit standing of the corporate user of the facilities being financed.
Participation interests are interests in municipal bonds, including IDBs and
PABs, and floating and variable rate obligations that are owned by banks. These
interests carry a demand feature permitting the holder to tender them back to
the bank, which demand feature is backed by an irrevocable letter of credit or
guarantee of the bank. A put bond is a municipal bond which gives the holder the
unconditional right to sell the bond back to the issuer at a specified price and
exercise date, which is typically well in advance of the bond's maturity date.
"Short-term municipal notes" and "tax exempt commercial paper" include tax
anticipation notes, bond anticipation notes, revenue anticipation notes and
other forms of short-term loans. Such notes are issued with a short-term
maturity in anticipation of the receipt of tax funds, the proceeds of bond
placements and other revenues.
Floating Rate and Variable Rate Obligations. Municipal Securities also include
certain variable rate and floating rate municipal obligations with or without
demand features. These variable rate securities do not have fixed interest
rates; rather, those rates fluctuate based upon changes in specified market
rates, such as the prime rate, or are adjusted at predesignated periodic
intervals. Such securities must comply with conditions established by the SEC
under which they may be considered to have remaining maturities of 397 days or
less. Certain of these obligations may carry a demand feature that gives the
Fund the right to demand prepayment of the principal amount of the security
prior to its maturity date. The demand obligation may or may not be backed by
letters of credit or other guarantees of banks or other financial institutions.
Such guarantees may enhance the quality of the security. As a matter of
fundamental policy, which may not be changed without shareholder approval, the
Fund will limit the value of its investments in any floating or variable rate
securities which are not readily marketable and in all other not readily
marketable securities to 10% or less of its total assets.
Stand-by Commitments. The Fund may also acquire "stand-by commitments" with
respect to Municipal Securities held in its portfolio. Under a stand-by
commitment, a dealer agrees to purchase, at the Fund's option, specified
Municipal Securities at a specified price. The Fund expects that stand-by
commitments generally will be available without the payment of direct or
indirect consideration. However, if necessary and advisable, the Fund may pay
for stand-by commitments either separately in cash or by paying a higher price
for portfolio securities which are acquired subject to such a commitment (thus
reducing the yield to maturity otherwise available for the same securities). The
total amount paid in either manner for outstanding stand-by commitments held in
the Fund's portfolio will not exceed 10% of the value of the Fund's total assets
calculated immediately after each stand-by commitment is acquired. The Fund will
enter into stand-by commitments only with banks and broker-dealers that, in the
judgment of the Fund's investment adviser, present minimal credit risks.
Taxable Investments. The Fund may temporarily invest up to 20% of the Fund's net
assets in taxable securities under any one or more of the following
circumstances: (a) pending investment of proceeds of sale of Fund shares or of
portfolio securities, (b) pending settlement of purchases of portfolio
securities, and (c) to maintain liquidity for the purpose of meeting anticipated
redemptions. In addition, the Fund may temporarily invest more than 20% of its
total assets in taxable securities for defensive purposes. The Fund may invest
for defensive purposes during periods when the Fund's assets available for
investment exceed the available Municipal Securities that meet the Fund's
quality and other investment criteria. Taxable securities in which the Fund may
invest on a short-term basis include obligations of the United States
Government, its agencies or instrumentalities, including repurchase agreements
with banks or securities dealers involving such securities; time deposits
maturing in not more than seven days; other debt securities rated within the two
highest ratings assigned by an SRO; commercial paper rated in the highest grade
by Moody's or S&P; and certificates of deposit issued by United States branches
of United States banks with assets of $1 billion or more.
EVERGREEN TREASURY MONEY MARKET FUND
The investment objective of EVERGREEN TREASURY MONEY MARKET 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.
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EVERGREEN TREASURY MONEY MARKET 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.
The short-term United States Treasury obligations in which the 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 Fund within 397 days from the date of acquisition. The Fund may also
retain Fund assets in cash.
INVESTMENT PRACTICES AND RESTRICTIONS
General. The Funds invest only in securities that have remaining maturities of
397 days (thirteen months) or less at the date of purchase. For this purpose,
floating rate or variable rate obligations (described under EVERGREEN TAX EXEMPT
MONEY MARKET FUND, above), which are payable on demand, but which may otherwise
have a stated maturity in excess of this period, will be deemed to have
remaining maturities of less than 397 days pursuant to conditions established by
the SEC. The Funds maintain a dollar-weighted average portfolio maturity of
ninety 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 market value of the obligations in a Fund's portfolio
can be expected to vary inversely to changes in prevailing interest rates. If a
portfolio security is no longer of eligible quality, a Fund shall dispose of
such security in an orderly fashion as soon as reasonably practicable, unless
the Trustees determine, in light of market conditions or other factors, that
disposal of the instrument would not be in the best interests of the Fund and
its shareholders.
The ability of each Fund to meet its investment objective is necessarily
subject to the ability of the issuers of securities in which the Funds invest to
meet their payment obligations. In addition, the portfolio of each Fund will be
affected by general changes in interest rates which will result in increases or
decreases in the value of the obligations held by the Fund. Investors should
recognize that, in periods of declining interest rates, the yield of a Fund will
tend to be somewhat higher than prevailing market rates, and in periods of
rising interest rates, the yield of a Fund will tend to be somewhat lower. Also,
when interest rates are falling, the inflow of net new money to a Fund from the
continuous sale of its shares will likely be invested in portfolio instruments
producing lower yields than the balance of the Fund's portfolio, thereby
reducing the current yield of the Fund. In periods of rising interest rates, the
opposite can be expected to occur.
Repurchase Agreements. The Funds may enter into repurchase agreements. A
repurchase agreement is an arrangement pursuant to which a buyer purchases a
security and simultaneously agrees to resell it to the vendor at a price that
results in an agreed-upon market rate of return which is effective for the
period of time (which is normally one to seven days, but may be longer) the
buyer's money is invested in the security. The arrangement results in a fixed
rate of return that is not subject to market fluctuations during a Fund's
holding period. Repurchase agreements may be entered into with member banks of
the Federal Reserve System, including, the Fund's custodian or "primary dealers"
(as designated by the Federal Reserve Bank of New York) in United States
Government securities. Each Fund will require continued maintenance of
collateral with its Custodian in an amount equal to, or in excess of, the
repurchase price (including accrued interest). In the event a vendor defaults on
its repurchase obligation, a Fund might suffer a loss to the extent that the
proceeds from the sale of the collateral were less than the repurchase price. If
the vendor becomes the subject of bankruptcy proceedings, a Fund might be
delayed in selling the collateral. Each Fund's investment adviser will review
and continually monitor the creditworthiness of each institution with which the
Fund enters into a repurchase agreement to evaluate these risks. A Fund may not
enter into repurchase agreements if, as a result, more than 10% of a Fund's
total assets would be invested in repurchase agreements maturing in more than
seven days and in other securities that are not readily marketable.
Securities Lending. In order to generate income and to offset expenses,
EVERGREEN TAX EXEMPT MONEY MARKET FUND and EVERGREEN MONEY MARKET FUND may lend
portfolio securities to brokers, dealers and other financial organizations. Each
Fund's investment adviser will monitor the creditworthiness of such borrowers.
Loans of securities by EVERGREEN TAX EXEMPT MONEY MARKET FUND or EVERGREEN MONEY
MARKET FUND, if and when made, may not exceed 30% of a Fund's total assets and
will be collateralized by cash, letters of credit or United States Government
securities that are maintained at all times in an amount equal to at least 100%
of the current market value of the loaned securities, including accrued
interest. While such securities are on loan, the borrower will pay a Fund any
income accruing thereon, and the Fund may invest the cash collateral in
portfolio securities,
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<PAGE>
thereby increasing its return. A Fund will have the right to call any such loan
and obtain the securities loaned at any time on five days' notice. Any gain or
loss in the market price of the loaned securities which occurs during the term
of the loan would affect a Fund and its investors. A Fund may pay reasonable
fees in connection with such loans.
When-Issued Securities. EVERGREEN TAX EXEMPT MONEY MARKET FUND and EVERGREEN
TREASURY MONEY MARKET FUND may purchase securities on a "when-issued" basis
(i.e., for delivery beyond the normal settlement date at a stated price and
yield). A Fund generally would not pay for such securities or start earning
interest on them until they are received. However, when a Fund purchases
securities on a when-issued basis, it assumes the risks of ownership at the time
of purchase, not at the time of receipt. Failure of the issuer to deliver a
security purchased by a Fund on a when-issued basis may result in the Fund
incurring a loss or missing an opportunity to make an alternative investment.
EVERGREEN TAX EXEMPT MONEY MARKET FUND does not expect that commitments to
purchase when-issued securities will normally exceed 25% of its total assets and
EVERGREEN TREASURY MONEY MARKET FUND does not expect that such commitments will
exceed 20% of its total assets. The Funds do not intend to purchase when-issued
securities for speculative purposes but only in furtherance of their investment
objective.
Illiquid Securities. The Funds may invest up to 10% of their net assets in
illiquid securities and other securities which are not readily marketable,
including repurchase agreements with maturities longer than seven days. In the
case of EVERGREEN TAX EXEMPT MONEY MARKET FUND and EVERGREEN MONEY MARKET FUND,
securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933, which have been determined to be liquid, will not be considered by each
Fund's investment adviser to be illiquid or not readily marketable and,
therefore, are not subject to the aforementioned 10% limit. The inability of a
Fund to dispose of illiquid or not readily marketable investments readily or at
a reasonable price could impair the Fund's ability to raise cash for redemptions
or other purposes. The liquidity of securities purchased by a Fund which are
eligible for resale pursuant to Rule 144A will be monitored by each Fund's
investment adviser on an ongoing basis, subject to the oversight of the
Trustees. In the event that such a security is deemed to be no longer liquid, a
Fund's holdings will be reviewed to determine what action, if any, is required
to ensure that the retention of such security does not result in a Fund having
more than 10% of its assets invested in illiquid or not readily marketable
securities.
Other Investment Policies. The Funds may borrow money for temporary or emergency
purposes in amounts not in excess of 10% of the value of a Fund's total assets
in the case of EVERGREEN TAX EXEMPT MONEY MARKET FUND and EVERGREEN MONEY MARKET
FUND and one-third of the value of EVERGREEN TREASURY MONEY MARKET FUND'S total
assets, including the amount borrowed. As another means of borrowing both
EVERGREEN TAX EXEMPT MONEY MARKET FUND and EVERGREEN MONEY MARKET FUND may agree
to sell portfolio securities to financial institutions such as banks and
broker-dealers and to repurchase them at a mutually agreed upon date and price
(a "reverse repurchase agreement") at the time of such borrowing in amounts up
to 5% of the value of their total assets. A Fund will not purchase any
securities whenever any borrowings (including reverse repurchase agreements) are
outstanding. If either EVERGREEN TAX EXEMPT MONEY MARKET FUND or EVERGREEN MONEY
MARKET FUND enter into a reverse repurchase agreement, they will place in a
segregated custodial account cash, United States Government securities or liquid
high grade debt obligations having a value equal to the repurchase price
(including accrued interest) and will subsequently monitor the account to ensure
that such equivalent value is maintained. Reverse repurchase agreements involve
the risk that the market value of the securities sold by a Fund may decline
below the repurchase price of those securities.
Other Investment Restrictions. Each Fund has adopted additional investment
restrictions that are set forth in the Statement of Additional Information.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISERS
The management of each Fund is supervised by the Trustees of the Trust
under which each Fund has been established ("Trustees"). Evergreen Asset
Management Corp. ("Evergreen Asset") has been retained to serve as investment
adviser to EVERGREEN MONEY MARKET FUND and EVERGREEN TAX EXEMPT MONEY MARKET
FUND. Evergreen Asset succeeded on June 30, 1994 to the advisory business of a
corporation with the same name, but under different ownership, which was
organized in 1971. Evergreen Asset, with its predecessors, has served as
investment adviser to the Evergreen Group of Mutual Funds since 1971. Evergreen
Asset is a wholly-owned subsidiary of First Union National Bank of North
Carolina ("FUNB"). The address of Evergreen Asset is 2500 Westchester Avenue,
Purchase, New York 10577. FUNB is a subsidiary of First Union Corporation
("First
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Union"), one of the ten largest bank holding companies in the United States.
Stephen A. Lieber and Nola Maddox Falcone serve as the chief investment officers
of Evergreen Asset and, along with Theodore J. Israel, Jr., were the owners of
Evergreen Asset's predecessor and the former general partners of Lieber &
Company, which, as described below, provides certain subadvisory services to
Evergreen Asset in connection with its duties as investment adviser to the
aforementioned Funds. The Capital Management Group of FUNB ("CMG") serves as
investment adviser to EVERGREEN TREASURY MONEY MARKET FUND.
First Union is headquartered in Charlotte, North Carolina, and had $83
billion in consolidated assets as of September 30, 1995. First Union and its
subsidiaries provide a broad range of financial services to individuals and
businesses through offices in 36 states. The Capital Management Group of FUNB
manages or otherwise oversees the investment of over $36 billion in assets
belonging to a wide range of clients, including all the series of Evergreen
Investment Trust (formerly known as First Union 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.
Evergreen Asset manages investments, provides various administrative
services and supervises the daily business affairs of EVERGREEN MONEY MARKET
FUND and EVERGREEN TAX EXEMPT MONEY MARKET FUND, subject to the authority of the
Trustees. Evergreen Asset is entitled to receive from each Fund an annual fee
equal to .50 of 1% of average daily net assets of each Fund on the first $1
billion in assets and .45 of 1% of average daily net assets in excess of $1
billion. However, Evergreen Asset has in the past, and may in the future,
voluntarily waived all or a portion of its fees for the purpose of reducing each
Fund's expense ratio. For the fiscal year ended August 31, 1995 Evergreen Asset
waived a portion of the advisory fee payable by the EVERGREEN MONEY MARKET FUND
and EVERGREEN TAX EXEMPT MONEY MARKET FUND as set forth in the section entitled
"Financial Highlights". The total expenses as a percentage of average daily net
assets on an annualized basis for EVERGREEN MONEY MARKET FUND and EVERGREEN TAX
EXEMPT MONEY MARKET FUND for the fiscal year ended August 31, 1995 are also set
forth in the section entitled "Financial Highlights". CMG manages investments
and supervises the daily business affairs of Evergreen Treasury Money Market
Fund and, as compensation therefor, is entitled to receive an annual fee equal
to .35 of 1% of average daily net assets of EVERGREEN TREASURY MONEY MARKET
FUND. For the fiscal year ended August 31, 1995 CMG waived a portion of the
advisory fee payable by the EVERGREEN TREASURY MONEY MARKET FUND as set forth in
the section entitled "Financial Highlights". The total annualized operating
expenses of EVERGREEN TREASURY MONEY MARKET FUND for its fiscal year ended
August 31, 1995 are also set forth in the section entitled "Financial
Highlights". Evergreen Asset serves as administrator to EVERGREEN TREASURY MONEY
MARKET FUND and is entitled to receive a fee based 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: .050%
of the first $7 billion; .035% on the next $3 billion; .030% on the next $5
billion; .020% on the next $10 billion; .015% on the next $5 billion; and .010%
on assets in excess of $30 billion. Furman Selz Incorporated, an affiliate of
Evergreen Funds Distributor, Inc., distributor for the Evergreen group of mutual
funds, serves as sub-administrator to EVERGREEN TREASURY MONEY MARKET 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: .0100%
of the first $7 billion; .0075% on the next $3 billion; .0050% on the next $15
billion; and .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 were approximately $10.1 billion as of September
30,1995.
SUB-ADVISER
Evergreen Asset has entered into sub-advisory agreements with Lieber &
Company which provide that Lieber & Company's research department and staff will
furnish Evergreen Asset with information, investment recommendations, advice and
assistance, and will be generally available for consultation on the portfolios
of EVERGREEN MONEY MARKET FUND and EVERGREEN TAX EXEMPT MONEY MARKET FUND.
Lieber & Company will be reimbursed by Evergreen Asset in connection with the
rendering of services on the basis of the direct and indirect costs of
performing such services. There is no additional charge to EVERGREEN MONEY
MARKET FUND and EVERGREEN TAX EXEMPT MONEY MARKET FUND for the services provided
by Lieber & Company. The address of Lieber & Company is 2500 Westchester Avenue,
Purchase, New York 10577. Lieber & Company is an indirect, wholly-owned,
subsidiary of First Union.
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PURCHASE AND REDEMPTION OF SHARES
HOW TO BUY SHARES
Eligible investors may purchase Fund shares at net asset value by mail or
wire as described below. The Funds impose no sales charges on Class Y shares.
Class Y shares are the only class of shares offered by this Prospectus and are
only available to (i) persons who at or prior to December 30, 1994, owned shares
in a mutual fund advised by Evergreen Asset, (ii) certain institutional
investors and (iii) investment advisory clients of CMG, Evergreen Asset or their
affiliates. The minimum initial investment is $1,000, which may be waived in
certain situations. There is no minimum for subsequent investments. Investors
may make subsequent investments by establishing a Systematic Investment Plan or
a Telephone Investment Plan.
Purchases by Mail or Wire. Each investor must complete the Share Purchase
Application and mail it, together with a check made payable to the Fund whose
shares are being purchased, to State Street Bank and Trust Company ("State
Street") at P.O. Box 9021, Boston, Massachusetts 02205-9827. Checks not drawn on
U.S. banks will be subject to foreign collection which will delay an investor's
investment date and will be subject to processing fees.
When making subsequent investments, an investor should either enclose the
return remittance portion of the statement, or indicate on the face of the
check, the name of the Fund in which an investment is to be made, the exact
title of the account, the address, and the Fund account number. Purchase
requests should not be sent to a Fund in New York. If they are, the Fund must
forward them to State Street, and the request will not be effective until State
Street receives them.
Initial investments may also be made by wire by (i) calling State Street
at (800) 423-2615 for an account number and (ii) instructing your bank, which
may charge a fee, to wire federal funds to State Street, as follows: State
Street Bank and Trust Company, ABA No.0110-0002-8, Attn: Custodian and
Shareholder Services. The wire must include references to the Fund in which an
investment is being made, account registration, and the account number. A
completed Application must also be sent to State Street indicating that the
shares have been purchased by wire, giving the date the wire was sent and
referencing the account number. Subsequent wire investments may be made by
existing shareholders by following the instructions outlined above. It is not
necessary, however, for existing shareholders to call for another account
number.
How the Funds Value Their Shares. The net asset value of each Fund's shares for
purposes of both purchases and redemptions is determined twice daily, at 12 noon
(Eastern time) and promptly after the regular close of the New York Stock
Exchange (currently 4:00 p.m. Eastern time) each business day (i.e., any weekday
exclusive of days on which the New York Stock Exchange (the "Exchange") or State
Street is closed). The Exchange is closed on New Year's Day, Presidents Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The net asset value per share is calculated by taking the sum of
the values of a Fund's investments and any cash and other assets, subtracting
liabilities, and dividing by the total number of shares outstanding. All
expenses, including the fees payable to each Fund's Investment adviser, are
accrued daily. The securities in a Fund's portfolio are valued on an amortized
cost basis. Under this method of valuation, a security is initially valued at
its acquisition cost, and thereafter, a constant straight-line amortization of
any discount or premium is assumed each day regardless of the impact of
fluctuating interest rates on the market value of the security. The market value
of the obligations in a Fund's portfolio can be expected to vary inversely to
changes in prevailing interest rates. As a result, the market value of the
obligations in a Fund's portfolio may vary from the value determined using the
amortized cost method. Securities which are not rated are normally valued on the
basis of valuations provided by a pricing service when such prices are believed
to reflect the fair value of such securities. Other assets and securities for
which no quotations are readily available are valued at the fair value as
determined in good faith by the Trustees.
Each Fund attempts to maintain its net asset value at $1.00 per share.
Under most conditions, management believes this will be possible, although there
can be no assurance that this will be achieved. Calculations are periodically
made to compare the value of a Fund's portfolio valued at amortized cost with
market values. If a deviation of 1/2 of 1% or more were to occur between the net
asset value calculated by reference to market values and a Fund's $1.00 per
share net asset value, or if there were other deviations which the Trustees
believed would result in a material dilution to shareholders or purchasers, the
Trustees would promptly consider what action, if any, should be initiated.
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Additional Purchase Information. As a condition of this offering, if a purchase
is canceled due to nonpayment or because an investor's check does not clear, the
investor will be responsible for any loss a Fund or the Fund's investment
adviser incurs. If such investor is an existing shareholder, a Fund may redeem
shares from his or her account to reimburse a Fund or the Fund's investment
adviser for any loss. In addition, such investors may be prohibited or
restricted from making further purchases in any of the Evergreen mutual funds.
Shares of the Funds are sold at the net asset value per share next
determined after a shareholder's investment has been converted to federal funds.
Investments by federal funds wire will be effective upon receipt. Qualified
institutions may telephone orders for the purchase of Fund shares. Shares
purchased by institutions via telephone will receive the dividend declared on
that day if the telephone order is placed by 12 noon (Eastern time), and federal
funds are received the same day by 4:00 p.m. (Eastern time). Institutions should
telephone the Fund at the number on the front page of this Prospectus for
additional information on same day purchases by telephone. Investment checks
received at State Street will be invested on the date of receipt. Shareholders
will begin earning dividends the following business day.
The Share Purchase Application may not be used to invest in any of the
prototype retirement plans for which the EVERGREEN MONEY MARKET FUND is an
available investment. For information about the requirements to make such
investments, including copies of the necessary application forms, please call
the telephone number set forth on the cover page of this Prospectus. A Fund
cannot accept investments specifying a certain price or date and reserves the
right to reject any specific purchase order, including orders in connection with
exchanges from the other Evergreen Funds. Although not currently anticipated,
each Fund reserves the right to suspend the offer of shares for a period of
time.
HOW TO REDEEM SHARES
You may "redeem", i.e., sell your shares in a Fund to the Fund on any day
the Exchange is open, either directly or through your financial intermediary.
The price you will receive is the net asset value next calculated after the Fund
receives your request in proper form. Proceeds generally will be sent to you
within seven days. However, for shares recently purchased by check, a Fund will
not send proceeds until it is reasonably satisfied that the check has been
collected (which may take up to ten days). Once a redemption request has been
telephoned or mailed, it is irrevocable and may not be modified or cancelled.
Redeeming Shares Directly by Mail or Telephone. Send a signed letter of
instruction or stock power form to State Street which is the registrar, transfer
agent and dividend-disbursing agent for each Fund. Stock power forms are
available from your financial intermediary, State Street, and many commercial
banks. Additional documentation is required for the sale of shares by
corporations, financial intermediaries, fiduciaries and surviving joint owners.
Signature guarantees are required for all redemption requests for shares with a
value of more than $10,000 or where the redemption proceeds are to be mailed to
an address other than that shown in the account registration. A signature
guarantee must be provided by a bank or trust company (not a Notary Public), a
member firm of a domestic stock exchange or by other financial institutions
whose guarantees are acceptable to State Street.
Shareholders may withdraw amounts of $1,000 or more from their accounts
by calling State Street at (800) 423-2615 between the hours of 8:00 a.m. to 5:30
p.m. (Eastern time) each business day (i.e., any weekday exclusive of days on
which the Exchange or State Street's offices are closed). The Exchange is closed
on New Year's Day, Presidents Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. Redemption requests made after
4:00 p.m. (Eastern time) will be processed using the net asset value determined
on the next business day. Such redemption requests must include the
shareholder's account name, as registered with a Fund, and the account number.
During periods of drastic economic or market changes, shareholders may
experience difficulty in effecting telephone redemptions. Shareholders who are
unable to reach a Fund or State Street by telephone should follow the procedures
outlined above for redemption by mail.
The telephone redemption service is not made available to shareholders
automatically. Shareholders wishing to use the telephone redemption service must
indicate this on the Share Purchase Application and choose how the redemption
proceeds are to be paid. Redemption proceeds will either (i) be mailed by check
to the shareholder at the address in which the account is registered or (ii) be
wired to an account with the same registration as the shareholder's account in a
Fund at a designated commercial bank. State Street currently deducts a $5.00
wire charge from all redemption proceeds wired. This charge is subject to change
without notice. Redemption proceeds will be wired on the same day if the request
is made prior to 12 noon (Eastern time). Such shares, however, will not earn
dividends for that day. Redemption requests received after 12 noon will earn
dividends for that day, and the proceeds will be wired on the following business
day. A shareholder who decides
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later to use this service, or to change instructions already given, should fill
out a Shareholder Services Form and send it to State Street Bank and Trust
Company, P.O. Box 9021, Boston, Massachusetts 02205-9827, with such
shareholder's signature guaranteed by a bank or trust company (not a Notary
Public), a member firm of a domestic stock exchange or by other financial
institutions whose guarantees are acceptable to State Street. Shareholders
should allow approximately ten days for such form to be processed. The Funds
will employ reasonable procedures to confirm that instructions communicated by
telephone are genuine. These procedures include requiring some form of personal
identification prior to acting upon instructions and tape recording of telephone
instructions. If a Fund fails to follow such procedures, it may be liable for
any losses due to unauthorized or fraudulent instructions. The Funds will not be
liable for following telephone instructions reasonably believed to be genuine.
The Funds reserve the right to refuse a telephone redemption if it is believed
advisable to do so. Financial intermediaries may charge a fee for handling
telephonic requests. Procedures for redeeming Fund shares by telephone may be
modified or terminated without notice at any time.
Redemptions by Check. Upon request, each Fund will provide holders of Class Y
shares, without charge, with checks drawn on the Fund that will clear through
State Street. Shareholders will be subject to State Street's rules and
regulations governing such checking accounts. Checks will be sent usually within
ten business days following the date the account is established. Checks may be
made payable to the order of any payee in an amount of $250 or more. The payee
of the check may cash or deposit it like a check drawn on a bank. (Investors
should be aware that, as in the case with regular bank checks, certain banks may
not provide cash at the time of deposit, but will wait until they have received
payment from State Street.) When such a check is presented to State Street for
payment, State Street, as the shareholder's agent, causes the Fund to redeem a
sufficient number of full and fractional shares in the shareholder's account to
cover the amount of the check. Checks will be returned by State Street if there
are insufficient or uncollectable shares to meet the withdrawal amount. The
check writing procedure for withdrawal enables shareholders to continue earning
income on the shares to be redeemed up to but not including the date the
redemption check is presented to State Street for payment.
Shareholders wishing to use this method of redemption, should fill out
the appropriate part of the Share Purchase Application (including the Signature
Card) and mail the completed form to State Street Bank and Trust Company, P.O.
Box 9021, Boston, Massachusetts 02205-9827. Shareholders requesting this service
after an account has been opened must contact State Street since additional
documentation will be required. Currently, there is no charge either for checks
or for the clearance of any checks. This service may be terminated or altered at
any time.
General. Under unusual circumstances, a Fund may suspend redemptions or postpone
payment for up to seven days or longer, as permitted by Federal securities law.
The Funds reserve the right to close an account that through redemption has
remained below $1,000 for thirty days. Shareholders will receive sixty days'
written notice to increase the account value before the account is closed. The
Funds have elected to be governed by Rule 18f-1 under the Investment Company Act
of 1940 pursuant to which each Fund is obligated to redeem shares solely in
cash, up to the lesser of $250,000 or 1% of a Fund's total net assets during any
ninety day period for any one shareholder. See the Statement of Additional
Information for further details.
EXCHANGE PRIVILEGE
How To Exchange Shares. You may exchange some or all of your shares for shares
of the same Class of the other Evergreen mutual funds by telephone or mail as
described below. An exchange which represents an initial investment in another
Evergreen mutual fund must amount to at least $1,000. Once an exchange request
has been telephoned or mailed, it is irrevocable and may not be modified or
canceled. Exchanges will be made on the basis of the relative net asset values
of the shares exchanged next determined after an exchange request is received.
Exchanges are subject to minimum investment and suitability requirements.
Each of the Evergreen mutual funds has different investment objectives
and policies. For complete information, a prospectus of the fund into which an
exchange will be made should be read prior to the exchange. An exchange is
treated for Federal income tax purposes as a redemption and purchase of shares
and may result in the realization of a capital gain or loss. Each Fund imposes a
fee of $5 per exchange on shareholders who exchange in excess of four times per
calendar year. This exchange privilege may be materially modified or
discontinued at any time by the Fund upon sixty days' notice to shareholders and
is only available in states in which shares of the fund being acquired may
lawfully be sold.
Exchanges by Telephone and Mail. You may exchange shares by telephone by calling
State Street at (800) 423-2615. Exchange requests made after 4:00 p.m. (Eastern
time) will be processed using the net asset value
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determined on the next business day. During periods of drastic economic or
market changes, shareholders may experience difficulty in effecting telephone
exchanges. You should follow the procedures outlined below for exchanges by mail
if you are unable to reach State Street by telephone. If you wish to use the
telephone exchange service you should indicate this on the Share Purchase
Application. As noted above, each Fund will employ reasonable procedures to
confirm that instructions for the redemption or exchange of shares communicated
by telephone are genuine. A telephone exchange may be refused by a Fund or State
Street if it is believed advisable to do so. Procedures for exchanging Fund
shares by telephone may be modified or terminated at any time. Written requests
for exchanges should follow the same procedures outlined for written redemption
requests in the section entitled "How to Redeem Shares", however, no signature
guarantee is required.
SHAREHOLDER SERVICES
The Funds offer the following shareholder services. For more information
about these services or your account, contact your financial intermediary,
Evergreen Funds Distributor, Inc. ("EFD"), the distributor of the Funds' shares,
or the number on the front page of this Prospectus. Some services are described
in more detail in the Share Purchase Application.
Systematic Investment Plan. You may make monthly or quarterly investments into
an existing account automatically in amounts of not less than $25.
Telephone Investment Plan. You may make investments into an existing account
electronically in amounts of not less than $100 or more than $25,000 per
investment. Telephone investment requests received by 3:00 p.m. (Eastern time)
will be credited to a shareholder's account two business days after the request
is received.
Systematic Cash Withdrawal Plan. When an account of $10,000 or more is opened or
when an existing account reaches that size, you may participate in the Funds
Systematic Cash Withdrawal Plan by filling out the appropriate part of the Share
Purchase Application. Under this plan, you may receive (or designate a third
party to receive) a monthly or quarterly check in a stated amount of not less
than $100. Fund shares will be redeemed as necessary to meet withdrawal
payments. All participants must elect to have their dividends and capital gain
distributions reinvested automatically.
Tax Sheltered Retirement Plans. Eligible investors may open a pension and profit
sharing account in any Evergreen mutual fund (except those funds having an
objective of providing tax free income) under the following prototype retirement
plans: (i) Individual Retirement Accounts ("IRAs") and Rollover IRAs; (ii)
Simplified Employee Pension (SEP) for sole proprietors, partnerships and
corporations; and (iii) Profit-Sharing and Money Purchase Pension Plans for
corporations and their employees.
Automatic Reinvestment Plan. For the convenience of investors, all dividends and
distributions are automatically reinvested in full and fractional shares of the
Funds at the net asset value per share at the close of business on the last
business day of each month, unless otherwise requested by a shareholder in
writing. If the transfer agent does not receive a written request for subsequent
dividends and/or distributions to be paid in cash at least three full business
days prior to a given record date, the dividends and/or distributions to be paid
to a shareholder will be reinvested. If you elect to receive dividends and
distributions in cash and the U.S. Postal Service cannot deliver the checks, or
if the checks remain uncashed for six months, the checks will be reinvested into
your account at the then current net asset value.
EFFECT OF BANKING LAWS
The Glass-Steagall Act and other banking laws and regulations presently
prohibit member banks of the Federal Reserve System ("Member Banks") or their
non-bank affiliates from sponsoring, organizing, controlling, or distributing
the shares of registered open-end investment companies such as the Funds. Such
laws and regulations also prohibit banks from issuing, underwriting or
distributing securities in general. However, under the Glass-Steagall Act and
such other laws and regulations, a Member Bank or an affiliate thereof may act
as investment adviser, transfer agent or custodian to a registered open-end
investment company and may also act as agent in connection with the purchase of
shares of such an investment company upon the order of their customer. Evergreen
Asset, since it is a subsidiary of FUNB, and CMG are subject to and in
compliance with the aforementioned laws and regulations.
Changes to applicable laws and regulations or future judicial or
administrative decisions could result in CMG or Evergreen Asset being prevented
from continuing to perform the services required under the investment advisory
contract or from acting as agent in connection with the purchase of shares of a
Fund by its customers. If
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CMG or Evergreen Asset were prevented from continuing to provide the services
called for under the investment advisory agreement, it is expected that the
Trustees would identify, and call upon each Fund's shareholders to approve, a
new investment adviser. If this were to occur, it is not anticipated that the
shareholders of any Fund would suffer any adverse financial consequences.
OTHER INFORMATION
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Funds declare substantially all of their net income as dividends on
each business day. Such dividends are paid monthly. Net income, for dividend
purposes, includes accrued interest and any market discount or premium that day,
less the estimated expenses of a Fund. Gains or losses realized upon the sale of
portfolio securities are not included in net income, but are reflected in the
net asset value of a Fund's shares. Distributions of any net realized capital
gains will be made annually or more frequently as required by the provisions of
the Internal Revenue Code of 1986, as amended (the "Code"). The amount of
dividends may fluctuate from day to day, and the dividend may be omitted on a
day where Fund expenses exceed net investment income. Dividends and
distributions generally are taxable in the year in which they are paid, except
any dividends paid in January that were declared in the previous calendar
quarter may be treated as paid in the immediately preceding December.
Such dividends will be automatically reinvested in full and fractional
shares of a Fund on the last business day of each month. However, shareholders
who so inform the transfer agent in writing may have their dividends paid out in
cash monthly. Shareholders who invest by check will be credited with a dividend
on the business day following initial investment. Shareholders will receive
dividends on investments made by federal funds bank wire the same day the wire
is received provided that wire purchases are received by State Street by 12 noon
(Eastern time). Shares purchased by qualified institutions via telephone as
described in "How to Purchase Shares" will receive the dividend declared on that
day if the telephone order is placed by 12 noon (Eastern time), and federal
funds are received by 4:00 p.m. (Eastern time). All other wire purchases
received after 12 noon (Eastern time) will earn dividends beginning the
following business day. Dividends accruing on the day of redemption will be paid
to redeeming shareholders except for redemptions by check and where proceeds are
wired the same day. (See "How to Redeem Shares".)
Each Fund has qualified and intends to continue to qualify to be treated
as a regulated investment company under the Code. While so qualified, it is
expected that each Fund will not be required to pay any Federal income taxes on
that portion of its investment company taxable income and any net realized
capital gains it distributes to shareholders. The Code imposes a 4%
nondeductible excise tax on regulated investment companies, such as the Funds,
to the extent they do not meet certain distribution requirements by the end of
each calendar year. Each Fund anticipates meeting such distribution
requirements. The excise tax generally does not apply to the tax exempt income
of a regulated investment company (such as EVERGREEN TAX EXEMPT MONEY MARKET
FUND) that pays exempt interest dividends. Except as noted below with respect to
EVERGREEN TAX EXEMPT MONEY MARKET FUND, most shareholders of the Funds normally
will have to pay Federal income taxes and any state or local taxes on the
dividends and distributions they receive from a Fund.
EVERGREEN TAX EXEMPT MONEY MARKET FUND will designate and pay
exempt-interest dividends derived from interest earned on qualifying tax exempt
obligations. Such exempt-interest dividends may be excluded by shareholders of
the Fund from their gross income for Federal income tax purposes, however, (1)
all or a portion of such exempt-interest dividends may be a specific preference
item for purposes of the Federal individual and corporate alternative minimum
taxes to the extent that they are derived from certain types of private activity
bonds issued after August 7, 1986, and (2) all exempt-interest dividends will be
a component of "adjusted current earnings" for purposes of the Federal corporate
alternative minimum tax. Dividends paid from taxable income, if any, and
distributions of any net realized short-term capital gains (whether from tax
exempt or taxable obligations) are taxable as ordinary income, even though
received in additional Fund shares. Market discount recognized on taxable and
tax-free bonds is taxable as ordinary income, not as excludable income.
Following the end of each calendar year, every shareholder of the Funds
will be sent applicable tax information and information regarding the dividends
and capital gain distributions made during the calendar year. Under current law,
the highest Federal income tax rate applicable to net long-term capital gains
realized by individuals is 28%. The rate applicable to corporations is 35%.
Since the Funds gross income is ordinarily
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expected to be interest income, it is not expected that the 70%
dividends-received deduction for corporations will be applicable. Specific
questions should be addressed to the investor's own tax adviser.
Each Fund is required by Federal law to withhold 31% of reportable
payments (which may include dividends, capital gain distributions and
redemptions) paid to certain shareholders. In order to avoid this backup
withholding requirement, you must certify on the Share Purchase Application, or
on a separate form supplied by State Street, that the investor's social security
or taxpayer identification number is correct and that the investor is not
currently subject to backup withholding or is exempt from backup withholding.
GENERAL INFORMATION
Portfolio Transactions. Consistent with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., and subject to seeking best
price and execution, a Fund may consider sales of its shares as a factor in the
selection of dealers to enter into portfolio transactions with the Fund.
Organization. The EVERGREEN MONEY MARKET FUND (formerly Evergreen Money Market
Trust) is a Massachusetts business trust organized in 1987. The EVERGREEN TAX
EXEMPT MONEY MARKET FUND is a separate investment series of The Evergreen
Municipal Trust, which is a Massachusetts business trust organized in 1988. The
Evergreen Treasury Money Market Fund is a separate investment series of
Evergreen Investment Trust (formerly First Union Funds), which is a
Massachusetts business trust organized in 1984.
The Funds do not intend to hold annual shareholder meetings; shareholder
meetings will be held only when required by applicable law. Shareholders have
available certain procedures for the removal of Trustees.
A shareholder in each class of a Fund will be entitled to his or her
share of all dividends and distributions from a Fund's assets, based upon the
relative value of such shares to those of other Classes of the Fund, and, upon
redeeming shares, will receive the then current net asset value of the Class of
shares of the Fund represented by the redeemed shares less any applicable CDSC.
The Trusts are empowered to establish, without shareholder approval, additional
investment series, which may have different investment objectives, and
additional classes of shares for any existing or future series. If an additional
series or class were established in a Fund, each share of the series or class
would normally be entitled to one vote for all purposes. Generally, shares of
each series and class would vote together as a single class on matters, such as
the election of Trustees, that affect each series and class in substantially the
same manner. Class A, B and Y shares have identical voting, dividend,
liquidation and other rights, except that each class bears, to the extent
applicable, its own distribution and transfer agency expenses as well as any
other expenses applicable only to a specific class. Each class of shares votes
separately with respect to Rule 12b-1 distribution plans and other matters for
which separate class voting is appropriate under applicable law. Shares are
entitled to dividends as determined by the Trustees and, in liquidation of a
Fund, are entitled to receive the net assets of the Fund.
Registrar, Transfer Agent And Dividend-Disbursing Agent. State Street Bank and
Trust Company, P.O. Box 9021, Boston, Massachusetts 02205-9827 acts as each
Fund's registrar, transfer agent and dividend-disbursing agent for a fee based
upon the number of shareholder accounts maintained for the Funds. The transfer
agency fee with respect to the Class B shares will be higher than the transfer
agency fee with respect to the Class A shares.
Principal Underwriter. EFD, an affiliate of Furman Selz Incorporated, located
237 Park Avenue, New York, New York 10017, is the principal underwriter of the
Funds. Furman Selz Incorporated also acts as sub-administrator to EVERGREEN
TREASURY MONEY MARKET FUND and provides certain sub-administrative services to
Evergreen Asset in connection with its role as investment adviser to EVERGREEN
TAX EXEMPT MONEY MARKET FUND and EVERGREEN MONEY MARKET FUND, including
providing personnel to serve as officers of the Funds.
Other Classes of Shares. EVERGREEN MONEY MARKET FUND offers three classes of
shares, Class A, Class B and Class Y. EVERGREEN TAX EXEMPT MONEY MARKET FUND and
EVERGREEN TREASURY MONEY MARKET FUND each offer two classes of shares, Class A
and Class Y. Class Y shares are the only Class offered by this Prospectus and
are only available to (i) persons who at or prior to December 31, 1994, owned
shares in a mutual fund advised by Evergreen Asset, (ii) certain institutional
investors and (iii) investment advisory clients of CMG, Evergreen Asset or their
affiliates. The dividends payable with respect to Class A and Class B shares
will be less than those payable with respect to Class Y shares due to the
distribution and distribution and shareholder servicing related expenses borne
by Class A and Class B shares and the fact that such expenses are not borne by
Class Y shares.
Performance Information. From time to time, a Fund may quote its yield in
advertisements or in reports to shareholders. Yield information may be useful in
reviewing the performance of a Fund and for providing a basis for
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comparison with other investment alternatives. However, since net investment
income of a Fund changes in response to fluctuations in interest rates and Fund
expenses, any given yield quotation should not be considered representative of a
Fund's yields for any future period.
The method of calculating each Fund's yield is set forth in the Statement
of Additional Information. Before investing in the EVERGREEN TAX EXEMPT MONEY
MARKET FUND, the investor may want to determine which investment -- tax-free or
taxable -- will result in a higher after-tax return. To do this, the yield on
the tax-free investment should be divided by the decimal determined by
subtracting from 1 the highest Federal tax rate to which the investor currently
is subject. For example, if the tax-free yield is 6% and the investor's maximum
tax bracket is 36%, the computation is:
6% Tax-Free Yield /(1 - .36 Tax Rate) = 6/.64 = 9.38% Taxable Yield.
In this example, the investor's after-tax return will be higher from the
6% tax-free investment if available taxable yields are below 9.38%. Conversely,
the taxable investment will provide a higher return when taxable yields exceed
9.38%. This is only an example and is not necessarily reflective of a Fund's
yield. The tax equivalent yield will be lower for investors in the lower income
brackets.
Comparative performance information may also be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., IBC/Donoghue's Money Fund Report, Bank Rate Monitor
and other industry publications.
Liability Under Massachusetts Law. Under Massachusetts law, trustees and
shareholders of a business trust may, in certain circumstances, be held
personally liable for its obligations. The Declarations of Trust under which
Funds operate provide that no trustee or shareholder will be personally liable
for the obligations of the trust and that every written contract made by the
trust contain a provision to that effect. If any trustee or shareholder were
required to pay any liability of the trust, that person would be entitled to
reimbursement from the general assets of the trust.
Additional Information. This Prospectus and the Statement of Additional
Information, which have been incorporated by reference herein, do not contain
all the information set forth in the Registration Statements filed by the Trusts
with the Commission under the Securities Act. Copies of the Registration
Statements may be obtained at a reasonable charge from the Commission or may be
examined, without charge, at the offices of the Commission in Washington, D.C.
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INVESTMENT ADVISER
Evergreen Asset Management Corp., 2500 Westchester Avenue, Purchase, New York
10577
EVERGREEN MONEY MARKET FUND, EVERGREEN TAX EXEMPT MONEY MARKET FUND
Capital Management Group of First Union National Bank of North Carolina, 201
South College Street, Charlotte, North Carolina 28288
EVERGREEN TREASURY MONEY MARKET FUND
CUSTODIAN & TRANSFER AGENT
State Street Bank & Trust Company, Box 9021, Boston, Massachusetts 02205-9827
LEGAL COUNSEL
Sullivan & Worcester, 1025 Connecticut Avenue, N.W., Washington, D.C. 20036
INDEPENDENT AUDITORS
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York 10036
EVERGREEN MONEY MARKET FUND, EVERGREEN TAX EXEMPT MONEY MARKET FUND
KPMG Peat Marwick, LLP One Mellon Bank Center Pittsburgh, Pennsylvania 15219
EVERGREEN TREASURY MONEY MARKET FUND
DISTRIBUTOR
Evergreen Funds Distributor, Inc., 237 Park Avenue, New York, New York 10017
536128rev01
******************************************************************************
STATEMENT OF ADDITIONAL INFORMATION
Ocotber 31, 1995
THE EVERGREEN MONEY MARKET FUNDS
2500 Westchester Avenue, Purchase, New York 10577
800-807-2940
The Evergreen Money Market Fund ("Money Market")
Evergreen Tax Exempt Money Market Fund ("Tax Exempt")
Evergreen Treasury Money Market Fund (formerly First Union Treasury Money
Market Portfolio)("Treasury")
This Statement of Additional Information pertains to all classes of shares of
the Funds listed below. It is not a prospectus and should be read in conjunction
with the Prospectus dated October 31, 1995 for the Fund in which you are making
or contemplating an investment. The Evergreen Money Market Funds are offered
through two separate prospectuses: one offering Class A and Class B shares of
Money Market and Class A shares of Tax Exempt and Treasury and a separate
prospectus offering Class Y shares of each Fund. Copies of each Prospectus may
be obtained without charge by calling the number listed above.
TABLE OF CONTENTS
Investment Objectives and Policies................................2
Investment Restrictions...........................................2
Certain Risk Considerations.......................................6
Management........................................................6
Investment Adviser................................................11
Distribution Plans................................................14
Allocation of Brokerage...........................................16
Additional Tax Information........................................17
Net Asset Value...................................................20
Purchase of Shares................................................20
Performance Information...........................................26
Financial Statements..............................................28
Appendix A - Description of Bond Municipal Note And Commercial Paper Ratings
1
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INVESTMENT OBJECTIVES AND POLICIES
(See also "Description of the Funds - Investment Objective and Policies" in each
Fund's Prospectus)
The investment objective of each Fund and a description of the securities in
which each Fund may invest is set forth under "Description of the Funds
Investment Objective and Policies" in the relevant Prospectus. The following
expands upon the discussion in the Prospectus regarding certain investments of
each Fund.
INVESTMENT RESTRICTIONS
FUNDAMENTAL INVESTMENT RESTRICTIONS
.........Except as noted, the investment restrictions set forth below are
fundamental and may not be changed with respect to each Fund without the
affirmative vote of a majority of the outstanding voting securities of the Fund.
Where an asterisk (*) appears after a Fund's name, the relevant policy is
non-fundamental with respect to that Fund and may be changed by the Fund's
investment adviser without shareholder approval, subject to review and approval
by the Trustees. As used in this Statement of Additional Information and in the
Prospectus, "a majority of the outstanding voting securities of the Fund" means
the lesser of (1) the holders of more than 50% of the outstanding shares of
beneficial interest of the Fund or (2) 67% of the shares present if more than
50% of the shares are present at a meeting in person or by proxy.
1........Concentration of Assets in Any One Issuer
.........Tax Exempt and Money Market may not invest more than 5% of their total
assets, at the time of the investment in question, in the securities of any one
issuer other than the U.S. government and its agencies or instrumentalities,
except that up to 25% of the value of Tax Exempt's total assets may be invested
without regard to such 5% limitation. For this purpose each political
subdivision, agency, or instrumentality and each multi-state agency of which a
state is a member, and each public authority which issues industrial development
bonds on behalf of a private entity, will be regarded as a separate issuer for
determining the diversification of each Fund's portfolio.
2........Ten Percent Limitation on Securities of Any One Issuer
.........Neither Money Market nor Tax-Exempt may purchase more than 10% of any
class of securities of any one issuer other than the U.S. government and its
agencies or instrumentalities.
3........Investment for Purposes of Control or Management
.........Neither Money Market nor Tax-Exempt may invest in companies for the
purpose of exercising control or management.
4........Purchase of Securities on Margin
.........No Fund may purchase securities on margin, except that each Fund may
obtain such short-term credits as may be necessary for the clearance of
transactions. A deposit or payment by a Fund of initial or variation margin in
connection with financial futures contracts or related options transactions is
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not considered the purchase of a security on margin.
5........Unseasoned Issuers
.........Money Market may not invest more than 5% of its total assets in
securities of unseasoned issuers that have been in continuous operation for less
than three years, including operating periods of their predecessors.
.........Tax-Exempt may not invest more than 5% of its total assets in taxable
securities of unseasoned issuers that have been in continuous operation for less
than three years, including operating periods of their predecessors, except that
(i) the Fund may invest in obligations issued or guaranteed by the U.S.
government and its agencies or instrumentalities, and (ii) the Fund may invest
in municipal securities.
6........Underwriting
.........Money Market and Tax-Exempt may not engage in the business of
underwriting the securities of other issuers; provided that the purchase by
Tax-Exempt of municipal securities or other permitted investments, directly from
the issuer thereof (or from an underwriter for an issuer) and the later
disposition of such securities in accordance with the Fund's investment program
shall not be deemed to be an underwriting.
7........Interests in Oil, Gas or Other Mineral Exploration or
Development Programs
.........Neither Money Market nor Tax-Exempt may purchase, sell or invest in
interests in oil, gas or other mineral exploration or development programs.
8........Concentration in Any One Industry
.........Neither Money Market nor Tax-Exempt may invest 25% or more of its total
assets in the securities of issuers conducting their principal business
activities in any one industry; provided, that this limitation shall not apply
to obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities, or with respect to Tax-Exempt, to municipal securities and
certificates of deposit and bankers' acceptances issued by domestic branches of
U.S. banks.
9........Warrants
.........Tax-Exempt may not invest more than 5% of its total net assets in
warrants, and, of this amount, no more than 2% of the Fund's total net assets
may be invested in warrants that are listed on neither the New York nor the
American Stock Exchange.
10.......Ownership by Trustees/Officers
.........Neither Money Market nor Tax-Exempt may purchase or retain the
securities of any issuer if (i) one or more officers or Trustees of a Fund or
its investment adviser individually owns or would own, directly or beneficially,
more than 1/2 of 1% of the securities of such issuer, and (ii) in the aggregate,
such persons own or would own, directly or beneficially, more than 5% of such
securities.
3
<PAGE>
11.......Short Sales
.........None of the Funds may make short sales of securities or maintain a
short position; except that, in the case of Treasury, at all times when a short
position is open it owns an equal amount of such securities or of securities
which, without payment of any further consideration are convertible into or
exchangeable for securities of the same issue as, and equal in amount to, the
securities sold short.
12.......Lending of Funds and Securities
.........Tax-Exempt and Money Market may not lend their funds to other persons;
however, they may purchase issues of debt securities, enter into repurchase
agreements and, in the case of Tax-Exempt, acquire privately negotiated loans
made to municipal borrowers.
.........Money Market may not lend its funds to other persons, provided that it
may purchase money market securities or enter into repurchase agreements.
.........Treasury will not lend any of its assets, except that it may purchase
or hold U.S. Treasury obligations, including repurchase agreements.
.........Neither Money Market nor Tax-Exempt may lend its portfolio securities,
unless the borrower is a broker, dealer or financial institution that pledges
and maintains collateral with the Fund consisting of cash, letters of credit or
securities issued or guaranteed by the United States Government having a value
at all times not less than 100% of the current market value of the loaned
securities, including accrued interest, provided that the aggregate amount of
such loans shall not exceed 30% of the Fund's total assets.
13.......Commodities
.........Tax-Exempt and Money Market may not purchase, sell or invest in
commodities, commodity contracts or financial futures contracts.
14.......Real Estate
.........The Funds may not purchase, sell or invest in real estate or interests
in real estate, except that Money Market may purchase, sell or invest in
marketable securities of companies holding real estate or interests in real
estate, including real estate investment trusts, and Tax-Exempt may purchase
municipal securities and other debt securities secured by real estate or
interests therein.
15.......Borrowing, Senior Securities, Reverse Repurchase Agreements
.........Tax-Exempt and Money Market may not borrow money, issue senior
securities or enter into reverse repurchase agreements, except for temporary or
emergency purposes, and not for leveraging, and then in amounts not in excess of
10% of the value of the Fund's total assets at the time of such borrowing; or
mortgage, pledge or hypothecate any assets except in connection with any such
borrowing and in amounts not in excess of the lesser of the dollar amounts
borrowed or 10% of the value of the Fund's total assets at the time of such
borrowing, provided that the Fund will not purchase any securities at times when
any borrowings (including reverse repurchase agreements) are outstanding. The
4
<PAGE>
Funds will not enter into reverse repurchase agreements exceeding 5% of the
value of their total assets.
.........Treasury will not issue senior securities except that the Fund may
borrow money directly, as a temporary measure for extraordinary or emergency
purposes and then only in amounts not in excess of 5% of the value of its total
assets, or in an amount up to one- third of the value of its total assets,
including the amount borrowed, in order to meet redemption requests without
immediately selling portfolio instruments. Any such borrowings need not be
collateralized. The Fund will not purchase any securities while borrowings in
excess of 5% of the total value of its total assets are outstanding. The Fund
will not borrow money or engage in reverse repurchase agreements for investment
leverage purposes. Treasury will not mortgage, pledge or hypothecate any assets
except to secure permitted borrowings. In these cases, it may pledge assets
having a market value not exceeding the lesser of the dollar amounts borrowed or
15% of the value of total assets at the time of the pledge.
16.......Options
.........Money Market and Tax-Exempt may not write, purchase or sell put or call
options, or combinations thereof, except Money Market may do so as permitted
under "Description of the Funds - Investment Objective and Policies" in the
Prospectus and Tax- Exempt may purchase securities with rights to put securities
to the seller in accordance with its investment program.
17.......Investment in Municipal Securities
.........Tax-Exempt may not invest more than 20% of its total assets in
securities other than municipal securities (as described under "Description of
Funds - Investment Objective and Policies" in the Fund's Prospectus), unless
extraordinary circumstances dictate a more defensive posture.
18.......Investment in Money Market Securities
.........Money Market may not purchase any securities other than money market
instruments (as described under "Description of Funds - Investment Objectives
and Policies" in the Fund's Prospectus).
19.......Investing in Securities of Other Investment Companies
.........Treasury*, Money Market* and Tax-Exempt* will purchase securities of
investment companies only in open-market transactions involving customary
broker's commissions. However, these limitations are not applicable if the
securities are acquired in a merger, consolidation or acquisition of assets. It
should be noted that investment companies incur certain expenses such as
management fees and therefore any investment by the Funds in shares of another
investment company would be subject to such duplicate expenses.
20........Other. In order to comply with certain state blue sky limitations:
-----
...........Money Market and Tax-Exempt interpret fundamental investment
restriction 7 to prohibit investments in oil, gas and mineral leases.
5
<PAGE>
...........Money Market and Tax-Exempt interpret fundamental investment
restriction 14 to prohibit investment in real estate limited partnerships which
are not readily marketable.
Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in percentage
resulting from any change in value or net assets will not result in a violation
of such restriction.
CERTAIN RISK CONSIDERATIONS
...........There can be no assurance that a Fund will achieve its investment
objective and an investment in the Fund involves certain risks which are
described under "Description of the Funds - Investment Objective and Policies"
in the Prospectus.
MANAGEMENT
The Trustees and executive officers of the Trusts, their ages, addresses
and principal occupations during the past five years are set forth below:
Laurence B. Ashkin (67), 180 East Pearson Street, Chicago, IL-Trustee. Real
estate developer and construction consultant since 1980; President of Centrum
Equities since 1987 and Centrum Properties, Inc. since 1980.
Foster Bam*(68), Greenwich Plaza, Greenwich, CT-Trustee. Partner in the law firm
of Cummings and Lockwood since 1968.
James S. Howell (71), 4124 Crossgate Road, Charlotte, NC-Chairman and Trustee.
Retired Vice President of Lance Inc. (food manufacturing); Chairman of the
Distribution Comm. Foundation for the Carolinas from 1989 to 1993.
Robert J. Jeffries (72), 2118 New Bedford Drive, Sun City Center, FL-Trustee.
Corporate consultant since 1967.
Gerald M. McDonnell (56), 821 Regency Drive, Charlotte, NC-Trustee. Sales
Representative with Nucor-Yamoto Inc. (steel producer) since 1988.
Thomas L. McVerry (57), 4419 Parkview Drive, Charlotte, NC-Trustee. Director of
Carolina Cooperative Federal Credit Union since 1990 and Rexham Corporation from
1988 to 1990; Vice President of Rexham Industries, Inc. (diversified
manufacturer) from 1989 to 1990; Vice President-Finance and Resources, Rexham
Corporation from 1979 to 1990.
William Walt Pettit*(40), Holcomb and Pettit, P.A., 207 West Trade St.,
Charlotte, NC-Trustee. Partner in the law firm Holcomb and Pettit, P.A. since
1990; Attorney, Clontz and Clontz from 1980 to 1990.
Russell A. Salton, III, M.D. (48), Primary Physician Care, 1515 Mockingbird
Lane, Charlotte, NC-Trustee. President, Primary Physician Care since 1990.
Michael S. Scofield (52), 212 S. Tryon Street Suite 980, Charlotte, NC-Trustee.
Attorney, Law Offices of Michael S. Scofield since prior to 1989.
John J. Pileggi (36), 237 Park Avenue, Suite 910, New York, NY-President and
6
<PAGE>
Treasurer. Senior Managing Director, Furman Selz Incorporated since 1992,
Managing Director from 1984 to 1992.
Joan V. Fiore (39), 237 Park Avenue, Suite 910, New York, NY-Secretary. Managing
Director and Counsel, Furman Selz Incorporated since 1991; Staff Attorney,
Securities and Exchange Commission from 1986 to 1991.
Except for Messrs. Ashkin, Bam and Jeffries, who are not Trustees of
Evergreen Investment Trust, the Trustees and officers listed above hold the same
positions with a total of ten registered investment companies offering a total
of thirty-two investment funds within the Evergreen mutual fund complex.
- --------
* Mr. Bam and Mr. Pettit may each be deemed to be an "interested person"
within the meaning of the Investment Company Act of 1940, as amended (the "1940
Act").
The officers of the Trusts are all officers and/or employees of Furman
Selz Incorporated. Furman Selz Incorporated is an affiliate of Evergreen Funds
Distributor, Inc., the distributor of each Class of shares of each Fund.
The Funds do not pay any direct remuneration to any officer or Trustee
who is an "affiliated person" of either First Union National Bank of North
Carolina or Evergreen Asset Management Corp. or their affiliates. See
"Investment Adviser." Currently, none of the Trustees is an "affiliated person"
as defined in the 1940 Act. The Trusts pay each Trustee who is not an
"affiliated person" an annual retainer and a fee per meeting attended, plus
expenses (and $500 for each telephone conference meeting) as follows:
Name of Trust/Fund Annual Retainer Meeting Fee
Money Market $4,000* $300
The Evergreen Municipal Trust $100
Tax Exempt $100
Evergreen Investment Trust $9,000** $1,500**
Treasury
* Allocated among the Evergreen Money Market Fund, which is not a series
fund, and the Evergreen Municipal Trust which offers four investment series, the
Evergreen Tax Exempt Money Market Fund, Evergreen Short-Intermediate Municipal
Fund, Evergreen Short-Intermediate Municipal Fund-California, and Evergreen
Florida High Income Municipal Bond Fund.
** Evergreen Investment Trust pays an annual retainer to each Trustee and a
per-meeting fee that are allocated among its fifteen series. Additionally, each
member of the Audit Committee receives $200 for attendance at each meeting of
the of the Audit Committee and an additional fee is paid to the Chairman of the
Board of $2,000.
Set forth below for each of the Trustees is the aggregate compensation
paid to such Trustees by each Trust for the fiscal year ended August 31, 1995.
7
<PAGE>
Total
Compensation
Aggregate Compensation From Trust From Trusts
& Fund
Name of Money Municipal Investment Complex Paid
Person Market Trust Trust* to Trustees
Laurence Ashkin 2,159 3,340 1,513 22,054
Foster Bam 2,165 3,306 1,524 22,092
James S. Howell 2,040 2,982 16,852 35,725
Robert J.
Jeffries 2,149 3,310 1,493 21,893
Gerald M.
McDonnell 2,040 2,982 14,343 33,215
Thomas L.
McVerry 2,040 3,032 15,818 34,740
William Walt
Pettit 2,040 2,982 15,618 34,490
Russell A.
Salton, III, M.D. 2,040 2,982 13,268 32,140
Michael S.
Scofield 2,040 2,982 14,343 33,215
* Formerly known as First Union Funds.
No officer or Trustee of the Trusts owned Class B shares of any Fund as
of the date hereof. The number and percent of outstanding shares of each Fund
owned by officers and Trustees as a group on October 4, 1995, is as follows:
No. of Shares Owned
By Officers and Ownership by Officers and
Trustees Trustees as a % of
Name of Fund as a Group Shares Outstanding
Money Market 7,908,377(Y) 2.42%
Tax Exempt 625,041(Y) .15%
Treasury 3,520(A) 0%
Set forth below is information with respect to each person, who, to
each Fund's knowledge, owned beneficially or of record more than 5% of a class
of each Fund's total outstanding shares and their aggregate ownership of the
Fund's total outstanding shares as of October 9, 1995.
8
<PAGE>
Name of % of
Name and Address* Fund/Class No. of Shares Class/Fund
- ---------------- ---------- ------------- ----------
First Union National Bank of FL Money Market/A 308,357,624 40.07% / 3.05%
Attn: Cap Account Dept.
One First Union Center
Charlotte, NC 28288
First Union National Bank of NC Money Market/A 114,159,956 14.83% /10.34%
Cap Account
Attn: Shelia Bryendon CMG 1164
One First Union Center
301 S. College Street
Charlotte, NC 28202-6000
First Union National Bank of VA Money Market/A 66,805,473 8.68% / 6.05%
Attn: Cap Account Dept.
One First Union Center
Charlotte, NC 28288
First Union National Bank of SC Money Market/A 39,701,031 5.16% / 3.60%
Attn: Sheila Bryenton CMG 1164
One First Union Center
Charlotte NC 28288
First Union National Bank Money Market/Y 43,612,933 13.35% / .43%
Trust Accounts
Attn: Ginny Batten
11th Floor CMG-1151
301 S. Tryon Street
Charlotte, NC 28288-0001
First Union National Bank of FL Tax-Exempt/A 217,443,910 37.99% / 21.92%
Attn: Cap Account Dept.
One First Union Center
Charlotte, NC 28288
First Union National Bank of NC Tax-Exempt/A 144,584,778 25.26% / 14.57%
Cap Account
Attn: Shelia Bryendon CMG 1164
One First Union Center
301 S. College Street
Charlotte, NC 28288-0001
First Union National Bank of GA Tax-Exempt/A 33,908,058 5.92% / 3.42%
Attn: Cap Account Dept.
One First Union Center
Charlotte, NC 28288
First Union National Bank of VA Tax-Exempt/A 33,956,691 5.93% / 3.42%
Attn: Cap Account Dept.
One First Union Center
Charlotte, NC 28288
<PAGE>
First Union National Bank Tax-Exempt/Y 87,310,599 20.80% / 8.80%
Trust Accounts
Attn: Ginny Batten
11th Floor CMG-151
301 S. Tyron Street
Charlotte, NC 28288
Jeri Jo Knitwear Tax-Exempt/Y 22,004,947 5.24% / 2.22%
Lieber & Company
2500 Westchester Avenue
Purchase, NY 10577
First Union National Bank of FL Treasury/A 400,667,561 32.82% / 27.0%
Attn: Cap Account Dept.
One First Union Center
Charlotte, NC 28288
First Union National Bank of NC Treasury/A 223,263,807 18.29% / 15.04%
Attn: Cap Account Dept.
One First Union Center
301 S. College Street
Charlotte, NC 28202-6000
First Union National Bank of VA Treasury/A 137,647,371 11.28% / 9.27%
Attn: Cap Account Dept.
One First Union Center
Charlotte, NC 28288
First Union National Bank of GA Treasury/A 86,359,098 7.07% / 5.82%
Attn: Cap Account Dept.
One First Union Center
Charlotte, NC 28288
First Union National Bank Treasury/Y 263,326,227 99.92% / 17.74%
Trust Accounts
Attn: Ginny Batten
11th Floor CMG-1151
301 S. Tryon Street
Charlotte, NC 28288-0001
- ---------------------------------
*First Union National Bank of North Carolina and its affiliates act in
various capacities for numerous accounts. As a result of its ownership of 74.87%
of Treasury, and 52.13% of Tax Exempt on October 9, 1995, First Union National
Bank of North Carolina and its affiliated banks may be deemed to "control" each
Fund as that term is defined in the 1940 Act.
10
<PAGE>
INVESTMENT ADVISER
(See also "Management of the Fund" in each Fund's Prospectus)
The investment adviser of Money Market and Tax Exempt is Evergreen
Asset Management Corp., a New York corporation, with offices at 2500 Westchester
Avenue, Purchase, New York ("Evergreen Asset" or the "Adviser."). Evergreen
Asset is owned by First Union National Bank of North Carolina ("FUNB" or the
"Adviser") which, in turn, is a subsidiary of First Union Corporation ("First
Union"), a bank holding company headquartered in Charlotte, North Carolina. The
investment adviser of Treasury is FUNB which provides investment advisory
services through its Capital Management Group. The Directors of Evergreen Asset
are Richard K. Wagoner and Barbara I. Colvin. The executive officers of
Evergreen Asset are Stephen A. Lieber, Chairman and Co-Chief Executive Officer,
Nola Maddox Falcone, President and Co-Chief Executive Officer, Theodore J.
Israel, Jr., Executive Vice President, Joseph J. McBrien, Senior Vice President
and General Counsel, and George R. Gaspari, Senior Vice President and Chief
Financial Officer.
On June 30, 1994, Evergreen Asset and Lieber and Company ("Lieber")
were acquired by First Union through certain of its subsidiaries. Evergreen
Asset was acquired by FUNB, a wholly-owned subsidiary (except for directors'
qualifying shares) of First Union, by merger into EAMC Corporation ("EAMC") a
wholly-owned subsidiary of FUNB. EAMC then assumed the name "Evergreen Asset
Management Corp." and succeeded to the business of Evergreen Asset.
Contemporaneously with the succession of EAMC to the business of Evergreen Asset
and its assumption of the name "Evergreen Asset Management Corp.", Money Market
and Tax Exempt entered into a new investment advisory agreement with EAMC and
into a distribution agreement with Evergreen Funds Distributor, Inc. (the
"Distributor"), an affiliate of Furman Selz Incorporated. At that time, EAMC
also entered into a new sub-advisory agreement with Lieber pursuant to which
Lieber provides certain services to Evergreen Asset in connection with its
duties as investment adviser.
The partnership interests in Lieber, a New York general partnership,
were acquired by Lieber I Corp. and Lieber II Corp., which are both wholly-owned
subsidiaries of FUNB. The business of Lieber is being continued. The new
advisory and sub-advisory agreements were approved by the shareholders of Money
Market and Tax Exempt at their meeting held on June 23, 1994, and became
effective on June 30, 1994.
Under its Investment Advisory Agreement with each Fund, each Adviser
has agreed to furnish reports, statistical and research services and
recommendations with respect to each Fund's portfolio of investments. In
addition, each Adviser provides office facilities to the Funds and performs a
variety of administrative services. Each Fund pays the cost of all of its other
expenses and liabilities, including expenses and liabilities incurred in
connection with maintaining their registration under the Securities Act of 1933,
as amended, and the 1940 Act, printing prospectuses (for existing shareholders)
as they are updated, state qualifications, share certificates, mailings,
brokerage, custodian and stock transfer charges, printing, legal and auditing
expenses, expenses of shareholder meetings and reports to shareholders.
Notwithstanding the foregoing, each Adviser will pay the costs of printing and
distributing prospectuses used for prospective shareholders.
The method of computing the investment advisory fee for each Fund is
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<PAGE>
described in such Fund's Prospectus. The advisory fees paid by each Fund for the
three most recent fiscal periods reflected in its registration statement are set
forth below:
TAX EXEMPT Year Ended Year Ended Year Ended
8/31/95 8/31/94 8/31/93
Advisory Fee $2,329,035 $2,126,246 $2,028,966
Waiver (558,942) (1,256,653) (1,168,131)
--------- ---------- ----------
Net Advisory Fee $1,770,093 $869,593 $860,835
========= ========= =========
MONEY MARKET Year Ended Year Ended Year Ended
8/31/95 8/31/94 10/31/93
Advisory Fee $1,831,518 $1,245,513 $1,637,123
Waiver ( 732,723) (974,438) (1,047,935)
--------- --------- ----------
Net Advisory Fee $1,098,795 $271,075 $589,188
========= ========= =========
TREASURY Year Ended Year Ended Year Ended
8/31/95 12/31/94 12/31/93
Advisory Fee $2,814,251 $2,549,955 $1,977,645
Waiver (1,258,611) (1,948,237) (1,712,975)
--------- --------- ----------
Net Advisory Fee $1,555,640 $601,718 $264,670
========= ========= =========
Expense Limitations
Each Adviser's fee will be reduced by, or the Adviser will reimburse
the Funds (except Money Market and Tax Exempt which have specific percentage
limitations described below) for any amount necessary to prevent such expenses
(exclusive of taxes, interest, brokerage commissions and extraordinary expenses,
but inclusive of the Adviser's fee) from exceeding the most restrictive of the
expense limitations imposed by state securities commissions of the states in
which the Funds' shares are then registered or qualified for sale.
Reimbursement, when necessary, will be made monthly in the same manner in which
the advisory fee is paid. Currently the most restrictive state expense
limitation is 2.5% of the first $30,000,000 of the Fund's average daily net
assets, 2% of the next $70,000,000 of such assets and 1.5% of such assets in
excess of $100,000,000.
With respect to Money Market and Tax Exempt, Evergreen Asset has
voluntarily agreed to reimburse each Fund to the extent that any of these Funds'
aggregate operating expenses (including the Adviser's fee but excluding
interest, taxes, brokerage commissions, and extraordinary expenses, and for
Class A and Class B shares Rule 12b-1 distribution fees and shareholder
12
<PAGE>
servicing fees payable) exceed 1.00% of their average net assets for any fiscal
year.
The Investment Advisory Agreements are terminable, without the payment
of any penalty, on sixty days' written notice, by a vote of the holders of a
majority of each Fund's outstanding shares, or by a vote of a majority of each
Trust's Trustees or by the respective Adviser. The Investment Advisory
Agreements will automatically terminate in the event of their assignment. Each
Investment Advisory Agreement provides in substance that the Adviser shall not
be liable for any action or failure to act in accordance with its duties
thereunder in the absence of willful misfeasance, bad faith or gross negligence
on the part of the Adviser or of reckless disregard of its obligations
thereunder. The Investment Advisory Agreements with respect to Money Market and
Tax Exempt were approved by each Fund's shareholders on June 23, 1994, became
effective on June 30, 1994, and will continue in effect until June 30, 1996, and
thereafter from year to year provided that their continuance is approved
annually by a vote of a majority of the Trustees of each Trust including a
majority of those Trustees who are not parties thereto or "interested persons"
(as defined in the 1940 Act) of any such party, cast in person at a meeting duly
called for the purpose of voting on such approval or a majority of the
outstanding voting shares of each Fund. With respect to Treasury, the Investment
Advisory Agreement dated February 28, 1985 and amended from time to time
thereafter was last approved by the Trustees of Evergreen Investment Trust
(formerly, First Union Funds) on April 20, 1995 and it will continue from year
to year with respect to each Fund provided that such continuance is approved
annually by a vote of a majority of the Trustees of Evergreen Investment Trust
including a majority of those Trustees who are not parties thereto or
"interested persons" of any such party cast in person at a meeting duly called
for the purpose of voting on such approval or by a vote of a majority of the
outstanding voting securities of the Fund.
Certain other clients of each Adviser may have investment objectives
and policies similar to those of the Funds. Each Adviser (including the
sub-adviser) may, from time to time, make recommendations which result in the
purchase or sale of a particular security by its other clients simultaneously
with a Fund. If transactions on behalf of more than one client during the same
period increase the demand for securities being purchased or the supply of
securities being sold, there may be an adverse effect on price or quantity. It
is the policy of each Adviser to allocate advisory recommendations and the
placing of orders in a manner which is deemed equitable by the Adviser to the
accounts involved, including the Funds. When two or more of the clients of the
Adviser (including one or more of the Funds) are purchasing or selling the same
security on a given day from the same broker-dealer, such transactions may be
averaged as to price.
Although the investment objectives of the Funds are not the same, and
their investment decisions are made independently of each other, they rely upon
the same resources for investment advice and recommendations. Therefore, on
occasion, when a particular security meets the different investment objectives
of the various Funds, they may simultaneously purchase or sell the same
security. This could have a detrimental effect on the price and quantity of the
security available to each Fund. If simultaneous transactions occur, the Adviser
attempts to allocate the securities, both as to price and quantity, in
accordance with a method deemed equitable to each Fund and consistent with their
different investment objectives. In some cases, simultaneous purchases or sales
13
<PAGE>
could have a beneficial effect, in that the ability of one Fund to participate
in volume transactions may produce better executions for that Fund.
Each Fund has adopted procedures under Rule 17a-7 of the 1940 Act to
permit purchase and sales transactions to be effected between each Fund and the
other registered investment companies for which either Evergreen Asset or FUNB
acts as investment adviser or between the Fund and any advisory clients of
Evergreen Asset, FUNB or Lieber. Each Fund may from time to time engage in such
transactions but only in accordance with these procedures and if they are
equitable to each participant and consistent with each participant's investment
objectives.
Prior to July 1, 1995, Federated Administrative Services, a subsidiary
of Federated Investors, provided legal, accounting and other administrative
personnel and support services to each of the portfolios of Evergreen Investment
Trust. The Trust paid a fee for such services at the following annual rate: .15%
on the first $250 million average daily net assets of the Trust; .125% on the
next $250 million; .10% on the next $250 million and .075% on assets in excess
of $250 million. For the fiscal period ended June 30, 1995 and the years ended
December 31, 1994 and 1993. Treasury incurred $462,002 and $613,889 in
administrative service costs, of which $0 and $ 111,107 were waived,
respectively.
On July 1, 1995, Evergreen Asset commenced providing administrative
services to each of the portfolios of Evergreen Investment Trust for a fee based
on the average daily net assets of each fund administered by Evergreen Asset for
which Evergreen Asset or FUNB also serve as investment advisor, calculated daily
and payable monthly at the following annual rates: .050% on the first $7
billion; .035% on the next $3 billion; .030% on the next $5 billion; .020% on
the next $10 billion; .015% on the next $5 billion; and .010% on assets in
excess of $30 billion. Furman Selz Incorporated, an affiliate of the
Distributor, serves as sub-administrator to Treasury and is entitled to receive
a fee based on the average daily net assets of Treasury at a rate from the Fund
calculated on the total assets of the mutual funds administered by Evergreen
Asset for which FUNB or Evergreen Asset also serve as investment adviser,
calculated in accordance with the following schedule: .0100% of the first $7
billion; .0075% on the next $3 billion; .0050% on the next $15 billion; .0040%
on assets in excess of $25 billion. The total assets of mutual funds
administered by Evergreen Asset for which Evergreen Asset or FUNB serve as
investment adviser as of September 30, 1995 were approximately $10.1 billion.
DISTRIBUTION PLANS
Reference is made to "Management of the Fund - Distribution Plans and
Agreements" in the Prospectus of each Fund for additional disclosure regarding
the Funds' distribution arrangements. Distribution fees are accrued daily and
paid monthly on the Class A, and for Money Market its Class B shares and are
charged as class expenses, as accrued. The distribution fees attributable to the
Class B shares are designed to permit an investor to purchase such shares
through broker-dealers without the assessment of a front-end sales charge, while
at the same time permitting the Distributor to compensate broker-dealers in
connection with the sale of such shares.
Under the Rule 12b-1 Distribution Plans that have been adopted by each
Fund with respect to each of its Class A, and Class B shares (to the extent that
14
<PAGE>
each Fund offers such classes) (each a "Plan" and collectively, the "Plans"),
the Treasurer of each Fund reports the amounts expended under the Plan and the
purposes for which such expenditures were made to the Trustees of each Trust for
their review on a quarterly basis. Also, each Plan provides that the selection
and nomination of Trustees who are not "interested persons" of each Trust (as
defined in the 1940 Act) are committed to the discretion of such disinterested
Trustees then in office.
Each Adviser may from time to time and from its own funds or such other
resources as may be permitted by rules of the Securities and Exchange Commission
make payments for distribution services to the Distributor; the latter may in
turn pay part or all of such compensation to brokers or other persons for their
distribution assistance.
Money Market commenced offering Class A and Class B shares and Tax
Exempt commenced offering Class A shares, on January 3, 1995. Each Plan with
respect to such Funds became effective on December 30, 1994 and was initially
approved by the sole shareholder of each Class of shares of each Fund with
respect to which a Plan was adopted on that date and by the unanimous vote of
the Trustees of each Trust, including the disinterested Trustees voting
separately, at a meeting called for that purpose and held on December 13, 1994.
The Distribution Agreements between each Fund and the Distributor, pursuant to
which distribution fees are paid under the Plans by each Fund with respect to
its Class A and Class B shares were also approved at the December 13, 1994
meeting by the unanimous vote of the Trustees, including the disinterested
Trustees voting separately. Each Plan and Distribution Agreement will continue
in effect for successive twelve-month periods provided, however, that such
continuance is specifically approved at least annually by the Trustees of each
Trust or by vote of the holders of a majority of the outstanding voting
securities (as defined in the 1940 Act) of that Class, and, in either case, by a
majority of the Trustees of the Trust who are not parties to the Agreement or
interested persons, as defined in the 1940 Act, of any such party (other than as
Trustees of the Trust) and who have no direct or indirect financial interest in
the operation of the Plan or any agreement related thereto.
Prior to July 8, 1995, Federated Securities Corp., a subsidiary of
Federated Investors, served as the distributor for Treasury as well as other
portfolios of Evergreen Investment Trust. The Distribution Agreement between
Treasury and the Distributor pursuant to which distribution fees are paid under
the Plans by Treasury with respect to its Class A shares was approved on June
15, 1995 by the unanimous vote of the Trustees including the disinterested
Trustees voting separately.
The Plans permit the payment of fees to brokers and others for
distribution and shareholder-related administrative services and to
broker-dealers, depository institutions, financial intermediaries and
administrators for administrative services as to Class A and Class B shares. The
Plans are designed to (i) stimulate brokers to provide distribution and
administrative support services to each Fund and holders of Class A and Class B
shares and (ii) stimulate administrators to render administrative support
services to the Fund and holders of Class A and Class B shares. The
administrative services are provided by a representative who has knowledge of
the shareholder's particular circumstances and goals, and include, but are not
limited to providing office space, equipment, telephone facilities, and various
personnel including clerical, supervisory, and computer, as necessary or
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beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries regarding Class
A and Class B shares; assisting clients in changing dividend options, account
designations, and addresses; and providing such other services as the Fund
reasonably requests for its Class A and Class B shares.
In the event that a Plan or Distribution Agreement is terminated or not
continued with respect to one or more Classes of a Fund, (i) no distribution
fees (other than current amounts accrued but not yet paid) would be owed by the
Fund to the Distributor with respect to that Class or Classes, and (ii) the Fund
would not be obligated to pay the Distributor for any amounts expended under the
Distribution Agreement not previously recovered by the Distributor from
distribution services fees in respect of shares of such Class or Classes through
deferred sales charges.
All material amendments to any Plan or Distribution Agreement must be
approved by a vote of the Trustees of a Trust or the holders of the Fund's
outstanding voting securities, voting separately by Class, and in either case,
by a majority of the disinterested Trustees, cast in person at a meeting called
for the purpose of voting on such approval; and any Plan or Distribution
Agreement may not be amended in order to increase materially the costs that a
particular Class of shares of a Fund may bear pursuant to the Plan or
Distribution Agreement without the approval of a majority of the holders of the
outstanding voting shares of the Class affected. Any Plan or Distribution
Agreement may be terminated (a) by a Fund without penalty at any time by a
majority vote of the holders of the outstanding voting securities of the Fund,
voting separately by Class or by a majority vote of the Trustees who are not
"interested persons" as defined in the 1940 Act, or (b) by the Distributor. To
terminate any Distribution Agreement, any party must give the other parties 60
days' written notice; to terminate a Plan only, the Fund need give no notice to
the Distributor. Any Distribution Agreement will terminate automatically in the
event of its assignment.
For the fiscal period from January 3, 1995 through August 31, 1995
Treasury incurred $1,896,720 in distribution services fees on behalf of Class A
shares.
For the fiscal period from January 3, 1995 through August 31, 1995,
Money Market and Tax Exempt incurred $280,287 and $241,973 respectively, in
distribution services fees on behalf of their Class A shares.
For the fiscal period from January 3, 1995 through August 31, 1995,
Money Market incurred $9,349 in distribution services fees on behalf of its
Class B shares.
ALLOCATION OF BROKERAGE
Decisions regarding each Fund's portfolio are made by its Adviser,
subject to the supervision and control of the Trustees. Orders for the purchase
and sale of securities and other investments are placed by employees of the
Adviser, all of whom, in the case of Evergreen Asset, are associated with
Lieber. In general, the same individuals perform the same functions for the
other funds managed by the Adviser. A Fund will not effect any brokerage
transactions with any broker or dealer affiliated directly or indirectly with
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the Adviser unless such transactions are fair and reasonable, under the
circumstances, to the Fund's shareholders. Circumstances that may indicate that
such transactions are fair or reasonable include the frequency of such
transactions, the selection process and the commissions payable in connection
with such transactions.
It is anticipated that most purchase and sale transactions involving
fixed income securities will be with the issuer or an underwriter or with major
dealers in such securities acting as principals. Such transactions are normally
on a net basis and generally do not involve payment of brokerage commissions.
However, the cost of securities purchased from an underwriter usually includes a
commission paid by the issuer to the underwriter. Purchases or sales from
dealers will normally reflect the spread between bid and ask prices.
In selecting firms to effect securities transactions, the primary
consideration of each Fund shall be prompt execution at the most favorable
price. A Fund will also consider such factors as the price of the securities and
the size and difficulty of execution of the order. If these objectives may be
met with more than one firm, the Fund will also consider the availability of
statistical and investment data and economic facts and opinions helpful to the
Fund. To the extent that receipt of these services for which the Adviser or its
affiliates might otherwise have paid, it would tend to reduce their expenses.
Under Section 11(a) of the Securities Exchange Act of 1934, as amended,
and the rules adopted thereunder by the Securities and Exchange Commission,
Lieber may be compensated for effecting transactions in portfolio securities for
a Fund on a national securities exchange provided the conditions of the rules
are met. Each Fund advised by Evergreen Asset has entered into an agreement with
Lieber authorizing Lieber to retain compensation for brokerage services. In
accordance with such agreement, it is contemplated that Lieber, a member of the
New York and American Stock Exchanges, will, to the extent practicable, provide
brokerage services to the Fund with respect to substantially all securities
transactions effected on the New York and American Stock Exchanges. In such
transactions, a Fund will seek the best execution at the most favorable price
while paying a commission rate no higher than that offered to other clients of
Lieber or that which can be reasonably expected to be offered by an unaffiliated
broker-dealer having comparable execution capability in a similar transaction.
However, no Fund will engage in transactions in which Lieber would be a
principal. While no Fund advised by Evergreen Asset contemplates any ongoing
arrangements with other brokerage firms, brokerage business may be given from
time to time to other firms. In addition, the Trustees have adopted procedures
pursuant to Rule 17e-1 under the 1940 Act to ensure that all brokerage
transactions with Lieber, as an affiliated broker-dealer, are fair and
reasonable.
Any profits from brokerage commissions accruing to Lieber as a result
of portfolio transactions for the Fund will accrue to FUNB and to its ultimate
parent, First Union. The Investment Advisory Agreements do not provide for a
reduction of the Adviser's fee with respect to any Fund by the amount of any
profits earned by Lieber from brokerage commissions generated by portfolio
transactions of the Fund.
ADDITIONAL TAX INFORMATION
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(See also "Taxes" in the Prospectus)
Each Fund has qualified and intends to continue to qualify for and
elect the tax treatment applicable to regulated investment companies ("RIC")
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). (Such qualification does not involve supervision of management or
investment practices or policies by the Internal Revenue Service.) In order to
qualify as a regulated investment company, a Fund must, among other things, (a)
derive at least 90% of its gross income from dividends, interest, payments with
respect to proceeds from securities loans, gains from the sale or other
disposition of securities or foreign currencies and other income (including
gains from options, futures or forward foreign contracts) derived with respect
to its business of investing in such securities; (b) derive less than 30% of its
gross income from the sale or other disposition of securities, options, futures
or forward contracts (other than those on foreign currencies), or foreign
currencies (or options, futures or forward contracts thereon) that are not
directly related to the RIC's principal business of investing in securities (or
options and futures with respect thereto) held for less than three months; and
(c) diversify its holdings so that, at the end of each quarter of its taxable
year, (i) at least 50% of the market value of the Fund's total assets is
represented by cash, U.S. government securities and other securities limited in
respect of any one issuer, to an amount not greater than 5% of the Fund's total
assets and 10% of the outstanding voting securities of such issuer, and (ii) not
more than 25% of the value of its total assets is invested in the securities of
any one issuer (other than U.S. government securities and securities of other
regulated investment companies). By so qualifying, a Fund is not subject to
Federal income tax if it timely distributes its investment company taxable
income and any net realized capital gains. A 4% nondeductible excise tax will be
imposed on a Fund to the extent it does not meet certain distribution
requirements by the end of each calendar year. Each Fund anticipates meeting
such distribution requirements.
Dividends paid by a Fund from investment company taxable income generally
will be taxed to the shareholders as ordinary income. Investment company taxable
income includes net investment income and net realized short-term gains (if
any). Any dividends received by a Fund from domestic corporations will
constitute a portion of the Fund's gross investment income.
Distributions of the excess of net long-term capital gain over net
short-term capital loss are taxable to shareholders (who are not exempt from
tax) as long-term capital gain, regardless of the length of time the shares of a
Fund have been held by such shareholders. Short-term capital gains distributions
are taxable to shareholders who are not exempt from tax as ordinary income. Such
distributions are not eligible for the dividends-received deduction. Any loss
recognized upon the sale of shares of a Fund held by a shareholder for six
months or less will be treated as a long-term capital loss to the extent that
the shareholder received a long-term capital gain distribution with respect to
such shares.
Distributions of investment company taxable income and any net
short-term capital gains will be taxable as ordinary income as described above
to shareholders (who are not exempt from tax), whether made in shares or in
cash. Shareholders electing to receive distributions in the form of additional
shares will have a cost basis for Federal income tax purposes in each share so
received equal to the net asset value of a share of a Fund on the reinvestment
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date.
Distributions by each Fund result in a reduction in the net asset value of
the Fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution nevertheless would be taxable as
ordinary income or capital gain as described above to shareholders (who are not
exempt from tax), even though, from an investment standpoint, it may constitute
a return of capital. In particular, investors should be careful to consider the
tax implications of buying shares just prior to a distribution. The price of
shares purchased at that time includes the amount of the forthcoming
distribution. Those purchasing just prior to a distribution will then receive
what is in effect a return of capital upon the distribution which will
nevertheless be taxable to shareholders subject to taxes.
Upon a sale or exchange of its shares, a shareholder will realize a taxable
gain or loss depending on its basis in the shares. Such gains or losses will be
treated as a capital gain or loss if the shares are capital assets in the
investor's hands and will be a long-term capital gain or loss if the shares have
been held for more than one year. Generally, any loss realized on a sale or
exchange will be disallowed to the extent shares disposed of are replaced within
a period of sixty-one days beginning thirty days before and ending thirty days
after the shares are disposed of. Any loss realized by a shareholder on the sale
of shares of the Fund held by the shareholder for six months or less will be
disallowed to the extent of any exempt interest dividends received by the
shareholder with respect to such shares, and will be treated for tax purposes as
a long-term capital loss to the extent of any distributions of net capital gains
received by the shareholder with respect to such shares.
All distributions, whether received in shares or cash, must be reported by
each shareholder on his or her Federal income tax return. Each shareholder
should consult his or her own tax adviser to determine the state and local tax
implications of Fund distributions.
Shareholders who fail to furnish their taxpayer identification numbers
to a Fund and to certify as to its correctness and certain other shareholders
may be subject to a 31% Federal income tax backup withholding requirement on
dividends, distributions of capital gains and redemption proceeds paid to them
by the Fund. If the withholding provisions are applicable, any such dividends or
capital gain distributions to these shareholders, whether taken in cash or
reinvested in additional shares, and any redemption proceeds will be reduced by
the amounts required to be withheld. Investors may wish to consult their own tax
advisers about the applicability of the backup withholding provisions.
The foregoing discussion relates solely to U.S. Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens and residents and U.S. domestic
corporations, partnerships, trusts and estates). It does not reflect the special
tax consequences to certain taxpayers (e.g., banks, insurance companies, tax
exempt organizations and foreign persons). Shareholders are encouraged to
consult their own tax advisers regarding specific questions relating to Federal,
state and local tax consequences of investing in shares of a Fund. Each
shareholder who is not a U.S. person should consult his or her tax adviser
regarding the U.S. and foreign tax consequences of ownership of shares of a
Fund, including the possibility that such a shareholder may be subject to a U.S.
withholding tax at a rate of 31% (or at a lower rate under a tax treaty) on
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amounts treated as income from U.S. sources under the Code.
Special Tax Considerations for Tax Exempt
With respect to Tax Exempt, to the extent that the Fund distributes
exempt interest dividends to a shareholder, interest on indebtedness incurred or
continued by such shareholder to purchase or carry shares of the Fund is not
deductible. Furthermore, entities or persons who are "substantial users" (or
related persons) of facilities financed by "private activity" bonds (some of
which were formerly referred to as "industrial development" bonds) should
consult their tax advisers before purchasing shares of the Fund. "Substantial
user" is defined generally as including a "non-exempt person" who regularly uses
in its trade or business a part of a facility financed from the proceeds of
industrial development bonds.
The percentage of the total dividends paid by a Fund with respect to
any taxable year that qualifies as exempt interest dividends will be the same
for all shareholders of the Fund receiving dividends with respect to such year.
If a shareholder receives an exempt interest dividend with respect to any share
and such share has been held for six months or less, any loss on the sale or
exchange of such share will be disallowed to the extent of the exempt interest
dividend amount.
NET ASSET VALUE
The following information supplements that set forth in each Prospectus
under the subheading "How to Buy Shares - How the Funds Value Their Shares" in
the Section entitled "Purchase and Redemption of Shares".
The public offering price of shares of a Fund is its net asset value.
On each Fund business day on which a purchase or redemption order is received by
a Fund and trading in the types of securities in which a Fund invests might
materially affect the value of Fund shares, the per share net asset value of
each such Fund is computed in accordance with the Declaration of Trust and
By-Laws governing each Fund twice daily, at 12 noon Eastern time and as of the
next close of regular trading on the New York Stock Exchange (the "Exchange")
(currently 4:00 p.m. Eastern time) by dividing the value of the Fund's total
assets, less its liabilities, by the total number of its shares then
outstanding. A Fund business day is any weekday, exclusive of national holidays
on which the Exchange is closed and Good Friday. Each Fund's securities are
valued at amortized cost. Under this method of valuation, a security is
initially valued at its acquisition cost and, thereafter, a constant straight
line amortization of any discount or premium is assumed each day regardless of
the impact of fluctuating interest rates on the market value of the security. If
accurate quotations are not available, securities will be valued at fair value
determined in good faith by the Board of Trustees.
PURCHASE OF SHARES
The following information supplements that set forth in each Prospectus
under the heading "Purchase and Redemption of Shares - How To Buy Shares".
General
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Shares of each Fund will be offered on a continuous basis at a price
equal to their net asset value without any front-end or contingent deferred
sales charges or with a contingent deferred sales charge (the "deferred sales
charge alternative") as described below. Class Y shares which, as described
below, are not offered to the general public, are offered without any front-end
or contingent sales charges. Shares of each Fund are offered on a continuous
basis through (i) investment dealers that are members of the National
Association of Securities Dealers, Inc. and have entered into selected dealer
agreements with the Distributor ("selected dealers"), (ii) depository
institutions and other financial intermediaries or their affiliates, that have
entered into selected agent agreements with the Distributor ("selected agents"),
or (iii) the Distributor. The minimum for initial investments is $1,000; there
is no minimum for subsequent investments. The subscriber may use the Share
Purchase Application available from the Distributor for his or her initial
investment. Sales personnel of selected dealers and agents distributing a Fund's
shares may receive differing compensation for selling Class A or Class B shares.
Investors may purchase shares of a Fund in the United States either
through selected dealers or agents or directly through the Distributor. A Fund
reserves the right to suspend the sale of its shares to the public in response
to conditions in the securities markets or for other reasons.
Each Fund will accept unconditional orders for its shares to be
executed at the public offering price equal to the net asset value next
determined, as described below. Orders received by the Distributor prior to the
close of regular trading on the Exchange on each day the Exchange is open for
trading are priced at the net asset value computed as of the close of regular
trading on the Exchange on that day. In the case of orders for purchase of
shares placed through selected dealers or agents, the applicable public offering
price will be the net asset value as so determined, but only if the selected
dealer or agent receives the order prior to the close of regular trading on the
Exchange and transmits it to the Distributor prior to its close of business that
same day (normally 5:00 p.m. Eastern time). The selected dealer or agent is
responsible for transmitting such orders by 5:00 p.m. If the selected dealer or
agent fails to do so, the investor's right to that day's closing price must be
settled between the investor and the selected dealer or agent. If the selected
dealer or agent receives the order after the close of regular trading on the
Exchange, the price will be based on the net asset value determined as of the
close of regular trading on the Exchange on the next day it is open for trading.
Following the initial purchase of shares of a Fund, a shareholder may
place orders to purchase additional shares by telephone if the shareholder has
completed the appropriate portion of the Share Purchase Application. Payment for
shares purchased by telephone can be made only by Electronic Funds Transfer from
a bank account maintained by the shareholder at a bank that is a member of the
National Automated Clearing House Association ("ACH"). If a shareholder's
telephone purchase request is received before 3:00 p.m. New York time on a Fund
business day, the order to purchase shares is automatically placed the same Fund
business day for non-money market funds, and two days following the day the
order is received for money market funds, and the applicable public offering
price will be the public offering price determined as of the close of business
on such business day. Full and fractional shares are credited to a subscriber's
account in the amount of his or her subscription. As a convenience to the
subscriber, and to avoid unnecessary expense to a Fund, stock certificates are
not issued for any class of shares of any Fund, although such shares remain
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in the shareholder's account on the records of a Fund. This facilitates later
redemption and relieves the shareholder of the responsibility for and
inconvenience of lost or stolen certificates.
Alternative Purchase Arrangements
Except as noted, each Fund issues three classes of shares: (i) Class A
shares, which are sold to investors choosing the no front-end sales charge or
contingent deferred sales charge alternative; (ii) Class B shares, which are
sold to investors choosing the deferred sales charge alternative and which are
not currently offered by Tax Exempt and Treasury; and (iii) Class Y shares,
which are offered only to (a) persons who at or prior to December 30, 1994 owned
shares in a mutual fund advised by Evergreen Asset, (b) certain investment
advisory clients of the Advisers and their affiliates, and (c) institutional
investors. The three classes of shares each represent an interest in the same
portfolio of investments of the Fund, have the same rights and are identical in
all respects, except that (I) only Class A and Class B shares are subject to a
Rule 12b-1 distribution fee, (II) Class B shares bear the expense of the
deferred sales charge, (III) Class B shares bear the expense of a higher Rule
12b-1 distribution services fee than Class A shares and higher transfer agency
costs, (IV) with the exception of Class Y shares, each Class of each Fund has
exclusive voting rights with respect to provisions of the Rule 12b-1 Plan
pursuant to which its distribution services fee is paid which relates to a
specific Class and other matters for which separate Class voting is appropriate
under applicable law, provided that, if the Fund submits to a simultaneous vote
of Class A and Class B shareholders an amendment to the Rule 12b-1 Plan that
would materially increase the amount to be paid thereunder with respect to the
Class A shares, the Class A shareholders and the Class B shareholders will vote
separately by Class, and (VI) only the Class B shares are subject to a
conversion feature. Each Class has different exchange privileges and certain
different shareholder service options available.
The alternative purchase arrangements permit an investor to choose the
method of purchasing shares that is most beneficial. The decision as to which
Class of shares of Money Market is more beneficial depends primarily on whether
or not the investor wishes to exchange all or part of any Class B shares
purchased for Class B shares of another Evergreen mutual fund at some future
date. If the investor does not contemplate such an exchange, it is probably in
such investor's best interest to purchase Class A shares. Class A shares are
subject to a lower distribution services fee and, accordingly, pay
correspondingly higher dividends per share than Class B shares.
With respect to each Fund, the Trustees have determined that currently
no conflict of interest exists between or among the Class A, Class B and Class Y
shares. On an ongoing basis, the Trustees, pursuant to their fiduciary duties
under the 1940 Act and state laws, will seek to ensure that no such conflict
arises.
Deferred Sales Charge Alternative--Class B Shares
Investors choosing the deferred sales charge alternative purchase Class
B shares at the public offering price equal to the net asset value per share of
the Class B shares on the date of purchase without the imposition of a sales
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charge at the time of purchase. The Class B shares are sold without a front-end
sales charge so that the full amount of the investor's purchase payment is
invested in the Fund initially.
Proceeds from the contingent deferred sales charge are paid to the
Distributor and are used by the Distributor to defray the expenses of the
Distributor related to providing distribution-related services to the Fund in
connection with the sale of the Class B shares, such as the payment of
compensation to selected dealers and agents for selling Class B shares. The
combination of the contingent deferred sales charge and the distribution
services fee enables the Fund to sell the Class B shares without a sales charge
being deducted at the time of purchase. The higher distribution services fee
incurred by Class B shares will cause such shares to have a higher expense ratio
and to pay lower dividends than those related to Class A shares.
Contingent Deferred Sales Charge. Class B shares which are redeemed
within seven years of purchase will be subject to a contingent deferred sales
charge at the rates set forth in the Prospectus charged as a percentage of the
dollar amount subject thereto. The charge will be assessed on an amount equal to
the lesser of the cost of the shares being redeemed or their net asset value at
the time of redemption. Accordingly, no sales charge will be imposed on
increases in net asset value above the initial purchase price. In addition, no
contingent deferred sales charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions. The amount of the
contingent deferred sales charge, if any, will vary depending on the number of
years from the time of payment for the purchase of Class B shares until the time
of redemption of such shares.
In determining the contingent deferred sales charge applicable to a
redemption, it will be assumed, that the redemption is first of any Class A
shares in the shareholder's Fund account, second of Class B shares held for over
eight years or Class B shares acquired pursuant to reinvestment of dividends or
distributions and third of Class B shares held longest during the eight-year
period.
To illustrate, assume that an investor purchased 1,000 Class B shares
at $1 per share (at a cost of $1,000) and, during such time, the investor has
acquired 100 additional Class B shares upon dividend reinvestment. If at such
time the investor makes his or her first redemption of 500 Class B shares, 100
Class B shares will not be subject to charge because of dividend reinvestment.
Therefore, of the $500 of the shares redeemed $400 of the redemption proceeds
(400 shares x $1 original purchase price) will be charged at a rate of 4.0% (the
applicable rate in the second year after purchase for a contingent deferred
sales charge of $16).
The contingent deferred sales charge is waived on redemptions of shares
(i) following the death or disability, as defined in the Code, of a shareholder,
or (ii) to the extent that the redemption represents a minimum required
distribution from an individual retirement account or other retirement plan to a
shareholder who has attained the age of 70-1/2.
Conversion Feature. At the end of the period ending seven years after
the end of the calendar month in which the shareholder's purchase order was
accepted, Class B shares will automatically convert to Class A shares and will
no longer be subject to a higher distribution services fee imposed on Class B
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shares. Such conversion will be on the basis of the relative net asset values of
the two classes, without the imposition of any sales load, fee or other charge.
The purpose of the conversion feature is to reduce the distribution services fee
paid by holders of Class B shares that have been outstanding long enough for the
Distributor to have been compensated for the expenses associated with the sale
of such shares.
For purposes of conversion to Class A, Class B shares purchased through
the reinvestment of dividends and distributions paid in respect of Class B
shares in a shareholder's account will be considered to be held in a separate
sub-account. Each time any Class B shares in the shareholder's account (other
than those in the sub-account) convert to Class A, an equal pro-rata portion of
the Class B shares in the sub-account will also convert to Class A.
The conversion of Class B shares to Class A shares is subject to the
continuing availability of an opinion of counsel to the effect that (i) the
assessment of the higher distribution services fee and transfer agency costs
with respect to Class B shares does not result in the dividends or distributions
payable with respect to other Classes of a Fund's shares being deemed
"preferential dividends" under the Code, and (ii) the conversion of Class B
shares to Class A shares does not constitute a taxable event under Federal
income tax law. The conversion of Class B shares to Class A shares may be
suspended if such an opinion is no longer available at the time such conversion
is to occur. In that event, no further conversions of Class B shares would
occur, and shares might continue to be subject to the higher distribution
services fee for an indefinite period which may extend beyond the period ending
eight years after the end of the calendar month in which the shareholder's
purchase order was accepted.
Class Y Shares
Class Y shares are not offered to the general public and are available
only to (i) persons who at or prior to December 30, 1994 owned shares in a
mutual fund advised by Evergreen Asset, (ii) certain investment advisory clients
of the Advisers and their affiliates, and (iii) institutional investors. Class Y
shares do not bear any Rule 12b-1 distribution expenses and are not subject to
any front-end or contingent deferred sales charges.
GENERAL INFORMATION ABOUT THE FUNDS
(See also "Other Information - General Information" in each Fund's Prospectus)
Capitalization and Organization
Evergreen Money Market Fund is a Massachusetts business trust. The
Evergreen Tax Exempt Money Market Fund is a separate series of The Evergreen
Municipal Trust, a Massachusetts business trust. The Evergreen Treasury Money
Market Fund, which prior to July 7, 1995 was known as the First Union Treasury
Money Market Portfolio, is a separate series of Evergreen Investment Trust, a
Massachusetts business trust. On July 7, 1995, First Union Funds changed its
name to Evergreen Investment Trust. On December 14, 1992, The Salem Funds
changed its name to First Union Funds. The above-named Trusts are individually
referred to in this Statement of Additional Information as the "Trust" and
collectively as the "Trusts". Each Trust is governed by a board of trustees.
Unless otherwise stated, references to the "Board of Trustees" or "Trustees" in
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this Statement of Additional Information refer to the Trustees of all the
Trusts.
Money Market and Tax Exempt may issue an unlimited number of shares of
beneficial interest with a $0.0001 par value. Treasury may issue an unlimited
number of shares of beneficial interest without par value. All shares of these
Funds have equal rights and privileges. Each share is entitled to one vote, to
participate equally in dividends and distributions declared by the Funds and on
liquidation to their proportionate share of the assets remaining after
satisfaction of outstanding liabilities. Shares of these Funds are fully paid,
nonassessable and fully transferable when issued and have no pre-emptive,
conversion or exchange rights. Fractional shares have proportionally the same
rights, including voting rights, as are provided for a full share.
Under each Trust's Declaration of Trust, each Trustee will continue in
office until the termination of the Fund or his or her earlier death,
incapacity, resignation or removal. Shareholders can remove a Trustee upon a
vote of two-thirds of the outstanding shares of beneficial interest of the
Trust. Vacancies will be filled by a majority of the remaining Trustees, subject
to the 1940 Act. As a result, normally no annual or regular meetings of
shareholders will be held, unless otherwise required by the Declaration of Trust
of each Trust or the 1940 Act.
Shares have noncumulative voting rights, which means that the holders
of more than 50% of the shares voting for the election of Trustees can elect
100% of the Trustees if they choose to do so and in such event the holders of
the remaining shares so voting will not be able to elect any Trustees.
The Trustees of each Trust are authorized to reclassify and issue any
unissued shares to any number of additional series without shareholder approval.
Accordingly, in the future, for reasons such as the desire to establish one or
more additional portfolios of a Trust with different investment objectives,
policies or restrictions, additional series of shares may be created by one or
more Funds. Any issuance of shares of another series or class would be governed
by the 1940 Act and the law of the Commonwealth of Massachusetts. If shares of
another series of a Trust were issued in connection with the creation of
additional investment portfolios, each share of the newly created portfolio
would normally be entitled to one vote for all purposes. Generally, shares of
all portfolios would vote as a single series on matters, such as the election of
Trustees, that affected all portfolios in substantially the same manner. As to
matters affecting each portfolio differently, such as approval of the Investment
Advisory Agreement and changes in investment policy, shares of each portfolio
would vote separately.
In addition any Fund may, in the future, create additional classes of
shares which represent an interest in the same investment portfolio. Except for
the different distribution related and other specific costs borne by such
additional classes, they will have the same voting and other rights described
for the existing classes of each Fund.
Procedures for calling a shareholders meeting for the removal of the
Trustees of each Trust, similar to those set forth in Section 16(c) of the 1940
Act, will be available to shareholders of each Fund. The rights of the holders
of shares of a series of a Fund may not be modified except by the vote of a
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majority of the outstanding shares of such series.
An order has been received from the Securities and Exchange Commission
permitting the issuance and sale of multiple classes of shares representing
interests in each Fund. In the event a Fund were to issue additional classes of
shares other than those described herein, no further relief from the Securities
and Exchange Commission would be required.
Distributor
Evergreen Funds Distributor, Inc. (the "Distributor"), 237 Park Avenue,
New York, New York 10169, serves as each Fund's principal underwriter, and as
such may solicit orders from the public to purchase shares of any Fund. The
Distributor is not obligated to sell any specific amount of shares and will
purchase shares for resale only against orders for shares. Under the Agreement
between each Fund and the Distributor, each Fund has agreed to indemnify the
Distributor, in the absence of its willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations thereunder, against certain
civil liabilities, including liabilities under the Securities Act of 1933, as
amended.
Counsel
Sullivan & Worcester LLP, Washington, D.C., serves as counsel to the
Funds.
Independent Auditors
Price Waterhouse LLP has been selected to be the independent auditors
of Money Market and Tax Exempt.
KPMG Peat Marwick LLP has been selected to be the independent auditors
of Treasury.
PERFORMANCE INFORMATION
YIELD CALCULATIONS
Money Market, Tax Exempt and Treasury may quote a "Current Yield" or
"Effective Yield" from time to time. The Current Yield is an annualized yield
based on the actual total return for a seven-day period. The Effective Yield is
an annualized yield based on a compounding of the Current Yield. These yields
are each computed by first determining the "Net Change in Account Value" for a
hypothetical account having a share balance of one share at the beginning of a
seven-day period ("Beginning Account Value"), excluding capital changes. The Net
Change in Account Value will generally equal the total dividends declared with
respect to the account.
The yields are then computed as follows:
Net Change in Account Value
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Current Yield = Beginning Account Value x 365/7
Effective Yield = (1 + Total Dividend for 7 days) 365/7-1
Yield fluctuations may reflect changes in a Fund's net investment
income, and portfolio changes resulting from net purchases or net redemptions of
the Fund's shares may affect the yield. Accordingly, a Fund's yield may vary
from day today, and the yield stated for a particular past period is not
necessarily representative of its future yield. Since the Funds use the
amortized cost method of net asset value computation, it does not anticipate any
change in yield resulting from any unrealized gains or losses or unrealized
appreciation or depreciation not reflected in the yield computation, or change
in net asset value during the period used for computing yield. If any of these
conditions should occur, yield quotations would be suspended. A Fund's yield is
not guaranteed, and the principal is not insured.
Yield information is useful in reviewing a Fund's performance, but
because yields fluctuate, such information cannot necessarily be used to compare
an investment in a Fund's shares with bank deposits, savings accounts and
similar investment alternatives which often provide an agreed or guaranteed
fixed yield for a stated period of time. Shareholders should remember that yield
is a function of the kind and quality of the instruments in the Funds'
investment portfolios, portfolio maturity, operating expenses and market
conditions.
It should be recognized that in periods of declining interest rates the
yields will tend to be somewhat higher than prevailing market rates, and in
periods of rising interest rates the yields will tend to be somewhat lower.
Also, when interest rates are falling, the inflow of net new money to a Fund
from the continuous sale of its shares will likely be invested in instruments
producing lower yields than the balance of the Fund's investments, thereby
reducing the current yield of the Fund. In periods of rising interest rates, the
opposite can be expected to occur.
The current yield and effective yield of each Fund for the seven-day
period ended August 31, 1995 for each Class of shares offered by the Funds is
set forth in the table below:
Current Effective
Yield Yield
Money Market
Class A 5.20% 5.33%
Class B 4.50% 4.60%
Class Y 5.49% 5.64%
Tax Exempt
Class A 3.30% 3.35%
Class Y 3.59% 3.65%
Treasury
Class A 5.16% 5.29%
Class Y 5.46% 5.61%
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GENERAL
From time to time, a Fund may quote its performance in advertising and other
types of literature as compared to the performance of the Bank Rate Monitor
National Index which publishes weekly average rates of 50 leading bank and
thrift institution money market deposit accounts. A Fund's performance may also
be compared to those of other mutual funds having similar objectives. This
comparative performance would be expressed as a ranking prepared by Lipper
Analytical Services, Inc., Donoghue's Money Fund Report or similar independent
services monitoring mutual fund performance. A Fund's performance will be
calculated by assuming, to the extent applicable, reinvestment of all capital
gains distributions and income dividends paid. Any such comparisons may be
useful to investors who wish to compare a Fund's past performance with that of
its competitors. Of course, past performance cannot be a guarantee of future
results.
Additional Information
Any shareholder inquiries may be directed to the shareholder's broker
or to each Adviser at the address or telephone number shown on the front cover
of this Statement of Additional Information. This Statement of Additional
Information does not contain all the information set forth in the Registration
Statement filed by the Trusts with the Securities and Exchange Commission under
the Securities Act of 1933. Copies of the Registration Statement may be obtained
at a reasonable charge from the Securities and Exchange Commission or may be
examined, without charge, at the offices of the Securities and Exchange
Commission in Washington, D.C.
FINANCIAL STATEMENTS
Each Fund's financial statements appearing in their most current fiscal
year Annual Report to shareholders and the report thereon of the independent
auditors appearing therein, namely Price Waterhouse LLP (in the case of Money
Market and Tax Exempt) or KPMG Peat Marwick LLP (in the case of Treasury) are
incorporated by reference in this Statement of Additional Information. The
Annual Reports to Shareholders for each Fund, which contain the referenced
statements, are available upon request and without charge.
APPENDIX "A"
DESCRIPTION OF BOND RATINGS
Standard & Poor's Ratings Groups. A Standard & Poor's corporate or
municipal bond rating is a current assessment of the credit worthiness of an
obligor with respect to a specific obligation. This assessment of credit
worthiness may take into consideration obligors such as guarantors, insurers or
lessees. The debt rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.
The ratings are based on current information furnished to Standard &
Poor's by the issuer or obtained by Standard & Poor's from other sources it
28
<PAGE>
considers reliable. Standard & Poor's does not perform any audit in connection
with the ratings and may, on occasion, rely on unaudited financial information.
The ratings may be changed, suspended or withdrawn as a result of changes in,
unavailability of such information, or for other circumstances.
The ratings are based, in varying degrees, on the following
considerations:
1. Likelihood of default-capacity and willingness of the obligor as to
the timely payment of interest and repayment of principal in accordance with the
terms of the obligation.
2. Nature of and provisions of the obligation.
3. Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization or their arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA - This is the highest rating assigned by Standard & Poor's to a
debt obligation and indicates an extremely strong capacity to pay interest and
repay any principal.
AA - Debt rated AA also qualifies as high quality debt obligations.
Capacity to pay interest and repay principal is very strong and in the majority
of instances they differ from AAA issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than is higher rated categories.
BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC and C is regarded, on a
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation.
BB indicates the lowest degree of speculation and C the highest degree
of speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
BB - Debt rated BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB - rating.
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B - Debt rated B has greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
BB or BB- rating.
CCC - Debt rated CCC has a currently indefinable vulnerability to
default, and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of principal. In the
event of adverse business, financial or economic conditions, it is not likely to
have the capacity to pay interest and repay principal. The CCC rating category
is also used for debt subordinated to senior debt that is assigned an actual or
implied B or B- rating.
CC - The rating CC is typically applied to debt subordinated to senior
debt that is assigned an actual or implied CCC rating.
C - The rating C is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed, but
debt service payments are continued.
C1 - The rating C1 is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. It is used when interest
payments or principal payments are not made on a due date even if the applicable
grace period has not expired, unless Standard & Poor's believes that such
payments will be made during such grace periods; it will also be used upon a
filing of a bankruptcy petition if debt service payments are jeopardized.
Plus (+) or Minus (-) - To provide more detailed indications of credit
quality, the ratings from AA to CCC may be modified by the addition of a plus or
minus sign to show relative standing within the major rating categories.
NR - indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular type of obligation as a matter of policy. Debt
obligations of issuers outside the United States and its territories are rated
on the same basis as domestic corporate and municipal issues. The ratings
measure the credit worthiness of the obligor but do not take into account
currency exchange and related uncertainties.
Bond Investment Quality Standards: Under present commercial bank
regulations issued by the Comptroller of the Currency, bonds rated in the top
four categories (AAA, AA, A, BBB, commonly known as "Investment Grade" ratings)
are generally regarded as eligible for bank investment. In addition, the Legal
Investment Laws of various states may impose certain rating or other standards
for obligations eligible for investment by savings banks, trust companies,
insurance companies and fiduciaries generally.
Moody's Investors Service. A brief description of the applicable Moody's
Investors Service rating symbols and their meanings follows:
Aaa - Bonds which are rated Aaa are judged to be of the best quality.
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They carry the smallest degree of investment risk and are generally referred to
as "gilt edge". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuations of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa - Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Some bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well. NOTE:
Bonds within the above categories which possess the strongest investment
attributes are designated by the symbol "1" following the rating.
Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa - Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca - bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C - bonds which are rated C are the lowest rated class of bonds and
issue so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Duff & Phelps: AAA-- highest credit quality, with negligible risk
factors; AA -- high credit quality, with strong protection factors and modest
risk, which
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may vary very slightly form time to time because of economic conditions;
A--average credit quality with adequate protection factors, but with greater and
more variable risk factors in periods of economic stress. The indicators "+" and
"-" to the AA and A categories indicate the relative position of a credit within
those rating categories.
Fitch Investors Service: AAA -- highest credit quality, with an
exceptionally strong ability to pay interest and repay principal; AA -- very
high credit quality, with very strong ablility to pay interest and repay
principal; A -- high credit quality, considered strong as regards principal and
interest protection, but may be more vulneralbe to adverse changes in economic
conditions and circumstances. The indicators "+" and "-" to the AA, A and BBB
categories indicate the relative position of credit within those rating
categories.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
A Standard & Poor's note rating reflects the liquidity concerns and
market access risks unique to notes. Notes due in three years or less will
likely receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in making
that assessment.
o Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
o Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note.)
Note rating symbols are as follows:
o SP-1 Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
o SP-2 Satisfactory capacity to pay principal and interest.
o SP-3 Speculative capacity to pay principal and interest.
Moody's Short-Term Loan Ratings - Moody's ratings for state and
municipal short-term obligations will be designated Moody's Investment Grade
(MIG). This distinction is in recognition of the differences between short-term
credit risk and long-term risk. Factors affecting the liquidity of the borrower
are uppermost in importance in short-term borrowing, while various factors of
major importance in bond risk are of lesser importance over the short run.
Rating symbols and their meanings follow:
o MIG 1 - This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
o MIG 2 - This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
o MIG 3 - This designation denotes favorable quality. All security
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<PAGE>
elements are accounted for but this is lacking the undeniable strength of the
preceding grades. Liquidity and cash flow protection may be narrow and market
access for refinancing is likely to be less well established.
o MIG 4 - This designation denotes adequate quality. Protection commonly
regarded as required of an investment security is present and although not
distinctly or predominantly speculative, there is specific risk.
COMMERCIAL PAPER RATINGS
Moody's Investors Service, Inc.: Commercial paper rated "Prime" carries the
smallest degree of investment risk. The modifiers 1, 2, and 3 are used to denote
relative strength within this highest classification.
Standard & Poor's Ratings Group: "A" is the highest commercial paper
rating category utilized by Standard & Poor's Ratings Group which uses the
numbers 1+, 1, 2 and 3 to denote relative strength within its "A"
classification.
Duff & Phelps: Duff 1 is the highest commercial paper rating category
utilized by Duff & Phelps which uses + or - to denote relative strength within
this classification. Duff 2 represents good certainty of timely payment, with
minimal risk factors. Duff 3 represents satisfactory protection factors, with
risk factors larger and subject to more variation.
Fitch Investors Service: F-1+ -- denotes exceptionally strong credit
quality given to issues regarded as having strongest degree of assurance for
timely payment; F-1+ -- very strong credit quality, with only slightly less
degree of assurance for timely payment than F-1 -- very strong, with only
slightly less degree of assurance for timely payment than F-1+; F-2 -- good
credit quality, caryying a satisfactory degree of assurance for timely payment.
33
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******************************************************************************
THE EVERGREEN MONEY MARKET TRUST
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
a. Financial Statements
Included in Part A of this Registration Statement:
Financial Highlights for the fiscal period from November 11, 1987
(commencement of operations) through October 31, 1988, for the fiscal
years ended October 31, 1989 through October 31, 1993 and for the
fiscal periods ended August 31, 1994 and August 31, 1995.
Included in Part B of this Registration Statement:*
Statement of Investments as of August 31, 1995.
Statement of Assets and Liabilities as of August 31, 1995.
Statement of Operations for the period ended August 31, 1995
Statements of Changes in Net Assets for the fiscal years ended
August 31, 1994 and August 31, 1995
Financial Highlights
Notes to Financial Statements
Report of Independent Auditors
Statements, schedules and historical information other than those
listed above have been omitted since they are either not applicable or
are not required or the required information is shown in the financial
statements or notes thereto.
b. Exhibits
Number Description
1(A) Amended and Restated Declaration of Trust**
1(B) Form of Instrument providing for the Establishment
and Designation of Classes**
2 By-Laws**
3 None
4 Instruments Defining Rights of Shareholders**
5(A) Investment Advisory Agreement**
5(B) Investment Subadvisory Agreement**
6 Distribution Agreement
7 None
8 Custodian Agreement**
9 None
10 Opinion of Messrs. Shereff, Friedman, Hoffman & Goodman**
11 Consent of Price Waterhouse, independent accountants
12 None
13 None
14 None
15 Rule 12b-1 Distribution Plans**
16 None
17 None
- --------------------------
* Incorporated by reference to the Annual Report to Shareholders for
the fiscal period ended August 31, 1995 which has been previously
filed with the Commission and by reference to the Annual Report of
Registrant on form NSAR for the aforementioned period.
** Incorporated by reference to Registrant's previous filings on Form
N-1A.
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant
None
Item 26. Number of Holders of Securities (as of October 16, 1995)
(1) (2)
Number of Record
Title of Class Shareholders
Class Y Shares of Beneficial Interest ($0.0001 par value) 14,907
Class A Shares of Beneficial Interest ($0.0001 par value) 9,628
Class B Shares of Beneficial Interest ($0.0001 par value) 274
Item 27. Indemnification
Article XI of the Registrant's By-laws contains the following
provisions regarding indemnification of Trustees and officers:
SECTION 11.1 Actions Against Trustee or Officer. The Trust shall
indemnify any individual who is a present or former Trustee or officer of the
Trust and who, by reason of his position as such, was, is, or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
any action or suit by or in the right of the Trust) against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement, actually and
reasonably incurred by him in connection with the claim, action, suit, or
proceeding, if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon the plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
SECTION 11.2 Derivative Actions Against Trustees or Officers. The Trust
shall indemnify any individual who is a present or former Trustee or officer of
the Trust and who, by reason of his position as such, was, is, or is threatened
to be made a party to any threatened, pending or completed action or suit by or
on behalf of the Trust to obtain a judgment or decree in its favor, against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit, if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust, except that no indemnification shall be made in
respect of any claim, issue or matter as to which the individual has been
adjudged to be liable for negligence or misconduct in the performance of his
duty to the Trust, except to the extent that the court in which the action or
suit was brought determines upon application that, despite the adjudication of
liability but in view of all circumstances of the case, the person is fairly and
reasonably entitled to indemnity for those expenses which the court shall deem
proper, provided such Trustee or officer is not adjudged to be liable by reason
of his willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office.
SECTION 11.3 Expenses of Successful Defense. To the extent that a
Trustee or officer of the Trust has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to in Section 11.1 or 11.2
or in defense of any claim, issue, or matter therein, he shall be indemnified
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection therewith.
SECTION 11.4 Required Standard of Conduct.
(a) Unless a court orders otherwise, any indemnification under Section
11.1 or 11.2 may be made by the Trust only as authorized in the specific case
after a determination that indemnification of the Trustee or officer is proper
in the circumstances because he has met the applicable standard of conduct set
forth in Section 11.1 or 11.2. The determination shall be made by: (i) the
Trustees, by a majority vote of a quorum consisting of Trustees who were not
parties to the action, suit or proceeding; or if the required quorum is not
obtainable, or if a quorum of disinterested Trustees so directs, (ii) an
independent legal counsel in a written opinion.
(b) Nothing contained in this Article XI shall be construed to protect
any Trustee or officer of the Trust against any liability to the Trust or its
Shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office (any such conduct being hereinafter called
"Disabling Conduct"). No indemnification shall be made pursuant to this Article
XI unless:
(i) There is a final determination on the merits by a court or
other body before whom the action, suit or proceeding was brought that the
individual to be indemnified was not liable by reason of Disabling Conduct; or
(ii) In the absence of such a judicial determination, there is
a reasonable determination, based upon a review of the facts, that such
individual was not liable by reason of Disabling Conduct, which determination
shall be made by:
(A) A majority of a quorum of Trustees who are neither
"interested persons" of the Trust, as defined in section 2(a) (19) of the 1940
Act, nor parties to the action, suit or proceeding; or
(B) An independent legal counsel in a written opinion.
SECTION 11.5 Advance Payments. Notwithstanding any provision of this
Article XI, any advance payment of expenses by the Trust to any Trustee or
officer of the Trust shall be made only upon the undertaking by or on behalf of
such Trustee or officer to repay the advance unless it is ultimately determined
that he is entitled to indemnification as above provided, and only if one of the
following conditions is met:
(a) the Trustee or officer to be indemnified provides a
security for his undertaking; or
(b) The Trust is insured against losses arising by reason of
any lawful advances; or
(c) There is a determination, based on a review of readily
available facts, that there is reason to believe that the Trustee or officer to
be indemnified ultimately will be entitled to indemnification, which
determination shall be made by:
(i) A majority of a quorum of Trustees who are neither
"interested persons" of the Trust, as defined in Section 2(a) (19) of the 1940
Act, nor parties to the action, suit or proceeding; or
(ii) An independent legal counsel in a written opinion.
SECTION 11.6 Former Trustees and Officers. The indemnification provided
by this Article XI shall continue as to an individual who has ceased to be a
Trustee or officer of the Trust and inure to the benefit of the legal
representatives of such individual and shall not be deemed exclusive of any
other rights to which any Trustee, officer, employee or agent of the Trust may
be entitled under any agreement, vote of Trustees or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding office as such; provided, that no Person may satisfy any right of
indemnity granted herein or to which he may be otherwise entitled, except out of
the Trust Property, and no Shareholder shall be personally liable with respect
to any claim for indemnity.
SECTION 11.7 Insurance. The Trust may purchase and maintain insurance
on behalf of any person who is or was a Trustee, officer, employee, or agent of
the Trust, against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such. However, the Trust shall
not purchase insurance to indemnify any Trustee or officer against liability for
any conduct in respect of which the 1940 Act prohibits the Trust itself from
indemnifying him.
SECTION 11.8 Other Rights to Indemnification. The indemnification
provided for herein shall not be deemed exclusive of any other rights to which
those seeking indemnification may be entitled under any By-Law, agreement, vote
of Shareholders or disinterested Trustees or otherwise.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to Trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Trustee, officer, or controlling person of the Registrant in
connection with the successful defense of any action, suit or proceeding) is
asserted by such Trustee, officer or controlling person in connection with the
shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 28. Business or Other Connections of Investment Adviser
(a) For a description of the other business of the investment adviser, see
the section entitled "Management of the Funds-Investment Adviser" in Part A.
Evergreen Asset Management Corp., the Registrant's investment adviser, and
Lieber and Company, the Registrant's sub-adviser also act as such to the
Evergreen Trust, The Evergreen Total Return Fund, The Evergreen Limited Market
Fund, Inc., Evergreen Growth and Income Fund, The Evergreen Money Market Trust,
The Evergreen American Retirement Trust, The Evergreen Municipal Trust,
and Evergreen Equity Trust, all registered investment companies. Stephen A.
Lieber, Theodore J. Israel, Jr., Nola Maddox Falcone, George R. Gaspari and
Joseph J. McBrien, officers of the Adviser and Lieber and Company, were,
prior to June 30, 1994 officers and/or directors or trustees of the
Registrant and the other funds for which the Adviser acts as investment
adviser. Evergreen Asset Management Corp. and Lieber and Company are wholly-
owned subsidiaries of First Union National Bank Of North Carolina.
The Trustees and principal executive officers of First Union National Bank
of North Carolina, parent of the Registrants's investment adviser and
sub-adviser, and the Directors of First Union National Bank of North Carolina,
are set forth in the following tables:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
BOARD OF DIRECTORS
Ben Mayo Boddie Raymond A. Bryan, Jr.
Chairman & CEO Chairman & CEO
Boddie-Noell Enterprises, Inc. T.A. Loving Company
P.O. Box 1908 P.O. Drawer 919
Rocky Mount, NC 27802 Goldsboro, NC 27530
John F.A.V. Cecil John W. Copeland
President President
Biltmore Dairy Farms, Inc. Ruddick Corporation
P.O. Box 5355 2000 Two First Union Center
Asheville, NC 28813 Charlotte, NC 28282
John Crosland, Jr. J. William Disher
Chairman of the Board Chairman & President
The Crosland Group, Inc. Lance Incorporated
135 Scaleybark Road P.O. Box 32368
Charlotte, NC 28209 Charlotte, NC 28232
Frank H. Dunn Malcolm E. Everett, III
Chairman and CEO President
First Union National Bank First Union National Bank
of North Carolina of North Carolina
One First Union Center 310 S. Tryon Street
Charlotte, NC 28288-0006 Charlotte, NC 28288-0156
James F. Goodmon Shelton Gorelick
President & Chief President
Executive Officer SGIC, Inc.
Capitol Broadcasting 741 Kenilworth Ave., Suite 200
Company, Inc. Charlotte, NC 28204
2619 Western Blvd.
Raleigh, NC 27605
Charles L. Grace James E. S. Hynes
President Chairman
Cummins Atlantic, Inc. Hynes Sales Company, Inc.
P.O. Box 240729 P.O. Box 220948
Charlotte, NC 28224-0729 Charlotte, NC 28222
Daniel W. Mathis Earl N. Phillips, Jr.
Vice Chairman President
First Union National Bank First Factors Corporation
of North Carolina P.O. Box 2730
One First Union Center High Point, NC 27261
Charlotte, NC 28288-0009
J. Gregory Poole, Jr. John P. Rostan, III
Chairman & President Senior Vice President
Gregory Poole Equipment Company Waldensian Bakeries, Inc.
P.O. Box 469 P.O. Box 220
Raleigh, NC 27602 Valdese, NC 28690
Nelson Schwab, III Charles M. Shelton, Sr.
Chairman & CEO Chairman & CEO
Paramount Parks The Shelton Companies, Inc
8720 Red Oak Boulevard, Suite 315 3600 One First Union Center
Charlotte, NC 28217 Charlotte, NC 28202
George Shinn Harley F. Shuford, Jr.
Owner and Chairman President and CEO
Shinn Enterprises, Inc. Shuford Industries
One Hive Drive P.O. Box 608
Charlotte, NC 28217 Hickory, NC 28603
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
EXECUTIVE OFFICERS
James Maynor, President, First Union Mortgage Corporation; Austin
A. Adams, Executive Vice President; Howard L. Arthur, Senior Vice
President; Robert T. Atwood, Executive Vice President and Chief
Financial Officer; Marion A. Cowell, Jr., Executive Vice
President, Secretary and General Counsel; Edward E. Crutchfield,
Jr., Chairman, CEO, First Union Corporation; Frank H. Dunn, Jr.,
Chairman and CEO; Malcolm E. Everett, III, President; John R.
Georgius, President, First Union Corporation; James Hatch, Senior
Vice President and Corporate Controller; Don R. Johnson,
Executive Vice President; Mark Mahoney, Senior Vice President;
Barbara K. Massa, Senior Vice President; Daniel W. Mathis, Vice
Chairman; H. Burt Melton, Executive Vice President; Malcolm T.
Murray, Jr., Executive Vice President; Alvin T. Sale, Executive
Vice President; Louis A. Schmitt, Jr., Executive Vice President;
Ken Stancliff, Senior Vice President and Corporate Treasurer;
Richard K. Wagoner, Executive Vice President and General Fund
Officer.
All of the Executive Officers are located at the following
address: First Union National Bank of North Carolina, One First
Union Center, Charlotte, NC 28288.
Item 29. Principal Underwriters
Evergreen Funds Distributor, Inc. The Director and principal
executive officers are:
Director Michael C. Petrycki
Officers Robert A. Hering President
Michael C. Petrycki Vice President
Gordon Forrester Vice President
Lawrence Wagner VP, Chief Financial Officer
Steven D. Blecher VP, Treasurer, Secretary
Elizabeth Q. Solazzo Assistant Secretary
Thalia M. Cody Assistant Secretary
Evergreen Funds Distributor, Inc. acts as Distributor for the
following registered investment companies or separate series thereof:
Evergreen Trust
Evergreen Fund
Evergreen Aggressive Growth Fund
The Evergreen Equity Trust:
Evergreen Global Real Estate Equity Fund
Evergreen U.S. Real Estate Equity Fund
Evergreen Global Leaders Fund
The Evergreen Limited Market Fund, Inc.
Evergreen Growth and Income Fund
The Evergreen Total Return Fund
The Evergreen American Retirement Trust:
The Evergreen American Retirement Fund
Evergreen Small Cap Equity Income Fund
The Evergreen Foundation Trust:
Evergreen Foundation Fund
Evergreen Tax Strategic Foundation Fund
The Evergreen Municipal Trust:
Evergreen Short-Intermediate Municipal Fund
Evergreen Short-Intermediate Municipal Fund-CA
Evergreen Florida High Income Municipal Bond Fund
Evergreen Tax Exempt Money Market Fund
The Evergreen Money Market Fund
Evergreen Investment Trust
Evergreen Emerging Markets Growth Fund
Evergreen International Equity Fund
Evergreen Balanced Fund
Evergreen Value Fund
Evergreen Utility Fund
Evergreen Fixed Income Fund
Evergreen Managed Bond Fund
Evergreen U.S. Government Fund
Evergreen Florida Municipal Bond Fund
Evergreen Georgia Municipal Bond Fund
Evergreen North Carolina Municipal Bond Fund
Evergreen South Carolina Municipal Bond Fund
Evergreen Virginia Municipal Bond Fund
Evergreen High Grade Tax Free Fund
Evergreen Treasury Money Market Fund
Item 30. Location of Accounts and Records
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder are maintained at the offices of the Registrant's Custodian, State
Street Bank and Trust Company, 2 Heritage Drive, North Quincy, Massachusetts
02171 or the offices of Evergreen Asset Management Corp., 2500 Westchester
Avenue, Purchase, New York 10577.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
Not Applicable.
<PAGE>
____________________
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and
the Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this registration statement pursuant to
Rule 485(b) of the Securities Act of 1933 and has duly caused this Post-
Effective Amendment No. 11 to the Registrant's Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
The City of Charlotte, State of North Carolina, on the 27th day of July, 1995.
Evergreen Money Market Fund
by /s/John J. Pileggi
-----------------------------
John J. Pileggi, President
Each person whose signature appears below hereby authorizes John J.Pileggi,
Joan V. Fiore and Joseph J. McBrien, as attorney-in-fact, to sign on his behalf,
individually and in each capacity stated below, any amendments to this Post-
Effective Amendment to Registrant's Registration Statement and to file the same,
with all exhibits thereto, with the Securities and Exchange Commission and any
state securities commission.
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment No. 11 to Registrant's Registration Statement
has been signed below by the following persons in the capacities and on
the dates indicated.
Signatures Title Date
- ----------- ----- ----
/s/ John J. Pileggi
- ------------------------------- President and October 30, 1995
John J. Pileggi
/s/ Joan V. Fiore
- ------------------------------- Secretary October 30, 1995
Joan V. Fiore
/s/ Foster Bam
- ------------------------------- Trustee October 30, 1995
Foster Bam
/s/ Laurence B. Ashkin
- ------------------------------- Trustee October 30, 1995
Laurence B. Ashkin
/s/ James S. Howell
- ------------------------------- Trustee October 30, 1995
James S. Howell
/s/ Robert Jeffries
- ------------------------------- Trustee October 30, 1995
Robert Jeffries
/s/ Gerald M. McDonnell
- ------------------------------- Trustee October 30, 1995
Gerald M. McDonnell
/s/ Thomas L. McVerry
- ------------------------------- Trustee October 30, 1995
Thomas L. McVerry
/s/ William Walt Pettit
- ------------------------------- Trustee October, 1995
William Walt Pettit
/s/ Russell A. Salton, III, M.D
- ------------------------------- Trustee October 30, 1995
Russell A. Salton, III, M.D
/s/ Michael S. Scofield
- ------------------------------- Trustee October 30, 1995
Michael S. Scofield
<PAGE>
JAMES P. WALLIN, ESQ.
2500 WESTCHESTER AVENUE
Purchase, New York 10577
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re Post-Effective Amendment of
EVERGREEN MONEY MARKET FUND
Registration No. 33-16706; Investment Company File No.811-5300
Commissioners:
I have acted as counsel to the above-referenced registrant which proposes
to file, pursuant to paragraph (b) of Rule 485 (the "Rule"), Post-Effective
Amendment No.11 (the "Amendment") to its registration statement under the
Securities Act of 1933, as amended.
Pursuant to paragraph (b)(4) of the Rule, I represent that
the Amendment does not contain disclosures which would render it ineligible to
become effective pursuant to paragraph (b) of the Rule.
Very truly yours,
/s/James P. Wallin
---------------------
James P. Wallin
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
11 Consent of Independent
Accountants
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Evergreen Money
Market Fund Post- Effective Amendment No. 11 to the registration statement on
Form N-1A (the "Registration Statement") of our report dated October 24, 1995,
relating to the financial statements and financial highlights appearing in the
August 31, 1995 Annual Report to Shareholders of Evergreen Money Market Fund,
which are also incorporated by reference into the Registration Statement. We
also consent to the references to us under the heading "Financial Highlights" in
the Prospectus and under the headings "Independent Accountants" and "Financial
Statements" in the Statement of Additional Information.
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
October 24, 1995
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<INVESTMENTS-AT-VALUE> 977,521,033
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<ASSETS-OTHER> 605,669
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<SHARES-COMMON-STOCK> 7,926,747
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<ACCUMULATED-NET-GAINS> (521,065)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 7,926,965
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 21,475,028
<OTHER-INCOME> 0
<EXPENSES-NET> 2,229,087
<NET-INVESTMENT-INCOME> 19,245,941
<REALIZED-GAINS-CURRENT> 19,987
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 19,265,928
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 56,561
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,070,755
<NUMBER-OF-SHARES-REDEEMED> 2,185,090
<SHARES-REINVESTED> 41,082
<NET-CHANGE-IN-ASSETS> 702,634,736
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,831,518
<INTEREST-EXPENSE> 0
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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