1933 Act No. 333-42181
1940 Act No. 811-08555
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 4 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 5 [X]
EVERGREEN MONEY MARKET TRUST
(Exact Name of Registrant as Specified in Charter)
200 Berkeley Street, Boston, Massachusetts 02116-5034
(Address of Principal Executive Offices)
(617) 210-3200
(Registrant's Telephone Number)
The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[X] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] 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)
<PAGE>
EVERGREEN MONEY MARKET TRUST
CONTENTS OF
POST-EFFECTIVE AMENDMENT NO. 4
TO
REGISTRATION STATEMENT
This Post-Effective Amendment No. 4 to Registrant's Registration Statement
No. 333-42181/811-08555 consists of the following pages, items of information
and documents:
The Facing Sheet
The Contents Page
The Cross-Reference Sheet
PART A
------
Prospectuses for Evergreen Money Market Fund,
Evergreen Pennsylvania Municipal Money Market Fund,
Evergreen Municipal Money Market Fund and
Evergreen Treasury Money Market Fund are contained herein.
PART B
------
Statement of Additional Information for Evergreen Money Market Fund,
Evergreen Pennsylvania Municipal Money Market Fund,
Evergreen Municipal Money Market Fund and
Evergreen Treasury Money Market Fund is contained herein.
PART C
------
Financial Statements
Exhibits
Number of Holders of Securities
Indemnification
Business and Other Connections of Investment Adviser
Principal Underwriter
Location of Accounts and Records
Undertakings
Signatures
<PAGE>
EVERGREEN MONEY MARKET TRUST
Cross-Reference Sheet pursuant to Rules 404 and 495 under the Securities
Act of 1933.
<TABLE>
<CAPTION>
N-1A Item No. Location in Prospectus(es)
<S> <C>
Part A
Item 1. Cover Page Cover Page
Item 2. Synopsis and Fee Table Expense Information; Other Information
Item 3. Condensed Financial Information Financial Highlights
Item 4. General Description of Registrant Cover Page; Description of the Funds; Investment Objectives and Policies;
Investment Practices and Restrictions; General Information
Item 5. Management of the Fund Organization and Service Providers; Expense Information
Item 6. Capital Stock and Other Securities Description of the Funds; Dividends, Distributions and Taxes; Shareholder
Services; General Information
Item 7. Purchase of Securities Being Offered Distribution Plans and Agreements; Purchase and Redemption of Shares; How to Buy
Shares; Shareholder Services
Item 8. Redemption or Repurchase Purchase and Redemption of Shares; How to Redeem 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 Fund Investments; Fundamental Policies; Investment Guidelines; Appendix
Item 14. Management of the Fund Management of the Trust
Item 15. Control Persons and Principal Principal Holders of Fund Shares
Holders of Securities
Item 16. Investment Advisory and Other Services Additional Information; Distributor; Distribution Plans and Agreements; Expenses;
Investment Adviser; Investment Advisory Agreements; Additional Service Providers;
Principal Underwriter; Contingent Deferred Sales Charges
Item 17. Brokerage Allocation Brokerage; Brokerage Commissions; General Brokerage Policies
Item 18. Capital Stock and Other Securities Articles of Incorporation
Item 19. Purchase, Redemption and Pricing of How the Funds Offer Shares to the Public; Valuation of Portfolio Securities;
Shares Calculation of Net Asset Value Per Share; Additional Information
Item 20. Tax Status Additional Tax Information
Item 21. Underwriters Principal Underwriter
Item 22. Calculation of Performance Data Performance
Item 23. Financial Statements Financial Statements
</TABLE>
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>
EVERGREEN MONEY MARKET TRUST
PART A
PROSPECTUSES
<PAGE>
- ----------------------------------------------------------------------------
PROSPECTUS June 1, 1998
- ----------------------------------------------------------------------------
(Evergreen Funds(sm) logo appears here)
EVERGREEN(SM) MONEY MARKET FUNDS
- ----------------------------------------------------------------------------
Evergreen Money Market Fund (Class A, B and C Shares)
Evergreen Municipal Money Market Fund (Class A Shares)
Evergreen Pennsylvania Municipal Money Market Fund (Class A Shares)
Evergreen Treasury Money Market Fund (Class A Shares)
(Each a "Fund," together the "Funds")
The Funds are designed to provide investors with current income, stability
of principal and liquidity. This prospectus provides information regarding the
Class A shares offered by each Fund and the Class B and Class C shares offered
by the Evergreen Money Market Fund. Each Fund is a series of an open-end
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 200 Berkeley Street, Boston, Massachusetts 02116.
A Statement of Additional Information ("SAI") for the Funds, dated June 1,
1998, as supplemented from time to time, has been filed with the Securities and
Exchange Commission ("SEC") and is incorporated by reference herein. The SAI
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) 343-2898. There can be no
assurance that the investment objective of any Fund will be achieved. Investors
are advised to read this prospectus carefully.
An investment in the Funds is not a deposit or obligation of any bank, is not
endorsed or guaranteed by any bank, and is 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 involves risk, including the
possible loss of principal. There is 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
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
EXPENSE INFORMATION 3
FINANCIAL HIGHLIGHTS 5
DESCRIPTION OF THE FUNDS 9
Investment Objectives and Policies 9
Investment Practices and Restrictions 12
ORGANIZATION AND SERVICE PROVIDERS 15
Organization 15
Service Providers 15
Distribution Plans and Agreements 16
</TABLE>
<TABLE>
<S> <C>
PURCHASE AND REDEMPTION OF SHARES 17
How to Buy Shares 17
How to Redeem Shares 19
Exchange Privilege 21
Shareholder Services 21
Effect of Banking Laws 22
OTHER INFORMATION 23
Dividends, Distributions and Taxes 23
General Information 24
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
EXPENSE INFORMATION
- --------------------------------------------------------------------------------
The table and examples below are designed to help you understand the
various expenses that you will bear, directly or indirectly, when you invest in
a Fund. Shareholder transaction expenses are fees paid directly from your
account when you buy or sell shares of a Fund.
<TABLE>
<CAPTION>
(All Funds) (Evergreen Money Market Fund only)
SHAREHOLDER TRANSACTION Class A Shares Class B Shares Class C Shares
EXPENSES ---------------- ---------------- ---------------
<S> <C> <C> <C>
Maximum Contingent Deferred Sales None 5.00%(1) 1.00%(2)
Charge (as a % of original purchase
price or redemption proceeds,
whichever is lower)
</TABLE>
(1) The deferred sales charge on Class B shares declines from 5.00% to
1.00% of amounts redeemed within six years after the month of purchase.
Evergreen Money Market Fund does not charge a contingent deferred sales
charge on redemptions made after that. See "Purchase and Redemption of
Shares" for more information.
(2) You will pay a 1.00% contingent deferred sales charge if you redeem
shares during the month of purchase and the 12-month period following
the month of purchase.
Annual operating expenses reflect the normal operating expenses of a Fund,
and include costs such as management, distribution and other fees. The tables
below show for each Fund actual annual operating expenses for the fiscal period
ended January 31, 1998. The examples show what you would pay if you invested
$1,000 over the periods indicated. The examples assume that you reinvest all of
your dividends and that a Fund's average annual return will be 5%. The examples
are for illustration purposes only and should not be considered a
representation of past or future expenses or annual return. A Fund's actual
expenses and returns will vary. For a more complete description of the various
costs and expenses borne by a Fund see "Organization and Service Providers."
Evergreen Money Market Fund
<TABLE>
<CAPTION>
Annual Operating
Expenses
(After Reimbursements)
----------------------------------
Class A Class B Class C
--------- --------- ----------
<S> <C> <C> <C>
Management Fees 0.46% 0.46% 0.46%
12b-1 Fees(1) 0.30% 1.00% 1.00%
Other Expenses 0.13% 0.13% 0.13%
---- ---- ----
Total 0.89% 1.59% 1.59%
==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Examples
--------------------------------------------------------
Assuming Redemption Assuming no
at End of Period Redemption
--------------------------------- --------------------
Class A Class B Class C Class B Class C
--------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
After 1 Year $ 9 $ 66 $ 26 $ 16 $ 16
After 3 Years $ 28 $ 80 $ 50 $ 50 $ 50
After 5 Years $ 49 $107 $ 87 $ 87 $ 87
After 10 Years $110 $161 $189 $161 $189
</TABLE>
Evergreen Municipal Money Market Fund
<TABLE>
<CAPTION>
Annual Operating
Expenses
(After
Reimbursements)
-----------------
<S> <C>
Class A
-----------------
Management Fees 0.50%
12b-1 Fees(1) 0.30%
Other Expenses 0.08%
----
Total 0.88%
====
</TABLE>
<TABLE>
<CAPTION>
Example
-----------------
Assuming
Redemption
at End of Period
-----------------
Class A
-----------------
<S> <C>
After 1 Year $ 9
After 3 Years $ 28
After 5 Years $ 49
After 10 Years $108
</TABLE>
3
<PAGE>
Evergreen Pennsylvania Municipal Money Market Fund
<TABLE>
<CAPTION>
Annual Operating
Expenses
(After
Reimbursements)(2)
-------------------
<S> <C>
Class A
-------------------
Management Fees 0.34%
12b-1 Fees(1) 0.10%
Other Expenses 0.17%
----
Total 0.61%
====
</TABLE>
<TABLE>
<CAPTION>
Example
-----------------
Assuming
Redemption
at End of Period
-----------------
Class A
-----------------
<S> <C>
After 1 Year $ 6
After 3 Years $20
After 5 Years $34
After 10 Years $76
</TABLE>
Evergreen Treasury Money Market Fund
<TABLE>
<CAPTION>
Annual Operating
Expenses
(After
Reimbursements)
-----------------
<S> <C>
Class A
-----------------
Management Fees 0.35%
12b-1 Fees(1) 0.30%
Other Expenses 0.08%
----
Total 0.73%
====
</TABLE>
<TABLE>
<CAPTION>
Example
-----------------
Assuming
Redemption
at End of Period
-----------------
Class A
-----------------
<S> <C>
After 1 Year $ 7
After 3 Years $23
After 5 Years $41
After 10 Years $91
</TABLE>
(1) Although Class A shares can pay up to 0.75% of average net assets as a
12b-1 fee, for the foreseeable future such fees have been limited to 0.30%
of average net assets. An additional portion of Evergreen Pennsylvania
Municipal Money Market Fund's 12b-1 fee is being waived. Absent such
waiver, Evergreen Pennsylvania Municipal Money Market Fund's 12b-1 fee
would have been 0.30%.
(2) First Union National Bank ("FUNB") has agreed to reimburse Evergreen
Pennsylvania Municipal Money Market Fund to the extent that the Fund's
aggregate annual operating expenses exceed 1.00% of average net assets for
any fiscal year. FUNB currently expects to continue such expense
limitation through January 31, 1999, but may cease this voluntary expense
reimbursement at any time. For the fiscal period ended January 31, 1998,
FUNB reimbursed management fees of Evergreen Pennsylvania Municipal Money
Market Fund. Absent such reimbursements, Evergreen Pennsylvania Municipal
Money Market Fund would have paid expenses equal to the following
percentage of net assets:
<TABLE>
<CAPTION>
Total Fund Operating
Management Expenses (Without
Fees Waivers and/or
Fund (Without Waiver) Reimbursement)
- ---------------------------------------------------- ------------------ ---------------------
<S> <C> <C>
Evergreen Pennsylvania Municipal Money Market Fund
Class A ......................................... 0.40% 0.87%
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables on the following pages present, for each Fund, financial
highlights for a share outstanding throughout each period indicated for the
life of each Fund. The information for Evergreen Money Market Fund and
Evergreen Municipal Money Market Fund has been audited by Price Waterhouse LLP,
each Fund's independent accountants, and the information for Evergreen Treasury
Money Market Fund and Evergreen Pennsylvania Municipal Money Market Fund has
been audited by KPMG Peat Marwick LLP, each Fund's independent auditors. A
report of Price Waterhouse LLP or KPMG Peat Marwick LLP, as the case may be, on
the audited information with respect to each Fund is incorporated by reference
in the Funds' SAI. The following information for each Fund should be read in
conjunction with the financial statements and related notes which are also
incorporated by reference in the Funds' SAI.
Further information about each Fund's performance is contained in the
Funds' Annual Report to shareholders, which may be obtained without charge.
Evergreen Money Market Fund -- Class A Shares
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------------------
Year Ended August
31,
January 4, 1995
Five Months (Commencement of
Ended Class Operations) to
January 31, 1998 (b) 1997 1996 August 31, 1995
---------------------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value beginning of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ -------
Net investment income ......................... 0.02 0.05 0.05 0.03
Less distributions to shareholders from net
investment income ............................ (0.02) (0.05) (0.05) (0.03)
-------- ------- ------- --------
Net asset value end of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ========
TOTAL RETURN ................................... 2.08% 4.95% 5.05% 3.53%
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Total expenses ................................ 0.89%(a) 0.79% 0.75% 0.81%(a)
Total expenses excluding indirectly paid
expenses ..................................... 0.89%(a) 0.79% -- --
Total expenses excluding waivers and/or
reimbursements ............................... 0.89%(a) 0.88% 0.89% 1.02%(a)
Net investment income ......................... 4.91%(a) 4.87% 4.86% 5.26%(a)
Net assets end of period (millions) ............ $ 2,910 $ 2,803 $ 1,755 $ 685
</TABLE>
- --------
(a) Annualized.
(b) The Fund changed its fiscal year end from August 31 to January 31.
5
<PAGE>
Evergreen Money Market Fund -- Class B Shares
<TABLE>
<CAPTION>
Class B Shares
------------------------------------------------------------------
Year Ended August
31,
January 26, 1995
Five Months (Commencement of
Ended Class Operations) to
January 31, 1998 (b) 1997 1996 August 31, 1995
---------------------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value beginning of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ -------
Net investment income ......................... 0.02 0.04 0.04 0.03
Less distributions to shareholders from net
investment income ............................ (0.02) (0.04) (0.04) (0.03)
-------- ------- ------- --------
Net asset value end of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ========
TOTAL RETURN (c) ............................... 1.78% 4.22% 4.31% 2.78%
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Total expenses ................................ 1.59%(a) 1.49% 1.45% 1.51%(a)
Total expenses excluding indirectly paid
expenses ..................................... 1.59%(a) 1.49% -- --
Total expenses excluding waivers and/or
reimbursements ............................... 1.59%(a) 1.55% 1.59% 2.39%(a)
Net investment income ......................... 4.22%(a) 4.16% 4.18% 4.54%(a)
Net assets end of period (millions) ............ $ 25 $ 23 $ 10 $ 8
</TABLE>
- --------
(a) Annualized.
(b) The Fund changed its fiscal year end from August 31 to January 31.
(c) Excluding applicable sales charges.
Evergreen Money Market Fund -- Class C Shares
<TABLE>
<CAPTION>
Class C Shares
--------------------------------------------
August 1, 1997
Five Months (Commencement of
Ended Class Operations) to
January 31, 1998 (d) August 31, 1997
---------------------- ---------------------
<S> <C> <C>
PER SHARE DATA:
Net asset value beginning of period ............................ $ 1.00 $ 1.00
------- --------
Net investment income ......................................... 0.02 0.00 (c)
Less distributions to shareholders from net investment income . (0.02) (0.00)(c)
-------- --------
Net asset value end of period .................................. $ 1.00 $ 1.00
======== ========
TOTAL RETURN (b) ............................................... 1.78% 0.37%
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Total expenses ................................................ 1.59%(a) 1.67%(a)
Total expenses excluding indirectly paid expenses ............. 1.59%(a) 1.66%(a)
Total expenses excluding waivers and/or reimbursements ........ 1.59%(a) 1.69%(a)
Net investment income ......................................... 4.20%(a) 4.42%(a)
Net assets end of period (millions) ............................ $ 2 $ 5
</TABLE>
- --------
(a) Annualized.
(b) Excluding applicable sales charges.
(c) Represents an amount less than $0.01 per share.
(d) The Fund changed its fiscal year end from August 31 to January 31.
6
<PAGE>
Evergreen Municipal Money Market Fund -- Class A Shares
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------------------
Year Ended August
31,
January 5, 1995
Five Months (Commencement of
Ended Class Operations) to
January 31, 1998 (b) 1997 1996 August 31, 1995
---------------------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value beginning of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ -------
Net investment income ......................... 0.01 0.03 0.03 0.02
Less distributions to shareholders from net
investment income ............................ (0.01) (0.03) (0.03) (0.02)
-------- ------- ------- --------
Net asset value end of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ========
TOTAL RETURN ................................... 1.34% 3.13% 3.22% 2.24%
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Total expenses ................................ 0.88%(a) 0.83% 0.79% 0.78%(a)
Total expenses excluding indirectly paid
expenses ..................................... 0.88%(a) 0.83% -- --
Total expenses excluding waivers and
reimbursments ................................ 0.88%(a) 0.86% 0.90% 0.90%(a)
Net investment income ......................... 3.18%(a) 3.09% 3.14% 3.28%(a)
Net assets end of period (millions) ............ $ 672 $ 667 $ 661 $ 555
</TABLE>
- --------
(a) Annualized.
(b) The Fund changed its fiscal year end from August 31 to January 31.
Evergreen Pennsylvania Municipal Money Market Fund -- Class A Shares
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------------------------------------
August 22, 1995
Five Months Six Months (Commencement of
Ended Year Ended Ended Class Operations) to
January 31, 1998 (c) August 31, 1997 August 31, 1996 (b) February 29, 1996
---------------------- ----------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value beginning of period ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------
Net investment income .................... 0.01 0.03 0.01 0.02
Less distributions to shareholders from
net investment income ................... (0.01) ( 0.03) (0.01) (0.02)
-------- ------- -------- --------
Net asset value end of period ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======== ========
TOTAL RETURN .............................. 1.34% 3.05% 1.49% 1.72%
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Total expenses ........................... 0.61%(a) 0.60% 0.55%(a) 0.47%(a)
Total expenses excluding indirectly paid
expenses ................................ 0.61%(a) 0.60% -- --
Total expenses excluding waivers
and/or reimbursements ................... 0.87%(a) 0.89% 0.96%(a) 1.08%(a)
Net investment income .................... 3.15%(a) 3.01% 2.97%(a) 3.14%(a)
Net assets end of period (millions) ....... $ 37 $ 36 $ 22 $ 4
</TABLE>
- --------
(a) Annualized.
(b) The Fund changed its fiscal year end from February 29 to August 31.
(c) The Fund changed its fiscal year end from August 31 to January 31.
7
<PAGE>
Evergreen Treasury Money Market Fund -- Class A Shares
<TABLE>
<CAPTION>
Class A Shares
--------------------------------------------
Year Ended August
31,
Five Months
Ended
January 31, 1998 (c) 1997 1996
---------------------- ---------- ----------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value
beginning of period ......... $ 1.00 $ 1.00 $ 1.00
-------- ------- -------
Net investment
income ..................... 0.02 0.05 0.05
Less distributions to
shareholders from
net investment
income ..................... (0.02) (0.05) (0.05)
--------- ------- -------
Net asset value end of
period ...................... $ 1.00 $ 1.00 $ 1.00
========= ======= =======
TOTAL RETURN ................. 2.07% 4.82% 4.98%
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average net
assets:
Total expenses .............. 0.73%(a) 0.72% 0.69%
Total expenses
excluding indirectly
paid expenses .............. 0.73%(a) 0.72% --
Total expenses
excluding waivers
and
reimbursments .............. 0.73%(a) 0.72% 0.77%
Net investment
income ..................... 4.89%(a) 4.73% 4.76%
Net assets end of
period (millions) ........... $ 2,616 $2,485 $2,608
<CAPTION>
Class A Shares
----------------------------------------------------------------------------
Year Ended December 31,
March 6, 1991
Eight Months (Commencement of
Ended Class Operations) to
August 31, 1995 (b) 1994 1993 1992 December 31, 1991
--------------------- ---------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value
beginning of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------- --------
Net investment
income ..................... 0.03 0.04 0.03 0.03 0.04
Less distributions to
shareholders from
net investment
income ..................... (0.03) (0.04) (0.03) (0.03) (0.04)
--------- ------- ------- ------- ---------
Net asset value end of
period ...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ======= ======= ======= =========
TOTAL RETURN ................. 3.58% 3.75% 2.73% 3.36% 4.46%
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average net
assets:
Total expenses .............. 0.63%(a) 0.50% 0.48% 0.48% 0.47%(a)
Total expenses
excluding indirectly
paid expenses .............. -- -- -- -- --
Total expenses
excluding waivers
and
reimbursments .............. 0.79%(a) 0.78% 0.82% 0.82% 1.08%(a)
Net investment
income ..................... 5.30%(a) 3.91% 2.70% 3.22% 4.95%(a)
Net assets end of
period (millions) ........... $ 1,178 $ 755 $ 261 $ 209 $ 100
</TABLE>
- --------
(a) Annualized.
(b) The Fund changed its fiscal year end from December 31 to August 31.
(c) The Fund changed its fiscal year end from August 31 to January 31.
8
<PAGE>
- --------------------------------------------------------------------------------
DESCRIPTION OF THE FUNDS
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- ----------------------------------
Each Fund's investment objective is nonfundamental; as a result, each Fund
may change its objective without a shareholder vote. Each Fund has also adopted
certain fundamental investment policies which are mainly designed to limit a
Fund's exposure to risk. The Funds' fundamental policies cannot be changed
without a shareholder vote. See the SAI for more information regarding each
Fund's fundamental investment policies or other related investment policies.
There can be no assurance that the Funds' investment objectives will be
achieved.
In addition to the investment policies detailed below, each Fund may
employ certain additional investment strategies which are discussed in
"Investment Practices and Restrictions" below.
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. The Fund will invest in securities determined to present
minimal credit risk and which are, at the time of acquisition, eligible
securities pursuant to Rule 2a-7 under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund will also comply with the diversification
requirements and other applicable requirements prescribed by Rule 2a-7. The
Fund's permitted investments include:
1. Marketable obligations of, or obligations guaranteed by the United
States ("U.S.") government, its agencies or instrumentalities, including issues
of the U.S. 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 U.S. government, others are supported by the right
of the issuer to borrow from the U.S. 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 U.S. government include, but are not limited to, the Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the U.S.,
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 U.S. Treasury include, but are not
limited to, the Federal Home Loan Bank, Federal Intermediate Credit Banks,
Federal National Mortgage Association and the Tennessee Valley Authority.
Agencies or instrumentalities whose securities are supported only by the credit
of the agency or instrumentality include the Inter-American 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 (within which
there may be sub-categories or gradations indicating relative standing) by any
two of Standard & Poor's Ratings Group ("S&P") or Moody's Investors Service
("Moody's") or any other nationally recognized statistical rating organization
("NRSRO") (or by a single NRSRO if only one 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 SAI.
3. Corporate debt securities and bank obligations that are rated in one of
the two highest short-term rating categories (within which there may be
sub-categories or gradations indicating relative standing) by any two of S&P,
Moody's and any other NRSRO (or by a single NRSRO if only one 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 397 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 any domestic or foreign company which has an outstanding
long-term debt issue rated in the top two rating categories by any NRSRO and
determined by the investment adviser to be of comparable quality to the unrated
securities.
9
<PAGE>
6. Unrated corporate debt securities, commercial paper and bank
obligations otherwise determined by the investment adviser to be of comparable
quality to the obligations in paragraphs 2 and 3 above.
7. Repurchase agreements involving the securities described in paragraphs
1 through 6 above.
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. Such risks include unfavorable political and economic
developments, 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 2 and 3
above which are issued in private placements pursuant to Section 4(2) of the
Securities Act of 1933 (the "1933 Act"), as amended. Such securities are not
registered for purchase and sale by the public under the Act and are not
considered readily marketable. The Fund will not invest more than 15% of its
net assets in securities which are not readily marketable (including private
placement securities) and in repurchase agreements maturing in more than seven
days. (See "Restricted Securities.")
Evergreen Municipal Money Market Fund
The investment objective of Evergreen Municipal 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. 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 U.S. and by the District of Columbia, and their political
subdivisions and duly constituted authorities. Such securities are generally
known as "Municipal Securities" and are described in greater detail below.
The Fund will invest in Municipal Securities determined to present minimal
credit risk and which are, at the time of acquisition, eligible securities
under Rule 2a-7. The Fund will also comply with the diversification
requirements and other applicable requirements prescribed by Rule 2a-7. The
Fund normally invests at least 80% of its net assets in Municipal Securities,
the interest from which is exempt from federal income tax (other than the
federal alternative minimum tax ("AMT")).
The Fund may temporarily invest up to 20% of its 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. However, the Fund
may temporarily invest up to 100% of its total assets in taxable securities for
defensive purposes. The Fund may invest for defensive purposes during periods
when its 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 U.S. 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 categories by any NRSRO;
commercial paper rated in the highest grade by Moody's or S&P; and certificates
of deposit issued by U.S. branches of U.S. banks with assets of $1 billion or
more.
Evergreen Pennsylvania Municipal Money Market Fund
The investment objective of Evergreen Pennsylvania Municipal Money Market
Fund is to seek to provide investors with as high a level of current income as
is consistent with preservation of capital and providing liquidity.
To obtain its objective, the Fund invests at least 80% of its net assets
in Municipal Securities issued by the Commonwealth of Pennsylvania or its
counties, municipalities, authorities or other political subdivisions, and
Municipal Securities issued by territories or possessions of the U.S., such as
Puerto Rico.
10
<PAGE>
The Fund will invest in Municipal Securities determined to present minimal
credit risk and which are, at the time of acquisition, eligible obligations
under Rule 2a-7. The Fund normally invests its assets so that at least 80% of
its annual interest income is exempt from federal income tax (other than the
AMT) and Pennsylvania income tax.
The Fund will also comply with the diversification requirements prescribed
by Rule 2a-7. However, the Fund is non-diversified and may invest a significant
percentage of its assets in the obligations of a single issuer. Since the Fund
invests primarily in Pennsylvania obligations, its investments will be
concentrated in one geographic area. The Fund will not invest in options,
financial futures transactions or other similar "derivative" instruments except
as otherwise provided herein.
Ordinarily, up to 20% of the Fund's annual interest income may be subject
to Pennsylvania or regular federal income tax. However, at all times under
normal market conditions the percentage of the Fund's income and corresponding
distributions which is tax-exempt will be very close to 100%. In addition, for
temporary defensive purposes, the Fund may invest up to 100% of its total
assets in such taxable obligations when, in the opinion of the investment
adviser, it is advisable to do so because of market conditions. The types of
taxable obligations in which the Fund may invest are limited to the following
money market instruments which have remaining maturities not exceeding 397
days: (i) obligations of the U.S. government, its agencies or
instrumentalities; (ii) negotiable certificates of deposit and bankers'
acceptances of U.S. banks which have more than $1 billion in total assets at
the time of investment and are members of the Federal Reserve System or are
examined by the Comptroller of the Currency or whose deposits are insured by
the Federal Deposit Insurance Corporation; (iii) domestic and foreign U.S.
dollar-denominated commercial paper rated "P-1" by Moody's or "A-1" or "A-1+"
by S&P; and (iv) repurchase agreements involving any of the foregoing portfolio
obligations.
The Fund may also invest in U.S. dollar-denominated foreign commercial
paper. Such investments may involve risks not applicable to domestic
obligations. These risks include foreign political or economic instability,
difficulties in enforcing a judgment against a foreign issuer should it
default, the imposition or tightening of exchange controls and changes in
foreign governmental attitudes toward private investment, including the
possibility of increased taxation, nationalization or expropriation of Fund
assets. Foreign issuers of obligations may also be subject to different
accounting and disclosure systems, which may affect the type and quality of
information available about an issuer. The rating services used by the Fund's
investment adviser take these factors into consideration when assigning a
rating to a particular security, and therefore the additional risk to the Fund
of investing in a foreign obligation with the same rating as a domestic
security is not expected to be significant.
The Fund does not intend to concentrate its investments in any one
industry. However, from time to time, the Fund may invest 25% or more of its
total assets in Municipal Securities which are related in such a way that an
economic, business or political development or change affecting one such
obligation would also affect the others. Two examples of obligations so related
are (i) obligations, the interest on which is paid from revenues of similar
type projects and (ii) obligations whose issuers are located in the same state.
Because the taxable money market is a broader and more liquid market, and
has a greater number of investors, issuers and market makers than the market
for short-term tax-exempt Municipal Securities, the liquidity of the Fund may
not be equal to that of a money market fund which invests exclusively in
short-term taxable money market instruments. The more limited marketability of
short-term tax-exempt Municipal Securities may make it difficult in certain
circumstances to dispose of large investments advantageously. In general,
tax-exempt Municipal Securities are also subject to credit risks such as the
loss of credit ratings or possible default. In addition, an issuer of
tax-exempt Municipal Securities may lose its tax-exempt status in the event of
a change in the current tax laws.
Risk Factors: Investing in Pennsylvania Municipal Securities. Each investor
- ------------------------------------------------------------
should consider carefully the special risks inherent in the Fund's investment
in Pennsylvania Municipal Securities. Pennsylvania has been historically
identified as a heavy industry state although that reputation has recently
changed. The industrial composition of Pennsylvania diversified when the coal,
steel, and railroad industries began to decline. This diversification was
necessary when the traditionally strong industries in Pennsylvania declined as
a long-term shift in jobs, investment and workers away from the northeast part
of the nation took place. The major new sources of growth are in the service
sector, including trade, medical and health services, education and financial
institutions. Pennsylvania is highly urbanized, with approximately 50% of the
Commonwealth's population contained in the metropolitan areas which include the
cities of Philadelphia and Pittsburgh.
11
<PAGE>
It should be noted that Pennsylvania Municipal Securities may be adversely
affected by local political and economic conditions and developments within
Pennsylvania. For example, adverse conditions in a significant industry within
Pennsylvania may from time to time have a correspondingly adverse effect on
specific issuers within Pennsylvania or on anticipated revenue to the
Commonwealth itself; conversely, an improving economic outlook for a
significant industry may have a positive effect on such issuers or revenues. An
expanded discussion of the risks associated with the purchase of Pennsylvania
issues is contained in the SAI.
Evergreen Treasury Money Market Fund
The investment objective of Evergreen Treasury Money Market Fund is to
maintain stability of principal while earning current income. The Fund will
attempt to seek income only to the extent consistent with stability of
principal. The Fund will invest in short-term U.S. Treasury obligations with an
average dollar-weighted maturity of 90 days or less. The Fund may also enter
into repurchase agreements collateralized by the types of securities in which
it may invest and obligations the principal and interest of which are backed by
the full faith and credit of the U.S. government, provided that the repurchase
agreement shall, under normal market conditions, be backed by collateral at
least 65% of which is in obligations issued directly by the U.S. Treasury. The
Fund may also lend its portfolio securities to qualified institutional
investors. As a matter of investment strategy, the Fund's investment adviser
intends to maintain a dollar-weighted average maturity for the Fund of 60 days
or less. The Fund will comply with Rule 2a-7.
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 U.S. 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 U.S. 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 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 90 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.
The Funds will not invest in any obligations of or loan any of their
portfolio obligations to First Union National Bank ("FUNB") or its affiliates
(as defined in the 1940 Act) or any affiliates of the Funds. Subject to the
limitations described, the Funds are permitted to invest in obligations of
correspondent banks of FUNB (banks with which FUNB maintains a special bank
servicing relationship) which are not affiliates of Evergreen Money Market
Trust, its investment adviser or its distributor, but the Funds will not give
preference in their investment selections to those obligations.
After purchase by a Fund, a security may cease to be rated or its rating
may be reduced below the minimum required for purchase by the Fund. Neither
event will require a sale of such security by the Fund. However, the investment
adviser will consider such event in its determination of whether the Fund
should continue to hold the security. To the extent the ratings given by
Moody's or S&P may change as a result of changes by such organizations of their
rating systems, a Fund will attempt to use comparable ratings as standards for
investments in accordance with the investment policies contained in this
prospectus and in the SAI.
The ability of each Fund to meet its investment objective is necessarily
subject to the ability of the issuers of securities in which the Fund invests
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
12
<PAGE>
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.
All Funds except Evergreen Pennsylvania Municipal Money Market Fund are
diversified.
Municipal Securities. Municipal Securities are municipal bonds, notes and
- --------------------
commercial paper issued by or for states, territories and possessions of the
U.S. including the District of Columbia and their political subdivisions,
agencies and instrumentalities. Municipal bonds include fixed, variable or
floating rate general obligation and revenue bonds. General obligation bonds
are used to support the government's general financial needs and are supported
by the full faith and credit of the municipality. General obligation bonds are
repaid from the issuer's general unrestricted revenues. Payment, however, may
be dependent upon legislative approval and may be subject to limitations on the
issuer's taxing power. Revenue bonds are used to finance public works and
certain private facilities. In contrast to general obligation bonds, revenue
bonds are repaid only with the revenue generated by the project financed.
Municipal notes include tax anticipation notes, bond anticipation notes
and revenue anticipation notes. Municipal commercial paper obligations are
unsecured promissory notes issued by municipalities to meet short-term credit
needs.
Since certain of the Funds invest in Municipal Securities, you should be
aware of the risks associated with investing in such securities. The value of
municipal bonds tends to go up when interest rates go down and vice versa. An
issuer's failure to make such payment due to political development or fiscal
mismanagement could affect its ability to make prompt payments of interest and
principal. Those events could also affect the market value of the security.
Moreover, the market for municipal bonds is often thin and can be temporarily
affected by large purchases and sales, including those by a Fund.
Opinions relating to the validity of Municipal Securities and to the
exclusion of interest thereon from federal and state personal income taxes are
rendered by counsel to the respective issuers at the time of issuance. Neither
the Funds, Evergreen Money Market Trust, nor the investment adviser will review
the proceedings relating to the issuance of Municipal Securities or the basis
for such opinions.
Floating Rate and Variable Rate Obligations. Each Fund, other than Evergreen
- -------------------------------------------
Treasury Money Market Fund, may invest in certain variable rate and floating
rate securities with or without demand features. These variable rate securities
do not have fixed interest rates; rather, interest 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 repayment 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. Each Fund currently limits 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% of its net assets.
Stand-by Commitments. The Funds may also acquire "stand-by commitments" with
- --------------------
respect to Municipal Securities held in their portfolio. Under a stand-by
commitment, a dealer agrees to purchase, at a Fund's option, specified
Municipal Securities at a specified price. Failure of the dealer to purchase
such Municipal Securities may result in a Fund incurring a loss or missing an
opportunity to make an alternative investment. Each Fund expects that stand-by
commitments generally will be available without the payment of direct or
indirect consideration. However, if necessary and advisable, a 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 each 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 Funds will maintain cash or liquid high grade debt obligations in a
segregated account with its custodian in an amount equal to such commitments.
The Funds will enter into stand-by commitments only with banks and
broker-dealers that, in the judgment of the Funds' investment advisers, present
minimal credit risks.
13
<PAGE>
Repurchase Agreements. The Funds may invest in repurchase agreements. A
- ---------------------
repurchase agreement is an agreement by which a Fund purchases a security
(usually U.S. government obligations) for cash and obtains a simultaneous
commitment from the seller (usually a bank or broker-dealer) to repurchase the
security at an agreed-upon price and specified future date. The repurchase
price reflects an agreed-upon interest rate for the time period of the
agreement. The Fund's risk is the inability of the seller to pay the
agreed-upon price on the delivery date. However, this risk is tempered by the
ability of the Fund to sell the security in the open market in the case of a
default. In such a case, the Fund may incur costs in disposing of the security
which would increase Fund expenses. The Fund's investment adviser will monitor
the creditworthiness of the firms with which the Fund enters into repurchase
agreements.
Securities Lending. To generate income and offset expenses, each Fund may lend
- ------------------
obligations to broker-dealers and other financial institutions. Loans of
obligations by a Fund may not exceed 30% of the value of the Fund's total
assets. While obligations are on loan, the borrower will pay the Fund any
income accruing on the security. Also, the Fund may invest any collateral it
receives in additional obligations. Gains or losses in the market value of a
lent security will affect the Fund and its shareholders. When a Fund lends its
obligations, it runs the risk that it may not be able to retrieve the
obligations on a timely basis possibly losing the opportunity to sell the
obligations at a desirable price. Also, if the borrower files for bankruptcy or
becomes insolvent, the Fund's ability to dispose of the obligations may be
delayed.
When-Issued Securities. Each Fund, other than Evergreen Money Market Fund, may
- ----------------------
enter into transactions whereby it commits to buying a security, but does not
pay for or take delivery of the security until some specified date in the
future. The value of these securities is subject to market fluctuations during
this period and no income accrues to the Funds until settlement. At the time of
settlement, a when-issued security may be valued at less than its purchase
price. When entering into these transactions, the Funds rely on the other party
to consummate the transaction; if the other party fails to do so, the Funds may
be disadvantaged. Evergreen Municipal 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. Each Fund does not intend to
purchase when-issued securities for speculative purposes, but only in
furtherance of its investment objective.
Illiquid Securities. Each Fund may invest up to 15% of its net assets in
- -------------------
illiquid securities and other securities which are not readily marketable.
Repurchase agreements with maturities longer than seven days will be included
for the purpose of the foregoing 15% limit. The inability of the Funds to
dispose of illiquid investments readily or at a reasonable price could impair
the Funds' ability to raise cash for redemptions or other purposes.
Restricted Securities. The Funds may invest in restricted securities, including
- ---------------------
securities eligible for resale pursuant to Rule 144A under the 1933 Act.
Generally, Rule 144A establishes a safe harbor from the registration
requirements of the 1933 Act for resale by large institutional investors of
securities not publicly traded in the United States. The Funds' investment
adviser determines the liquidity of Rule 144A securities according to
guidelines and procedures adopted by the Board of Trustees of Evergreen Money
Market Trust. The Board of Trustees monitors the investment adviser's
application of those guidelines and procedures. Securities eligible for resale
pursuant to Rule 144A, which the Funds' investment adviser has determined to be
liquid or readily marketable, are not subject to the 15% limit on illiquid
securities.
Borrowing. Each Fund may borrow from banks in an amount up to 33 1/3% of its
- ---------
total assets, taken at market value. Each Fund may also borrow an additional 5%
of its total assets from banks or others. A Fund may only borrow as a temporary
measure for extraordinary or emergency purposes such as the redemption of Fund
shares. A Fund will not purchase obligations while borrowings are outstanding
except to exercise prior commitments and to exercise subscription rights. The
Funds do not intend to leverage except to the extent that they may invest in
reverse repurchase agreements as described below.
Reverse Repurchase Agreements. Each Fund may enter into reverse repurchase
- -----------------------------
agreements. A reverse repurchase agreement is an agreement by a Fund to sell a
security and repurchase it at a specified time and price. A Fund could lose
money if the market values of the obligations it sold decline below their
repurchase prices. Reverse repurchase agreements may be considered a form of
borrowing, and, therefore, a form of leverage. Leverage may magnify gains or
losses of the Fund.
14
<PAGE>
Investing in Securities of Other Investment Companies. The Funds may invest in
- -----------------------------------------------------
securities of other investment companies. As a shareholder of another
investment company, a Fund would pay its portion of the other investment
company's expenses. These expenses would be in addition to the expenses that
the Fund currently bears concerning its own operations and may result in some
duplication of fees.
Other Investment Restrictions. Each Fund has adopted additional investment
- -----------------------------
restrictions that are set forth in the SAI.
- --------------------------------------------------------------------------------
ORGANIZATION AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
ORGANIZATION
- ------------
Fund Structure. Each Fund is an investment pool, which invests shareholders'
- --------------
money toward a specified goal. In technical terms, each Fund is a series of an
open-end, management investment company, called Evergreen Money Market Trust
(the "Trust"). The Trust is a Delaware business trust organized on September
18, 1997.
Board of Trustees. The Trust is supervised by a Board of Trustees that is
- -----------------
responsible for representing the interests of shareholders. The Trustees meet
periodically throughout the year to oversee the Funds' activities, reviewing,
among other things, each Fund's performance and its contractual arrangements
with various service providers.
Shareholder Rights. All shareholders participate in distributions from the
- ------------------
Funds' assets and have equal liquidation and other rights. Shareholders may
exchange shares as described under "Exchanges," but will have no other
preference, conversion, exchange or preemptive rights. When issued and paid
for, shares will be fully paid and nonassessable. Shares of the Funds are
redeemable, transferable and freely assignable as collateral. The Trust may
establish additional classes or series of shares.
The Funds do not hold annual shareholder meetings; the Funds may, however,
hold special meetings for such purposes as electing or removing Trustees,
changing fundamental policies and approving investment advisory agreements or
12b-1 plans. In addition, the Funds are prepared to assist shareholders in
communicating with one another for the purpose of convening a meeting to elect
Trustees. If any matters are to be voted on by shareholders, each share owned
as of the record date for the meeting would be entitled to one vote for each
dollar of net asset value applicable to such share.
SERVICE PROVIDERS
- -----------------
Investment Advisers. The investment adviser of Evergreen Money Market Fund and
- -------------------
Evergreen Municipal Money Market Fund is Evergreen Asset Management Corp.
("Evergreen Asset"). Evergreen Asset, a subsidiary of First Union Corporation
("First Union"), is located at 2500 Westchester Avenue, Purchase, New York
10577.
Evergreen Asset manages investments, supervises daily business affairs and
provides administrative services for Evergreen Money Market Fund and Evergreen
Municipal Money Market Fund. Evergreen Asset is entitled to receive from each
Fund an annual fee of 0.50% of average daily net assets up to and including
$1,000,000,000 in assets and 0.45% of average daily net assets in excess of
$1,000,000,000.
The Capital Management Group of FUNB serves as investment adviser to
Evergreen Treasury Money Market Fund and Evergreen Pennsylvania Municipal Money
Market Fund. FUNB is a subsidiary of First Union. FUNB is located at 201 South
College Street, and First Union is located at 301 South College St., Charlotte,
North Carolina 28288-0630. First Union and its subsidiaries provide a broad
range of financial services to individuals and businesses throughout the U.S.
FUNB manages the investments for and supervises the daily business affairs
of Evergreen Treasury Money Market Fund and Evergreen Pennsylvania Municipal
Money Market Fund. FUNB is entitled to receive from Evergreen Treasury Money
Market Fund an annual fee of 0.35% of 1% of the Fund's average daily net
assets. FUNB is entitled to receive from Evergreen Pennsylvania Municipal Money
Market Fund an annual fee equal to 0.40 of 1% of the Fund's average daily net
assets up to $500 million, 0.36 of 1% of the next $500 million of assets, 0.32
of 1% of assets in excess of $1 billion but not exceeding $1.5 billion, and
0.28 of 1% of assets in excess of $1.5 billion.
15
<PAGE>
Sub-Adviser. Evergreen Asset has entered into sub-advisory agreements with
- -----------
Lieber & Company, an indirect wholly-owned subsidiary of First Union, which
provide that Lieber & Company's research department and staff will furnish
Evergreen Asset with information, investment recommendations, advice and
assistance, and will generally be available for consultation on the portfolios
of Evergreen Money Market Fund and Evergreen Municipal 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 the Funds for the
services provided by Lieber & Company. The address of Lieber & Company is 2500
Westchester Avenue, Purchase, New York 10577.
Administrator. Evergreen Investment Services, Inc. ("EIS"), 200 Berkeley St.,
- -------------
Boston, Massachusetts, 02116, serves as administrator to Evergreen Treasury
Money Market Fund and Evergreen Pennsylvania Municipal Money Market Fund. As
administrator, and subject to the supervision and control of the Trust's Board
of Trustees, EIS provides the Funds with facilities, equipment and personnel.
For its services as administrator, EIS is entitled to receive a fee based on
the aggregate average daily net assets of the Funds at a rate based on the
total assets of all mutual funds advised by First Union subsidiaries. The
administration fee is 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
EIS also provides facilities, equipment and personnel to Evergreen Money
Market Fund and Evergreen Municipal Money Market Fund on behalf of Evergreen
Asset.
Transfer Agent and Dividend Disbursing Agent. Evergreen Service Company
- --------------------------------------------
("ESC"), 200 Berkeley Street, Boston, Massachusetts 02116, acts as the Funds'
transfer agent and dividend disbursing agent. ESC is an indirect, wholly-owned
subsidiary of First Union.
Custodian. State Street Bank and Trust Company ("State Street"), P.O. Box 9021,
- ---------
Boston, Massachusetts 02205-9827, acts as the Funds' custodian.
Principal Underwriter. Evergreen Distributor, Inc. ("EDI"), a subsidiary of The
- ---------------------
BISYS Group, Inc., located at 125 West 55th Street, New York, New York 10019,
is the principal underwriter of the Funds.
DISTRIBUTION PLANS AND AGREEMENTS
- ---------------------------------
Distribution Plans. Each class of shares pays for the expenses associated with
- ------------------
the distribution of its shares according to a distribution plan that it has
adopted pursuant to Rule 12b-1 under the 1940 Act (each a "Plan," or
collectively, the "Plans"). Under the Plans, each Fund may incur
distribution-related and shareholder servicing-related expenses which are based
upon a maximum annual rate as a percentage of each Fund's average daily net
assets attributable to the Class, as follows:
<TABLE>
<S> <C>
Class A shares 0.75% (currently limited to 0.30%)
Class B shares 1.00%
Class C shares 1.00%
</TABLE>
Of the amount that each class may pay under its respective Plan, up to
0.25% may constitute a service fee to be used to compensate organizations,
which may include each Fund's investment adviser or its affiliates, for
personal services rendered to shareholders and/or the maintenance of
shareholder accounts. The Funds may not pay any distribution or service fees
during any fiscal period in excess of the amounts set forth above. Amounts paid
under the Plans are used to compensate the Funds' distributor pursuant to the
distribution agreements entered into by each Fund.
16
<PAGE>
Distribution Agreements. Each Fund has also entered into a distribution
- -----------------------
agreement (each, a "Distribution Agreement" or collectively the "Distribution
Agreements") with EDI. Pursuant to the Distribution Agreements, each Fund will
compensate EDI for its services as distributor based upon the maximum annual
rate as a percentage of each Fund's average daily net assets attributable to
the Class, as follows:
<TABLE>
<S> <C>
Class A shares 0.30%
Class B shares 1.00%
Class C shares 1.00%
</TABLE>
The Distribution Agreements provide that EDI will use the distribution fee
received from a Fund for payments (i) to compensate broker-dealers or other
persons for distributing shares of a Fund, including interest and principal
payments made in respect of amounts paid to broker-dealers or other persons
that have been financed (EDI may assign its rights to receive compensation
under the Plans to secure such financings), (ii) to otherwise promote the sale
of shares of a Fund, and (iii) to compensate broker-dealers, depository
institutions and other financial intermediaries for providing administrative,
accounting and other services with respect to each Fund's shareholders. FUNB or
its affiliates may finance the payments made by EDI to compensate
broker-dealers or other persons for distributing shares of a Fund.
In the event a Fund acquires the assets of other mutual funds,
compensation paid to EDI under the Distribution Agreements may be paid by EDI
to the distributors of the acquired funds or their predecessors.
Since EDI's compensation under the Distribution Agreements is not directly
tied to the expenses incurred by EDI, the amount of compensation received by
EDI under the Distribution Agreements during any year may be more or less than
its actual expenses and may result in a profit to EDI. Distribution expenses
incurred by EDI in one fiscal year that exceed the level of compensation paid
to EDI for that year may be paid from distribution fees received from a Fund in
subsequent fiscal years.
- --------------------------------------------------------------------------------
PURCHASE AND REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
HOW TO BUY SHARES
- -----------------
You may purchase shares of any Fund through broker-dealers, banks or other
financial intermediaries, or directly through EDI. In addition, you may
purchase shares of a Fund by mailing to that Fund, c/o ESC, P.O. Box 2121,
Boston, Massachusetts 02106-2121, a completed application and a check payable
to the Fund. You may also telephone 1-800-343-2898 to obtain the number of an
account to which you can wire or electronically transfer funds and then send in
a completed application. The minimum initial investment is $1,000, which may be
waived in certain situations. Subsequent investments in any amount may be made
by check, by wiring federal funds, by direct deposit or by an electronic funds
transfer.
There is no minimum amount for subsequent investments. Investments of $25
or more are allowed under the Systematic Investment Plan. See the application
for more information. Only Class A, Class B and Class C shares are offered
through this prospectus (see "General Information" -- "Other Classes of
Shares").
Class A Shares. You may purchase Class A shares of each Fund 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.
There is no size limit on purchases of Class A shares.
Class B Shares -- Deferred Sales Charge Alternative. You may purchase Class B
- ---------------------------------------------------
shares of Evergreen Money Market Fund at net asset value without an initial
sales charge. However, you may pay a contingent deferred sales charge ("CDSC")
(see further discussion below) if you redeem shares within six years after the
month of purchase. 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 month of purchase of Class B shares as set forth
below.
17
<PAGE>
<TABLE>
<CAPTION>
CDSC
Redemption Timing Imposed
- ----------------------------------------------------------------------------------------- ----------
<S> <C>
Month of purchase and the first twelve-month period following the month of purchase ..... 5.00%
Second twelve-month period following the month of purchase .............................. 4.00%
Third twelve-month period following the month of purchase ............................... 3.00%
Fourth twelve-month period following the month of purchase .............................. 3.00%
Fifth twelve-month period following the month of purchase ............................... 2.00%
Sixth twelve-month period following the month of purchase ............................... 1.00%
</TABLE>
No CDSC is imposed on amounts redeemed thereafter.
The CDSC is deducted from the amount of the redemption and is paid to EDI.
In the event a Fund acquires the assets of other mutual funds, the CDSC may be
paid by EDI to the distributors of the acquired funds. Class B shares are
subject to higher distribution and/or shareholder service fees than Class A
shares for a period of seven years after the month of purchase (after which it
is expected that they will convert to Class A shares). The higher fees mean a
higher expense ratio, so Class B shares pay correspondingly lower dividends.
The Fund will not normally accept any purchase of Class B shares in the amount
of $250,000 or more.
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
the higher distribution or shareholder service fees imposed on Class B shares.
Such conversion will be on the basis of the relative net asset values of the
two classes, without the imposition of any 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.
Class C Shares -- Level-Load Alternative. Class C shares of Evergreen Money
- ----------------------------------------
Market Fund are only offered through broker-dealers who have special
distribution agreements with EDI. You may purchase Class C shares at net asset
value without any initial sales charge, and therefore, the full amount of your
investment will be used to purchase Fund shares. However, you will pay a 1.00%
CDSC if you redeem shares during the month of purchase and the 12-month period
following the month of purchase. No CDSC is imposed on amounts redeemed
thereafter. Class C shares incur higher distribution and/or shareholder service
fees than Class A shares but, unlike Class B shares, do not convert to any
other class of shares of a Fund. The higher fees mean a higher expense ratio,
so Class C shares pay correspondingly lower dividends than Class A shares. The
Fund will not normally accept any purchase of Class C shares in the amount of
$500,000 or more. No CDSC will be imposed on Class C shares purchased by
institutional investors and through certain employee benefit and savings plans.
Broker-dealers and other financial intermediaries whose clients have purchased
Class C shares may receive a trailing commission equal to 0.75% of the average
daily net asset value of such shares on an annual basis held by their clients
more than one year from the date of purchase. Trailing commissions will
commence immediately with respect to shares eligible for exemption from the
CDSC normally applicable to Class C shares.
Contingent Deferred Sales Charge. Shares obtained from dividend or distribution
- --------------------------------
reinvestment are not subject to a CDSC. Any CDSC imposed upon the redemption of
Class B or Class C shares is a percentage of the lesser of (1) the net asset
value of the shares redeemed or (2) the net asset value at the time of purchase
of such shares.
No CDSC is imposed on a redemption of shares of Evergreen Money Market
Fund in the event of (1) death or disability of the shareholder; (2) a lump-sum
distribution from a 401(k) plan or other benefit plan qualified under the
Employee Retirement Income Security Act of 1974 ("ERISA"); (3) automatic
withdrawals from ERISA plans if the shareholder is at least 59 1/2 years old;
(4) involuntary redemptions of accounts having an aggregate net asset value of
less than $1,000; (5) automatic withdrawals under the Systematic Withdrawal
Plan of up to 1.00% per month of the shareholder's initial account balance; (6)
withdrawals consisting of loan proceeds to a retirement plan participant; (7)
financial hardship withdrawals made by a retirement plan participant; or (8)
withdrawals consisting of returns of excess contributions or excess deferral
amounts made to a retirement plan participant.
18
<PAGE>
Evergreen Money Market Fund may sell Class B or Class C shares at net
asset value without any initial sales charge or a CDSC to certain Directors,
Trustees, officers and employees of the Funds, Keystone Investment Management
Company ("Keystone"), FUNB, Evergreen Asset, EDI and certain of their
affiliates, and to members of the immediate families of such persons, to
registered representatives of firms with dealer agreements with EDI, and to a
bank or trust company acting as a trustee for a single account.
How the Funds Value Their Shares. The net asset value of each class of shares
- --------------------------------
of a Fund 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, Martin Luther
King, Jr. 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 obligations 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.
General. In general you should only purchase Class B or Class C shares if you
- -------
are planning to exchange in the near future into Class B or Class C shares of
another Evergreen fund. Consult your financial intermediary for further
information. The compensation received by broker-dealers and agents may differ
depending on whether they sell Class A, Class B or Class C shares.
In addition to the discount or commission paid to broker-dealers, EDI may
from time to time pay to broker-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 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 broker-dealer
and their immediate family members to urban or resort locations within or
outside the U.S. Such a dealer may elect to receive cash incentives of
equivalent amount in lieu of such payments. EDI may also limit the availability
of such incentives to certain specified dealers. EDI from time to time sponsors
promotions involving First Union Brokerage Services, an affiliate of each
Fund's investment adviser, and select broker-dealers, pursuant to which
incentives are paid, including gift certificates and payments in amounts up to
1% of the dollar amount of shares of a Fund sold. Awards may also be made based
on the opening of a minimum number of accounts. Such promotions are not being
made available to all broker-dealers. Certain broker-dealers may also receive
payments from EDI or a Fund's investment adviser over and above the usual trail
commissions or shareholder servicing payments applicable to a given class of
shares.
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 its investment adviser
incurs. If such investor is an existing shareholder, a Fund may redeem shares
from an investor's account to reimburse the Fund or its investment adviser for
any loss. In addition, such investors may be prohibited or restricted from
making further purchases in any of the Evergreen funds. The Funds will not
accept third party checks other than those payable directly to a shareholder
whose account has been in existence at least 30 days.
HOW TO REDEEM SHARES
- --------------------
You may "redeem" (i.e., sell) your shares in a Fund to the Fund for cash
at their net redemption value on any day the Exchange is open, either directly
by writing to the Fund, c/o ESC, or through your financial intermediary. The
amount you will receive is based on the net asset value adjusted for fractions
of a cent (less any applicable CDSC) 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 15 days). Once a redemption request has been
telephoned or mailed, it is irrevocable and may not be modified or canceled.
19
<PAGE>
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). Your
financial intermediary is responsible for furnishing all necessary
documentation to the Fund and may charge you for this service. Certain
financial intermediaries may require that you give instructions earlier than
4:00 p.m. (eastern time).
Redeeming Shares Directly by Mail or Telephone. You may redeem by mail by
- ----------------------------------------------
sending a signed letter of instruction or stock power form to a Fund, c/o ESC
(the registrar, transfer agent and dividend-disbursing agent for each Fund).
Stock power forms are available from your financial intermediary, ESC, 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 $50,000. Currently, the requirement for a
signature guarantee has been waived on redemptions of $50,000 or less when the
account address of record has been the same for a minimum period of 30 days.
Each Fund and ESC reserve the right to withdraw this waiver at any time. 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 under the Securities Exchange Act
of 1934 and ESC's policies.
Shareholders may redeem amounts of $1,000 or more (up to $50,000) from
their accounts by calling the telephone number on the front page of this
prospectus between the hours of 8:00 a.m. and 6:00 p.m. (eastern time) each
business day (i.e., any weekday exclusive of days on which the Exchange or
ESC's offices are closed). Redemption requests received 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. If you cannot reach a Fund by telephone,
you should follow the procedures for redeeming by mail or through a
broker-dealer as set forth herein. The telephone redemption service is not made
available to shareholders automatically. Shareholders wishing to use the
telephone redemption service must complete the appropriate sections on the
application and choose how the redemption proceeds are to be paid. Redemption
proceeds will be either (1) mailed by check to the shareholder at the address
in which the account is registered or (2) wired to an account with the same
registration as the shareholder's account in a Fund at a designated commercial
bank.
In order to insure that instructions received by ESC are genuine when you
initiate a telephone transaction, you will be asked to verify certain criteria
specific to your account. At the conclusion of the transaction, you will be
given a transaction number confirming your request, and written confirmation of
your transaction will be mailed the next business day. Your telephone
instructions will be recorded. Redemptions by telephone are allowed only if the
address and bank account of record have been the same for a minimum period of
30 days. Each Fund reserves the right at any time to terminate, suspend, or
change the terms of any redemption method described in this prospectus, except
redemption by mail, and to impose fees.
Except as otherwise noted, the Funds, ESC and EDI will not assume
responsibility for the authenticity of any instructions received by any of them
from a shareholder in writing, over the Evergreen Express Line (described
below), or by telephone. ESC will employ reasonable procedures to confirm that
instructions received over the Evergreen Express Line or by telephone are
genuine. The Funds, ESC and EDI will not be liable when following instructions
received over the Evergreen Express Line or by telephone that ESC reasonably
believes are genuine.
Evergreen Express Line. The Evergreen Express Line offers you specific fund
- ----------------------
account information and price and yield quotations as well as the ability to do
account transactions, including investments, exchanges and redemptions. You may
access the Evergreen Express Line by dialing toll free 1-800-346-3858 on any
touch-tone telephone, 24 hours a day, seven days a week.
General. The sale of shares is a taxable transaction for federal income tax
- -------
purposes. The Funds may temporarily suspend the right to redeem their shares
when (1) the Exchange is closed, other than customary weekend and holiday
closings; (2) trading on the Exchange is restricted; (3) an emergency exists
and the Funds cannot dispose of their investments or fairly determine their
value; or (4) the SEC so orders. The Funds reserve the right to close an
account that through redemption has fallen below $1,000 and has remained so for
30 days. Shareholders will receive 60 days' written notice to increase the
account value to at least $1,000 before the account is closed. The Funds have
elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which each
Fund is obligated to redeem
20
<PAGE>
shares solely in cash, up to the lesser of $250,000 or 1% of a Fund's total net
assets, during any 90-day period for any one shareholder.
EXCHANGE PRIVILEGE
- ------------------
How to Exchange Shares. You may exchange some or all of your shares for shares
- ----------------------
of the same class in other Evergreen funds through your financial intermediary,
by calling or writing to ESC, or by using the Evergreen Express Line as
described above. 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. An exchange which represents an initial
investment in another Evergreen fund is subject to the minimum investment and
suitability requirements of each Fund.
Each of the Evergreen funds has different investment objectives and
policies. For more complete information, a prospectus of the fund into which an
exchange will be made should be read prior to the exchange. An exchange order
must comply with the requirement for a redemption or repurchase order and must
specify the dollar value or number of shares to be exchanged. 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 modified or discontinued at
any time by a Fund upon 60 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 or C shares are exchanged for
shares of the same class of other Evergreen funds. If you redeem shares, the
CDSC applicable to the shares of the Evergreen fund originally purchased for
cash is applied. Also, Class B shares will continue to age following an
exchange for the purpose of conversion to Class A shares and for the purpose of
determining the amount of the applicable CDSC. If you buy Class A shares of a
Fund, you will be charged a sales load upon exchange for Class A shares of
another Evergreen fund.
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 the Fund and may
charge you for this service.
Exchanges By Telephone And Mail. Exchange requests received by a Fund after
- -------------------------------
4:00 p.m. (eastern time) will be processed using the net asset value determined
at the close of 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 ESC by telephone. If you wish to use the
telephone exchange service you should indicate this on the 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 ESC 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, ESC
or call the toll-free number on the front page of this prospectus. Some
services are described in more detail in the application.
Systematic Investment Plan. Under a Systematic Investment Plan, you may invest
- --------------------------
as little as $25 per month to purchase shares of a Fund with no minimum initial
investment required.
Telephone Investment Plan. You may make investments into an existing account
- -------------------------
electronically in amounts of not less than $100 or more than $10,000 per
investment. Telephone investment requests received by 4:00 p.m. (eastern time)
will be credited to a shareholder's account the day the request is received.
Systematic 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
Systematic Withdrawal Plan (the "Withdrawal Plan") by filling out the
appropriate part of the application. Under this Withdrawal Plan, you may
receive (or designate a third party to receive) a
21
<PAGE>
monthly or quarterly fixed-withdrawal payment in a stated amount of at least
$75 and as much as 1.00% per month or 3.00% per quarter of the total net asset
value of the Fund shares in your account when the Withdrawal Plan was opened.
Fund shares will be redeemed as necessary to meet withdrawal payments. All
participants must elect to have their dividends and capital gains distributions
reinvested automatically.
Investments Through Employee Benefit and Savings Plans. Certain qualified and
- ------------------------------------------------------
non-qualified employee benefit and savings plans may make shares of the Funds
and the other Evergreen funds available to their participants. A Fund's
investment adviser or FUNB may provide compensation to organizations providing
administrative and recordkeeping services to plans which make shares of the
Evergreen 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
a Fund at the net asset value per share at the close of business on the record
date, 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.
Dollar Cost Averaging. Through dollar cost averaging you can invest a fixed
- ---------------------
dollar amount each month or each quarter in any Evergreen fund. This results in
more shares being purchased when the selected fund's net asset value is
relatively low and fewer shares being purchased when the fund's net asset value
is relatively high and may result in a lower average cost per share than a less
systematic investment approach.
Prior to participating in dollar cost averaging, you must establish an
account in an Evergreen fund. You should designate on the application (i) the
dollar amount of each monthly or quarterly investment you wish to make, and
(ii) the fund in which the investment is to be made. Thereafter, on the first
day of the designated month, an amount equal to the specified monthly or
quarterly investment will automatically be redeemed from your initial account
and invested in shares of the designated fund.
If you are a Class A investor and paid a sales charge on your initial
purchase, the shares purchased will be eligible for Rights of Accumulation and
the sales charge applicable to the purchase will be determined accordingly. In
addition, the value of shares purchased will be included in the total amount
required to fulfill a Letter of Intent. If a sales charge was not paid on the
initial purchase, a sales charge will be imposed at the time of subsequent
purchases, and the value of shares purchased will become eligible for Rights of
Accumulation and Letters of Intent. Consult the application for additional
information concerning these reduced sales charges.
Two Dimensional Investing. You may elect to have income and capital gains
- -------------------------
distributions from any Class of Evergreen fund shares you own automatically
invested to purchase the same class of shares of any other Evergreen fund. You
may select this service on your application and indicate the Evergreen fund(s)
into which distributions are to be invested.
Tax Sheltered Retirement Plans. The Funds have various retirement plans
- ------------------------------
available to eligible investors, including Individual Retirement Accounts
(IRAs); Rollover IRAs; Simplified Employee Pension Plans (SEPs); Savings
Incentive Match Plan for Employees (SIMPLEs); Tax Sheltered Annuity Plans;
403(b)(7) Plans; 401(k) Plans; Keogh Plans; Profit-Sharing Plans; Medical
Savings Accounts; Pension and Target Benefit and Money Purchase Plans. For
details, including fees and application forms, call toll free 1-800-247-4075 or
write to ESC.
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 obligations 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 and FUNB are subject to and in compliance with the
aforementioned laws and regulations.
22
<PAGE>
Changes to applicable laws and regulations or future judicial or
administrative decisions could result in Evergreen Asset or FUNB 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 Evergreen Asset or FUNB 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 investment 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 obligations are not included in net investment 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. The
amount of dividends may fluctuate from day to day, and the dividend may be
omitted on a day where Fund expenses exceed 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 will be treated as paid in the immediately preceding December.
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 Internal Revenue Code of 1986, as
amended (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 Municipal Money Market Fund and Evergreen
Pennsylvania Municipal Money Market Fund) that pays exempt- interest dividends.
Except as noted below with respect to Evergreen Municipal Money Market Fund and
Evergreen Pennsylvania Municipal 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 Municipal Money Market Fund and Evergreen Pennsylvania Municipal
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 these Funds 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)
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.
23
<PAGE>
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 gains 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 gains distributions and
redemptions) paid to certain shareholders. In order to avoid this backup
withholding requirement, you must certify on the 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 Conduct Rules 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.
Other Classes of Shares. Evergreen Money Market Fund offers four classes of
- -----------------------
shares: Class A, Class B, Class C and Class Y. Evergreen Municipal Money Market
Fund, Evergreen Pennsylvania Municipal Money Market Fund and Evergreen Treasury
Money Market Fund each offer two classes of shares, Class A and Class Y. Class
Y shares are offered through a separate prospectus. Class Y shares are
available only 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 FUNB, Evergreen Asset or
their affiliates. The dividends payable with respect to Class A, Class B and
Class C shares will be less than those payable with respect to Class Y shares
due to the distribution and shareholder servicing related expenses borne by
Class A, Class B and Class C 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, reports or other communications to shareholders. Yield is
computed separately for each class of shares. 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 SAI.
Before investing in Evergreen Municipal Money Market Fund or the Evergreen
Pennsylvania Municipal 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.
In marketing a Fund's shares, information may be provided that is designed
to help individuals understand their investment goals and explore various
financial strategies. Such information may include publications describing
general principles of investing, such as asset allocation, diversification,
risk tolerance, and goal setting; a questionnaire designed to help create a
personal financial profile; and an action plan offering investment
alternatives.
24
<PAGE>
The information provided to investors may also include discussions of other
Evergreen funds, products, and services, which may include: retirement
investing; brokerage products and services; the effects of periodic investment
plans and dollar cost averaging; saving for college; and charitable giving. In
addition, the information provided to investors may quote financial or business
publications and periodicals, including model portfolios or allocations, as
they relate to fund management, investment philosophy, and investment
techniques. EDI may also reprint, and use as advertising and sales literature,
articles from Evergreen Events, a quarterly magazine provided to Evergreen fund
shareholders.
Year 2000 Risks. Like other investment companies, financial and business
- ---------------
organizations and individuals around the world, the Funds could be adversely
affected if the computer systems used by the Funds' investment advisers and the
Funds' other service providers do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Funds' investment advisers are
taking steps to address the Year 2000 Problem with respect to the computer
systems that they use and to obtain assurances that comparable steps are being
taken by the Funds' other major service providers. At this time, however, there
can be no assurance that these steps will be sufficient to avoid any adverse
impact on the Funds.
Additional Information. This prospectus and the SAI, which has been
- ----------------------
incorporated by reference herein, do not contain all the information set forth
in the Registration Statement filed by the Trust with the SEC under the Act.
Copies of the Registration Statement may be obtained at a reasonable charge
from the SEC or may be examined, without charge, at the offices of the SEC in
Washington, D.C.
25
<PAGE>
Investment Advisers
Evergreen Asset Management Corp., 2500 Westchester Avenue, Purchase, New York
10577
Evergreen Money Market Fund, Evergreen Municipal Money Market Fund
Capital Management Group of First Union National Bank, 201 South College
Street, Charlotte, North Carolina 28288-0630
Evergreen Treasury Money Market Fund, Evergreen Pennsylvania Municipal
Money Market Fund
Custodian
State Street Bank and Trust Company, P.O. Box 9021, Boston, Massachusetts
02205-9827
Transfer Agent
Evergreen Service Company, 200 Berkeley Street, Boston, Massachusetts, 02116
Legal Counsel
Sullivan & Worcester LLP, 1025 Connecticut Avenue, N.W., Washington, D.C. 20036
Independent Accountants/Auditors
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York 10036
Evergreen Money Market Fund, Evergreen Municipal Money Market Fund
KPMG Peat Marwick LLP, 99 High Street, Boston, Massachusetts 02110
Evergreen Treasury Money Market Fund, Evergreen Pennsylvania Municipal
Money Market Fund
Distributor
Evergreen Distributor, Inc., 125 W. 55th Street, New York, New York 10019
68617 53620REV05
<PAGE>
- ----------------------------------------------------------------------------
PROSPECTUS June 1, 1998
- ----------------------------------------------------------------------------
(Evergreen Funds(SM) logo appears here)
EVERGREEN(SM) MONEY MARKET FUNDS
- ----------------------------------------------------------------------------
Evergreen Money Market Fund
Evergreen Municipal Money Market Fund
Evergreen Pennsylvania Municipal Money Market Fund
Evergreen Treasury Money Market Fund
(Each a "Fund," together the "Funds")
CLASS Y SHARES
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 each Fund. Each Fund is a series of an open-end
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 200 Berkeley Street, Boston, Massachusetts 02116.
A Statement of Additional Information ("SAI") for the Funds, dated June 1,
1998, as supplemented from time to time has been filed with the Securities and
Exchange Commission ("SEC") and is incorporated by reference herein. The SAI
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) 343-2898. There can be no
assurance that the investment objective of any Fund will be achieved. Investors
are advised to read this prospectus carefully.
An investment in the Funds is not a deposit or obligation of any bank, is not
endorsed or guaranteed by any bank, and is 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 involves risk, including the
possible loss of principal. There is 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
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
EXPENSE INFORMATION 3
FINANCIAL HIGHLIGHTS 4
DESCRIPTION OF THE FUNDS 9
Investment Objectives and Policies 9
Investment Practices and Restrictions 12
ORGANIZATION AND SERVICE PROVIDERS 15
Organization 15
Service Providers 15
</TABLE>
<TABLE>
<S> <C>
PURCHASE AND REDEMPTION OF SHARES 16
How to Buy Shares 16
How to Redeem Shares 17
Exchange Privilege 18
Shareholder Services 19
Effect of Banking Laws 20
OTHER INFORMATION 20
Dividends, Distributions and Taxes 20
General Information 21
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
EXPENSE INFORMATION
- --------------------------------------------------------------------------------
The table and examples below are designed to help you understand the
various expenses that you will bear, directly or indirectly, when you invest in
a Fund. Shareholder transaction expenses are fees paid directly from your
account when you buy or sell shares of a Fund.
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales Charge Imposed on Purchases None
Sales Charge on Dividend Reinvestments None
Contingent Deferred Sales Charge None
</TABLE>
Annual operating expenses reflect the normal operating expenses of a Fund,
and include costs such as management, distribution and other fees. The tables
below show for each Fund actual annual operating expenses for the fiscal period
ended January 31, 1998. The examples show what you would pay if you invested
$1,000 over the periods indicated. The examples assume that you reinvest all of
your dividends and that each Fund's average annual return will be 5%. The
examples are for illustration purposes only and should not be considered a
representation of past or future expenses or annual return. Each Fund's actual
expenses and returns will vary. For a more complete description of the various
costs and expenses borne by each Fund see "Organization and Service Providers."
Evergreen Money Market Fund
<TABLE>
<CAPTION>
Annual Operating
Expenses
-----------------------
<S> <C>
Management Fees 0.46%
12b-1 Fees 0.00%
Other Expenses 0.13%
----
Total 0.59%
====
</TABLE>
<TABLE>
<CAPTION>
Example
--------
<S> <C>
Class Y
--------
After 1 Year $ 6
After 3 Years $19
After 5 Years $33
After 10 Years $74
</TABLE>
Evergreen Municipal Money Market Fund
<TABLE>
<CAPTION>
Annual Operating
Expenses
-----------------------
<S> <C>
Management Fees 0.50%
12b-1 Fees 0.00%
Other Expenses 0.08%
----
Total 0.58%
====
</TABLE>
<TABLE>
<CAPTION>
Example
--------
<S> <C>
Class Y
--------
After 1 Year $ 6
After 3 Years $19
After 5 Years $32
After 10 Years $73
</TABLE>
Evergreen Pennsylvania Municipal Money Market Fund
<TABLE>
<CAPTION>
Annual Operating
Expenses
(After Reimbursements)(1)
--------------------------
<S> <C>
Management Fees 0.34%
12b-1 Fees 0.00%
Other Expenses 0.17%
----
Total 0.51%
====
</TABLE>
<TABLE>
<CAPTION>
Example
--------
<S> <C>
Class Y
--------
After 1 Year $ 5
After 3 Years $16
After 5 Years $29
After 10 Years $64
</TABLE>
Evergreen Treasury Money Market Fund
<TABLE>
<CAPTION>
Annual Operating
Expenses
-----------------
<S> <C>
Management Fees 0.35%
12b-1 Fees 0.00%
Other Expenses 0.08%
----
Total 0.43%
====
</TABLE>
<TABLE>
<CAPTION>
Example
--------
<S> <C>
Class Y
--------
After 1 Year $ 4
After 3 Years $14
After 5 Years $24
After 10 Years $54
</TABLE>
- --------
(1) First Union National Bank ("FUNB") has agreed to reimburse Evergreen
Pennsylvania Municipal Money Market Fund to the extent that the Fund's
aggregate annual operating expenses exceed 1.00% of average net assets for
any fiscal year. FUNB may cease this voluntary expense reimbursement at
any time. For the fiscal period ended January 31, 1998, FUNB reimbursed
management fees of Evergreen Pennsylvania Municipal Money Market Fund.
Absent such reimbursements, the Fund would have paid the expenses equal to
the following percentages of net assets:
3
<PAGE>
<TABLE>
<CAPTION>
Total Fund Operating
Management Expenses (Without
Fees Waivers and/or
Fund (Without Waiver) Reimbursement)
- --------------------------------------------------------- ------------------ ---------------------
<S> <C> <C>
Evergreen Pennsylvania Municipal Money Market Fund
Class Y ......................................... 0.40% 0.58%
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables on the following pages present, for each Fund, financial
highlights for a share outstanding throughout each period indicated for the
life of each Fund. The information for Evergreen Money Market Fund and
Evergreen Municipal Money Market Fund has been audited by Price Waterhouse LLP,
each Fund's independent accountants, and the information for Evergreen Treasury
Money Market Fund and Evergreen Pennsylvania Municipal Money Market Fund has
been audited by KPMG Peat Marwick LLP, each Fund's independent auditors. A
report of Price Waterhouse LLP or KPMG Peat Marwick LLP, as the case may be, on
the audited information with respect to each Fund is incorporated by reference
in the Funds' SAI. The following information for each Fund should be read in
conjunction with the financial statements and related notes which are also
incorporated by reference in the Funds' SAI.
Further information about each Fund's performance is contained in the
Funds' Annual Report to shareholders, which may be obtained without charge.
Evergreen Money Market Fund -- Class Y Shares
<TABLE>
<CAPTION>
Ten Months
Five Months Year Ended August 31, Ended
Ended -------------------------------- August 31,
January 31, 1998 (c) 1997 1996 1995 1994 (b)
--------------------- ---------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value beginning of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ ------ -------
Net investment income ................................. 0.02 0.05 0.05 0.05 0.03
Less distributions to shareholders from net
investment income ................................... (0.02) (0.05) (0.05) (0.05) (0.03)
-------- ------- ------- ------- --------
Net asset value end of period .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======= ========
TOTAL RETURN ........................................... 2.21% 5.27% 5.36% 5.38% 2.92%
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Total expenses ........................................ 0.59%(a) 0.48% 0.45% 0.53% 0.32%(a)
Total expenses excluding indirectly paid expenses ..... 0.59%(a) 0.48% -- -- --
Total expenses excluding waivers and/or
reimbursements ...................................... 0.59%(a) 0.54% 0.59% 0.73% 0.71%(a)
Net investment income ................................. 5.22%(a) 5.13% 5.16% 5.26% 3.46%(a)
Net assets end of period (millions) .................... $ 610 $ 635 $ 671 $ 283 $ 273
</TABLE>
4
<PAGE>
Evergreen Money Market Fund -- Class Y Shares (continued)
<TABLE>
<CAPTION>
November 2, 1987
Year Ended October 31, (Commencement of
------------------------------------------------------ Class Operations) to
1993 1992 1991 1990 1989 October 31, 1988
---------- ---------- ---------- ---------- ---------- ---------------------
<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
------ ------ ------ ------ ------ -------
Net investment income ......................... 0.03 0.04 0.07 0.08 0.09 0.07
Less distributions to shareholders from net
investment income ............................ (0.03) (0.04) (0.07) (0.08) (0.09) (0.07)
------- ------- ------- ------- ------- --------
Net asset value end of period ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ========
TOTAL RETURN .................................... 3.23% 4.23% 6.73% 8.40% 9.39% 7.37%
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Total expenses ................................ 0.39% 0.36% 0.30% 0.35% 0.38% 0.43%(a)
Total expenses excluding indirectly paid
expenses ..................................... -- -- -- -- -- --
Total expenses excluding waivers and/or
reimbursements ............................... 0.71% 0.72% 0.70% 0.69% 0.75% 0.93%(a)
Net investment income ......................... 3.19% 4.18% 6.53% 8.08% 9.42% 7.26%(a)
Net assets end of period (millions) ............. $ 299 $ 358 $ 438 $ 458 $ 408 $ 161
</TABLE>
- --------
(a) Annualized.
(b) The Fund changed its fiscal year end from October 31 to August 31.
(c) The Fund changed its fiscal year end from August 31 to January 31.
5
<PAGE>
Evergreen Municipal Money Market Fund -- Class Y Shares
<TABLE>
<CAPTION>
Five Months Year Ended August 31,
Ended -------------------------------------------
January 31, 1998 (b) 1997 1996 1995 1994
--------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value beginning of period ...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ ------ ------
Net investment income ................................... 0.01 0.03 0.03 0.04 0.02
Less distributions to shareholders from net investment
income ................................................ (0.01) (0.03) (0.03) (0.04) (0.02)
-------- ------- ------- ------- -------
Net asset value end of period ............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======= =======
TOTAL RETURN ............................................. 1.47% 3.44% 3.53% 3.59% 2.50%
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Total expenses .......................................... 0.58%(a) 0.53% 0.49% 0.50% 0.34%
Total expenses excluding indirectly paid expenses ....... 0.58%(a) 0.53% -- -- --
Total expenses excluding waivers and reimbursments ...... 0.58%(a) 0.55% 0.60% 0.63% 0.64%
Net investment income ................................... 3.46%(a) 3.37% 3.44% 3.53% 2.47%
Net assets end of period (millions) ...................... $ 386 $ 378 $ 617 $ 421 $ 402
</TABLE>
<TABLE>
<CAPTION>
November 2, 1988
Year Ended August 31, (Commencement of
------------------------------------------- Class Operations) to
1993 1992 1991 1990 August 31, 1989
---------- ---------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value beginning of period ...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ -------
Net investment income ................................... 0.03 0.04 0.05 0.06 0.05
Less distributions to shareholders from net investment
income ................................................ (0.03) (0.04) (0.05) (0.06) (0.05)
------- ------- ------- ------- --------
Net asset value end of period ............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ========
TOTAL RETURN ............................................. 2.61% 3.73% 5.46% 6.15% 5.51%
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Total expenses .......................................... 0.34% 0.32% 0.28% 0.31% 0.24%(a)
Total expenses excluding indirectly paid expenses ....... -- -- -- -- --
Total expenses excluding waivers and reimbursments ...... 0.63% 0.63% 0.66% 0.71% 0.79%(a)
Net investment income ................................... 2.58% 3.72% 5.23% 5.94% 6.77%(a)
Net assets end of period (millions) ...................... $ 401 $ 417 $ 510 $ 311 $ 109
</TABLE>
- --------
(a) Annualized.
(b) The Fund changed its fiscal year end from August 31 to January 31.
6
<PAGE>
Evergreen Pennsylvania Municipal Money Market Fund -- Class Y Shares
<TABLE>
<CAPTION>
Five Months Six Months
Ended Year Ended Ended
January 31, 1998 (c) August 31, 1997 August 31, 1996 (b)
---------------------- ----------------- --------------------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value beginning
of period ..................... $ 1.00 $ 1.00 $ 1.00
-------- ------ --------
Net investment income ......... 0.01 0.03 0.01
Less distributions to
shareholders from net
investment income ............ (0.01) (0.03) (0.01)
--------- ------- ---------
Net asset value end of
period ........................ $ 1.00 $ 1.00 $ 1.00
========= ======= =========
TOTAL RETURN ................... 1.38% 3.15% 1.51%
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average net
assets:
Total expenses ................ 0.51%(a) 0.50% 0.50%(a)
Total expenses
excluding indirectly
paid expenses ................ 0.51%(a) 0.50% --
Total expenses
excluding waivers
and/or
reimbursements ............... 0.58%(a) 0.60% 0.66%(a)
Net investment income ......... 3.26%(a) 3.10% 2.92%(a)
Net assets end of period
(millions) .................... $ 33 $ 32 $ 48
<CAPTION>
August 15, 1991
Year Ended February 28, (Commencement of
------------------------------------------- Class Operations) to
1996 1995 1994 1993 February 29, 1992
---------- ---------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value beginning
of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- --------
Net investment income ......... 0.03 0.03 0.02 0.03 0.02
Less distributions to
shareholders from net
investment income ............ (0.03) (0.03) (0.02) (0.03) (0.02)
------- ------- ------- ------- ---------
Net asset value end of
period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =========
TOTAL RETURN ................... 3.55% 2.81% 2.10% 2.68% 2.20%
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average net
assets:
Total expenses ................ 0.37% 0.33% 0.47% 0.35% 0.19%(a)
Total expenses
excluding indirectly
paid expenses ................ -- -- -- -- --
Total expenses
excluding waivers
and/or
reimbursements ............... 0.73% 1.05% 1.26% 1.07% 0.77%(a)
Net investment income ......... 3.42% 3.09% 2.10% 2.62% 3.90%(a)
Net assets end of period
(millions) .................... $ 83 $ 44 $ 14 $ 16 $ 21
</TABLE>
- --------
(a) Annualized.
(b) The Fund changed its fiscal year end from February 29 to August 31.
(c) The Fund changed its fiscal year end from August 31 to January 31.
7
<PAGE>
Evergreen Treasury Money Market Fund -- Class Y Shares
<TABLE>
<CAPTION>
Five Months Year Ended August 31,
Ended ---------------------
January 31, 1998 (c) 1997 1996
---------------------- ---------- ----------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value beginning
of period ..................... $ 1.00 $ 1.00 $ 1.00
-------- ------- -------
Net investment income ......... 0.02 0.05 0.05
Less distributions to
shareholders from net
investment income ............ (0.02) (0.05) (0.05)
--------- ------- -------
Net asset value end of
period ........................ $ 1.00 $ 1.00 $ 1.00
========= ======= =======
TOTAL RETURN ................... 2.20% 5.14% 5.29%
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average net
assets:
Total expenses ................ 0.43%(a) 0.42% 0.39%
Total expenses
excluding indirectly
paid expenses ................ 0.43%(a) 0.42% --
Total expenses
excluding
waivers and
reimbursments ................ 0.43%(a) 0.43% 0.47%
Net investment income ......... 5.19%(a) 5.02% 5.12%
Net assets end of period
(millions) .................... $ 572 $ 547 $ 760
<CAPTION>
March 6, 1991
Eight Months Year Ended December 31, (Commencement of
Ended -------------------------------- Class Operations) to
August 31, 1995 (b) 1994 1993 1992 December 31, 1991
-------------------- ---------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value beginning
of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------- --------
Net investment income ......... 0.04 0.04 0.03 0.04 0.05
Less distributions to
shareholders from net
investment income ............ (0.04) (0.04) (0.03) (0.04) (0.05)
--------- ------- ------- ------- ---------
Net asset value end of
period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ======= ======= ======= =========
TOTAL RETURN ................... 3.78% 4.06% 3.04% 3.67% 4.66%
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average net
assets:
Total expenses ................ 0.33%(a) 0.20% 0.18% 0.17% 0.20%(a)
Total expenses
excluding indirectly
paid expenses ................ -- -- -- -- --
Total expenses
excluding
waivers and
reimbursments ................ 0.49%(a) 0.48% 0.52% 0.52% 0.52%(a)
Net investment income ......... 5.60%(a) 3.78% 3.00% 3.61% 5.53%(a)
Net assets end of period
(millions) .................... $ 277 $ 163 $ 366 $ 286 $ 265
</TABLE>
- --------
(a) Annualized.
(b) The Fund changed its fiscal year end from December 31 to August 31.
(c) The Fund changed its fiscal year end from August 31 to January 31.
8
<PAGE>
- --------------------------------------------------------------------------------
DESCRIPTION OF THE FUNDS
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
Each Fund's investment objective is nonfundamental; as a result, each Fund
may change its objective without a shareholder vote. Each Fund has also adopted
certain fundamental investment policies which are mainly designed to limit a
Fund's exposure to risk. The Funds' fundamental policies cannot be changed
without a shareholder vote. See the SAI for more information regarding the
Funds' fundamental investment policies or other related investment policies.
There can be no assurance that the Funds' investment objectives will be
achieved.
In addition to the investment policies detailed below, each Fund may
employ certain additional investment strategies which are discussed in
"Investment Practices and Restrictions" below.
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. The Fund will invest in securities determined to present
minimal credit risk and which are, at the time of acquisition, eligible
securities pursuant to Rule 2a-7 under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund will also comply with the diversification
requirements and other applicable requirements prescribed by Rule 2a-7. The
Fund's permitted investments include:
1. Marketable obligations of, or obligations guaranteed by the United
States ("U.S.") Government, its agencies or instrumentalities, including issues
of the U.S. 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 U.S. government, others are supported by the right
of the issuer to borrow from the U.S. 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 U.S. government 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 U.S. Treasury include,
but are not limited to, the Federal Home Loan Bank, Federal Intermediate Credit
Banks, Federal National Mortgage Association and the Tennessee Valley
Authority. Agencies or instrumentalities whose securities are supported only by
the credit of the agency or instrumentality include the Inter-American
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 (within which
there may be sub-categories or gradations indicating relative standing) by any
two of Standard & Poor's Ratings Group ("S&P") or Moody's Investors Service
("Moody's") or any other nationally recognized statistical rating organization
("NRSRO") (or by a single NRSRO if only one 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 SAI.
3. Corporate debt securities and bank obligations that are rated in one of
the two highest short-term rating categories (within which there may be
sub-categories or gradations indicating relative standing) by any two of S&P,
Moody's and any other NRSRO (or by a single NRSRO if only one 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 397 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 any domestic or foreign company which has an outstanding
long-term debt issue rated in the top two rating categories by any NRSRO and
determined by the investment adviser to be of comparable quality to the
unrelated securities.
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6. Unrated corporate debt securities, commercial paper and bank
obligations otherwise determined by the investment adviser to be of comparable
quality to the obligations in paragraphs 2 and 3 above.
7. Repurchase agreements involving the securities described in paragraphs
1 through 6 above.
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. Such risks include unfavorable political and economic
developments, 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 2 and 3
above which are issued in private placements pursuant to Section 4(2) of the
Securities Act of 1933 (the "1933 Act"), as amended. Such securities are not
registered for purchase and sale by the public under the Act and are not
considered readily marketable. The Fund will not invest more than 15% of its
net assets in securities which are not readily marketable (including private
placement securities) and in repurchase agreements maturing in more than seven
days. (See "Restricted Securities.")
Evergreen Municipal Money Market Fund
The investment objective of Evergreen Municipal 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. 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 U.S. and by the District of Columbia, and their political
subdivisions and duly constituted authorities. Such securities are generally
known as "Municipal Securities" and are described in greater detail below.
The Fund will invest in Municipal Securities determined to present minimal
credit risk and which are, at the time of acquisition, eligible securities
under Rule 2a-7. The Fund will also comply with the diversification
requirements and other applicable requirements prescribed by Rule 2a-7. The
Fund normally invests at least 80% of its net assets in Municipal Securities,
the interest from which is exempt from federal income tax (other than the
federal alternative minimum tax ("AMT")).
The Fund may temporarily invest up to 20% of its 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. However, 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 its 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 U.S. 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 categories by any NRSRO;
commercial paper rated in the highest grade by Moody's or S&P; and certificates
of deposit issued by U.S. branches of U.S. banks with assets of $1 billion or
more.
Evergreen Pennsylvania Municipal Money Market Fund
The investment objective of the Evergreen Pennsylvania Municipal Money
Market Fund is to seek to provide investors with as high a level of current
income as is consistent with preservation of capital and providing liquidity.
To obtain its objective, the Fund invests at least 80% of its net assets
in Municipal Securities issued by the Commonwealth of Pennsylvania or its
counties, municipalities, authorities or other political subdivisions, and
Municipal Securities issued by territories or possessions of the U.S., such as
Puerto Rico.
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The Fund will invest in Municipal Securities determined to present minimal
credit risk and which are, at the time of acquisition, eligible securities
under Rule 2a-7. The Fund normally invests its assets so that at least 80% of
its annual interest income is exempt from federal income tax (other than the
AMT) and Pennsylvania income tax.
The Fund will also comply with the diversification requirements prescribed
by Rule 2a-7. However, the Fund is non-diversified and may invest a significant
percentage of its assets in the securities of a single issuer. Since the Fund
invests primarily in Pennsylvania obligations, its investments will be
concentrated in one geographic area. The Fund will not invest in options,
financial futures transactions or other similar "derivative" instruments except
as otherwise provided herein.
Ordinarily, up to 20% of the Fund's annual interest income may be subject
to Pennsylvania or regular federal income tax. However, at all times under
normal market conditions the percentage of the Fund's income and corresponding
distributions which is tax-exempt will be very close to 100%. In addition, for
temporary defensive purposes, the Fund may invest up to 100% of its total
assets in such taxable securities when, in the opinion of the investment
adviser, it is advisable to do so because of market conditions. The types of
taxable securities in which the Fund may invest are limited to the following
money market instruments which have remaining maturities not exceeding 397
days; (i) obligations of the U.S. government, its agencies or
instrumentalities; (ii) negotiable certificates of deposit and bankers'
acceptances of U.S. banks which have more than $1 billion in total assets at
the time of investment and are members of the Federal Reserve System or are
examined by the Comptroller of the Currency or whose deposits are insured by
the Federal Deposit Insurance Corporation; (iii) domestic and foreign U.S.
dollar-denominated commercial paper rated "P-1" by Moody's or "A-1" or "A-1+"
by S&P; and (iv) repurchase agreements involving any of the foregoing portfolio
securities.
The Fund may also invest in U.S. dollar-denominated foreign commercial
paper. Such investments may involve risks not applicable to domestic
obligations. These risks include foreign political or economic instability,
difficulties in enforcing a judgment against a foreign issuer should it
default, the imposition or tightening of exchange controls and changes in
foreign governmental attitudes toward private investment, including the
possibility of increased taxation, nationalization or expropriation of Fund
assets. Foreign issuers of securities may also be subject to different
accounting and disclosure systems, which may affect the type and quality of
information available about an issuer. The rating services used by the Fund's
investment adviser take these factors into consideration when assigning a
rating to a particular security, and therefore the additional risk to the Fund
of investing in a foreign security with the same rating as a domestic security
is not expected to be significant.
The Fund does not intend to concentrate its investments in any one
industry. However, from time to time, the Fund may invest 25% or more of its
total assets in Municipal Securities which are related in such a way that an
economic, business or political development or change affecting one such
obligation would also affect the others. Two examples of obligations so related
are (i) obligations, the interest on which is paid from revenues of similar
type projects and (ii) obligations whose issuers are located in the same state.
Because the taxable money market is a broader and more liquid market, and
has a greater number of investors, issuers and market makers, than the market
for short-term tax-exempt Municipal Securities, the liquidity of the Fund may
not be equal to that of a money market fund which invests exclusively in
short-term taxable money market instruments. The more limited marketability of
short-term tax-exempt Municipal Securities may make it difficult in certain
circumstances to dispose of large investments advantageously. In general,
tax-exempt Municipal Securities are also subject to credit risks such as the
loss of credit ratings or possible default. In addition, an issuer of
tax-exempt Municipal Securities may lose its tax-exempt status in the event of
a change in the current tax laws.
Risk Factors: Investing in Pennsylvania Municipal Securities. Each investor
should consider carefully the special risks inherent in the Fund's investment
in Pennsylvania Municipal Securities. Pennsylvania has been historically
identified as a heavy industry state although that reputation has recently
changed. The industrial composition of Pennsylvania diversified when the coal,
steel, and railroad industries began to decline. This diversification was
necessary when the traditionally strong industries in Pennsylvania declined as
a long-term shift in jobs, investment and workers away from the northeast part
of the nation took place. The major new sources of growth are in the service
sector, including trade, medical and health services, education and financial
institutions. Pennsylvania is highly urbanized, with approximately 50% of the
Commonwealth's population contained in the metropolitan areas which include the
cities of Philadelphia and Pittsburgh.
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It should be noted that Pennsylvania Municipal Securities may be adversely
affected by local political and economic conditions and developments within
Pennsylvania. For example, adverse conditions in a significant industry within
Pennsylvania may from time to time have a correspondingly adverse effect on
specific issuers within Pennsylvania or on anticipated revenue to the
Commonwealth itself; conversely, an improving economic outlook for a
significant industry may have a positive effect on such issuers or revenues. An
expanded discussion of the risks associated with the purchase of Pennsylvania
issues is contained in the SAI.
Evergreen Treasury Money Market Fund
The investment objective of Evergreen Treasury Money Market Fund is to
maintain stability of principal while earning current income. The Fund will
attempt to seek income only to the extent consistent with stability of
principal. The Fund will invest in short-term U.S. Treasury obligations with an
average dollar-weighted maturity of 90 days or less. The Fund may also enter
into repurchase agreements collateralized by the types of securities in which
it may invest and obligations the principal and interest of which are backed by
the full faith and credit of the U.S. government, provided that the repurchase
agreement shall, under normal market conditions, be backed by collateral at
least 65% of which is in obligations issued directly by the U.S. Treasury. The
Fund may also lend its portfolio securities to qualified institutional
investors. As a matter of investment strategy, the Fund's investment adviser
intends to maintain a dollar-weighted average maturity for the Fund of 60 days
or less. The Fund will comply with Rule 2a-7.
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 U.S. 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 U.S. 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 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 90 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.
The Fund will not invest in any obligations of or loan any of its
portfolio securities to FUNB or its affiliates (as defined in the 1940 Act) or
any affiliates of the Fund. Subject to the limitations described, the Fund is
permitted to invest in obligations of correspondent banks of FUNB (banks with
which the FUNB maintains a special bank servicing relationship) which are not
affiliates of Evergreen Money Market Trust, its investment adviser or its
distributor, but the Fund will not give preference in its investment selections
to those obligations.
After purchase by the Fund, a security may cease to be rated or its rating
may be reduced below the minimum required for purchase by the Fund. Neither
event will require a sale of such security by the Fund. However, the investment
adviser will consider such event in its determination of whether the Fund
should continue to hold the security. To the extent the ratings given by
Moody's or S&P may change as a result of changes by such organizations of their
rating systems, the Fund will attempt to use comparable ratings as standards
for investments in accordance with the investment policies contained in this
prospectus and in the SAI.
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
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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.
Municipal Securities. Municipal Securities are municipal bonds, notes and
commercial paper issued by or for states, territories and possessions of the
U.S. including the District of Columbia and their political subdivisions,
agencies and instrumentalities. Municipal bonds include fixed, variable or
floating rate general obligation and revenue bonds. General obligation bonds
are used to support the government's general financial needs and are supported
by the full faith and credit of the municipality. General obligation bonds are
repaid from the issuer's general unrestricted revenues. Payment, however, may
be dependent upon legislative approval and may be subject to limitations on the
issuer's taxing power. Revenue bonds are used to finance public works and
certain private facilities. In contrast to general obligation bonds, revenue
bonds are repaid only with the revenue generated by the project financed.
Municipal notes include tax anticipation notes, bond anticipation notes
and revenue anticipation notes. Municipal commercial paper obligations are
unsecured promissory notes issued by municipalities to meet short-term credit
needs.
Since certain of the Funds invest primarily in Municipal Securities, you
should be aware of the risks associated with investing in such securities. The
value of municipal bonds tends to go up when interest rates go down and vice
versa. An issuer's failure to make such payment due to political development or
fiscal mismanagement could affect its ability to make prompt payments of
interest and principal. Those events could also affect the market value of the
security. Moreover, the market for municipal bonds is often thin and can be
temporarily affected by large purchases and sales, including those by a Fund.
Opinions relating to the validity of Municipal Securities and to the
exclusion of interest thereon from federal and state personal income taxes are
rendered by counsel to the respective issuers at the time of issuance. Neither
the Funds, Evergreen Money Market Trust, nor the investment adviser will review
the proceedings relating to the issuance of Municipal Securities or the basis
for such opinions.
Floating Rate and Variable Rate Obligations. Each Fund, other than Evergreen
Treasury Money Market Fund, may invest in certain variable rate and floating
rate securities with or without demand features. These variable rate securities
do not have fixed interest rates; rather, interest 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 repayment 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. Each Fund currently limits 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% of its net assets.
Stand-by Commitments. The Funds may also acquire "stand-by commitments" with
respect to Municipal Securities held in their portfolio. Under a stand-by
commitment, a dealer agrees to purchase, at a Fund's option, specified
Municipal Securities at a specified price. Failure of the dealer to purchase
such Municipal Securities may result in a Fund incurring a loss or missing an
opportunity to make an alternative investment. Each Fund expects that stand-by
commitments generally will be available without the payment of direct or
indirect consideration. However, if necessary and advisable, a 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 each 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 Funds will maintain cash or liquid high grade debt obligations in a
segregated account with its custodian in an amount equal to such commitments.
The Funds will enter into stand-by commitments only with banks and
broker-dealers that, in the judgment of the Funds' investment advisers, present
minimal credit risks.
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Repurchase Agreements. The Funds may invest in repurchase agreements. A
repurchase agreement is an agreement by which a Fund purchases a security
(usually U.S. government obligations) for cash and obtains a simultaneous
commitment from the seller (usually a bank or broker-dealer) to repurchase the
security at an agreed-upon price and specified future date. The repurchase
price reflects an agreed-upon interest rate for the time period of the
agreement. The Fund's risk is the inability of the seller to pay the
agreed-upon price on the delivery date. However, this risk is tempered by the
ability of the Fund to sell the security in the open market in the case of a
default. In such a case, the Fund may incur costs in disposing of the security
which would increase Fund expenses. The Fund's investment adviser will monitor
the creditworthiness of the firms with which the Fund enters into repurchase
agreements.
Securities Lending. To generate income and offset expenses, each Fund may lend
obligations to broker-dealers and other financial institutions. Loans of
obligations by a Fund may not exceed 30% of the value of the Fund's total
assets. While obligations are on loan, the borrower will pay the Fund any
income accruing on the security. Also, the Fund may invest any collateral it
receives in additional obligations. Gains or losses in the market value of a
lent security will affect the Fund and its shareholders. When a Fund lends its
obligations, it runs the risk that it may not be able to retrieve the
obligations on a timely basis possibly losing the opportunity to sell the
obligations at a desirable price. Also, if the borrower files for bankruptcy or
becomes insolvent, the Fund's ability to dispose of the obligations may be
delayed.
When-Issued Securities. Each Fund, other than Evergreen Money Market Fund, may
enter into transactions whereby it commits to buying a security, but does not
pay for or take delivery of the security until some specified date in the
future. The value of these securities is subject to market fluctuations during
this period and no income accrues to the Funds until settlement. At the time of
settlement, a when-issued security may be valued at less than its purchase
price. When entering into these transactions, the Funds rely on the other party
to consummate the transaction; if the other party fails to do so, the Funds may
be disadvantaged. Evergreen Municipal 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. Each Fund does not intend to
purchase when-issued securities for speculative purposes, but only in
furtherance of its investment objective.
Illiquid Securities. Each Fund may invest up to 15% of its net assets in
illiquid securities and other securities which are not readily marketable.
Repurchase agreements with maturities longer than seven days will be included
for the purpose of the foregoing 15% limit. The inability of the Funds to
dispose of illiquid investments readily or at a reasonable price could impair
the Funds' ability to raise cash for redemptions or other purposes.
Restricted Securities. The Funds may invest in restricted securities, including
securities eligible for resale pursuant to Rule 144A under the 1933 Act.
Generally, Rule 144A establishes a safe harbor from the registration
requirements of the 1933 Act for resale by large institutional investors of
securities not publicly traded in the United States. The Funds' investment
adviser determines the liquidity of Rule 144A securities according to
guidelines and procedures adopted by the Board of Trustees of Evergreen Money
Market Trust. The Board of Trustees monitors the investment adviser's
application of those guidelines and procedures. Securities eligible for resale
pursuant to Rule 144A, which the Funds' investment adviser has determined to be
liquid or readily marketable, are not subject to the 15% limit on illiquid
securities.
Borrowing. Each Fund may borrow from banks in an amount up to 33 1/3% of its
total assets, taken at market value. Each Fund may also borrow an additional 5%
of its total assets from banks or others. A Fund may only borrow as a temporary
measure for extraordinary or emergency purposes such as the redemption of Fund
shares. A Fund will not purchase obligations while borrowings are outstanding
except to exercise prior commitments and to exercise subscription rights. The
Funds do not intend to leverage except to the extent that they may invest in
reverse repurchase agreements as described below.
Reverse Repurchase Agreements. Each Fund may enter into reverse repurchase
agreements. A reverse repurchase agreement is an agreement by a Fund to sell a
security and repurchase it at a specified time and price. A Fund could lose
money if the market values of the obligations it sold decline below their
repurchase prices. Reverse repurchase agreements may be considered a form of
borrowing, and, therefore, a form of leverage. Leverage may magnify gains or
losses of the Fund.
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Investing in Securities of Other Investment Companies. The Funds may invest in
securities of other investment companies. As a shareholder of another
investment company, the Fund would pay its portion of the other investment
company's expenses. These expenses would be in addition to the expenses that
the Fund currently bears concerning its own operations and may result in some
duplication of fees.
Other Investment Restrictions. Each Fund has adopted additional investment
restrictions that are set forth in the SAI.
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ORGANIZATION AND SERVICE PROVIDERS
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ORGANIZATION
Fund Structure. Each Fund is an investment pool, which invests shareholders'
money toward a specified goal. In technical terms, each Fund is a series of an
open-end, management investment company, called Evergreen Money Market Trust
(the "Trust"). All Funds except Evergreen Pennsylvania Municipal Money Market
Fund are diversified. The Trust is a Delaware business trust organized on
September 18, 1997.
Board of Trustees. The Trust is supervised by a Board of Trustees that is
responsible for representing the interests of shareholders. The Trustees meet
periodically throughout the year to oversee the Funds' activities, reviewing,
among other things, each Fund's performance and its contractual arrangements
with various service providers.
Shareholder Rights. All shareholders participate in dividends and distributions
from the Funds' assets and have equal voting, liquidation and other rights.
Shareholders may exchange shares as described under "Exchanges," but will have
no other preference, conversion, exchange or preemptive rights. When issued and
paid for, shares will be fully paid and nonassessable. Shares of the Funds are
redeemable, transferable and freely assignable as collateral. The Trust may
establish additional classes or series of shares.
The Funds do not hold annual shareholder meetings; the Funds may, however,
hold special meetings for such purposes as electing or removing Trustees,
changing fundamental policies and approving investment advisory agreements or
12b-1 plans. In addition, the Funds are prepared to assist shareholders in
communicating with one another for the purpose of convening a meeting to elect
Trustees. If any matters are to be voted on by shareholders, each share owned
as of the record date for the meeting would be entitled to one vote for each
dollar of net asset value applicable to such share.
SERVICE PROVIDERS
Investment Advisers. The investment adviser of Evergreen Money Market Fund and
Evergreen Municipal Money Market Fund is Evergreen Asset Management Corp.
("Evergreen Asset"). Evergreen Asset, a subsidiary of First Union Corporation
("First Union"), is located at 2500 Westchester Avenue, Purchase, New York
10577.
Evergreen Asset manages investments, supervises daily business affairs and
provides administrative services for Evergreen Money Market Fund and Evergreen
Municipal Money Market Fund. Evergreen Asset is entitled to receive from each
Fund an annual fee of 0.50% of average daily net assets up to and including
$1,000,000,000 in assets and 0.45% of average daily net assets in excess of
$1,000,000,000.
The Capital Management Group of First Union National Bank ("FUNB") serves
as investment adviser to Evergreen Treasury Money Market Fund and Evergreen
Pennsylvania Municipal Money Market Fund. FUNB is a subsidiary of First Union.
Both are located at 201 South College Street, Charlotte, North Carolina
28288-0630. First Union and its subsidiaries provide a broad range of financial
services to individuals and businesses throughout the U.S.
FUNB manages the investments for and supervises the daily business affairs
of Evergreen Treasury Money Market Fund and Evergreen Pennsylvania Municipal
Money Market Fund. FUNB is entitled to receive from Evergreen Treasury Money
Market Fund an annual fee of 0.35% of the Fund's average daily net assets. FUNB
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is entitled to receive from Evergreen Pennsylvania Municipal Money Market Fund
an annual fee equal to 0.40 of 1% of the Fund's average daily net assets up to
$500 million, 0.36 of 1% of the next $500 million of assets, 0.32 of 1% of
assets in excess of $1 billion but not exceeding $1.5 billion, and 0.28% of 1%
of assets in excess of $1.5 billion.
Sub-adviser. Evergreen Asset has entered into sub-advisory agreements with
Lieber & Company, an indirect wholly-owned subsidiary of First Union, which
provide that Lieber & Company's research department and staff will furnish
Evergreen Asset with information, investment recommendations, advice and
assistance, and will generally be available for consultation on the portfolios
of Evergreen Money Market Fund and Evergreen Municipal 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 the Funds for the
services provided by Lieber & Company. The address of Lieber & Company is 2500
Westchester Avenue, Purchase, New York 10577.
Administrator. Evergreen Investment Services, Inc. ("EIS"), 200 Berkeley St.,
Boston, Massachusetts, 02116, serves as administrator to Evergreen Treasury
Money Market Fund and Evergreen Pennsylvania Municipal Money Market Fund. As
administrator, and subject to the supervision and control of the Trust's Board
of Trustees, EIS provides the Funds with facilities, equipment and personnel.
For its services as administrator, EIS is entitled to receive a fee based on
the aggregate average daily net assets of the Funds at a rate based on the
total assets of all mutual funds advised by First Union subsidiaries. The
administration fee is 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
EIS also provides facilities, equipment and personnel to Evergreen Money
Market Fund and Evergreen Municipal Money Market Fund on behalf of Evergreen
Asset.
Transfer Agent and Dividend Disbursing Agent. Evergreen Service Company
("ESC"), 200 Berkeley Street, Boston, Massachusetts, 02116, acts as the Funds'
transfer agent and dividend disbursing agent. ESC is an indirect, wholly-owned
subsidiary of First Union.
Custodian. State Street Bank and Trust Company ("State Street"), P.O. Box 9021,
Boston, Massachusetts, 02205-9827, acts as the Funds' custodian.
Principal Underwriter. Evergreen Distributor, Inc. ("EDI"), a subsidiary of The
BISYS Group, Inc., located at 125 West 55th Street, New York, New York 10019,
is the principal underwriter of the Funds.
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PURCHASE AND REDEMPTION OF SHARES
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HOW TO BUY SHARES
Class Y shares are offered at net asset value without a front-end sales
charge or a contingent deferred sales load. Class Y shares are only offered to
(1) persons who at or prior to December 31, 1994 owned shares in a mutual fund
advised by Evergreen Asset, (2) certain institutional investors and (3)
investment advisory clients of FUNB, Evergreen Asset, Keystone Investment
Management Company ("Keystone"), or their affiliates.
Eligible investors may purchase Class Y shares of a Fund through
broker-dealers, banks or other financial intermediaries, or directly through
EDI. In addition, you may purchase Class Y shares of a Fund by mailing to the
Fund, c/o ESC, P.O. Box 2121, Boston, Massachusetts 02106-2121, a completed
application and a check payable to the Fund. You may also telephone
1-800-343-2898 to obtain the number of an account to which you can wire or
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electronically transfer funds and then send in a completed application. The
minimum initial investment is $1,000, which may be waived in certain
situations. Subsequent investments in any amount may be made by check, by
wiring federal funds, by direct deposit or by an electronic funds transfer.
There is no minimum amount for subsequent investments. Investments of $25
or more are allowed under the Systematic Investment Plan. Share certificates
are not issued. See the application for more information. Only Class Y shares
are offered through this prospectus (see "General Information" -- "Other
Classes of Shares").
How the Funds Value Their Shares. The net asset value of Fund 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, Martin Luther King, Jr. 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.
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 its investment adviser
incurs. If such investor is an existing shareholder, a Fund may redeem shares
from an investor's account to reimburse the Fund or its investment adviser for
any loss. In addition, such investors may be prohibited or restricted from
making further purchases in any of the Evergreen funds. The Funds will not
accept third party checks other than those payable directly to a shareholder
whose account has been in existence at least 30 days.
HOW TO REDEEM SHARES
You may "redeem" (i.e., sell) your Class Y shares in a Fund to the Fund
for cash at their net redemption value on any day the Exchange is open, either
directly by writing to the Fund, c/o ESC, or through your financial
intermediary. The amount you will receive is based on the net asset value
adjusted for fractions of a cent 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 15 days). Once a redemption request has been telephoned
or mailed, it is irrevocable and may not be modified or canceled.
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. Your financial intermediary is
responsible for furnishing all necessary documentation to the Fund and may
charge you for this service. Certain financial intermediaries may require that
you give instructions earlier than 4:00 p.m. (eastern time).
Redeeming Shares Directly by Mail or Telephone. You may redeem by mail by
sending a signed letter of instruction or stock power form to a Fund, c/o ESC
(the registrar, transfer agent and dividend-disbursing agent for each Fund).
Stock power forms are available from your financial intermediary, ESC, 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 $50,000. Currently, the requirement for a
signature guarantee has been waived on redemptions of $50,000 or less when the
account address of record has been the same for a minimum period of 30 days.
Each Fund and ESC reserve the right to withdraw this waiver at any time. 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 under the Securities Exchange Act
of 1934 and ESC's policies.
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Shareholders may redeem amounts of $1,000 or more (up to $50,000) from
their accounts by calling the telephone number on the front page of this
prospectus between the hours of 8:00 a.m. and 6:00 p.m. (eastern time) each
business day (i.e., any weekday exclusive of days on which the Exchange or
ESC's offices are closed). Redemption requests received 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. If you cannot reach a Fund by telephone,
you should follow the procedures for redeeming by mail or through a
broker-dealer as set forth herein. The telephone redemption service is not made
available to shareholders automatically. Shareholders wishing to use the
telephone redemption service must complete the appropriate sections on the
application and choose how the redemption proceeds are to be paid. Redemption
proceeds will be either (1) mailed by check to the shareholder at the address
in which the account is registered or (2) wired to an account with the same
registration as the shareholder's account in a Fund at a designated commercial
bank.
In order to insure that instructions received by ESC are genuine when you
initiate a telephone transaction, you will be asked to verify certain criteria
specific to your account. At the conclusion of the transaction, you will be
given a transaction number confirming your request, and written confirmation of
your transaction will be mailed the next business day. Your telephone
instructions will be recorded. Redemptions by telephone are allowed only if the
address and bank account of record have been the same for a minimum period of
30 days. Each Fund reserves the right at any time to terminate, suspend, or
change the terms of any redemption method described in this prospectus, except
redemption by mail, and to impose fees.
Except as otherwise noted, the Funds, ESC and EDI will not assume
responsibility for the authenticity of any instructions received by any of them
from a shareholder in writing, over the Evergreen Express Line (described
below), or by telephone. ESC will employ reasonable procedures to confirm that
instructions received over the Evergreen Express Line or by telephone are
genuine. The Funds, ESC and EDI will not be liable when following instructions
received over the Evergreen Express Line or by telephone that ESC reasonably
believes are genuine.
Evergreen Express Line. The Evergreen Express Line offers you specific fund
account information and price and yield quotations as well as the ability to do
account transactions, including investments, exchanges and redemptions. You may
access the Evergreen Express Line by dialing toll free 1-800-346-3858 on any
touch-tone telephone, 24 hours a day, seven days a week.
General. The sale of shares is a taxable transaction for federal income tax
purposes. The Funds may temporarily suspend the right to redeem their shares
when (1) the Exchange is closed, other than customary weekend and holiday
closings; (2) trading on the Exchange is restricted; (3) an emergency exists
and the Funds cannot dispose of their investments or fairly determine their
value; or (4) the SEC so orders. The Funds reserve the right to close an
account that through redemption has fallen below $1,000 and has remained so for
30 days. Shareholders will receive 60 days' written notice to increase the
account value to at least $1,000 before the account is closed. The Funds have
elected to be governed by Rule 18f-1 under the 1940 Act 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 90-day period for any one
shareholder.
EXCHANGE PRIVILEGE
How to Exchange Shares. You may exchange some or all of your Class Y shares for
shares of the same class in other Evergreen funds through your financial
intermediary, by calling or writing to ESC, or by using the Evergreen Express
Line as described above. 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. An exchange which
represents an initial investment in another Evergreen fund is subject to the
minimum investment and suitability requirements of each Fund.
Each of the Evergreen funds has different investment objectives and
policies. For more complete information, a prospectus of the fund into which an
exchange will be made should be read prior to the exchange. An exchange order
must comply with the requirement for a redemption or repurchase order and must
specify the dollar value or number of shares to be exchanged. 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
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<PAGE>
per calendar year, with a maximum of three per calendar quarter. This exchange
privilege may be modified or discontinued at any time by a Fund upon 60 days'
notice to shareholders and is only available in states in which shares of the
fund being acquired may lawfully be sold.
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 the Fund and may
charge you for this service.
Exchanges By Telephone And Mail. Exchange requests received by a Fund after
4:00 p.m. (eastern time) will be processed using the net asset value determined
at the close of 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 ESC by telephone. If you wish to use the
telephone exchange service you should indicate this on the 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 ESC 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, ESC
or call the toll-free number on the front page of this prospectus. Some
services are described in more detail in the application.
Systematic Investment Plan. Under a Systematic Investment Plan, you may invest
as little as $25 per month to purchase shares of a Fund with no minimum initial
investment required.
Telephone Investment Plan. You may make investments into an existing account
electronically in amounts of not less than $100 or more than $10,000 per
investment. Telephone investment requests received by 4:00 p.m. (eastern time)
will be credited to a shareholder's account the day the request is received.
Systematic 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
Systematic Withdrawal Plan (the "Withdrawal Plan") by filling out the
appropriate part of the application. Under this Withdrawal Plan, you may
receive (or designate a third party to receive) a monthly or quarterly
fixed-withdrawal payment in a stated amount of at least $75 and as much as
1.00% per month or 3.00% per quarter of the total net asset value of the Fund
shares in your account when the Withdrawal Plan was opened. Fund shares will be
redeemed as necessary to meet withdrawal payments. All participants must elect
to have their dividends and capital gains distributions reinvested
automatically.
Automatic Reinvestment Plan. For the convenience of investors, all dividends
and distributions are automatically reinvested in full and fractional shares of
a Fund at the net asset value per share at the close of business on the record
date, 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.
Dollar Cost Averaging. Through dollar cost averaging you can invest a fixed
dollar amount each month or each quarter in any Evergreen fund. This results in
more shares being purchased when the selected fund's net asset value is
relatively low and fewer shares being purchased when the fund's net asset value
is relatively high and may result in a lower average cost per share than a less
systematic investment approach.
Prior to participating in dollar cost averaging, you must establish an
account in an Evergreen fund. You should designate on the application (i) the
dollar amount of each monthly or quarterly investment you wish to make, and
(ii) the fund in which the investment is to be made. Thereafter, on the first
day of the designated month, an amount equal to the specified monthly or
quarterly investment will automatically be redeemed from your initial account
and invested in shares of the designated fund.
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<PAGE>
Two Dimensional Investing. You may elect to have income and capital gains
distributions from any Class Y Class of Evergreen fund shares you own
automatically invested to purchase the same Class of shares of any other
Evergreen fund. You may select this service on your application and indicate
the Evergreen fund(s) into which distributions are to be invested.
Tax Sheltered Retirement Plans. The Funds have various retirement plans
available to eligible investors, including Individual Retirement Accounts
(IRAs); Rollover IRAs; Simplified Employee Pension Plans (SEPs); Savings
Incentive Match Plan for Employees (SIMPLEs); Tax Sheltered Annuity Plans;
403(b)(7) Plans; 401(k) Plans; Keogh Plans; Profit-Sharing Plans; Medical
Savings Accounts; Pension and Target Benefit and Money Purchase Plans. For
details, including fees and application forms, call toll free 1-800-247-4075 or
write to ESC.
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 and FUNB 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 Evergreen Asset or FUNB 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 Evergreen Asset or FUNB 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 investment 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 investment 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. The amount
of dividends may fluctuate from day to day, and the dividend may be omitted on
a day where Fund expenses exceed 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 will be
treated as paid in the immediately preceding December.
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.")
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Each Fund has qualified and intends to continue to qualify to be treated
as a regulated investment company under the Internal Revenue Code of 1986, as
amended (the "Code"). While so qualified, 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 Municipal Money Market Fund and Evergreen
Pennsylvania Municipal Money Market Fund) that pays exempt- interest dividends.
Except as noted below with respect to Evergreen Municipal Money Market Fund and
Evergreen Pennsylvania Municipal 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 Municipal Money Market Fund and Evergreen Pennsylvania Municipal
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 these Funds 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 gains 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 gains distributions and
redemptions) paid to certain shareholders. In order to avoid this backup
withholding requirement, you must certify on the 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 Conduct Rules 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.
Other Classes of Shares. Evergreen Money Market Fund offers four Classes of
shares: Class A, Class B, Class C and Class Y. Evergreen Municipal Money Market
Fund, Evergreen Pennsylvania Municipal Money Market Fund and Evergreen Treasury
Money Market Fund each offer two classes of shares, Class A and Class Y. Class
A, Class B and Class C shares are offered through separate prospectuses.
Investors should call the telephone number on the front page of this prospectus
to obtain more information on other classes of shares. The dividends payable
with respect to Class A, Class B and Class C shares will be less than those
payable with respect to Class Y shares due to the distribution and shareholder
servicing related expenses borne by Class A, Class B and Class C 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, reports or other communications to shareholders. Yield is
computed separately for each class of shares. 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.
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The method of calculating each Fund's yield is set forth in the SAI.
Before investing in the Evergreen Municipal Money Market Fund or the Evergreen
Pennsylvania Municipal 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.
In marketing a Fund's shares, information may be provided that is designed
to help individuals understand their investment goals and explore various
financial strategies. Such information may include publications describing
general principles of investing, such as asset allocation, diversification,
risk tolerance, and goal setting; a questionnaire designed to help create a
personal financial profile; and an action plan offering investment
alternatives. The information provided to investors may also include
discussions of other Evergreen funds, products, and services, which may
include: retirement investing; brokerage products and services; the effects of
periodic investment plans and dollar cost averaging; saving for college; and
charitable giving. In addition, the information provided to investors may quote
financial or business publications and periodicals, including model portfolios
or allocations, as they relate to fund management, investment philosophy, and
investment techniques. EDI may also reprint, and use as advertising and sales
literature, articles from Evergreen Events, a quarterly magazine provided to
Evergreen fund shareholders.
Year 2000 Risks. Like other investment companies, financial and business
organizations and individuals around the world, the Funds could be adversely
affected if the computer systems used by the Funds' investment advisers and the
Funds' other service providers do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Funds' investment advisers are
taking steps to address the Year 2000 Problem with respect to the computer
systems that they use and to obtain assurances that comparable steps are being
taken by the Funds' other major service providers. At this time, however, there
can be no assurance that these steps will be sufficient to avoid any adverse
impact on the Funds.
Additional Information. This prospectus and the SAI, which has been
incorporated by reference herein, do not contain all the information set forth
in the Registration Statement filed by the Trust with the SEC under the Act.
Copies of the Registration Statement may be obtained at a reasonable charge
from the SEC or may be examined, without charge, at the offices of the SEC 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 Municipal Money Market Fund
Capital Management Group of First Union National Bank, 201 South College
Street, Charlotte, North Carolina 28288-0630
Evergreen Treasury Money Market Fund, Evergreen Pennsylvania Municipal
Money Market Fund
Custodian
State Street Bank and Trust Company, Box 9021, Boston, Massachusetts 02205-9827
Transfer Agent
Evergreen Service Company, 200 Berkeley St., Boston, Massachusetts, 02116
Legal Counsel
Sullivan & Worcester LLP, 1025 Connecticut Avenue, N.W., Washington, D.C. 20036
Independent Accountants/Auditors
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York 10036
Evergreen Money Market Fund, Evergreen Municipal Money Market Fund
KPMG Peat Marwick LLP, 99 High Street, Boston, Massachusetts 02110
Evergreen Treasury Money Market Fund, Evergreen Pennsylvania Municipal
Money Market Fund
Distributor
Evergreen Distributor, Inc., 125 W. 55th Street, New York, New York 10019
69239
<PAGE>
EVERGREEN MONEY MARKET TRUST
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
EVERGREEN MONEY MARKET TRUST
200 BERKELEY STREET
BOSTON, MASSACHUSETTS 02116
(800) 633-2700
STATEMENT OF ADDITIONAL INFORMATION
JUNE 1, 1998
EVERGREEN MONEY MARKET FUND ("MONEY FUND")
EVERGREEN MUNICIPAL MONEY MARKET FUND ("MUNICIPAL FUND")
EVERGREEN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND ("PENNSYLVANIA FUND")
EVERGREEN TREASURY MONEY MARKET FUND ("TREASURY FUND")
(EACH A "FUND"; TOGETHER, THE "FUNDS")
EACH FUND IS A SERIES OF AN OPEN-END MANAGEMENT INVESTMENT COMPANY KNOWN AS
EVERGREEN MONEY MARKET TRUST (THE "TRUST").
This Statement of Additional Information ("SAI") pertains to all
classes of shares of the Funds listed above. It is not a prospectus and should
be read in conjunction with the prospectuses dated June 1, 1998 for the Fund in
which you are making or contemplating an investment. The Funds are offered
through two separate prospectuses: one offering Class A shares of each Fund and
Class B and Class C shares of Evergreen Money Market Fund and one offering Class
Y shares of each Fund. You may obtain any of these prospectuses from Evergreen
Distributor, Inc.
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TABLE OF CONTENTS
FUND INVESTMENTS......................................................3
General Information..........................................3
Fundamental Policies.........................................5
Investment Guidelines........................................6
MANAGEMENT OF THE TRUST...............................................7
PRINCIPAL HOLDERS OF FUND SHARES.....................................10
INVESTMENT ADVISORY AND OTHER SERVICES...............................13
Investment Advisers.........................................13
Investment Advisory Agreements..............................13
Distributor.................................................14
Distribution Plans and Agreements...........................14
Additional Service Providers................................15
BROKERAGE............................................................16
Selection of Brokers........................................16
Brokerage Commissions.......................................16
General Brokerage Policies..................................17
TRUST ORGANIZATION...................................................17
Form of Organization........................................17
Description of Shares.......................................17
Voting Rights...............................................17
Limitation of Trustees' Liability...........................18
PURCHASE, REDEMPTION AND PRICING OF SHARES...........................18
How the Funds Offer Shares to the Public....................18
Purchase Alternatives.......................................18
Contingent Deferred Sales Charge............................19
Waiver of CDSCs.............................................19
Exchanges...................................................20
Calculation of Net Asset Value Per Share ("NAV")............20
Valuation of Portfolio Securities...........................20
Shareholder Services........................................21
PRINCIPAL UNDERWRITER................................................21
ADDITIONAL TAX INFORMATION...........................................22
Requirements for Qualification as a Regulated
Investment Company...................................22
Taxes on the Sale or Exchange of Fund Shares................22
Taxes on Distributions......................................23
Special Tax Considerations for Municipal Fund and
Pennsylvania Fund....................................23
Other Tax Considerations....................................24
EXPENSES.............................................................24
Advisory Fees...............................................25
Distribution Fees...........................................26
Brokerage Commissions.......................................26
PERFORMANCE..........................................................26
Current, Effective and Tax-Equivalent Yields................26
ADDITIONAL INFORMATION...............................................28
FINANCIAL STATEMENTS.................................................28
APPENDIX A...........................................................A-1
APPENDIX B...........................................................B-1
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FUND INVESTMENTS
GENERAL INFORMATION
The investment objective of each Fund and a description of the
securities in which each Fund may invest is set forth in each Fund's prospectus.
The following expands upon the discussion in the prospectuses regarding certain
investments of the Funds.
Municipal Securities (Municipal Fund, Pennsylvania Fund)
The Fund will invest in municipal securities determined to present
minimal credit risk and which are, at the time of acquisition, eligible
securities pursuant to Rule 2a-7 under the Investment Company Act of 1940 (the
"1940 Act"), as amended. The Fund will also comply with the diversification
requirements prescribed by Rule 2a-7. The Fund, under normal circumstances,
invests its assets so that at least 80% of its annual interest income is exempt
from federal income tax other than the alternative minimum tax.
For the purpose of certain requirements under the 1940 Act and each
Fund's various investment restrictions, identification of the "issuer" of a
municipal security depends on the terms and conditions of the security. When the
assets and revenues of a political subdivision are separate from those of the
government which created the subdivision and the security is backed only by the
assets and revenues of the subdivision, the subdivision would be deemed to be
the sole issuer. Similarly, in the case of an industrial development bond, if
that bond is backed only by the assets and revenues of the non-governmental
user, then the non-governmental user would be deemed to be the sole issuer. If,
however, in either case, the creating government or some other entity guarantees
the security, the guarantee would be considered a separate security and would be
treated as an issue of the government or other agency.
Municipal bonds may be categorized as "general obligation" or "revenue"
bonds. General obligation bonds are secured by the issuer's pledge of its faith,
credit and taxing power for the payment of principal and interest. Revenue bonds
are secured by the net revenue derived from a particular facility or group of
facilities or, in some cases, the proceeds of a special excise tax or other
specific revenue source, but not by the general taxing power. Industrial
development bonds are, in most cases, revenue bonds and do not generally carry
the pledge of the credit of the issuing municipality or public authority.
Municipal Notes
Municipal notes include, but are not limited to, tax anticipation
notes, bond anticipation notes, revenue anticipation notes, construction loan
notes and project notes. Notes sold as interim financing in anticipation of
collection of taxes, a bond sale or receipt of other revenue are usually general
obligations of the issuer. Project notes are issued by local housing authorities
to finance urban renewal and public housing projects and are secured by the full
faith and credit of the U.S. government.
Municipal Commercial Paper
Municipal commercial paper is issued to finance seasonal working
capital needs or as short-term financing in anticipation of longer-term debt. It
is paid from the general revenues of the issuer or refinanced with additional
issuances of commercial paper or long-term debt.
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<PAGE>
Municipal Leases
Municipal leases, which may take the form of a lease or an installment
purchase or conditional sale contract, are issued by state and local governments
and authorities to acquire a wide variety of equipment and facilities such as
fire and sanitation vehicles, telecommunications equipment and other capital
assets. Municipal leases frequently have special risks not normally associated
with general obligation or revenue bonds. Leases and installment purchases or
conditional sale contracts (which normally provide for title to the leased asset
to pass eventually to the government issuer) have evolved as a means for
governmental issuers to acquire property and equipment without meeting the
constitutional and statutory requirements for the issuance of debt. The
debt-issuance limitations of many state constitutions and statutes are deemed to
be inapplicable because of the inclusion in many leases or contracts of
"non-appropriation" clauses that provide that the governmental issuer has no
obligation to make future payments under the lease or contract unless money is
appropriated for such purpose by the appropriate legislative body on a yearly or
other periodic basis. These types of municipal leases may be considered illiquid
and subject to the 10% limitation on investments in illiquid securities set
forth under "Investment Guidelines" contained herein. The Board of Trustees of
the Trust under which each Fund operates may adopt guidelines and delegate to
the Adviser (as defined below) the daily function of determining and monitoring
the liquidity of municipal leases. In making such determination, the Board and
the Adviser may consider such factors as the frequency of trades for the
obligations, the number of dealers willing to purchase or sell the obligations,
the number of other potential buyers and the nature of the marketplace for the
obligations, including the time needed to dispose of the obligations and the
method of soliciting offers. If the Board determines that any municipal leases
are illiquid, such leases will be subject to the 10% limitation on investments
in illiquid securities.
For purposes of diversification under the 1940 Act, the identification
of the issuer of municipal obligations depends on the terms and conditions of
the obligation. If the assets and revenues of an agency, authority,
instrumentality or other political subdivision are separate from those of the
government creating the subdivision and the obligation is backed only by the
assets and revenues of the subdivision, such subdivision would be regarded as
the sole issuer. Similarly, in the case of an industrial development bond, if
the bond is backed only by the assets and revenues of the non-governmental user,
the non-governmental user would be deemed to be the sole issuer. If in either
case the creating government or another entity guarantees an obligation, the
guarantee would be considered a separate security and be treated as an issue of
such government or entity.
As described in each Fund's prospectus, each Fund may, under limited
circumstances, elect to invest in certain taxable securities and repurchase
agreements with respect to those securities. A Fund will enter into repurchase
agreements only with broker-dealers, domestic banks or recognized financial
institutions which, in the opinion of the Fund's Adviser, present minimal credit
risks. In the event of default by the seller under a repurchase agreement, a
Fund may have problems in exercising its rights to the underlying securities and
may incur costs and experience time delays in connection with the disposition of
such securities. The Fund's Adviser will monitor the value of the underlying
security at the time the transaction is entered into and at all times during the
term of the repurchase agreement to ensure that the value of the security always
equals or exceeds the agreed upon repurchase price. Repurchase agreements may be
considered to be loans under the 1940 Act, collateralized by the underlying
securities.
Securities With Put Rights (Or "Stand-by Commitments")
When a Fund purchases municipal obligations it may obtain the right to
resell them, or "put" them, to the seller (a broker-dealer or bank) at an
agreed-upon price within a specific period prior to
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4
<PAGE>
their maturity date. The Fund does not limit the percentage of its assets that
may be invested in securities with put rights.
The amount payable to a Fund by the seller upon its exercise of a put
will normally be (i) the Fund's acquisition cost of the securities (excluding
any accrued interest which the Fund paid on their acquisition), less any
amortized market premium plus any amortized market or original issue discount
during the period the Fund owned the securities, plus (ii) all interest accrued
on the securities since the last interest payment date during the period the
securities were owned by the Fund. Absent unusual circumstances, each Fund
values the underlying securities at their amortized cost. Accordingly, the
amount payable by a broker-dealer or bank during the time a put is exercisable
will be substantially the same as the value of the underlying securities.
FUNDAMENTAL POLICIES
The Funds have adopted the fundamental investment restrictions set
forth below which may not be changed without the vote of a majority of each
Fund's outstanding shares, as defined in the 1940 Act. Unless otherwise stated,
all references to the assets of a Fund are in terms of current market value.
Diversification
Each Fund, except Pennsylvania Fund which is nondiversified, may not
make any investment that is inconsistent with its classification as a
diversified investment company under the 1940 Act.
Concentration
Each Fund may not concentrate its investments in the securities of
issuers primarily engaged in a particular industry (other than securities issued
or guaranteed by the U.S. government or its agencies or instrumentalities or, in
the case of Money Fund, domestic bank money instruments).
Issuing Senior Securities
Except as permitted under the 1940 Act, each Fund may not issue senior
securities.
Borrowing
Each Fund may not borrow money, except to the extent permitted by
applicable law.
Underwriting
Each Fund may not underwrite securities of other issuers, except
insofar as each Fund may be deemed an underwriter in connection with the
disposition of its portfolio securities.
Real Estate
Each Fund may not purchase or sell real estate, except that, to the
extent permitted by applicable law, each Fund may invest in (a) securities that
are directly or indirectly secured by real estate, or (b) securities issued by
issuers that invest in real estate.
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<PAGE>
Commodities
Each Fund may not purchase or sell commodities or contracts on
commodities except to the extent that each Fund may engage in financial futures
contracts and related options and currency contracts and related options and may
otherwise do so in accordance with applicable law, and without registering as a
commodity pool operator under the Commodity Exchange Act.
Loans to Other Persons
Each Fund may not make loans to other persons, except that the Fund may
lend its portfolio securities in accordance with applicable law. The acquisition
of investment securities or other investment instruments shall not be deemed to
be the making of a loan.
Federally Tax Exempt Securities
Municipal Fund and Pennsylvania Fund will, during periods of normal
market conditions, invest their assets in accordance with applicable guidelines
issued by the Securities and Exchange Commission ("SEC") or its staff concerning
investment in tax-exempt securities for funds with the words "tax-exempt,"
"tax-free," or "municipal" in their names.
INVESTMENT GUIDELINES
Unlike the Fundamental Policies above, to the extent permitted by law,
the following guidelines may be changed by the Trust's Board of Trustees without
shareholder approval. Unless otherwise stated, all references to the assets of a
Fund are in terms of current market value.
Diversification
To remain classified as a diversified investment company under the 1940
Act, each Fund, except Pennsylvania Fund, must conform with the following: With
respect to 75% of its total assets, a diversified investment company may not
invest more than 5% of its total assets, determined at market or other fair
value at the time of purchase, in the securities of any one issuer, or invest in
more than 10% of the outstanding voting securities of any one issuer, determined
at the time of purchase. These limitations do not apply to investments in
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities.
As a nondiversified investment company, Pennsylvania Fund is not
subject to the limitations imposed on diversified investment companies under the
1940 Act, but it must meet other diversification requirements as a regulated
investment company (a "RIC") under Subchapter M of the Internal Revenue Code of
1986 (the "Code"). Under the Code, a RIC is permitted to invest 50% of its total
assets in two issuers (i.e., 25% each); the remaining 50% of its total assets
must be diversified according to the 5% and 10% limits described above.
Borrowings
Each Fund may borrow money from banks or enter into reverse repurchase
agreements in an amount up to one third of its total assets. Each Fund may also
borrow an additional 5% of its total assets from banks or others. Each Fund may
borrow only as a temporary measure for extraordinary or emergency purposes. Each
Fund will not purchase securities while borrowings are outstanding except to
exercise prior commitments and to exercise subscription rights. Each Fund may
obtain such
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6
<PAGE>
short-term credit as may be necessary for the clearance of purchases and sales
of portfolio securities. Each Fund may purchase securities on margin to the
extent permitted by applicable law.
Concentration
For purposes of the investment restriction on concentration, the phrase
"securities of issuers primarily engaged in any particular industry" includes
industrial development bonds from the same facility or similar types of
facilities. Otherwise, each Fund may invest more than 25% of its assets in
industrial development bonds. Also, governmental issuers are not considered to
be members of an industry for concentration purposes.
Illiquid And Restricted Securities
Each Fund may not invest more than 10% of its net assets in securities
that are illiquid. A security is illiquid when a Fund cannot dispose of it in
the ordinary course of business within seven days at approximately the value at
which the Fund has the investment on its books.
Each Fund, except for Treasury Fund, may invest in "restricted"
securities, i.e., securities subject to restrictions on resale under federal
securities laws. Rule 144A under the Securities Act of 1933 allows certain
restricted securities to be traded freely among qualified institutional
investors. Since Rule 144A securities may have limited markets, the Board of
Trustees will determine whether such securities should be considered illiquid
for the purpose of determining a Fund's compliance with the limit on illiquid
securities indicated above. In determining the liquidity of Rule 144A
securities, the Trustees will consider: (1) the frequency of trades and quotes
for the security; (2) the number of dealers willing to purchase or sell the
security and the number of other potential buyers; (3) dealer undertakings to
make a market in the security; and (4) the nature of the security and the nature
of the marketplace trades.
Investment in Other Investment Companies
Each Fund may purchase the shares of other investment companies to the
extent permitted under the 1940 Act. Currently, each Fund may not: (1) own more
than 3% of the outstanding voting stock of another investment company; (2)
invest more than 5% of its assets in any single investment company; and (3)
invest more than 10% of its assets in investment companies. However, each Fund
may invest all of its investable assets in securities of a single open-end
management investment company with substantially the same fundamental investment
objectives, policies and limitations as the Fund.
Short Sales
Each Fund may not make short sales of securities or maintain a short
position unless, 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. Each Fund may
effect a short sale in connection with an underwriting in which a Fund is a
participant.
MANAGEMENT OF THE TRUST
Set forth below are the Trustees and officers of the Trust and their
principal occupations and
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7
<PAGE>
some of their affiliations over the last five years. Unless otherwise indicated,
the address for each Trustee and officer is 200 Berkeley Street, Boston,
Massachusetts 02116. Each Trustee is also a Trustee of each of the other Trusts
in the Evergreen Fund complex, other than Evergreen Variable Trust of which
Messrs. Howell, Salton and Scofield are the only Trustees.
<TABLE>
<CAPTION>
NAME POSITION WITH TRUST PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
<S> <C> <C>
LAURENCE B. ASHKIN TRUSTEE REAL ESTATE DEVELOPER AND CONSTRUCTION
(DOB: 2/2/28) CONSULTANT; AND PRESIDENT OF CENTRUM EQUITIES
AND CENTRUM PROPERTIES, INC.
CHARLES A. AUSTIN III TRUSTEE INVESTMENT COUNSELOR TO APPLETON PARTNERS,
(DOB: 10/23/34) INC.; AND FORMER MANAGING DIRECTOR, SEAWARD
MANAGEMENT CORPORATION (INVESTMENT ADVICE).
K. DUN GIFFORD TRUSTEE TRUSTEE, TREASURER AND CHAIRMAN OF THE FINANCE
(DOB: 10/12/38) COMMITTEE, CAMBRIDGE COLLEGE; CHAIRMAN
EMERITUS AND DIRECTOR, AMERICAN INSTITUTE OF
FOOD AND WINE; CHAIRMAN AND PRESIDENT, OLDWAYS
PRESERVATION AND EXCHANGE TRUST (EDUCATION);
FORMER CHAIRMAN OF THE BOARD, DIRECTOR, AND
EXECUTIVE VICE PRESIDENT, THE LONDON HARNESS
COMPANY; FORMER MANAGING PARTNER, ROSCOMMON
CAPITAL CORP.; FORMER CHIEF EXECUTIVE OFFICER,
GIFFORD GIFTS OF FINE FOODS; FORMER CHAIRMAN,
GIFFORD, DRESCHER & ASSOCIATES (ENVIRONMENTAL
CONSULTING); AND FORMER DIRECTOR, KEYSTONE
INVESTMENTS, INC.
JAMES S. HOWELL CHAIRMAN OF THE BOARD FORMER CHAIRMAN OF THE DISTRIBUTION
(DOB: 8/13/24) OF TRUSTEES FOUNDATION FOR THE CAROLINAS; AND FORMER VICE
PRESIDENT OF LANCE INC. (FOOD MANUFACTURING).
LEROY KEITH, JR. TRUSTEE CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
(DOB: 2/14/29) OFFICER, CARSON PRODUCTS COMPANY; DIRECTOR
OF PHOENIX TOTAL RETURN FUND AND EQUIFAX
INC.; TRUSTEE OF PHOENIX SERIES FUND, PHOENIX
MULTI-PORTFOLIO FUND, AND THE PHOENIX BIG
EDGE SERIES FUND; AND FORMER PRESIDENT,
MOREHOUSE COLLEGE.
GERALD M. MCDONNELL TRUSTEE SALES REPRESENTATIVE WITH NUCOR-YAMOTO, INC.
(DOB: 7/14/39) (STEEL PRODUCER)
THOMAS L. MCVERRY TRUSTEE FORMER VICE PRESIDENT AND DIRECTOR OF REXHAM
(DOB: 8/2/39) CORPORATION; AND FORMER DIRECTOR OF CAROLINA
COOPERATIVE FEDERAL CREDIT UNION.
WILLIAM WALT PETTIT TRUSTEE PARTNER IN THE LAW FIRM OF WILLIAM WALT PETTIT,
(DOB: 8/26/55) P.A.
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<PAGE>
NAME POSITION WITH TRUST PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
DAVID M. RICHARDSON TRUSTEE VICE CHAIR AND FORMER EXECUTIVE VICE
(DOB: 9/14/41) PRESIDENT, DHR INTERNATIONAL, INC. (EXECUTIVE
RECRUITMENT); FORMER SENIOR VICE PRESIDENT,
BOYDEN INTERNATIONAL INC. (EXECUTIVE
RECRUITMENT); AND DIRECTOR, COMMERCE AND
INDUSTRY ASSOCIATION OF NEW JERSEY, 411
INTERNATIONAL, INC., AND J&M CUMMING PAPER
CO.
RUSSELL A. SALTON, III MD TRUSTEE MEDICAL DIRECTOR, U.S. HEALTH CARE/AETNA
(DOB: 6/2/47) HEALTH SERVICES; FORMER MANAGED HEALTH CARE
CONSULTANT; AND FORMER PRESIDENT, PRIMARY
PHYSICIAN CARE.
MICHAEL S. SCOFIELD TRUSTEE ATTORNEY, LAW OFFICES OF MICHAEL S. SCOFIELD.
(DOB: 2/20/43)
RICHARD J. SHIMA TRUSTEE FORMER CHAIRMAN, ENVIRONMENTAL WARRANTY, INC.
(DOB: 8/11/39) (INSURANCE AGENCY); EXECUTIVE CONSULTANT,
DRAKE BEAM MORIN, INC. (EXECUTIVE
OUTPLACEMENT); DIRECTOR OF CONNECTICUT NATURAL
GAS CORPORATION, HARTFORD HOSPITAL, OLD STATE
HOUSE ASSOCIATION, MIDDLESEX MUTUAL ASSURANCE
COMPANY, AND ENHANCE FINANCIAL SERVICES, INC.;
CHAIRMAN, BOARD OF TRUSTEES, HARTFORD GRADUATE
CENTER; TRUSTEE, GREATER HARTFORD YMCA; FORMER
DIRECTOR, VICE CHAIRMAN AND CHIEF INVESTMENT
OFFICER, THE TRAVELERS CORPORATION; FORMER
TRUSTEE, KINGSWOOD-OXFORD SCHOOL; AND FORMER
MANAGING DIRECTOR AND CONSULTANT, RUSSELL
MILLER, INC.
WILLIAM J. TOMKO* PRESIDENT AND TREASURER SENIOR VICE PRESIDENT AND OPERATIONS
(DOB: 8/30/58) EXECUTIVE, BISYS FUND SERVICES.
NIMISH S. BHATT* VICE PRESIDENT AND VICE PRESIDENT, TAX, BISYS FUND SERVICES;
(DOB: 6/6/63) ASSISTANT TREASURER FORMER ASSISTANT VICE PRESIDENT, EVERGREEN
ASSET MANAGEMENT CORP./FIRST UNION BANK;
FORMER SENIOR TAX CONSULTANT/ACTING
MANAGER, INVESTMENT COMPANIES GROUP, PRICE
WATERHOUSE LLP, NEW YORK.
BRYAN HAFT* VICE PRESIDENT TEAM LEADER, FUND ADMINISTRATION, BISYS
(DOB: 1/23/65) FUND SERVICES.
D'RAY MOORE* SECRETARY SENIOR VICE PRESIDENT AND OPERATIONS
(DOB: 3/30/59) EXECUTIVE, BISYS FUND SERVICES.
</TABLE>
*ADDRESS: BISYS FUND SERVICES, 3435 STELZER ROAD, COLUMBUS, OHIO 43219-8001
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9
<PAGE>
PRINCIPAL HOLDERS OF FUND SHARES
As of the date of this SAI, the officers and Trustees of the Trust
owned as a group less than 1% of the outstanding Class A, Class B, Class C or
Class Y shares, as applicable, of any Fund.
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 a
Fund's outstanding shares as of April 30, 1998.
MONEY FUND / CLASS A
FUNB 74.229%
Attn: Cap Finance Gl
230 S. Tryon St.
Charlotte, NC 28202-3215
First Union Brokerage Services 9.649%
Money Market Omnibus Account
CP 13-NC1167
301 S. College St.
Charlotte, NC 28202-6000
MONEY FUND / CLASS B
None
MONEY FUND / CLASS C
State Street Bk and Tr Co Cust 9.240%
Rollover IRA FBO
Mark Loveland
2701 Westheimer Rd. #12H
Houston, TX 77098-1238
State Street BK & Tr Co Cust 7.693%
Mark S. Matlock MD
2817 Mc Clelland Blvd #125
Joplin, MO 64804-1630
Susanna L. Moran 6.712%
126 E. Wing St. #326
Arlington Hts., IL 60004-6064
Sue K. Isbell 6.132%
2226 Potomac #1
Houston, TX 77057-2941
Jack Douglas Perry 5.322%
Asset Mgmt. Account
13806 Boudreaux Estates Dr.
Tomball, TX 77275-7212
<PAGE>
MONEY FUND / CLASS Y
First Union National Bank 47.888%
Trust Accounts
Attn: Ginny Batten CMG-1151-2
401 S. Tryon St. 3rd Flr
Charlotte, NC 29202-1911
Pitcairn Trust Company 13.090%
One Pitcairn Place
Jenkintown, PA 19046-3531
MUNICIPAL FUND / CLASS A
FUNB 79.108%
Attn: Cap Finance Gl
230 S. Tryon St.
Charlotte, NC 28202-3215
First Union Brokerage Services 11.214%
Money Market Omnibus Account
CP13-NC1167
301 S. College St.
Charlotte, NC 28202-6000
MUNICIPAL FUND / CLASS Y
First Union National Bank 15.581%
Trust Accounts
Attn: Ginny Batten
11th Fl CMG-151
301 S. Tryon St.
Charlotte, NC 28288
Pitcairn Trust Company 12.857%
One Pitcairn Place
Jenkintown, PA 19046-3531
Evergreen Tax-Exempt Money 7.032%
Market "Y" Shr Fund Reinvest A/C
C/O FUNB For Customers
One First Union Center
301 South College St.
Charlotte, NC 28202-6000
TREASURY FUND / CLASS A
FUNB 64.611%
Attn: Cap Finance Gl
230 S. Tryon St.
Charlotte, NC 28202-3215
First Union National Bank 20.890%
Trust Accounts
Attn: Ginny Batten
11th Fl CMG-151
301 S. Tryon St.
Charlotte, NC 28202-1910
<PAGE>
First Union Brokerage Services 5.248%
Money Market Omnibus Account
CP13-NC1167
301 S. College St.
Charlotte, NC 28202-6000
TREASURY FUND / CLASS Y
First Union National Bank 89.307%
Trust Accounts
Attn: Ginny Batten
11th Fl CMG-151
301 S. Tryon St.
Charlotte, NC 28202-1910
Evergreen Money Market 7.625%
"Y" Fund Reinvest A/C
C/O FUNB For Customers
One First Union Center
301 South College St.
Charlotte, NC 28202-6000
PENNSYLVANIA FUND / CLASS A
FUNB 90.137%
Attn: Cap Finance Gl
230 S. Tryon St.
Charlotte, NC 28202-3215
First Union Brokerage Services 8.393%
Money Market Omnibus Account
CP13-NC1167
301 S. College St.
Charlotte, NC 28202-6000
PENNSYLVANIA FUND / CLASS Y
First Union National Bank 89.307%
Trust Accounts
Attn: Ginny Batten CMG-1151-2
401 S. Tryon St. 3rd flr.
Charlotte, NC 28202-1911
Agnes C. Kim 7.846%
760 Conshohocken State Rd.
Gladwyne, PA 19035-1416
Johnathan B. Detwiler 7.761%
P.O. Box 69
Phoenixville, PA 19460-0069
First Union Brokerage Services 6.123%
Money Market Omnibus Account
CP13-NC1167
301 S. College St.
Charlotte, NC 28202-6000
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISERS
The investment adviser to each Fund (the "Adviser") is a subsidiary of
First Union Corporation ("First Union"), a bank holding company headquartered at
301 South College Street, Charlotte, North Carolina 28288-0630. First Union and
its subsidiaries provide a broad range of financial services to individuals and
businesses throughout the United States. Each Adviser is supervised by the Board
of Trustees.
The Adviser to Treasury Fund and Pennsylvania Fund is the Capital
Management Group of First Union National Bank ("FUNB"), 201 South College
Street, Charlotte, North Carolina 28288-0630. FUNB is entitled to receive from
Treasury Fund an annual fee of 0.35% of the Fund's average daily net assets.
FUNB is entitled to receive from Pennsylvania Fund an annual fee of 0.40% of the
Fund's average daily net assets up to $500 million, 0.36% of the next $500
million of assets, 0.32% of assets in excess of $1 billion but not exceeding
$1.5 billion, and 0.28% of assets in excess of $1.5 billion.
The Adviser to Money Fund and Municipal Fund is Evergreen Asset
Management Corp. ("Evergreen Asset"), 2500 Westchester Avenue, Purchase, New
York 10577. Each Fund pays the Adviser a fee based on a percentage of each
Fund's average daily net assets on an annual basis. The fee is 0.50% of the
first $1 billion and 0.45% of amounts over $1 billion. Under an agreement with
the Adviser, Lieber & Company serves as subadviser to Money Fund and Municipal
Fund at no additional cost to either Fund. Lieber and Company, a subsidiary of
First Union, is located at 2500 Westchester Avenue, Purchase, New York 10577.
INVESTMENT ADVISORY AGREEMENTS
On behalf of each of its Funds, the Trust has entered into an
investment advisory agreement with each Adviser (the "Advisory Agreements").
Under the Advisory Agreements, and subject to the supervision of the Trust's
Board of Trustees, each Adviser furnishes to the appropriate Fund investment
advisory, management and administrative services, office facilities, and
equipment in connection with its services for managing the investment and
reinvestment of the Fund's assets. The Adviser pays for all of the expenses
incurred in connection with the provision of its services. Each Fund pays for
all charges and expenses, other than those specifically referred to as being
borne by the Adviser, including, but not limited to: (1) custodian charges and
expenses; (2) bookkeeping and auditors' charges and expenses; (3) transfer agent
charges and expenses; (4) fees and expenses of Independent Trustees (Trustees
who are not interested persons of a Fund, as defined in the 1940 Act); (5)
brokerage commissions, brokers' fees and expenses; (6) issue and transfer taxes;
(7) costs and expenses under the Distribution Plan (as applicable); (8) taxes
and trust fees payable to governmental agencies; (9) the cost of share
certificates; (10) fees and expenses of the registration and qualification of
such Fund and its shares with the SEC or under state or other securities laws;
(11) expenses of preparing, printing and mailing prospectuses, SAIs, notices,
reports and proxy materials to shareholders of the Fund; (12) expenses of
shareholders' and Trustees' meetings; (13) charges and expenses of legal counsel
for the Fund and for the Independent Trustees of the Trust on matters relating
to such Fund; (14) charges and expenses of filing annual and other reports with
the SEC and other authorities; and (15) all extraordinary charges and expenses
of such Fund.
Each Advisory Agreement continues in effect for two years from its
effective date and, thereafter, from year to year only if approved at least
annually by the Board of Trustees of the Trust or by a vote of a majority of
each Fund's outstanding shares. In either case, the terms of the Advisory
Agreement and continuance thereof must be approved by the vote of a majority of
the Independent Trustees cast in person at a meeting called for the purpose of
voting on such approval. The Advisory
<PAGE>
Agreements may be terminated, without penalty, on 60 days' written notice by the
Trust's Board of Trustees or by a vote of a majority of outstanding shares. Each
Advisory Agreement will terminate automatically upon its "assignment" as that
term is defined in the 1940 Act.
Transactions among Advisory Affiliates
The Trust has adopted procedures pursuant to Rule 17a-7 under the 1940
Act ("Rule 17a-7 Procedures"). The Rule 17a-7 Procedures permit a Fund to buy or
sell securities from another investment company for which a subsidiary of First
Union is an investment adviser. The Rule 17a-7 Procedures also allow the Funds
to buy or sell securities from other advisory clients for whom a subsidiary of
First Union is an investment adviser. The Funds may engage in such transactions
if they are equitable to each participant and consistent with each participant's
investment objective.
DISTRIBUTOR
Evergreen Distributor, Inc. (the "Distributor") markets the Funds
through broker-dealers and other financial representatives. Its address is 125
West 55th Street, New York, NY 10019.
DISTRIBUTION PLANS AND AGREEMENTS
Distribution fees are accrued daily and paid monthly on Class A shares
of each Fund, and Class B and Class C shares of Money Fund. The fees are charged
as Class expenses, as accrued. The distribution fees attributable to the Class B
shares and Class C shares are designed to permit an investor to purchase such
shares through broker-dealers without the assessment of a front-end sales
charge, and, in the case of Class C shares, without the assessment of a
contingent deferred sales charge after the first year following the month of
purchase, while at the same time permitting the Distributor to compensate
broker-dealers in connection with the sale of such shares. In this regard, the
purpose and function of the combined contingent deferred sales charge and
distribution services fee on Class B shares and Class C shares are the same as
those of the front-end sales charge and distribution fee with respect to the
Class A shares in that in each case the sales charge and/or distribution fee
provide for the financing of the distribution of the Fund's shares.
The National Association of Securities Dealers, Inc. ("NASD") limits
the amount that a mutual fund may pay annually in distribution costs for sale of
its shares and shareholder service fees. The NASD limits annual expenditures to
1.00% of the aggregate average daily net asset value of its shares, of which
0.75% may be used to pay such distribution costs and 0.25% may be used to pay
shareholder service fees. The NASD also limits the aggregate amount that the
Fund may pay for such distribution costs to 6.25% of gross share sales since the
inception of the distribution plan, plus interest at the prime rate plus 1.00%
on such amounts remaining unpaid from time to time.
Under the Rule 12b-1 Distribution Plans that have been adopted by each
Fund with respect to its Class A shares, as well as Class B and Class C shares
in the case of Money Fund (each a "Plan" and collectively, the "Plans"), the
Treasurer of each Fund reports the amounts expended under the Plans and the
purposes for which such expenditures were made to the Trustees of the Trust for
their review on a quarterly basis. Also, each Plan provides that the selection
and nomination of the Independent Trustees are committed to the discretion of
such Independent 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 SEC 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.
<PAGE>
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 the Trust or by vote
of the holders of a majority of the outstanding voting securities of that Class
and, in either case, by a majority of the Independent Trustees of the Trust who
have no direct or indirect financial interest in the operation of the Plan or
any agreement related thereto.
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 shares, as well as
Class B and Class C shares in the case of Money Fund. The Plans are designed to
(i) stimulate brokers to provide distribution and administrative support
services to each Fund and holders of such Class A, Class B, and Class C shares
and (ii) stimulate administrators to render administrative support services to
the Fund and holders of such Class A, Class B and Class C 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
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 such
Class A, Class B and Class C 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, Class B and Class C shares, as
applicable.
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 the Trust or the holders of the Fund's
outstanding voting securities, voting separately by Class, and in either case,
by a majority of the Independent 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 (i) 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 Independent Trustees, or
(ii) 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.
ADDITIONAL SERVICE PROVIDERS
Administrator
Evergreen Investment Services, Inc. ("EIS") serves as administrator to
the Treasury Fund and Pennsylvania Fund, subject to the supervision and control
of the Trust's Board of Trustees. EIS provides the Funds with facilities,
equipment and personnel and is entitled to receive a fee based on the aggregate
average daily net assets of the Fund at a rate based on the total assets of all
mutual funds
<PAGE>
advised by First Union subsidiaries. The fee paid to EIS is calculated in
accordance with the following schedule: 0.050% on the first $7 billion; 0.035%
on the next $3 billion; 0.030% on the next $5 billion; 0.020% on the next $10
billion; 0.015% on the next $5 billion and 0.010% on assets in excess of $30
billion.
EIS also provides facilities, equipment and personnel to Money Fund and
Municipal Fund on behalf of Evergreen Asset.
Transfer Agent
Evergreen Service Company ("ESC"), a subsidiary of First Union
Corporation, is the Funds' transfer agent. The transfer agent issues and redeems
shares, pays dividends and performs other duties in connection with the
maintenance of shareholder accounts. The transfer agent's address is 200
Berkeley Street, Boston, Massachusetts 02116.
Independent Auditors/Accountants
KPMG Peat Marwick LLP, 99 High Street, Boston, Massachusetts 02110,
audits the financial statements of Treasury Fund and Pennsylvania Fund.
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York
10036, audits the financial statements of Money Fund and Municipal Fund.
Custodian
State Street Bank and Trust Company is the Funds' custodian. The bank
keeps custody of each Fund's securities and cash and performs other related
duties. The custodian's address is P.O. Box 9021, Boston, Massachusetts
02205-9827.
Legal Counsel
Sullivan & Worcester LLP provides legal advice to the Funds. Its
address is 1025 Connecticut Avenue, N.W., Washington, D.C. 20036.
BROKERAGE
SELECTION OF BROKERS
In effecting transactions in portfolio securities for each Fund, the
Adviser seeks the best execution of orders at the most favorable prices. The
Adviser determines whether a broker has provided each Fund with best execution
and price in the execution of a securities transaction by evaluating, among
other things, the broker's ability to execute large or potentially difficult
transactions, and the financial strength and stability of the broker.
BROKERAGE COMMISSIONS
Each Fund expects to buy and sell its fixed-income securities through
principal transactions, that is, directly from the issuer or from an underwriter
or market maker for the securities. Generally, a Fund will not pay brokerage
commissions for such purchases. Usually, when a Fund buys a security from
<PAGE>
an underwriter, the purchase price will include an underwriting commission or
concession. The purchase price for securities bought from dealers serving as
market makers will similarly include the dealer's mark up or reflect a dealer's
mark down. When a Fund executes transactions in the over-the-counter market, it
will deal with primary market makers unless more favorable prices are otherwise
obtainable.
GENERAL BROKERAGE POLICIES
The Adviser makes investment decisions for each Fund independently from
those of its other clients. It may frequently develop, however, that the Adviser
will make the same investment decision for more than one client. Simultaneous
transactions are inevitable when the same security is suitable for the
investment objective of more than one account. When two or more of its clients
are engaged in the purchase or sale of the same security, the Adviser will
allocate the transactions according to a formula that is equitable to each of
its clients. Although, in some cases, this system could have a detrimental
effect on the price or volume of a Fund's securities, each Fund believes that in
other cases its ability to participate in volume transactions will produce
better executions. In order to take advantage of the availability of lower
purchase prices, the Funds may occasionally participate in group bidding for the
direct purchase from an issuer of certain securities.
The Board of Trustees periodically reviews each Fund's brokerage policy.
Because of the possibility of further regulatory developments affecting the
securities exchanges and brokerage practices generally, the Board of Trustees
may change, modify or eliminate any of the foregoing practices.
TRUST ORGANIZATION
FORM OF ORGANIZATION
Each Fund is a series of an open-end management investment company,
known as Evergreen Money Market Trust (the "Trust"). The Trust was formed as a
Delaware business trust on September 18, 1997 (the "Declaration of Trust"). A
copy of the Declaration of Trust is on file at the SEC as an exhibit to the
Trust's Registration Statement, of which this SAI is a part. This summary is
qualified in its entirety by reference to the Declaration of Trust.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number
of shares of beneficial interest of series and Classes of shares. Each share of
each Fund represents an equal proportionate interest with each other share of
that series and/or Class. Upon liquidation, shares are entitled to a pro rata
share of the Trust based on the relative net assets of each series and/or Class.
Shareholders have no preemptive or conversion rights. Shares are redeemable and
transferable.
VOTING RIGHTS
Under the terms of the Declaration of Trust, the Trust is not required
to hold annual meetings. At meetings called for the initial election of Trustees
or to consider other matters, each share is entitled to one vote for each dollar
of net asset value applicable to such share. Shares generally vote together as
one Class on all matters. Classes of shares of each Fund have equal voting
rights. No amendment may be made to the Declaration of Trust that adversely
affects any Class of shares without the
<PAGE>
approval of a majority of the votes applicable to the shares of that Class.
Shares have non-cumulative voting rights, which means that the holders of more
than 50% of the votes applicable to shares voting for the election of Trustees
can elect 100% of the Trustees to be elected at a meeting and, in such event,
the holders of the remaining shares voting will not be able to elect any
Trustees.
After the initial meeting as described above, no further meetings of
shareholders for the purpose of electing Trustees will be held, unless required
by law, unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders, at which time, the Trustees
then in office will call a shareholders' meeting for the election of Trustees.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee will not be liable for
errors of judgment or mistakes of fact or law, but nothing in the Declaration of
Trust protects a Trustee against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of his duties involved in the conduct of his office.
PURCHASE, REDEMPTION AND PRICING OF SHARES
HOW THE FUNDS OFFER SHARES TO THE PUBLIC
You may buy shares of a Fund through the Distributor, broker-dealers
that have entered into special agreements with the Distributor or certain other
financial institutions. Each Fund offers two Classes of shares, except Money
Fund which offers four Classes, that differ primarily with respect to sales
charges and distribution fees. Depending upon the Class of shares, you will pay
an initial sales charge when you buy a Fund's shares, a contingent deferred
sales charge (a "CDSC") when you redeem a Fund's shares or no sales charges at
all.
PURCHASE ALTERNATIVES
Class A Shares
Each Fund offers Class A shares at net asset value without an initial
sales charge. However, certain broker-dealers and other financial institutions
may impose a fee in connection with Class A purchases of the Funds.
Class B Shares
Money Fund offers Class B shares at net asset value without an initial
sales charge. With certain exceptions, however, the Fund will charge a CDSC on
shares you redeem within 72 months after the month of purchase, in accordance
with the following schedule:
REDEMPTION TIMING CDSC RATE
Month of purchase and the first twelve-month period following
the month of purchase...........................................5.00%
Second twelve-month period following the month of purchase...............4.00%
Third twelve-month period following the month of purchase................3.00%
Fourth twelve-month period following the month of purchase...............3.00%
Fifth twelve-month period following the month of purchase................2.00%
Sixth twelve-month period following the month of purchase................1.00%
Thereafter...............................................................0.00%
<PAGE>
Class B shares that have been outstanding for seven years after the month of
purchase will automatically convert to Class A shares without the imposition of
a front-end sales charge or exchange fee. (Holders of Class B share certificates
must return their certificates to ESC to effect such a conversion.)
Class C Shares
Money Fund offers Class C shares only through broker-dealers who have
entered into special distribution agreements with the Distributor. Class C
shares are offered at net asset value without an initial sales charge. With
certain exceptions, however, a CDSC of 1.00% will be charged on shares you
redeem within 12 months after the month of purchase. (See "Contingent Deferred
Sales Charge" below.)
Class Y Shares
No CDSC is imposed on the redemption of Class Y shares. Class Y shares
are not offered to the general public and are available only to (1) persons who
at or prior to December 31, 1994 owned shares in a mutual fund advised by
Evergreen Asset, (2) certain institutional investors and (3) investment advisory
clients of CMG, Evergreen Asset or their affiliates. Class Y shares are offered
at net asset value without a front-end or back-end sales charge and do not bear
any Rule 12b-1 distribution expenses.
CONTINGENT DEFERRED SALES CHARGE
Money Fund charges a CDSC as reimbursement for certain expenses, such
as commissions or shareholder servicing fees, that it has incurred in connection
with the sale of its Class B and Class C shares (see "Distribution Plans and
Agreements"). If imposed, the CDSC is deducted from the redemption proceeds you
would otherwise receive. The CDSC is a percentage of the lesser of (1) the net
asset value of the shares at the time of redemption or (2) the shareholder's
original net cost for such shares. Upon request for redemption, to keep the CDSC
a shareholder must pay as low as possible, a Fund will first seek to redeem
shares not subject to the CDSC and/or shares held the longest, in that order.
The CDSC on any redemption is, to the extent permitted by the National
Association of Securities Dealers, Inc. ("NASD"), paid to the Distributor or its
predecessor.
WAIVER OF CDSCs
Money Fund does not impose a CDSC when you redeem Class B and Class C
shares which represent:
1. an increase in the share value above the net cost of such
shares;
2. certain shares for which the Fund did not pay a commission on
issuance, including shares acquired through reinvestment of
dividend income and capital gains distributions;
3. shares that are in the accounts of a shareholder who has died
or become disabled;
4. a lump-sum distribution from a 401(k) plan or other benefit
plan qualified under the
<PAGE>
Employee Retirement Income Security Act of 1974 ("ERISA");
5. an automatic withdrawal from the ERISA plan of a shareholder
who is a least 591/2 years old;
6. shares in an account that the Fund has closed because the
account has an aggregate net asset value of less than $1,000;
7. an automatic withdrawal under an Systematic Income Plan of up
to 1.0% per month of your initial account balance;
8. a withdrawal consisting of loan proceeds to a retirement plan
participant;
9. a financial hardship withdrawal made by a retirement plan
participant;
10. a withdrawal consisting of return of excess contributions or
excess deferral amounts made to a retirement plan; or
11. a redemption by an individual participant in a Qualifying Plan
that purchased Class C shares (this waiver is not available in
the event a Qualifying Plan, as a whole, redeems substantially
all of its assets).
EXCHANGES
Investors may exchange shares of a Fund for shares of the same Class of
any other Evergreen fund, as described under the section entitled "Exchanges" in
a Fund's prospectus. Before you make an exchange, you should read the prospectus
of the Evergreen fund into which you want to exchange. The Trust's Board of
Trustees reserves the right to discontinue, alter or limit the exchange
privilege at any time.
CALCULATION OF NET ASSET VALUE PER SHARE ("NAV")
Each Fund computes its NAV twice daily on Monday through Friday, as
described in the prospectus. A Fund will not compute its NAV on the day the
following legal holidays are observed: New Year's Day, Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
The NAV of each Fund is calculated by dividing the value of a Fund's
net assets attributable to that Class by all of the shares issued for that
Class.
VALUATION OF PORTFOLIO SECURITIES
The securities in a Fund's portfolio are valued on an amortized cost
basis. Under this method of valuation, a security is intially 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 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
<PAGE>
in good faith by the Trustees.
SHAREHOLDER SERVICES
As described in the prospectus, a shareholder may elect to receive his
or her dividends and capital gains distributions in cash instead of shares.
However, ESC will automatically convert a shareholder's distribution option so
that the shareholder reinvests all dividends and distributions in additional
shares when it learns that the postal or other delivery service is unable to
deliver checks or transaction confirmations to the shareholder's address of
record. The Funds will hold the returned distribution or redemption proceeds in
a non interest-bearing account in the shareholder's name until the shareholder
updates his or her address. No interest will accrue on amounts represented by
uncashed distribution or redemption checks.
PRINCIPAL UNDERWRITER
The Distributor is the principal underwriter for the Trust and with
respect to each Class of each Fund. The Trust has entered into a Principal
Underwriting Agreement ("Underwriting Agreement") with the Distributor with
respect to each Class of each Fund. The Distributor is a subsidiary of The BISYS
Group, Inc.
The Distributor, as agent, has agreed to use its best efforts to find
purchasers for the shares. The Distributor may retain and employ representatives
to promote distribution of the shares and may obtain orders from broker-dealers,
and others, acting as principals, for sales of shares to them. The Underwriting
Agreement provides that the Distributor will bear the expense of preparing,
printing, and distributing advertising and sales literature and prospectuses
used by it.
All subscriptions and sales of shares by the Distributor are at the
public offering price of the shares, which is determined in accordance with the
provisions of the Trust's Declaration of Trust, By-Laws, current prospectuses
and SAI. All orders are subject to acceptance by the Trust and the Trust
reserves the right, in its sole discretion, to reject any order received. Under
the Underwriting Agreement, the Trust is not liable to anyone for failure to
accept any order.
The Distributor has agreed that it will, in all respects, duly comply
with all state and federal laws applicable to the sale of the shares. The
Distributor has also agreed that it will indemnify and hold harmless the Trust
and each person who has been, is, or may be a Trustee or officer of the Trust
against expenses reasonably incurred by any of them in connection with any
claim, action, suit, or proceeding to which any of them may be a party that
arises out of or is alleged to arise out of any misrepresentation or omission to
state a material fact on the part of the Distributor or any other person for
whose acts the Distributor is responsible or is alleged to be responsible,
unless such misrepresentation or omission was made in reliance upon written
information furnished by the Trust.
The Underwriting Agreement provides that it will remain in effect as
long as its terms and continuance are approved annually (i) by a vote of a
majority of the Trust's Independent Trustees, and (ii) by vote of a majority of
the Trust's Trustees, in each case, cast in person at a meeting called for that
purpose.
The Underwriting Agreement may be terminated, without penalty, on 60
days' written notice by the Board of Trustees or by a vote of a majority of
outstanding shares subject to such agreement. The Underwriting Agreement will
terminate automatically upon its assignment, as defined in the 1940 Act.
<PAGE>
From time to time, if, in the Distributor's judgment, it could benefit
the sales of shares, the Distributor may provide to selected broker-dealers
promotional materials and selling aids, including, but not limited to, personal
computers, related software, and data files.
ADDITIONAL TAX INFORMATION
REQUIREMENTS FOR QUALIFICATION AS A REGULATED INVESTMENT COMPANY
Each Fund has qualified and intends to continue to qualify for and
elect the tax treatment applicable to a RIC under Subchapter M of 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
RIC, a Fund must, among other things, (i) 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 contracts) derived with respect to its business of investing in such
securities; (ii) 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 (this requirement is repealed for Fund
fiscal years beginning after August 5, 1997); and (iii) diversify its holdings
so that, at the end of each quarter of its taxable year, (a) at least 50% of the
market value of a 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 a Fund's total assets and 10% of the outstanding
voting securities of such issuer, and (b) 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.
TAXES ON THE SALE OR EXCHANGE OF FUND SHARES
Upon a sale or exchange of Fund shares, a shareholder may realize a
taxable gain or loss depending on his or her basis in the shares. A shareholder
must treat such gains or losses as a capital gain or loss if the shareholder
held the shares as capital assets. Also, a shareholder must treat as long-term
capital gains or losses any capital gains or losses on Fund shares held for more
than one year. Capital gain on assets held for more than eighteen months is
generally subject to a maximum federal income tax rate of 20% for an individual.
The maximum capital gains tax rate for capital assets held by an individual for
more than twelve months but not more than eighteen months is generally 28%.
Generally, the Code will not allow a shareholder to realize a loss on shares he
or she has sold or exchanged and replaced within a sixty-one-day period
beginning thirty days before and ending thirty days after he or she sold or
exchanged the shares. The Code will not allow a shareholder to realize a loss on
the sale of Fund shares held by the shareholder for six months or less to the
extent the shareholder received exempt-interest dividends on such shares.
Moreover, the Code will treat a shareholder's loss on shares held for six months
or less as a long-term capital loss to the extent the shareholder received
distributions of net capital gains on such shares.
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
<PAGE>
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.
TAXES ON DISTRIBUTIONS
Distributions will be taxable to shareholders 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 date.
To calculate ordinary income for federal income tax purposes,
shareholders must generally include dividends paid by the Fund from its
investment company taxable income (net investment income plus net realized
short-term capital gains, if any). Since none of a Fund's income will consist of
corporate dividends, no distributions will qualify for the 70% corporate
dividends received deduction.
From time to time, each Fund will distribute the excess of its net
long-term capital gains over its short-term capital losses to shareholders. For
federal tax purposes, shareholders must include such distributions when
calculating their long-term capital gains. Each Fund will inform its
shareholders of the portion if any of a long-term capital gain distribution
which is subject to tax at the maximum 28% rate and the portion if any of a
long-term capital gain distribution which is subject to tax at the maximum 20%
rate. Distributions of long-term capital gains are taxable as such to a
shareholder, no matter how long the shareholder has held the 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.
SPECIAL TAX CONSIDERATIONS FOR MUNICIPAL FUND AND PENNSYLVANIA FUND
Each Fund expects that substantially all of its dividends will be
"exempt-interest dividends," which should be treated as excludable from federal
gross income. In order to pay exempt-interest dividends, at least 50% of the
value of the Fund's assets must consist of federally tax-exempt obligations at
the close of each quarter. An exempt-interest dividend is any dividend or part
thereof (other than a capital gain dividend) paid by the Fund with respect to
its net federally excludable municipal obligation interest and designated as an
exempt-interest dividend in a written notice mailed to each shareholder not
later than 60 days after the close of its taxable year. 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.
Any shareholder of a Fund who may be a "substantial user" of a facility
financed with an issue of tax-exempt obligations or a "related person" to such a
user should consult his tax adviser concerning his qualification to receive
exempt-interest dividends should the Fund hold obligations financing such
facility.
Under regulations to be promulgated, to the extent attributable to
interest paid on certain private activity bonds, a Fund's exempt-interest
dividends, while otherwise tax-exempt, will be treated as a tax preference item
for alternative minimum tax purposes. Corporate shareholders should also be
aware that the receipt of exempt-interest dividends could subject them to
alternative minimum tax under the provisions
<PAGE>
of Section 56(g) of the Code (relating to "adjusted current earnings").
Under particularly unusual circumstances, such as when a Fund is in a
prolonged defensive investment position, it is possible that no portion of a
Fund's distributions of income to its shareholders for a fiscal year would be
exempt from federal income tax. The Funds do not presently anticipate, however,
that such unusual circumstances will occur.
Each Fund intends to distribute its net capital gains as capital gains
dividends. Shareholders should treat such dividends as long-term capital gains.
Each Fund will designate capital gains distributions as such by a written notice
mailed to each shareholder no later than 60 days after the close of the Fund's
taxable year. If a shareholder receives a capital gain dividend and holds his or
her shares for six months or less, then any allowable loss on disposition of
such shares will be treated as a long-term capital loss to the extent of such
capital gain dividend.
Interest on indebtedness incurred or continued by shareholders to
purchase or carry shares of a Fund will not be deductible for federal income tax
purposes to the extent of the portion of the interest expense relating to
exempt-interest dividends. Such portion is determined by multiplying the total
amount of interest paid or accrued on the indebtedness by a fraction, the
numerator of which is the exempt-interest dividends received by a shareholder in
his taxable year and the denominator of which is the sum of the exempt-interest
dividends and the taxable distributions out of the Fund's investment income and
long-term capital gains received by the shareholder.
OTHER TAX CONSIDERATIONS
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 30% (or at a lower rate under a tax treaty) on
amounts treated as income from U.S. sources under the Code.
EXPENSES
Trustee Compensation
Listed below is the compensation paid to Trustees for the fiscal year
ended January 31, 1998.
COMPENSATION FROM TRUST
TRUSTEE COMPENSATION FROM TRUST AND FUND COMPLEX
Laurence B. Ashkin $ 8,096.00 $ 75,667.00
Charles A. Austin III $ 879.00 $ 46,385.00
K. Dun Gifford $ 839.00 $ 42,277.00
<PAGE>
James S. Howell $ 21,159.00 $117,523.00
Leroy Keith Jr. $ 839.00 $ 42,277.00
Gerald M. McDonnell $ 17,972.00 $103,067.00
Thomas L. McVerry $ 18,796.00 $104,705.00
William Walt Pettit $ 17,899.00 $100,303.00
David M. Richardson $ 839.00 $ 45,969.00
Russell A. Salton, III $ 18,275.00 $105,497.00
Michael S. Scofield $ 18,403 .00 $ 70,079.00
Richard J. Shima $ 9,740.00 $70,079.00
ADVISORY FEES
The table below shows amounts the Adviser was entitled to receive from
each Fund as well as the amounts waived by the Advisers for the fiscal year or
period indicated. For more information, see "Investment Advisory and Other
Services."
ADVISORY FEES WAIVERS
============================================= ================ =============
FIVE MONTHS ENDED JAN. 31, 1998
- --------------------------------------------- ================ =============
Money Fund $6,801,389 $0
Municipal Fund $2,155,943 $0
Pennsylvania Fund $111,425 $17,363
Treasury Fund $4,446,822 $0
- ---------------------------------------------
FISCAL YEAR ENDED AUG. 31, 1997
- --------------------------------------------- -------------------------------
Money Fund $13,092,396 $1,482,584
Municipal Fund $5,695,367 $183,559
Pennsylvania Fund $275,516 $62,049
Treasury Fund $10,831,288 $132,244
- --------------------------------------------- ---------------- -------------
FISCAL YEAR ENDED AUG. 31, 1996
- ---------------------------------------------- ------------------------------
Money Fund $8,346,173 $2,427,423
Municipal Fund $5,540,924 $1,243,131
Pennsylvania Fund (1) $148,591 $79,856
Treasury Fund $8,857,503 $2,109,068
============================================= ================ =============
(1) For fiscal period March 1 to August 31, 1996.
<PAGE>
DISTRIBUTION FEES
Pursuant to each Fund's Distribution Plan, the following amounts were
deducted from the net assets of each Fund's shares for the fiscal period ended
January 31, 1998. For more information, see "Distribution Plans and Agreements."
DISTRIBUTION FEES
===========================================================================
CLASS A CLASS B CLASS C CLASS K (1)
- -------------------- -------------- ----------- ------------- -------------
Money Fund $3,594,206 $88,649 $15,098 $244
Municipal Fund $833,863 N/A N/A N/A
Pennsylvania Fund $43,990 (a) N/A N/A N/A
Treasury Fund $3,142,342 N/A N/A N/A
- --------------------
(1) Class K shares no longer offered as of January 16, 1998.
(a) Of this amount, $29,326 was waived by the Distributor.
BROKERAGE COMMISSIONS
The Funds paid no brokerage commissions during the fiscal year or
period ended January 31, 1998, August 31, 1997 and August 31, 1996.
PERFORMANCE
CURRENT, EFFECTIVE AND TAX-EQUIVALENT YIELDS
Each Fund 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 (shown as
"beginning account value" in the formula below), 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:
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. Portfolio changes resulting from net purchases or net redemptions of the
Fund's shares may also affect the yield. Accordingly, a Fund's yield may vary
from day to day. The yield stated for a particular past period is not
necessarily representative of its future yield. Since each Fund uses the
amortized cost method of net asset value computation, it does not anticipate any
change in yield resulting from 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,
<PAGE>
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 (1) the kind and quality of the instruments a Fund holds, (2)
portfolio maturity, (3) operating expenses and (4) market conditions.
In periods of declining interest rates, yields will tend to be somewhat
higher than prevailing market rates. In periods of rising interest rates, 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.
For Municipal Fund and Pennsylvania Fund, a tax-equivalent yield is
calculated, reflecting the rate an investor would need to earn from a fully
taxable investment to equal the yield the Fund would provide after federal
taxes. The following formula is used:
Tax-Equivalent Yield = EFFECTIVE YIELD
----------------------------
1 - FEDERAL TAX RATE
Below are the yields of each Fund for the seven-day period ended
January 31, 1998. With respect to the tax-equivalent yield of the Municipal
Fund, a federal tax rate of 36% is assumed, and for Pennsylvania Fund, a
combined federal and state tax rate of 37.8% is assumed.
CURRENT YIELD EFFECTIVE YIELD TAX EQUIVALENT YIELD
MONEY FUND
Class A 4.95% 5.07% N/A
Class B 4.24% 4.33% N/A
Class C 4.24% 4.33% N/A
Class Y 5.24% 5.38% N/A
MUNICIPAL FUND
Class A 3.05% 3.10% 4.84%
Class Y 3.35% 3.41% 5.32%
TREASURY FUND
Class A 4.43% 4.53% N/A
Class Y 5.23% 5.32% N/A
<PAGE>
CURRENT YIELD EFFECTIVE YIELD TAX EQUIVALENT YIELD
PENNSYLVANIA FUND
Class A 2.91% 2.95% 4.75%
Class Y 3.01% 3.05% 4.91%
ADDITIONAL INFORMATION
Except as otherwise stated in its prospectus or required by law, each
Fund reserves the right to change the terms of the offer stated in its
prospectus without shareholder approval, including the right to impose or change
fees for services provided.
No dealer, salesman or other person is authorized to give any
information or to make any representation not contained in a Fund's prospectus,
SAI or in supplemental sales literature issued by such Fund or the Distributor,
and no person is entitled to rely on any information or representation not
contained therein.
Each Fund's prospectus and SAI omit certain information contained in
the Trust's registration statement, which you may obtain for a fee from the SEC
in Washington, D.C.
FINANCIAL STATEMENTS
The audited financial statements of the Funds and the Independent
Auditors' reports thereon are hereby incorporated by reference to each Fund's
Annual Report. You may obtain a copy of the Annual Report without charge by
writing to ESC, P.O. Box 2121, Boston, Massachusetts 02106-2121, or by calling
ESC toll-free at 1-800-343-2898.
<PAGE>
APPENDIX A
DESCRIPTION OF BOND RATINGS
Standard & Poor's Ratings Group ("S&P").
An S&P corporate or municipal bond rating is a current assessment of
the creditworthiness 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 S&P by the
issuer or obtained by S&P from other sources it considers reliable. S&P 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 or unavailability of such information, or
due to other circumstances.
The ratings are based, in varying degrees, on the following
considerations:
1. Likelihood of default-capacity and willingness of the obligor to
make 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 S&P 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
it differs 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 it normally exhibits 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 in 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.
<PAGE>
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.
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 S&P 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 S&P 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
creditworthiness 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 and 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, Inc. ("Moody's").
A brief description of the applicable Moody's rating symbols and their
meanings follows:
<PAGE>
Aaa - Bonds which are rated Aaa are judged to be of the best quality. 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 a 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 to 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 issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Duff & Phelps, Inc.: AAA - highest credit quality, with negligible risk factors;
AA -- high credit quality, with strong protection factors and modest risk, which
may vary very slightly from 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 credit within
those rating categories.
Fitch IBCA: AAA - highest credit quality, with an exceptionally strong ability
to pay interest and repay principal; AA - very high credit quality, with very
strong ability to pay interest and repay principal; A - high credit quality,
considered strong as regards principal and interest protection, but may be more
vulnerable to adverse changes in economic conditions and circumstances. The
indicators "+" and "-"
<PAGE>
to the AA, A and BBB categories indicate the relative position of credit within
those rating categories.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
An S&P 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 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: 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.
S&P: "A" is the highest commercial paper rating category utilized by S&P, which
uses the numbers 1+, 1, 2 and 3 to denote relative strength within its "A"
classification.
Duff & Phelps, Inc.: Duff 1 is the highest commercial paper rating category
utilized by Duff & Phelps,
<PAGE>
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 L.P.: F-1+ -- denotes exceptionally strong credit
quality given to issues regarded as having the strongest degree of assurance for
timely payment; F-1 -- very strong, with only a slightly less degree of
assurance for timely payment than F-1+; F-2 -- good credit quality, carrying a
satisfactory degree of assurance for timely payment.
<PAGE>
APPENDIX B
SPECIAL CONSIDERATIONS RELATING TO
INVESTMENT IN PENNSYLVANIA ISSUERS
General
The Commonwealth of Pennsylvania, the fifth most populous state,
historically has been identified as a heavy industry state, although that
reputation has changed with the decline of the coal, steel and railroad
industries and the resulting diversification of the Commonwealth's industrial
composition. The major new sources of growth are in the service sector,
including trade, medical and health services, educational and financial
institutions. Manufacturing has fallen behind both the service sector and the
trade sector as a source of employment in Pennsylvania. The Commonwealth is the
headquarters for 58 major corporations. Pennsylvania's average annual
unemployment rate since 1990 has generally not been more than one percent
greater or lesser than the nation's annual average unemployment rate. The
seasonally adjusted unemployment rate for Pennsylvania for March, 1997 was 5.1%
and for the United States for March, 1997 was 5.2%. The population of
Pennsylvania, 12,056 million people in 1996 according to the U.S. Bureau of the
Census, represents an increase from the 1987 estimate of 11,811 million. Per
capita income in Pennsylvania for 1995 of $23,558 was higher than the per capita
income of the United States of $23,208. The Commonwealth's General Fund, which
receives all tax receipts and most other revenues and through which debt service
on all general obligations of the Commonwealth is made, closed fiscal years
ended June 30, 1994, June 30, 1995 and June 30, 1996 with positive fund balances
of $892,940, $688,304 and $635,182, respectively.
Debt
The Commonwealth may incur debt to rehabilitate areas affected by
disaster, debt approved by the electorate, debt for certain capital projects
(for projects such as highways, public improvements, transportation assistance,
flood control, redevelopment assistance, site development and industrial
development) and tax anticipation debt payable in the fiscal year of issuance.
The Commonwealth had outstanding general obligation debt of $5,054 million at
June 30, 1996. The Commonwealth is not permitted to fund deficits between fiscal
years with any form of debt. All year-end deficit balances must be funded within
the succeeding fiscal year's budget. At March 11, 1996, all outstanding general
obligation bonds of the Commonwealth were rated AA- by Standard & Poor's Ratings
Group and A-1 by Moody's Investors Service, Inc. (see Appendix A). There can be
no assurance that these ratings will remain in effect in the future. Over the
five-year period ending June 30, 2001, the Commonwealth has projected that it
will issue notes and bonds totaling $2,325 million and retire bonded debt in the
principal amount of $2,239 million.
Certain agencies created by the Commonwealth have statutory
authorization to incur debt for which Commonwealth appropriations to pay debt
service thereon are not required. As of December 31, 1996, total combined debt
outstanding for these agencies was $8,356 million. The debt of these agencies is
supported by assets of, or revenues derived from, the various projects financed
and is not an obligation of the Commonwealth. Some of these agencies, however,
are indirectly dependent on Commonwealth appropriations. The only obligations of
agencies in the Commonwealth that bear a moral obligation of the Commonwealth
are those issued by the Pennsylvania Housing Finance Agency ("PHFA"), a
state-created agency which provides housing for lower and moderate income
families, and The Hospitals and Higher Education Facilities Authority of
Philadelphia (the "Hospital Authority"), an agency created by the City of
Philadelphia to acquire and prepare various sites for use as intermediate
B-1
<PAGE>
care facilities for the mentally retarded.
Local Government Debt
Numerous local government units in Pennsylvania issue general
obligation (i.e., backed by taxing power) debt, including counties, cities,
boroughs, townships and school districts. School district obligations are
supported indirectly by the Commonwealth. The issuance of non-electoral general
obligation debt is limited by constitutional and statutory provisions. Electoral
debt, i.e., that approved by the voters, is unlimited. In addition, local
government units and municipal and other authorities may issue revenue
obligations that are supported by the revenues generated from particular
projects or enterprises. Examples include municipal authorities (frequently
operating water and sewer systems), municipal authorities formed to issue
obligations benefitting hospitals and educational institutions, and industrial
development authorities, whose obligations benefit industrial or commercial
occupants. In some cases, sewer or water revenue obligations are guaranteed by
taxing bodies and have the credit characteristics of general obligation debt.
Litigation
Pennsylvania is currently involved in certain litigation where adverse
decisions could have an adverse impact on its ability to pay debt service. For
example, in BABY NEAL V. COMMONWEALTH, the American Civil Liberties Union filed
a lawsuit against the Commonwealth seeking an order that would require the
Commonwealth to provide additional funding for child welfare services. COUNTY OF
ALLEGHENY V. COMMONWEALTH OF PENNSYLVANIA involves litigation regarding the
state constitutionality of the statutory scheme for county funding of the
judicial system. In PENNSYLVANIA ASSOCIATION OF RURAL AND SMALL SCHOOLS V.
CASEY, the constitutionality of Pennsylvania's system for funding local school
districts has been challenged. No estimates for the amount of these claims are
available.
Other Factors
The performance of the obligations which are held by Pennsylvania Fund
and issued by the Commonwealth, its agencies, subdivisions and instrumentalities
are in part tied to state-wide, regional and local conditions within the
Commonwealth and to the creditworthiness of certain non-Commonwealth related
obligors, depending upon the Pennsylvania Fund's portfolio mix at any given
time. Adverse changes to the state-wide, regional or local economies or changes
in government may adversely affect the creditworthiness of the Commonwealth, its
agencies and municipalities, and certain other non-government related obligors
of Pennsylvania tax-free obligations (e.g., a university, a hospital or a
corporate obligor). The City of Philadelphia, for example, experienced severe
financial problems which impaired its ability to borrow money and adversely
affected the ratings of its obligations and their marketability. Conversely,
some obligations held by the Fund will be almost exclusively dependent on the
creditworthiness of one underlying obligor, such as a project occupant or
provider of credit or liquidity support.
22814
B-2
<PAGE>
<PAGE>
EVERGREEN MONEY MARKET TRUST
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
Item 24(a). Financial Statements
The financial statements listed below are included in Part A of this
Amendment to the Registration Statement:
EVERGREEN MONEY MARKET FUND
Class A Financial Highlights For the five-month period ended
January 31, 1998; for each of the
years in the two-year period ended
August 31, 1997; and for the period
from January 4, 1995 (Commencement
of Operations) to August 31, 1995
Class B Financial Highlights For the five-month period ended
January 31, 1998; for each of the
years in the two-year period ended
August 31, 1997; and for the period
from January 26, 1995 (Commencement
of Operations) to August 31, 1995
Class C Financial Highlights For the five-month period ended
January 31, 1998; and for the
period from August 1, 1997
(Commencement of Operations) to
August 31, 1997
Class Y Financial Highlights For the five-month period ended
January 31, 1998; for each of the
years in the three-year period
ended August 31, 1997; for the
ten-month period ended August 31,
1994; for each of the years in the
five-year period ended October 31,
1993; and for the period from
November 2, 1987 (Commencement of
Operations) to October 31, 1988
EVERGREEN MUNICIPAL MONEY MARKET FUND
Class A Financial Highlights For the five-month period ended
January 31, 1998; for each of the
years in the two-year period ended
August 31, 1997; and for the period
from January 5, 1995 (Commencement
of Operations) to August 31, 1995
Class Y Financial Highlights For the five-month period ended
January 31, 1998; for each of the
years in the eight-year period
ended August 31, 1997; and for the
period from November 2, 1988
(Commencement of Operations) to
August 31, 1989
EVERGREEN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
Class A Financial Highlights For the five-month period ended
January 31, 1998; for the year
ended August 31, 1997; for the
six-month period ended August 31,
1996; and for the period from
August 22, 1995 (Commencement
of Operations) to February 29, 1996
Class Y Financial Highlights For the five-month period ended
January 31, 1998; for the year
ended August 31, 1997; for the
six-month period August 31, 1996;
for each of the years in four-year
period ended February 28, 1996; and
for the period from August 15, 1991
(Commencement of Operations) to
February 29, 1992
EVERGREEN TREASURY MONEY MARKET FUND
Class A Financial Highlights For the five-month period ended
January 31, 1998; for each of the
years in the two-year period ended
August 31, 1997; for the eight-
month period ended August 31, 1995;
for each of the years in three-year
period ended December 31, 1994; and
for the period from March 6, 1991
(Commencement of Operations) to
December 31, 1991
Class Y Financial Highlights For the five-month period ended
January 31, 1998; for each of the
years in the two-year period ended
August 31, 1997; for the
eight-month period August 31, 1995;
for each of the years in three-year
period ended December 31, 1994; and
for the period from March 6, 1991
(Commencement of Operations) to
December 31, 1991
The financial statements listed below are incorporated by reference in
Part B of this Amendment to the Registration Statement:
Financial Highlights For the same periods as
included in Part A
Schedule of Investments January 31, 1998
Statement of Assets and Liabilities January 31, 1998
Statement of Operations For the five-month period
ended January 31, 1998 and the
year ended August 31, 1997
Statements of Changes in Net Assets
Evergreen Money Market Fund and For the five-month period
Evergreen Municipal Money Market Fund ended January 31, 1998 and
the two years ended August 31,
1997
Evergreen Pennsylvania Municipal For the five-month period
Money Market Fund ended January 31, 1998, the
year ended August 31, 1997,
the six-month period ended
August 31, 1996 and the year
ended February 29, 1996
Evergreen Treasury Money Market Fund For the five-month period
ended January 31, 1998 and
the two years ended August 31,
1997
Combined Notes to Financial Statements January 31, 1998
Independent Auditors' Report March 2, 1998
(for Evergreen Pennsylvania
Municipal Money Market Fund
and Evergreen Treasury Money
Market Fund)
Report of Independent Accountants March 13, 1998
(for Evergreen Money Market
Fund and Evergreen Municipal
Money Market Fund)
Item 24(b). Exhibits
Unless otherwise indicated, each of the Exhibits listed below is filed
herewith.
<TABLE>
<CAPTION>
Exhibit
Number Description Location
- ------- ----------- -----------
<S> <C> <C>
1 Declaration of Trust Incorporated by reference to
Registrant's Registration Statement
Filed on December 12, 1997
2 By-laws Incorporated by reference to
Registrant's Registration Statement
Filed on December 12, 1997
3 Not applicable
4 Provisions of instruments defining the rights
of holders of the securities being registered
are contained in the Declaration of Trust
Articles II, III.(6)(c), VI.(3), IV.(8), V, VI,
VII, VIII and By-laws Articles II, III and VIII
included as part of Exhibits 1 and 2 of this
Registration Statement
5(a) Investment Advisory and Management
Agreement between the Registrant and First
Union National Bank
5(b) Investment Advisory and Management
Agreement between the Registrant and Evergreen
Asset Management Corp.
6(a) Class A and Class C Principal Underwriting
Agreement between the Registrant and Evergreen
Distributor, Inc.
6(b) Class B Principal Underwriting Agreement
between the Registrant and Evergreen Distributor,
Inc. (Evergreen)
6(c) Class Y Principal Underwriting Agreement
between the Registrant and Evergreen Distributor,
Inc.
6(d) Form of Dealer Agreement used by Evergreen Incorporated by reference to
Distributor, Inc. Registrant's Registration Statement
Filed on December 12, 1997
7 Form of Deferred Compensation Plan Incorporated by reference to
Registrant's Registration Statement
Filed on December 12, 1997
8 Custodian Agreement between the Registrant
and State Street Bank and Trust Company
9(a) Administration Agreement between Evergreen
Investment Services, Inc. and the Registrant
9(b) Transfer Agent Agreement between the
Registrant and Evergreen Service Company
10 Opinion and Consent of Sullivan & Worcester LLP Incorporated by reference to
Registrant's Registration Statement
Filed on December 12, 1997
11(a) Consent of Price Waterhouse LLP
11(b) Consent of KPMG Peat Marwick LLP
12 Not applicable
13 Not applicable
15(a) 12b-1 Distribution Plan for Class A
15(b) 12b-1 Distribution Plan for Class B
(Evergreen)
15(c) 12b-1 Distribution Plan for Class C
16 Fund Performance
17 Financial Data Schedules
18 Multiple Class Plan Incorporated by reference to
Registrant's Registration Statement
Filed on December 12, 1997
19 Powers of Attorney
</TABLE>
Item 25. Persons Controlled by or Under Common Control with Registrant.
None
Item 26. Number of Holders of Securities (as of April 30, 1998)
Evergreen Money Market Fund
Class A 12,226
Class B 1,758
Class C 451
Class Y 10,791
Evergreen Municipal Money Market Fund
Class A 851
Class Y 6,177
Evergreen Pennsylvania Municipal Money Market Fund
Class A 8
Class Y 127
Evergreen Treasury Money Market Fund
Class A 5,761
Class Y 147
Item 27. Indemnification.
Provisions for the indemnification of the Registrant's Trustees and
officers are contained in the Registrant's Declaration of Trust.
Provisions for the indemnification of the Registrant's Investment Advisers
are contained in their Investment Advisory and Management Agreements.
Provisions for the indemnification of Evergreen Distributor, Inc., the
Registrant's principal underwriter, are contained in each Principal Underwriting
Agreement between Evergreen Distributor, Inc. and the Registrant.
Item 28. Business or Other Connections of Investment Adviser.
The Directors and principal executive officers of First Union National Bank
are:
Edward E. Crutchfield, Jr. Chairman and Chief Executive Officer,
First Union Corporation; Chief Executive
Officer and Chairman, First Union National
Bank
John R. Georgius President, First Union Corporation; Vice
Chairman and President, First Union National
Bank
Marion A. Cowell, Jr. Executive Vice President, Secretary &
General Counsel, First Union Corporation;
Secretary and Executive Vice President,
First Union National Bank
Robert T. Atwood Executive Vice President and Chief Financial
Officer, First Union Corporation; Chief
Financial Officer and Executive Vice
President
All of the above persons are located at the following address: First Union
National Bank, One First Union Center, Charlotte, NC 28288.
The information required by this item with respect to Evergreen Asset
Management Corp. is incorporated by reference to the Form ADV (File No.
801-46522) of Evergreen Asset Management Corp.
Item 29. Principal Underwriters.
The Directors and principal executive officers of Evergreen Distributor,
Inc. are:
Lynn C. Mangum Director, Chairman and Chief Executive
Officer
J. David Huber President
Kevin J. Dell Vice President, General Counsel and Secretary
All of the above persons are located at the following address: Evergreen
Distributor, Inc., 125 West 55th Street, New York, New York 10019.
Evergreen Distributor, Inc. acts as principal underwriter for each
registered investment company or series thereof that is a part of the Evergreen
"fund complex" as such term is defined in Item 22(a) of Schedule 14A under the
Securities Exchange Act of 1934.
Item 30. Location of Accounts and Records.
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Evergreen Investment Services, Inc., Evergreen Service Company and Keystone
Investment Management Company, all located at 200 Berkeley Street, Boston,
Massachusetts 02110
First Union National Bank, One First Union Center, 301 S. College Street,
Charlotte, North Carolina 28288
Evergreen Asset Management Corp., 2500 Westchester Avenue, Purchase,
New York 10577
Iron Mountain, 3431 Sharp Slot Road, Swansea, Massachusetts 02777
State Street Bank and Trust Company, 2 Heritage Drive, North Quincy,
Massachusetts 02171
Item 31. Management Services.
Not Applicable
Item 32. Undertakings.
The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Columbus, and State of Ohio, on the 29th day of May,
1998.
EVERGREEN MONEY MARKET TRUST
By: /s/ William J. Tomko
-----------------------------
Name: William J. Tomko
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 29th day of May, 1998.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/William J. Tomko /s/ Laurence B. Ashkin /s/ Charles A. Austin, III
- ------------------------- ----------------------------- --------------------------------
William J. Tomko Laurence B. Ashkin* Charles A. Austin III*
President and Treasurer (Principal Trustee Trustee
Financial and Accounting Officer)
/s/ K. Dun Gifford /s/ James S. Howell /s/ William Walt Pettit
- ---------------------------- ---------------------------- --------------------------------
K. Dun Gifford* James S. Howell* William Walt Pettit*
Trustee Trustee Trustee
/s/Gerald M. McDonnell /s/ Thomas L. McVerry /s/ Michael S. Scofield
- ------------------------------- ----------------------------- --------------------------------
Gerald M. McDonell* Thomas L. McVerry* Michael S. Scofield*
Trustee Trustee Trustee
/s/ David M. Richardson /s/ Russell A. Salton, III MD
- ------------------------------ -------------------------------
David M. Richardson* Russell A. Salton, III MD*
Trustee Trustee
/s/ Richard J. Shima
- ------------------------------
Richard J. Shima*
Trustee
</TABLE>
*By: /s/ Maureen E. Towle
- -------------------------------
Maureen E. Towle
Attorney-in-Fact
*Maureen E. Towle, by signing her name hereto, does hereby sign this
document on behalf of each of the above-named individuals pursuant to powers of
attorney duly executed by such persons.
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Exhibit
- -------------- -------
5(a) Investment Advisory and
Management Agreement
5(b) Investment Advisory and
Management Agreement
6(a) Principal Underwriting Agreement
- Class A and C Shares
6(b) Principal Underwriting Agreement
- Class B Shares
6(c) Principal Underwriting Agreement
- Class Y Shares
8 Custodian Agreement
9(a) Administration Agreement
9(b) Transfer Agent Agreement
11(a) Consent of Price Waterhouse LLP
11(b) Consent of KPMG Peat Marwick LLP
15(a) 12b-1 Distribution Plan
for Class A
15(b) 12b-1 Distribution Plan
for Class B
15(c) 12b-1 Distribution Plan
for Class C
16 Fund Performance
17 Financial Data Schedules
19 Powers of Attorney
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
AGREEMENT made the 18th day of September 1997, by and between EVERGREEN
MONEY MARKET TRUST, a Delaware business trust (the "Trust") and THE FIRST UNION
NATIONAL BANK, a national banking association (the "Adviser").
WHEREAS, the Trust and the Adviser wish to enter into an Agreement
setting forth the terms on which the Adviser will perform certain services for
the Trust, its series of shares as listed on Schedule 1 to this Agreement and
each series of shares subsequently issued by the Trust (each singly a "Fund" or
collectively the "Funds").
THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, the Trust and the Adviser agree as follows:
1. (a) The Trust hereby employs the Adviser to manage and administer
the operation of the Trust and each of its Funds, to supervise the provision of
the services to the Trust and each of its Funds by others, and to manage the
investment and reinvestment of the assets of each Fund of the Trust in
conformity with such Fund's investment objectives and restrictions as may be set
forth from time to time in the Fund's then current prospectus and statement of
additional information, if any, and other governing documents, all subject to
the supervision of the Board of Trustees of the Trust, for the period and on the
terms set forth in this Agreement. The Adviser hereby accepts such employment
and agrees during such period, at its own expense, to render the services and to
assume the obligations set forth herein, for the compensation provided herein.
The Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
(b) In the event that the Trust establishes one or more Funds, in
addition to the Funds listed on Schedule 1, for which it wishes the Adviser to
perform services hereunder, it shall notify the Adviser in writing. If the
Adviser is willing to render such services, it shall notify the Trust in writing
and such Fund shall become a Fund hereunder and the compensation payable to the
Adviser by the new Fund will be as agreed in writing at the time.
2. The Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of each Fund with broker-dealers selected
by the Adviser. In executing portfolio transactions and selecting
broker-dealers, the Adviser will use its best efforts to seek best execution on
behalf of each Fund. In assessing the best execution available for any
transaction, the Adviser shall consider all factors it deems relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker-dealer, and the
reasonableness of the commission, if any (all for the specific transaction and
on a continuing basis). In evaluating the best execution available, and in
selecting the broker-dealer to execute a particular transaction, the Adviser may
also consider
23959
1
<PAGE>
the brokerage and research services (as those terms are used in Section 28(e) of
the Securities Exchange Act of 1934 (the "1934 Act")) provided to a Fund and/or
other accounts over which the Adviser or an affiliate of the Adviser exercises
investment discretion. The Adviser is authorized to pay a broker-dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for a Fund which is in excess of the amount of commission
another broker-dealer would have charged for effecting that transaction if, but
only if, the Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker-dealer viewed in terms of that particular transaction or
in terms of all of the accounts over which investment discretion is so
exercised.
3. The Adviser, at its own expense, shall furnish to the Trust office
space in the offices of the Adviser or in such other place as may be agreed upon
by the parties from time to time, all necessary office facilities, equipment and
personnel in connection with its services hereunder, and shall arrange, if
desired by the Trust, for members of the Adviser's organization to serve without
salaries from the Trust as officers or, as may be agreed from time to time, as
agents of the Trust. The Adviser assumes and shall pay or reimburse the Trust
for:
(a) the compensation (if any) of the Trustees of the Trust who are
affiliated with the Adviser or with its affiliates, or with any adviser retained
by the Adviser, and of all officers of the Trust as such; and
(b) all expenses of the Adviser incurred in connection with its
services hereunder.
The Trust assumes and shall pay all other expenses of the Trust and its
Funds, including, without limitation:
(a) all charges and expenses of any custodian or depository appointed
by the Trust for the safekeeping of the cash, securities and other property of
any of its Funds;
(b) all charges and expenses for bookkeeping and auditors;
(c) all charges and expenses of any transfer agents and registrars
appointed by the Trust;
(d) all fees of all Trustees of the Trust who are not affiliated with
the Adviser or any of its affiliates, or with any adviser retained by the
Adviser;
(e) all brokers' fees, expenses, and commissions and issue and transfer
taxes chargeable to a Fund in connection with transactions involving securities
and other property to which the Fund is a party;
(f) all costs and expenses of distribution of shares of its Funds
incurred pursuant to Plans of Distribution adopted under Rule 12b-1 under the
Investment Company Act of 1940 ("1940 Act");
(g) all taxes and trust fees payable by the Trust or its Funds to
Federal, state, or other governmental agencies;
(h) all costs of certificates representing shares of the Trust or its
Funds;
23959
2
<PAGE>
(i) all fees and expenses involved in registering and maintaining
registrations of the Trust, its Funds and of their shares with the Securities
and Exchange Commission (the "Commission") and registering or qualifying the
Funds' shares under state or other securities laws, including, without
limitation, the preparation and printing of registration statements,
prospectuses, and statements of additional information for filing with the
Commission and other authorities;
(j) expenses of preparing, printing, and mailing prospectuses and
statements of additional information to shareholders of each Fund of the Trust;
(k) all expenses of shareholders' and Trustees' meetings and of
preparing, printing, and mailing notices, reports, and proxy materials to
shareholders of the Funds;
(l) all charges and expenses of legal counsel for the Trust and its
Funds and for Trustees of the Trust in connection with legal matters relating to
the Trust and its Funds, including, without limitation, legal services rendered
in connection with the Trust and its Funds' existence, trust, and financial
structure and relations with its shareholders, registrations and qualifications
of securities under Federal, state, and other laws, issues of securities,
expenses which the Trust and its Funds have herein assumed, whether customary or
not, and extraordinary matters, including, without limitation, any litigation
involving the Trust and its Funds, its Trustees, officers, employees, or agents;
(m) all charges and expenses of filing annual and other reports with
the Commission and other authorities; and
(n) all extraordinary expenses and charges of the Trust and its Funds.
In the event that the Adviser provides any of these services or pays
any of these expenses, the Trust and any affected Fund will promptly reimburse
the Adviser therefor.
The services of the Adviser to the Trust and its Funds hereunder are
not to be deemed exclusive, and the Adviser shall be free to render similar
services to others.
4. As compensation for the Adviser's services to the Trust with respect
to each Fund during the period of this Agreement, the Trust will pay to the
Adviser a fee at the annual rate set forth on Schedule 2 for such Fund.
The Adviser's fee is computed as of the close of business on each
business day.
A pro rata portion of the Trust's fee with respect to a Fund shall be
payable in arrears at the end of each day or calendar month as the Adviser may
from time to time specify to the Trust. If and when this Agreement terminates,
any compensation payable hereunder for the period ending with the date of such
termination shall be payable upon such termination.
Amounts payable hereunder shall be promptly paid when due.
5. The Adviser may enter into an agreement to retain, at its own
expense, a firm or firms ("SubAdviser") to provide the Trust with respect to all
or any of its Funds all of the services to be provided by the Adviser hereunder,
if such agreement is approved as required
23959
3
<PAGE>
by law. Such agreement may delegate to such SubAdviser all of Adviser's rights,
obligations, and duties hereunder.
6. The Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust or any of its Funds in connection
with the performance of this Agreement, except a loss resulting from the
Adviser's willful misfeasance, bad faith, gross negligence, or from reckless
disregard by it of its obligations and duties under this Agreement. Any person,
even though also an officer, Director, partner, employee, or agent of the
Adviser, who may be or become an officer, Trustee, employee, or agent of the
Trust, shall be deemed, when rendering services to the Trust or any of its Funds
or acting on any business of the Trust or any of its Funds (other than services
or business in connection with the Adviser's duties hereunder), to be rendering
such services to or acting solely for the Trust or any of its Funds and not as
an officer, Director, partner, employee, or agent or one under the control or
direction of the Adviser even though paid by it.
7. The Trust shall cause the books and accounts of each of its Funds to
be audited at least once each year by a reputable independent public accountant
or organization of public accountant or organization of public accountants who
shall render a report to the Trust.
8. Subject to and in accordance with the Declaration of Trust of the
Trust, the governing documents of the Adviser and the governing documents of any
SubAdviser, it is understood that Trustees, Directors, officers, agents and
shareholders of the Trust or any Adviser are or may be interested in the Adviser
(or any successor thereof) as Directors and officers of the Adviser or its
affiliates, as stockholders of First Union Corporation or otherwise; that
Directors, officers and agents of the Adviser and its affiliates or stockholders
of First Union Corporation are or may be interested in the Trust or any Adviser
as Trustees, Directors, officers, shareholders or otherwise; that the Adviser
(or any such successor) is or may be interested in the Trust or any SubAdviser
as shareholder, or otherwise; and that the effect of any such adverse interests
shall be governed by the Declaration of Trust of the Trust, governing documents
of the Adviser and governing documents of any SubAdviser.
9. This Agreement shall continue in effect for two years from the date
set forth above and after such date (a) such continuance is specifically
approved at least annually by the Board of Trustees of the Trust or by a vote of
a majority of the outstanding voting securities of the Trust, and (b) such
renewal has been approved by the vote of the majority of Trustees of the Trust
who are not interested persons, as that term is defined in the 1940 Act, of the
Adviser or of the Trust, cast in person at a meeting called for the purpose of
voting on such approval.
10. On sixty days' written notice to the Adviser, this Agreement may be
terminated at any time without the payment of any penalty by the Board of
Trustees of the Trust or by vote of the holders of a majority of the outstanding
voting securities of any Fund with respect to that Fund; and on sixty days'
written notice to the Trust, this Agreement may be terminated at any time
without the payment of any penalty by the Adviser with respect to a Fund. This
23959
4
<PAGE>
Agreement shall automatically terminate upon its assignment (as that term is
defined in the 1940 Act). Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postage prepaid, to the other party
at the main office of such party.
11. This Agreement may be amended at any time by an instrument in
writing executed by both parties hereto or their respective successors, provided
that with regard to amendments of substance such execution by the Trust shall
have been first approved by the vote of the holders of a majority of the
outstanding voting securities of the affected Funds and by the vote of a
majority of Trustees of the Trust who are not interested persons (as that term
is defined in the 1940 Act) of the Adviser, any predecessor of the Adviser, or
of the Trust, cast in person at a meeting called for the purpose of voting on
such approval. A "majority of the outstanding voting securities" of the Trust or
the affected Funds shall have, for all purposes of this Agreement, the meaning
provided therefor in the 1940 Act.
12. Any compensation payable to the Adviser hereunder for any period
other than a full year shall be proportionately adjusted.
13. The provisions of this Agreement shall be governed, construed, and
enforced in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EVERGREEN MONEY MARKET TRUST
By: /s/ John J. Pileggi
-------------------------
Name: John J. Pileggi
Title: President
FIRST UNION NATIONAL BANK
By: /s/ T. Hal Clarke
-------------------------
Name: T. Hal Clarke
Title: President
23959
5
<PAGE>
Schedule 1
----------
Evergreen Treasury Money Market Fund
Evergreen Pennsylvania Tax Free Money Market Fund
(To be redesignated Evergreen Pennsylvania Municipal Money Market Fund
January 12, 1998)
23959
6
<PAGE>
Schedule 2
----------
As compensation for the Adviser's services to the Fund during the
period of this Agreement, the Fund will pay to the Adviser a fee at the annual
rate of :
I. EVERGREEN TREASURY MONEY MARKET FUND
0.35 of 1% of Average Daily Net Assets of the Fund
II. EVERGREEN PENNSYLVANIA TAX FREE MONEY MARKET FUND
An annual fee equal to 0.40 of 1% of the average daily net assets of
the Fund up to $500 million, 0.36 of 1% of the next $500 million of assets, 0.32
of 1% of assets in excess of $1 billion but not exceeding $1.5 billion, and 0.28
of 1% of assets in excess of $1.5 billion.
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
AGREEMENT made the 18th day of September 1997, by and between EVERGREEN
MONEY MARKET TRUST, a Delaware business trust (the "Trust") and EVERGREEN ASSET
MANAGEMENT CORP., a New York corporation (the "Adviser").
WHEREAS, the Trust and the Adviser wish to enter into an Agreement
setting forth the terms on which the Adviser will perform certain services for
the Trust, its series of shares as listed on Schedule 1 to this Agreement and
each series of shares subsequently issued by the Trust (each singly a "Fund" or
collectively the "Funds").
THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, the Trust and the Adviser agree as follows:
1. (a) The Trust hereby employs the Adviser to manage and administer
the operation of the Trust and each of its Funds, to supervise the provision of
the services to the Trust and each of its Funds by others, and to manage the
investment and reinvestment of the assets of each Fund of the Trust in
conformity with such Fund's investment objectives and restrictions as may be set
forth from time to time in the Fund's then current prospectus and statement of
additional information, if any, and other governing documents, all subject to
the supervision of the Board of Trustees of the Trust, for the period and on the
terms set forth in this Agreement. The Adviser hereby accepts such employment
and agrees during such period, at its own expense, to render the services and to
assume the obligations set forth herein, for the compensation provided herein.
The Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
(b) In the event that the Trust establishes one or more Funds, in
addition to the Funds listed on Schedule 1, for which it wishes the Adviser to
perform services hereunder, it shall notify the Adviser in writing. If the
Adviser is willing to render such services, it shall notify the Trust in writing
and such Fund shall become a Fund hereunder and the compensation payable to the
Adviser by the new Fund will be as agreed in writing at the time.
2. The Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of each Fund with broker-dealers selected
by the Adviser. In executing portfolio transactions and selecting
broker-dealers, the Adviser will use its best efforts to seek best execution on
behalf of each Fund. In assessing the best execution available for any
transaction, the Adviser shall consider all factors it deems relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker-dealer, and the
reasonableness of the commission, if any (all for the specific transaction and
on a continuing basis). In evaluating the best execution available, and in
selecting the broker-dealer to execute a particular transaction, the Adviser may
also consider
23842
1
<PAGE>
the brokerage and research services (as those terms are used in Section 28(e) of
the Securities Exchange Act of 1934 (the "1934 Act")) provided to a Fund and/or
other accounts over which the Adviser or an affiliate of the Adviser exercises
investment discretion. The Adviser is authorized to pay a broker-dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for a Fund which is in excess of the amount of commission
another broker-dealer would have charged for effecting that transaction if, but
only if, the Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker-dealer viewed in terms of that particular transaction or
in terms of all of the accounts over which investment discretion is so
exercised.
3. The Adviser, at its own expense, shall furnish to the Trust office
space in the offices of the Adviser or in such other place as may be agreed upon
by the parties from time to time, all necessary office facilities, equipment and
personnel in connection with its services hereunder, and shall arrange, if
desired by the Trust, for members of the Adviser's organization to serve without
salaries from the Trust as officers or, as may be agreed from time to time, as
agents of the Trust. The Adviser assumes and shall pay or reimburse the Trust
for:
(a) the compensation (if any) of the Trustees of the Trust who are
affiliated with the Adviser or with its affiliates, or with any adviser retained
by the Adviser, and of all officers of the Trust as such; and
(b) all expenses of the Adviser incurred in connection with its
services hereunder.
The Trust assumes and shall pay all other expenses of the Trust and its
Funds, including, without limitation:
(a) all charges and expenses of any custodian or depository appointed
by the Trust for the safekeeping of the cash, securities and other property of
any of its Funds;
(b) all charges and expenses for bookkeeping and auditors;
(c) all charges and expenses of any transfer agents and registrars
appointed by the Trust;
(d) all fees of all Trustees of the Trust who are not affiliated with
the Adviser or any of its affiliates, or with any adviser retained by the
Adviser;
(e) all brokers' fees, expenses, and commissions and issue and transfer
taxes chargeable to a Fund in connection with transactions involving securities
and other property to which the Fund is a party;
(f) all costs and expenses of distribution of shares of its Funds
incurred pursuant to Plans of Distribution adopted under Rule 12b-1 under the
Investment Company Act of 1940 ("1940 Act");
(g) all taxes and trust fees payable by the Trust or its Funds to
Federal, state, or other governmental agencies;
(h) all costs of certificates representing shares of the Trust or its
Funds;
23842
2
<PAGE>
(i) all fees and expenses involved in registering and maintaining
registrations of the Trust, its Funds and of their shares with the Securities
and Exchange Commission (the "Commission") and registering or qualifying the
Funds' shares under state or other securities laws, including, without
limitation, the preparation and printing of registration statements,
prospectuses, and statements of additional information for filing with the
Commission and other authorities;
(j) expenses of preparing, printing, and mailing prospectuses and
statements of additional information to shareholders of each Fund of the Trust;
(k) all expenses of shareholders' and Trustees' meetings and of
preparing, printing, and mailing notices, reports, and proxy materials to
shareholders of the Funds;
(l) all charges and expenses of legal counsel for the Trust and its
Funds and for Trustees of the Trust in connection with legal matters relating to
the Trust and its Funds, including, without limitation, legal services rendered
in connection with the Trust and its Funds' existence, trust, and financial
structure and relations with its shareholders, registrations and qualifications
of securities under Federal, state, and other laws, issues of securities,
expenses which the Trust and its Funds have herein assumed, whether customary or
not, and extraordinary matters, including, without limitation, any litigation
involving the Trust and its Funds, its Trustees, officers, employees, or agents;
(m) all charges and expenses of filing annual and other reports with
the Commission and other authorities; and
(n) all extraordinary expenses and charges of the Trust and its Funds.
In the event that the Adviser provides any of these services or pays
any of these expenses, the Trust and any affected Fund will promptly reimburse
the Adviser therefor.
The services of the Adviser to the Trust and its Funds hereunder are
not to be deemed exclusive, and the Adviser shall be free to render similar
services to others.
4. As compensation for the Adviser's services to the Trust with respect
to each Fund during the period of this Agreement, the Trust will pay to the
Adviser a fee at the annual rate set forth on Schedule 2 for such Fund.
The Adviser's fee is computed as of the close of business on each
business day.
A pro rata portion of the Trust's fee with respect to a Fund shall be
payable in arrears at the end of each day or calendar month as the Adviser may
from time to time specify to the Trust. If and when this Agreement terminates,
any compensation payable hereunder for the period ending with the date of such
termination shall be payable upon such termination.
Amounts payable hereunder shall be promptly paid when due.
5. The Adviser may enter into an agreement to retain, at its own
expense, a firm or firms ("SubAdviser") to provide the Trust with respect to all
or any of its Funds all of the services to be provided by the Adviser hereunder,
if such agreement is approved as required
23842
3
<PAGE>
by law. Such agreement may delegate to such SubAdviser all of Adviser's rights,
obligations, and duties hereunder.
6. The Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust or any of its Funds in connection
with the performance of this Agreement, except a loss resulting from the
Adviser's willful misfeasance, bad faith, gross negligence, or from reckless
disregard by it of its obligations and duties under this Agreement. Any person,
even though also an officer, Director, partner, employee, or agent of the
Adviser, who may be or become an officer, Trustee, employee, or agent of the
Trust, shall be deemed, when rendering services to the Trust or any of its Funds
or acting on any business of the Trust or any of its Funds (other than services
or business in connection with the Adviser's duties hereunder), to be rendering
such services to or acting solely for the Trust or any of its Funds and not as
an officer, Director, partner, employee, or agent or one under the control or
direction of the Adviser even though paid by it.
7. The Trust shall cause the books and accounts of each of its Funds to
be audited at least once each year by a reputable independent public accountant
or organization of public accountant or organization of public accountants who
shall render a report to the Trust.
8. Subject to and in accordance with the Declaration of Trust of the
Trust, the governing documents of the Adviser and the governing documents of any
SubAdviser, it is understood that Trustees, Directors, officers, agents and
shareholders of the Trust or any Adviser are or may be interested in the Adviser
(or any successor thereof) as Directors and officers of the Adviser or its
affiliates, as stockholders of First Union Corporation or otherwise; that
Directors, officers and agents of the Adviser and its affiliates or stockholders
of First Union Corporation are or may be interested in the Trust or any Adviser
as Trustees, Directors, officers, shareholders or otherwise; that the Adviser
(or any such successor) is or may be interested in the Trust or any SubAdviser
as shareholder, or otherwise; and that the effect of any such adverse interests
shall be governed by the Declaration of Trust of the Trust, governing documents
of the Adviser and governing documents of any SubAdviser.
9. This Agreement shall continue in effect for two years from the date
set forth above and after such date (a) such continuance is specifically
approved at least annually by the Board of Trustees of the Trust or by a vote of
a majority of the outstanding voting securities of the Trust, and (b) such
renewal has been approved by the vote of the majority of Trustees of the Trust
who are not interested persons, as that term is defined in the 1940 Act, of the
Adviser or of the Trust, cast in person at a meeting called for the purpose of
voting on such approval.
10. On sixty days' written notice to the Adviser, this Agreement may be
terminated at any time without the payment of any penalty by the Board of
Trustees of the Trust or by vote of the holders of a majority of the outstanding
voting securities of any Fund with respect to that Fund; and on sixty days'
written notice to the Trust, this Agreement may be terminated at any time
without the payment of any penalty by the Adviser with respect to a Fund. This
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Agreement shall automatically terminate upon its assignment (as that term is
defined in the 1940 Act). Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postage prepaid, to the other party
at the main office of such party.
11. This Agreement may be amended at any time by an instrument in
writing executed by both parties hereto or their respective successors, provided
that with regard to amendments of substance such execution by the Trust shall
have been first approved by the vote of the holders of a majority of the
outstanding voting securities of the affected Funds and by the vote of a
majority of Trustees of the Trust who are not interested persons (as that term
is defined in the 1940 Act) of the Adviser, any predecessor of the Adviser, or
of the Trust, cast in person at a meeting called for the purpose of voting on
such approval. A "majority of the outstanding voting securities" of the Trust or
the affected Funds shall have, for all purposes of this Agreement, the meaning
provided therefor in the 1940 Act.
12. Any compensation payable to the Adviser hereunder for any period
other than a full year shall be proportionately adjusted.
13. The provisions of this Agreement shall be governed, construed, and
enforced in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EVERGREEN MONEY MARKET TRUST
By: /s/ John J. Pileggi
-------------------------
Name: John J. Pileggi
Title: President
EVERGREEN ASSET MANAGEMENT CORP.
By: /s/ Stephen A. Lieber
-------------------------
Name: Stephen A. Kieber
Title: Chairman & Co-Chief Executive
Officer
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<PAGE>
Schedule 1
----------
Evergreen Money Market Fund
Evergreen Tax Exempt Money Market Fund
(To be redesignated Evergreen Municipal Money Market Fund January 12, 1998)
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<PAGE>
Schedule 2
----------
As compensation for the Adviser's services to the Fund during the
period of this Agreement, the Fund will pay the Adviser a fee at the annual rate
of:
Average Daily Net Assets
Management Fee Of the Fund
-------------- ------------------------
0.50 of 1% of the first $1,000,000,000; plus
0.45 of 1% of amounts over $1,000,000,000.
PRINCIPAL UNDERWRITING AGREEMENT
EVERGREEN MONEY MARKET TRUST
CLASS A AND C SHARES
AGREEMENT made this 18th day of September, 1997 by and between
Evergreen Money Market Trust on behalf of its series listed on Exhibit A
attached hereto and made a part hereof (such Trust and series referred to herein
as "Fund" individually or "Funds" collectively) and Evergreen Distributor, Inc.,
a Delaware corporation ("Principal Underwriter").
It is hereby mutually agreed as follows:
1. The Fund hereby appoints Principal Underwriter a principal
underwriter of the Class A and Class C shares of beneficial interest of the Fund
("Shares") as an independent contractor upon the terms and conditions
hereinafter set forth. Except as the Fund may from time to time agree, Principal
Underwriter will act as agent for the Fund and not as principal.
2. Principal Underwriter will use its best efforts to find purchasers
for the Shares, to promote distribution of the Shares and may obtain orders from
brokers, dealers or other persons for sales of Shares to them. No such broker,
dealer or other person shall have any authority to act as agent for the Fund;
such dealer, broker or other person shall act only as principal in the sale of
Shares.
3. Sales of Shares by Principal Underwriter shall be at the applicable
public offering price determined in the manner set forth in the prospectus
and/or statement of additional information of the Fund current at the time of
the Fund's acceptance of the order for Shares; provided that Principal
Underwriter also shall have the right to sell Shares at net asset value, if such
sale is permissible under and consistent with applicable statutes, rules,
regulations and orders. All orders shall be subject to acceptance by the Fund,
and the Fund reserves the right in its sole discretion to reject any order
received. The Fund shall not be liable to anyone for failure to accept any
order.
4. On all sales of Shares, the Fund shall receive the current net asset
value, and Principal Underwriter shall be entitled to receive fees for sales of
Class A and C Shares as set forth on Exhibit B attached hereto and made a part
hereof.
5. The payment provisions of this Agreement shall be applicable to the
extent necessary to enable the Fund to comply with the obligation of the Fund to
pay Principal Underwriter in accordance with this Agreement in respect of Class
C Shares and shall remain in effect so long as any payments are required to be
made by the Fund pursuant to the irrevocable payment instruction under the
Master Sale Agreement between Principal Underwriter and Mutual Fund Funding
1994-1 dated as of December 6, 1996 (the "Master Sale Agreement").
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6. Payment to the Fund for Shares shall be in New York or Boston
Clearing House
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<PAGE>
funds received by Principal Underwriter within (3) business days after notice of
acceptance of the purchase order and the amount of the applicable public
offering price has been given to the purchaser. If such payment is not received
within such 3-day period, the Fund reserves the right, without further notice,
forthwith to cancel its acceptance of any such order. The Fund shall pay such
issue taxes as may be required by law in connection with the issue of the
Shares.
7. Principal Underwriter shall not make in connection with any sale or
solicitation of a sale of the Shares any representations concerning the Shares
except those contained in the then current prospectus and/or statement of
additional information covering the Shares and in printed information approved
by the Fund as information supplemental to such prospectus and statement of
additional information. Copies of the then current prospectus and statement of
additional information will be supplied by the Fund to Principal Underwriter in
reasonable quantities upon request.
8. Principal Underwriter agrees to comply with the Business Conduct
Rules of the National Association of Securities Dealers, Inc.
9. The Fund appoints Principal Underwriter as its agent to accept
orders for redemptions and repurchases of Shares at values and in the manner
determined in accordance with the then current prospectus and/or statement of
additional information of the Fund.
10. The Fund agrees to indemnify and hold harmless the Principal
Underwriter, its officers and Directors and each person, if any, who controls
the Principal Underwriter within the meaning of Section 15 of the Securities Act
of 1933 ("1933 Act"), against any losses, claims, damages, liabilities and
expenses (including the cost of any legal fees incurred in connection therewith)
which the Principal Underwriter, its officers, Directors or any such controlling
person may incur under the 1933 Act, under any other statute, at common law or
otherwise, arising out of or based upon
a) any untrue statement or alleged untrue statement of a
material fact contained in the Fund's registration statement,
prospectus or statement of additional information (including amendments
and supplements thereto), or
b) any omission or alleged omission to state a material fact
required to be stated in the Fund's registration statement, prospectus
or statement of additional information necessary to make the statements
therein not misleading, provided, however, that insofar as losses,
claims, damages, liabilities or expenses arise out of or are based upon
any such untrue statement or omission or alleged untrue statement or
omission made in reliance and in conformity with information furnished
to the Fund by the Principal Underwriter for use in the Fund's
registration statement, prospectus or statement of additional
information, such indemnification is not applicable. In no case shall
the Fund indemnify the Principal Underwriter or its controlling person
as to any amounts incurred for any liability arising out of or based
upon any action for which the Principal
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<PAGE>
Underwriter, its officers and Directors or any controlling person would
otherwise be subject to liability by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason
of the reckless disregard of its obligations and duties under this
Agreement.
11. The Principal Underwriter agrees to indemnify and hold harmless the
Fund, its officers, Trustees and each person, if any, who controls the Fund
within the meaning of Section 15 of the 1933 Act against any loss, claims,
damages, liabilities and expenses (including the cost of any legal fees incurred
in connection therewith) which the Fund, its officers, Trustees or any such
controlling person may incur under the 1933 Act, under any other statute, at
common law or otherwise arising out of the acquisition of any Shares by any
person which
a) may be based upon any wrongful act by the Principal
Underwriter or any of its employees or representatives, or
b) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in the Fund's registration
statement, prospectus or statement of additional information (including
amendments and supplements thereto), or any omission or alleged
omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such
statement or omission was made in reliance upon information furnished
or confirmed in writing to the Fund by the Principal Underwriter.
12. The Fund agrees to execute such papers and to do such acts and
things as shall from time to time be reasonably requested by Principal
Underwriter for the purpose of qualifying the Shares for sale under the
so-called "blue sky" laws of any state or for registering Shares under the 1933
Act or the Fund under the Investment Company Act of 1940 ("1940 Act"). Principal
Underwriter shall bear the expense of preparing, printing and distributing
advertising, sales literature, prospectuses and statements of additional
information. The Fund shall bear the expense of registering Shares under the
1933 Act and the Fund under the 1940 Act, qualifying Shares for sale under the
so-called "blue sky" laws of any state, the preparation and printing of
prospectuses, statements of additional information and reports required to be
filed with the Securities and Exchange Commission and other authorities, the
preparation, printing and mailing of prospectuses and statements of additional
information to shareholders of the Fund and the direct expenses of the issue of
Shares.
13. To the extent required by the Fund's 12b-1 Plans, Principal
Underwriter shall provide to the Board of Trustees of the Fund in connection
with such 12b-1 Plans, not less than quarterly, a written report of the amounts
expended pursuant to such 12b-1 Plans and the purposes for which such
expenditures were made.
14. This Agreement shall become effective as of the date of the
commencement of
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<PAGE>
operations of the Fund and shall remain in force for two years unless sooner
terminated or continued as provided below. This Agreement shall continue in
effect after such term if its continuance is specifically approved by a majority
of the Trustees of the Fund and a majority of the 12b-1 Trustees referred to in
the 12b-1 Plans of the Fund ("Rule 12b-1 Trustees") at least annually in
accordance with the 1940 Act and the rules and regulations thereunder.
This Agreement may be terminated at any time, without payment of any
penalty, by vote of a majority of any Rule 12b-1 Trustees or by a vote of a
majority of the Fund's outstanding Shares on not more than sixty (60) days
written notice to any other party to the Agreement; and shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).
15. This Agreement shall be construed in accordance with the laws of
The Commonwealth of Massachusetts. All sales hereunder are to be made, and title
to the Shares shall pass, in Boston, Massachusetts.
16. The Fund is a series of a Delaware business trust established under
a Declaration of Trust, as it may be amended from time to time. The obligations
of the Fund are not personally binding upon, nor shall recourse be had against,
the private property of any of the Trustees, shareholders, officers, employees
or agents of the Fund, but only the property of the Fund shall be bound.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized at Boston,
Massachusetts, as of the day and year first written above.
EVERGREEN MONEY MARKET TRUST
By: /s/ John J. Pileggi
-------------------------
Name: John J. Pileggi
Title: President
EVERGREEN DISTRIBUTOR, INC.
By: /s/ William J. Tomko
-------------------------
Name: William J. Tomko
Title: President
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<PAGE>
EXHIBIT A
EVERGREEN MONEY MARKET TRUST
Evergreen Money Market Fund
Evergreen Pennsylvania Tax Free Money Market Fund**
(To be redesignated Evergreen Pennsylvania Municipal Money Market Fund
January 12, 1998)
Evergreen Tax Exempt Money Market Fund
(To be redesignated Evergreen Municipal Money Market Fund January 12,
1998)
Evergreen Treasury Money Market Fund**
**Class C Shares authorized but not issued
<PAGE>
EXHIBIT B
TO
PRINCIPAL UNDERWRITING AGREEMENT
DATED
SEPTEMBER 18, 1997
Schedule of Payments
--------------------
Class A Shares Up to 0.25% annually of the average daily net asset
value of Class A shares of a Fund
A sales charge, the difference between the current
offering price of Shares, as set forth in the current
prospectus for each Fund, and the net asset value, less
any reallowance that is payable in accordance with the
sales charge schedule in effect at any given time with
respect to the Shares
Class C Shares Up to 1.00% annually of the average daily net asset
value of Class C shares of a Fund, consisting of 12b-1
fees at the annual rate of 0.75% of the average daily
net asset value of a Fund and service fees of 0.25% of
the average daily net asset value of a Fund
PRINCIPAL UNDERWRITING AGREEMENT
EVERGREEN MONEY MARKET TRUST
CLASS B SHARES
AGREEMENT, made as of the 18th day of September, 1997, by and between
Evergreen Money Market Trust (the "Trust") and Evergreen Distributor, Inc.
("EDI")
WHEREAS, The Trust, has adopted one or more Plans of Distribution with
respect to certain Classes of shares of its separate investment series (each a
"Plan", or collectively the "Plans") pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "1940 Act") which Plans authorize the Trust
on behalf of the Funds to enter into agreements regarding the distribution of
such Classes of shares (the "Shares") of the separate investment series of the
Trust (the "Funds") set forth on Exhibit A; and
WHEREAS, the Trust has agreed that Evergreen Distributor, Inc. (the
"Distributor"), a Delaware corporation, shall act as the distributor of the
Shares; and
WHEREAS, the Distributor agrees to act as distributor of the Shares for the
period of this Distribution Agreement (the "Agreement");
NOW, THEREFORE, in consideration of the agreements hereinafter contained,
it is agreed as follows:
1. SERVICES AS DISTRIBUTOR.
1.1. The Distributor agrees to use appropriate efforts to promote each Fund
and to solicit orders for the purchase of Shares and will undertake such
advertising and promotion as it believes reasonable in connection with such
solicitation. The services to be performed hereunder by the Distributor are
described in more detail in Section 7 hereof. In the event that the Trust
establishes additional investment series with respect to which it desires to
retain the Distributor to act as distributor for Class B shares hereunder, it
shall promptly notify the Distributor in writing. If the Distributor is willing
to render such services it shall notify the Trust in writing whereupon such
portfolio shall become a Fund and its Class B shares shall become Shares
hereunder.
1.2. All activities by the Distributor and its agents and employees as the
distributor of Shares shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations made or
adopted pursuant to the 1940 Act by the Securities and Exchange Commission (the
"Commission") or any securities association registered under the Securities
Exchange Act of 1934, as amended.
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<PAGE>
1.3 In selling the Shares, the Distributor shall use its best efforts in
all respects duly to conform with the requirements of all federal and state laws
relating to the sale of such securities. Neither the Distributor, any selected
dealer or any other person is authorized by the Trust to give any information or
to make any representations, other than those contained in the Trust's
registration statement (the "Registration Statement") or related Fund prospectus
and statement of additional information ("Prospectus and Statement of Additional
Information") and any sales literature specifically approved by the Trust.
1.4 The Distributor shall adopt and follow procedures, as approved by the
officers of the Trust, for the confirmation of sales to investors and selected
dealers, the collection of amounts payable by investors and selected dealers on
such sales, and the cancellation of unsettled transactions, as may be necessary
to comply with the requirements of the National Association of Securities
Dealers, Inc. (the "NASD"), as such requirements may from time to time exist.
1.5. The Distributor will transmit any orders received by it for purchase
or redemption of Shares to the transfer agent and custodian for the applicable
Fund.
1.6. Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, or by abnormal circumstances of any kind, the
Trust's officers may decline to accept any orders for, or make any sales of
Shares until such time as those officers deem it advisable to accept such orders
and to make such sales.
1.7. The Distributor will act only on its own behalf as principal if it
chooses to enter into selling agreements with selected dealers or others. The
Distributor shall offer and sell Shares only to such selected dealers as are
members, in good standing, of the NASD.
1.8 The Distributor agrees to adopt compliance standards, in a form
satisfactory to the Trust, governing the operation of the multiple class
distribution system under which Shares are offered.
2. DUTIES OF THE TRUST.
2.1. The Trust agrees at its own expense to execute any and all documents
and to furnish, at its own expense, any and all information and otherwise to
take all actions that may be reasonably necessary in connection with the
qualification of Shares for sale in such states as the Trust and the Distributor
may designate.
2.2. The Trust shall furnish from time to time, for use in connection with
the sale of Shares such information with respect to the Funds and the Shares as
the Distributor may reasonably request; and the Trust warrants that any such
information shall be true and correct. Upon request, the Trust shall also
provide or cause to be provided to the Distributor: (a) unaudited
23939
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<PAGE>
semi-annual statements of each Fund's books and accounts, (b) quarterly earnings
statements of each Fund, (c) a monthly itemized list of the securities in each
Fund, (d) monthly balance sheets as soon as practicable after the end of each
month, and (e) from time to time such additional. information regarding each
Fund's financial condition as the Distributor may reasonably request.
3. REPRESENTATIONS OF THE TRUST.
3.1. The Trust represents to the Distributor that it is registered under
the 1940 Act and that the Shares of each of the Funds have been registered under
the Securities Act of 1933, as amended (the "Securities Act"). The Trust will
file such amendments to its Registration Statement as may be required and will
use its best efforts to ensure that such Registration Statement remains
accurate.
4. INDEMNIFICATION.
4.1 The Trust shall indemnify and hold harmless the Distributor, its
Officers and Directors, and each person, if any, who controls the Distributor
within the meaning of Section 15 of the Securities Act against any loss,
liability, claim, damage or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damage or expense
and reasonable counsel fees incurred in connection therewith), which the
Distributor or such Officer and Director or controlling person may incur under
the Securities Act or under common law or otherwise, arising out of or based
upon any untrue statement, or alleged untrue statement, of a material fact
contained in the Registration Statement, as from time to time amended or
supplemented, any prospectus or annual or interim report to shareholders of the
Trust, or arising out of or based upon any omission, or alleged omission, to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, information furnished to the Trust in
connection therewith by or on behalf of the Distributor, provided, however, that
in no case (i) is the indemnification of the Trust in favor of the Distributor,
its Officer and Directors, or any such controlling persons to be deemed to
protect such Distributor, any Officer or Director thereof, or any such
controlling persons thereof against any liability to the Trust of each Fund or
any securities holders thereof to which the Distributor any Officer or Director
thereof, or any such controlling persons would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of their
duties or by reason of the reckless disregard of their obligations and duties
under this Agreement; or (ii) is the Trust to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made against the
Distributor or any such controlling persons, unless the Distributor or such
controlling person, as the case maybe, shall have notified the Trust in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
Distributor or such controlling persons (or after the Distributor or such
controlling persons
23939
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<PAGE>
shall have received notice of such service on any designated agent), but failure
to notify the Trust of any such claim shall not relieve it from any liability
which it may have to the person against whom such action it brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Trust will be entitled to participate at its own expense in the defense, or, if
it so elects, to assume the defense of any suit brought to enforce any such
liability, but if the Trust elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or such
controlling person or persons, defendant or defendants in the suit. In the event
the Trust elects to assume the defense of any such suit and retain such counsel,
the Distributor or such controlling person or persons, defendant or defendants
in the suit, shall bear the fees and expenses of any additional counsel retained
by them, but, in case the Trust does not elect to assume the defense of any such
suit, it will reimburse the Distributor or such controlling person or persons,
defendant or defendants in the suit, for the reasonable fees and expenses of any
counsel retained by them. The Trust shall promptly notify the Distributor of the
commencement of any litigation or proceeding against it or any of its officers
or directors in connection with the issuance or sale of any of the shares.
4.2 The Distributor shall indemnify and hold harmless the Trust and each of
its directors and officers and each person, if any, who controls the Trust
against any loss, liability, claim, damage or expense described in the foregoing
indemnity contained in paragraph 4.1, but only with respect to statements or
omissions made in reliance upon , and in conformity with, information furnished
to the Trust in writing by or on behalf of the Distributor for uses in
connection with the Registration Statement, as from time to time amended, or the
annual or interim reports to shareholders. In case any action shall be brought
against the Trust or any persons so indemnified, in respect of which indemnity
may be sought against the Distributor, the Distributor shall have rights and
duties given to the Trust, and the Trust and each person so indemnified shall
have the rights and duties given to the Distributor by the provisions of
paragraph 4.1.
5. OFFERING OF SHARES.
5.1. None of the Shares shall be offered by either the Distributor or the
Trust under any of the provisions of this Agreement, and no orders for the
purchase or sale of Shares hereunder shall be accepted by the Trust, if and so
long as the effectiveness of the registration statement then in effect or any
necessary amendments thereto shall be suspended under any of the provisions of
the Securities Act or if and so long as a current prospectus and statement of
additional information as required by Section 10(b)(2) of the Securities Act, as
amended, is not on file with the Commission; provided, however, that nothing
contained in this paragraph 5.1 shall in any way restrict or have any
application to or bearing upon the Trust's obligation to repurchase Shares from
any shareholder in accordance with the provisions of the prospectus of each Fund
or the Trust's prospectus or Declaration of Trust.
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<PAGE>
6. AMENDMENTS TO REGISTRATION STATEMENT AND OTHER MATERIAL EVENTS.
6.1. The Trust agrees to advise the Distributor as soon as reasonably
practical by a notice in writing delivered to the Distributor: (a) of any
request or action taken by the Commission which is material to the Distributor's
obligations hereunder or (b) any material fact of which the Trust becomes aware
which affects the Distributor's obligations hereunder.
For purposes of this section, informal requests by or acts of the Staff of
the Commission shall not be deemed actions of or requests by the Commission.
7. COMPENSATION OF DISTRIBUTOR.
7.1 (a) On all sales of Shares of the Fund shall receive the current net
asset value. The Trust in respect of each Fund shall pay to the Distributor the
Distributor's Allocable Portion (as defined below) of a fee (the "Distribution
Fee") in respect of the Shares of each such Fund at the rate of .75% per annum
of the average daily net asset value of the Shares of such Fund, subject to the
limitation on the maximum amount of such fees under the Business Conduct Rules
as applicable to such Distribution Fee on the date hereof, as compensation to
the Distributor for its services in connection with the offer and sale of Shares
and shall also pay to the Distributor contingent deferred sales charges ("CDSC")
as set forth in the Fund's current Prospectus and Statement of Additional
Information, and as required by this Agreement. The Distributor shall also
receive payments consisting of shareholder service fees ("Service Fees") at the
rate of .25% per annum of the average daily net asset value of the Shares. The
Distributor may allow all or a part of said Distribution Fee and CDSCs received
by it (and not paid to others as hereinafter provided) to such brokers, dealers
or other persons as Distributor may determine. The Distributor may also pay
Service Fees to brokers, dealers or other persons providing services to
shareholders.
(b) The provisions of this Section 7.1 shall be applicable to the extent
necessary to enable the Trust to comply with its obligations in respect of each
Fund to pay Distributor its Allocable Portion (as hereinafter described) of the
Distribution Fee paid in respect of Shares of such Fund, and shall remain in
effect with respect to the Shares so long as any payments are required to be
made by the Trust with respect to the Shares of a Fund pursuant to the
irrevocable payment instructions as defined in the Purchase and Sale Agreement
dated as of May 31, 1995 (as amended and supplemented, the "Purchase Agreement")
among the Distributor, Evergreen Keystone Investment Services, Inc., Citibank,
N.A. and Citicorp North America, Inc. and the Amended and Restated Master Sale
Agreement between the Distributor and Mutual Fund Funding 1994-1 dated as of May
5, 1997, as amended and supplemented from time to time (the "Master Sale
Agreement") (the "Irrevocable Payment Instructions").
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<PAGE>
(c) As promptly as possible after the first Business Day (as defined in the
Prospectus) following the twentieth day of each month, the Trust shall pay to
the Distributor the Distributor's Allocable Portion of the Distribution Fee, any
CDSCs and any Service Fees that may be due in respect of each Fund.
(d) The Distributor's Allocable Portion of the Distribution Fee paid by the
Trust in respect of Shares of a Fund shall mean the portion of the Asset Based
Sales Charge allocable to Distributor Shares of such Fund (as defined in
Schedule I to this Agreement) in accordance with Schedule I hereto. The Trust
agrees to cause its transfer agent to maintain the records and arrange for the
payments on behalf of the trust in respect of each Fund at the times and in the
amounts and to the accounts required by Schedule I hereto, as the same may be
amended from time to time. It is acknowledged and agreed that by virtue of the
operation of Schedule I hereto the Distributor's Allocable Portion of the
Distribution Fee paid by the Trust in respect of Shares of each Fund, may, to
the extent provided in Schedule I hereto, take into account the Distribution Fee
payable by such Fund in respect of other existing and future classes and/or
sub-classes of shares of such Fund which would be treated as "Shares: under
Schedule I hereto. The trust will limit amounts paid to any subsequent principal
underwriters of Shares of a Fund to the portion of the Asset Based Sales Charge
paid in respect of Shares attributable to such Shares which are Post-Distributor
Shares (as defined in Schedule I hereto) in accordance with Schedule I hereto.
The Trust shall cause the transfer agent and sub-transfer agents for each
Fund to withhold from redemption proceeds payable to holders of Shares of such
Fund on redemption thereof the CDSCs payable upon redemption thereof as set
forth in the then current Prospectus and/or Statement of Additional Information
of such Fund and to pay to the Distributor the Distributor's Allocable Portion
of such CDSCs paid in respect of Class B Shares of such Fund which shall be
equal to the portion thereof allocable to Distributor Shares of such Fund (as
defined in Schedule I hereto) in accordance with Schedule I hereto.
(e) The Distributor shall be considered to have completely earned the right
to the payment of its Allocable Portion of the Distribution Fee and the right to
payment over to it of its Allocable Portion of the CDSC in respect of Shares of
a Fund as provided for hereby upon the completion of the sales of each
Commission Share of such Fund (as defined in Schedule I hereto) taken into
account as a Distributor Share in computing the Distributor's Allocable Portion
in accordance with Schedule I hereto.
(f) Except as provided in Section 7(g) below in respect of the Distribution
Fee only, the Trust's obligation to pay the Distributor the Distribution Fee in
respect of a Fund and to pay over to the Distributor CDSCs provided for hereby
shall be absolute and unconditional and shall not be subject to dispute, offset,
counterclaim or any defense whatsoever (it being understood that nothing in this
sentence shall be deemed a waiver by the trust of its right separately to pursue
any claims it may have against the Distributor with respect to a Fund and
enforce such claims
23939
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<PAGE>
against any assets (other than the Distributor's right to its Allocable Portion
of the Distribution Fee and CDSCs (the "Collection Rights")) of the Distributor.
(g) Notwithstanding anything in this Agreement to the contrary, the Trust
in respect of each Fund shall pay to the Distributor its Allocable Portion of
the Distribution Fee provided for hereby notwithstanding its termination as
Distributor for the Shares of such Fund or any termination of this Agreement and
such payment of such Distribution fee, and that obligation and the method of
computing such payment, shall not be changed or terminated except to the extent
required by any change in applicable law, including, without limitation, the
1940 Act, the Rules promulgated thereunder by the Securities and Exchange
Commission and the Business Conduct Ruled, in each case enacted or promulgated
after May 1, 1997, or in connection with a Complete Termination (as hereinafter
defined). For the purposes of this Section 7, "Complete Termination" means in
respect of a Fund a termination of such Fund's Rule 12b-1 plan for Class B
Shares involving the cessation of payments of the Distribution Fee, and the
cessation of payments of Distribution Fee pursuant to every other Rule 12b-1
plan of such Fund for every existing or future B-Class-of-Shares (as hereinafter
defined) and the Fund's discontinuance of the offering of every existing or
future B-Class-of-Shares, which conditions shall be deemed satisfied when they
are first complied with hereafter and so long thereafter as they are complied
with prior to the date upon which all of the Shares which are Distributor Shares
pursuant to Schedule I hereto shall have been redeemed or converted. For
purposes of this Section 7, the term B-Class-of-Shares means the Shares of each
Fund and each other class of shares of such Fund hereafter issued which would be
treated as Shares under Schedule I hereto or which has substantially similar
economic characteristics to the B Class of Shares taking into account the total
sales charge, CDSC or other similar charges borne directly or indirectly by the
holder of the shares of such class. The parties agree that the existing C Class
of Shares of any Fund does not have substantially similar economic
characteristics to the B-Class-of-Shares taking into account the total sales
charges, CDSCs or other similar charges borne directly or indirectly by the
holder of such shares. For purposes of clarity the parties to the Agreement
hereby state that they intend that a new installment load class of shares which
may be authorized by amendment to Rule 6(c)-10 under the 1940 Act will be
considered to be a B-class-of-Shares if it has economic characteristics
substantially similar to the economic characteristics of the existing Class B
Shares taking into account the total sale charge, CDCSs or other similar charges
borne directly or indirectly by the holder of such charges and will not be
considered to be a B-Class-of-Shares if it has economic characteristics
substantially similar to the economic characteristics of the existing Class C
shares of the Fund taking into account the total sales charge, CDSCs or other
similar charges home directly or indirectly by the holder of such shares.
(h) The Distributor may assign, sell or otherwise transfer any part of its
Allocable Portions of the Distribution Fees and CDSCs and obligations of the
Trust with respect to a Fund related thereto (but not the Distributor's
obligations to the Trust with respect to such Fund provided for in this
Agreement) to any person (an "assignee") and any such assignment shall be
effective upon written notice to the Trust by the Distributor. In connection
23939
-7-
<PAGE>
therewith the Trust shall pay all or any amounts in respect of its Allocable
Portions directly to the Assignee thereof as directed in a writing by the
Distributor in the Irrevocable Payment Instructions, as the same may be amended
from time to time with the consent of the Trust, and the trust shall be without
liability to any person of it pays such amounts when and as so directed, except
for underpayments of amounts actually due without any amount payable as
consequential or other damages due to such underpayment and without interest
except to the extent that delay in payment of Distribution Fee and CDSCs results
in an increase in the maximum amount allowable under the NASD Business Conduct
Rules, which increases daily at a rate of prime plus one percent per annum.
Each Fund will not, to the extent it may otherwise be empowered to do so,
change or waive any CDSC with respect to Class B Shares, except as provided in
the Fund's Prospectus or Statement of Additional Information without the
Distributor's or Assignee's consent, as applicable. Notwithstanding anything to
the contrary in this Agreement or any termination of this Agreement or the
Distributor as principal underwriter for the Shares of the Funds, the
Distributor shall be entitled to be paid its Allocable Portion of the CDSCs
whether or not a Fund's Rule 12b- 1 plan for B Shares is terminated and whether
or not any such termination is a Complete Termination, as defined above.
(i) Under this Agreement, the Distributor shall: (i) make payments to
securities dealers and others engaged in the sale of Shares; (ii) make payments
of principal and interest in connection with the financing of commission
payments made by the Distributor in connection with the sale of Shares (iii)
incur the expense of obtaining such support services, telephone facilities and
shareholder services as may reasonably be required in connection with its duties
hereunder; (iv) formulate and implement marketing and promotional activities,
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (v) prepare, print and
distribute sales literature; (vi) prepare, print and distribute Prospectuses of
the Funds and reports for recipients other than existing shareholders of the
Funds; and (vii) provide to the Trust such information, analyses and opinions
with respect to marketing and promotional activities as the Trust may, from time
to time, reasonably request.
(j) The Distributor shall prepare and deliver reports to the Treasurer of
the Trust on a regular, at least monthly, basis, showing the distribution
expenditures incurred by the Distributor in connection with its services
rendered pursuant to this Agreement and the Plan and the purposes therefor, as
well as any supplemental reports as the Trustees, from time to time, may
reasonably request.
(k) The Distributor may retain the difference between the current offering
price of Shares, as set forth in the current prospectus for each Fund, and net
asset value, less any reallowance that is payable in accordance with the sales
charge schedule in effect at any given time with respect to the Shares.
23939
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<PAGE>
(l) The Distributor may retain any CDSCs payable with respect to the
redemption of any Shares, provided however, that any CDSCs received by the
Distributor shall first be applied by the Distributor or its Assignee to any
outstanding amounts payable or which may in the future be payable by the
Distributor or its Assignee under financing arrangements entered into in
connection with the payment of commissions on the sale of Shares.
8. CONFIDENTIALITY, NON-EXCLUSIVE AGENCY.
8.1. The Distributor agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information relative to the Funds and its prior, present or potential
shareholders, and not to use such records and information for any purpose other
than performance of its responsibilities and to obtain approval in writing by
the Trust, which approval shall not be unreasonably withheld and may not be
withheld where the Distributor may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust.
8.2. Nothing contained in this Agreement shall prevent the Distributor, or
any affiliated person of the Distributor, from performing services similar to
those to be performed hereunder for any other person, firm, or corporation or
for its or their own accounts or for the accounts of others.
9. TERM.
9.1. This Agreement shall continue for two years from the date of
commencement of operations and thereafter for successive annual periods,
provided such continuance is specifically approved at least annually by (i) a
vote of the majority of the Trustees of the Trust and (ii) a vote of the
majority of those Trustees of the Trust who are not interested persons of the
Trust and who have no direct or indirect financial interest in the operation of
the Plan, in this Agreement or any agreement related to the Plan (the
"Independent Trustees") by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable at any time,
with respect to the Trust, without penalty, (a) on not less than 60 days'
written notice by vote of a majority of the Independent Trustees, or by vote of
the holders of a majority of the outstanding voting securities of the Trust, or
(b) upon not less than 60 days' written notice by the Distributor. This
Agreement may remain in effect with respect to a Fund even if it has been
terminated in accordance with this paragraph with respect to one or more other
Funds of the Trust. This Agreement will also terminate automatically in the
event of its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons," and "assignment" shall
have the same meaning as such terms have in the 1940 Act.)
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<PAGE>
10. MISCELLANEOUS.
10.1. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts. All sales hereunder are to be made, and title to the Shares shall
pass, in Boston, Massachusetts.
10.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their constructions or effect.
10.3 The obligations of the Trust hereunder are not personally binding
upon, nor shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Trust and only the Trust's
property shall be bound.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below.
EVERGREEN MONEY MARKET TRUST
By: /s/ John J. Pileggi
-------------------------
Name: John J. Pileggi
Title: President
EVERGREEN DISTRIBUTOR, INC.
By: /s/ J. David Huber
-------------------------
Name: J. David Huber
Title: President
<PAGE>
EXHIBIT A
EVERGREEN MONEY MARKET TRUST
Evergreen Money Market Fund
Evergreen Pennsylvania Tax Free Money Market Fund
(To be redesignated Evergreen Pennsylvania Municipal Money Market Fund
January 12, 1998)
Evergreen Tax Exempt Money Market Fund
(To be redesignated Evergreen Municipal Money Market Fund January 12,
1998)
Evergreen Treasury Money Market Fund
PRINCIPAL UNDERWRITING AGREEMENT
EVERGREEN MONEY MARKET TRUST
CLASS Y SHARES
AGREEMENT made this 18th day of September, 1997 by and between
Evergreen Money Market Trust on behalf of its series listed on Exhibit A
attached hereto (such Trust and series referred to herein as "Fund" individually
or "Funds" collectively) and Evergreen Distributor, Inc., a Delaware corporation
("Principal Underwriter").
It is hereby mutually agreed as follows:
1. The Fund hereby appoints Principal Underwriter a principal
underwriter of the Class Y shares of beneficial interest of the Fund ("Shares")
as an independent contractor upon the terms and conditions hereinafter set
forth. Except as the Fund may from time to time agree, Principal Underwriter
will act as agent for the Fund and not as principal.
2. Principal Underwriter will use its best efforts to find purchasers
for the Shares, to promote distribution of the Shares and may obtain orders from
brokers, dealers or other persons for sales of Shares to them. No such brokers,
dealers or other persons shall have any authority to act as agent for the Fund;
such brokers, dealers or other persons shall act only as principal in the sale
of Shares.
3. Sales of Shares by Principal Underwriter shall be at the applicable
public offering price determined in the manner set forth in the prospectus
and/or statement of additional information of the Fund current at the time of
the Fund's acceptance of the order for Shares. Principal Underwriter shall have
the right to sell Shares at net asset value, if such sale is permissible under
and consistent with applicable statutes, rules, regulations and orders. All
orders shall be subject to acceptance by the Fund, and the Fund reserves the
right, in its sole discretion, to reject any order received. The Fund shall not
be liable to anyone for failure to accept any order.
4. On all sales of Shares, the Fund shall receive the current net asset
value.
5. Payment to the Fund for Shares shall be in New York or Boston
Clearing House funds received by Principal Underwriter within three (3) business
days after notice of acceptance of the purchase order and the amount of the
applicable public offering price has been given to the purchaser. If such
payment is not received within such three-day period, the Fund reserves the
right, without further notice, forthwith to cancel its acceptance of any such
order. The Fund shall pay such issue taxes as may be required by law in
connection with the issuance of the Shares.
6. Principal Underwriter shall not make in connection with any sale or
solicitation of a sale of the Shares any representations concerning the Shares
except those contained in the then
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1
<PAGE>
current prospectus and/or statement of additional information covering the
Shares and in printed
information approved by the Fund as information supplemental to such prospectus
and statement of additional information. Copies of the then current prospectus
and statement of additional information and any such printed supplemental
information will be supplied by the Fund to Principal Underwriter in reasonable
quantities upon request.
7. Principal Underwriter agrees to comply with the Business Conduct
Rules of the National Association of Securities Dealers, Inc.
8. The Fund appoints Principal Underwriter as its agent to accept
orders for redemptions and repurchases of Shares at values and in the manner
determined in accordance with the then current prospectus and/or statement of
additional information of the Fund.
9. The Fund agrees to indemnify and hold harmless the Principal
Underwriter, its officers and Directors and each person, if any, who controls
the Principal Underwriter within the meaning of Section 15 of the Securities Act
of 1933 ("1933 Act"), against any losses, claims, damages, liabilities and
expenses (including the cost of any legal fees incurred in connection therewith)
which the Principal Underwriter, its officers, Directors or any such controlling
person may incur under the 1933 Act, under any other statute, at common law or
otherwise, arising out of or based upon
a) any untrue statement or alleged untrue statement of a
material fact contained in the Fund's registration statement,
prospectus or statement of additional information (including amendments
and supplements thereto), or
b) any omission or alleged omission to state a material fact
required to be stated in the Fund's registration statement, prospectus
or statement of additional information necessary to make the statements
therein not misleading, provided, however, that insofar as losses,
claims, damages, liabilities or expenses arise out of or are based upon
any such untrue statement or omission or alleged untrue statement or
omission made in reliance and in conformity with information furnished
to the Fund by the Principal Underwriter for use in the Fund's
registration statement, prospectus or statement of additional
information, such indemnification is not applicable. In no case shall
the Fund indemnify the Principal Underwriter or its controlling person
as to any amounts incurred for any liability arising out of or based
upon any action for which the Principal Underwriter, its officers and
Directors or any controlling person would otherwise be subject to
liability by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of the
reckless disregard of its obligations and duties under this Agreement.
10. The Principal Underwriter agrees to indemnify and hold harmless the
Fund, its officers, Trustees and each person, if any, who controls the Fund
within the meaning of Section
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2
<PAGE>
15 of the 1933 Act against any loss, claims, damages, liabilities and expenses
(including the cost
of any legal fees incurred in connection therewith) which the Fund, its
officers, Trustees or any such controlling person may incur under the 1933 Act,
under any other statute, at common law or otherwise arising out of the
acquisition of any Shares by any person which
a) may be based upon any wrongful act by the Principal
Underwriter or any of its employees or representatives, or
b) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in the Fund's registration
statement, prospectus or statement of additional information (including
amendments and supplements thereto), or any omission or alleged
omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such
statement or omission was made in reliance upon information furnished
or confirmed in writing to the Fund by the Principal Underwriter.
11. The Fund agrees to execute such papers and to do such acts and
things as shall from time to time be reasonably requested by Principal
Underwriter for the purpose of qualifying the Shares for sale under the
so-called "blue sky" laws of any state or for registering Shares under the 1933
Act or the Fund under the Investment Company Act of 1940 ("1940 Act"). Principal
Underwriter shall bear the expense of preparing, printing and distributing
advertising, sales literature, prospectuses and statements of additional
information. The Fund shall bear the expense of registering Shares under the
1933 Act and the Fund under the 1940 Act, qualifying Shares for sale under the
so-called "blue sky" laws of any state, the preparation and printing of
prospectuses, statements of additional information and reports required to be
filed with the Securities and Exchange Commission and other authorities, the
preparation, printing and mailing of prospectuses and statements of additional
information to shareholders of the Fund, and the direct expenses of the issuance
of Shares.
12. This Agreement shall become effective as of the date of the
commencement of operations of the Fund and shall remain in force for two years
unless sooner terminated or continued as provided below. This Agreement shall
continue in effect after such term if its continuance is specifically approved
by a majority of the Trustees of the Fund at least annually in accordance with
the 1940 Act and the rules and regulations thereunder.
This Agreement may be terminated at any time, without payment of any
penalty, by vote of a majority of the Trustees or by a vote of a majority of the
Fund's outstanding Shares on not more than sixty (60) days written notice to any
other party to the Agreement; and shall terminate automatically in the event of
its assignment (as defined in the 1940 Act).
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<PAGE>
13. This Agreement shall be construed in accordance with the laws of
The Commonwealth of Massachusetts. All sales hereunder are to be made, and title
to the Shares shall pass, in Boston, Massachusetts.
14. The Fund is a series of a Delaware business trust established under
a Declaration of Trust, as it may be amended from time to time. The obligations
of the Fund are not personally binding upon, nor shall recourse be had against,
the private property of any of the Trustees, shareholders, officers, employees
or agents of the Fund, but only the property of the Fund shall be bound.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized at Boston,
Massachusetts, as of the day and year first written above.
EVERGREEN MONEY MARKET TRUST
By: /s/ John J. Pileggi
---------------------------
Name: John J. Pileggi
Title: President
EVERGREEN DISTRIBUTOR, INC.
By: /s/ William J. Tomko
---------------------------
Name: William J. Tomko
Title: President
<PAGE>
EXHIBIT A
EVERGREEN MONEY MARKET TRUST
Evergreen Money Market Fund
Evergreen Pennsylvania Tax Free Money Market Fund
(To be redesignated Evergreen Pennsylvania Municipal Money Market Fund
January 12, 1998)
Evergreen Tax Exempt Money Market Fund
(To be redesignated Evergreen Municipal Money Market Fund January 12,
1998)
Evergreen Treasury Money Market Fund
CUSTODIAN AGREEMENT
This Agreement between EVERGREEN MONEY MARKET TRUST, a business trust
organized and existing under the laws of Delaware with its principal place of
business at 200 Berkeley Street, Boston, Massachusetts 02116 (the "Fund"), and
STATE STREET BANK and TRUST COMPANY, a Massachusetts trust company with its
principal place of business at 225 Franklin Street, Boston, Massachusetts 02110
(the "Custodian"),
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund intends that this Agreement be applicable to the
series set forth on Schedule C hereto (such series together with all other
series subsequently established by the Fund and made subject to this Agreement
in accordance with Section 18, be referred to herein as the "Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Fund's
Declaration of Trust. The Fund on behalf of the Portfolio(s) agrees to deliver
to the Custodian all securities and cash of the Portfolios, and all payments of
income, payments of principal or capital distributions received by it with
respect to all securities owned by the Portfolio(s) from time to time, and the
cash consideration received by it for such new or treasury shares of beneficial
interest of the Fund representing interests in the Portfolios ("Shares") as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of a Portfolio held or received by the Portfolio and not delivered
to the Custodian.
Upon receipt of "Proper Instructions" (as such term is defined in
Section 6 hereof), the Custodian shall on behalf of the applicable Portfolio(s)
from time to time employ one or more sub-custodians located in the United
States, but only in accordance with an applicable vote by the Board of Trustees
of the Fund (the "Board of Trustees") on behalf of the applicable Portfolio(s),
and provided that the Custodian shall have no more or less responsibility or
liability to the Fund on
<PAGE>
account of any actions or omissions of any sub-custodian so employed than any
such sub-custodian has to the Custodian. The Custodian may employ as
sub-custodian for the Fund's foreign securities on behalf of the applicable
Portfolio(s) the foreign banking institutions and foreign securities
depositories designated in Schedules A and B hereto but only in accordance with
the applicable provisions of Sections 3 and 4.
SECTION 2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY
THE CUSTODIAN IN THE UNITED STATES
SECTION 2.1 HOLDING SECURITIES. The Custodian shall hold and physically
segregate for the account of each Portfolio all non-cash property, to be held by
it in the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to Section
2.8 in a clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the Treasury (each, a
"U.S. Securities System") and (b) commercial paper of an issuer for which State
Street Bank and Trust Company acts as issuing and paying agent ("Direct Paper")
which is deposited and/or maintained in the Direct Paper System of the Custodian
(the "Direct Paper System") pursuant to Section 2.9.
SECTION 2.2 DELIVERY OF SECURITIES. The Custodian shall release and
deliver domestic securities owned by a Portfolio held by the Custodian or in a
U.S. Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only upon
receipt of Proper Instructions on behalf of the applicable Portfolio, which may
be continuing instructions when deemed appropriate by the parties, and only in
the following cases:
1) Upon sale of such securities for the account of the Portfolio
and receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;
3) In the case of a sale effected through a U.S. Securities
System, in accordance with the provisions of Section 2.8
hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee
<PAGE>
name of any agent appointed pursuant to Section 2.7 or into
the name or nominee name of any sub-custodian appointed
pursuant to Section 1; or for exchange for a different number
of bonds, certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in
any such case, the new securities are to be delivered to the
Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; provided that in any such case, the Custodian shall
have no responsibility or liability for any loss arising from
the delivery of such securities prior to receiving payment for
such securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Portfolio, but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrowing by
the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, but only
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance
<PAGE>
with the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Portfolio
of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered under
the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or organizations,
regarding account deposits in connection with transactions by
the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent for the
Fund (the "Transfer Agent") for delivery to such Transfer
Agent or to the holders of Shares in connection with
distributions in kind, as may be described from time to time
in the currently effective prospectus and statement of
additional information of the Fund related to the Portfolio
(the "Prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15) For any other proper trust purpose, but only upon receipt of,
in addition to Proper Instructions from the Fund on behalf of
the applicable Portfolio, a copy of a resolution of the Board
of Trustees or of the Executive Committee thereof signed by an
officer of the Fund and certified by the Secretary or an
Assistant Secretary thereof (a "Certified Resolution"),
specifying the securities of the Portfolio to be delivered,
setting forth the purpose for which such delivery is to be
made, declaring such purpose to be a proper trust purpose, and
naming the person or persons to whom delivery of such
securities shall be made.
SECTION 2.3 REGISTRATION OF SECURITIES. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the Portfolio
or of any nominee of the Custodian which nominee shall be assigned exclusively
to the Portfolio, unless the Fund has authorized in writing the appointment of a
nominee to be used in common with other registered investment companies having
the same investment adviser as the Portfolio, or in the name or nominee name of
any agent appointed pursuant to Section 2.7 or in the name or nominee name of
any sub-custodian appointed pursuant to Section 1. All securities accepted by
the Custodian on behalf of the Portfolio under the terms of this Agreement shall
be in "street name" or other good delivery form. If, however, the Fund directs
the Custodian to maintain securities in "street name", the Custodian shall
utilize its best efforts only to timely collect income due the Fund on such
securities and to notify the Fund on a best efforts basis only of relevant
corporate actions including, without limitation, pendency of calls, maturities,
tender or exchange offers.
SECTION 2.4 BANK ACCOUNTS. The Custodian shall open and maintain
a separate bank account or accounts in the United States in the name of each
Portfolio of the Fund, subject only to
<PAGE>
draft or order by the Custodian acting pursuant to the terms of this Agreement,
and shall hold in such account or accounts, subject to the provisions hereof,
all cash received by it from or for the account of the Portfolio, other than
cash maintained by the Portfolio in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940, as amended
(the "1940 Act"). Funds held by the Custodian for a Portfolio may be deposited
by it to its credit as Custodian in the Banking Department of the Custodian or
in such other banks or trust companies as it may in its discretion deem
necessary or desirable; provided, however, that every such bank or trust company
shall be qualified to act as a custodian under the 1940 Act and that each such
bank or trust company and the funds to be deposited with each such bank or trust
company shall on behalf of each applicable Portfolio be approved by vote of a
majority of the Board of Trustees. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
SECTION 2.5 COLLECTION OF INCOME. Subject to the provisions of Section
2.3, the Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which each
Portfolio shall be entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely basis all income and other
payments with respect to bearer domestic securities if, on the date of payment
by the issuer, such securities are held by the Custodian or its agent thereof
and shall credit such income, as collected, to such Portfolio's custodian
account. Without limiting the generality of the foregoing, the Custodian shall
detach and present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest when due on
securities held hereunder. Income due each Portfolio on securities loaned
pursuant to the provisions of Section 2.2 (10) shall be the responsibility of
the Fund. The Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or data as may
be necessary to assist the Fund in arranging for the timely delivery to the
Custodian of the income to which the Portfolio is properly entitled.
SECTION 2.6 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions
on behalf of the applicable Portfolio, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay out monies of a
Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Portfolio but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian (or
any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the 1940 Act
to act as a custodian and has been designated by the Custodian
as its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
U.S. Securities System, in accordance with the conditions
<PAGE>
set forth in Section 2.8 hereof; (c) in the case of a purchase
involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.9; (d) in the case of
repurchase agreements entered into between the Fund on behalf
of the Portfolio and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against delivery
of the securities either in certificate form or through an
entry crediting the Custodian's account at the Federal Reserve
Bank with such securities or (ii) against delivery of the
receipt evidencing purchase by the Portfolio of securities
owned by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from
the Portfolio or (e) for transfer to a time deposit account of
the Fund in any bank, whether domestic or foreign; such
transfer may be effected prior to receipt of a confirmation
from a broker and/or the applicable bank pursuant to Proper
Instructions from the Fund as defined herein;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued as set forth
in Section 5 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares declared pursuant
to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper trust purpose, but only upon receipt of,
in addition to Proper Instructions from the Fund on behalf of
the Portfolio, a copy of a Certified Resolution specifying the
amount of such payment, setting forth the purpose for which
such payment is to be made, declaring such purpose to be a
proper trust purpose, and naming the person or persons to whom
such payment is to be made.
SECTION 2.7 APPOINTMENT OF AGENTS. The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions of this Section 2 as
the Custodian may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its responsibilities
or liabilities hereunder.
SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The
Custodian may deposit and/or maintain securities owned by a Portfolio in a
clearing agency registered with the
<PAGE>
United States Securities and Exchange Commission (the "SEC") under Section 17A
of the Exchange Act , which acts as a securities depository, or in the
book-entry system authorized by the U.S. Department of the Treasury and certain
federal agencies, collectively referred to herein as "U.S. Securities System" in
accordance with applicable Federal Reserve Board and SEC rules and regulations,
if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are
represented in an account of the Custodian in the U.S.
Securities System (the "U.S. Securities System Account") which
account shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a U.S. Securities System
shall identify by book-entry those securities belonging to the
Portfolio;
3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the
U.S. Securities System that such securities have been
transferred to the U.S. Securities System Account, and (ii)
the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the
Portfolio. The Custodian shall transfer securities sold for
the account of the Portfolio upon (i) receipt of advice from
the U.S. Securities System that payment for such securities
has been transferred to the U.S. Securities System Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account
of the Portfolio. Copies of all advices from the U.S.
Securities System of transfers of securities for the account
of the Portfolio shall identify the Portfolio, be maintained
for the Portfolio by the Custodian and be provided to the Fund
at its request. Upon request, the Custodian shall furnish the
Fund on behalf of the Portfolio confirmation of each transfer
to or from the account of the Portfolio in the form of a
written advice or notice and shall furnish to the Fund on
behalf of the Portfolio copies of daily transaction sheets
reflecting each day's transactions in the U.S. Securities
System for the account of the Portfolio;
4) The Custodian shall provide the Fund with any report obtained
by the Custodian on the U.S. Securities System's accounting
system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities
System;
5) The Custodian shall have received from the Fund on behalf of
the Portfolio the initial or annual certificate, as the case
may be, required by Section 15 hereof;
<PAGE>
6) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable to the Fund for the benefit of
the Portfolio for any loss or damage to the Portfolio
resulting from use of the U.S. Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or
any of its agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the U.S.
Securities System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with
respect to any claim against the U.S. Securities System or any
other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the
Portfolio has not been made whole for any such loss or damage.
SECTION 2.9 FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM.
The Custodian may deposit and/or maintain securities owned by a Portfolio in the
Direct Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper Instructions
from the Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are represented in
the Direct Paper System Account, which account shall not
include any assets of the Custodian other than assets held as
a fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System
shall identify by book-entry those securities belonging to the
Portfolio;
4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on the
records of the Custodian to reflect such payment and transfer
of securities to the account of the Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio upon the making of an entry on the records of the
Custodian to reflect such transfer and receipt of payment for
the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the account
of the Portfolio, in the form of a written advice or notice,
of Direct Paper on the next business day following such
transfer and shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting each
day's transaction in the Direct Paper System for the account
of the Portfolio;
<PAGE>
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal accounting
control as the Fund may reasonably request from time to time.
SECTION 2.10 SEGREGATED ACCOUNT. The Custodian shall upon receipt of
Proper Instructions on behalf of each applicable Portfolio establish and
maintain a segregated account or accounts for and on behalf of each such
Portfolio, into which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by the Custodian
pursuant to Section 2.8 hereof, (i) in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the Custodian and a
broker-dealer registered under the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Portfolio, (ii) for purposes of segregating cash or
government securities in connection with options purchased, sold or written by
the Portfolio or commodity futures contracts or options thereon purchased or
sold by the Portfolio, (iii) for the purposes of compliance by the Portfolio
with the procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the SEC relating to the maintenance of
segregated accounts by registered investment companies and (iv) for other proper
trust purposes, but only, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the applicable
Portfolio, a copy of a Certified Resolution setting forth the purpose or
purposes of such segregated account and declaring such purpose(s) to be a proper
trust purpose.
SECTION 2.11 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian
shall execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with receipt of income or other payments
with respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.
SECTION 2.12 PROXIES. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting materials
and all notices relating to such securities.
SECTION 2.13 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Subject
to the provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without limitation,
pendency of calls and maturities of domestic securities and expirations of
rights in connection therewith and notices of exercise of call and put options
written by the Fund on behalf of the Portfolio and the maturity of futures
contracts purchased or sold by the Portfolio) received by the Custodian from
issuers of the securities being held for the
<PAGE>
Portfolio. With respect to tender or exchange offers, the Custodian shall
transmit promptly to the Portfolio all written information received by the
Custodian from issuers of the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or exchange offer. If the
Portfolio desires to take action with respect to any tender offer, exchange
offer or any other similar transaction, the Portfolio shall notify the Custodian
at least three business days prior to the date on which the Custodian is to take
such action.
SECTION 3. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER OF THE PORTFOLIOS
SECTION 3.1. DEFINITIONS. The following capitalized terms shall have
the indicated meanings:
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment; economic and financial infrastructure
(including financial institutions such as any Mandatory Securities Depositories
operating in the country); prevailing or developing custody and settlement
practices; and laws and regulations applicable to the safekeeping and recovery
of Foreign Assets held in custody in that country.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the SEC, or a foreign branch of a Bank (as defined in Section 2(a)(5)
of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of
the 1940 Act, except that the term does not include Mandatory Securities
Depositories.
"Foreign Assets" means any of the Portfolios' investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Portfolios'
transactions in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(2) of Rule
17f-5.
"Mandatory Securities Depository" means a foreign securities depository or
clearing agency that, either as a legal or practical matter, must be used if the
Fund, on the Portfolios' behalf, determines to place Foreign Assets in a country
outside the United States (i) because required by law or regulation; (ii)
because securities cannot be withdrawn from such foreign securities depository
or clearing agency; or (iii) because maintaining or effecting trades in
securities outside the foreign securities depository or clearing agency is not
consistent with prevailing or developing custodial or market practices.
SECTION 3.2. DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
The Fund, by resolution adopted by the Board of Trustees, hereby delegates to
the Custodian with
<PAGE>
respect to the Portfolios, subject to Section (b) of Rule 17f-5, the
responsibilities set forth in this Section 3 with respect to Foreign Assets of
the Portfolios held outside the United States, and the Custodian hereby accepts
such delegation, as Foreign Custody Manager with respect to the Portfolios.
SECTION 3.3. COUNTRIES COVERED. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only
with respect to the countries and custody arrangements for each such country
listed on Schedule A of this Contract, which may be amended from time to time by
the Foreign Custody Manager. The Foreign Custody Manager shall list on Schedule
A the Eligible Foreign Custodians selected by the Foreign Custody Manager to
maintain the assets of the Portfolios. Mandatory Securities Depositories are
listed on Schedule B to this Contract, which may be amended from time to time by
the Foreign Custody Manager. The Foreign Custody Manager will provide amended
versions of Schedules A and B in accordance with Section 3.7 hereof.
Upon the receipt by the Foreign Custody Manager of Proper Instructions
to open an account or to place or maintain Foreign Assets in a country listed on
Schedule A, and the fulfillment by the Fund on behalf of the Portfolios of the
applicable account opening requirements for the country, the Foreign Custody
Manager shall be deemed to have been delegated by the Board of Trustees on
behalf of the Portfolios responsibility as Foreign Custody Manager with respect
to that country and to have accepted such delegation. Following the receipt of
Proper Instructions directing the Foreign Custody Manager to close the account
of a Portfolio with the Eligible Foreign Custodian selected by the Foreign
Custody Manager in a designated country, the delegation by the Board of Trustees
on behalf of the Portfolios to the Custodian as Foreign Custody Manager for that
country shall be deemed to have been withdrawn and the Custodian shall
immediately cease to be the Foreign Custody Manager of the Portfolios with
respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period as to which the parties agree in
writing) after receipt of any such notice by the Fund, the Custodian shall have
no further responsibility as Foreign Custody Manager to the Fund with respect to
the country as to which the Custodian's acceptance of delegation is withdrawn.
SECTION 3.4. SCOPE OF DELEGATED RESPONSIBILITIES.
3.4.1. Selection of Eligible Foreign Custodians. Subject to the
provisions of this Section 3, the Portfolios' Foreign Custody Manager may place
and maintain the Foreign Assets in the care of the Eligible Foreign Custodian
selected by the Foreign Custody Manager in each country listed on Schedule A, as
amended from time to time.
<PAGE>
In performing its delegated responsibilities as Foreign Custody Manager
to place or maintain Foreign Assets with an Eligible Foreign Custodian, the
Foreign Custody Manager shall determine that the Foreign Assets will be subject
to reasonable care, based on the standards applicable to custodians in the
country in which the Foreign Assets will be held by that Eligible Foreign
Custodian, after considering all factors relevant to the safekeeping of such
assets, including, without limitation:
(i) the Eligible Foreign Custodian's practices, procedures, and
internal controls, including, but not limited to, the physical
protections available for certificated securities (if
applicable), its methods of keeping custodial records, and its
security and data protection practices;
(ii) whether the Eligible Foreign Custodian has the financial
strength to provide reasonable care for Foreign Assets;
(iii) the Eligible Foreign Custodian's general reputation and
standing and, in the case of a foreign securities depository
or clearing agency which is not a Mandatory Securities
Depository, the foreign securities depository's or clearing
agency's operating history and the number of participants in
the foreign securities depository or clearing agency; and
(iv) whether the Fund will have jurisdiction over and be able to
enforce judgments against the Eligible Foreign Custodian, such
as by virtue of the existence of any offices of the Eligible
Foreign Custodian in the United States or the Eligible Foreign
Custodian's consent to service of process in the United
States.
3.4.2. Contracts With Eligible Foreign Custodians. The Foreign Custody
Manager shall determine that the contract (or the rules or established practices
or procedures in the case of an Eligible Foreign Custodian that is a foreign
securities depository or clearing agency) governing the foreign custody
arrangements with each Eligible Foreign Custodian selected by the Foreign
Custody Manager will provide reasonable care for the Foreign Assets held by that
Eligible Foreign Custodian based on the standards applicable to custodians in
the particular country. Each such contract shall include provisions that
provide:
(i) for indemnification or insurance arrangements (or any
combination of the foregoing) such that each Portfolio will be
adequately protected against the risk of loss of the Foreign
Assets held in accordance with such contract;
(ii) that the Foreign Assets will not be subject to any right,
security interest, or lien or claim of any kind in favor of
the Eligible Foreign Custodian or its creditors except a claim
of payment for their safe custody or administration or, in the
case of cash deposits, liens or rights in favor of creditors
of the Eligible Foreign Custodian arising under bankruptcy,
insolvency, or similar laws;
<PAGE>
(iii) that beneficial ownership of the Foreign Assets will be freely
transferable without the payment of money or value other than
for safe custody or administration;
(iv) that adequate records will be maintained identifying the
Foreign Assets as belonging to the applicable Portfolio or as
being held by a third party for the benefit of such Portfolio;
(v) that the independent public accountants for each Portfolio
will be given access to those records or confirmation of the
contents of those records; and
(vi) that the Fund will receive periodic reports with respect to
the safekeeping of the Foreign Assets, including, but not
limited to, notification of any transfer of the Foreign Assets
to or from a Portfolio's account or a third party account
containing the Foreign Assets held for the benefit of the
Portfolio,
or, in lieu of any or all of the provisions set forth in (i) through (vi) above,
such other provisions that the Foreign Custody Manager determines will provide,
in their entirety, the same or greater level of care and protection for the
Foreign Assets as the provisions set forth in (i) through (vi) above, in their
entirety.
3.4.3. Monitoring. In each case in which the Foreign Custody Manager
maintains Foreign Assets with an Eligible Foreign Custodian selected by the
Foreign Custody Manager, the Foreign Custody Manager shall establish a system to
monitor (i) the appropriateness of maintaining the Foreign Assets with such
Eligible Foreign Custodian and (ii) the contract governing the custody
arrangements established by the Foreign Custody Manager with the Eligible
Foreign Custodian. In the event the Foreign Custody Manager determines that the
custody arrangements with an Eligible Foreign Custodian it has selected are no
longer appropriate, the Foreign Custody Manager shall notify the Board of
Trustees in accordance with Section 3.7 hereunder.
SECTION 3.5. GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For
purposes of this Section 3, the Board of Trustees shall be deemed to have
considered and determined to accept such Country Risk as is incurred by placing
and maintaining the Foreign Assets in each country for which the Custodian is
serving as Foreign Custody Manager of the Portfolios. The Fund, on behalf of the
Portfolios, and the Custodian each expressly acknowledge that the Foreign
Custody Manager shall not be delegated any responsibilities under this Section 3
with respect to Mandatory Securities Depositories.
<PAGE>
SECTION 3.6. STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF THE
PORTFOLIOS. In performing the responsibilities delegated to it, the Foreign
Custody Manager agrees to exercise reasonable care, prudence and diligence such
as a person having responsibility for the safekeeping of assets of management
investment companies registered under the 1940 Act would exercise.
SECTION 3.7. REPORTING REQUIREMENTS. The Foreign Custody Manager shall
report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian
and the placement of such Foreign Assets with another Eligible Foreign Custodian
by providing to the Board of Trustees amended Schedules A or B at the end of the
calendar quarter in which an amendment to either Schedule has occurred. The
Foreign Custody Manager shall make written reports notifying the Board of
Trustees of any other material change in the foreign custody arrangements of the
Portfolios described in this Article 3 after the occurrence of the material
change.
SECTION 3.8. REPRESENTATIONS WITH RESPECT TO RULE 17f-5. The Foreign
Custody Manager represents to the Fund that it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5. The Fund represents to the Custodian that the
Board of Trustees has determined that it is reasonable for the Board of Trustees
to rely on the Custodian to perform the responsibilities delegated pursuant to
this Agreement to the Custodian as the Foreign Custody Manager of the
Portfolios.
SECTION 3.9. EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN
CUSTODY MANAGER. The Board of Trustees' delegation to the Custodian as Foreign
Custody Manager of the Portfolios shall be effective as of the date of execution
of this Agreement and shall remain in effect until terminated at any time,
without penalty, by written notice from the terminating party to the
non-terminating party. Termination will become effective thirty (30) days after
receipt by the non-terminating party of such notice. The provisions of Section
3.3 hereof shall govern the delegation to and termination of the Custodian as
Foreign Custody Manager of the Portfolios with respect to designated countries.
SECTION 4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS
HELD OUTSIDE OF THE UNITED STATES
SECTION 4.1 DEFINITIONS. Capitalized terms in this Section 4 shall
-----------
have the following meanings:
"Foreign Securities System" means either a clearing agency or a securities
depository listed on Schedule A hereto or a Mandatory Securities Depository
listed on Schedule B hereto.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
<PAGE>
SECTION 4.2. HOLDING SECURITIES. The Custodian shall identify on its
books as belonging to the Portfolios the foreign securities held by each Foreign
Sub-Custodian or Foreign Securities System. The Custodian may hold foreign
securities for all of its customers, including the Portfolios, with any Foreign
Sub-Custodian in an account that is identified as belonging to the Custodian for
the benefit of its customers, provided however, that (i) the records of the
Custodian with respect to foreign securities of the Portfolios which are
maintained in such account shall identify those securities as belonging to the
Portfolios and (ii) the Custodian shall require that securities so held by the
Foreign Sub-Custodian be held separately from any assets of such Foreign
Sub-Custodian or of other customers of such Foreign Sub-Custodian.
SECTION 4.3. FOREIGN SECURITIES SYSTEMS. Foreign securities shall be
maintained in a Foreign Securities System in a designated country only through
arrangements implemented by the Foreign Sub-Custodian in such country pursuant
to the terms of this Agreement.
SECTION 4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. Delivery of Foreign Securities. The Custodian or a Foreign
Sub-Custodian shall release and deliver foreign securities of the Portfolios
held by such Foreign Sub-Custodian, or in a Foreign Securities System account,
only upon receipt of Proper Instructions, which may be continuing instructions
when deemed appropriate by the parties, and only in the following cases:
(i) upon the sale of such foreign securities for the Portfolios in
accordance with reasonable market practice in the country
where such foreign securities are held or traded, including,
without limitation: (A) delivery against expectation of
receiving later payment; or (B) in the case of a sale effected
through a Foreign Securities System in accordance with the
rules governing the operation of the Foreign Securities
System;
(ii) in connection with any repurchase agreement related to foreign
securities;
(iii) to the depository agent in connection with tender or other
similar offers for foreign securities of the Portfolios;
(iv) to the issuer thereof or its agent when such foreign
securities are called, redeemed, retired or otherwise become
payable;
(v) to the issuer thereof, or its agent, for transfer into the
name of the Custodian (or the name of the respective Foreign
Sub-Custodian or of any nominee of the Custodian or such
Foreign Sub-Custodian) or for exchange for a different number
of bonds, certificates or other evidence representing the same
aggregate face amount or number of units;
<PAGE>
(vi) to brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with market
custom; provided that in any such case the Foreign
Sub-Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise from
the Foreign Sub-Custodian's own negligence or willful
misconduct;
(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
(viii) in the case of warrants, rights or similar foreign securities,
the surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(ix) or delivery as security in connection with any borrowing by
the Portfolios requiring a pledge of assets by the Portfolios;
(x) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(xi) in connection with the lending of foreign securities; and
(xii) for any other proper trust purpose, but only upon receipt of,
in addition to Proper Instructions, a copy of a Certified
Resolution specifying the foreign securities to be delivered,
setting forth the purpose for which such delivery is to be
made, declaring such purpose to be a proper trust purpose, and
naming the person or persons to whom delivery of such
securities shall be made.
4.4.2. Payment of Portfolio Monies. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, the Custodian shall pay out, or direct the respective Foreign
Sub-Custodian or the respective Foreign Securities System to pay out, monies of
a Portfolio in the following cases only:
(i) upon the purchase of foreign securities for the Portfolio,
unless otherwise directed by Proper Instructions, by (A)
delivering money to the seller thereof or to a dealer therefor
(or an agent for such seller or dealer) against expectation of
receiving later delivery of such foreign securities; or (B) in
the case of a purchase effected through a Foreign Securities
System, in accordance with the rules governing the operation
of such Foreign Securities System;
<PAGE>
(ii) in connection with the conversion, exchange or surrender of
foreign securities of the Portfolio;
(iii) for the payment of any expense or liability of the Portfolio,
including but not limited to the following payments: interest,
taxes, investment advisory fees, transfer agency fees, fees
under this Agreement, legal fees, accounting fees, and other
operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign
exchange contracts for the Portfolio, including transactions
executed with or through the Custodian or its Foreign
Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vii) in connection with the borrowing or lending of foreign
securities; and
(viii) for any other proper trust purpose, but only upon receipt of,
in addition to Proper Instructions, a copy of a Certified
Resolution specifying the amount of such payment, setting
forth the purpose for which such payment is to be made,
declaring such purpose to be a proper trust purpose, and
naming the person or persons to whom such payment is to be
made.
4.4.3. Market Conditions. Notwithstanding any provision of this
Agreement to the contrary, settlement and payment for Foreign Assets received
for the account of the Portfolios and delivery of Foreign Assets maintained for
the account of the Portfolios may be effected in accordance with the customary
established securities trading or processing practices and procedures in the
country or market in which the transaction occurs, including, without
limitation, delivering Foreign Assets to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) with the expectation of
receiving later payment for such Foreign Assets from such purchaser or dealer.
SECTION 4.5. REGISTRATION OF FOREIGN SECURITIES. The foreign securities
maintained in the custody of a Foreign Custodian (other than bearer securities)
shall be registered in the name of the applicable Portfolio or in the name of
the Custodian or in the name of any Foreign Sub-Custodian or in the name of any
nominee of the foregoing, and the Fund on behalf of such Portfolio agrees to
hold any such nominee harmless from any liability as a holder of record of such
foreign securities. The Custodian or a Foreign Sub-Custodian shall not be
obligated to accept securities on behalf of a Portfolio under the terms of this
Agreement unless the form of such securities and the manner in which they are
delivered are in accordance with reasonable market practice.
<PAGE>
SECTION 4.6. BANK ACCOUNTS. A bank account or bank accounts opened and
maintained outside the United States on behalf of a Portfolio with a Foreign
Sub-Custodian shall be subject only to draft or order by the Custodian or such
Foreign Sub-Custodian, acting pursuant to the terms of this Agreement to hold
cash received by or from or for the account of the Portfolio.
SECTION 4.7. COLLECTION OF INCOME. The Custodian shall use reasonable
endeavors to collect all income and other payments in due course with respect to
the Foreign Assets held hereunder to which the Portfolios shall be entitled and
shall credit such income, as collected, to the applicable Portfolio. In the
event that extraordinary measures are required to collect such income, the Fund
and the Custodian shall consult as to such measures and as to the compensation
and expenses of the Custodian relating to such measures.
SECTION 4.8. PROXIES. The Custodian will generally with respect to the
foreign securities held under this Section 4 use its reasonable endeavors to
facilitate the exercise of voting and other shareholder proxy rights, subject
always to the laws, regulations and practical constraints that may exist in the
country where such securities are issued. The Fund acknowledges that local
conditions, including lack of regulation, onerous procedural obligations, lack
of notice and other factors may have the effect of severely limiting the ability
of the Fund to exercise shareholder rights.
SECTION 4.9. COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The
Custodian shall transmit promptly to the Fund written information (including,
without limitation, pendency of calls and maturities of foreign securities and
expirations of rights in connection therewith) received by the Custodian via the
Foreign Sub-Custodians from issuers of the foreign securities being held for the
account of the Portfolios. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Fund written information so received by
the Custodian from issuers of the foreign securities whose tender or exchange is
sought or from the party (or its agents) making the tender or exchange offer.
The Custodian shall not be liable for any untimely exercise of any tender,
exchange or other right or power in connection with foreign securities or other
property of the Portfolios at any time held by it unless (i) the Custodian or
the respective Foreign Sub-Custodian is in actual possession of such foreign
securities or property and (ii) the Custodian receives Proper Instructions with
regard to the exercise of any such right or power, and both (i) and (ii) occur
at least three (3) business days prior to the date on which such right or power
is to be exercised.
<PAGE>
SECTION 4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS AND FOREIGN
SECURITIES SYSTEMS. Each agreement pursuant to which the Custodian employs as a
Foreign Sub-Custodian shall, to the extent possible, require the Foreign
Sub-Custodian to exercise reasonable care in the performance of its duties and,
to the extent possible, to indemnify, and hold harmless, the Custodian from and
against any loss, damage, cost, expense, liability or claim arising out of or in
connection with the Foreign Sub-Custodian's performance of such obligations. At
the Fund's election, the Portfolios shall be entitled to be subrogated to the
rights of the Custodian with respect to any claims against a Foreign
Sub-Custodian as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Portfolios have not been made
whole for any such loss, damage, cost, expense, liability or claim.
SECTION 4.11. TAX LAW. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on the Fund, the
Portfolios or the Custodian as custodian of the Portfolios by the tax law of the
United States or of any state or political subdivision thereof. It shall be the
responsibility of the Fund to notify the Custodian of the obligations imposed on
the Fund with respect to the Portfolios or the Custodian as custodian of the
Portfolios by the tax law of countries other than those mentioned in the above
sentence, including responsibility for withholding and other taxes, assessments
or other governmental charges, certifications and governmental reporting. The
sole responsibility of the Custodian with regard to such tax law shall be to use
reasonable efforts to assist the Fund with respect to any claim for exemption or
refund under the tax law of countries for which the Fund has provided such
information.
SECTION 4.12. CONFLICT. If the Custodian is delegated the
responsibilities of Foreign Custody Manager pursuant to the terms of Section 3
hereof, in the event of any conflict between the provisions of Sections 3 and 4
hereof, the provisions of Section 3 shall prevail.
SECTION 5. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent and deposit into the account of the appropriate Portfolio
such payments as are received for Shares thereof issued or sold from time to
time by the Fund. The Custodian will provide timely notification to the Fund on
behalf of each such Portfolio and the Transfer Agent of any receipt by it of
payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Fund's Declaration of Trust and any applicable votes of the
Board of Trustees pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares, the Custodian is authorized upon receipt of instructions
from the Transfer Agent to wire funds to or through a
<PAGE>
commercial bank designated by the redeeming shareholders. In connection with the
redemption or repurchase of Shares, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
SECTION 6. PROPER INSTRUCTIONS
Proper Instructions as used throughout this Agreement means a writing
signed or initialed by one or more person or persons as the Board of Trustees
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Trustees accompanied
by a detailed description of procedures approved by the Board of Trustees,
Proper Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Board of Trustees and
the Custodian are satisfied that such procedures afford adequate safeguards for
the Portfolios' assets. For purposes of this Section, Proper Instructions shall
include instructions received by the Custodian pursuant to any three - party
agreement which requires a segregated asset account in accordance with Section
2.10.
SECTION 7. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Agreement, provided that all such payments
shall be accounted for to the Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Portfolio, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Portfolio except as otherwise directed by the Board of
Trustees.
<PAGE>
SECTION 8. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the Fund.
The Custodian may receive and accept a Certified Resolution as conclusive
evidence (a) of the authority of any person to act in accordance with such
resolution or (b) of any determination or of any action by the Board of Trustees
pursuant to the Fund's Declaration of Trust as described in such resolution, and
such resolution may be considered as in full force and effect until receipt by
the Custodian of written notice to the contrary.
SECTION 9. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Trustees to keep the books of
account of each Portfolio and/or compute the net asset value per Share of the
outstanding Shares or, if directed in writing to do so by the Fund on behalf of
the Portfolio, shall itself keep such books of account and/or compute such net
asset value per Share. If so directed, the Custodian shall also calculate daily
the net income of the Portfolio as described in the Prospectus and shall advise
the Fund and the Transfer Agent daily of the total amounts of such net income
and, if instructed in writing by an officer of the Fund to do so, shall advise
the Transfer Agent periodically of the division of such net income among its
various components. The calculations of the net asset value per Share and the
daily income of each Portfolio shall be made at the time or times described from
time to time in the Prospectus.
SECTION 10. RECORDS
The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Agreement in
such manner as will meet the obligations of the Fund under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and shall at all times during
the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Fund and employees and agents of
the SEC. The Custodian shall, at the Fund's request, supply the Fund with a
tabulation of securities owned by each Portfolio and held by the Custodian and
shall, when requested to do so by the Fund and for such compensation as shall be
agreed upon between the Fund and the Custodian, include certificate numbers in
such tabulations.
SECTION 11. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
<PAGE>
The Custodian shall take all reasonable action, as the Fund on behalf
of each applicable Portfolio may from time to time request, to obtain from year
to year favorable opinions from the Fund's independent accountants with respect
to its activities hereunder in connection with the preparation of the Fund's
Form N-1A, and Form N-SAR or other annual reports to the SEC and with respect to
any other requirements thereof.
SECTION 12. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Fund, on behalf of each of the
Portfolios at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or maintained
in a U.S. Securities System or a Foreign Securities System (collectively
referred to herein as the "Securities Systems"), relating to the services
provided by the Custodian under this Agreement; such reports, shall be of
sufficient scope and in sufficient detail, as may reasonably be required by the
Fund to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
SECTION 13. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian.
SECTION 14. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Agreement,
but shall be kept indemnified by and shall be without liability to the Fund for
any action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice. The Custodian shall be
without liability to the Fund and the Portfolios for any loss, liability, claim
or expense resulting from or caused by anything which is (A) part of Country
Risk (as defined in Section 3 hereof), including without limitation
nationalization, expropriation, currency restrictions, or acts of war,
revolution, riots or terrorism,
<PAGE>
or (B) part of the "prevailing country risk" of the Portfolios, as such term is
used in SEC Release Nos. IC-22658; IS-1080 (May 12, 1997) or as such term or
other similar terms are now or in the future interpreted by the SEC or by the
staff of the Division of Investment Management thereof.
Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or agent,
the Custodian shall be without liability to the Fund for any loss, liability,
claim or expense resulting from or caused by (i) events or circumstances beyond
the reasonable control of the Custodian or any sub-custodian or Securities
System or any agent or nominee of any of the foregoing, including, without
limitation, the interruption, suspension or restriction of trading on or the
closure of any securities market, power or other mechanical or technological
failures or interruptions, computer viruses or communications disruptions, work
stoppages, natural disasters, or other similar events or acts; (ii) errors by
the Fund or the Investment Advisor in their instructions to the Custodian
provided such instructions have been in accordance with this Agreement; (iii)
the insolvency of or acts or omissions by a Securities System; (iv) any delay or
failure of any broker, agent or intermediary, central bank or other commercially
prevalent payment or clearing system to deliver to the Custodian's sub-custodian
or agent securities purchased or in the remittance or payment made in connection
with securities sold; (v) any delay or failure of any company, corporation, or
other body in charge of registering or transferring securities in the name of
the Custodian, the Fund, the Custodian's sub-custodians, nominees or agents or
any consequential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and other
accretions or benefits; (vi) delays or inability to perform its duties due to
any disorder in market infrastructure with respect to any particular security or
Securities System; and (vii) changes to any existing, or any provision of any
future, law or regulation or order of the United States of America, or any state
thereof, or any other country, or political subdivision thereof or of any court
of competent jurisdiction.
The Custodian shall be liable for the acts or omissions of a Foreign
Sub-Custodian (as defined in Section 4 hereof) to the same extent as set forth
with respect to sub-custodians generally in this Agreement.
If the Fund on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Fund or the Portfolio being liable for the payment
of money or incurring liability of some other form, the Fund on behalf of the
Portfolio, as a prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form satisfactory to
it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement) or
in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the
<PAGE>
performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the applicable Portfolio shall
be security therefor and should the Fund fail to repay the Custodian promptly,
the Custodian shall be entitled to utilize available cash and to dispose of such
Portfolio's assets to the extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
SECTION 15. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided,
however that the Custodian shall not with respect to a Portfolio act under
Section 2.8 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees has approved the
initial use of a particular Securities System by such Portfolio, as required by
Rule 17f-4 under the 1940 Act and that the Custodian shall not with respect to a
Portfolio act under Section 2.9 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has approved the initial use of the Direct Paper System by such
Portfolio; provided further, however, that the Fund shall not amend or terminate
this Agreement in contravention of any applicable federal or state regulations,
or any provision of the Fund's Declaration of Trust, and further provided, that
the Fund on behalf of one or more of the Portfolios may at any time by action of
its Board of Trustees (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Agreement in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Agreement, the Fund on behalf of each
applicable Portfolio shall pay to the Custodian such compensation as may be due
as of the date of such termination and shall likewise reimburse the Custodian
for its costs, expenses and disbursements.
SECTION 16. SUCCESSOR CUSTODIAN
If a successor custodian for one or more Portfolios shall be appointed
by the Board of Trustees, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian, duly endorsed and in the
form for transfer, all securities of each applicable Portfolio then held by it
hereunder and shall transfer to an account of the successor custodian all of the
securities of each such Portfolio held in a Securities System.
<PAGE>
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a Certified Resolution, deliver at the office of
the Custodian and transfer such securities, funds and other properties in
accordance with such resolution.
In the event that no written order designating a successor custodian or
Certified Resolution shall have been delivered to the Custodian on or before the
date when such termination shall become effective, then the Custodian shall have
the right to deliver to a bank or trust company, which is a "bank" as defined in
the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian on behalf of each
applicable Portfolio and all instruments held by the Custodian relative thereto
and all other property held by it under this Agreement on behalf of each
applicable Portfolio, and to transfer to an account of such successor custodian
all of the securities of each such Portfolio held in any Securities System.
Thereafter, such bank or trust company shall be the successor of the Custodian
under this Agreement.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the Certified Resolution to appoint a successor
custodian, the Custodian shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of such securities, funds
and other properties and the provisions of this Agreement relating to the duties
and obligations of the Custodian shall remain in full force and effect.
SECTION 17. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian and
the Fund on behalf of each of the Portfolios, may from time to time agree on
such provisions interpretive of or in addition to the provisions of this
Agreement as may in their joint opinion be consistent with the general tenor of
this Agreement. Any such interpretive or additional provisions shall be in a
writing signed by both parties and shall be annexed hereto, provided that no
such interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Fund's Declaration of
Trust. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Agreement.
SECTION 18. ADDITIONAL FUNDS
In the event that the Fund establishes one or more series of Shares in
addition to those set forth on Schedule C with respect to which it desires to
have the Custodian render services as
<PAGE>
custodian under the terms hereof, it shall so notify the Custodian in writing,
and if the Custodian agrees in writing to provide such services, such series of
Shares shall become a Portfolio hereunder.
SECTION 19. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.
SECTION 20. PRIOR AGREEMENTS
This Agreement supersedes and terminates, as of the date hereof, all
prior Agreements between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.
SECTION 21. NOTICES.
Any notice, instruction or other instrument required to be given
hereunder may be delivered in person to the offices of the parties as set forth
herein during normal business hours or delivered prepaid registered mail or by
telex, cable or telecopy to the parties at the following addresses or such other
addresses as may be notified by any party from time to time.
To the Fund: EVERGREEN MONEY MARKET TRUST
c/o First Union Corporation - Legal Division
200 Berkeley Street
Boston, Massachusetts 02116-5034
Attention: Terrence J. Cullen, Esq.
Telephone: 617-210-3200
Telecopy: 617-210-3468
To the Custodian: STATE STREET BANK AND TRUST COMPANY
One Heritage Drive, 3rd Floor South
North Quincy, Massachusetts 02171
Attention: Ronald F. Mauriello
Telephone: 617-985-1891
Telecopy: 617-537-5203
Such notice, instruction or other instrument shall be deemed to have
been served in the case of a registered letter at the expiration of five
business days after posting, in the case of cable twenty-four hours after
dispatch and, in the case of telex, immediately on dispatch and if
<PAGE>
delivered outside normal business hours it shall be deemed to have been received
at the next time after delivery when normal business hours commence and in the
case of cable, telex or telecopy on the business day after the receipt thereof.
Evidence that the notice was properly addressed, stamped and put into the post
shall be conclusive evidence of posting.
SECTION 22. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION 23. SHAREHOLDER COMMUNICATIONS ELECTION
SEC Rule 14b-2 requires banks which hold securities for the account of
customers to respond to requests by issuers of securities for the names,
addresses and holdings of beneficial owners of securities of that issuer held by
the bank unless the beneficial owner has expressly objected to disclosure of
this information. In order to comply with the rule, the Custodian needs the Fund
to indicate whether it authorizes the Custodian to provide the Fund's name,
address, and share position to requesting companies whose securities the Fund
owns. If the Fund tells the Custodian "no", the Custodian will not provide this
information to requesting companies. If the Fund tells the Custodian "yes" or
does not check either "yes" or "no" below, the Custodian is required by the rule
to treat the Fund as consenting to disclosure of this information for all
securities owned by the Fund or any funds or accounts established by the Fund.
For the Fund's protection, the Rule prohibits the requesting company from using
the Fund's name and address for any purpose other than corporate communications.
Please indicate below whether the Fund consents or objects by checking one of
the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name, address,
and share positions.
NO [ ] The Custodian is not authorized to release the Fund's name,
address, and share positions.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of September 18, 1997.
EVERGREEN MONEY MARKET TRUST FUND SIGNATURE ATTESTED TO BY:
By: /s/ John J. Pileggi By: /s/ George O. Martinez
--------------------------- ---------------------------
Name: John J. Pileggi Name: George O. Martinez
Title: President Title: Secretary
STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:
By: /s/ Ronald E. Logue By: /s/ Glenn Ciotti
--------------------------- ---------------------------
Name: Ronald E. Logue Name: Glenn Ciotti
Title: Executive Vice President Title: VP and Assoc. Counsel
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Non-Mandatory
Country Subcustodian Depositories
- --------- ------------ -------------
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria Erste Bank der oesterreichischen --
Sparkasen AG
Bahrain The British Bank of the Middle East --
(as delegate of the Hongkong and
Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Generale Bank --
Bermuda The Bank of Bermuda Limited --
Bolivia Banco Boliviano Americano --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Bulgaria ING Bank N.V. --
Canada Canada Trustco Mortgage Company --
Chile Citibank, N.A. --
People's Republic The Hongkong and Shanghai --
of China Banking Corporation Limited,
Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. --
Sociedad Fiduciaria
Croatia Privredana banka Zagreb d.d --
Cyprus Barclays Bank PLC --
Cyprus Offshore Banking Unit
Czech Republic Ceskoslovenska Obchodni --
Banka A.S.
Denmark Den Danske Bank --
Ecuador Citibank, N.A. --
Egypt National Bank of Egypt --
Estonia Hansabank --
Finland Merita Bank Ltd. --
France Banque Paribas --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited --
Greece National Bank of Greece S.A Bank of Greece
Hong Kong Standard Chartered Bank --
Hungary Citibank Budapest Rt. --
India Deutsche Bank AG; --
The Hongkong and Shanghai
Banking Corporation Limited
Indonesia Standard Chartered Bank --
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
Italy Banque Paribas --
Ivory Coast Societe Generale de Banques --
en Cote d'Ivoire
Jamaica Scotiabank Trust and Merchant Bank --
Japan The Daiwa Bank, Limited; Japan Securities
The Fuji Bank, Limited Depository
Center;
Jordan The British Bank of the Middle East --
(as delegate of the Hongkong and
Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited --
Republic of Korea The Hongkong and Shanghai Banking --
Corporation Limited
Latvia Hansabank --
Lebanon The British Bank of the Middle East Custodian and
(as delegate of the Hongkong and Clearing Center
Shanghai Banking Corporation Limited) of Financial
Instruments
for Lebanon
(MIDCLEAR)
S.A.L.;
Lithuania Vilniaus Bankas AB --
Malaysia Standard Chartered Bank --
Malaysia Berhad
Mauritius The Hongkong and Shanghai --
Banking Corporation Limited
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South Africa -
The Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group --
(New Zealand) Limited
Norway Christiania Bank og --
Kreditkasse
Oman The British Bank of the Middle East --
(as delegate of the Hongkong and
Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG --
Peru Citibank, N.A. --
Philippines Standard Chartered Bank --
Poland Citibank Poland S.A. --
Portugal Banco Comercial Portugues --
Romania ING Bank, N.V. --
Russia Credit Suisse First Boston, Zurich --
via Credit Suisse First Boston
Limited, Moscow
Singapore The Development Bank --
of Singapore Ltd.
Slovak Republic Ceskoslovenska Obchodna -
Banka A.S.
Slovenia Banka Creditanstalt d.d. --
South Africa Standard Bank of South Africa Limited --
Spain Banco Santander, S.A. --
Sri Lanka The Hongkong and Shanghai --
Banking Corporation Limited
Swaziland Barclays Bank of Swaziland Limited --
Sweden Skandinaviska Enskilda Banken --
Switzerland Union Bank of Switzerland --
Taiwan - R.O.C. Central Trust of China --
Thailand Standard Chartered Bank --
Trinidad & Tobago Republic Bank Ltd. --
Tunisia Banque Internationale Arabe de Tunisie --
Turkey Citibank, N.A. --
United Kingdom State Street Bank and Trust --
Uruguay Citibank, N.A. --
Venezuela Citibank, N.A. --
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe Limited --
Euroclear (The Euroclear System)
Cedel (Cedel Bank, societe anonyme)
INTERSETTLE (for EASDAQ Securities)
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
Country Mandatory Depositories
- ---------- ------------------------------------------
Argentina -Caja de Valores S.A.;
-CRYL
Australia -Austraclear Limited;
-Reserve Bank Information and
Transfer System
Austria -Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium -Caisse Interprofessionnelle de Depots et
de Virements de Titres S.A.;
-Banque Nationale de Belgique
Brazil - Camara de Liquidacao de Sao Paulo, (Calispa);
-Bolsa de Valores de Rio de Janeiro
- All SSB clients presently use Calispa
-Central de Custodia e de Liquidacao Financeira
de Titulos
-Banco Central do Brasil,
Systema Especial de Liquidacao e
Custodia
Bulgaria - Central Depository AD
Canada -The Canadian Depository
for Securities Limited; West Canada
Depository Trust Company [depositories linked]
People's Republic -Shanghai Securities Central Clearing and
of China Registration Corporation;
-Shenzhen Securities Central Clearing Co., Ltd.
Croatia Ministry of Finance
Czech Republic --Stredisko cennych papiru;
-Czech National Bank
Denmark -Vaerdipapircentralen - The Danish
Securities Center
Egypt -Misr Company for Clearing, Settlement,
and Central Depository
Estonia - Eesti Vaartpaberite Keskdepositooruim
Finland -The Finnish Central Securities
Depository
France -Societe Interprofessionnelle
pour la Compensation des
Valeurs Mobilieres;
-Banque de France,
Saturne System
Germany -The Deutscher Kassenverein AG
Greece -The Central Securities Depository
(Apothetirion Titlon A.E.);
Hong Kong -The Central Clearing and
Settlement System;
-The Central Money Markets Unit
Hungary -The Central Depository and Clearing
House (Budapest) Ltd.
[Mandatory for Gov't Bonds only;
SSB does not use for other securities]
India The National Securities Depository Limited
Indonesia -Bank of Indonesia
Ireland -The Central Bank of Ireland,
The Gilt Settlement Office
Israel -The Clearing House of the
Tel Aviv Stock Exchange;
-Bank of Israel
Italy -Monte Titoli S.p.A.;
-Banca d'Italia
Japan -Bank of Japan Net System
Republic of Korea -Korea Securities Depository Corporation
Latvia - The Latvian Central Depository
Lebanon -The Central Bank of Lebanon
Lithuania - The Central Securities Depository of Lithuania
Malaysia -Malaysian Central Depository Sdn.
Bhd.;
-Bank Negara Malaysia,
Scripless Securities Trading and Safekeeping
Systems
Mauritius -The Central Depository & Settlement
Co. Ltd.
Mexico -S.D. INDEVAL, S.A. de C.V.
(Instituto para el Deposito de
Valores);
The Netherlands -Nederlands Centraal Instituut voor
Giraal Effectenverkeer B.V. ("NECIGEF");
New Zealand -New Zealand Central Securities
Depository Limited
Norway -Verdipapirsentralen - The Norwegian
Registry of Securities
Oman -Muscat Securities Market
Peru -Caja de Valores y Liquidaciones
(CAVALI, S.A.)
Philippines -The Philippines Central Depository Inc.
-The Book-Entry-System of Bangko
Sentral ng Pilipinas;
-The Registry of Scripless Securities of the
Bureau of the Treasury
Poland -The National Depository of Securities
(Krajowy Depozyt Papierow Wartos'ciowych);
-National Bank of Poland
Portugal -Central de Valores Mobiliarios
Romania -National Securities Clearing, Settlement and
Depository Co.;
-Bucharest Stock Exchange;
-National Bank of Romania
Singapore -The Central Depository (Pvt.)
Limited;
-Monetary Authority of Singapore
Slovak Republic -Stredisko Cennych Papierov;
-National Bank of Slovakia
Slovenia - Klirinsko Depotna Bruzba
South Africa -The Central Depository Limited
Spain -Servicio de Compensacion y
Liquidacion de Valores, S.A.;
-Banco de Espana,
Anotaciones en Cuenta
Sri Lanka -Central Depository System
(Pvt) Limited
Sweden -Vardepapperscentralen VPC AB -
The Swedish Central Securities Depository
Switzerland -Schweizerische Effekten - Giro AG;
Taiwan - R.O.C. -The Taiwan Securities Central
Depository Company, Ltd.
Thailand -Thailand Securities Depository
Company Limited
Tunisia -STICODEVAM;
-Central Bank of Tunisia;
-Tunisian Treasury
Turkey -Takas ve Saklama Bankasi A.S.;
-Central Bank of Turkey
United Kingdom -The Bank of England,
The Central Gilts Office;
The Central Moneymarkets Office
Uruguay -Central Bank of Uruguay
Zambia -Lusaka Central Depository
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
<PAGE>
SCHEDULE C
Pursuant to the custodian agreement between Evergreen Money Market Trust (the
"Fund") and State Street Bank and Trust Company dated September 18, 1997 (the
"Agreement"), as of January 12, 1998, the Fund had made the following Portfolios
(as such term is defined in the Agreement) subject to the Agreement:
Evergreen Money Market Fund
Evergreen Pennsylvania Municipal Money Market Fund
Evergreen Municipal Money Market Fund
Evergreen Treasury Money Market Fund
<PAGE>
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
Addendum to the Custodian Agreement between EVERGREEN MONEY MARKET
TRUST (the "Customer") and State Street Bank and Trust Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets
of the Customer pursuant to a certain Custodian Agreement (the "Custodian
Agreement") dated as of September 18, 1997;
WHEREAS, State Street has developed and utilizes proprietary accounting
and other systems, including State Street's proprietary Multicurrency HORIZONSM
Accounting System, in its role as custodian of the Customer, and maintains
certain Customer-related data ("Customer Data") in databases under the control
and ownership of State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to the Customer certain Data
Access Services solely for the benefit of the Customer, and intends to provide
additional services, consistent with the terms and conditions of this Addendum.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
a. System. Subject to the terms and conditions of this Addendum, State
Street hereby agrees to provide the Customer with access to State Street's
Multicurrency HORIZONSM Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports and information, solely on computer hardware,
system software and telecommunication links as listed in Attachment B (the
"Designated Configuration") of the Customer, or certain third parties approved
by State Street that serve as investment advisors or investment managers of the
Customer (the "Investment Advisor"), and solely with respect to the Customer or
on any designated substitute or back-up equipment configuration with State
Street's written consent, such consent not to be unreasonably withheld.
b. Data Access Services. State Street agrees to make available to the
Customer the Data Access Services subject to the terms and conditions of this
Addendum and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of the Customer to originate
electronic instructions to State Street on behalf of the Customer in order to
(i) effect the transfer or movement of cash or securities held under custody by
State Street or (ii) transmit accounting or other information (such transactions
are referred to herein as "Client Originated Electronic Financial
Instructions"), and (iii) access data for the purpose of reporting and analysis,
shall be deemed to be Data Access Services for purposes of this Addendum.
c. Additional Services. State Street may from time to time agree to
make available to the Customer additional Systems that are not described in the
attachments to this Addendum. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include, and this
Addendum shall govern, the Customer's access to and use of any additional System
made available by State Street and/or accessed by the Customer.
2. NO USE OF THIRD PARTY SYSTEMS-LEVEL SOFTWARE
State Street and the Customer acknowledge that in connection with the
Data Access Services provided under this Addendum, the Customer will have
access, through the Data Access Services, to Customer Data and to functions of
State Street's proprietary systems; provided, however that in no event will the
Customer have direct access to any third party systems-level software that
retrieves data for, stores data from, or otherwise supports the System.
3. LIMITATION ON SCOPE OF USE
a. Designated Equipment; Designated Location. The System and the Data
Access Services shall be used and accessed solely on and through the Designated
Configuration at the offices of the Customer or the Investment Advisor located
in Boston, Massachusetts ("Designated Location").
b. Designated Configuration; Trained Personnel. State Street shall be
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and the Customer agree
that each will engage or retain the services of trained personnel to enable both
parties to perform their respective obligations under this Addendum. State
Street agrees to use commercially reasonable efforts to maintain the System so
that it remains serviceable, provided, however, that State Street does not
guarantee or assure uninterrupted remote access use of the System.
c. Scope of Use. The Customer will use the System and the Data Access
Services only for the processing of securities transactions, the keeping of
books of account for the Customer and accessing data for purposes of reporting
and analysis. The Customer shall not, and shall cause its employees and agents
not to (i) permit any third party to use the System or the Data Access Services,
(ii) sell, rent, license or otherwise use the System or the Data Access Services
in the operation of a service bureau or for any purpose other than as expressly
authorized under this Addendum, (iii) use the System or the Data Access Services
for any fund, trust or other investment vehicle without the prior written
consent of State Street, (iv) allow access to the System or the Data Access
Services through terminals or any other computer or telecommunications
facilities located outside the Designated Locations, (v) allow or cause any
information (other than portfolio holdings, valuations of portfolio holdings,
and other information reasonably necessary for the management or distribution of
the assets of the Customer) transmitted from State Street's databases, including
data from third party sources, available through use of the System or the Data
Access Services to be redistributed or retransmitted to another computer,
terminal or other device for other than use for or on behalf of the Customer or
(vi) modify the System in any way, including without limitation, developing any
software for or attaching any devices or computer programs to any equipment,
system, software or database which forms a part of or is resident on the
Designated Configuration.
d. Other Locations. Except in the event of an emergency or of a planned
System shutdown, the Customer's access to services performed by the System or to
Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, the Customer may use any back-up site
included in the Designated Configuration or any other back-up site agreed to by
State Street, which agreement will not be unreasonably withheld. The Customer
may secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.
e. Title. Title and all ownership and proprietary rights to the System,
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.
f. No Modification. Without the prior written consent of State Street,
the Customer shall not modify, enhance or otherwise create derivative works
based upon the System, nor shall the Customer reverse engineer, decompile or
otherwise attempt to secure the source code for all or any part of the System.
g. Security Procedures. The Customer shall comply with data access
operating standards and procedures and with user identification or other
password control requirements and other security procedures as may be issued
from time to time by State Street for use of the System on a remote basis and to
access the Data Access Services. The Customer shall have access only to the
Customer Data and authorized transactions agreed upon from time to time by State
Street and, upon notice from State Street, the Customer shall discontinue remote
use of the System and access to Data Access Services for any security reasons
cited by State Street; provided, that, in such event, State Street shall, for a
period not less than 180 days (or such other shorter period specified by the
Customer) after such discontinuance, assume responsibility to provide accounting
services under the terms of the Custodian Agreement.
h. Inspections. State Street shall have the right to inspect the use of
the System and the Data Access Services by the Customer and the Investment
Advisor to ensure compliance with this Addendum. The on-site inspections shall
be upon prior written notice to the Customer and the Investment Advisor and at
reasonably convenient times and frequencies so as not to result in an
unreasonable disruption of the Customer's or the Investment Advisor's business.
4. PROPRIETARY INFORMATION
a. Proprietary Information. The Customer acknowledges and State Street
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Customer by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street.
Any and all such information provided by State Street to the Customer shall be
deemed proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Customer agrees that it will hold such
Proprietary Information in the strictest confidence and secure and protect it in
a manner consistent with its own procedures for the protection of its own
confidential information and to take appropriate action by instruction or
agreement with its employees who are permitted access to the Proprietary
Information to satisfy its obligations hereunder. The Customer further
acknowledges that State Street shall not be required to provide the Investment
Advisor with access to the System unless it has first received from the
Investment Advisor an undertaking with respect to State Street's Proprietary
Information in the form of Attachment C to this Addendum. The Customer shall use
all commercially reasonable efforts to assist State Street in identifying and
preventing any unauthorized use, copying or disclosure of the Proprietary
Information or any portions thereof or any of the logic, formats or designs
contained therein.
b. Cooperation. Without limitation of the foregoing, the Customer shall
advise State Street immediately in the event the Customer learns or has reason
to believe that any person to whom the Customer has given access to the
Proprietary Information, or any portion thereof, has violated or intends to
violate the terms of this Addendum, and the Customer will, at its expense,
co-operate with State Street in seeking injunctive or other equitable relief in
the name of the Customer or State Street against any such person.
c. Injunctive Relief.The Customer acknowledges that the disclosure of
any Proprietary Information, or of any information which at law or equity ought
to remain confidential, will immediately give rise to continuing irreparable
injury to State Street inadequately compensable in damages at law. In addition,
State Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
d. Survival.The provisions of this Section 4 shall survive the
termination of this Addendum.
5. LIMITATION ON LIABILITY
a. Limitation on Amount and Time for Bringing Action. The Customer
agrees that any liability of State Street to the Customer or any third party
arising out of State Street's provision of Data Access Services or the System
under this Addendum shall be limited to the amount paid by the Customer for the
preceding 24 months for such services. In no event shall State Street be liable
to the Customer or any other party for any special, indirect, punitive or
consequential damages even if advised of the possibility of such damages. No
action, regardless of form, arising out of this Addendum may be brought by the
Customer more than two years after the Customer has knowledge that the cause of
action has arisen.
b. Limited Warranties. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, ARE MADE BY STATE STREET.
c. Third-Party Data. Organizations from which State Street may obtain
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
d. Regulatory Requirements. As between State Street and the Customer,
the Customer shall be solely responsible for the accuracy of any accounting
statements or reports produced using the Data Access Services and the System and
the conformity thereof with any requirements of law.
e. Force Majeure. Neither party shall be liable for any costs or
damages due to delay or nonperformance under this Addendum arising out of any
cause or event beyond such party's control, including without limitation,
cessation of services hereunder or any damages resulting therefrom to the other
party, or the Customer as a result of work stoppage, power or other mechanical
failure, computer virus, natural disaster, governmental action, or communication
disruption.
6. INDEMNIFICATION
The Customer agrees to indemnify and hold State Street harmless from any loss,
damage or expense including reasonable attorney's fees, (a "loss") suffered by
State Street arising from (i) the negligence or willful misconduct in the use by
the Customer of the Data Access Services or the System, including any loss
incurred by State Street resulting from a security breach at the Designated
Location or committed by the Customer's employees or agents or the Investment
Advisor and (ii) any loss resulting from incorrect Client Originated Electronic
Financial Instructions. State Street shall be entitled to rely on the validity
and authenticity of Client Originated Electronic Financial Instructions without
undertaking any further inquiry as long as such instruction is undertaken in
conformity with security procedures established by State Street from time to
time.
7. FEES
Fees and charges for the use of the System and the Data Access Services and
related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). Any tariffs,
duties or taxes imposed or levied by any government or governmental agency by
reason of the transactions contemplated by this Addendum, including, without
limitation, federal, state and local taxes, use, value added and personal
property taxes (other than income, franchise or similar taxes which may be
imposed or assessed against State Street) shall be borne by the Customer. Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
a. Training. State Street agrees to provide training, at a designated
State Street training facility or at the Designated Location, to the Customer's
personnel in connection with the use of the System on the Designated
Configuration. The Customer agrees that it will set aside, during regular
business hours or at other times agreed upon by both parties, sufficient time to
enable all operators of the System and the Data Access Services, designated by
the Customer, to receive the training offered by State Street pursuant to this
Addendum.
b. Installation and Conversion. State Street shall be responsible for
the technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. The Customer shall have the following responsibilities
in connection with Installation and Conversion of the System:
(i) The Customer shall be solely responsible for the
timely acquisition and maintenance of the hardware
and software that attach to the Designated
Configuration in order to use the Data Access
Services at the Designated Location.
(ii) State Street and the Customer each agree that they
will assign qualified personnel to actively
participate during the Installation and Conversion
phase of the System implementation to enable both
parties to perform their respective obligations under
this Addendum.
9. SUPPORT
During the term of this Addendum, State Street agrees to provide the
support services set out in Attachment D to this Addendum.
10. TERM OF ADDENDUM
a. Term of Addendum. This Addendum shall become effective on the date
of its execution by State Street and shall remain in full force and effect until
terminated as herein provided.
b. Termination of Addendum. Either party may terminate this Addendum
(i) for any reason by giving the other party at least one-hundred and eighty
days' prior written notice in the case of notice of termination by State Street
to the Customer or thirty days' notice in the case of notice from the Customer
to State Street of termination; or (ii) immediately for failure of the other
party to comply with any material term and condition of the Addendum by giving
the other party written notice of termination. In the event the Customer shall
cease doing business, shall become subject to proceedings under the bankruptcy
laws (other than a petition for reorganization or similar proceeding) or shall
be adjudicated bankrupt, this Addendum and the rights granted hereunder shall,
at the option of State Street, immediately terminate with notice to the
Customer. This Addendum shall in any event terminate as to any Customer within
90 days after the termination of the Custodian Agreement applicable to such
Customer.
c. Termination of the Right to Use. Upon termination of this Addendum
for any reason, any right to use the System and access to the Data Access
Services shall terminate and the Customer shall immediately cease use of the
System and the Data Access Services. Immediately upon termination of this
Addendum for any reason, the Customer shall return to State Street all copies of
documentation and other Proprietary Information in its possession; provided,
however, that in the event that either party terminates this Addendum or the
Custodian Agreement for any reason other than the Customer's breach, State
Street shall provide the Data Access Services for a period of time and at a
price to be agreed upon by the parties.
11. MISCELLANEOUS
a. Assignment; Successors. This Addendum and the rights and obligations
of the Customer and State Street hereunder shall not be assigned by either party
without the prior written consent of the other party, except that State Street
may assign this Addendum to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by, or under common control with
State Street.
b. Year 2000. State Street will take all steps necessary to ensure that
its products (and those of its third-party suppliers) reflect the available
state of the art technology to offer products that are Year 2000 compliant,
including, but not limited to, century recognition of dates, calculations that
correctly compute same century and multi century formulas and date values, and
interface values that reflect the date issues arising between now and the next
one-hundred years. If any changes are required, State Street will make the
changes to its products at no cost to Customer and in a commercially reasonable
time frame and will require third-party suppliers to do likewise.
c. Survival. All provisions regarding indemnification, warranty,
liability and limits thereon, and confidentiality and/or protection of
proprietary rights and trade secrets shall survive the termination of this
Addendum.
d. Entire Agreement. This Addendum and the attachments hereto
constitute the entire understanding of the parties hereto with respect to the
Data Access Services and the use of the System and supersedes any and all prior
or contemporaneous representations or agreements, whether oral or written,
between the parties as such may relate to the Data Access Services or the
System, and cannot be modified or altered except in a writing duly executed by
the parties. This Addendum is not intended to supersede or modify the duties and
liabilities of the parties hereto under the Custodian Agreement or any other
agreement between the parties hereto except to the extent that any such
agreement specifically refers to the Data Access Services or the System. No
single waiver of any right hereunder shall be deemed to be a continuing waiver.
e. Severability. If any provision or provisions of this Addendum shall
be held to be invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
f. Governing Law. This Addendum shall be interpreted and construed in
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
<PAGE>
ATTACHMENT A
Multicurrency HORIZONSM Accounting System
System Product Description
I. The Multicurrency HORIZONSM Accounting System is designed to provide
lot level portfolio and general ledger accounting for SEC and ERISA
type requirements and includes the following services: 1) recording of
general ledger entries; 2) calculation of daily income and expense; 3)
reconciliation of daily activity with the trial balance, and 4)
appropriate automated feeding mechanisms to (i) domestic and
international settlement systems, (ii) daily, weekly and monthly
evaluation services, (iii) portfolio performance and analytic services,
(iv) customer's internal computing systems and (v) various State Street
provided information services products.
II. GlobalQuestR is designed to provide customer access to the following
information maintained on The Multicurrency HORIZONSM Accounting
System: 1) cash transactions and balances; 2) purchases and sales; 3)
income receivables; 4) tax refund receivables; 5) daily priced
positions; 6) open trades; 7) settlement status; 8) foreign exchange
transactions; 9) trade history, and 10) daily, weekly and monthly
evaluation services.
III. SaFiReSM. SaFiReSM is designed to provide the customer with the ability
to prepare its own financial reports by permitting the customer to
access customer information maintained on the Multicurrency HORIZONR
Accounting System, to organize such information in a flexible reporting
format and to have such reports printed on the customer's desktop or by
its printing provider.
<PAGE>
ATTACHMENT B
Designated Configuration
<PAGE>
ATTACHMENT C
Undertaking
The undersigned understands that in the course of its employment as
Investment Advisor to *[FUND NAME] (the "Customer") it will have access to State
Street Bank and Trust Company's ("State Street") Multicurrency HORIZONSM
Accounting System and other information systems (collectively, the "System").
The undersigned acknowledges that the System and the databases,
computer programs, screen formats, report formats, interactive design
techniques, documentation and other information made available to the
undersigned by State Street as part of the Data Access Services provided to the
Customer and through the use of the System constitute copyrighted, trade secret,
or other proprietary information of substantial value to State Street. Any and
all such information provided by State Street to the Undersigned shall be deemed
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The undersigned agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder.
The undersigned will not attempt to intercept data, gain access to data
in transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
First Union National Bank
By: _________________________
Title: _________________________
Date: _________________________
<PAGE>
ATTACHMENT C-1
Undertaking
The undersigned understands that in the course of its employment as
Independent Auditor to EVERGREEN MONEY MARKET TRUST (the "Customer") it will
have access to State Street Bank and Trust Company's ("State Street")
Multicurrency HORIZON Accounting System and other information systems
(collectively, the "System").
The undersigned acknowledges that the System and the databases,
computer programs, screen formats, report formats, interactive design
techniques, documentation, and other information made available to the
Undersigned by State Street as part of the Data Access Services provided to the
Customer and through the use of the System constitute copyrighted, trade secret,
or other proprietary information of substantial value to State Street. Any and
all such information provided by State Street to the Undersigned shall be deemed
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Undersigned agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder.
The Undersigned will not attempt to intercept data, gain access to data
in transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
*[Name of Independent Auditor]
By:
Title:
Date:
<PAGE>
ATTACHMENT D
Support
During the term of this Addendum, State Street agrees to provide the
following on-going support services:
a. Telephone Support. The Customer Designated Persons may contact State
Street's Multicurrency HORIZONSM Help Desk and Customer Assistance Center
between the hours of 8 a.m. and 6 p.m. (Eastern time) on all business days for
the purpose of obtaining answers to questions about the use of the System, or to
report apparent problems with the System. From time to time, the Customer shall
provide to State Street a list of persons, not to exceed five in number, who
shall be permitted to contact State Street for assistance (such persons being
referred to as "the Customer Designated Persons").
b. Technical Support. State Street will provide technical support to
assist the Customer in using the System and the Data Access Services. The total
amount of technical support provided by State Street shall not exceed 10
resource days per year. State Street shall provide such additional technical
support as is expressly set forth in the fee schedule in effect from time to
time between the parties (the "Fee Schedule"). Technical support, including
during installation and testing, is subject to the fees and other terms set
forth in the Fee Schedule.
c. Maintenance Support. State Street shall use commercially reasonable
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d. System Enhancements. State Street will provide to the Customer any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Customer and shall offer the Customer reasonable
training on the enhancement. Charges for system enhancements shall be as
provided in the Fee Schedule. State Street retains the right to charge for
related systems or products that may be developed and separately made available
for use other than through the System.
e. Custom Modifications. In the event the Customer desires custom
modifications in connection with its use of the System, the Customer shall make
a written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
f. Limitation on Support. State Street shall have no obligation to
support the Customer's use of the System: (i) for use on any computer equipment
or telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Customer has modified the System in
breach of this Addendum.
ADMINISTRATIVE SERVICES AGREEMENT
EVERGREEN MONEY MARKET TRUST
This Administrative Services Agreement is made as of this 18th day of
September, 1997 between Evergreen Money Market Trust, a Delaware business trust
(herein called the "Trust"), and Evergreen Investment Services, Inc., a Delaware
corporation (herein called "EIS").
W I T N E S S E T H:
WHEREAS, the Trust is a Delaware business trust consisting of one or
more portfolios which operates as an open-end management investment company and
is so registered under the Investment Company Act of 1940; and
WHEREAS, the Trust desires to retain EIS as its Administrator to
provide it with administrative services, and EIS is willing to render such
services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereto agree as follows:
1. APPOINTMENT OF ADMINISTRATOR. The Trust hereby appoints EIS as
administrator of the Trust and each of its portfolios listed on SCHEDULE A
attached hereto on the terms and conditions set forth in this Agreement; and EIS
hereby accepts such appointment and agrees to perform the services and duties
set forth in Section 2 of this Agreement in consideration of the compensation
provided for in Section 4 hereof.
2. SERVICES AND DUTIES. As Administrator, and subject to the
supervision and control of the Trustees of the Trust, EIS will hereafter provide
facilities, equipment and personnel to carry out the following administrative
services for operation of the business and affairs of the Trust and each of its
portfolios:
(a) prepare, file and maintain the Trust's governing documents,
including the Declaration of Trust (which has previously been
prepared and filed), the By-laws, minutes of meetings of
Trustees and shareholders, and proxy statements for meetings
of shareholders;
(b) prepare and file with the Securities and Exchange Commission
and the appropriate state securities authorities the
registration statements for the Trust and the Trust's shares
and all amendments thereto, reports to regulatory authorities
and shareholders, prospectuses, proxy statements, and such
other documents as may be necessary or convenient to enable
the Trust to make a continuous offering of its shares;
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<PAGE>
(c) prepare, negotiate and administer contracts on behalf of the
Trust with, among others, the Trust's distributor, custodian
and transfer agent;
(d) supervise the Trust's fund accounting agent in the maintenance
of the Trust's general ledger and in the preparation of the
Trust's financial statements, including oversight of expense
accruals and payments and the determination of the net asset
value of the Trust's assets and of the Trust's shares, and of
the declaration and payment of dividends and other
distributions to shareholders;
(e) calculate performance data of the Trust for dissemination to
information services covering the investment company industry;
(f) prepare and file the Trust's tax returns;
(g) examine and review the operations of the Trust's custodian and
transfer agent;
(h) coordinate the layout and printing of publicly disseminated
prospectuses and reports;
(i) prepare various shareholder reports;
(j) assist with the design, development and operation of new
portfolios of the Trust;
(k) coordinate shareholder meetings;
(l) provide general compliance services; and
(m) advise the Trust and its Trustees on matters concerning the
Trust and its affairs.
The foregoing, along with any additional services that EIS shall agree
in writing to perform for the Trust hereunder, shall hereafter be referred to as
"Administrative Services." Administrative Services shall not include any duties,
functions, or services to be performed for the Trust by the Trust's investment
adviser, distributor, custodian or transfer agent pursuant to their agreements
with the Trust.
3. EXPENSES. EIS shall be responsible for expenses incurred in
providing office space, equipment and personnel as may be necessary or
convenient to provide the Administrative Services to the Trust. The Trust shall
be responsible for all other expenses incurred by EIS on behalf of the Trust,
including without limitation postage and courier expenses, printing expenses,
registration fees, filing fees, fees of outside counsel and independent
auditors, insurance premiums, fees payable to Trustees who are not EIS
employees, and trade association dues.
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<PAGE>
4. COMPENSATION. For the Administrative Services provided, the Trust
hereby agrees to pay and EIS hereby agrees to accept as full compensation for
its services rendered hereunder an administrative fee, calculated daily and
payable monthly, at an annual rate determined in accordance with the table
below.
Aggregate Daily Net Assets of Funds
Administered by EIS for Which Any
Affiliate of First Union National Bank
Administrative Fee Serves as Investment Adviser
------------------ --------------------------------------
.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
.010% on assets in excess of $30 billion
Each portfolio of the Trust shall pay a portion of the administrative fee equal
to the rate determined above times that portfolio's average annual daily net
assets.
5. RESPONSIBILITY OF ADMINISTRATOR. EIS shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust in
connection with the matters to which this Agreement relates, except a loss
resulting from wilful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. EIS shall be entitled to rely on
and may act upon advice of counsel (who may be counsel for the Trust) on all
matters, and shall be without liability for any action reasonably taken or
omitted pursuant to such advice. Any person, even though also an officer,
director, partner, employee or agent of EIS, who may be or become an officer,
trustee, employee or agent of the Trust, shall be deemed, when rendering
services to the Trust or acting on any business of the Trust (other than
services or business in connection with the duties of EIS hereunder) to be
rendering such services to or acting solely for the Trust and not as an officer,
director, partner, employee or agent or one under the control or direction of
EIS even though paid by EIS.
6. DURATION AND TERMINATION.
(a) This Agreement shall continue in effect from year to year
thereafter, provided it is
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<PAGE>
approved, at least annually, by a vote of a majority of
Trustees of the Trust including a majority of the
disinterested Trustees.
(b) This Agreement may be terminated at any time, without
payment of any penalty, on sixty (60) day's prior written
notice by a vote of a majority of the Trust's Trustees or
by EIS.
7. AMENDMENT. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which an enforcement of the change, waiver, discharge or
termination is sought.
8. NOTICES. Notices of any kind to be given to the Trust hereunder by
EIS shall be in writing and shall be duly given if delivered to the Trust and to
its investment adviser at the following address: First Union National Bank, One
First Union Center, Charlotte, North Carolina 28288. Notices of any kind to be
given to EIS hereunder by the Trust shall be in writing and shall be duly given
if delivered to EIS at 200 Berkeley Street, Boston, Massachusetts 02116.
Attention: Chief Administrative Officer.
9. LIMITATION OF LIABILITY. EIS is hereby expressly put on notice of
the limitation of liability as set forth in the Declaration of Trust and agrees
that the obligations pursuant to this Agreement of a particular portfolio and of
the Trust with respect to that particular portfolio be limited solely to the
assets of that particular portfolio, and EIS shall not seek satisfaction of any
such obligation from the assets of any other portfolio, the shareholders of any
portfolio, the Trustees, officers, employees or agents of the Trust, or any of
them.
10. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court or
regulatory agency decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. Subject to the provisions of Section 5
hereof, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by
Delaware law; provided, however, that nothing herein shall be construed in a
manner inconsistent with the Investment Company Act of 1940 or any rule or
regulation promulgated by the Securities and Exchange Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Administrative
Services Agreement to be executed by their officers designated below as of the
day and year first above written.
EVERGREEN MONEY MARKET TRUST
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<PAGE>
ATTEST:/s/ Carol Churns By:/s/ John J. Pileggi
---------------------- -------------------------
Name: John J. Pileggi
Title: President
EVERGREEN INVESTMENT SERVICES, INC.
ATTEST:_______________________ By:/s/ Gordon Forrester
-------------------------
Name: Gordon Forrester
Title: Chief Administrative Officer
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<PAGE>
SCHEDULE A
EVERGREEN MONEY MARKET TRUST
Evergreen Pennsylvania Tax Free Money Market Fund
(To be redesignated Evergreen Pennsylvania Municipal Money Market Fund
January 12, 1998)
Evergreen Treasury Money Market Fund
MASTER TRANSFER AND RECORDKEEPING AGREEMENT
AGREEMENT made as of the 18th day of September, 1997 by and between
each of the parties listed on Exhibit A which is attached hereto and made a part
hereof (each a "Fund" or "Funds"), each for itself and not jointly, each having
its principal place of business at 200 Berkeley Street, Boston, Massachusetts
02116, and Evergreen Service Company ("ESC"), having its principal place of
business at 200 Berkeley Street, Boston, Massachusetts 02116.
W I T N E S S E T H T H A T
WHEREAS, each Fund desires ESC to perform certain services for the
Fund, and ESC is willing to perform such services.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, each party, for itself and not jointly, agrees as follows:
1. ADDITIONAL PARTIES - Any other registered investment company for
which Keystone Investment Management Company (KIMCO), Evergreen Asset Management
Corp. ("Evergreen Asset"), First Union National Bank or one of its affiliates
serves as investment adviser, trustee or manager may become a Fund party to this
Agreement, for itself and not jointly, by giving written notice to ESC that it
has elected to become a Fund party hereto, to which election ESC has given its
written consent.
2. SERVICES - ESC shall perform for each Fund the services set forth on
Exhibit B which is attached hereto and made a part hereof. ESC shall also
perform for each Fund, without additional charge, any services which it
customarily performs in the ordinary course of business without additional
charge for the investment companies for which ESC acts as transfer agent,
dividend disbursing agent, or shareholder servicing and recordkeeping agent.
ESC shall perform such other services in addition to those set forth on
Exhibit B hereto as a Fund shall request in writing. Any of the services to be
performed hereunder, and the manner in which such services are to be performed,
shall be changed only pursuant to a written agreement signed by the parties
hereto.
ESC will undertake no activity which, in its judgment, will adversely
effect the performance of its obligations to a Fund under this Agreement.
3. FEES - Each Fund shall pay ESC for the services to be performed
pursuant to this Agreement in accordance with and in the manner set forth with
respect to such Fund on Exhibit C attached hereto and made a part hereof.
4. EFFECTIVE DATE - This Agreement shall become effective as of the
date set forth above and shall become effective as to each Fund which gives
written notice to ESC
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pursuant to Paragraph 1 hereof that it elects to become a party hereto as of the
date of such notice.
5. TERM - This Agreement shall be in effect until terminated in
accordance with Section 17 hereof.
6. USE OF ESC'S NAME - The Funds will not use ESC's name in any sales
literature or other material in a manner not approved by ESC in writing before
such use, unless a similar use was previously approved. Notwithstanding the
foregoing, ESC hereby consents to all uses of ESC's name which merely refer in
accurate terms to ESC's appointments hereunder or which are required by the
Securities and Exchange Commission or a state securities commission, and
provided, further, that in no case will such approval be unreasonably withheld
or delayed.
7. STANDARD OF CARE - ESC shall at all times use its best efforts and
act in good faith and in a non-negligent manner in performing all services
pursuant to this Agreement.
8. UNCONTROLLABLE EVENTS - ESC shall not be liable for damage, loss of
data, delays or errors occurring by reason of circumstances beyond its control,
including, but not limited to, acts of civil or military authority, national
emergencies, fire, flood or catastrophe, acts of God, insurrection, war, riots,
or failure of transportation, communication or power supply. However, ESC shall
keep in a separate and safe place additional copies of all records required to
be maintained pursuant to this Agreement or additional tapes or discs necessary
to reproduce all such records. Furthermore, at all times during this Agreement,
ESC shall maintain an arrangement whereby ESC will have a backup computer
facility available for its use in providing the services required hereunder in
the event circumstances beyond ESC's control result in ESC not being able to
process the necessary work at its principal computer facility. ESC shall, from
time to time, upon request from any Fund provide written evidence and details of
its arrangement for obtaining the use of such a backup computer facility. ESC
shall use reasonable care to minimize the likelihood of all damage, loss of
data, delays and errors resulting from an uncontrollable event. Should such
damage, loss of data, delays or errors occur, ESC shall use its best efforts to
mitigate the effects of such occurrence. Representatives of each Fund shall be
entitled to inspect the ESC premises and operating capabilities within
reasonable business hours and upon reasonable notice to ESC.
9. INDEMNIFICATION - Each Fund shall indemnify and hold ESC, its
employees and agents harmless against any losses, claims, damages, judgments,
liabilities or expenses (including reasonable counsel fees and expenses)
resulting from (1) transactions which occurred prior to the date ESC began
serving as Transfer Agent to the Fund; (2) action taken or permitted by ESC in
good faith with due care and without negligence in reliance upon instructions
received from such Fund in accordance with Section 10 hereof or with respect to
a Fund upon the opinion of counsel for the Fund, as to anything arising in
connection with its performance under this Agreement; or (3) any act done or
suffered by ESC with respect to a Fund in good faith with due care and without
negligence in connection with its performance under this Agreement in reliance
upon any instruction, order, stock certificate or other instrument reasonably
believed by it to be
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<PAGE>
genuine and to bear the genuine signature of any person or persons authorized to
sign, countersign, or execute same, and which complies with all applicable
requirements of the Fund's current prospectus(es) and statement of additional
information, this Agreement and instructions and other governing documents
provided to ESC by the Fund. For purposes of this indemnification, it is
specifically agreed that if any instruction received by ESC in accordance with
Section 10 hereof differs from the requirements set forth in the Fund's current
prospectus(es) or statement of additional information then, with regard to that
difference, the instruction, order, stock certificate or other instrument relied
upon by ESC, ESC need only comply with such instruction (and not the current
prospectus(es) or statement of additional information).
In the event that ESC requests any Fund to indemnify or hold it
harmless hereunder, ESC shall use its best efforts to inform the Fund of the
relevant facts concerning the matter in question. ESC shall use reasonable care
to identify and promptly notify a Fund concerning any matter which ESC believes
may result in a claim for indemnification against such Fund, and shall notify
the Fund within seven days of notice to ESC of the filing of any suit or other
legal action or the institution by a government agency of any administrative
action or investigation against ESC which involves its duties under this
Agreement. Each Fund shall have the election of defending ESC against any claim
with respect to such Fund which may be the subject of indemnification or holding
it harmless hereunder. In the event a Fund so elects, it will so notify ESC.
Thereupon the Fund shall take over defense of the claim, and, if so requested by
a Fund, ESC shall incur no further legal or other expenses related thereto for
which it shall be entitled to indemnity or holding harmless hereunder; provided,
however, that nothing herein shall prevent ESC from retaining counsel to defend
any claim at ESC's own expense.
Except with the prior written consent of a Fund, ESC shall in no event
confess any claim or make any compromise in any matter in which such Fund will
be asked to indemnify or hold ESC harmless hereunder. ESC shall be without
liability to a Fund with respect to anything done or omitted to be done in
accordance with the terms of this Agreement or instructions properly received
pursuant hereto if done in good faith and without negligence or willful or
wanton misconduct. In no event shall ESC be liable for consequential damages,
lost profits, or other special damages, even if ESC has been informed of the
possibility of such damage or loss by the Fund or by third parties.
Notwithstanding the foregoing, ESC shall be liable to each Fund for
any damage or losses suffered by such Fund as a result of a delay or negligence
on the part of ESC in processing a purchase or liquidation transaction or in
making payment to a shareholder of such Fund; it being agreed that, without in
any way limiting ESC's liability for other transactions hereunder, that such
damages shall not be deemed to be consequential or special.
10. INSTRUCTIONS - ESC shall comply with all instructions issued by a
Fund in the form prescribed below which are permitted or required under Exhibit
B attached hereto. Whenever ESC takes action hereunder pursuant to instructions
from a Fund, ESC shall be entitled to rely upon such instructions only when such
instructions are signed by the President or Treasurer of
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the Fund or by an individual designated in writing by the President or Treasurer
as a person authorized to give instructions hereunder. A Fund may waive the
requirement that all instructions be in writing, if such waiver defines the
occurrences not requiring written instruction, indicates the persons authorized
to give such non-written instructions, and is signed by one of the persons
pursuant to the immediately preceding sentence of this Section 10. In the event
ESC obtains a Fund's written waiver, it may rely on non-written instructions
received pursuant thereto.
11. CONFIDENTIALITY - ESC agrees to treat as confidential all records
and other information relative to a Fund and the Fund's shareholders. ESC, on
behalf of itself and its employees, agrees to keep confidential all such
information, except, after prior notification to and approval by a Fund (which
approval shall not be unreasonably withheld and may not be withheld where ESC
may be exposed to civil or criminal contempt proceedings) when requested to
divulge such information by duly constituted authorities or when requested by a
shareholder of a Fund seeking information about his own or an appropriately
related account.
12. REPORTS - ESC will furnish to each Fund and to properly authorized
auditors, examiners, investment companies, dealers, salesmen, insurance
companies, transfer agents, registrars, investors, and others designated by each
Fund in writing, such reports at such times as are prescribed for each service
in Exhibit B.
13. RIGHT OF OWNERSHIP - ESC agrees that all records and other data
received, computed, developed, used and/or stored pursuant to this Agreement are
the exclusive property of each respective Fund and that all such records and
other data will be furnished without additional charge to a Fund in available
machine readable data form immediately upon termination of this Agreement with
respect to such Fund for any reason whatsoever. Furthermore, upon a Fund's
request at any time or times while this Agreement is in effect, ESC shall
deliver to such Fund, at the Fund's expense, any or all of the data and records
held by ESC pursuant to this Agreement, in the form as requested by the Fund. On
the effective date of termination of this Agreement with respect to a Fund or,
if later, on the date a Fund ceases to use ESC's services, ESC will promptly
return to the Fund any and all records and other data belonging to the Fund free
of any claim or retention of rights by ESC.
14. REDEMPTION OF SHARES - The parties hereto agree that ESC shall
process liquidations, redemptions or repurchases of shares of each Fund, as the
agent for such Fund, in the manner described in the then current prospectus(es)
and statement of additional information for the Fund. Notwithstanding the
foregoing, ESC shall be liable for any losses, damages, claims or expenses
resulting from ESC's failure to obtain the appropriate signature guarantee with
regard to any redemption or transfer processed by ESC even if the current
prospectus(es) or statement of additional information authorizes ESC to waive
the requirement of a signature guarantee unless ESC is authorized in writing by
an appropriate party to waive such a requirement.
15. SUBCONTRACTING - Each Fund may require that ESC, or ESC may, with
the prior written consent of such Fund, subcontract with one or more of its
affiliated or other persons to
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perform all or part of its obligations hereunder, provided, however, that,
notwithstanding any such subcontract, ESC shall be fully responsible to each
Fund hereunder.
16. ASSIGNMENT - This Agreement and the rights and duties hereunder
shall not be assignable by ESC or any of the Fund parties hereto except by the
specific written consent of the other party.
17. TERMINATION - This Agreement may be terminated with respect to a
Fund on such date on which ESC has given such Fund not less than 180 days prior
written notice or on which such Fund has given ESC not less than 90 days prior
written notice. Upon such termination, ESC will use its best efforts to
cooperate and assist in accomplishing a timely, efficient and accurate
conversion to the person or firm which will provide the services described
hereunder. This Agreement may be terminated by any Fund without the payment of
any penalty, forfeiture, compulsory buyout amount or performance of any other
obligation which could deter termination; provided, however, that for the
purpose of this Section 17 any amount due under Section 3 of this Agreement
which is undisputed is not considered a penalty, forfeiture, compulsory buyout
amount or performance of any other obligation which could deter termination.
This Agreement may be terminated with respect to a Fund after written
notice to ESC by the Fund if there is a material breach or violation of this
Agreement or if ESC fails to perform any of its obligations under this Agreement
and the failure continues for more than 30 days after the Fund gives notice of
the failure to ESC or bankruptcy or insolvency proceedings of any nature are
instituted by or against ESC.
18. INSURANCE - ESC shall maintain throughout the term of this
Agreement a fidelity bond(s) in an amount in excess of the minimum amount
required to be obtained by the Funds which are parties hereto pursuant to Rule
17g-1 under the Investment Company Act of 1940 (the "1940 Act") covering the
acts of its officers, employees or agents in performing any and all of the
services required to be performed hereunder. ESC agrees to promptly notify each
Fund in writing of any material amendment or cancellation of such bond(s). ESC
shall at such times as the Fund may request, but at least once each year, notify
each Fund of any claims made pursuant to such bond(s).
19. AMENDMENT - This Agreement may be amended at any time by an
instrument in writing executed by both ESC and any Fund which is a party hereto,
or each of their respective successors, provided that any such amendment will
conform to the requirements set forth in the 1940 Act and the rules and
regulations thereunder.
20. NOTICE - Any notice shall be sufficiently given when sent by
registered or certified mail to any party at the address of such party set forth
above or at such other address as such party may from time to time specify in
writing to the other party.
21. SECTION HEADINGS - Section headings are included for convenience
only and are not
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to be used to construe or interpret this Agreement.
22. INTERPRETIVE PROVISIONS - In connection with the operation of this
Agreement, ESC and one or more of the Funds may agree with respect to such Funds
and ESC from time to time on such provisions interpretive of or in addition to
the provisions of this Agreement as may in their combined opinion be consistent
with the general tenor of this Agreement. Furthermore, ESC and such Fund(s) may
agree to add to, delete from or change the services set forth with respect to
such Fund(s) in Exhibit B of the Agreement. Each such interpretive or additional
provision, and each addition, deletion or change is to be signed by all parties
affected and annexed hereto, and no such provision, addition, deletion or change
shall contravene any applicable federal or state law or regulation and no such
provision, addition, deletion or change shall be deemed to be an amendment of
any provision of this Agreement with the exception of Exhibit B hereto.
23. GOVERNING LAW - This Agreement shall be governed by and its
provisions shall be construed in accordance with the laws of The Commonwealth of
Massachusetts.
24. DELAWARE BUSINESS TRUST - Each of the Funds listed on Exhibit A
attached hereto is a Delaware business trust established under a Declaration of
Trust. The obligations of such Funds are not personally binding upon, nor shall
recourse be had against the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Funds, but only the property
of such Funds shall be bound.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
EVERGREEN SERVICE COMPANY
By: /s/ Edward J. Falvey
------------------------
Edward J. Falvey
President
Evergreen Select Fixed Income Trust, a Delaware Business Trust consisting of the
following series:
Evergreen Select Limited Duration Fund Evergreen Select Fixed Income
Fund Evergreen Select Income Plus Fund Evergreen Select Intermediate
Tax Exempt Bond Fund Evergreen Select Core Bond Fund Evergreen Select
Intermediate Bond Fund Evergreen Select Adjustable Rate Fund
Evergreen Select Equity Trust, a Delaware Business Trust consisting of the
following series:
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Evergreen Select Strategic Value Fund Evergreen Select Large Cap Blend
Fund Evergreen Select Strategic Growth Fund Evergreen Select Social
Principles Fund Evergreen Select Equity Income Fund Evergreen Select
Small Company Value Fund Evergreen Select Common Stock Fund Evergreen
Select Small Cap Growth Fund Evergreen Select Balanced Fund Evergreen
Select Diversified Value Fund
Evergreen Select Money Market Trust, a Delaware Business Trust consisting of the
following series:
Evergreen Select 100% Treasury Money Market Fund
Evergreen Institutional Money Market Fund
Evergreen Institutional Tax Exempt Money Market Fund
Evergreen Institutional Treasury Money Market Fund
Evergreen Municipal Trust, a Delaware Business Trust consisting of the
following series:
Evergreen California Tax Free Fund Evergreen Connecticut Municipal Bond
Fund Evergreen Florida High Income Municipal Bond Fund Evergreen
Florida Municipal Bond Fund Evergreen Georgia Municipal Bond Fund
Evergreen Massachusetts Tax Free Fund Evergreen Missouri Tax Free Fund
Evergreen New Jersey Tax Free Income Fund Evergreen New York Tax Free
Fund Evergreen North Carolina Municipal Bond Fund Evergreen
Pennsylvania Tax Free Fund Evergreen South Carolina Municipal Bond Fund
Evergreen Virginia Municipal Bond Fund Evergreen High Grade Tax Free
Fund Evergreen Short-Intermediate Municipal Fund Evergreen Tax Free
Fund
Evergreen Equity Trust, a Delaware Business Trust consisting of the following
series:
Evergreen Aggressive Growth Fund Evergreen Fund Evergreen Micro Cap
Fund Evergreen Omega Fund Evergreen Small Company Growth Fund Keystone
Strategic Growth Fund (K-2) Evergreen American Retirement Fund
23146
<PAGE>
Evergreen Foundation Fund Evergreen Tax Strategic Foundation Fund
Evergreen Balanced Fund Evergreen Fund for Total Return Evergreen
Growth & Income Fund Evergreen Income & Growth Fund Evergreen Small Cap
Equity Income Fund Evergreen Value Fund Evergreen Utility Fund Keystone
Growth and Income Fund (S-1)
Evergreen Fixed Income Trust, a Delaware Business Trust consisting of the
following series:
Evergreen U.S. Government Fund
Evergreen Strategic Income Fund
Evergreen Diversified Bond Fund
Keystone High Income Bond Fund (B-4)
Evergreen Capital Preservation and Income Fund
Evergreen Intermediate Term Bond Fund
Evergreen Intermediate-Term Government Securities Fund
Evergreen Short-Intermediate Bond Fund
Evergreen International Trust, a Delaware Business Trust consisting of the
following series:
Evergreen Emerging Markets Growth Fund Evergreen Global Leaders Fund
Evergreen Global Opportunities Fund Evergreen International Equity Fund
Evergreen Latin America Fund Evergreen Natural Resources Fund Keystone
Precious Metals Holdings Keystone International Fund
Evergreen Money Market Trust, a Delaware Business Trust consisting of the
following series:
Evergreen Money Market Fund
Evergreen Pennsylvania Tax Free Money Market Fund
Evergreen Tax Exempt Money Market Fund
Evergreen Treasury Money Market Fund
By: /s/ John Pileggi
------------------------------------
John Pileggi
President and Treasurer of each
Delaware Business Trust listed above
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EXHIBIT A
Evergreen Select Fixed Income Trust, a Delaware Business Trust consisting of the
following series:
Evergreen Select Limited Duration Fund Evergreen Select Fixed Income
Fund Evergreen Select Income Plus Fund Evergreen Select Intermediate
Tax Exempt Bond Fund Evergreen Select Core Bond Fund Evergreen Select
Intermediate Bond Fund Evergreen Select Adjustable Rate Fund
Evergreen Select Equity Trust, a Delaware Business Trust consisting of the
following series:
Evergreen Select Strategic Value Fund Evergreen Select Large Cap Blend
Fund Evergreen Select Strategic Growth Fund Evergreen Select Social
Principles Fund Evergreen Select Equity Income Fund Evergreen Select
Small Company Value Fund Evergreen Select Common Stock Fund Evergreen
Select Small Cap Growth Fund Evergreen Select Balanced Fund Evergreen
Select Diversified Value Fund
Evergreen Select Money Market Trust, a Delaware Business Trust consisting of the
following series:
Evergreen Select 100% Treasury Money Market Fund
Evergreen Institutional Money Market Fund
Evergreen Institutional Tax Exempt Money Market Fund
Evergreen Institutional Treasury Money Market Fund
Evergreen Municipal Trust, a Delaware Business Trust consisting of the following
series:
Evergreen California Tax Free Fund Evergreen Connecticut Municipal Bond
Fund Evergreen Florida High Income Municipal Bond Fund Evergreen
Florida Municipal Bond Fund Evergreen Georgia Municipal Bond Fund
Evergreen Massachusetts Tax Free Fund Evergreen Missouri Tax Free Fund
Evergreen New Jersey Tax Free Income Fund Evergreen New York Tax Free
Fund Evergreen North Carolina Municipal Bond Fund
23146
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<PAGE>
Evergreen Pennsylvania Tax Free Fund
Evergreen South Carolina Municipal Bond Fund
Evergreen Virginia Municipal Bond Fund
Evergreen High Grade Tax Free Fund
Evergreen Short-Intermediate Municipal Fund
Evergreen Tax Free Fund
Evergreen Equity Trust, a Delaware Business Trust consisting of the following
series:
Evergreen Aggressive Growth Fund Evergreen Fund Evergreen Micro Cap
Fund Evergreen Omega Fund Evergreen Small Company Growth Fund Keystone
Strategic Growth Fund (K-2) Evergreen American Retirement Fund
Evergreen Foundation Fund Evergreen Tax Strategic Foundation Fund
Evergreen Balanced Fund Evergreen Fund for Total Return Evergreen
Growth & Income Fund Evergreen Income & Growth Fund Evergreen Small Cap
Equity Income Fund Evergreen Value Fund Evergreen Utility Fund Keystone
Growth and Income Fund (S-1)
Evergreen Fixed Income Trust, a Delaware Business Trust consisting of the
following series:
Evergreen U.S. Government Fund
Evergreen Strategic Income Fund
Evergreen Diversified Bond Fund
Keystone High Income Bond Fund (B-4)
Evergreen Capital Preservation and Income Fund
Evergreen Intermediate Term Bond Fund
Evergreen Intermediate-Term Government Securities Fund
Evergreen Short-Intermediate Bond Fund
Evergreen International Trust, a Delaware Business Trust consisting of the
following series:
Evergreen Emerging Markets Growth Fund
Evergreen Global Leaders Fund
Evergreen Global Opportunities Fund
Evergreen International Equity Fund
Evergreen Latin America Fund
Evergreen Natural Resources Fund
23146
A-2
<PAGE>
Keystone Precious Metals Holdings
Keystone International Fund
Evergreen Money Market Trust, a Delaware Business Trust consisting of the
following series:
Evergreen Money Market Fund
Evergreen Pennsylvania Tax Free Money Market Fund
Evergreen Tax Exempt Money Market Fund
Evergreen Treasury Money Market Fund
23146
A-2
<PAGE>
EXHIBIT B
The services provided for in this Agreement shall be performed by ESC,
or any agent appointed by ESC pursuant to Section 15 of this Agreement, under
the name of Evergreen Service Company (ESC) and this name or any similar name or
logo will not be used by ESC or its agents for any purposes other than those
related to this Agreement or to any other agreement which ESC may enter into
with any of the Fund (s) or with companies affiliated with the Fund (s).
The offices of ESC shall be open to perform the services pursuant to
this Agreement on all days when the Fund is open to transact business.
ESC will perform all services normally provided to investment companies
such as the Fund(s), and the quality of such services shall be equal to or
better than that provided to the other investment companies serviced by ESC.
With respect to each Fund, by way of illustration, but not limitation, these
services will include:
1. Establishing, maintaining, safeguarding and reporting on
shareholder account information and account histories,
(including registration, name and address recorded in
generally accepted form, dealer, representative, branch, and
territory information, mailing address, distribution address,
various codes and specific information relating to (if
applicable); withdrawal plans, letters of intent, systematic
investing, insured redemptions plans, account groupings for
rights of accumulation discount processing, and for account
group reporting for plan accounts and other accounts grouped
for master sub-account reporting.)
2. Recording and controlling shares outstanding in certificate
("issued") and non-certificate ("unissued") form.
3. Maintaining a record for each certificate issued to include
certificate number, account number, issued date, number of
shares, canceled date or stop date, where appropriate.
4. Reconciling the number of outstanding shares of each Fund on a
daily basis with the Fund and the Fund's custodian, promptly
correcting any differences noted.
5. Establishing and maintaining a trade file on behalf of each
Fund based on trade information furnished to the transfer
agent by the Fund or its distributors.
23146
B-1
<PAGE>
6. Accepting and processing direct cash investments however
received and investing such investments promptly in
shareholder accounts.
7. Passing upon the adequacy of documents properly endorsed and
guaranteed submitted by or on behalf of a shareholder to
transfer ownership or redeem shares.
8. Transferring ownership of shares upon the books of each Fund.
9. Redeeming shares and preparing and mailing redemption checks
or wire proceeds as instructed.
10. Preparing and promptly mailing account statements to the
shareholder or such other authorized address and, when
appropriate, as instructed by a Fund, to the dealer or dealer
branch, whenever transaction activity effecting share balances
are posted to a Fund account that is of the type that should
receive such statement.
11. Checking surrendered certificates for stop transfer
instructions.
12. Canceling certificates surrendered.
13. Issuing certificates as replacements for those canceled, or as
an original issue of additional shares or upon the reduction
of an equal number of unissued shares.
14. Maintaining and updating a stop transfer file, promptly
placing stop transfer codes upon notification of possible
loss, destruction or disappearance of a certificate. Upon
receipt of proper documentation obtaining necessary insurance
forms and issuing replacement certificates.
15. Balancing outstanding shares of record with the custodian
prior to each distribution and calculating and paying or
reinvesting distributions to shareholders of record and to
open trade receivables and free stock.
16. Processing exchanges of shares of one Fund or Portfolio for
another, calculating proper sales charges and collecting fees
as required.
17. Processing withdrawal plan liquidations according to plan
instructions.
18. Reporting to each Fund and its custodian daily the capital
stock activities and dollar amounts of transactions.
19. Promptly answering inquiries from shareholders, dealers, Fund
personnel, and others as requested in accordance with the
terms of this Agreement as to account
23146
B-2
<PAGE>
matters, referring policy or investment matters to the Fund.
20. Mailing reports and special mailings, as directed by a Fund,
to all shareholders or selected holders or dealers.
21. Providing services with regard to the annual or special
meetings of a Fund, including preparation and timely mailing
of proxy material to shareholders of record and others as
directed by the Fund, and receiving, examining and recording
all properly executed proxies and performing such follow-up as
required by the Fund.
22. Providing periodic listings and tallies of shareholder votes
and certifying the final tally.
23. Providing an inspector of elections at the annual or any
special meetings of a Fund.
24. Maintaining tax information for each account, deducting
amounts where required and furnishing to a Fund, its
shareholders, dealers and, when appropriate, regulatory
bodies, the necessary tax information, all in compliance with
the various applicable laws.
25. Maintaining records of account and distribution information
for checks and confirmations returned as undeliverable by the
Post Office.
26. Maintaining records and reporting sales information for Blue
Sky reporting purposes.
27. Calculating and processing Fund mergers or stock dividends, as
directed by a Fund.
28. Maintaining all Fund records as outlined in the record and
tape retention schedule delivered by a Fund.
29. Reconciling all investment, distribution and redemption
accounts.
30. Providing for the replacement of uncashed distribution or
redemption checks.
31. Maintaining and safeguarding an inventory of unissued blank
stock certificates, checks and other Fund records.
32. Making available to a Fund and its distributors at their
locations devices which will provide immediate electronic
access to computerized records maintained for a Fund.
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<PAGE>
33. Providing space and such technical expertise as may be
required to enable a Fund and its properly authorized
auditors, examiners and others designated by the Fund in
writing to properly understand and examine all books, records,
computer files, microfilm and other items maintained pursuant
to this Agreement, and to assist as required in such
examination.
34. Assigning a single account number to each shareholder
regardless of the number of Funds or Portfolios owned for
which Keystone Investment Management Company, Evergreen Asset
Management Corp., First Union National Bank or one of its
affiliates is the trustee, investment adviser or manager
(except as instructed otherwise.)
35. Mailing prospectuses to existing accounts on receipt of the
first direct investment transaction after a new prospectus has
been issued by a Fund.
36. Mailing cash election notices when required prior to capital
gains distributions.
37. Maintaining information, performing the necessary research and
producing reports required to comply with all applicable state
escheat or abandoned property laws.
With respect to each Fund, the Transfer Agent will produce reports as requested
by a Fund including, but not limited to, the following:
Shareholder Account Confirmation As required
Redemption Checks When redemption is made
Certificates When requested
Withdrawal plan payment checks On payment cycle
Distribution checks As required
Name and address labels
(per account registration) As requested
Proxy When required
1099 Annually
23146
B-4
<PAGE>
1042-S Annually
Transaction journals Daily
Record date position control Daily
Daily and (monthly) cash proof Daily
Daily and (monthly) share proof Daily
Daily master control Daily
Blue Sky exception Daily
Blue Sky master list Monthly and whenever a new
permit is issued by a state
Blue Sky sales report Cycle as designated in
advance by distributor
Check register Daily
Account information reports When requested
(Monthly) Cumulative Monthly
transaction
New account list Monthly
Shareholder master list When requested
Sales by State Monthly
Activities statistics Monthly
Distribution journals As required
Proxy tallies and vote listings When requested
Withdrawal plan account check Monthly
reconciliation
23146
B-5
<PAGE>
Dividend account check As required
reconciliation
23146
B-6
<PAGE>
EXHIBIT C
TRANSFER AGENT FEE SCHEDULE
CHARGES TO FUNDS
GROUP 1 - MONTHLY DIVIDEND FUNDS
Per open account per year $26.50
Per closed account per year 9.00
Per new account 10.00
GROUP 2 - QUARTERLY DIVIDEND FUNDS
Per open account per year $25.50
Per closed account per year 9.00
Per new account 10.00
GROUP 3 - SEMI-ANNUAL AND ANNUAL DIVIDEND FUNDS
Per open account per year $24.50
Per closed account per year 9.00
Per new account 10.00
GROUP 4 - MONEY MARKET FUNDS
Per open account per year $26.50
Per closed account per year 9.00
Per new account 10.00
CHARGES TO SHAREHOLDERS
GROUP 5 - ERISA*
Per IRA participant per year $10.00 with a maximum of $20.00**
Per Keogh participant per year $10.00 with a maximum of $20.00
Per TSA per year $10.00 with a maximum of $20.00
*These fees are not borne by the Funds, but are direct shareholder charges.
**Fee waived for participants with assets in excess of $25,000. Funds that have
"seed" capital only will not be charged until the Fund has public shareholders.
23146
C-1
<PAGE>
This Fee Schedule is exclusive of out-of-pocket reimbursable expenses.
Out-of-pocket expenses include but are not limited to the following:
Stationery and supplies
Checks
Express Delivery
Postage
Printing of forms
Telephone
Photocopies and Microfilm
C-2
23146
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 4 to the registration statement on Form N-1A (the "Registration
Statement") of Evergreen Money Market Trust of our report dated March 13, 1998,
relating to the financial statements and financial highlights of Evergreen Money
Market Fund and Evergreen Municipal Money Market Fund (the "Funds"), appearing
in the Funds' January 31, 1998 Annual Report to Shareholders, which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the
Prospectuses and under the heading "Independent Auditors" in such Statement of
Additional Information.
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
May 27, 1998
CONSENT OF INDEPENDENT AUDITORS
The Trustees and Shareholders
Evergreen Money Market Trust
We consent to the use of our report dated March 3, 1998 for Evergreen
Pennsylvania Municipal Money Market Fund and Evergreen Treasury Money Market
Fund incorporated by reference herein and to the references and to our firm
under the captions "FINANCIAL HIGHTLIGHTS" in the prospectuses and "Independent
Auditors" in the Statement of Additional Information.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Boston, Massachusetts
May 29, 1998
DISTRIBUTION PLAN OF CLASS A SHARES
THE EVERGREEN MONEY MARKET TRUST
SECTION 1. The Evergreen Money Market Trust (the "Trust") individually
and/or on behalf of its series (each a "Fund") referred to in Exhibit A to this
Rule 12b-1 Plan of Distribution (the "Plan") may act as the distributor of
securities which are issued in respect of the Fund's Class A shares ("Shares"),
pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act")
according to the terms of this Plan.
SECTION 2. The Trust on behalf of each Fund may expend daily amounts at
an annual rate of 0.75% of the average daily net asset value of Class A shares
("Shares") of the Fund. Such amounts may be expended to finance activity which
is principally intended to result in the sale of Shares including, without
limitation, expenditures consisting of payments to a principal underwriter of
the Fund ("Principal Underwriter") or others in order (i) to make payments to
the Principal Underwriter or others of sales commissions, other fees or other
compensation for services provided or to be provided, to enable payments to be
made by the Principal Underwriter or others for any activity primarily intended
to result in the sale of Shares, to pay interest expenses associated with
payments in connection with the sale of Shares and to pay any expenses of
financing permitted by this clause (i); (ii) to enable the Principal Underwriter
or others to receive, pay or to have paid to others who have sold Shares, or who
provide services to holders of Shares, a service fee, maintenance or other fee
in respect of such services, at such intervals as the Principal Underwriter or
such others may determine, in respect of Shares previously sold and remaining
outstanding during the period in respect of which such fee is or has been paid;
and/or (iii) to compensate the Principal Underwriter or others for efforts
(including without limitation any financing of payments under (i) and (ii) for
the sale of shares) in respect of sales of Shares since inception of the Plan or
any predecessor plan. Appropriate adjustments shall be made to the payments made
pursuant to this Section 2 to the extent necessary to ensure that no payment is
made by the Trust on behalf of any Fund with respect to the Class in excess of
the applicable limit imposed on asset based, front end and deferred sales
charges under subsection (d) of Rule 2830 of the Business Conduct Rules of the
National Association of Securities Dealers Regulation, Inc. (The "NASDR"). In
addition, to the extent any amounts paid hereunder fall within the definition of
an "asset based sales charge" under said NASDR Rule such payments shall be
limited to 0.75 of 1% of the aggregate net asset value of the Shares on an
annual basis and, to the extent that any such payments are made in respect of
"shareholder services" as that term is defined in the NASDR Rule, such payments
shall be limited to .25 of 1% of the aggregate net asset value of the Shares on
an annual basis and shall only be made in respect of shareholder services
rendered during the period in which such amounts are accrued.
SECTION 3. This Plan shall not take effect until it has been approved
together with any related agreements by votes of a majority of both (a) the
Board of Trustees of the Trust and (b) those Trustees of the Trust who are not
"interested persons" of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or any
agreements of the Fund or any other person related to this Plan ("Rule 12b-1
Trustees"), cast in person
23937
<PAGE>
at a meeting called for the purpose of voting on this Plan or such agreements.
SECTION 4. Unless sooner terminated pursuant to Section 6, this Plan
shall continue in effect for a period of one year from the date it takes effect
and thereafter shall continue in effect so long as such continuance is
specifically approved at least annually in the manner provided for approval of
this Plan in Section 3.
SECTION 5. Any person authorized to direct the disposition of monies
paid or payable by the Trust on behalf of each Fund pursuant to this Plan or any
related agreement shall provide to the Trust's Board of Trustees and the Board
shall review at least quarterly a written report of the amounts so expended and
the purposes for which such expenditures were made.
SECTION 6. This Plan may be terminated at any time with respect to any
Fund by vote of a majority of the Rule 12b-1 Trustees or by vote of a majority
of such Fund's outstanding Shares.
SECTION 7. Any agreement of the Fund related to this Plan shall be in
writing and shall provide:
(a) that such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the Rule
12b-1 Trustees or by a vote of a majority of such Fund's
outstanding Shares on not more than sixty days written notice
to any other party to the agreement; and
(b) that such agreement shall terminate automatically in the event
of its assignment.
SECTION 8. This Plan may not be amended to increase materially the
amount of distribution expenses provided for in Section 2 hereof unless such
amendment is approved by a vote of at least a majority (as defined in the 1940
Act) of each Fund's outstanding Shares, and no material amendment to this Plan
shall be made unless approved in the manner provided for in Section 3 hereof.
23937
DISTRIBUTION PLAN OF CLASS B SHARES
EVERGREEN MONEY MARKET TRUST
Section 1. The Evergreen Money Market Trust (the "Trust"), individually
and/or on behalf of its series (each a "Fund") referred to in Exhibit A to this
12b-1 Distribution Plan (the "Plan") may act as the distributor of certain
securities of which it is the issuer, pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "1940 Act") according to the terms of this
Plan.
Section 2. The Trust on behalf of each Fund may expend daily amounts at an
annual rate of 1.00% of the average daily net asset value of its Class B shares
("Shares") to finance any activity which is principally intended to result in
the sale of Shares including, without limitation, expenditures consisting of
payments to a principal underwriter of the Fund ("Principal Underwriter") or
others in order: (i) to enable payments to be made by the Principal Underwriter
or others for any activity primarily intended to result in the sale of Shares,
including, without limitation,
(a) compensation to public relations consultants or other persons assisting in,
or providing services in connection with, the distribution of Shares, (b)
advertising, (c) printing and mailing of prospectuses and reports for
distribution to persons other than existing shareholders, (d) preparation and
distribution of advertising material and sales literature, (e) commission
payments, and principal and interest expenses associated with the financing of
commission payments, made by the Principal Underwriter in connection with the
sale of Shares and (f) conducting public relations efforts such as seminars;
(ii) to enable the Principal Underwriter or others to receive, pay or to have
paid to others who have sold Shares, or who provide services to holders of
Shares, a maintenance or other fee in respect of services provided to holders of
Shares, at such intervals as the Principal Underwriter or such others may
determine, in respect of Shares previously sold and remaining outstanding during
the period in respect of which such fee is or has been paid; and/or (iii) to
compensate the Principal Underwriter or such others for their efforts in respect
of sales of Shares since inception of the Plan or any predecessor plan.
Appropriate adjustments shall be made to the payments made pursuant to this
Section 2 to the extent necessary to ensure that no payment is made on behalf of
any Fund with respect to Class B Shares in excess of any limit imposed on asset
based, front end and deferred sales charges under any rule or regulations
adopted by the National Association of Securities Dealers, Inc. (the "NASD
Rules"). In addition, to the extent any amounts paid hereunder fall within the
definition of an "asset based sales charge" under said NASD Rules such payments
shall be limited to .75 of 1% of the aggregate net asset value of the Shares on
an annual
23936
-1-
<PAGE>
basis and, to the extent that any such payments are made in respect of
"shareholder services" as that term is defined in the NASD Rules, such payments
shall be limited to .25 of 1% of the aggregate net asset value of the Shares on
an annual basis and shall only be made in respect of shareholder services
rendered during the period in which such amounts are accrued.
Section 3. This Plan shall not take effect with respect to any Fund until
it has been approved by votes of a majority of (a) the Trustees of the Trust,
and (b) those Trustees of the Trust who are not "interested persons" (as defined
in the 1940 Act) and who have no direct or indirect financial interest
in the operation of this Plan or any agreements of the Trust related hereto or
any other person related to this Plan ("Disinterested Trustees"), cast in person
at a meeting called for the purpose of voting on this Plan. In addition, any
agreement related to this Plan and entered into by the Trust on behalf of the
Fund in connection therewith shall not take effect until it has been approved by
votes of a majority of (a) the Board of Trustees of the Trust, and (c) the
Disinterested Trustees of the Trust.
Section 4. Unless sooner terminated pursuant to Section 6, this Plan shall
continue in effect for a period of one year from the date it takes effect and
thereafter shall continue in effect for additional periods that shall not exceed
one year so long as such continuance is specifically approved by votes of a
majority of both (a) the Board of Trustees of the Trust and (b) the
Disinterested Trustees of the Trust, cast in person at a meeting called for the
purpose of voting on this Plan, provided that payments for services theretofore
provided or for reimbursement of expenses theretofore incurred or accrued prior
to termination of this Plan in accordance with Section 2 may be continued by the
Fund to the extent provided for in Section 6, below, as applicable.
Section 5. Any person authorized to direct the disposition of monies paid
or payable pursuant to this Plan or any related agreement shall provide to the
Trust's Board and the Board shall review at least quarterly a written report of
the amounts so expended and the purposes for which such expenditures were made.
Section 6. Payments with respect to services provided by the Principal
Underwriter or others pursuant to Section 2, above, shall be authorized
hereunder, whether or not this Plan has been otherwise terminated, if such
payments are for services theretofore provided or for reimbursement of expenses
theretofore incurred or accrued prior to termination of this Plan in other
respects and if such payment is or has been so approved by the Board, including
the Disinterested Trustees, or agreed to on behalf of the Fund with such
approval, all subject to such specific implementation as the Board, including
the Disinterested Trustees, may approve; provided that, at the time any such
payment
23936
-2-
<PAGE>
is made, whether or not this Plan has been otherwise terminated, the making of
such payment will not cause the limitation upon such payments set forth in
Section 2 to be exceeded. Without limiting the generality of the foregoing, the
Trust on behalf of any Fund may pay to, or on the order of, any person who has
served from time to time as Principal Underwriter amounts for distribution
services pursuant to a principal underwriting agreement or otherwise. Any such
principal underwriting agreement may, but need not, provide that such Principal
Underwriter may be paid for distribution services to Class B Shares and/or other
specified classes of shares of any Fund (together the "B-Class-of-Shares"), a
fee which may be designated a Distribution Fee and may be paid at a rate per
annum up to .75 % of the average daily net asset value of such B-Class-of-Shares
of the Fund and may, but need not, also provide: (i) that a Principal
Underwriter will be deemed to have fully earned its "Allocable Portion" of the
Distribution Fee upon the sale of the Commission Shares (as defined in the
Allocation Schedule) taken into account in determining its Allocable Portion;
(ii) that the Fund's obligation to pay such Principal Underwriter its Allocable
Portion of the Distribution Fee shall be absolute and unconditional and shall
not be subject to dispute, offset, counterclaim or any defense whatsoever (it
being understood that such provision is not a waiver of the Fund's right to
pursue such Principal Underwriter and enforce such claims against the assets of
such Principal Underwriter other than its right to its Allocable Portion of the
Distribution Fee and CDSCs (as defined below); (iii) that the Fund's obligation
to pay such Principal Underwriter its Allocable Portion of the Distribution Fee
shall not be changed or terminated except to the extent required by any change
in applicable law, including without limitation, the 1940 Act, the Rules
promulgated thereunder by the Securities and Exchange Commission and the
Business Conduct Rules of the National Association of Securities Dealers, Inc.,
in each case enacted or promulgated after May 5, 1997, or in connection with a
"Complete Termination" (as hereinafter defined); (iv) that the Trust on behalf
of any Fund will not waive or change any contingent deferred sales charge
("CDSC") in respect of the Distributor's Allocable Portion thereof, except as
provided in the Fund's prospectus or statement of additional
information without the consent of the Principal Underwriter or any assignee of
such Principal Underwriter's rights to its Allocable Portion; (v) that the
termination of the Principal Underwriter, the principal underwriting agreement
or this Plan will not terminate such Principal Underwriter's rights to its
Allocable Portion of the CDSCs; and (vi) that any Principal Underwriter may
assign its rights to its Allocable Portion of the Distribution Fee and CDSCs
(but not such Principal Underwriter's obligations to the Fund under its
principal underwriting agreement) to raise funds to make expenditures described
in Section 2 above and in connection therewith, and upon receipt of notice of
such assignment, the Trust on behalf of any Fund shall pay to the assignee such
portion of the Principal Underwriter's Allocable Portion of the Distribution Fee
and CDSCs so assigned. For purposes of such principal underwriting agreement,
the term Allocable Portion of Distribution Fee
23936
-3-
<PAGE>
as applied to any Principal Underwriter may mean the portion of the Distribution
Fee allocable to Distributor Shares in accordance with the "Allocation Schedule"
attached to such Principal Underwriter's principal underwriting agreement. For
purposes of such principal underwriting agreement, the term Allocable Portion of
CDSCs as applied to any Principal Underwriter may mean the portion of the CDSCs
allocable to Distributor Shares in accordance with the Allocation Schedule
attached to such Principal Underwriter's principal underwriting agreement. For
purposes of such principal underwriting agreement, the term "Complete
Termination" may mean a termination of this Plan involving the cessation of
payments of the Distribution Fee thereunder, the cessation of payments of
distribution fees pursuant to every other Rule 12b-1 plan of the Fund for every
existing or future B-Class-of-Shares and the cessation of the offering by the
Fund of existing or future B-Class-of-Shares, which conditions shall be deemed
to be satisfied when they are first complied with and so long thereafter as they
are complied with prior to the earlier of (i) the date upon which all of the B
Shares which are Distributor Shares pursuant to the Allocation Schedule shall
have been redeemed or converted or (ii) a specified date, after either of which
times such conditions need no longer be complied with. For purposes of such
principal underwriting agreement, the term "B-Class-of-Shares" may mean the B
Class of Shares of the Fund and each other class of shares of the Fund hereafter
issued which would be treated as "Shares" under such Allocation Schedule or
which has economic characteristics substantially similar to those of the B Class
of Shares taking into account the total sales charge, CDSC or other similar
charges borne directly or indirectly by the holder of the shares of such
classes.
The parties may agree that the existing C Class of Shares of the Fund does
not have substantially similar economic characteristics to the B Classes of
Shares taking into account the total sales charge, CDSC or other similar charges
borne directly or indirectly by the holder of such shares. For purposes of
clarity the parties to such principal underwriting agreement may state that they
intend that a new installment load class of shares which may be authorized by
amendments to Rule 6(c)-10 under the 1940 Act will not be considered to be a
B-Class-of-Shares if it has economic characteristics substantially similar to
the economic characteristics of the existing C Class of Shares taking into
account the total sales charge, CDSC or other similar charges borne directly or
indirectly by the holder of such shares and will not be considered to be a
B-Class-of-Shares if it has economic characteristics substantially similar to
the economic characteristics of the existing C Class of shares of the Fund
taking into account the total sales charge, CDSC or other similar charges borne
directly or indirectly by the holder of such shares. For purposes of such
principal underwriting agreement, "Allocation Schedule" may mean a schedule
which shall be approved by Trustees (as defined below) in connection with their
23936
-4-
<PAGE>
required approval of such principal underwriting agreement as assigning to each
Principal Underwriter of Shares the portion of the total Distribution Fee
payable by the Trust on behalf of each Fund under such principal underwriting
agreement which has been earned by such Principal Underwriter to the extent
necessary so that the continued payments thereof if such Principal Underwriter
ceases
23936
-5-
<PAGE>
to serve in that capacity does not penalize the Fund by requiring the Trust on
behalf of such Fund to pay for services that have not been earned.
Section 7. This Plan may be terminated at any time with respect to any Fund
by vote of a majority of the Disinterested Trustees, or by vote of a majority of
the Shares of such Fund, provided that payments for services theretofore
provided or for reimbursement of expenses theretofore incurred or accrued prior
to termination of this Plan in accordance with Section 2 may be continued by the
Fund to the extent provided for in Section 6, above, as applicable.
Section 8. Any agreement of the Trust, with respect to any Fund, related to
this Plan shall be in writing and shall provide:
A. That such agreement may be terminated with respect to any Fund at any
time without payment of any penalty, by vote of a majority of the Disinterested
Trustees or by a vote of a majority of the outstanding Shares of such Fund on
not more than sixty days written notice to any other party to the agreement; and
B. That such agreement shall terminate automatically in the event of its
assignment.
Section 9. This Plan may not be amended to increase materially the amount
of distribution expenses provided for in Section 2 with respect to a Fund unless
such amendment is approved by a vote of at least a majority (as defined in the
1940 Act) of the outstanding Shares of such Fund, and no material amendment to
this Plan shall be made unless approved by votes of a majority of (a) the Board
of Trustees of the Trust, and (c) the Disinterested Trustees of the Trust, cast
in person at a meeting called for the purpose of voting on such amendment.
23936
-6-
DISTRIBUTION PLAN OF CLASS C SHARES
EVERGREEN MONEY MARKET TRUST
SECTION 1. The Evergreen Money Market Trust (the "Trust") individually
and/or on behalf of its series (the "Fund") referred to in Exhibit A to this
Rule 12b-1 Plan of Distribution (the "Plan") may act as the distributor of
securities which are issued in respect of the Fund's Class C shares ("Shares"),
pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act")
according to the terms of this Plan.
SECTION 2. The Trust on behalf of each Fund may expend daily amounts at
an annual rate of 1.00% of the average daily net asset value of the Shares. Such
amounts may be expended to finance activity which is principally intended to
result in the sale of Shares including, without limitation, expenditures
consisting of payments to a principal underwriter of the Fund ("Principal
Underwriter") or others in order (i) to make payments to the Principal
Underwriter or others of sales commissions, other fees or other compensation for
services provided or to be provided, to enable payments to be made by the
Principal Underwriter or others for any activity primarily intended to result in
the sale of Shares, to pay interest expenses associated with payments in
connection with the sale of Shares and to pay any expenses of financing
permitted by this clause (i); (ii) to enable the Principal Underwriter or others
to receive, pay or to have paid to others who have sold Shares, or who provide
services to holders of Shares, a service fee, maintenance or other fee in
respect of such services, at such intervals as the Principal Underwriter or such
others may determine, in respect of Shares previously sold and remaining
outstanding during the period in respect of which such fee is or has been paid;
and/or (iii) to compensate the Principal Underwriter or others for efforts
(including without limitation any financing of payments under (i) and (ii) for
the sale of shares) in respect of sales of Shares since inception of the Plan or
any predecessor plan. Appropriate adjustments shall be made to the payments made
pursuant to this Section 2 to the extent necessary to ensure that no payment is
made by the Trust on behalf of any Fund with respect to the Class in excess of
the applicable limit imposed on asset based, front end and deferred sales
charges under subsection (d) of Rule 2830 of the Business Conduct Rules of the
National Association of Securities Dealers Regulation, Inc. (The "NASDR"). In
addition, to the extent any amounts paid hereunder fall within the definition of
an "asset based sales charge" under said NASDR Rule, such payments shall be
limited to 0.75 of 1% of the aggregate net asset value of the Shares on an
annual basis and, to the extent that any such payments are made in respect of
"shareholder services" as that term is defined in the NASDR Rule, such payments
shall be limited to .25 of 1% of the aggregate net asset value of the Shares on
an annual basis and shall only be made in respect of shareholder services
rendered during the period in which such amounts are accrued.
SECTION 3. This Plan shall not take effect until it has been approved
together with any related agreements by votes of a majority of both (a) the
Board of Trustees of the Trust and (b)
23935
-1-
<PAGE>
those Trustees of the Trust who are not "interested persons" of the Trust (as
said term is defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Plan or any agreements of the Fund
or any other person related to this Plan (the "Rule 12b-1 Trustees"), cast in
person at a meeting called for the purpose of voting on this Plan or such
agreements.
SECTION 4. Unless sooner terminated pursuant to Section 6 hereof, this
Plan shall continue in effect for a period of one year from the date it takes
effect and thereafter shall continue in effect so long as such continuance is
specifically approved at least annually in the manner provided for approval of
this Plan in Section 3 hereof.
SECTION 5. Any person authorized to direct the disposition of monies
paid or payable by the Trust on behalf of each Fund pursuant to this Plan or any
related agreement shall provide to the Trust's Board of Trustees and the Board
shall review at least quarterly a written report of the amounts so expended and
the purposes for which such expenditures were made.
SECTION 6. This Plan may be terminated with respect to any Fund at any
time by vote of a majority of the Rule 12b-1 Trustees or by vote of a majority
of such Fund's outstanding Shares.
SECTION 8. Any agreement of the Fund related to this Plan shall be in
writing, and shall provide as follows:
(a) that such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the Rule
12b-1 Trustees or by a vote of a majority of such Fund's
outstanding Shares on not more than sixty days written notice
to any other party to the agreement; and
(b) that such agreement shall terminate automatically in the event
of its assignment.
SECTION 8. This Plan may not be amended to increase materially the
amount of distribution expenses provided for in Section 2 hereof unless such
amendment is approved by a vote of at least a majority (as defined in the 1940
Act) of each Fund's outstanding Shares, and no material amendment to this Plan
shall be made unless approved in the manner provided for in Section 3 hereof.
23935
-2-
Evergreen Money Market Fund - Class A
<TABLE>
<CAPTION>
$952.50
A NAV A A
TIME ACCOUNT A AVERAGE A/C VALUE A AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL W/LOAD CLASS ANNNUAL
<S> <C> <C> <C> <C> <C> <C> <C>
31-Jan-98 BLANK 1,165.10 0.00% 952.5 -4.75% -4.75%
31-Aug-97 5 MO 1,141.38 2.08% 2.08% 972.29 -2.77% -2.77%
31-Oct-97 QTR 1,150.85 1.24% 1.24% 964.29 -3.57% -3.57%
31-Dec-97 YTD 1,160.18 0.42% 0.42% 956.54 -4.35% -4.35%
31-Jan-97 1 1,109.59 5.00% 5.00% 1,000.15 0.01% 0.01%
31-Jan-95 3 1,003.83 16.07% 5.09% 1,105.52 10.55% 3.40%
31-Jan-93 5
31-Jan-88 10
4-Jan-95 INCEPT 1,000.00 16.51% 5.09% 1,109.76 10.98% 3.44%
</TABLE>
INCEPTION FACTOR: 3.0795
Evergreen Money Market Fund - Class B
<TABLE>
<CAPTION>
$1,000
B B NAV LEVEL VALUE OF VALUE OF B
TIME ACCOUNT B AVERAGE LOAD CLASS B CLASS B INIB. AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL COMP INVESTMENT INVESTMENT CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jan-98 BLANK 1,137.23 0.00% 50 1,000.00 1,000.00 0.00%
31-Aug-97 5 MO 1,117.34 1.78% 1.78% 50 1,017.80 1,000.00 -3.22% -3.22%
31-Oct-97 QTR 1,125.28 1.06% 1.06% 50 1,010.62 1,000.00 -3.94% -3.94%
31-Dec-97 YTD 1,133.10 0.36% 0.36% 50 1,003.64 1,000.00 -4.64% -4.64%
31-Jan-97 1 1,090.63 4.27% 4.27% 50 1,042.72 1,000.00 -0.73% -0.73%
31-Jan-95 3 1,000.67 13.65% 4.36% 30 1,136.47 1,000.00 10.65% 3.43%
31-Jan-93 5
31-Jan-88 10
26-Jan-95 INCEPT 1,000.00 13.72% 4.35% 30 1,137.23 1,000.00 10.72% 3.43%
</TABLE>
INCEPTION FACTOR: 3.0192
Evergreen Money Market Fund - Class C
<TABLE>
<CAPTION>
$1,000
C C NAV LEVEL VALUE OF VALUE OF C
TIME ACCOUNT C AVERAGE LOAD CLASS C CLASS C INIC. AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL COMP INVESTMENT INVESTMENT CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jan-98 BLANK 1,021.55 0.00% 10 1,000.00 1,000.00 0.00%
31-Aug-97 5 MO 1,003.68 1.78% 1.78% 10 1,017.80 1,000.00 0.78% 0.78%
31-Oct-97 QTR 1,010.82 1.06% 1.06% 10 1,010.62 1,000.00 0.06% 0.06%
31-Dec-97 YTD 1,017.84 0.36% 0.36% 10 1,003.64 1,000.00 -0.64% -0.64%
31-Jan-97 1
31-Jan-95 3
31-Jan-93 5
31-Jan-88 10
1-Aug-88 INCEPT. 1,000.00 2.15% 4.32% 10 1,021.55 1,000.00 1.15% 2.30%
</TABLE>
INCEPTION FACTOR: 0.5041
Evergreen Money Market Fund - Class Y
Y
ACCOUNT Y AVERAGE
YEARS VALUE CLASS ANNNUAL
31-Jan-98 BLANK 1,797.41 0.00%
31-Aug-97 5 MO 1,758.61 2.21% 2.21%
31-Oct-97 QTR 1,774.11 1.31% 1.31%
31-Dec-97 YTD 1,789.38 0.45% 0.45%
31-Jan-97 1 1,706.63 5.32% 5.32%
31-Jan-95 3 1,534.97 17.10% 5.40%
31-Jan-93 5 1,427.77 25.89% 4.71%
31-Jan-88 10 1,017.78 76.60% 5.85%
2-Nov-87 INCEPT 1,000.00 79.74% 5.88%
INCEPTION FACTOR: 10.2575
<PAGE>
Evergreen Municipal Money Market Fund - Class A
<TABLE>
<CAPTION>
$952.50
A NAV A A
TIME ACCOUNT A AVERAGE A/C VALUE A AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL W/LOAD CLASS ANNNUAL
<S> <C> <C> <C> <C> <C> <C> <C>
31-Jan-98 BLANK 1,102.95 0.00% 952.5 -4.75% -4.75%
31-Aug-97 5 MO 1,088.35 1.34% 1.34% 965.28 -3.47% -3.47%
31-Oct-97 QTR 1,094.15 0.80% 0.80% 960.17 -3.98% -3.98%
31-Dec-97 YTD 1,100.11 0.26% 0.26% 954.96 -4.50% -4.50%
31-Jan-97 1 1,068.94 3.18% 3.18% 982.81 -1.72% -1.72%
31-Jan-95 3 1,002.25 10.05% 3.24% 1,048.21 4.82% 1.58%
31-Jan-93 5
31-Jan-88 10
5-Jan-95 INCEPT. 1,000.00 10.30% 3.24% 1,050.56 5.06% 1.62%
INCEPTION FACTOR: 3.0767
</TABLE>
Evergreen Municipal Money Market Fund - Class Y
Y
ACCOUNT Y AVERAGE
YEARS VALUE CLASS ANNNUAL
31-Jan-98 BLANK 1,450.46 0.00%
31-Aug-97 5 MO 1,429.47 1.47% 1.47%
31-Oct-97 QTR 1,437.81 0.88% 0.88%
31-Dec-97 YTD 1,446.36 0.28% 0.28%
31-Jan-97 1 1,401.54 3.49% 3.49%
31-Jan-95 3 1,306.35 11.03% 3.55%
31-Jan-93 5 1,239.50 17.02% 3.19%
31-Jan-88 10
2-Nov-88 INCEPT. 1,000.00 45.05% 4.10%
INCEPTION FACTOR: 9.2548
<PAGE>
Evergreen Pennsylvania Municipal Money Market Fund - Class A
<TABLE>
<CAPTION>
$952.50
A NAV A A
TIME ACCOUNT A AVERAGE A/C VALUE A AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL W/LOAD CLASS ANNNUAL
<S> <C> <C> <C> <C> <C> <C> <C>
31-Jan-88 BLANK 1,078.03 0.00% 952.5 -4.75% -4.75%
31-Aug-97 5 MO 1,063.81 1.34% 1.34% 965.23 -3.48% -3.48%
31-Oct-97 QTR 1,069.69 0.78% 0.78% 959.92 -4.01% -4.01%
31-Dec-97 YTD 1,075.35 0.25% 0.25% 954.87 -4.51% -4.51%
31-Jan-97 1 1,045.40 3.12% 3.12% 982.23 -1.78% -1.78%
31-Jan-95 3
31-Jan-93 5
31-Jan-88 10
22-Aug-95 INCEPT. 1,000.00 7.80% 3.12% 1,026.82 2.68% 1.09%
</TABLE>
INCEPTION FACTOR: 2.4493
ACTUAL INCEPTION DATE 8/22/95
Evergreen Pennsylvania Municipal Money Market Fund - Class Y
<TABLE>
<CAPTION>
Y
ACCOUNT Y AVERAGE
YEARS VALUE CLASS ANNNUAL
<S> <C> <C> <C> <C>
31-Jan-98 BLANK 1,210.75 0.00%
31-Aug-97 5 MO 1,194.28 1.38% 1.38%
31-Oct-97 QTR 1,201.09 0.80% 0.80%
31-Dec-97 YTD 1,207.65 0.26% 0.26%
31-Jan-97 1 1,172.92 3.23% 3.23%
31-Jan-95 3 1,098.14 10.25% 3.31%
31-Jan-93 5 1,047.66 15.57% 2.94%
31-Jan-88 10
15-Aug-91 INCEPT. 1,000.00 21.08% 3.00%
</TABLE>
INCEPTION FACTOR: 6.4712
<PAGE>
Evergreen Treasury Money Market Fund - Class A
<TABLE>
<CAPTION>
$952.50
A NAV A A
TIME ACCOUNT A AVERAGE A/C VALUE A AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL W/LOAD CLASS ANNNUAL
<S> <C> <C> <C> <C> <C> <C> <C>
31-Jan-98 BLANK 1,338.83 0.00% 952.5 -4.75% -4.75%
31-Aug-97 5 MO 1,311.71 2.07% 2.07% 972.19 -2.78% -2.78%
31-Oct-97 QTR 1,322.56 1.23% 1.23% 964.22 -3.58% -3.58%
31-Dec-97 YTD 1,333.29 0.42% 0.42% 956.46 -4.35% -4.35%
31-Jan-97 1 1,276.11 4.92% 4.92% 999.32 -0.07% -0.07%
31-Jan-95 3 1,155.63 15.85% 5.03% 1,103.50 10.35% 3.34%
31-Jan-93 5 1,082.26 23.71% 4.35% 1,178.31 17.83% 3.34%
31-Jan-88 10
6-Mar-91 INCEPT. 1,000.00 33.88% 4.31% 1,275.24 27.52% 3.58%
</TABLE>
INCEPTION FACTOR: 6.9151
Evergreen Treasury Money Market Fund - Class Y
<TABLE>
<CAPTION>
Y
ACCOUNT Y AVERAGE
YEARS VALUE CLASS ANNNUAL
<S> <C> <C> <C> <C>
31-Jan-98 BLANK 1,366.08 0.00%
31-Aug-97 5 MO 1,336.73 2.20% 2.20%
31-Oct-97 QTR 1,348.47 1.31% 1.31%
31-Dec-97 YTD 1,360.08 0.44% 0.44%
31-Jan-97 1 1,298.21 5.23% 5.23%
31-Jan-95 3 1,168.64 16.89% 5.34%
31-Jan-93 5 1,087.93 25.57% 4.66%
31-Jan-88 10
6-Mar-91 INCEPT. 1,000.00 36.61% 4.61%
</TABLE>
INCEPTION FACTOR: 6.9151
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN MONEY MARKET MARKET FUND CLASS A
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 3,555,071,932
<INVESTMENTS-AT-VALUE> 3,555,071,932
<RECEIVABLES> 36,411,572
<ASSETS-OTHER> 531,184
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,592,014,688
<PAYABLE-FOR-SECURITIES> 25,011,917
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 20,321,210
<TOTAL-LIABILITIES> 45,333,127
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,547,313,193
<SHARES-COMMON-STOCK> 2,909,730,900
<SHARES-COMMON-PRIOR> 2,802,742,607
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (516,638)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,546,681,561
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 85,035,929
<OTHER-INCOME> 0
<EXPENSES-NET> (12,336,782)
<NET-INVESTMENT-INCOME> 72,699,147
<REALIZED-GAINS-CURRENT> 5,356
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 72,704,503
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (58,870,079)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,144,355,044
<NUMBER-OF-SHARES-REDEEMED> (2,048,538,132)
<SHARES-REINVESTED> 11,140,240
<NET-CHANGE-IN-ASSETS> 81,357,695
<ACCUMULATED-NII-PRIOR> 2,555
<ACCUMULATED-GAINS-PRIOR> (636,988)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (6,801,389)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (12,336,782)
<AVERAGE-NET-ASSETS> 2,858,119,825
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN MONEY MARKET MARKET FUND CLASS B
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 3,555,071,932
<INVESTMENTS-AT-VALUE> 3,555,071,932
<RECEIVABLES> 36,411,572
<ASSETS-OTHER> 531,184
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,592,014,688
<PAYABLE-FOR-SECURITIES> 25,011,917
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 20,321,210
<TOTAL-LIABILITIES> 45,333,127
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25,048,770
<SHARES-COMMON-STOCK> 25,055,619
<SHARES-COMMON-PRIOR> 22,875,453
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,822)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 25,044,948
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 85,035,929
<OTHER-INCOME> 0
<EXPENSES-NET> (12,336,782)
<NET-INVESTMENT-INCOME> 72,699,147
<REALIZED-GAINS-CURRENT> 5,356
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 72,704,503
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (373,680)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 33,697,484
<NUMBER-OF-SHARES-REDEEMED> (31,906,139)
<SHARES-REINVESTED> 314,550
<NET-CHANGE-IN-ASSETS> 74,436,718
<ACCUMULATED-NII-PRIOR> 2,555
<ACCUMULATED-GAINS-PRIOR> (636,988)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (6,801,389)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (12,336,782)
<AVERAGE-NET-ASSETS> 21,142,861
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 1.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN MONEY MARKET MARKET FUND CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 3,555,071,932
<INVESTMENTS-AT-VALUE> 3,555,071,932
<RECEIVABLES> 36,411,572
<ASSETS-OTHER> 531,184
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,592,014,688
<PAYABLE-FOR-SECURITIES> 25,011,917
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 20,321,210
<TOTAL-LIABILITIES> 45,333,127
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,028,194
<SHARES-COMMON-STOCK> 2,030,152
<SHARES-COMMON-PRIOR> 5,088,082
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (651)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,027,543
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 85,035,929
<OTHER-INCOME> 0
<EXPENSES-NET> (12,336,782)
<NET-INVESTMENT-INCOME> 72,699,147
<REALIZED-GAINS-CURRENT> 5,356
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 72,704,503
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (67,432)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,355,264
<NUMBER-OF-SHARES-REDEEMED> (8,464,881)
<SHARES-REINVESTED> 51,687
<NET-CHANGE-IN-ASSETS> 69,579,141
<ACCUMULATED-NII-PRIOR> 2,555
<ACCUMULATED-GAINS-PRIOR> (636,988)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (6,801,389)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12,336,782
<AVERAGE-NET-ASSETS> 3,601,880
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 1.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN MONEY MARKET MARKET FUND CLASS Y
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 3,555,071,932
<INVESTMENTS-AT-VALUE> 3,555,071,932
<RECEIVABLES> 36,411,572
<ASSETS-OTHER> 531,184
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,592,014,688
<PAYABLE-FOR-SECURITIES> 25,011,917
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 20,321,210
<TOTAL-LIABILITIES> 45,333,127
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 609,896,280
<SHARES-COMMON-STOCK> 610,567,332
<SHARES-COMMON-PRIOR> 635,220,110
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (110,521)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 609,785,759
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 85,035,929
<OTHER-INCOME> 0
<EXPENSES-NET> (12,336,782)
<NET-INVESTMENT-INCOME> 72,699,147
<REALIZED-GAINS-CURRENT> 5,356
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 72,704,503
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (13,387,956)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,383,614,256
<NUMBER-OF-SHARES-REDEEMED> (1,414,565,744)
<SHARES-REINVESTED> 6,298,710
<NET-CHANGE-IN-ASSETS> 34,663,769
<ACCUMULATED-NII-PRIOR> 2,555
<ACCUMULATED-GAINS-PRIOR> (636,988)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (6,801,389)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (12,336,782)
<AVERAGE-NET-ASSETS> 611,457,014
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN MUNICIPAL MONEY MARKET FUND CLASS A
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 1,052,542,763
<INVESTMENTS-AT-VALUE> 1,052,542,763
<RECEIVABLES> 7,888,252
<ASSETS-OTHER> 96,321
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,060,527,336
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,715,642
<TOTAL-LIABILITIES> 2,715,642
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,058,039,832
<SHARES-COMMON-STOCK> 671,853,620
<SHARES-COMMON-PRIOR> 666,866,419
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (228,138)
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,057,811,694
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 17,538,976
<OTHER-INCOME> 0
<EXPENSES-NET> (3,343,757)
<NET-INVESTMENT-INCOME> 14,195,219
<REALIZED-GAINS-CURRENT> 32,649
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 14,227,868
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (8,830,796)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 481,665,658
<NUMBER-OF-SHARES-REDEEMED> (477,834,788)
<SHARES-REINVESTED> 1,156,331
<NET-CHANGE-IN-ASSETS> 10,384,273
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (260,787)
<GROSS-ADVISORY-FEES> (1,379,804)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2,448,024)
<AVERAGE-NET-ASSETS> 663,130,322
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.01)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.88
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN MUNICIPAL MONEY MARKET FUND CLASS Y
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 1,052,542,763
<INVESTMENTS-AT-VALUE> 1,052,542,763
<RECEIVABLES> 7,888,252
<ASSETS-OTHER> 96,321
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,060,527,336
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,715,642
<TOTAL-LIABILITIES> 2,715,642
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,058,039,832
<SHARES-COMMON-STOCK> 386,147,346
<SHARES-COMMON-PRIOR> 377,781,716
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (228,138)
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,057,811,694
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 17,538,976
<OTHER-INCOME> 0
<EXPENSES-NET> (3,343,757)
<NET-INVESTMENT-INCOME> 14,195,219
<REALIZED-GAINS-CURRENT> 32,649
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 14,227,868
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,364,423)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 452,634,103
<NUMBER-OF-SHARES-REDEEMED> (448,415,258)
<SHARES-REINVESTED> 4,146,785
<NET-CHANGE-IN-ASSETS> 17,229,075
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (260,787)
<GROSS-ADVISORY-FEES> (776,139)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (895,733)
<AVERAGE-NET-ASSETS> 369,530,931
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.01)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.58
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN TREASURY MONEY MARKET FUND CLASS A
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 3,190,336,431
<INVESTMENTS-AT-VALUE> 3,190,336,431
<RECEIVABLES> 10,758,728
<ASSETS-OTHER> 75,779
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,201,170,938
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,266,326
<TOTAL-LIABILITIES> 13,266,326
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,187,814,260
<SHARES-COMMON-STOCK> 2,616,319,634
<SHARES-COMMON-PRIOR> 2,484,732,831
<ACCUMULATED-NII-CURRENT> 90,352
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,187,904,612
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 71,376,919
<OTHER-INCOME> 0
<EXPENSES-NET> (8,553,618)
<NET-INVESTMENT-INCOME> 62,823,301
<REALIZED-GAINS-CURRENT> 40,712
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 62,864,013
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (51,249,555)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,939,261,773
<NUMBER-OF-SHARES-REDEEMED> (1,813,656,225)
<SHARES-REINVESTED> 5,981,255
<NET-CHANGE-IN-ASSETS> 143,201,261
<ACCUMULATED-NII-PRIOR> 49,640
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (3,646,394)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (7,603,939)
<AVERAGE-NET-ASSETS> 2,499,037,527
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN TREASURY MONEY MARKET FUND CLASS Y
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 3,190,336,431
<INVESTMENTS-AT-VALUE> 3,190,336,431
<RECEIVABLES> 10,758,728
<ASSETS-OTHER> 75,779
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,201,170,938
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,266,326
<TOTAL-LIABILITIES> 13,266,326
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,187,814,260
<SHARES-COMMON-STOCK> 571,511,177
<SHARES-COMMON-PRIOR> 546,914,493
<ACCUMULATED-NII-CURRENT> 90,352
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,187,904,612
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 71,376,919
<OTHER-INCOME> 0
<EXPENSES-NET> (8,553,618)
<NET-INVESTMENT-INCOME> 62,823,301
<REALIZED-GAINS-CURRENT> 40,712
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 62,864,013
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (11,573,746)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 572,904,033
<NUMBER-OF-SHARES-REDEEMED> (549,630,132)
<SHARES-REINVESTED> 1,322,783
<NET-CHANGE-IN-ASSETS> 75,886,951
<ACCUMULATED-NII-PRIOR> 49,640
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (800,428)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (949,679)
<AVERAGE-NET-ASSETS> 531,769,705
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.43
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN PENNSYLVANIA TAX-FREE MONEY MARKET FUND CLASS A
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 70,726,717
<INVESTMENTS-AT-VALUE> 70,726,717
<RECEIVABLES> 522,313
<ASSETS-OTHER> 3,228
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 71,252,258
<PAYABLE-FOR-SECURITIES> 703,547
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 156,859
<TOTAL-LIABILITIES> 860,406
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 70,402,069
<SHARES-COMMON-STOCK> 37,117,441
<SHARES-COMMON-PRIOR> 35,729,874
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5,109)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 70,391,852
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,048,168
<OTHER-INCOME> 0
<EXPENSES-NET> (156,460)
<NET-INVESTMENT-INCOME> 891,708
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 891,708
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (461,218)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 53,496,270
<NUMBER-OF-SHARES-REDEEMED> (52,168,806)
<SHARES-REINVESTED> 60,103
<NET-CHANGE-IN-ASSETS> 1,818,057
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 111,425
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (156,460)
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.01)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.61
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN PENNSYLVANIA TAX-FREE MONEY MARKET FUND CLASS Y
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 70,726,717
<INVESTMENTS-AT-VALUE> 70,726,717
<RECEIVABLES> 522,313
<ASSETS-OTHER> 3,228
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 71,252,258
<PAYABLE-FOR-SECURITIES> 703,547
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 156,859
<TOTAL-LIABILITIES> 860,406
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 33,281,198
<SHARES-COMMON-STOCK> 33,284,628
<SHARES-COMMON-PRIOR> 31,984,725
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5,108)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 33,276,090
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,048,168
<OTHER-INCOME> 0
<EXPENSES-NET> (156,460)
<NET-INVESTMENT-INCOME> 891,708
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 891,708
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (430,490)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 19,395,074
<NUMBER-OF-SHARES-REDEEMED> (18,388,470)
<SHARES-REINVESTED> 293,299
<NET-CHANGE-IN-ASSETS> 1,761,121
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 111,425
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (156,460)
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.01)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ K. Dun Gifford
- -------------------------------- Trustee
K. Dun Gifford
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ Charles A. Austin III
- ----------------------------- Trustee
Charles A. Austin III
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ Laurence B. Ashkin
- -------------------------------- Trustee
Laurence B. Ashkin
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ William Walt Pettit
- -------------------------------- Trustee
William Walt Pettit
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ James S. Howell
- -------------------------------- Trustee
James S. Howell
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ Leroy Keith, Jr.
- -------------------------------- Trustee
Leroy Keith, Jr.
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ Gerald M. McDonnell
- -------------------------------- Trustee
Gerald M. McDonnell
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ Thomas L. McVerry
- -------------------------------- Trustee
Thomas L. McVerry
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ David M. Richardson
- -------------------------------- Trustee
David M. Richardson
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ Richard J. Shima
- -------------------------------- Trustee
Richard J. Shima
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ Michael S. Scofield
- -------------------------------- Trustee
Michael S. Scofield
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ Russell A. Salton, III, M.D. Trustee
- --------------------------------
Russell A. Salton, III M.D.
POWER OF ATTORNEY
I, the undersigned, hereby constitute Maureen E. Towle, Michael H. Koonce,
T. Hal Clarke, John A. Dudley, Robert N. Hickey, David M. Leahy and William J.
Tomko, and each of them singly, my true and lawful attorneys, with full power to
them and each of them to sign for me and in my name in the capacity indicated
below any and all registration statements, including, but not limited to, Forms
N-8A, N-8B-1, S-5, N-14 and N-1A, as amended from time to time, and any and all
amendments thereto to be filed with the Securities and Exchange Commission for
the purpose of registering from time to time all investment companies of which I
am now or hereafter a Trustee and for which Keystone Investment Management
Company, Evergreen Asset Management Corp., First Union National Bank, or any
other investment advisory affiliate of First Union National Bank, serves as
Adviser or Manager and registering from time to time the shares of such
companies, and generally to do all such things in my name and on my behalf to
enable such investment companies to comply with the provisions of the Securities
Act of 1933, as amended, the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
my said attorneys to any and all registration statements and amendments thereto.
In Witness Whereof, I have executed this Power of Attorney as of
March 27, 1998.
Signature Title
/s/ William J. Tomko
- ----------------------- President and Treasurer
William J. Tomko
