EVERGREEN MONEY MARKET TRUST, 485BPOS, 1999-05-28

EVERGREEN MONEY MARKET TRUST
485BPOS, 1999-05-28

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 9 [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 10 [X]

EVERGREEN 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. 9
TO
REGISTRATION STATEMENT

This Post-Effective Amendment No. 9 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

PART A
------

Prospectuses for Evergreen Money Market Fund, Evergreen Pennsylvania
Municipal Money Market Fund, Evergreen Municipal Money Market Fund, Evergreen
Treasury Money Market Fund, Evergreen Florida Municipal Money Market Fund and
Evergreen New Jersey Municipal 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, Evergreen Treasury Municipal Money Market Fund, Evergreen Florida
Municipal Money Market Fund and Evergreen New Jersey Municipal Money Market Fund
are 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

PART A

PROSPECTUS

<PAGE>

EVERGREEN MONEY MARKET FUNDS

Evergreen Florida Municipal Money Market Fund
Evergreen Money Market Fund
Evergreen Municipal Money Market Fund
Evergreen New Jersey Municipal Money Market Fund
Evergreen Pennsylvania Municipal Money Market Fund
Evergreen Treasury Money Market Fund
Class A
Class B
Class C
Class Y

Prospectus, June 1, 1999

The Securities and Exchange Commission has not determined that the information
in this prospectus is accurate or complete, nor has it approved or disapproved
these securities. Anyone who tells you otherwise is committing a crime.

<PAGE>

FUND SUMMARIES:

Evergreen Florida Municipal Money Market Fund 2
Evergreen Money Market Fund 4
Evergreen Municipal Money Market Fund 6
Evergreen New Jersey Municipal Money Market Fund 8
Evergreen Pennsylvania Municipal Money Market Fund 10
Evergreen Treasury Money Market Fund 12

GENERAL INFORMATION:

The Funds' Investment Advisors 14
Calculating the Share Price 14
How to Choose an Evergreen Fund 14
How to Choose the Share Class That Best Suits You 15
How to Buy Shares 16
How to Redeem Shares 17
Other Services 18
The Tax Consequences of Investing in the Funds 18
Fees and Expenses of the Funds 19
Financial Highlights 20
Other Fund Practices 26

In general, Funds included in this prospectus seek to provide investors with
current income consistent with stability of principal and liquidity.

Fund Summaries Key
Each Fund's summary is organized around the following basic topics and
questions:

Investment Goal
What is the Fund's financial objective? You can find clarification on how the
Fund seeks to achieve its objective by looking at the Fund's strategy and
investment policies. The Fund's Board of Trustees can change the investment
objective without a shareholder vote.

Investment Strategy
How does the Fund go about trying to meet its goals? What types of investments
does it contain? What style of investing and investment philosophy does it
follow? Does it have limits on the amount invested in any particular type of
security?

Risk Factors
What are the specific risks for an investor in the Fund?

Performance
How well has the Fund performed in the past year? The past five years? The past
ten years?

Expenses
How much does it cost to invest in the Fund? What is the difference between
sales charges and expenses?

<PAGE>

Money Market

Funds

typically rely on a combination of the following strategies:
maintaining $1.00 per share net asset value;

o investing in high-quality, short-term money market instruments including
U.S. government securities;
o investing in compliance with industry-standard requirements for money
market funds for the quality, maturity and diversification of investments;
and
o selling a portfolio investment when the issuer's investment fundamentals
begin to deteriorate, when the investment no longer appears to meet the
Fund's investment objective, when the Fund must meet redemptions, or for
other reasons which the portfolio manager deems necessary.

may be appropriate for investors who:

o are seeking a conservative investment which invests in relatively safe
securities;
o are seeking a Fund for short-term investment; and
o are seeking liquidity.

Following this overview, you will find information on each Money Market Fund's
specific investment strategies and risks.

Risk Factors for All Mutual Funds
Please remember that mutual fund investment shares are:
o not guaranteed to achieve their investment goal
o not insured, endorsed or guaranteed by the FDIC, a bank or any government
agency
o subject to investment risks, including possible loss of your original
investment

Although the Money Market Funds seek to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Funds.

Here are the most important factors that may affect the value of your
investment:

Interest Rate Risk

When interest rates go up, the value of debt securities tends to fall. Since
your Fund invests a significant portion of its portfolio in debt securities, if
interest rates rise, then the value of your investment may decline. When
interest rates go down, interest earned by your Fund on its investments may also
decline, which could cause the Fund to reduce the dividends it pays.

Credit Risk

The value of a debt security is directly affected by the issuer's ability to
repay principal and pay interest on time. Since your Fund invests in debt
securities, the value of your investment may decline if an issuer fails to pay
an obligation on a timely basis.

Concentration Risk
An investment in a Fund that concentrates its investments in a single state
entails greater risk than an investment in a Fund that invests its assets in
numerous states. The Fund may be vulnerable to any development in its named
state's economy that may weaken or jeopardize the ability of the state's
municipal bond issuers to pay interest and principal on their bonds. As a
result, the Fund's shares may fluctuate more widely in value than those of a
Fund investing in municipal bonds from a number of different states.

Foreign Investment Risk
If your Fund invests in non-U.S. securities it could be exposed to certain
unique risks of foreign investing. For example, political turmoil and economic
instability in the countries in which the Fund invests could adversely affect
the value of your investment. In addition, if the value of any foreign currency
in which the Fund's investments are denominated declines relative to the U.S.
dollar, the value of your investment in the Fund may decline as well. Certain
foreign countries have less developed and less regulated securities markets and
accounting systems than the U.S. This may make it harder to get accurate
information about a security or company, and increase the likelihood that an
investment will not perform as well as expected.

Non-Diversification Risk
An investment in a fund that is non-diversified entails greater risk than an
investment in a diversified fund. When a fund is non-diversified, there is no
limit on the percentage of assets that can be invested in any single issuer. A
higher percentage of investments among fewer issuers may result in greater
fluctuation in the total market value of the fund's portfolio.

<PAGE>

FLORIDA MUNICIPAL MONEY MARKET FUND
FUND FACTS:

Goal:
o High Current Income Exempt from Federal and State Tax
o Preservation of Capital
o Maintain Liquidity and Stability of Principal

Principal Investment:
o Municipal Money Market Securities

Classes of Shares Offered in this Prospectus:
o Class A
o Class Y

Investment Advisor:
o Evergreen Asset Management Corp.

NASDAQ Symbols:
EFIXX (Class A)

Dividend Payment Schedule:
Monthly

INVESTMENT GOAL

The Fund seeks to provide Florida residents an investment that is, to the extent
possible, exempt from the Florida intangible personal property tax and to seek
as high a level of current income exempt from regular federal income taxes, as
is believed to be consistent with the preservation of capital, maintenance of
liquidity and stability of principal.

INVESTMENT STRATEGY

The following supplements the investment strategies discussed in the "Overview"
on page 1.

The Fund invests at least 80% of its net assets in high quality debt obligations
issued by the state of Florida, possessions of the U.S. and their political
subdivisions, and which are determined to present minimal credit risk. The Fund
is non-diversified. 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
alternative minimum tax and exempt from the Florida intangible personal property
tax.

Up to 20% of the Fund's total assets may be invested in taxable securities.
However, the Fund may temporarily invest up to 100% of its assets in taxable
securities for defensive purposes.

RISK FACTORS

Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:

o Interest Rate Risk
o Credit Risk
o Concentration Risk
o Non-Diversification Risk

The performance of the Fund is influenced by the political, economic and
statutory environment within the State. The Fund invests in obligations of
Florida issuers, which results in the Fund's performance being subject to risks
associated with the most current conditions within the State. For more
information on the factors that could affect the ability of bond issuers to pay
interest and principal on securities acquired by the Fund, see the Statement of
Additional Information.

Some of these conditions include state budgetary problems associated with the
State's growing population, its reliance on tourism, and the impact which both
of these factors may have on the State's tax base and revenues. These and other
factors may cause rating agencies to downgrade the credit ratings on certain
issues.

PERFORMANCE

Since the Fund began operations on October 26, 1998 and has not yet completed a
full calendar year, no performance information is available.

To obtain current yield information call 1-800-343-2898.

EXPENSES

This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.

Shareholder Fees
(fees paid directly from your investment)
Shareholder Transaction Expense Class A Class Y
None None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)*

Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 0.45% 0.30% 0.16% 0.91%
Class Y 0.45% N/A 0.16% 0.61%

*Estimated for the fiscal year ending 1/31/2000.

The table below shows the total expenses you would pay on a $10,000 investment
over one- and three- year periods. The example is intended to help you compare
the cost of investing in this Fund versus other mutual funds and is for
illustration only. The example assumes a 5% average annual return and that you
reinvest all of your dividends. Your actual costs may be higher or lower.

Example of Fund Expenses

Class A Class Y
After 1 year $ 93 $62
After 3 years $ 290 $195

<PAGE>

MONEY MARKET FUND
FUND FACTS:

Goal:

o High Current Income
o Preservation of Capital
o Liquidity

Principal Investment:

o Money Market Instruments

Classes of Shares Offered in this Prospectus:

o Class A
o Class B
o Class C
o Class Y

Investment Advisor:
o Evergreen Asset Management Corp.

NASDAQ Symbols:
EMAXX (Class A)
EMBXX (Class B)
EGMXX (Class Y)

Dividend Payment Schedule:

Monthly

INVESTMENT GOAL

The Fund seeks to achieve as high a level of current income as is consistent
with preserving capital and providing liquidity.

INVESTMENT STRATEGY

The following supplements the investment strategies discussed in the "Overview"
on page 1.

The Fund invests in money market securities, including certificates of deposit
and bankers' acceptances, commercial paper, U.S. treasury obligations,
short-term corporate obligations and repurchase agreements determined to present
minimal credit risk.

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.

RISK FACTORS

Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:

o Interest Rate Risk
o Credit Risk
o Foreign Investment Risk

PERFORMANCE

The following charts show how the Fund has performed in the past. Past
performance is not an indication of future results.

The chart below shows the percentage gain or loss for Class Y shares of the Fund
in each of the last ten calendar years. It should give you a general idea of how
the Fund's return has varied from year-to-year. This graph includes the effects
of Fund expenses.

Year-by-Year Total Return for Class Y Shares (%)
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
9.41 8.30 6.26 3.88 3.22 3.98 5.66 5.22 5.33 5.26
Best Quarter: 2nd Quarter 1989 +2.42%
Worst Quarter: 1st Quarter 1994 +0.78%

The next table lists the Fund's average annual total return by class over the
past one, five and ten years and since inception (through 12/31/98), including
applicable sales charges. This table is intended to provide you with some
indication of the risks of investing in the Fund.

Average Annual Total Return*
(For the period ended 12/31/98)
Inception Performance
Date Since
of Class 1 year 5 year 10 year 11/2/87

Class A 1/4/95 4.95% 4.83% 5.51% 5.72%
Class B 1/26/95 -0.78% 3.91% 5.22% 5.46%
Class C 8/1/97 3.21% 4.78% 5.48% 5.70%
Class Y 11/2/87 5.26% 5.08% 5.63% 5.84%

*Historical performance shown for Class A, B and C prior to their inception is
based on the performance of Class Y, the original class offered. These
historical returns for Classes A, B and C have not been adjusted to reflect the
effect of each class' 12b-1 fees. These fees for Classes A, B and C are 0.30%,
1.00% and 1.00%, respectively. Class Y does not pay a 12b-1 fee. If these fees
had been reflected, returns would have been lower.

To obtain current yield information call 1-800-343-2898.

EXPENSES

This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.

Shareholder Fees

(fees paid directly from your investment)
Shareholder Transaction Expenses Class A Class B Class C Class Y
Maximum deferred sales charge
(as a % of either the redemption
amount or initial investment,
whichever is lower) None 5.00% 1.00% None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)*

Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses

Class A 0.46% 0.30% 0.09% 0.85%
Class B 0.46% 1.00% 0.09% 1.55%
Class C 0.46% 1.00% 0.09% 1.55%
Class Y 0.46% N/A 0.09% 0.55%

*Actual for the fiscal year ended 1/31/99.

The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or lower.

Example of Fund Expenses

Assuming Redemption at Assuming
End of Period No Redemption

Class A Class B Class C Class Y Class B Class C
After 1 year $ 87 $ 658 $ 258 $ 56 $ 158 $ 158
After 3 years $ 271 $ 790 $ 490 $ 176 $ 490 $ 490
After 5 years $ 471 $1,045 $ 845 $ 307 $ 845 $ 845
After 10 years $1,049 $1,569 $1,845 $ 689 $1,569 $1,845

<PAGE>

MUNICIPAL MONEY MARKET FUND

FUND FACTS:

Goal:

o High Current Income Exempt from Federal Tax
o Preservation of Capital
o Liquidity

Principal Investment:

o Municipal Money Market Securities

Classes of Shares Offered in this Prospectus:

o Class A
o Class Y

Investment Advisor:
o Evergreen Asset Management Corp.

NASDAQ Symbols:
EXAXX (Class A)
EVTXX (Class Y)

Dividend Payment Schedule:

Monthly

INVESTMENT GOAL

The Fund seeks to achieve as high a level of current income exempt from federal
income tax, as is consistent with preserving capital and providing liquidity.

INVESTMENT STRATEGY

The following supplements the investment strategies discussed in the "Overview"
on page 1.

The Fund invests in municipal money market securities determined to present
minimal credit risk and issued by any U.S. state, the District of Columbia and
their political subdivisions.

The Fund invests at least 80% of its assets in municipal securities, the
interest from which is exempt from federal income tax, other than the
alternative minimum tax. However, the Fund may temporarily invest up to 100% of
its total assets in taxable securities for defensive purposes.

RISK FACTORS

Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:

o Interest Rate Risk
o Credit Risk

PERFORMANCE

The following charts show how the Fund has performed in the past. Past
performance is not an indication of future results.

Year-by-Year Total Return for Class Y Shares (%)
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
6.65 6.10 4.88 3.16 2.48 2.76 3.77 3.39 3.50 3.40

Best Quarter: 2nd Quarter 1989 +1.72%
Worst Quarter: 1st Quarter 1994 +0.60%

next table lists the Fund's average annual total return by class over the
past one, five and ten years and since inception (through 12/31/98). This table
is intended to provide you with some indication of the risks of investing in the
Fund.

Average Annual Total Return
(for the period ended 12/31/98)

Inception Performance
Date Since
of Class 1 year 5 year 10 year 11/2/88
Class A* 1/5/95 3.10% 3.12% 3.88% 3.92%
Class Y 11/2/88 3.40% 3.36% 4.00% 4.04%

*Historical performance shown for Class A prior to its inception is based on the
performance of Class Y, the original class offered. The historical returns for
Class A have not been adjusted to reflect the effect of Class A 12b-1 fee of
0.30%. Class Y does not pay a 12b-1 fee. If these fees had been reflected,
returns would have been lower.

To obtain current yield information call 1-800-343-2898.

EXPENSES

This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.

Shareholder Fees

(fees paid directly from your investment)

Shareholder Transaction Expenses Class A Class Y
None None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)*

Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses

Class A 0.49% 0.30% 0.08% 0.87%
Class Y 0.49% N/A 0.08% 0.57%
*Actual for the fiscal year ended 1/31/99.

Example of Fund Expenses

Class A Class Y
After 1 year $ 89 $ 58
After 3 years $ 278 $ 183
After 5 years $ 482 $ 318
After 10 years $1,073 $ 714

<PAGE>

NEW JERSEY MUNICIPAL MONEY MARKET FUND
FUND FACTS:

Goal:
i High Current Income Exempt from Federal and State Tax
i Preservation of Capital
i Maintain Liquidity and Stability of Principal

Principal Investment:
i Municipal Money Market Securities

Classes of Shares Offered in this Prospectus:
o Class A
o Class Y

Investment Advisor:
Evergreen Asset Management Corp.

NASDAQ Symbols:
ENJXX (Class A)

Dividend Payment Schedule:
Monthly

INVESTMENT GOAL

The Fund seeks to achieve as high a level of current income exempt from regular
federal income tax and, to the extent possible, from New Jersey gross income
tax, as is believed to be consistent with the preservation of capital,
maintenance of liquidity and stability of principal.

INVESTMENT STRATEGY

The following supplements the investment strategies discussed in the "Overview"
on page 1.

The Fund invests at least 80% of its net assets in municipal money market
securities issued by the state of New Jersey, possessions of the U.S. and their
political subdivisions, and which are determined to present minimal credit risk.
The Fund is non-diversified.

The Fund normally invest its assets so that at least 80% of its annual interest
income tax exempt from federal income tax other than alternative minimum tax and
from New Jersey gross income tax. However, the Fund may temporarily invest up to
100% of its total assets in taxable securities for defensive purposes.

RISK FACTORS

Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:

o Interest Risk
o Credit Risk
o Concentration Risk
o Non-Diversification Risk

The performance of the Fund is influenced by the political, economic and
statutory environment within the State. The Fund invests in obligations of New
Jersey issuers, which results in the Fund's performance being subject to risks
associated with the most current conditions within the State. For more
information on the factors that could affect the ability of the bond issuers to
pay interest and principal on securities acquired by the Fund, see the Statement
of Additional Information.

Some of these conditions include the State's slowing growth rate since 1987 and
the job losses which have occurred in certain sectors of New Jersey's economy.
These and other factors may cause rating agencies to downgrade the credit
ratings on certain issues.

PERFORMANCE

Since the Fund began operations on October 26, 1998 and has not yet completed a
full calendar year, no performance information is available.

To obtain current yield information call 1-800-343-2898.

EXPENSES

This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.

Shareholder Fees
(fees paid directly from your investment)
Shareholder Transaction Expenses Class A Class Y
None None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)*

Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 0.45% 0.30% 0.15% 0.90%
Class Y 0.45% N/A 0.15% 0.60%

*Estimated for the fiscal year ending 1/31/2000.

Example of Fund Expenses

Class A Class Y
After 1 year $ 92 $ 61
After 3 years $ 287 $ 192

<PAGE>

PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
FUND FACTS:

Goal:

o High Current Income Exempt from Federal and State Tax
o Preservation of Capital
o Liquidity

Principal Investment:

o Municipal Money Market Securities

Classes of Shares Offered in this Prospectus:

o Class A
o Class Y

Investment Advisor:

o Evergreen Investment Management

NASDAQ Symbols:
EPPXX (Class A)
EPAXX (Class Y)

Dividend Payment Schedule:

Monthly

INVESTMENT GOAL

The Fund seeks to provide investors with as high a level of current income
exempt from regular federal income tax, as is consistent with preservation of
capital and providing liquidity.

INVESTMENT STRATEGY

The following supplements the investment strategies discussed in the "Overview"
on page 1.

The Fund invests at least 80% of its net assets in municipal money market
municipal securities issued by the state of Pennsylvania or its political
subdivisions and by U.S. possessions, which are determined to present minimal
credit risk. The Fund is non-diversified.

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 alternative minimum tax
and from Pennsylvania income tax. However, the Fund may temporarily invest up to
100% of its total assets in taxable securities for defensive purposes.

In addition, the Fund may also invest in U.S. dollar-denominated foreign
commercial paper.

RISK FACTORS

Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:

o Interest Rate Risk
o Credit Risk
o Concentration Risk
o Foreign Investment Risk
o Non-Diversification Risk

In addition, the Fund's investment in U.S. dollar-denominated foreign commercial
paper could expose it to certain unique risks of foreign investing. For example,
political turmoil and economic instability in the countries in which the Fund
invests could adversely affect the value of your investment.

The performance of the Fund is influenced by the political, economic and
statutory environment within the State. The Fund invests in obligations of
Pennsylvania issuers, which results in the Fund's performance being subject to
risks associated with the most current conditions within the State. For more
information on the factors that could affect the ability of the bond issuers to
pay interest and principal on securities acquired by the Fund, see the Statement
of Additional Information.

Some of these conditions include adverse changes to the state-wide, regional or
local economies which affect the creditworthiness of the State and certain other
non-governmental related issuers and may cause rating agencies to downgrade the
credit ratings on certain issues.

PERFORMANCE

The following charts show how the Fund has performed in the past. Past
performance is not an indication of future results.

The chart below shows the percentage gain or loss for Class Y shares of the Fund
in each calendar year since inception. It should give you a general idea of how
the Fund's return has varied from year-to-year. This graph includes the effects
of Fund expenses.

Year-by-Year Total Return for Class Y Shares (%)
1992 1993 1994 1995 1996 1997 1998
2.87 2.12 2.54 3.66 3.07 3.23 3.09
Best Quarter: 2nd Quarter 1995 +0.99%
Worst Quarter: 1st Quarter 1994 +0.49%

The next table lists the Fund's average annual total return by class over the
past one and five years and since inception (through 12/31/98). This table is
intended to provide you with some indication of the risks of investing in the
Fund.

Average Annual Total Return
(for the period ended 12/31/98)

Inception Performance
Date 1 year 5 year 10 year Since
of Class 8/15/91
Class A* 8/22/95 2.99% 3.06% N/A 2.98%
Class Y 8/15/91 3.09% 3.11% N/A 3.01%

To obtain current yield information call 1-800-343-2898.

EXPENSES

This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.

Shareholder Fees
(fees paid directly from your investment)

Shareholder Transaction Expenses Class A Class Y
None None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)*

Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses

Class A** 0.40% 0.30% 0.11% 0.81%
Class Y 0.40% N/A 0.12% 0.52%

*Actual for the fiscal year ended 1/31/99.
**The Fund is currently waiving 12b-1 fees for Class A in the amount of 0.20%.
Total Fund Operating Expenses net of these waivers is 0.61%.

Example of Fund Expenses

Class A Class Y
After 1 year $ 83 $ 53
After 3 years $ 259 $ 167
After 5 years $ 450 $ 291
After 10 years $1,002 $ 653

<PAGE>

TREASURY MONEY MARKET FUND

FUND FACTS:

Goal:

o Stability of Principal
o Current Income

Principal Investment:

o Short-term U.S. Treasury Obligations

Classes of Shares Offered in this Prospectus:

o Class A
o Class Y

Investment Advisor:

o Evergreen Investment Management

NASDAQ Symbols:
ETAXX (Class A)
ETYXX (Class Y)

Dividend Payment Schedule:

Monthly

INVESTMENT GOAL

The Fund seeks to maintain stability of principal while earning current income.

INVESTMENT STRATEGY

The following supplements the investment strategies discussed in the "Overview"
on page 1.

The Fund will invest in short-term Treasury obligations with an average
dollar-weighted maturity of 60 days or less.

The Fund may enter into repurchase agreements collateralized by the types of
securities in which it may invest and obligations whose principal and interest
are backed by the full faith and credit of the U.S. government, provided that
such repurchase agreements, under normal market conditions, are backed by
collateral at least 65% of which is in U.S. Treasury obligations.

RISK FACTORS

Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:

o Interest Rate Risk
o Credit Risk

PERFORMANCE

The following charts show how the Fund has performed in the past. Past
performance is not an indication of future results.

Year-by-Year Total Return for Class Y Shares (%)
1992 1993 1994 1995 1996 1997 1998
3.67 3.04 4.06 5.69 5.09 5.24 5.14

Best Quarter: 2nd Quarter 1995 +1.43%
Worst Quarter: 4th Quarter 1993 +0.75%

The next table lists the Fund's average annual return by class over the past one
and five years and since inception (through 12/31/98). This table is intended to
provide you with some indication of the risks of investing in the Fund.

Average Annual Total Return
(for the period ended 12/31/98)

Inception Performance
Date 1 year 5 year 10 year Since
of Class 3/6/91
Class A 3/6/91 4.83% 4.73% N/A 4.37%
Class Y 3/6/91 5.14% 5.04% N/A 4.68%

<PAGE>

To obtain current yield information call 1-800-343-2898.

EXPENSES

This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.

Shareholder Fees
(fees paid directly from your investment)

Shareholder Transaction Expenses Class A Class Y
None None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)*

Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 0.35% 0.30% 0.08% 0.73%
Class Y 0.35% N/A 0.08% 0.43%

*Actual for the fiscal year ended 1/31/99.

Example of Fund Expenses

Class A Class Y
After 1 year $ 75 $ 44
After 3 years $ 233 $ 138
After 5 years $ 406 $ 241
After 10 years $ 906 $ 542

<PAGE>

The Funds' Investment Advisors

Each investment advisor manages a Fund's investments and supervises its daily
business affairs. There are two different investment advisors for the Evergreen
Money Market Funds. All investment advisors for the Evergreen Funds are
subsidiaries of First Union Corporation, the sixth largest bank holding company
in the United States, with over $223 billion in consolidated assets as of March
31, 1999. First Union Corporation is located at 301 South College Street,
Charlotte, North Carolina 28288-0013.

Evergreen Asset Management Corp. (EAMC) is the investment advisor to:
Florida Municipal Money Market Fund
Money Market Fund
Municipal Money Market Fund
New Jersey Municipal Money Market Fund

EAMC, with its predecessors, has served as investment advisor to the Evergreen
Funds since 1971, and currently manages over $18.7 billion in assets for 21 of
the Evergreen Funds. EAMC is located at 2500 Westchester Avenue, Purchase, New
York 10577.

Evergreen Investment Management (EIM) is the investment advisor to:
Pennsylvania Municipal Money Market Fund
Treasury Money Market Fund

EIM (formerly known as the Capital Management Group or CMG), a division of First
Union National Bank (FUNB), has been managing money for over 50 years and
currently manages over $28.8 billion in assets for 44 of the Evergreen Funds.
EIM is located at 201 South College Street, Charlotte, North Carolina
28288-0630.

Year 2000 Compliance

The investment advisors and other service providers for the Evergreen Funds are
taking steps to address any potential Year 2000-related computer problems.
However, there is some risk that these problems could disrupt the Funds'
operations or financial markets generally. In addition, issuers of securities,
especially foreign issuers, in which the Funds' invest may be adversely affected
by Year 2000 problems. Such problems could negatively impact the value of the
funds securities.

Calculating The Share Price

The value of one share of a Fund, also known as the net asset value, or NAV, is
calculated twice daily on each day the New York Stock Exchange is open at 12:00
noon (Eastern time) and as of the time the Exchange closes (normally 4:00 p.m.
Eastern time). We calculate the share price for each share by adding up the
total assets of the Fund, subtracting all liabilities, then dividing the result
by the total number of shares outstanding. Each class of shares is calculated
separately. Each security held by a Fund is valued on an amortized cost basis
according to Rule 2a-7 under the Investment Company Act of 1940. Under this
method of valuation, a security is initially valued at its acquisition cost, and
thereafter a contstant straightline 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 price per share you pay for a Fund purchase or the amount you receive for a
Fund redemption is based on the next price calculated after the order is
received and all required information is provided. The value of your account at
any given time is the latest share price multiplied by the number of shares you
own.

Florida Municipal Money Market Fund, Municipal Money Market Fund, New Jersey
Municipal Money Market Fund and Pennsylvania Municipal Money Market Fund Only
Prior to investing in Florida Municipal Money Market Fund, Municipal Money
Market Fund, New Jersey Muncipal Money Market Fund or 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.

How To Choose An evergreen Fund

When choosing an Evergreen Fund, you should:

Most importantly, read the prospectus to see if the Fund is suitable for you.
o Consider talking to an investment professional. He or she is qualified to
give you investment advice based on your investment goals and financial
situation and will be able to answer questions you may have after reading
the Fund's prospectus. He or she can also assist you through all phases
of opening your account.
Request any additional information you want about the Fund, such as the
Statement of Additional Information, Annual Report or Semi-annual Report
by calling 1-800-343-2898.

How To Choose The Share
Class That Best Suits You

After choosing a Fund , you select a share class. Each Evergreen Money Market
Fund offers up to four different share classes: Class A, Class B, Class C and
Class Y. Each class except Class Y has its own sales charge. Pay particularly
close attention to the fee structure of each class so you know how much you will
be paying before you invest.

Class A

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 (Money Market Fund Only)

If you select Class B shares, you do not pay a front-end sales charge, so the
entire amount of your purchase is invested in the Fund. However, your shares are
subject to an additional expense, known as the 12b-1 fee. In addition, you may
pay a deferred sales charge if you redeem your shares within six years after the
month of purchase. The amount of the deferred sales charge depends on the length
of time the shares are held, as shown below:

Time Held Contingent Deferred Sales Charge

Month of Purchase + First 12 Month Period 5.00%
Month of Purchase + Second 12 Month Period 4.00%
Month of Purchase + Third 12 Month Period 3.00%
Month of Purchase + Fourth 12 Month Period 3.00%
Month of Purchase + Fifth 12 Month Period 2.00%
Month of Purchase + Sixth 12 Month Period 1.00%
Thereafter 0%
After 7 Years Converts to Class A
Dealer Allowance 4.00%

The deferred sales charge percentage is applied to the value of the shares when
purchased or when redeemed, whichever is less. No deferred sales charge is paid
on shares purchased through dividend or capital gain reinvestments or on any
gain in the value of your shares.

Class C (Money Market Fund Only)
Class C shares of Money Market Fund are similar to Class B shares, except the
deferred sales charge is less and only applies if shares are redeemed within the
first year after the month of purchase. Also, these shares do not convert to
Class A shares and so the higher 12b-1 fee continues for the life of the
account.

Time Held Deferred Sales Charge

Month of Purchase + Less Than 1 Year 1.00%
Month of Purchase + 1 Year or More 0%

Waiver of Class B or Class C Deferred Sales Charges

You will not be assessed a deferred sales charge for Class B or Class C shares
if you redeem shares in the following situations: o When the shares were
purchased through reinvestment of dividends/capital gains o Death or disability

o Lump-sum distribution from a 401(k) plan or other benefit plan qualified under
ERISA o Automatic IRA withdrawals if your age is at least 59 1/2 o Automatic
withdrawals of up to 1.0% of the account balance per month o Loan proceeds and
financial hardship distributions from a retirement plan o Returns of excess
contributions or excess deferral amounts made to a retirement plan participant

Class Y
Each Fund offers Class Y shares at net asset value without an initial sales
charge, deferred sales charge or 12b-1 fees. Class Y shares are only offered to
persons who owned shares in a Fund advised by Evergreen Asset Management Corp.
on or before December 31, 1994; certain institutional investors; clients of an
investment advisor of an Evergreen Fund (or the advisor's affiliates).

How To Buy Shares

Evergreen Funds' low investment minimums make investing easy. Once you decide on
an amount and a share class, simply fill out an application and send in your
payment, or talk to your investment professional.

Minimum Investments
Initial Additional

Regular Accounts $1,000 None
IRAs $250 None
Systematic Investment Plan $50 $25

Method

By Mail or through
an Investment Professional

Opening an Account

o Complete and sign the account application.
o Make the check payable to Evergreen Funds.
o Mail the application and your check to the address below:

Evergreen Service Company Overnight Address:
P.O. Box 2121 Evergreen Service Company
Boston, MA 02106-2121 200 Berkeley St.
Boston, MA 02116-5039

o Or deliver them to your investment representative (provided he or she has a
broker-dealer arrangement with Evergreen Distributor, Inc.)

Adding to an Account

o Make your check payable to Evergreen Funds o Write a note specifying:
- the Fund name
- share class
- your account number
- the name(s) in which the account is registered
o Mail to the address to the left or deliver to your investment representative

By Phone

o Call 1-800-343-2898 to set up an account number and get wiring instructions
(call before 12 noon if you want wired funds to be credited that day).
o Instruct your bank to wire or transfer your purchase (they may charge a wiring
fee).
o Complete the account application and mail to:

Evergreen Service Company Overnight Address:
P.O. Box 2121 Evergreen Service Company
Boston, MA 02106-2121 200 Berkeley St.
Boston, MA 02116-5039

o Wires received after 4:00 p.m. Eastern time on market trading days will
receive the next market day's closing price.**

o Call the Evergreen Express Line at
1-800-346-3858 24 hours a day or
1-800-343-2898 between 8 a.m. and 6 p.m. Eastern time, on any business day.
o If your bank account is set up on file, you can request either:
- Federal Funds Wire (offers immediate access to funds) or

- Electronic transfer through the Automated Clearing House, which avoids
wiring fees.

By Exchange

o You can make an additional investment by exchange from an existing Evergreen
Fund account by contacting your investment representative or calling the
Evergreen Express Line at 1-800-346-3858.*

You can only exchange shares within the same class.
o There is no sales charge or redemption fee when exchanging Funds within
the Evergreen Funds family.

o Orders placed before 4 p.m. Eastern time on market trading days will
receive that day's closing share price (if not, you will receive the next
market day's closing price).**

o Exchanges are limited to three per calendar quarter, and five per
calendar year.

o Exchanges between accounts which do not have identical ownership must be
made in writing with a signature guarantee (see below).

Systematic Investment Plan (SIP)
o You can transfer money automatically from your bank account into your Fund on
a monthly basis.
o Initial investment minimum is $50 if you invest at least $25 per month with
this service.
o To enroll, check off the box on the account application and provide:
- your bank account information
- the amount and date of your monthly investment
o To establish automatic investing for an existing account, call 1-800-343-2898
for an application.
o The minimum is $25 per month or $75 per quarter.
o You can also establish an investing program through direct deposit from your
paycheck. Call 1-800-343-2898 for details.

* Once you have authorized either the telephone exchange or redemption service,
anyone with a Personal Identification Number (PIN) and the required account
information (including your broker) can request a telephone transaction in your
account. All calls are recorded or monitored for verification, recordkeeping and
quality-assurance purposes. The Evergreen Funds reserve the right to terminate
the exchange privilege of any shareholder who exceeds the listed maximum number
of exchanges, as well as to reject any large dollar exchange if placing it
would, in the judgment of the portfolio manager, adversely affect the price of
the Fund.

** The Fund's shares may be made available through financial service firms who
have a service agreement with the Fund, which are also investment dealers. The
Fund has approved the acceptance of purchase and repurchase request orders
effective as of the time of their receipt by certain authorized financial
intermediaries.

How To redeem Shares

We offer you several convenient ways to redeem your shares in any of the
Evergreen Funds:

Methods

Call Us

Requirements

o Call the Evergreen Express Line at 1-800-346-3858 24 hours a day or
1-800-343-2898 between 8 a.m. and 6 p.m. Eastern time, on any business day.
o This service must be authorized ahead of time, and is only available for
regular accounts.*

o All authorized requests made before 4 p.m. Eastern time on market trading days
will be processed at that day's closing price.
Requests after 4 p.m. will be processed the following business day.**

o We can either:
- wire the proceeds into your bank account (service charges may apply)
- electronically transmit the proceeds to your bank account via the Automated
Clearing House service - mail you a check.
o All telephone calls are recorded for your protection. We are not responsible
for acting on telephone orders we believe are genuine.
o See exceptions list below for requests that must be made in writing.

Write Us

o You can mail a redemption request to:

Evergreen Service Company
P.O. Box 2121
Boston, MA 02106-2121

Overnight Address:
Evergreen Service Company
200 Berkeley St.
Boston, MA 02116-5039

o Your letter of instructions must:
- list the Fund name and the account number
- indicate the number of shares or dollar value you wish to redeem
- be signed by the registered owner(s)
o See exceptions list below for requests that must be signature guaranteed.
o To redeem from an IRA or other retirement account, call 1-800-346-3858 for a
special application.

Sell Your Shares in Person

o You may also redeem your shares through participating broker-dealers by
delivering a letter as described above to your broker-dealer.
o A fee may be charged for this service.

Systematic
Withdrawal
Plan (SWP)

o You can transfer money automatically from your Fund account on a monthly or
quarterly basis without redemption fees. o The withdrawal can be mailed to you,
or deposited directly to your bank account.

o The minimum is $75 per month.
o The maximum is 1% of your account per month or 3% per quarter.
o To enroll, call 1-800-343-2898 for an application.

Timing of Proceeds

Normally, we will send your redemption proceeds on the next business day after
we receive your request; however, we reserve the right to wait up to seven
business days to redeem any investments made by check and five business days for
investments made by Automated Clearing House transfer.

We also reserve the right to redeem in kind by paying you the proceeds of a
redemption in securities rather than in cash, and to redeem the remaining amount
in the account if your redemption brings the account balance below the initial
minimum of $1,000.

Exceptions: Redemption Requests That Require A Signature Guarantee

To protect you and Evergreen Funds against fraud, certain redemption requests
must be in writing with your signature guaranteed. A signature guarantee can be
obtained at most banks and securities dealers. A notary public is not authorized
to provide a signature guarantee. The following circumstances require signature
guarantees:
o You are redeeming more than $50,000
o You want the proceeds transmitted to a bank account not listed on the account
o You want the proceeds payable to anyone other than the registered owner(s) of
the account
o Either your address or the address of your bank account has been changed
within 30 days
o The account is registered in the name of a fiduciary corporation or any other
organization. In these cases, additional documentation is required:

corporate accounts: certified copy of corporate resolution
fiduciary accounts: copy of the power of attorney or other governing document

Who Can Provide A Signature Guarantee:
o Commercial Bank
o Trust Company
o Savings Association
o Credit Union
o Member of a U.S. stock exchange

Other Services

Evergreen Express Line
Use our automated, 24-hour service to check the value of your investment in a
Fund; purchase, redeem or exchange Fund shares; find a Fund's price, yield or
total return; order a statement or duplicate tax form; or hear market commentary
from Evergreen portfolio managers.

Automatic Reinvestment of Dividends
For the convenience of investors, all dividends and capital gains distributions
are automatically reinvested, unless you request otherwise. Distributions can be
made by check or electronic transfer through the Automated Clearing House to
your bank account. The details of your dividends and other distributions will be
included on your statement.

Payroll Deduction
If you want to invest automatically through your paycheck, call us to find out
how you can set up direct payroll deductions. The amounts deducted will be
invested in your Fund account using the Electronic Funds Transfer System. We
will provide the Fund account number. Your payroll department will let you know
the date of the pay period when your investment begins.

Telephone Investment Plan
You may make additional investments electronically in an existing Fund account
at amounts of not less than $100 or more than $10,000 per investment. Telephone
requests received by 4:00 p.m. Eastern time will be invested the day the request
is received.

Dividend Exchange
You may elect on the application to reinvest capital gains and/or dividends
earned in one Evergreen Fund into an existing account in another Evergreen Fund
in the same share class -- automatically. Please indicate on the application the
Evergreen Fund(s) into which you want to invest the distributions.

Reinvestment Privileges

Under certain circumstances, shareholders may, within one year of redemption,
reinstate their accounts at the current price (NAV).

The Tax Consequences of Investing in the funds

You may be taxed in two ways:
o On Fund distributions (capital gains and dividends)
o On any profit you make when you sell any or all of your shares.

Fund Distributions

A mutual fund passes along to all of its shareholders the net income or profits
it receives from its investments. The shareholders of the fund then pay any
taxes due, whether they receive these distributions in cash or elect to have
them reinvested. The Florida Municipal Money Market Fund, Municipal Money Market
Fund, New Jersey Municipal Money Market Fund and Pennsylvania Municipal Money
Market Fund expect that substantially all of their regular dividends will be
exempt from federal income tax other than the alternative minimum tax.
Otherwise, the Funds will distribute two types of taxable income to you:

o Dividends. To the extent the regular dividends are derived from interest that
is not tax-exempt, or from short-term capital gains, you will have to include
them in your federal taxable income. Each Fund pays a monthly dividend from the
dividends, interest and other income on the securities in which it invests.

o Capital Gains. When a mutual fund sells a security it owns for a profit, the
result is a capital gain. Evergreen Money Market Funds generally distribute
capital gains at least once a year, near the end of the calendar year.
Short-term capital gains reflect securities held by the Fund for a year or less
and are considered ordinary income just like dividends. Profits on securities
held longer than 12 months are considered long-term capital gains and are taxed
at a special tax rate (20% for most taxpayers, on sales made after January 1,
1998.)

Dividend and Capital Gain Reinvestment
Unless you choose otherwise on the account application, all dividend and capital
gain payments will be reinvested to buy additional shares. Distribution checks
that are returned and distribution checks that are uncashed when the shareholder
has failed to respond to mailings from the shareholder servicing agent will
automatically be reinvested to buy additional shares.

No interest will accrue on amounts represented by uncashed distribution or
redemption checks.
We will send you a statement each January with the federal tax status of
dividends and distributions paid by each Fund during the previous calendar year.

Profits You Realize When You Redeem Shares

When you sell shares in a mutual fund, whether by redeeming or exchanging, you
have created a taxable event. You must report any gain or loss on your tax
return unless the transaction was entered into by a tax-deferred retirement plan
or occurred in a money market fund. It is your responsibility to keep accurate
records of your mutual fund transactions. You will need this information when
you file your income tax return, since you must report any capital gains or
losses you incur when you sell shares. Remember, an exchange is a purchase and a
sale for tax purposes.

Tax Reporting
Evergreen Service Company provides you with a tax statement of your dividend and
capital gains distributions for each calendar year on Form 1099 DIV. Proceeds
from a sale are reported on Form 1099B. You must report these on your tax
return. Since the IRS receives a copy as well, you could pay a penalty if you
neglect to report them.

Evergreen Service Company will send you a tax information guide each year during
tax season, which may include a cost basis statement detailing the gain or loss
on taxable transactions you had during the year. Please consult your own tax
advisor for further information regarding the federal, state and local tax
consequences of an investment in the Funds.

Retirement Plans

You may invest in each Fund through various retirement plans, including IRAs,
401(k) plans, Simplified Employee Plans (SEPs), IRAs, 403(b) plans, 457 plans
and others. For special rules concerning these plans, including applications,
restrictions, tax advantages, and potential sales charge waivers, contact your
broker-dealer. To determine if a retirement plan may be appropriate for you,
consult your tax advisor.

fees and Expenses of the funds

Every mutual fund has fees and expenses that are assessed either directly or
indirectly. This section describes each of those fees.

Management Fee

The management fee pays for the normal expenses of managing the fund, including
portfolio manager salaries, research costs, corporate overhead expenses and
related expenses.

12b-1 Fee

The Trustees of the Evergreen Funds have approved a policy to assess 12b-1 fees
for Class A, Class B and Class C shares. These fees increase the cost of your
investment. The purpose of the 12b-1 fee is to promote the sale of more shares
of the Funds to the public. The Funds might use this fee for advertising and
marketing and as a "service fee" to the broker-dealer for additional shareholder
services.

Other Expenses

Other expenses include miscellaneous fees from affiliated and outside service
providers. These may include legal, audit, custodial and safekeeping fees, the
printing and mailing of reports and statements, automatic reinvestment of
distributions and other conveniences for which the shareholder pays no
transaction fees.

Total Fund Operating Expenses

The total cost of running the Fund is called the expense ratio. As a
shareholder, you are not charged these fees directly; instead they are taken out
before the Fund's net asset value is calculated, and are expressed as a
percentage of the Fund's average daily net assets. The effect of these fees is
reflected in the performance results for that share class. Because these fees
are "invisible," investors should examine them closely in the prospectus,
especially when comparing one fund with another fund in the same investment
category. There are three things to remember about expense ratios: 1) your total
return in the Fund is reduced in direct proportion to the fees; 2) expense
ratios can vary greatly between funds and fund families, from under 0.25% to
over 3.0%; and 3) a Fund's advisor may waive a portion of the Fund's expenses
for a period of time, reducing its expense ratio.

Financial Highlights

This section looks in detail at the results for one share in each share class of
the Funds--how much income it earned, how much of this income was passed along
as a distribution and how much the return was reduced by expenses. The following
tables have been derived from financial information audited by
PricewaterhouseCoopers LLP: Money Market Fund for each fiscal year ended or
period shown and Municipal Money Market Fund for each fiscal year ended or
period shown. The following tables have been derived from financial information
audited by KPMG LLP for each fiscal year or period shown below: Florida
Municipal Money Market Fund, New Jersey Municipal Money Market Fund,
Pennsylvania Municipal Money Market Fund and Treasury Money Market Fund. For a
more complete picture of the Funds' financial statements, please see the Funds'
Annual Report as well as the Statement of Additional Information.

OTHER FUND PRACTICES

The Funds may borrow money and lend their securities. Borrowing is a form of
leverage, which may magnify a Fund's gain or loss. Lending securities may cause
the Fund to lose the opportunity to sell these securities at the most desirable
price and, therefore, lose money.

Please consult the Statement of Additional Information for more information
regarding these and other investment practices used by the Funds, including
risks.

<PAGE>

Notes

<PAGE>

Evergreen Funds
Money Market
Florida Municipal Money Market Fund
Money Market Fund
Municipal Money Market Fund
New Jersey Municipal Money Market Fund
Pennsylvania Municipal Money Market Fund
Treasury Money Market Fund

Municipal Bond
Short Intermediate Municipal Fund
High Grade Municipal Bond Fund
Municipal Bond Fund California Municipal Bond Fund
Connecticut Municipal Bond Fund
Florida High Income Municipal Bond Fund
Florida Municipal Bond Fund
Georgia Municipal Bond Fund
Maryland Municipal Bond Fund
Massachusetts Municipal Bond Fund
Missouri Municipal Bond Fund
New Jersey Municipal Bond Fund
New York Municipal Bond Fund
North Carolina Municipal Bond Fund
Pennsylvania Municipal Bond Fund
South Carolina Municipal Bond Fund
Virginia Municipal Bond Fund

Income
Capital Preservation and Income Fund
Short Intermediate Bond Fund
Intermediate Term Government Securities Fund
Intermediate Term Bond Fund
U.S. Government Fund
Diversified Bond Fund
Strategic Income Fund
High Yield Bond Fund

Balanced
American Retirement Fund
Balanced Fund
Tax Strategic Foundation Fund
Foundation Fund

Growth & Income
Utility Fund
Income and Growth Fund
Equity Income Fund
Value Fund
Blue Chip Fund
Growth and Income Fund
Small Cap Value Fund

Domestic Growth
Strategic Growth Fund
Stock Selector Fund
Evergreen Fund
Omega Fund
Small Company Growth Fund
Aggressive Growth Fund
Micro Cap Fund
Tax Strategic Equity Fund
Masters Fund

Global International
Global Leaders Fund
International Growth Fund
Global Opportunities Fund
Precious Metals Fund
Emerging Markets Growth Fund
Latin America Fund

Express Line
800.346.3858

Investor Services
800.343.2898

Evergreen Express Line
Call 1-800-346-3858
24 hours a day to
o check your account
o order a statement
o get a Fund's current price, yield and
total return
o buy, redeem or exchange Fund shares

Non-retirement account holders
Call 1-800-343-2898
Each business day, 8 a.m. to 6 p.m. Eastern time to
o buy, redeem or exchange shares
o order applications
o get assistance with your account

Information Line for Hearing and Speech Impaired (TTY/TDD)
Call 1-800-343-2888
Each business day, 8 a.m. to 6 p.m. Eastern time

Write us a letter
Evergreen Service Company
P.O. Box 2121
Boston, MA 02106-2121
o to buy, redeem or exchange shares
o to change the registration on your account
o for general correspondence

For express, registered or certified mail:
Evergreen Service Company
200 Berkeley Street
Boston, MA 02116-5039

Regular communications you will receive:

Account Statements -- You will receive quarterly statements for each fund
you invest in.

Confirmation Notices -- We send a confirmation of any transaction you make
within five days of the transaction.

Annual and Semiannual reports -- You will receive a detailed financial
report on each Fund you invest in twice a year.

Tax Forms -- Each January you will receive any Fund tax information you
need to include in your tax returns as well as the Evergreen Tax
Information Guide.

<PAGE>

For More Information About the Evergreen Money Market Funds, Ask for:

The Funds' most recent Annual or Semi-Annual Report, which contains a
complete financial accounting for each Fund and a complete list of the
Fund's holdings as of a specific date, as well as commentary from the
Fund's manager. This Report discusses the market conditions and investment
strategies that significantly affected the Fund's performance during the
most recent fiscal year or period.

The Statement of Additional Information (SAI), which contains more detailed
information about the policies and procedures of the Funds. The SAI has
been filed with the Securities and Exchange Commission ("SEC") and its
contents are legally considered to be part of this prospectus.

For questions, other information, or to request a copy, without charge, of
any of the documents, call 1-800-343-2898 or ask your investment
representative. We will mail material within three business days.

Information about these Funds (including the SAI) is also available on the
SEC's Internet web site at http://www.sec.gov, or, for a duplication fee,
by writing the SEC Public Reference Section, Washington DC 20549-6009. This
material can also be reviewed and copied at the SEC's Public Reference Room
in Washington, DC. For more information, call the SEC at 1-800-SEC-0330.

Evergreen Distributor, Inc.

90 Park Avenue

New York, New York 10016

SEC File No.: 811-08555

<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, 1999

Evergreen Florida Municipal Money Market Fund ("Florida Fund")
Evergreen Money Market Fund ("Money Fund")
Evergreen Municipal Money Market Fund ("Municipal Fund")
Evergreen New Jersey Municipal Money Market Fund ("New Jersey 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 but
should be read in conjunction with the prospectuses dated June 1, 1999 for
the Fund in which you are making or contemplating an investment. The Funds
are offered through one prospectus one offering Class A and Class Y shares
of each Fund and Class B and Class C shares of Evergreen Money Market Fund.
You may obtain a prospectus without charge by calling (800)-343-2898.

Certain information may be incorporated by reference to the Funds'
Annual Report dated January 31, 1999. You may obtain a copy of the Annual
Report without charge by calling (800)-343-2898.

TABLE OF CONTENTS

PART 1

TRUST HISTORY..........................................................1-3
INVESTMENT POLICIES....................................................1-3
OTHER SECURITIES AND PRACTICES.........................................1-5
PRINCIPAL HOLDERS OF FUND SHARES.......................................1-5
EXPENSES...............................................................1-8
PERFORMANCE...........................................................1-13
SERVICE PROVIDERS.....................................................1-15
FINANCIAL STATEMENTS..................................................1-16
ADDITIONAL INFORMATION CONCERNING FLORIDA.............................1-17
ADDITIONAL INFORMATION CONCERNING NEW JERSEY..........................1-22
ADDITIONAL INFORMATION CONCERNING PENNSYLVANIA........................1-25

PART 2

ADDITIONAL INFORMATION ON SECURITIES AND INVESTMENT PRACTICES..........2-1
PURCHASE, REDEMPTION AND PRICING OF SHARES............................2-12
SALES CHARGE WAIVERS AND REDUCTIONS...................................2-14
PERFORMANCE CALCULATIONS..............................................2-17
PRINCIPAL UNDERWRITER.................................................2-19
DISTRIBUTION EXPENSES UNDER RULE 12b-1................................2-20
TAX INFORMATION.......................................................2-22
BROKERAGE.............................................................2-25
ORGANIZATION..........................................................2-26
INVESTMENT ADVISORY AGREEMENT.........................................2-27
MANAGEMENT OF THE TRUST...............................................2-29
CORPORATE AND MUNICIPAL BOND RATINGS..................................2-31
ADDITIONAL INFORMATION................................................2-41

PART 1

TRUST HISTORY

The Evergreen Money Market Trust is an open-end management investment
company, which was organized as a Delaware business trust on September 18, 1997.
A copy of the Declaration of Trust is on file as an exhibit to the Trust's
Registration Statement, of which this SAI is a part. The foregoing is qualified
in its entirety by reference to the Declaration of Trust.

INVESTMENT POLICIES

FUNDAMENTAL INVESTMENT RESTRICTIONS

Each Fund has adopted the fundamental investment restrictions set forth
below which may not be changed without the vote of a majority of the Fund's
outstanding shares, as defined in the Investment Company Act of 1940 (the "1940
Act"). Where necessary, an explanation beneath a fundamental policy describes
the Fund's practices with respect to that policy, as allowed by current law. If
the law governing a policy changes, the Funds' practices may change accordingly
without a shareholder vote. Unless otherwise stated, all references to the
assets of the Fund are in terms of current market value.

1. Diversification (Excluding Florida Fund, New Jersey Fund and
Pennsylvania Fund)

Each Fund, except Florida Fund, New Jersey Fund and Pennsylvania Fund
which are nondiversified, may not make any investment that is inconsistent with
its classification as a diversified investment company under the 1940 Act.

Further Explanation of Diversification Policy:

To remain classified as a diversified investment company under the 1940
Act, each 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 United States ("U.S.") government or its agencies or
instrumentalities.

2. Concentration

Each Fund may not concentrate its investments in the securities of
issuers primarily engaged in any particular industry (other than securities that
are issued or guaranteed by the U.S. government or its agencies or
instrumentalities or, in the case of Money Fund, domestic bank money
instruments).

Further Explanation of Concentration Policy:

Each Fund may not invest more than 25% of its total assets, taken at
market value, in the securities of issuers primarily engaged in any particular
industry (other than securities issued or guaranteed by the U.S. government or
its agencies or instrumentalities).

3. Issuing Senior Securities

Except as permitted under the 1940 Act, each Fund may not issue senior
securities.

4. Borrowing

Each Fund may not borrow money, except to the extent permitted by
applicable law.

Further Explanation of Borrowing Policy:

Each Fund may borrow from banks and enter into reverse repurchase
agreements in an amount up to 33 1/3% of its total assets, taken at market
value. Each Fund may also borrow up to an additional 5% of its total assets from
banks or others. A Fund may borrow only as a temporary measure for extraordinary
or emergency purposes such as the redemption of Fund shares. A Fund may purchase
additional securities so long as borrowings do not exceed 5% of its total
assets. Each Fund may obtain such short-term credit as may be necessary for the
clearance of purchases and sales of portfolio securities.

5. Underwriting

Each Fund may not underwrite securities of other issuers, except
insofar as a Fund may be deemed to be an underwriter in connection with the
disposition of its portfolio securities.

6. Real Estate

Each Fund may not purchase or sell real estate, except that, to the
extent permitted by applicable law, a 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.

7. Commodities

Each Fund may not purchase or sell commodities or contracts on
commodities except to the extent that a 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.

8. Lending

Each Fund may not make loans to other persons, except that a 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.

Further Explanation of Lending Policy:

To generate income and offset expenses, a Fund may lend portfolio
securities to broker-dealers and other financial institutions in an amount up to
33 1/3% of its total assets, taken at market value. While securities are on
loan, the borrower will pay the Fund any income accruing on the security. The
Fund may invest any cash collateral it receives in additional portfolio
securities, such as U.S. Treasury notes, certificates of deposit, other
high-grade, short-term obligations or interest bearing cash equivalents. Gains
or losses in the market value of a security lent will affect the Fund and its
shareholders.

When a Fund lends its securities, it will require the borrower to give
the Fund collateral in cash or government securities. The Fund will require
collateral in an amount equal to at least 100% of the current market value of
the securities lent, including accrued interest. The Fund has the right to call
a loan and obtain the securities lent any time on notice of not more than five
business days. The Fund may pay fees in connection with such loans.

9. Investments in Federally Tax-Exempt Securities

Each Fund, other than Money Fund and Treasury Fund, will, during
periods of normal market conditions, invest its 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.

OTHER SECURITIES AND PRACTICES

For information regarding certain securities the Funds may purchase and
certain investment practices the Funds may use, see the following sections under
"Additional Information on Securities and Investment Practices" in Part 2 of
this SAI:

When-Issued, Delayed-Delivery and Forward Commitment Transactions (except for
Money Fund)
Repurchase Agreements
Reverse Repurchase Agreements
Illiquid and Restricted Securities
Investment in Other Investment Companies
Short Sales
U.S. Treasury Obligations
Stand-by Commitments
Floating Rate and Variable Rate Obligations (except for Treasury Fund)
Municipal Securities

PRINCIPAL HOLDERS OF FUND SHARES

As of February 28, 1999, the officers and Trustees of the Trust owned
as a group less than 1% of the outstanding shares of any class of each 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 the
outstanding shares of any class of each Fund as of February 28, 1999.

Florida Fund Class A

FUNB 83.16%
Attn: Cap Financial
230 S. Tryon Street
Charlotte, NC 28202-3215

First Union Brokerage Services 16.25%
301 South College Street
Charlotte, NC 28202-6000

Florida Fund Class Y

Money Fund Class A

FUNB 77.346%
Attn: Cap Financial
230 S. Tryon Street
Charlotte, NC 28202-3215

First Union Brokerage Services 8.708%
301 S. College Street
Charlotte, NC 28202-6000

Money Market Class B

None

Money Fund Class C

J C Bradford & Company Cust 8.352%
Consolidated Investors
330 Commerce Street
Nashville, TN 37201-1809

State Street Bank and Trust Co. 6.724%
Paul K. Kugler
92 North Grove
East Aurora, NY 14052-1747

J C Bradford & Company 5.886%
330 Commerce Street
Nashville, TN 37201-1809

Industrial Conveyor Corp. 5.479%
James G. Johnson &
Thomas A. Johnson Trustees
5324 Crestview Drive
Memphis, TN 38134

State Street Bank & Trust Co. 5.466%
Mark S. Matlock MD
2817 McClelland Blvd. #125
Joplin, MO 64804-1630

J C Bradford & Co. Trust 5.420%
RCIP Limited Partners
330 Commerce Street
Nashville, TN 37201-1809

Money Fund Class Y

First Union National Bank 61.812%
Attn: Ginny Batten
401 S. Tryon Street, 3rd Floor
Charlotte, NC 28202-1911

Byrd & Company 8.715%
C/o First Union National Bank
Sweep Funds Processing
530 Walnut Street
Philadelphia, PA 19101

Pitcairn Trust Company 5.448%
One Pitcairn Place
Jenkintown, PA 19046-3531

Municipal Fund Class A

FUNB 80.430%
Attn: Cap Financial
230 S. Tryon Street
Charlotte, NC 28202-3215

First Union Brokerage Services 11.958%
301 S. College Street
Charlotte, NC 28202-6000

Municipal Fund Class Y

First Union National Bank 32.933%
Attn: Ginny Batten
11th Floor
301 S. Tryon Street
Charlotte, NC 28288

Pitcairn Trust Company 10.139%
One Pitcairn Place
Jenkintown, PA 19046-3531

New Jersey Fund Class A

FUNB 62.01%
Attn: Cap Financial
230 S. Tryon Street
Charlotte, NC 28202-3215

First Union Brokerage Services 37.69%
301 South College Street
Charlotte, NC 28202-6000

New Jersey Fund Class Y

None

Pennsylvania Fund Class A

FUNB 79.79%
Attn: Cap Financial
230 S. Tryon Street
Charlotte, NC 28202-3215

First Union Brokerage Services 19.67%
301 South College Street
Charlotte, NC 28202-6000

Pennsylvania Fund Class Y

First Union National Bank 61.86%
Trust Accounts
Attn: Ginny Batten
401 S. Tryon Street, 3rd Floor
Charlotte, NC 28202-1911

First Union Brokerage Services 7.56%
301 S. College Street
Charlotte, NC 28202-6000

Johnathan B. Detwiler 7.51%
P.O. Box 69
Phoenixville, PA 19460-0069

Agnes C. Kim 5.84%
760 Conshohocken State Road
Gladuyne, PA 19035-1416

Treasury Fund Class A

FUNB 69.85%
Attn: Cap Financial
230 S. Tryon Street
Charlotte, NC 28202-3215

First Union National Bank 13.90%
Attn: Ginny Batten
301 S. Tryon Street, 11th floor
Charlotte, NC 28202-1910

First Union Brokerage Services 5.64%
301 S. College Street
Charlotte, NC 28202-6000

Treasury Fund Class Y

First Union National Bank 85.41%
Attn: Ginny Batten
301 S. Tryon Street, 11th Floor
Charlotte, NC 28202-1910

EXPENSES

Advisory Fees

Each Fund has its own investment advisor. For more information, see
"Investment Advisory Agreement" in Part 2 of this SAI.

Evergreen Asset Management Corp. ("EAMC") is the investment advisor to
Florida Fund, Money Fund, Municipal Fund and New Jersey Fund. Lieber & Company
acts as sub-advisor to Money Fund and Municipal Fund and is reimbursed by EAMC
for the costs of providing sub-advisory services. EAMC is entitled to receive an
annual fee based on 0.45% of each Fund's average daily net assets. EAMC is
entitled to receive from Money Fund and Municipal Fund an annual fee based on
the Fund's average daily net assets as follows:

Average Daily Net Assets Fee

First $1 billion 0.50%

Over $1 billion 0.45%

Evergreen Investment Management ("EIM"), formerly the Capital
Management Group of First Union National Bank, is the investment advisor to
Treasury Fund. EIM is entitled to receive from Treasury Fund an annual fee equal
to 0.35% of the average daily net assets of the Fund.

EIM is also the investment advisor to Pennsylvania Fund. EIM is
entitled to receive from Pennsylvania Fund an annual fee based on the average
daily net assets, as follows:

Average Daily Net Assets Fee

First $500 million 0.40%

Next $500 million 0.36%

Over $1billion and up to and 0.32%
including $1.5 billion

Over $1.5 billion 0.28%

Advisory Fees Paid

Below are the advisory fees paid by each Fund for the last three fiscal
periods.

Fund/Fiscal Year or Period Advisory Fee Waiver

Year or Period Ended 1999

Florida Fund (Three months ended 1/31/99) $107,393 $45,775

Money Fund (Year ended 1/31/99) $24,349,144 -0-

Municipal Fund (Year ended 1/31/99) $6,136,621 -0-

New Jersey Fund (Three months ended 1/31/99) $114,832 $61,737

Pennsylvania Fund (Year ended 1/31/99) $376,038 -0-

Treasury Fund (Year ended 1/31/99) $13,851,709 -0-

Year or Period Ended 1998

Money Fund (Year ended 1/31/98)* $6,801,389 -0-

Municipal Fund (Year ended 1/31/98)* $2,155,943 -0-

Pennsylvania Fund (Year ended 1/31/98)* $111,425 $17,363

Treasury Fund (Year ended 1/31/98)* $4,446,822 -0-

Year or Period Ended 1997

Money Fund (Year ended 8/31/97) $13,092,396 $1,482,584

Municipal Fund (Year ended 8/31/97) $5,695,367 $183,559

Pennsylvania Fund (Year ended (8/31/97) $275,516 $62,049

Treasury Fund (Year ended 8/31/97) $10,831,288 $132,244

*Five months ended January 31, 1998.

Brokerage Commissions

The Funds paid no brokerage commissions during the fiscal year or
period ended January 31, 1999.

Underwriting Commissions

For each Fund, with the exception of Money Fund, there are no
Underwriting Commissions for the last three fiscal periods. For the period ended
January 31, 1999 the total Underwriting Commission for the Money Fund is
$243,233.

12b-1 Fees

Below are the 12b-1 fees paid by each Fund for the fiscal year or
period ended January 31, 1999. For more information, see "Distribution Expenses
Under Rule 12b-1" in Part 2 of this SAI.

Class B Class C
Fund Class A Class B

Distribution Service Fees Distribution Service Fees Distribution Service Fees
Fees Fees Fees

Florida Fund 0 $71,590 N/A N/A N/A N/A

Money Fund 0 $11,866,370 $463,118 $154,373 $39,140 $13,047

Municipal Fund 0 $2,255,210 N/A N/A N/A N/A

New Jersey Fund 0 $76,555 N/A N/A N/A N/A

Pennsylvania Fund 0 $178,215* N/A N/A N/A N/A
- -

Treasury Fund 0 $9,205,494 N/A N/A N/A N/A

* Voluntary waived $118,810

</TABLE>

Trustee Compensation

Listed below is the Trustee compensation paid by the Trust individually
and by the Trust and the eight other trusts in the Evergreen Fund Complex for
the twelve months ended January 31, 1999. The Trustees do not receive pension or
retirement benefits from the Funds. For more information, see "Management of the
Trust" in Part 2 of this SAI.

Trustee Aggregate Compensation Total Compensation from
from Trust Trust and Fund Complex Paid
to Trustees**

Laurence B. Ashkin $16,150 $75,500

Charles A. Austin, III $16,150 $75,500

K. Dun Gifford $15,629 $73,000

James S. Howell $21,322 $98,000

Leroy Keith Jr. $15,629 $73,000

Gerald M. McDonnell $16,150 $75,500

Thomas L. McVerry $18,443 $86,500

William Walt Pettit $14,619 $68,000

David M. Richardson $15,510 $72,375

Russell A. Salton, III $17,141 $78,500

Michael S. Scofield $17,141 $78,500

Richard J. Shima $15,629 $73,000

**Certain Trustees have elected to defer all or part of their total
compensation for the twelve months ended January 31, 1999. The
amounts listed below will be payable in later years to the respective
Trustees:

Austin $11,325
Howell $75,500
McDonnell $78,500
McVerry $79,200
Pettit $68,000
Salton $86,500
Scofield $ 2,750

PERFORMANCE

Current, Effective and Tax Equivalent Yields

Below are the yields for each class of shares of the Funds for the
seven-day period ended January 31, 1999. With respect to the tax-equivalent
yield of the Florida Fund, a combined federal and state rate 36% is assumed, for
Municipal Fund, a federal tax rate of 36% is assumed, for New Jersey Fund, a
combined federal and state tax rate 40.08% is assumed, and for Pennsylvania
Fund, a combined federal and state tax rate 37.8% is assumed. For more
information, see Yield under "Performance Calculations" in Part 2 of this SAI.

Fund/Class
Current Effective Tax Equivalent
Yield

Florida Fund

Class A 2.16% 2.18% 3.38%

Class Y 2.53% 2.56% 3.95%

Money Fund

Class A 4.38% 4.47% N/A

Class B 3.68% 3.75% N/A

Class C 3.68% 3.75% N/A

Class Y 4.68% 4.79% N/A

Municipal Fund

Class A 2.50% 2.53% 3.91%

Class Y 2.80% 2.84% 4.38%

New Jersey Fund

Class A 2.04% 2.06% 3.40%

Class Y N/A N/A N/A

Pennsylvania Fund

Class A 2.43% 2.46% 3.91%

Class Y 2.53% 2.57% 4.07%

Treasury Fund

Class A 4.10% 4.18% N/A

Class Y 4.40% 4.50% N/A

Total Return

Below are the annual total returns for each class of shares of the
Funds (including applicable sales charges) as of January 31, 1999. The returns
for Florida Fund and New Jersey Fund are cumulative since inception since
inception. For more information, see "Total Return" under "Performance
Calculations" in Part 2 of this SAI.

Fund/Class One Year Five Years Ten Years or Since Inception Date
Inception

<S> <C> <C> <C> <C>
Florida Fund

Class A N/A N/A 0.69% 10/26/98

Class Y N/A N/A 0.72% 12/29/98

Municipal Fund

Class A 3.07% 3.13% 3.85% 01/05/95

Class Y 3.38% 3.37% 3.97% 11/02/88

Money Fund

Class A 4.90% 4.85% 5.74% 01/04/95

Class B -0.82% 3.92% 5.17% 01/26/95

Class C 3.16% 4.80% 5.44% 08/01/97

Class Y 5.21% 5.11% 5.60% 11/02/87

New Jersey Fund

Class A N/A N/A 0.66% 10/26/98

Class Y N/A N/A N/A N/A

Pennsylvania Fund

Class A 2.96% 3.08% 2.97% 08/22/95

Class Y 3.07% 3.13% 3.01% 08/15/91

Treasury Fund

Class A 4.75% 4.75% 4.37% 03/06/91

Class Y 5.07% 5.07% 4.67% 03/06/91

</TABLE>

The returns for the Money Fund Class A, B and C shares prior to inception are
based upon the historical performance of Class Y shares, the original class
offered, the inception of which is 11/2/87, and do not reflect 12b-1 fees. If
12b-1 fees had been reflected, returns would have been lower.

The returns for the Municipal Fund Class A shares prior to inception are based
upon the historical performance of Class Y shares, the original class offered,
the inception of which is 11/2/88, and do not reflect 12b-1 fees. If 12b-1 fees
had been reflected, returns would have been lower.

The returns for the Pennsylvania Fund Class A shares prior to inception are
based upon the historical performance of Class Y shares, the original class
offered, the inception of which is 8/15/91, and do not reflect 12b-1 fees. If
12b-1 fees had been reflected, returns would have been lower.

SERVICE PROVIDERS

Administrator

Evergreen Investment Services, Inc. ("EIS") serves as administrator to
the Florida Fund, New Jersey Fund, 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 each Fund at a rate based
on the total assets of all mutual funds advised by First Union subsidiaries. The
fee paid to EIS is calculated in accordance with the following schedule:

Assets Fee

first $7 billion 0.050%

next $3 billion 0.035%

next $5 billion 0.030%

next $10 billion 0.020%

next $5 billion 0.015%

over $30 billion 0.010%

EIS also provides facilities, equipment and personnel to Money Fund and
Municipal Fund on behalf of Evergreen Asset Management Corp.

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. The transfer agent's fees are
calculated in accordance with the following schedule:

Fund Type Annual Fee Annual Fee
Per Open Per Closed
Account* Account**

Monthly Dividend Funds $25.50 $9.00

Quarterly Dividend Funds $24.50 $9.00

Semiannual Dividend Funds $23.50 $9.00

Annual Dividend Funds $23.50 $9.00

Money Market Funds $25.50 $9.00

*For shareholder accounts only. The Fund pays ESC cost plus 15% for broker
accounts.
**Closed accounts are maintained on the system in order to facilitate
historical and tax information.

Distributor

Evergreen Distributor, Inc. ( "EDI") markets the Funds through broker-
dealers and other financial representatives. Its address is 125 W. 55th Street,
New York, NY 10019.

Independent Auditors

KPMG LLP, 99 High Street, Boston, Massachusetts 02110, audits the
financial statements of Florida Fund, New Jersey Fund, Pennsylvania Fund and
Treasury 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.

FINANCIAL STATEMENTS

The audited financial statements and the reports thereon are hereby
incorporated by reference to the Funds' Annual Report, a copy of which may be
obtained without charge from ESC, P.O. Box 2121, Boston, Massachusetts
02106-2121.

<PAGE>

ADDITIONAL INFORMATION CONCERNING FLORIDA

The performance of the Florida Fund is susceptible to various
statutory, political and economic factors unique to the State of Florida. The
information summarized below describes some of the more significant factors that
could affect the ability of the bond issuers to repay interest and principal on
securities acquired by the Fund. Such information is derived from various public
sources all of which are available to investors generally and which the Fund
believes to be accurate.

State Economy

General. Florida is the nation's fourth most popular state with an
estimated population of 14,713,000 as of April 1, 1997. Only California, New
York and Texas have populations larger than Florida. The State's population grew
from 6,800,000 in 1970 to 12,900,000 in 1990 and to an estimated 14,713,000 in
1997. This represents a 13.7% growth since the 1990 Census. Florida's population
is primarily an urban population with approximately 85% of its population
located in urbanized areas. The University of Florida, Bureau of Economic and
Business Research projects Florida's population will exceed 17,900,000 by April
1, 2010.

Economic Condition and Outlook. The current Florida Economic Consensus
Estimating Conference (February 5, 1998) forecast shows that the Florida economy
is expected to grow at a moderate pace along with the nation, but will continue
to outperform the U.S. as a whole. Total non-farm employment is expected to
increase 3.9% for the 1997-98 fiscal year which began July 1, 1997. By the end
of fiscal year 1998-99, non-farm employment is expected to reach an average of
6.7 million. Trade and service employment, the two largest sectors, account for
more than half of total non-farm employment. Florida's unemployment rate is
forecasted at 4.6% for 1997-98, then to rise to 4.8% in 1998-99.

Tourism is an important element of Florida's economy. Tourist arrivals
are expected to increase 2.1% for 1997-98 and 4.0% for 1998-99. Air tourists
will increase 1.6% and 3.7%, while auto tourists will increase 2.7% and 4.2%,
respectively. By the end of 1997-98, 43.8 million domestic and international
tourists are expected to have visited the State. In 1998-99, tourist visits
should reach 45.6 million.

Florida's Budget Process

Balance Budget Requirement. Florida's constitution requires an annual
balanced budget. In addition, the constitution requires a Budget Stabilization
Fund equal to 4% of the last fully completed fiscal year's net revenue
collections for the General Revenue Fund for the fiscal year 1997-98 and 5% for
fiscal year 1998-99 and thereafter. In the Governor's 1998-99 Recommended
Budget, the Budget Stabilization Fund is required to be funded at 5%, or $785
million.

State Revenue Limitations. On November 8, 1994, the citizens of Florida
enacted a Constitutional Amendment on state revenue. This amendment provides
that the rate of growth in state revenues is limited to no more than the average
annual growth rate in Florida personal income during the past five years.
Revenue growth in excess of the limitation is to be deposited into the Budget
Stabilization Fund unless two-thirds of the members of both houses of the
Legislature vote to raise the limit. The revenue limit is determined by
multiplying the average annual growth rate in Florida personal income over the
past five years times state revenues for the previous year.

Budget Process. Chapter 216 Florida Statutes, promulgates the process
used to develop the budget for the State of Florida. By September 1 of each
year, the head of each State agency and the Chief Justice of the Supreme Court
for the Judicial Branch submit a final annual legislative budget request to the
Governor and Legislature. Then, at least 45 days before the scheduled annual
legislative session in each year, the Governor, as chief budget officer, submits
his recommended budget to each legislator.

The Governor also provides estimates of revenues sufficient to fund the
recommended appropriations. Estimates for the General Revenue Fund, Budget
Stabilization Fund and Working Capital Fund are made by the Revenue Estimating
Conference (see the description of the budgetary basis fund types in the next
section). This group includes members of the executive and legislative branches
with forecasting experience who develop official information regarding
anticipated State and local government revenues as needed for the State
budgeting process. In addition to the Revenue Estimating Conference, other
consensus estimating conferences cover national and state economics, national
and state demographics, the state public education system, criminal justice
system, social services system, transportation planning and budgeting, the child
welfare system, the juvenile justice system and the career education planning
process.

Trust fund revenue estimates are generally made by the agency that
administers the fund. These estimates are reviewed by the Governor and then
incorporated into his recommended budget.

The Governor's recommended budget forms the basis of the appropriations
bill. As amended and approved by the Legislature (subject to the line-item veto
power of the Governor and override authority of the Legislature), this bill
becomes the General Appropriations Act.

The Governor and the Comptroller are responsible for detecting
conditions which could lead to a deficit in any agency's funds and reporting
that fact to the Administration Commission and the Chief Justice of the Supreme
Court. The Constitution of the State, Article VII, Section 1(d), states,
"Provision shall be made by law for raising sufficient revenue to defray the
expenses of the State for each fiscal year."

The Legislature is responsible for annually providing direction in the
General Appropriations Act regarding the use of the Working Capital Fund to
offset General Revenue Fund deficits. Absent any specific direction to the
contrary, the Governor and the Chief Justice of the Supreme Court shall comply
with guidelines provided in Section 216.221(5), F.S., for reductions in the
approved operating budgets of the executive branch and the judicial branch.

The State of Florida is progressing toward full implementation of a
performance-based budgeting system. Chapter 216., F.S., designates when each
department will be phased into this new budgeting method. Some agencies are
already subject to the performance-based budgeting standards and all agencies
will be under this new system by the fiscal year ended June 30, 2002. With
performance-based budgeting, a department receives a lump-sum appropriation from
the Legislature for each designated program at the beginning of the year. The
Governor, for State agencies, or the Chief Justice, for the judicial branch, is
responsible for allocating the amounts among the traditional appropriation
categories so that specified performance standards can be met. At any time
during the year, the agency head or Chief Justice may transfer appropriations
between categories within the performance-based program with no limit on the
amount of the transfer in order for the designated program to accomplish its
objectives. However, no transfer from any other budget entity may be made into
the performance-based program, nor may any funds be transferred from the
performance-based program to another budget entity, except pursuant to Section
216.77, FS.

Line Item Veto. Florida's Constitution grants the Governor the power to
veto any specific appropriation in a general appropriation bill, but the
Governor may not veto any qualification or restriction without also vetoing the
appropriation to which it relates. A statement identifying the items vetoed and
containing his or her objections thereto must be delivered to the appropriate
house in which the bill originated, if in session, otherwise to the Secretary of
State. The legislature may reconsider and restate the vetoed specific
appropriation items by a two-thirds vote of each house.

Revenues. The State accounts for its receipts using fund accounting. It
has established the General Revenue Fund, the working Capital Fund and various
other trust funds, which are maintained for the receipt of monies which under
law or trust agreements must be maintained separately. The General Revenue Fund
consists of all monies received by the State from every source whatsoever which
are not allocable to the other funds. Major sources of tax revenues for the
General Revenue Fund are the sales and use tax, the corporate income tax, and
the intangible personal property tax, which are projected for fiscal year
1998-99 to amount to 71%, 8% and 4%, respectively, of the total receipts of that
fund. Florida's constitution and statutes mandate that the state budget as a
whole and each separate fund within the State budget be kept in balance from
currently available revenues for each fiscal year.

Sales and Use Tax. The greatest single source of tax receipts in
Florida is the sales and use tax, which is projected to amount to $12.5 billion
for fiscal year 1998-99. The sales tax rate is 6% of the sales price of tangible
personal property sold at retail in the State. The use tax rate is 6% of the
cash price of fair market value of tangible personal property when it is not
sold but is used, or stored for use, in the State. In other words, the use tax
applies to the use of tangible personal property in Florida, which was purchased
in another state but would have been subject to the sales tax if purchased in
Florida. Approximately 10% of the sales tax is designated for local governments
and is distributed to the respective counties in which collected for use by such
counties and municipalities therein. In addition to this distribution, local
governments may (by referendum) assess a 1% sales surtax within their county.
Proceeds from this local option sales surtax can be earmarked for funding county
wide bus and rapid transit systems, local infrastructure construction and
maintenance, medical care for indigents and capital projects for county school
districts as set forth in Section 212.055(2), of the Florida Statutes.

The two taxes, sales and use, stand as complements to each other, and
taken together provide a uniform tax upon either the sale at retail or the use
of all tangible personal property irrespective of where it may have been
purchased. The sales tax also includes a levy on the following: (1) rentals on
tangible personal property and accommodations in hotels, motels, some
apartments, offices, real estate, parking and storage places in parking lots,
garages and marinas for motor vehicles or boats; (ii) admissions to places of
amusements, most sports and recreation events; (iii) utilities, except those
used in homes; and (iv) restaurant meals and expendables used in radio and
television broadcasting. Exemptions include: groceries; medicines; hospital
rooms and meals; seeds, feeds, fertilizers and farm crop protection materials;
purchases by religious, charitable and educational nonprofit institutions;
professional services, insurance and certain personal service transaction;
newspapers; apartments used as permanent dwellings; and kindergarten through
community college athletic contests or amateur plays.

Other State Taxes. Other taxes which Florida levies include the motor
fuel tax, intangible property tax, documentary stamp tax, gross-receipts
utilities tax and severance tax on the production of oil and gas and the mining
of solid minerals, such as phosphate and sulfur.

Government Debt. Florida maintains a high bond rating from Moody's
Investors Service (AMoody=s@) (AA+), Standard and Poor's Ratings Services
(AS&P@)(AA) and Fitch IBCA, Inc. (AFitch@) (AA) on all state general obligation
bonds. Outstanding general obligation bonds have been issued to finance capital
outlay for educational projects of local school districts, community colleges
and state universities, environmental protection and highway construction.

Numerous government units, counties, cities, school districts and
special taxing districts, issue general obligation bonds backed by their taxing
power. State and local government units may issue revenue obligations, which are
supported by the revenues generated from the particular projects or enterprises.
Examples include obligations issued to finance the construction of water and
sewer systems, health care facilities and educational facilities. In some cases,
sewer or water revenue obligations may be further secured by the full faith and
credit of the State.

Florida's Constitution generally limits state bonds pledging the full
faith and credit of the state, to those necessary to finance or refinance the
cost of state fixed capital outlay projects authorized by law, and then only
upon approval by a vote of the electors. The constitution further limits the
total outstanding principal of such bonds to no more than 50% of the total tax
revenues of the state for the two preceding fiscal years, excluding any tax
revenues held in trust. Exceptions to the requirement for voter approval are:
(i) bonds issued for pollution control and abatement and solid waste disposal
facilities and other water facilities authorized by general law and operated by
state or local governmental agencies; and (ii) bonds issued to finance or
refinance the cost of acquiring real property or rights thereto for state roads
as defined by law, or to finance or refinance the cost of state bridge
construction.

State revenue bonds may be issued without a vote of the electors to
finance or refinance the cost of state fixed capital outlay projects authorized
by law, as long as they are payable solely from funds derived directly from
sources other than State tax revenues. Revenue bonds may be issued to establish
a student loan fund, as well as to finance or refinance housing and related
facilities so long as repayments come solely from revenues derived from the fund
or projects so financed. The Constitution imposes no limit on the principal
amount of revenue bonds which may be issued by the state and Local Governmental
Agency. Local Governmental Agencies, such as counties, school boards or
municipalities may issue bonds, certificates of indebtedness or any form of tax
anticipation certificate, payable from ad valorem taxes and maturing more than
12 months from the date of issuance only: (i) to finance or refinance capital
projects authorized by law, and only when approved by a vote of the electors who
are property owners living within boundaries of the agency. Generally, ad
valorem taxes levied by a Local Governmental Agency may not exceed 10 miles on
the value of real estate and tangible personal property unless approved by the
electors. Local Governmental Agencies may issue revenue bonds to finance or
refinance the cost of capital projects for airports or port facilities or for
industrial or manufacturing plants, without the vote of electors, so long as the
revenue bonds are payable solely from revenues derived from the projects.

Other Factors. The performance of the obligations issued by Florida,
its municipalities, subdivisions and instrumentalities are in part tied to
state-wide, regional and local conditions within Florida. Adverse changes to
state-wide, regional or local economies may adversely affect the
creditworthiness of Florida, its municipalities, etc. Also, some revenue
obligations may be issued to finance construction of capital projects which are
leased to nongovernmental entities. Adverse economic conditions might affect
those lessees' ability to meet their obligations to the respective governmental
authority which in turn might jeopardize the repayment of the principal of, or
the interest on, the revenue obligations.

Litigation

Due to its size and broad range of activities, the State is involved in
numerous routine legal actions. The ultimate disposition and fiscal consequences
of these lawsuits are not presently determinable; however, according to the
departments involved, the results of such litigation pending or anticipated will
not materially affect the State of Florida=s financial position. The information
disclosed in this Litigation Section has been deemed material by the Florida
Auditor General and has been derived from information disclosed in the Florida
Comptroller=s Annual Report dated January 29, 1998. No assurance can be made
that other litigation has not been filed or is not pending which may have a
material impact on the State=s financial position.

A. Coastal Petroleum v. State of Florida

Case No. 90-3195, 2nd Judicial Circuit. This is an inverse condemnation
case claiming that the action of the Trustees and Legislature constitute a
taking of Coastal=s leases for which compensation is due. The Circuit judge
granted the State=s motion for summary judgment finding that as a matter of law,
the State had not deprived Coastal of any royalty it might have. Coastal
appealed to the First District Court of Appeals, but the case was remanded to
Circuit Court for trial. On August 6, 1996, final judgment was made in favor of
the State. Coastal petitioned the Florida Supreme Court for a review, which was
denied on January 28, 1998.

B. Florida Department of Transportation v. 745 Property Investments, CSX
Transportation, Inc. and Continental Equities

Case No. 94-17739 CA 27, Dade County Circuit Court. This cases involves
the Florida Department of Transportation (FDOT) and CSX Transportation, Inc.
FDOT has filed an action against the adjoining property owners seeking a
declaratory judgment from the Dade County Circuit Court that the Department is
not the owner of the property that is subject to a claim by the U.S.
Environmental Protection Agency (EPA). The case was dismissed and FDOT=s appeal
of the order of dismissal is pending in the Third District Court of Appeal.

The EPA is seeking clean-up costs, pursuant to the Comprehensive
Environmental Response Compensation and Liability Act, regarding property which
the EPA alleges is owned by the FDOT (and formerly owned by CSX Transportation,
Inc.). The EPA has agreed to await the outcome of the Department=s declaratory
action before proceeding further. If the Department is unsuccessful in its
actions, the possible clean-up costs could exceed $25 million.

C. Jenkins v. Florida Department of Health and Rehabilitative Services

Case No. 79-102-CIV-J-16, United States District Court. This is a class
action suit on behalf of clients of residential placement for the
developmentally disabled seeking refunds for services where children were
entitled to free education under the Education for Handicapped Act. The district
court held that the State could not charge maintenance fees for children between
the ages of 5 and 17 based on the Education for Handicapped Act. The State=s
potential cost of refunding these charges could exceed $42 million. Attorneys
are in the process of negotiating a settlement amount.

D. Nathan M. Hameroff, M.D., et. al. v. Agency for Health Care
Administration, et. al.

Case No. 95-5036, Leon County Circuit Court. The plaintiffs challenge
the constitutionality of the Public Medical Assistance Trust Fund (PMATF) annual
assessment on net operating revenue of free-standing out-patient facilities
offering sophisticated radiology services. A trial has not been scheduled.
Plaintiff filed a Notice of Pendency of Class Action on July 29, 1997. If the
State is unsuccessful in its actions, the potential refund liability could
amount to approximately $70 million.

E. Walden v. Department of Corrections

Case No. 95-40357-WS (USDC N.D. Fla.) This action is brought by one
captain and one lieutenant in the Department of Corrections seeking declaratory
judgment that they (and potentially 700 similarly situated others) are not
exempt employees under the Fair Labor Standards Act (FLSA) and, therefore, are
entitled to overtime compensation at a rate of not less than one and one-half
times their regular rate of pay for overtime hours worked since April 1, 1992,
forward and including liquidated damages. The U.S. District Court for the
Northern District of Florida entered an order dismissing the case for lack of
jurisdiction on June 24, 1996. Plaintiffs filed a lawsuit against the Department
(Case No. 96-3955) in July 1996 at the State level (Circuit Court, Second
Judicial Circuit), making the same allegations at that level which plaintiffs
previously made before the U.S. District Court for the Northern District of
Florida. On December 20, 1996, that Court determined that it has jurisdiction
over the FLSA claim. On December 10, 1997, the Court entered final summary
judgment. Plaintiffs were not awarded any damages, but were awarded attorneys'
fees and costs.

F. Barnett Bank v. Department of Revenue

Case No. 97-02375, 4th Judicial Circuit, involves the issue of whether
Florida's refund statute for dealer repossessions authorizes the Department to
grant a refund to a financial institution as the assignee of numerous security
agreements governing the sale of automobiles and other property sold by dealers.
The questions turn on whether the Legislature intended the statute only to
provide a refund or credit to the dealer who actually sold the tangible personal
property and collected and remitted the tax or intended that right to be
assignable. Several banks have applied for refunds; the potential refund to
financial institutions exceeds $30,000,000.

ADDITIONAL INFORMATION CONCERNING NEW JERSEY

New Jersey Municipal Securities

The financial condition of the State of New Jersey, its public authorities (the
"Authorities") and its local governments, could affect the market values and
marketability of, and therefore the net asset value per share and the interest
income of New Jersey Fund, or result in the default of existing obligations,
including obligations which may be held by the Fund. The following section
provides only a brief summary of the complex factors affecting the financial
situation in New Jersey and is based on information obtained from New Jersey,
certain of its Authorities and certain other localities, as publicly available
on the date of this Statement of Additional Information. The information
contained in such publicly available documents has not been independently
verified. It should be noted that the creditworthiness of obligations issued by
local issuers may be unrelated to the creditworthiness of New Jersey, and that
there is no obligation on the part of New Jersey to make payment on such local
obligations in the event of default in the absence of a specific guarantee or
pledge provided by New Jersey.

Economic Factors

New Jersey is the ninth largest state in population and the fifth smallest in
land area. With an average of 1,077 people per square mile, it is the most
densely populated of all the states. The State's economic base is diversified,
consisting of a variety of manufacturing, construction and service industries,
supplemented by rural areas with selective commercial agriculture. The extensive
facilities of the Port Authority of New York and New Jersey, the Delaware River
Port Authority and the South Jersey Port Corporation across the Delaware River
from Philadelphia augment the air, land and water transportation complex which
has influenced much of the State's economy. The State's central location in the
northeastern corridor, the transportation and port facilities and proximity to
New York City make the State an attractive location for corporate headquarters
and international business offices. According to the United States Bureau of the
Census, the population of New Jersey was 7,170,000 in 1970, 7,365,000 in 1980,
7,730,000 in 1990 and 7,988,000 in 1996. Historically, New Jersey's average per
capita income has been well above the national average, and in 1996 the State
ranked second among the states in per capita personal income ($31,053).

While New Jersey's economy continued to expand during the late 1980s, the level
of growth slowed considerably after 1987. By the beginning of the national
recession in July 1990 (according to the National Bureau of Economic Research),
construction activity had already been declining in New Jersey for nearly two
years, growth had tapered off markedly in the service sectors and the long-term
downward trend of factory employment had accelerated, partly because of a
leveling off of industrial demand nationally. The onset of recession caused an
acceleration of New Jersey's job losses in construction and manufacturing, as
well as an employment downturn in such previously growing sectors as wholesale
trade, retail trade, finance, utilities and trucking and warehousing. The net
effect was a decline in the State's total nonfarm wage and salary employment
from a peak of 3,689,800 in 1989 to a low of 3,457,900 in 1992. This loss has
been followed by an employment gain of 255,600 from May 1992 to June 1997, a
recovery of 97.5% of the jobs lost during the recession. In July 1991, S&P
lowered the State's general obligation bond rating from AAA to AA+.

<PAGE>

Reflecting the downturn, the rate of unemployment in the State rose from a low
of 3.6% during the first quarter of 1989 to a recessionary peak of 8.5% during
1992. Since then, the unemployment rate fell to 6.2% during 1996 and 5.5% for
the six month period from January 1997 through June 1997.

For the recovery period as a whole, May 1992 to June 1997, service-producing
employment in New Jersey has expanded by 283,500 jobs. Hiring has been reported
by food stores, wholesale distributors, trucking and warehousing firms, security
and commodity brokers, business and engineering/management service firms,
hotels/hotel-casinos, social service agencies and health care providers other
than hospitals. Employment growth was particularly strong in business services
and its personnel supply component with increases of 17,300 and 7,500,
respectively, in the 12-month period ending June 1997.

In the manufacturing sector, employment losses slowed between 1992 and 1994.
After an average annual job loss of 33,500 from 1989 through 1992, New Jersey's
factory job losses fell to 13,300 during 1993 and 7,300 during 1994. During 1995
and 1996, however, manufacturing job losses increased slightly to 10,100 and
13,900 respectively, reflecting a slowdown in national manufacturing production
activity. While experiencing growth in the number of production workers in 1994,
the number declined in 1995 at the same time that managerial and office staff
were also reduced as part of nationwide downsizing. Through August 1996, layoffs
of white collar workers and corporate downsizing appear to be abating.

Conditions have slowly improved in the construction industry, where employment
has risen by 18,600 since its low in May 1992. Between 1992 and 1996, this
sector's hiring rebound was driven primarily by increased homebuilding and
nonresidential projects. During 1996 and the first five months of 1997, public
works projects and homebuilding became the growth segments while nonresidential
construction lessened but remained positive.

State Finances

The State operates on a fiscal year beginning July 1 and ending June 30. For
example, "Fiscal Year 1999" refers to the State's fiscal year beginning July 1,
1998 and ending June 30, 1999. The General Fund is the fund into which all State
revenues not otherwise restricted by statute are deposited and from which
appropriations are made. The largest part of the total financial operations of
the State is accounted for in the General Fund. Revenues received from taxes and
unrestricted by statute, most federal revenue and certain miscellaneous revenue
items are recorded in the General Fund. The appropriations act provides the
basic framework for the operation of the General Fund. Undesignated Fund
Balances are available for appropriation in succeeding fiscal years. There have
been positive Undesignated Fund Balances in the General Fund at the end of each
year since the State Constitution was adopted in 1947. The estimates for Fiscal
Year 1998 and Fiscal Year 1999 reflect the amounts contained in the Governor's
Fiscal Year 1999 Budget Message delivered on February 10, 1998.

In Fiscal Years 1996 and 1997, the actual General Fund balances were $442.0
million and $280.5 million, respectively, and total Undesignated Fund Balances
were $882.2 million and $1,106.4 million. For Fiscal Years 1998 and 1999 General
Fund balances are estimated to be $268.7 million and $144.0 million,
respectively, and total Undesignated Fund Balances are estimated to be $1,021.3
million and $6750.0 million.

<PAGE>

Fiscal Years 1998 and 1999 State Revenue Estimates

Sales and Use Tax. The revised estimate forecasts Sales and Use tax collections
for Fiscal Year 1998 as $4,720.0 million, a 6.9% increase from the Fiscal Year
1997 revenue. The Fiscal Year 1999 estimate of $4,928.0 million is a 4.4%
increase from the Fiscal Year 1998 estimate.

Gross Income Tax. The revised estimate forecasts Gross Income Tax collections
for Fiscal Year 1998 of $5,340.0 million, a 10.7% increase from Fiscal Year 1997
revenue. The Fiscal Year 1999 estimate of $5,860.0 million is a 9.7% increase
from the Fiscal Year 1998 estimate. Included in the Fiscal Year 1998 estimate
and the Fiscal Year 1999 estimate is the enactment of a property tax deduction,
to be phased in over a three-year period, permitting a deduction by resident
taxpayers against gross income tax of a percentage of their property taxes.

Corporation Business Tax. The revised estimate forecasts Corporation Business
Tax collection for Fiscal Year 1998 as $1,315.1 million, a 2.2% decrease from
Fiscal Year 1997 revenue. The Fiscal Year 1999 estimate of $1,431.0 million is
an 8.8% increase from the Fiscal Year 1998 estimate.

General Considerations. Estimated receipts from State taxes and revenues,
including the three principal taxes set forth above, are forecasts based on the
best information available at the time of such forecasts. Changes in economic
activity in the State and the nation, consumption of durable goods, corporate
financial performance and other factors that are difficult to predict may result
in actual collections being more or less than forecasted.

Should revenues be less than the amount anticipated in the budget for a fiscal
year, the Governor may, pursuant to statutory authority, prevent any expenditure
under any appropriation. There are additional means by which the Governor may
ensure that the State is operated efficiently and does not incur a deficit. No
supplemental appropriation may be enacted after adoption of an appropriations
act except where there are sufficient revenues on hand or anticipated, as
certified by the Governor, to meet such appropriation. In the past when actual
revenues have been less than the amount anticipated in the budget, the Governor
has exercised her plenary powers leading to, among other actions, implementation
of a hiring freeze for all State departments and the discontinuation of programs
for which appropriations were budgeted but not yet spent. Under the State
Constitution, no general appropriations law or other law appropriating money for
any State purpose may be enacted if the amount of money appropriated therein,
together with all other prior appropriations made for the same fiscal year,
exceeds the total amount of revenue on hand and anticipated to be available for
such fiscal year, as certified by the Governor.

<PAGE>

ADDITIONAL INFORMATION CONCERNING PENNSYLVANIA

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 in 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 for the year 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 May, 1998 was 4.3%
and for the United States for May, 1998 was 4.3%. The population of
Pennsylvania,12.02 million people in 1997 according to the U.S. Bureau of the
Census, represents an increase from the 1988 estimate of 11.846 million. Per
capita income in Pennsylvania for 1996 of $24, 803 was higher than the per
capita income of the United States of $24,426. 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 are made, closed fiscal
years ended June 30, 1995, June 30, 1996 and June 30, 1997 with positive fund
balances of $688.304 million, $635.182 million and $1,364.9 million
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 $4.795 million at
June 30, 1997. 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, 1997, all outstanding general
obligation bonds of the Commonwealth were rated AA- by Standard & Poor's Ratings
Services and Aa3 by Moody's Investors Service, Inc. (see Part 2 of this SAI).
There can be no assurance that these ratings will remain in effect in the
future. Over the five-year period ending June 30, 2003, the Commonwealth has
projected that it will issue notes and bonds totaling $2,984.5 million and
retire bonded debt in the principal amount of $2,350.9 million.

<PAGE>

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 June 30, 1997, one of these agencies,
the Pennsylvania Turnpike Commission, had total outstanding indebtedness of
$1,177.6 million. The Combined total debt outstanding for all other above
mentioned agencies as of December 31, 1997 was $7,047.4. 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 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 obligations 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 held by the Pennsylvania Fund 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 obligers,
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 obligers 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.

<PAGE>

EVERGREEN FUNDS
Statement of Additional Information ("SAI")

PART 2

ADDITIONAL INFORMATION ON SECURITIES
AND INVESTMENT PRACTICES

The prospectus describes the Fund's investment objective and the
securities in which it primarily invests. The following describes other
securities the Fund may purchase and investment strategies it may use. Some of
the information below will not apply to the Fund in which you are interested.
See the list under Other Securities and Practices in Part 1 of this SAI to
determine which of the sections below are applicable.

Defensive Investments

The Fund may invest up to 100% of its assets in high quality money
market instruments, such as notes, certificates of deposit, commercial paper,
banker's acceptances, bank deposits or U.S. government securities if, in the
opinion of the advisor, market conditions warrant a temporary defensive
investment strategy. Evergreen Fund for Total Return may also invest in debt
securities and high grade preferred stocks for defensive purposes when its
investment advisor determines a temporary defensive strategy is warranted.

U.S. Government Securities

The Fund may invest in securities issued or guaranteed by U.S.
Government agencies or instrumentalities.

These securities are backed by (1) the discretionary authority of the
U.S. Government to purchase certain obligations of agencies or instrumentalities
or (2) the credit of the agency or instrumentality issuing the obligations.

Some government agencies and instrumentalities may not receive
financial support from the U.S. Government. Examples of such agencies are:

(i) Farm Credit System, including the National Bank for
Cooperatives, Farm Credit Banks and Banks for Cooperatives;
(ii) Farm Home Administration;
(iii) Federal Home Loan Banks;
(iv) Federal Home Loan Mortgage Corporation;
(v) Federal National Mortgage Association; and
(vi) Student Loan Marketing Association.

Securities Issued by the Government National Mortgage Association
("GNMA")

The Fund may invest in securities issued by the GNMA, a corporation
wholly-owned by the U.S. Government. GNMA securities or "certificates" represent
ownership in a pool of underlying mortgages. The timely payment of principal and
interest due on these securities is guaranteed.

Unlike conventional bonds, the principal on GNMA certificates is not
paid at maturity but over the life of the security in scheduled monthly
payments. While mortgages pooled in a GNMA certificate may have maturities of up
to 30 years, the certificate itself will have a shorter average maturity and
less principal volatility than a comparable 30-year bond.
The market value and interest yield of GNMA certificates can vary due
not only to market fluctuations, but also to early prepayments of mortgages
within the pool. Since prepayment rates vary widely, it is impossible to
accurately predict the average maturity of a GNMA pool. In addition to the
guaranteed principal payments, GNMA certificates may also make unscheduled
principal payments resulting from prepayments on the underlying mortgages.

Although GNMA certificates may offer yields higher than those available
from other types of U.S. Government securities, they may be less effective as a
means of locking in attractive long-term rates because of the prepayment
feature. For instance, when interest rates decline, prepayments are likely to
increase as the holders of the underlying mortgages seek refinancing. As a
result, the value of a GNMA certificate is not likely to rise as much as the
value of a comparable debt security would in response to same decline. In
addition, these prepayments can cause the price of a GNMA certificate originally
purchased at a premium to decline in price compared to its par value, which may
result in a loss.

When-Issued, Delayed-Delivery and Forward Commitment Transactions

The Fund may purchase securities on a when-issued or delayed delivery
basis and may purchase or sell securities on a forward commitment basis.
Settlement of such transactions normally occurs within a month or more after the
purchase or sale commitment is made.

The Fund may purchase securities under such conditions only with the
intention of actually acquiring them, but may enter into a separate agreement to
sell the securities before the settlement date. Since the value of securities
purchased may fluctuate prior to settlement, the Fund may be required to pay
more at settlement than the security is worth. In addition, the purchaser is not
entitled to any of the interest earned prior to settlement.

Upon making a commitment to purchase a security on a when-issued,
delayed delivery or forward commitment basis the Fund will hold liquid assets
worth at least the equivalent of the amount due. The liquid assets will be
monitored on a daily basis and adjusted as necessary to maintain the necessary
value.

Purchases made under such conditions may involve the risk that yields
secured at the time of commitment may be lower than otherwise available by the
time settlement takes place, causing an unrealized loss to the Fund. In
addition, when the Fund engages in such purchases, it relies on the other party
to consummate the sale. If the other party fails to perform its obligations, the
Fund may miss the opportunity to obtain a security at a favorable price or
yield.

Repurchase Agreements

The Fund may enter into repurchase agreements with entities that are
registered as U.S. Government securities dealers, including member banks of the
Federal Reserve System having at least $1 billion in assets, primary dealers in
U.S. government securities or other financial institutions believed by the
investment advisor to be creditworthy. In a repurchase agreement the Fund
obtains a security and simultaneously commits to return the security to the
seller at a set price (including principal and interest) within period of time
usually not exceeding seven days. The resale price reflects the purchase price
plus an agreed upon market rate of interest which is unrelated to the coupon
rate or maturity of the underlying security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is in
effect secured by the value of the underlying security.

The Fund's custodian or a third party will take possession of the
securities subject to repurchase agreements, and these securities will be marked
to market daily. To the extent that the original seller does not repurchase the
securities from the Fund, the Fund could receive less than the repurchase price
on any sale of such securities. In the event that such a defaulting seller filed
for bankruptcy or became insolvent, disposition of such securities by the Fund
might be delayed pending court action. The Fund's investment advisor believes
that under the regular procedures normally in effect for custody of the Fund's
portfolio securities subject to repurchase agreements, a court of competent
jurisdiction would rule in favor of the Fund and allow retention or disposition
of such securities. The Fund will only enter into repurchase agreements with
banks and other recognized financial institutions, such as broker-dealers, which
are deemed by the investment advisor to be creditworthy pursuant to guidelines
established by the Board of Trustees.

Reverse Repurchase Agreements

As described herein, the Fund may also enter into reverse repurchase
agreements. These transactions are similar to borrowing cash. In a reverse
repurchase agreement, the Fund transfers possession of a portfolio instrument to
another person, such as a financial institution, broker, or dealer, in return
for a percentage of the instrument's market value in cash, and agrees that on a
stipulated date in the future the Fund will repurchase the portfolio instrument
by remitting the original consideration plus interest at an agreed upon rate.

The use of reverse repurchase agreements may enable the Fund to avoid
selling portfolio instruments at a time when a sale may be deemed to be
disadvantageous, but the ability to enter into reverse repurchase agreements
does not ensure that the Fund will be able to avoid selling portfolio
instruments at a disadvantageous time.

When effecting reverse repurchase agreements, liquid assets of the
Fund, in a dollar amount sufficient to make payment for the obligations to be
purchased, are segregated at the trade date. These securities are marked to
market daily and maintained until the transaction is settled.

Options

An option is a right to buy or sell a security for a specified price
within a limited time period. The option buyer pays the option seller (known as
the "writer") for the right to buy, which is a "call" option, or the right to
sell, which is a "put" option. Unless the option is terminated, the option
seller must then buy or sell the security at the agreed-upon price when asked to
do so by the option buyer.

The Fund may buy or sell put and call options on securities it holds or
intends to acquire, and may purchase put and call options for the purpose of
offsetting previously written put and call options of the same series. The Fund
may also buy and sell options on financial futures contracts. The Fund will use
options as a hedge against decreases or increases in the value of securities it
holds or intends to acquire.

The Fund may write only covered options. With regard to a call option,
this means that the Fund will own, for the life of the option, the securities
subject to the call option. The Fund will cover put options by holding, in a
segregated account, liquid assets having a value equal to or greater than the
price of securities subject to the put option. If the Fund is unable to effect a
closing purchase transaction with respect to the covered options it has sold, it
will not be able to sell the underlying securities or dispose of assets held in
a segregated account until the options expire or are exercised.

Futures Transactions

The Fund may enter into financial futures contracts and write options
on such contracts. The Fund intends to enter into such contracts and related
options for hedging purposes. The Fund will enter into futures on securities or
index-based futures contracts in order to hedge against changes in interest or
exchange rates or securities prices. A futures contract on securities is an
agreement to buy or sell securities at a specified price during a designated
month. A futures contract on a securities index does not involve the actual
delivery of securities, but merely requires the payment of a cash settlement
based on changes in the securities index. The Fund does not make payment or
deliver securities upon entering into a futures contract. Instead, it puts down
a margin deposit, which is adjusted to reflect changes in the value of the
contract and which continues until the contract is terminated.

The Fund may sell or purchase futures contracts. When a futures
contract is sold by the Fund, the value of the contract will tend to rise when
the value of the underlying securities declines and to fall when the value of
such securities increases. Thus, the Fund sells futures contracts in order to
offset a possible decline in the value of its securities. If a futures contract
is purchased by the Fund, the value of the contract will tend to rise when the
value of the underlying securities increases and to fall when the value of such
securities declines. The Fund intends to purchase futures contracts in order to
establish what is believed by the investment advisor to be a favorable price or
rate of return for securities the Fund intends to purchase.

The Fund also intends to purchase put and call options on futures
contracts for hedging purposes. A put option purchased by the Fund would give it
the right to assume a position as the seller of a futures contract. A call
option purchased by the Fund would give it the right to assume a position as the
purchaser of a futures contract. The purchase of an option on a futures contract
requires the Fund to pay a premium. In exchange for the premium, the Fund
becomes entitled to exercise the benefits, if any, provided by the futures
contract, but is not required to take any action under the contract. If the
option cannot be exercised profitably before it expires, the Fund's loss will be
limited to the amount of the premium and any transaction costs.

The Fund may enter into closing purchase and sale transactions in order
to terminate a futures contract and may sell put and call options for the
purpose of closing out its options positions. The Fund's ability to enter into
closing transactions depends on the development and maintenance of a liquid
secondary market. There is no assurance that a liquid secondary market will
exist for any particular contract or at any particular time. As a result, there
can be no assurance that the Fund will be able to enter into an offsetting
transaction with respect to a particular contract at a particular time. If the
Fund is not able to enter into an offsetting transaction, the Fund will continue
to be required to maintain the margin deposits on the contract and to complete
the contract according to its terms, in which case it would continue to bear
market risk on the transaction.

Although futures and options transactions are intended to enable the
Fund to manage market, interest rate or exchange rate risk, unanticipated
changes in interest rates or market prices could result in poorer performance
than if it had not entered into these transactions. Even if the investment
advisor correctly predicts interest rate movements, a hedge could be
unsuccessful if changes in the value of the Fund's futures position did not
correspond to changes in the value of its investments. This lack of correlation
between the Fund's futures and securities positions may be caused by differences
between the futures and securities markets or by differences between the
securities underlying the Fund's futures position and the securities held by or
to be purchased for the Fund. The Fund's investment advisor will attempt to
minimize these risks through careful selection and monitoring of the Fund's
futures and options positions.

The Fund does not intend to use futures transactions for speculation or
leverage. The Fund has the ability to write options on futures, but currently
intends to write such options only to close out options purchased by the Fund.
The Fund will not change these policies without supplementing the information in
the prospectus and SAI.

The Fund will not maintain open positions in futures contracts it has
sold or call options it has written on futures contracts if, in the aggregate,
the value of the open positions (marked to market) exceeds the current market
value of its securities portfolio plus or minus the unrealized gain or loss on
those open positions, adjusted for the correlation of volatility between the
hedged securities and the futures contracts. If this limitation is exceeded at
any time, the Fund will take prompt action to close out a sufficient number of
open contracts to bring its open futures and options positions within this
limitation.

"Margin" in Futures Transactions

Unlike the purchase or sale of a security, the Fund does not pay or
receive money upon the purchase or sale of a futures contract. Rather the Fund
is required to deposit an amount of "initial margin" in cash or U.S. Treasury
bills with its custodian (or the broker, if legally permitted). The nature of
initial margin in futures transactions is different from that of margin in
securities transactions in that futures contract initial margin does not involve
the borrowing of funds by the Fund to finance the transactions. Initial margin
is in the nature of a performance bond or good faith deposit on the contract
which is returned to the Fund upon termination of the futures contract, assuming
all contractual obligations have been satisfied.

A futures contract held by the Fund is valued daily at the official
settlement price of the exchange on which it is traded. Each day the Fund pays
or receives cash, called "variation margin," equal to the daily change in value
of the futures contract. This process is known as "marking to market." Variation
margin does not represent a borrowing or loan by the Fund but is instead
settlement between the Fund and the broker of the amount one would owe the other
if the futures contract expired. In computing its daily net asset value the Fund
will mark-to-market its open futures positions. The Fund is also required to
deposit and maintain margin when it writes call options on futures contracts.

Foreign Securities

The Fund may invest in foreign securities or U.S. securities traded in
foreign markets. In addition to securities issued by foreign companies,
permissible investments may also consist of obligations of foreign branches of
U.S. banks and of foreign banks, including European certificates of deposit,
European time deposits, Canadian time deposits and Yankee certificates of
deposit. The Fund may also invest in Canadian commercial paper and Europaper.
These instruments may subject the Fund to investment risks that differ in some
respects from those related to investments in obligations of U.S. issuers. Such
risks include the possibility of adverse political and economic developments;
imposition of withholding taxes on interest or other income; seizure,
nationalization, or expropriation of foreign deposits; establishment of exchange
controls or taxation at the source; greater fluctuations in value due to changes
in exchange rates, or the adoption of other foreign governmental restrictions
which might adversely affect the payment of principal and interest on such
obligations. Such investments may also entail higher custodial fees and sales
commissions than domestic investments. Foreign issuers of securities or
obligations are often subject to accounting treatment and engage in business
practices different from those respecting domestic issuers of similar securities
or obligations. Foreign branches of U.S. banks and foreign banks may be subject
to less stringent reserve requirements than those applicable to domestic
branches of U.S. banks.

Foreign Currency Transactions

As one way of managing exchange rate risk, the Fund may enter into
forward currency exchange contracts (agreements to purchase or sell currencies
at a specified price and date). The exchange rate for the transaction (the
amount of currency the Fund will deliver and receive when the contract is
completed) is fixed when the Fund enters into the contract. The Fund usually
will enter into these contracts to stabilize the U.S. dollar value of a security
it has agreed to buy or sell. The Fund intends to use these contracts to hedge
the U.S. dollar value of a security it already owns, particularly if the Fund
expects a decrease in the value of the currency in which the foreign security is
denominated. Although the Fund will attempt to benefit from using forward
contracts, the success of its hedging strategy will depend on the investment
advisor's ability to predict accurately the future exchange rates between
foreign currencies and the U.S. dollar. The value of the Fund's investments
denominated in foreign currencies will depend on the relative strengths of those
currencies and the U.S. dollar, and the Fund may be affected favorably or
unfavorably by changes in the exchange rates or exchange control regulations
between foreign currencies and the U.S. dollar. Changes in foreign currency
exchange rates also may affect the value of dividends and interest earned, gains
and losses realized on the sale of securities and net investment income and
gains, if any, to be distributed to shareholders by the Fund. The Fund may also
purchase and sell options related to foreign currencies in connection with
hedging strategies.

High Yield, High Risk Bonds

The Fund may invest a portion of its assets in lower rated bonds. Bonds
rated below BBB by Standard & Poor's Ratings Services ("S&P") or Fitch IBCA,
Inc. ("Fitch") or below Baa by Moody's Investors Service, Inc. ("Moody's"),
commonly known as "junk bonds," offer high yields, but also high risk. While
investment in junk bonds provides opportunities to maximize return over time,
they are considered predominantly speculative with respect to the ability of the
issuer to meet principal and interest payments.
Investors should be aware of the following risks:

(1) The lower ratings of junk bonds reflect a greater possibility that
adverse changes in the financial condition of the issuer or in general economic
conditions, or both, or an unanticipated rise in interest rates may impair the
ability of the issuer to make payments of interest and principal, especially if
the issuer is highly leveraged. Such issuer's ability to meet its debt
obligations may also be adversely affected by the issuer's inability to meet
specific forecasts or the unavailability of additional financing. Also, an
economic downturn or an increase in interest rates may increase the potential
for default by the issuers of these securities.

(2) The value of junk bonds may be more susceptible to real or
perceived adverse economic or political events than is the case for higher
quality bonds.

(3) The value of junk bonds, like those of other fixed income
securities, fluctuates in response to changes in interest rates, generally
rising when interest rates decline and falling when interest rates rise. For
example, if interest rates increase after a fixed income security is purchased,
the security, if sold prior to maturity, may return less than its cost. The
prices of junk bonds, however, are generally less sensitive to interest rate
changes than the prices of higher-rated bonds, but are more sensitive to news
about an issuer or the economy which is, or investors perceive as, negative.

(4) The secondary market for junk bonds may be less liquid at certain
times than the secondary market for higher quality bonds, which may adversely
effect (a) the bond's market price, (b) the Fund's ability to sell the bond and
the Fund's ability to obtain accurate market quotations for purposes of valuing
its assets.

For bond ratings descriptions, see "Corporate and Municipal Bond
Ratings" below.

Illiquid and Restricted Securities

The Fund may not invest more than 15% of its net assets in securities
that are illiquid. A security is illiquid when the 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.

The 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 ("Rule 144A") allows certain restricted securities to
trade 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 the
Fund's compliance with the limit on illiquid securities indicated above. In
determine 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

The Fund may purchase the shares of other investment companies to the
extent permitted under the 1940 Act. Currently, the Fund may not (1) own more
than 3% of the outstanding voting stocks 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, the 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

A short sale is the sale of a security the Fund has borrowed. The Fund
expects to profit from a short sale by selling the borrowed security for more
than the cost of buying it to repay the lender. After a short sale is completed,
the value of the security sold short may rise. If that happens, the cost of
buying it to repay the lender may exceed the amount originally received for the
sale by the Fund.

The Fund may engage in short sales, but it 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. The Fund may effect a short sale in connection with an
underwriting in which the Fund is a participant.

Municipal Bonds

The Fund may invest in municipal bonds of any state, territory or
possession of the United States ("U.S."), including the District of Columbia.
The Fund may also invest in municipal bonds of any political subdivision, agency
or instrumentality (e.g., counties, cities, towns, villages, districts,
authorities) of the U.S. or its possessions. Municipal bonds are debt
instruments issued by or for a state or local government to support its general
financial needs or to pay for special projects such as airports, bridges,
highways, public transit, schools, hospitals, housing and water and sewer works.
Municipal bonds may also may be issued to refinance public debt.

Municipal bonds are mainly divided between "general obligation" and
"revenue" bonds. General obligation bonds are backed by the full faith and
credit of governmental issuers with the power to tax. They are repaid from the
issuer's general revenues. Payment, however, may be dependent upon legislative
approval and may be subject to limitations on the issuer's taxing power.
Enforcement of payments due under general obligation bonds varies according to
the law applicable to the issuer. In contrast, revenue bonds are supported only
by the revenues generated by the project or facility.

The Fund may also invest in industrial development bonds. Such bonds
are usually revenue bonds issued to pay for facilities with a public purpose
operated by private corporations. The credit quality of industrial development
bonds is usually directly related to the credit standing of the owner or user of
the facilities. To qualify as a municipal bond, the interest paid on an
industrial development bond must qualify as fully exempt from federal income
tax. However, the interest paid on an industrial development bond may be subject
to the federal alternative minimum tax.

The yields on municipal bonds depend on such factors as market
conditions, the financial condition of the issuer and the issue's size, maturity
date and rating. Municipal bonds are rated by S&P, Moody's and Fitch. Such
ratings, however, are opinions, not absolute standards of quality. Municipal
bonds with the same maturity, interest rates and rating may have different
yields, while municipal bonds with the same maturity and interest rate, but
different ratings, may have the same yield. Once purchased by the Fund, a
municipal bond may cease to be rated or receive a new rating below the minimum
required for purchase by the Fund. Neither event would require the Fund to sell
the bond, but the Fund's investment advisor would consider such events in
determining whether the Fund should continue to hold it.

The ability of the Fund to achieve its investment objective depends
upon the continuing ability of issuers of municipal bonds to pay interest and
principal when due. Municipal bonds are subject to the provisions of bankruptcy,
insolvency and other laws affecting the rights and remedies of creditors. Such
laws extend the time for payment of principal and/or interest, and may otherwise
restrict the Fund's ability to enforce its rights in the event of default. Since
there is generally less information available on the financial condition of
municipal bond issuers compared to other domestic issuers of securities, the
Fund's investment advisor may lack sufficient knowledge of an issue's
weaknesses. Other influences, such as litigation, may also materially affect the
ability of an issuer to pay principal and interest when due. In addition, the
market for municipal bonds is often thin and can be temporarily affected by
large purchases and sales, including those by the Fund.

From time to time, Congress has considered restricting or eliminating
the federal income tax exemption for interest on municipal bonds. Such actions
could materially affect the availability of municipal bonds and the value of
those already owned by the Fund. If such legislation were passed, the Trust's
Board of Trustees may recommend changes in the Fund's investment objectives and
policies or dissolution of the Fund.

Virgin Islands, Guam and Puerto Rico

The Fund may invest in obligations of the governments of the Virgin
Islands, Guam and Puerto Rico to the extent such obligations are exempt from the
income or intangibles taxes, as applicable, of the state for which the Fund is
named. The Fund does not presently intend to invest more than (a) 10% of its net
assets in the obligations of each of the Virgin Islands and Guam or (b) 25% of
its net assets in the obligations of Puerto Rico. Accordingly, the Fund may be
adversely affected by local political and economic conditions and developments
within the Virgin Islands, Guam and Puerto Rico affecting the issuers of such
obligations.

Master Demand Notes

The Fund may invest in master demand notes. These are unsecured
obligations that permit the investment of fluctuating amounts by the Fund at
varying rates of interest pursuant to direct arrangements between the Fund, as
lender, and the issuer, as borrower. Master demand notes may permit daily
fluctuations in the interest rate and daily changes in the amounts borrowed. The
Fund has the right to increase the amount under the note at any time up to the
full amount provided by the note agreement, or to decrease the amount. The
borrower may repay up to the full amount of the note without penalty. Master
demand notes permit the Fund to demand payment of principal and accrued interest
at any time (on not more than seven days' notice). Notes acquired by the Fund
may have maturities of more than one year, provided that (1) the Fund is
entitled to payment of principal and accrued interest upon not more than seven
days' notice, and (2) the rate of interest on such notes is adjusted
automatically at periodic intervals, which normally will not exceed 31 days, but
may extend up to one year. The notes are deemed to have a maturity equal to the
longer of the period remaining to the next interest rate adjustment or the
demand notice period. Because these types of notes are direct lending
arrangements between the lender and borrower, such instruments are not normally
traded and there is no secondary market for these notes, although they are
redeemable and thus repayable by the borrower at face value plus accrued
interest at any time. Accordingly, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. In
connection with master demand note arrangements, the Fund`s investment advisor
considers, under standards established by the Board of Trustees, earning power,
cash flow and other liquidity ratios of the borrower and will monitor the
ability of the borrower to pay principal and interest on demand. These notes are
not typically rated by credit rating agencies. Unless rated, the Fund may invest
in them only if at the time of an investment the issuer meets the criteria
established for high quality commercial paper, i.e., rated A-1 by S&P, Prime-1
by Moody's or F-1 by Fitch.

Obligations of Foreign Branches of United States Banks

The Fund may invest in obligations of foreign branches of U.S. banks.
These may be general obligations of the parent bank in addition to the issuing
branch, or may be limited by the terms of a specific obligation and by
government regulation. Payment of interest and principal upon these obligations
may also be affected by governmental action in the country of domicile of the
branch (generally referred to as sovereign risk). In addition, evidences of
ownership of such securities may be held outside the U.S. and the Fund may be
subject to the risks associated with the holding of such property overseas.
Examples of governmental actions would be the imposition of currency controls,
interest limitations, withholding taxes, seizure of assets or the declaration of
a moratorium. Various provisions of federal law governing domestic branches do
not apply to foreign branches of domestic banks.

Obligations of United States Branches of Foreign Banks

The Fund may invest in obligations of U.S. branches of foreign banks.
These may be general obligations of the parent bank in addition to the issuing
branch, or may be limited by the terms of a specific obligation and by federal
and state regulation as well as by governmental action in the country in which
the foreign bank has its head office. In addition, there may be less publicly
available information about a U.S. branch of a foreign bank than about a
domestic bank.

Payment-in-kind Securities

The Fund may invest in Payment-in-kind ("PIK") securities. PIKs pay
interest in either cash or additional securities, at the issuer's option, for a
specified period. The issuer's option to pay in additional securities typically
ranges from one to six years, compared to an average maturity for all PIK
securities of eleven years. Call protection and sinking fund features are
comparable to those offered on traditional debt issues.

PIKs, like zero coupon bonds, are designed to give an issuer
flexibility in managing cash flow. Several PIKs are senior debt. In other cases,
where PIKs are subordinated, most senior lenders view them as equity
equivalents.

An advantage of PIKs for the issuer -- as with zero coupon securities
- -- is that interest payments are automatically compounded (reinvested) at the
stated coupon rate, which is not the case with cash-paying securities. However,
PIKs are gaining popularity over zeros since interest payments in additional
securities can be monetized and are more tangible than accretion of a discount.

As a group, PIK bonds trade flat (i.e., without accrued interest).
Their price is expected to reflect an amount representing accredit interest
since the last payment. PIKs generally trade at higher yields than comparable
cash-paying securities of the same issuer. Their premium yield is the result of
the lesser desirability of non-cash interest, the more limited audience for
non-cash paying securities, and the fact that many PIKs have been issued to
equity investors who do not normally own or hold such securities.

Calculating the true yield on a PIK security requires a discounted cash
flow analysis if the security (ex interest) is trading at a premium or a
discount because the realizable value of additional payments is equal to the
current market value of the underlying security, not par.

Regardless of whether PIK securities are senior or deeply subordinated,
issuers are highly motivated to retire them because they are usually their most
costly form of capital.

Zero Coupon "Stripped" Bonds

The Fund may invest in zero coupon "stripped" bonds. These represent
ownership in serially maturing interest payments or principal payments on
specific underlying notes and bonds, including coupons relating to such notes
and bonds. The interest and principal payments are direct obligations of the
issuer. Zero coupon bonds of any series mature periodically from the date of
issue of such series through the maturity date of the securities related to such
series. Principal zero coupon bonds mature on the date specified therein, which
is the final maturity date of the related securities. Each zero coupon bond
entitles the holder to receive a single payment at maturity. There are no
periodic interest payments on a zero coupon bond. Zero coupon bonds are offered
at discounts from their face amounts.

In general, owners of zero coupon bonds have substantially all the
rights and privileges of owners of the underlying coupon obligations or
principal obligations. Owners of zero coupon bonds have the right upon default
on the underlying coupon obligations or principal obligations to proceed
directly and individually against the issuer and are not required to act in
concert with other holders of zero coupon bonds.

For federal income tax purposes, a purchaser of principal zero coupon bonds or
coupon zero coupon bonds (either initially or in the secondary market) is
treated as if the buyer had purchased a corporate obligation issued on the
purchase date with an original issue discount equal to the excess of the amount
payable at maturity over the purchase price. The purchaser is required to take
into income each year as ordinary income an allocable portion of such discounts
determined on a "constant yield" method. Any such income increases the holder's
tax basis for the zero coupon bond, and any gain or loss on a sale of the zero
coupon bonds relative to the holder's basis, as so adjusted, is a capital gain
or loss. If the holder owns both principal zero coupon bonds and coupon zero
coupon bonds representing interest in the same underlying issue of securities, a
special basis allocation rule (requiring the aggregate basis to be allocated
among the items sold and retained based on their relative fair market value at
the time of sale) may apply to determine the gain or loss on a sale of any such
zero coupon bonds.

Mortgage-Backed or Asset-Backed Securities

The Fund may invest in mortgage-backed securities and asset-backed
securities. Two principal types of mortgage-backed securities are collateralized
mortgage obligations ("CMOs") and real estate mortgage investment conduits
("REMICs"). CMOs are securities collateralized by mortgages, mortgage
pass-throughs, mortgage pay-through bonds (bonds representing an interest in a
pool of mortgages where the cash flow generated from the mortgage collateral
pool is dedicated to bond repayment), and mortgage-backed bonds (general
obligations of the issuers payable out of the issuers' general funds and
additionally secured by a first lien on a pool of single family detached
properties). Many CMOs are issued with a number of classes or series which have
different maturities and are retired in sequence.

Investors purchasing CMOs in the shortest maturities receive or are credited
with their pro rata portion of the scheduled payments of interest and principal
on the underlying mortgages plus all unscheduled prepayments of principal up to
a predetermined portion of the total CMO obligation. Until that portion of such
CMO obligation is repaid, investors in the longer maturities receive interest
only. Accordingly, the CMOs in the longer maturity series are less likely than
other mortgage pass-throughs to be prepaid prior to their stated maturity.
Although some of the mortgages underlying CMOs may be supported by various types
of insurance, and some CMOs may be backed by GNMA certificates or other mortgage
pass-throughs issued or guaranteed by U.S. government agencies or
instrumentalities, the CMOs themselves are not generally guaranteed.

REMICs, which were authorized under the Tax Reform Act of 1986, are private
entities formed for the purpose of holding a fixed pool of mortgages secured by
an interest in real property. REMICs are similar to CMOs in that they issue
multiple classes of securities.

In addition to mortgage-backed securities, the Fund may invest in
securities secured by other assets including company receivables, truck and auto
loans, leases, and credit card receivables. These issues may be traded
over-the-counter and typically have a short-intermediate maturity structure
depending on the pay down characteristics of the underlying financial assets
which are passed through to the security holder.

Credit card receivables are generally unsecured and the debtors are
entitled to the protection of a number of state and federal consumer credit
laws, many of which give such debtors the right to set off certain amounts owed
on the credit cards, thereby reducing the balance due. Most issuers of
asset-backed securities backed by automobile receivables permit the servicers of
such receivables to retain possession of the underlying obligations. If the
services were to sell these obligations to another party, there is a risk that
the purchaser would acquire an interest superior to that of the holders of the
rated asset-backed securities. In addition, because of the large number of
vehicles involved in a typical issuance and technical requirements under state
laws, the trustee for the holders of asset-backed securities backed by
automobile receivables may not have a proper security interest in all of the
obligations backing such receivables. Therefore, there is the possibility that
recoveries on repossessed collateral may not, in some cases, be available to
support payments on these securities.

In general, issues of asset-backed securities are structured to include
additional collateral and/or additional credit support to protect against the
risk that a portion of the collateral supporting the asset-backed securities may
default and/or may suffer from these defects. In evaluating the strength of
particular issues of asset-backed securities, the investment advisor considers
the financial strength of the guarantor or other provider of credit support, the
type and extent of credit enhancement provided as well as the documentation and
structure of the issue itself and the credit support.

Variable or Floating Rate Instruments

The Fund may invest in variable or floating rate instruments which may
involve a demand feature and may include variable amount master demand notes
which may or may not be backed by bank letters of credit. Variable or floating
rate instruments bear interest at a rate which varies with changes in market
rates. The holder of an instrument with a demand feature may tender the
instrument back to the issuer at par prior to maturity. A variable amount master
demand note is issued pursuant to a written agreement between the issuer and the
holder, its amount may be increased by the holder or decreased by the holder or
issuer, it is payable on demand, and the rate of interest varies based upon an
agreed formula. The quality of the underlying credit must, in the opinion of the
investment advisor, be equivalent to the long-term bond or commercial paper
ratings applicable to permitted investments for the Fund. The investment advisor
will monitor, on an ongoing basis, the earning power, cash flow, and liquidity
ratios of the issuers of such instruments and will similarly monitor the ability
of an issuer of a demand instrument to pay principal and interest on demand.

PURCHASE, REDEMPTION AND PRICING OF SHARES

You may buy shares of the Fund through the Distributor, broker-dealers
that have entered into special agreements with the Distributor or certain other
financial institutions. The Fund may offer up to four different classes of
shares 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 the Fund's shares, a contingent deferred sales charge (a "CDSC")
when you redeem the Fund's shares or no sales charges at all.

Class A Shares

With certain exceptions, when you purchase Class A shares you will pay
a maximum sales charge of 4.75%. The prospectus contains a complete table of
applicable sales charges and a discussion of sales charge reductions or waivers
that may apply to purchases. If you purchase Class A shares in the amount of $1
million or more, without an initial sales charge, the Fund will charge a CDSC of
1.00% if you redeem during the month of your purchase or the 12-month period
following the month of your purchase (see "Contingent Deferred Sales Charge"
below).

No front-end sales charges are imposed on Class A shares purchased by
(a) institutional investors, which may include bank trust departments and
registered investment advisors; (b) investment advisors, consultants or
financial planners who place trades for their own accounts or the accounts of
their clients and who charge such clients a management, consulting, advisory or
other fee; (c) clients of investment advisors or financial planners who place
trades for their own accounts if the accounts are linked to the master account
of such investment advisors or financial planners on the books of the
broker-dealer through whom shares are purchased; (d) institutional clients of
broker-dealers, including retirement and deferred compensation plans and the
trusts used to fund these plans, which place trades through an omnibus account
maintained with the Fund by the broker-dealer; (e) shareholders of record on
October 12, 1990 in any series of Evergreen Investment Trust in existence on
that date, and the members of their immediate families; (f) current and retired
employees of First Union National Bank ("FUNB") and its affiliates, EDI and any
broker-dealer with whom EDI has entered into an agreement to sell shares of the
Fund, and members of the immediate families of such employees; and (g) upon the
initial purchase of an Evergreen fund by investors reinvesting the proceeds from
a redemption within the preceding 30 days of shares of other mutual funds,
provided such shares were initially purchased with a front-end sales charge or
subject to a CDSC.

Class B Shares

The 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 your purchase, in
accordance with the following schedule:

REDEMPTION TIME CDSC RATE
Month of purchase and the first 12-month
period following the month of purchase. ..........................5.00%
Second 12-month period following the month of purchase............4.00%
Third 12-month period following the month of purchase.............3.00%
Fourth 12-month period following the month of purchase............3.00%
Fifth 12-month period following the month of purchase.............2.00%
Sixth 12-month period following the month of purchase.............1.00%
Thereafter........................................................0.00%

Class B shares that have been outstanding for seven years after the
month of purchase will automatically convert to Class A shares without
imposition of a front-end sales charge or exchange fee. Conversion of Class B
shares represented by stock certificates will require the return of the stock
certificate to ESC.

Class C Shares

Class C shares are available only through broker-dealers who have
entered into special distribution agreements with the Distributor. The Fund
offers Class C shares at net asset value without an initial sales charge. With
certain exceptions, however, the Fund will charge a CDSC of 1.00% on shares you
redeem within 12-months after the month of your 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 (2)
certain institutional investors and (3) investment advisory clients of EIM,
EAMC, EIMC, Meridian Investment Company, First International Advisors, Ltd., 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.

Institutional Shares, Institutional Service Shares and Charitable Shares

Each institutional class of shares is sold without a front-end sales
charge or contingent deferred sales charge. Institutional Service shares pay an
ongoing service fee. The minimum initial investment in any institutional class
of shares is $1 million, which may be waived in certain circumstances. There is
no minimum amount required for subsequent purchases.

Contingent Deferred Sales Charge

The 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 shares (see "Distribution Expenses Under Rule 12b-1,"
below). Institutional, Institutional Service and Charitable shares do not charge
a CDSC. If imposed, the Fund deducts the CDSC 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, the 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., paid to the Distributor or its
predecessor.

SALES CHARGE WAIVERS AND REDUCTIONS

The following information is not applicable to Institutional,
Institutional Service and Charitable shares.

If you making a large purchase, there are several ways you can combine
multiple purchases of Class A shares in Evergreen Funds and take advantage of
lower sales charges. These are described below.

Combined Purchases

You can reduce your sales charge by combining purchases of Class A
shares of multiple Evergreen Funds. For example, if you invested $75,000 in each
of two different Evergreen Funds, you would pay a sales charge based on a
$150,000 purchase (i.e., 3.75% of the offering price, rather than 4.75%).

Rights of Accumulation

You can reduce your sales charge by adding the value of Class A shares
of Evergreen Funds you already own to the amount of your next Class A
investment. For example, if you hold Class A shares valued at $99,999 and
purchase an additional $5,000, the sales charge for the $5,000 purchase would be
at the next lower sales charge of 3.75%, rather than 4.75%.

Your account, and therefore your rights of accumulation, can be linked
to immediate family members which includes father and mother, brothers and
sisters, and sons and daughters. The same rule applies with respect to
individual retirement plans. Please note, however, that retirement plans
involving employees stand alone and do not pass on rights of accumulation.

Letter of Intent

You can, by completing the "Letter of Intent" section of the
application, purchase Class A shares over a 13-month period and receive the same
sales charge as if you had invested all the money at once. All purchases of
Class A shares of an Evergreen Fund during the period will qualify as Letter of
Intent purchases.

Waiver of Initial Sales Charges

The Fund may sell its shares at net asset value without an initial
sales charge to:

1. purchasers of shares in the amount of $1 million or more;

2. a corporate or certain other qualified retirement plan or a
non-qualified deferred compensation plan or a Title 1
tax-sheltered annuity or TSA plan sponsored by an organization
having 100 or more eligible employees (a "Qualifying Plan") or
a TSA plan sponsored by a public educational entity having
5,000 or more eligible employees (an "Educational TSA Plan");

3. institutional investors, which may include bank trust
departments and registered investment advisors;

4. investment advisors, consultants or financial planners who
place trades for their own accounts or the accounts of their
clients and who charge such clients a management, consulting,
advisory or other fee;

5. clients of investment advisors or financial planners who place
trades for their own accounts if the accounts are linked to a
master account of such investment advisors or financial
planners on the books of the broker-dealer through whom shares
are purchased;

6. institutional clients of broker-dealers, including retirement
and deferred compensation plans and the trusts used to fund
these plans, which place trades through an omnibus account
maintained with the Fund by the broker-dealer;

7. employees of FUNB, its affiliates, the Distributor, any
broker-dealer with whom the Distributor, has entered into an
agreement to sell shares of the Fund, and members of the
immediate families of such employees;

8. certain Directors, Trustees, officers and employees of the
Evergreen Funds, the Distributor or their affiliates and to
the immediate families of such persons; or

9. a bank or trust company in a single account in the name of
such bank or trust company as Trustee if the initial
investment in or any Evergreen fund made pursuant to this
waiver is at least $500,000 and any commission paid at the
time of such purchase is not more than 1% of the amount
invested.

With respect to items 8 and 9 above, the Fund will only sell shares to
these parties upon the purchasers written assurance that the purchase is for
their personal investment purposes only. Such purchasers may not resell the
securities except through redemption by the Fund. The Fund will not charge any
CDSC on redemptions by such purchasers.

Waiver of CDSCs

The Fund does not impose a CDSC when the shares you are redeeming
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 Employee Retirement Income Security Act of
1974 ("ERISA");

5. an automatic withdrawal from the ERISA plan of a shareholder who
is a least 59 years old;

6. shares in an account that we have 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 returns 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 the Fund for shares of the same class
of any other Evergreen fund which offers the same class of shares. See "By
Exchange" under "How to Buy Shares" in the 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.

Automatic Reinvestment

As described in the prospectus, a shareholder may elect to receive
dividends and capital gains distributions in cash instead of shares. However,
ESC will automatically reinvest 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. When a check is returned, the Fund will hold the check amount in a
no-interest account in the shareholder's name until the shareholder updates his
or her address or automatic reinvestment begins. Uncashed or returned redemption
checks will also be handled in the manner described above.

Calculation of Net Asset Value

The Fund calculates its net asset value ("NAV") once daily on Monday
through Friday, as described in the prospectus. The Fund will not compute its
NAV on the days the New York Stock Exchange is closed: 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 the Fund is calculated by dividing the value of the Fund's
net assets attributable to that class by all of the shares issued for that
class.

Valuation of Portfolio Securities

Current values for the Fund's portfolio securities are determined as
follows:

1. Securities that are traded on an established securities exchange
or the over-the-counter National Market System ("NMS") are valued
on the basis of the last sales price on the exchange where
primarily traded or on the NMS prior to the time of the valuation,
provided that a sale has occurred.

2. Securities traded on an established securities exchange or in the
over-the-counter market for which there has been no sale and other
securities traded in the over-the-counter market are valued at the
mean of the bid and asked prices at the time of valuation.

3. Short-term investments maturing in more than 60 days, for which
market quotations are readily available, are valued at current
market value.

4. Short-term investments maturing in sixty days or less are valued
at amortized cost, which approximates market.

5. Securities, including restricted securities, for which market
quotations are not readily available; listed securities or those
on NMS if, in the Fund's opinion, the last sales price does not
reflect a current market value; and other assets are valued at
prices deemed in good faith to be fair under procedures
established by the Board of Trustees.

PERFORMANCE CALCULATIONS

Total Return

Total return quotations for a class of shares of the Fund as they may
appear from time to time in advertisements are calculated by finding the average
annual compounded rates of return over one, five and ten year periods, or the
time periods for which such class of shares has been effective, whichever is
relevant, on a hypothetical $1,000 investment that would equate the initial
amount invested in the class to the ending redeemable value. To the initial
investment all dividends and distributions are added, and all recurring fees
charged to all shareholder accounts are deducted. The ending redeemable value
assumes a complete redemption at the end of the relevant periods. The following
is the formula used to calculate average annual total return:

[OBJECT OMITTED]

P = initial payment of $1,000 T = average total return N = number of
years
ERV = ending redeemable value of the initial $1,000

Yield

Described below are yield calculations the Fund may use. Yield
quotations are expressed in annualized terms and may be quoted on a compounded
basis. Yields based on these calculations do not represent the Fund's yield for
any future period.

30-Day Yield

If the Fund invests primarily in bonds, it may quote its 30-day yield
in advertisements or in reports or other communications to shareholders. It is
calculated by dividing the net investment income per share earned during the
period by the maximum offering price per share on the last day of the period,
according to the following formula:

[OBJECT OMITTED] [OBJECT OMITTED]
Where:
a = Dividends and interest earned during the period
b = Expenses accrued for the period (net of reimbursements)
c = The average daily number of shares outstanding during the period
that were entitled to receive dividends
d = The maximum offering price per share on the last day of the period

7-Day Current and Effective Yield

If the Fund invests primarily in money market instruments, it may
quote its 7-day current yield or effective yield in advertisements or in reports
or other communications to shareholders.

The current yield is calculated by determining the net change,
excluding capital changes and income other than investment income, in the value
of a hypothetical, pre-existing account having a balance of one share at the
beginning of the 7-day base period, subtracting a hypothetical charge reflecting
deductions from shareholder accounts, and dividing the difference by the value
of the account at the beginning of the base period to obtain the base period
return, and then multiplying the base period return by (365/7).

The effective yield is based on a compounding of the current yield,
according to the following formula:

Tax Equivalent Yield

If the Fund invests primarily in municipal bonds, it may quote in
advertisements or in reports or other communications to shareholders a tax
equivalent yield, which is what an investor would generally need to earn from a
fully taxable investment in order to realize, after income taxes, a benefit
equal to the tax free yield provided by the Fund. Tax equivalent yield is
calculated using the following formula:

[OBJECT OMITTED]

The quotient is then added to that portion, if any, of the Fund's yield
that is not tax exempt. Depending on the Fund's objective, the income tax rate
used in the formula above may be federal or a combination of federal and state.

PRINCIPAL UNDERWRITER

The Distributor is the principal underwriter for the Trust and with
respect to each class of shares of the Fund. The Trust has entered into a
Principal Underwriting Agreement ("Underwriting Agreement") with the Distributor
with respect to each class of the 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 Fund and the Fund reserves
the right, in its sole discretion, to reject any order received. Under the
Underwriting Agreement, the Fund is not liable to anyone for failure to accept
any order.

The Distributor has agreed that it will, in all respects, duly conform
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 Trustees who are not interested persons of the Fund, as
defined in the 1940 Act (the "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 that term is defined in the
1940 Act.

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.

DISTRIBUTION EXPENSES UNDER RULE 12b-1

The Fund bears some of the costs of selling its Class A, Class B, and,
when applicable, Class C shares, or Institutional Service shares, including
certain advertising, marketing and shareholder service expenses, pursuant to
Rule 12b-1 of the 1940 Act. These "12b-1 fees" or "distribution fees" are
indirectly paid by the shareholder, as shown by the Fund's expense table in the
prospectus.

Under the Distribution Plans (each a "Plan," together, the "Plans")
that the Fund has adopted for its, Class A, Class B, and, when applicable, Class
C shares, or Institutional Service shares, the Fund may incur expenses for
distribution costs up to a maximum annual percentage of the average daily net
assets attributable to a class, as follows:

Class A 0.75%*

Class B 1.00%

Class C 1.00%

Institutional Service 0.25%*

*Currently limited to 0.25% or less. See the expense table in the prospectus of
the Fund in which you are interested.

Of the amounts above, each class may pay under its Plan a maximum
service fee of 0.25% to compensate organizations, which may include the Fund's
investment advisor or its affiliates, for personal services provided to
shareholders and the maintenance of shareholder accounts. The Fund may not,
during any fiscal period, pay distribution or service fees greater than the
amounts above.

Amounts paid under the Plans are used to compensate the Distributor
pursuant to Distribution Agreements (each an "Agreement," together, the
"Agreements") that the Fund has entered into with respect to its Class A, Class
B and, if applicable, Class C shares, or Institutional Service shares. The
compensation is based on a maximum annual percentage of the average daily net
assets attributable to a class, as follows:

Class A 0.25%*

Class B 1.00%

Class C 1.00%

Institutional Service 0.25%*

*May be lower. See the expense table in the prospectus of the Fund in which
you are interested.

The Agreements provide that the Distributor will use the distribution
fees received from the Fund for the following purposes:

(1) to compensate broker-dealers or other persons for distributing
Fund shares;

(2) to compensate broker-dealers, depository institutions and
other financial intermediaries for providing administrative,
accounting and other services with respect to the Fund's
shareholders; and

(3) to otherwise promote the sale of Fund shares.

The Agreements also provide that the Distributor may use distribution
fees to make interest and principal payments in respect of amounts that have
been financed to pay broker-dealers or other persons for distributing Fund
shares. The Distributor may assign its rights to receive compensation under the
Plans to secure such financings. FUNB or its affiliates may finance payments
made by the Distributor to compensate broker-dealers or other persons for
distributing shares of the Fund.

In the event the Fund acquires the assets of another mutual fund,
compensation paid to the Distributor under the Agreements may be paid by the
Fund's Distributor to the acquired fund's distributor or its predecessor.

Since the Distributor's compensation under the Agreements is not
directly tied to the expenses incurred by the Distributor, the compensation
received by it under the Agreements during any fiscal year may be more or less
than its actual expenses and may result in a profit to the Distributor.
Distribution expenses incurred by the Distributor in one fiscal year that exceed
the compensation paid to the Distributor for that year may be paid from
distribution fees received from the Fund in subsequent fiscal years.

Distribution fees are accrued daily and paid at least monthly on Class
A, Class B and Class C shares and are charged as class expenses, as accrued. The
distribution fees attributable to the Class B 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, 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 the Class B 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.

Under the Plans, the Treasurer of the Trust 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.

The investment advisor may from time to time from its own funds or such
other resources as may be permitted by rules of the Securities and Exchange
Commission ("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.

Each Plan and the Agreement will continue in effect for successive
12-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.

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, Class B, Class C and
Institutional Service shares. The Plans are designed to (i) stimulate brokers to
provide distribution and administrative support services to the Fund and holders
of Class A, Class B, Class C and Institutional Service shares and (ii) stimulate
administrators to render administrative support services to the Fund and holders
of Class A, Class B, Class C and Institutional Service 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 Class
A, Class B, Class C and Institutional Service 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,
Class C and Institutional Service shares.

In the event that the Plan or Distribution Agreement is terminated or
not continued with respect to one or more classes of the 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 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 the 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 the 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. For more information about 12b-1
fees, see "Expenses" in the prospectus and "12b-1 Fees" under "Expenses" in Part
1 of this SAI.

TAX INFORMATION

Requirements for Qualifications as a Regulated Investment Company

The Fund intends to qualify for and elect the tax treatment applicable
to regulated investment companies ("RIC") under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). If the (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, the 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; and (ii) diversify its
holdings so that, at the end of each quarter of its taxable year, (a) at least
50% of the market value of the Fund's total assets is represented by cash, U.S.
government securities and other securities limited in respect of any one issuer,
to an amount not greater than 5% of the Fund's total assets and 10% of the
outstanding voting securities of such issuer, and (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, the 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 the Fund to the
extent it does not meet certain distribution requirements by the end of each
calendar year. The Fund anticipates meeting such distribution requirements.

Taxes on Distributions

Unless the Fund is a municipal bond fund, 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 the 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 taxable investment income plus net
realized short-term capital gains, if any). The Fund will include dividends it
receives from domestic corporations when the Fund calculates its gross
investment income. Unless the Fund is a municipal bond fund or U.S. Treasury
money market fund, it anticipates that all or a portion of the ordinary
dividends which it pays will qualify for the 70% dividends-received deduction
for corporations. The Fund will inform shareholders of the amounts that so
qualify. If the Fund is a municipal bond fund or U.S. Treasury money market
fund, none of its income will consist of corporate dividends; therefore, none of
its distributions will qualify for the 70% dividends-received deduction for
corporations.

From time to time, the Fund will distribute the excess of its net
long-term capital gains over its short-term capital loss to shareholders (i.e.,
capital gain dividends). For federal tax purposes, shareholders must include
such capital gain dividends when calculating their net long-term capital gains.
Capital gain dividends are taxable as net long-term capital gains to a
shareholder, no matter how long the shareholder has held the shares.

Distributions by the Fund reduce its NAV. A distribution that reduces
the Fund's NAV below a shareholder's cost basis is taxable as described above,
although from an investment standpoint, it is a return of capital. In
particular, if a shareholder buys Fund shares just before the Fund makes a
distribution, when the Fund makes the distribution the shareholder will receive
what is in effect a return of capital. Nevertheless, the shareholder may incur
taxes on the distribution. Therefore, shareholders should carefully consider the
tax consequences of buying Fund shares just before a distribution.

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 a tax advisor to determine the state and local tax implications
of Fund distributions.

If more than 50% of the value of the Fund's total assets at the end of
a fiscal year is represented by securities of foreign corporations and the Fund
elects to make foreign tax credits available to its shareholders, a shareholder
will be required to include in his gross income both cash dividends and the
amount the Fund advises him is his pro rata portion of income taxes withheld by
foreign governments from interest and dividends paid on the Fund's investments.
The shareholder may be entitled, however, to take the amount of such foreign
taxes withheld as a credit against his U.S. income tax, or to treat the foreign
tax withheld as an itemized deduction from his gross income, if that should be
to his advantage. In substance, this policy enables the shareholder to benefit
from the same foreign tax credit or deduction that he would have received if he
had been the individual owner of foreign securities and had paid foreign income
tax on the income therefrom. As in the case of individuals receiving income
directly from foreign sources, the credit or deduction is subject to a number of
limitations.

Special Tax Information for Municipal Bond Fund Shareholders

The 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 the 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 the Fund who may be a "substantial user" (as defined
by the Code) of a facility financed with an issue of tax-exempt obligations or a
"related person" to such a user should consult his tax advisor 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, the 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 of Section 56(g) of the Code
(relating to "adjusted current earnings").

Interest on indebtedness incurred or continued by shareholders to
purchase or carry shares of the 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.

Taxes on the Sale or Exchange of Fund Shares

Upon a sale or exchange of Fund shares, a shareholder will 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. Capital gain on assets held for more than 12
months is generally subject to a maximum federal income tax rate of 20% for an
individual. 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 61-day period
beginning 30 days before and ending 30 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 the Fund and to certify as to its correctness and certain other shareholders
may be subject to a 31% federal income tax backup withholding requirement on
dividends, distributions of capital gains and redemption proceeds paid to them
by the Fund. If the withholding provisions are applicable, any such dividends or
capital gain distributions to these shareholders, whether taken in cash or
reinvested in additional shares, and any redemption proceeds will be reduced by
the amounts required to be withheld. Investors may wish to consult their own tax
advisors about the applicability of the backup withholding provisions.

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 advisors regarding specific questions
relating to federal, state and local tax consequences of investing in shares of
the Fund. Each shareholder who is not a U.S. person should consult his or her
tax advisor regarding the U.S. and foreign tax consequences of ownership of
shares of the 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.

BROKERAGE

Brokerage Commissions

If the Fund invests in equity securities, it expects to buy and sell
them through brokerage transactions for which commissions are payable. Purchases
from underwriters will include the underwriting commission or concession, and
purchases from dealers serving as market makers will include a dealer's mark-up
or reflect a dealer's mark-down. Where transactions are made in the
over-the-counter market, the Fund will deal with primary market makers unless
more favorable prices are otherwise obtainable.

If the Fund invests in fixed income securities, it expects to buy and
sell them directly from the issuer or an underwriter or market maker for the
securities. Generally, the Fund will not pay brokerage commissions for such
purchases. When the Fund buys a security from an underwriter, the purchase price
will usually 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 the Fund
executes transactions in the over-the-counter market, it will deal with primary
market makers unless more favorable prices are otherwise obtainable.

Selection of Brokers

When buying and selling portfolio securities, the investment advisor
seeks brokers who can provide the most benefit to the Fund. When selecting a
broker, the investment advisor will primarily look for the best price at the
lowest commission, but in the context of the broker's:

1. ability to provide the best net financial result to the Fund;
2. efficiency in handling trades;
3. ability to trade large blocks of securities;
4. readiness to handle difficult trades;
5. financial strength and stability; and
6. provision of "research services," defined as (a) reports and
analyses concerning issuers, industries, securities and
economic factors and (b) other information useful in making
investment decisions.

The Fund may pay higher brokerage commissions to a broker providing it
with research services, as defined in item 6, above. Pursuant to Section 28(e)
of the Securities Exchange Act of 1934, this practice is permitted if the
commission is reasonable in relation to the brokerage and research services
provided. Research services provided by a broker to the investment advisor do
not replace, but supplement, the services the investment advisor is required to
deliver to the Fund. It is impracticable for the investment advisor to allocate
the cost, value and specific application of such research services among its
clients because research services intended for one client may indirectly benefit
another.

When selecting a broker for portfolio trades, the investment advisor
may also consider the amount of Fund shares a broker has sold, subject to the
other requirements described above.

If the Fund is advised by EAMC, Lieber & Company, an affiliate of EAMC
and a member of the New York and American Stock Exchanges, will to the extent
practicable effect substantially all of the portfolio transactions effected on
those exchanges for the Fund.

Simultaneous Transactions

The investment advisor makes investment decisions for the Fund
independently of decisions made for its other clients. When a security is
suitable for the investment objective of more than one client, it may be prudent
for the investment advisor to engage in a simultaneous transaction, that is, buy
or sell the same security for more than one client. The investment advisor
strives for an equitable result in such transactions by using an allocation
formula. The high volume involved in some simultaneous transactions can result
in greater value to the Fund, but the ideal price or trading volume may not
always be achieved for the Fund.

ORGANIZATION

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
the 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 "NAV" applicable to such share. Shares generally vote together as one class
on all matters. Classes of shares of the Fund have equal voting rights. No
amendment may be made to the Declaration of Trust that adversely affects any
class of shares without the 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 (for such reasons as electing or removing Trustees, changing fundamental
policies, and approving advisory agreements or 12b-1 plans), 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.

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 Trust. 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 advisor, 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 its customer, FUNB and
its affiliates 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 FUNB and its affiliates 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
the Fund by its customers. If FUNB and its affiliates were prevented from
continuing to provide for services called for under the investment advisory
agreement, it is expected that the Trustees would identify, and call upon the
Fund's shareholders to approve a new investment advisor. If this were to occur,
it is not anticipated that the shareholders of the Fund would suffer any adverse
financial consequences.

INVESTMENT ADVISORY AGREEMENT

On behalf of the Fund, the Trust has entered into an investment
advisory agreement with the Fund's investment advisor (the "Advisory
Agreement"). Under the Advisory Agreement, and subject to the supervision of the
Trust's Board of Trustees, the investment advisor furnishes to the Fund (unless
the Fund is Evergreen Masters 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
investment advisor pays for all of the expenses incurred in connection with the
provision of its services.

If the Fund is Masters, the Advisory Agreement is similar to the above
except that the investment advisor selects sub-advisors (hereinafter referred to
as "Managers") for the Fund and monitors each Manager's investment program and
results. The investment advisor has primary responsibility under the
multi-manager strategy to oversee the Managers, including making recommendations
to the Trust regarding the hiring, termination and replacement of Managers.

The Fund pays for all charges and expenses, other than those
specifically referred to as being borne by the investment advisor, 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; (5) brokerage commissions, brokers'
fees and expenses; (6) issue and transfer taxes; (7) applicable costs and
expenses under the Distribution Plan (as described above) (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 the 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 on matters relating to the 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 the Fund. For information on
advisory fees paid by the Fund, see "Expenses" in Part 1 of this SAI.

The 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 the
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 Agreement 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. The Advisory Agreement will terminate
automatically upon its "assignment" as that term is defined in the 1940 Act.

Managers (Evergreen Masters Fund only)

Evergreen Masters Fund's investment program is based upon the
investment advisor's multi-manager concept. The investment advisor allocates the
Fund's portfolio assets on an equal basis among a number of investment
management organizations - currently four in number - each of which employs a
different investment style, and periodically rebalances the Fund's portfolio
among the Managers so as to maintain an approximate equal allocation of the
portfolio among them throughout all market cycles. Each Manager provides these
services under a Portfolio Management Agreement. Each Manager has discretion,
subject to oversight by the Trustees and the investment advisor, to purchase and
sell portfolio assets consistent with the Fund's investment objectives, policies
and restrictions and specific investment strategies developed by the investment
advisor. The Fund's current Managers are Evergreen Asset Management Corp., MFS
Institutional Advisors, Inc. ("MFS"), Oppenheimer Funds, Inc. ("Oppenheimer")
and Putnam Investment Management, Inc. ("Putnam").

The Trust and FUNB have received an order from the SEC that permits the
investment advisor to employ a "manager of managers" strategy in connection with
its management of the Fund. The exemptive order permits the investment advisor,
subject to certain conditions, and without shareholder approval, to: (a) select
new Managers who are unaffiliated with the investment advisor with the approval
of the Trust's Board of Trustees; (b) change the material terms of the Portfolio
Management Agreements with the Managers; and (c) continue the employment of a
Manager after an event which would otherwise cause the automatic termination of
a Portfolio Management Agreement. Shareholders would be notified of any Manager
changes. Shareholders have the right to terminate arrangements with a Manager by
vote of a majority of the outstanding shares of the Fund. The order also permits
the Fund to disclose the Managers' fees only in the aggregate.

Transactions Among Advisory Affiliates

The Trust has adopted procedures pursuant to Rule 17a-7 of the 1940 Act
("Rule 17a-7 Procedures"). The Rule 17a-7 Procedures permit the Fund to buy or
sell securities from another investment company for which a subsidiary of First
Union Corporation is an investment advisor. The Rule 17a-7 Procedures also allow
the Fund to buy or sell securities from other advisory clients for whom a
subsidiary of First Union Corporation is an investment advisor. The Fund may
engage in such transaction if it is equitable to each participant and consistent
with each participant's investment objective.

MANAGEMENT OF THE TRUST

The Trust is supervised by a Board of Trustees that is responsible for
representing the interest of the shareholders. The Trustees meet periodically
throughout the year to oversee the Fund's activities, reviewing, among other
things, the Fund's performance and its contractual arrangements with various
service providers. Each Trustee is paid a fee for his or her services.
See "Expenses-Trustee Compensation" in Part 1 of this SAI.

The Trust has an Executive Committee which consists of the Chairman of
the Board, James Howell, Vice Chairman of the Board, Michael Scofield and
Russell Salton, each of whom is an Independent Trustee. The Executive Committee
recommends Trustees to fill vacancies, prepares the agenda for Board meetings
and acts on routine matters between scheduled Board meetings.

Set forth below are the Trustees and officers of the Trust and their
principal occupations and affiliations over the last five years. Unless
otherwise indicated, the address for each Trustee and officer is 200 Berkeley
Street, Boston, Massachusetts 02116. Each Trustee is also a Trustee of each of
the other Trusts in the Evergreen Fund complex.

<TABLE>
<CAPTION>
Name Position with Trust Principal Occupations for Last Five Years
<S> <C> <C>
Laurence B. Ashkin Trustee Real estate developer and construction consultant; and
(DOB: 2/2/28) President of Centrum Equities and Centrum Properties, Inc.

Charles A. Austin III Trustee Investment Counselor to Appleton Partners, Inc.; former
(DOB: 10/23/34) Director, Executive Vice President and Treasurer, State
Street Research & Management Company (investment advice);
Director, The Andover Companies (Insurance); and Trustee,
Arthritis Foundation of New England

K. Dun Gifford Trustee Trustee, Treasurer and Chairman of the Finance Committee,
(DOB: 10/12/38) 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)

<PAGE>

Nimish S. Bhatt* Vice President and Vice President, Tax, BISYS Fund Services; former Assistant
(DOB: 6/6/63) Assistant Treasurer Vice President, EAMC/First Union Bank; former Senior Tax
Consulting/Acting Manager, Investment Companies Group,
PricewaterhouseCoopers LLP, New York.

Bryan Haft* Vice President Team Leader, Fund Administration, BISYS Fund Services.
(DOB: 1/23/65)
Senior Vice President and Assistant General Counsel, First
Michael H. Koonce Secretary Union Corporation; former Senior Vice President and General
(DOB: 4/20/60) Counsel, Colonial Management Associates, Inc.

*Address: BISYS, 3435 Stelzer Road, Columbus, Ohio 43219-8001

</TABLE>

CORPORATE AND MUNICIPAL BOND RATINGS

The Fund relies on ratings provided by independent rating services to
help determine the credit quality of bonds and other obligations the Fund
intends to purchase or already owns. A rating is an opinion of an issuer's
ability to pay interest and/or principal when due. Ratings reflect an issuer's
overall financial strength and whether it can meet its financial commitments
under various economic conditions.

If a security held by the Fund loses its rating or has its rating
reduced after the Fund has purchased it, the Fund is not required to sell or
otherwise dispose of the security, but may consider doing so.

The principal rating services, commonly used by the Fund and investors
generally, are S&P and Moody's. The Fund may also rely on ratings provided by
Fitch. Rating systems are similar among the different services. As an example,
the chart below compares basic ratings for long-term bonds. The "Credit Quality"
terms in the chart are for quick reference only. Following the chart are the
specific definitions each service provides for its ratings.

COMPARISON OF LONG-TERM BOND RATINGS

MOODY'S S&P FITCH Credit Quality
<S> <C> <C> <C>
Aaa AAA AAA Excellent Quality (lowest risk)

Aa AA AA Almost Excellent Quality (very low risk)

A A A Good Quality (low risk)

Baa BBB BBB Satisfactory Quality (some risk)

Ba BB BB Questionable Quality (definite risk)

B B B Low Quality (high risk)

Caa/Ca/C CCC/CC/C CCC/CC/C In or Near Default

D DDD/DD/D In Default

</TABLE>

CORPORATE BONDS

LONG-TERM RATINGS

Moody's Corporate Long-Term Bond Ratings

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
edged." 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 fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than the 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 some time 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.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

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 both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range raking and the modifier 3 indicates that the company ranks in the
lower end of its generic rating category.

<PAGE>

S&P Corporate Long-Term Bond Ratings

AAA An obligation rated AAA has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA An obligation rated AA differs from the highest-rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.

BB, B, CCC, CC and C: As described below, obligations rated BB, B, CCC,
CC, and C are regarded as having significant speculative characteristics. BB
indicates the least degree of speculation and C the highest. While such
obligations will likely have some quality and protective characteristics, these
may be outweighed by large uncertainties or major exposures to adverse
conditions.

BB An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions, which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation. B An obligation rated B is more vulnerable to nonpayment than
obligations rated BB, but the obligor currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet it
financial commitment on the obligation.

CCC An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

CC An obligation rated CC is currently highly vulnerable to nonpayment.

C The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.

D The D rating, unlike other ratings, is not prospective; rather, it is used
only where a default has actually occurred--and not where a default is only
expected. S&P changes ratings to D either:

! On the day an interest and/or principal payment is due and is not paid.
An exception is made if there is a grace period and S&P believes that a
payment will be made, in which case the rating can be maintained; or
! Upon voluntary bankruptcy filing or similar action. An exception is
made if S&P expects that debt service payments will continue to be made
on a specific issue. In the absence of a payment default or bankruptcy
filing, a technical default (i.e., covenant violation) is not
sufficient for assigning a D rating.

Plus (+) or minus (-) 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.

Fitch Corporate Long-Term Bond Ratings

Investment Grade

AAA Highest credit quality. AAA ratings denote the lowest expectation of credit
risk. They are assigned only in case of exceptionally strong capacity for timely
payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA Very high credit quality. AA ratings denote a very low expectation of credit
risk. They indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.

BBB Good credit quality. BBB ratings indicate that there is currently a low
expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity. This is the lowest
investment-grade category.

Speculative Grade

BB Speculative. BB ratings indicate that there is a possibility of credit risk
developing, particularly as the result of adverse economic change over time;
however, business or financial alternatives may be available to allow financial
commitments to be met.
Securities rated in this category are not investment grade.

B Highly speculative. B ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met; however, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

CCC, CC, C High default risk. Default is a real possibility. Capacity for
meeting financial commitment is solely reliant upon sustained, favorable
business or economic developments. A CC rating indicates that default of some
kind appears probable. C ratings signal imminent default.

DDD, DD, D Default. Securities are not meeting current obligations and are
extremely speculative. DDD designates the highest potential for recovery of
amounts outstanding on any securities involved. For U.S. corporates, for
example, DD indicates expected recovery of 50%-90% of such outstandings, and D
the lowest recovery potential, i.e. below 50%.

+ or - may be appended to a rating to denote relative status within major rating
categories. Such suffixes are not added to the AAA rating category or to
categories below CCC.

CORPORATE SHORT-TERM RATINGS

Moody's Corporate Short-Term Issuer Ratings

Prime-1 Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics.

- -- Leading market positions in well-established industries.
- -- High rates of return on funds employed.
- -- Conservative capitalization structure with moderate reliance on debt and
ample asset protection. -- Broad margins in earnings coverage of fixed financial
changes and high internal cash generation. -- Well-established access to a range
of financial markets and assured sources of alternate liquidity.

Prime-2 Issuers rated Prime-2 (or supporting institutions) have a strong ability
for repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Prime-3 Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.

Not Prime Issuers rated Not Prime do not fall within any of the Prime rating
categories.

S&P Corporate Short-Term Obligation Ratings

A-1 A short-term obligation rated A-1 is rated in the highest category by S&P.
The obligor's capacity to meet its financial commitment on the obligation is
strong. Within this category certain obligations are designated with a plus sign
(+). This indicates that the obligor?s capacity to meet its financial commitment
on these obligations is extremely strong.

A-2 A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor?s capacity to meet
its financial commitment on the obligation is satisfactory.

A-3 A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

B A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor?s inadequate capacity to meet its financial
commitment on the obligation.

C A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.

D The D rating, unlike other ratings, is not prospective; rather, it is used
only where a default has actually occurred--and not where a default is only
expected. S&P changes ratings to D either:

! On the day an interest and/or principal payment is due and is not paid.
An exception is made if there is a grace period and S&P believes that a
payment will be made, in which case the rating can be maintained; or
! Upon voluntary bankruptcy filing or similar action, An exception is
made if S&P expects that debt service payments will continue to be made
on a specific issue. In the absence of a payment default or bankruptcy
filing, a technical default (i.e., covenant violation) is not
sufficient for assigning a D rating.

Fitch Corporate Short-Term Obligation Ratings

F1 Highest credit quality. Indicates the strongest capacity for timely payment
of financial commitments; may have an added ?+? to denote any exceptionally
strong credit feature. F2 Good credit quality. A satisfactory capacity for
timely payment of financial commitments, but the margin of safety is not as
great as in the case of the higher ratings.

F3 Fair credit quality. The capacity for timely payment of financial commitments
is adequate; however, near-term adverse changes could result in a reduction to
non-investment grade.

B Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D Default. Denotes actual or imminent payment default.

MUNICIPAL BONDS

LONG-TERM RATINGS

Moody's Municipal Long-Term Bond Ratings

Aaa Bonds 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 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 fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risk appear somewhat larger than the Aaa securities.

A Bonds 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 some time in the future.

Baa Bonds 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.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba Bonds 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 both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.

B Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

Caa Bonds 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 rated Ca represent obligations which are speculative in a high degree.
Such issues are often in default or have other marked shortcomings.

C Bonds 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.

Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa to B. The modifier 1 indicates that the company ranks in
the higher end of its generic rating category; the modifier 2 indicates a
mid-range raking and the modifier 3 indicates that the company ranks in the
lower end of its generic rating category.

S&P Municipal Long-Term Bond Ratings

AAA An obligation rated AAA has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA An obligation rated AA differs from the highest-rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

B An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet it financial
commitment on the obligation.

CC An obligation rated CC is currently highly vulnerable to nonpayment.

C The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.

D An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition or the taking of a similar action if payments on
an obligation are jeopardized.

Plus (+) or minus (-) 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.

Fitch Municipal Long-Term Bond Ratings

Investment Grade

A High credit quality. A ratings denote a lower expectation of credit risk. The
capacity for timely payment of financial commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings. BBB Good credit
quality. BBB ratings indicate that there is currently a low expectation of
credit risk. The capacity for timely payment of financial commitments is
considered adequate, but adverse changes in circumstances and in economic
conditions are more likely to impair this capacity. This is the lowest
investment-grade category.

Speculative Grade

CCC, CC, C High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A CC rating indicates that default of some
kind appears probable. C ratings signal imminent default.

DDD, DD, D Default. Securities are not meeting current obligations and are
extremely speculative. DDD designates the highest potential for recovery of
amounts outstanding on any securities involved. DD designates lower recovery
potential and D the lowest.

+ or - may be appended to a rating to denote relative status within major rating
categories. Such suffixes are not added to the AAA rating category or to
categories below CCC.

SHORT-TERM MUNICIPAL RATINGS

Moody's Municipal Short-Term Issuer Ratings

Not Prime Issuers rated Not Prime do not fall within any of the Prime rating
categories.

Moody's Municipal Short-Term Loan Ratings

MIG 1 This designation denotes best quality. There is strong protection by
established cash flows, superior liquidity support, or demonstrated broad-based
access to the market for refinancing.

MIG 2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.

MIG 3 This designation denotes favorable quality. Liquidity and cash-flow
protection may be narrow and market access for refinancing is likely to be less
well established.

SG This designation denotes speculative quality. Debt instruments in this
category may lack margins of protection.

S&P Commercial Paper Ratings

A-1 This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.

A-2 Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues designated
A-1.

A-3 Issues carrying this designation have an adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.

B Issues rated B are regarded as having only speculative capacity for timely
payment.

C This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.

D Debt rated D is in payment default. The D rating category is used when
interest payments of principal payments are not made on the date due, even if
the applicable grace period has not expired, unless S&P believes such payments
will be made during such grace period.

S&P Municipal Short-Term Obligation Ratings

SP-1 Strong capacity to pay principal and interest. An issue determined to
possess a very strong capacity to pay debt service is given a plus (+)
designation.

SP-2 Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

SP-3 Speculative capacity to pay principal and interest.

Fitch Municipal Short-Term Obligation Ratings

F1 Highest credit quality. Indicates the strongest capacity for timely payment
of financial commitments; may have an added "+" to denote any exceptionally
strong credit feature.

F2 Good credit quality. A satisfactory capacity for timely payment of financial
commitments, but the margin of safety is not as great as in the case of the
higher ratings. F3 Fair credit quality. The capacity for timely payment of
financial commitments is adequate; however, near-term adverse changes could
result in a reduction to non-investment grade.

B Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D Default. Denotes actual or imminent payment default.

ADDITIONAL INFORMATION

Except as otherwise stated in its prospectus or required by law, the
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 the Fund's
prospectus, SAI or in supplemental sales literature issued by the Fund or the
Distributor, and no person is entitled to rely on any information or
representation not contained therein.

The 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.

<PAGE>
EVERGREEN MONEY MARKET TRUST

PART C

OTHER INFORMATION

Item 23 Exhibits

Unless otherwise indicated, each of the Exhibits listed below is filed
herewith.

<TABLE>
<CAPTION>
Exhibit
Number Description Location
- ------- ----------- -----------
<S> <C>
<C>
(a) Declaration of Trust Incorporated by reference to
Registrant's Registration Statement
Filed on December 12, 1997

(b) By-laws Incorporated by reference to
Registrant's Registration Statement
Filed on December 12, 1997

(c) 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

(d)(1) Investment Advisory and Management Incorporated by reference to
Agreement between the Registrant and First Post-Effective Amendment No. 4 to
Union National Bank Registrant's Registration Statement
Filed on May 31, 1998 ("Post-
Effective Amendment No. 4")

(d)(2) Investment Advisory and Management Post-Effective Amendment No. 4
Agreement between the Registrant and Evergreen
Asset Management Corp.

(e)(1) Class A and Class C Principal Underwriting Post-Effective Amendment No. 4
Agreement between the Registrant and Evergreen
Distributor, Inc.

(e)(2) Class B Principal Underwriting Agreement Post-Effective Amendment No. 4
between the Registrant and Evergreen Distributor,
Inc. (Evergreen)

(e)(3) Class Y Principal Underwriting Agreement Post-Effective Amendment No. 4
between the Registrant and Evergreen Distributor,
Inc.

(e)(4) Specimen of Dealer Agreement used by Evergreen Incorporated by reference to
Distributor, Inc. Registrant's Registration Statement
Filed on December 12, 1997

(f) Form of Deferred Compensation Plan Incorporated by reference to
Registrant's Registration Statement
Filed on December 12, 1997

(g) Custodian Agreement between the Registrant Post-Effective Amendment No. 4
and State Street Bank and Trust Company

(h)(1) Administration Agreement between Evergreen Post-Effective Amendment No. 4
Investment Services, Inc. and the Registrant

(h)(2) Transfer Agent Agreement between the Post-Effective Amendment No. 4
Registrant and Evergreen Service Company

(i) Opinion and Consent of Sullivan & Worcester LLP Incorporated by reference to
Registrant's Registration Statement

(j)(1) Consent of PriceWaterhouseCoopers, LLP. Incorporated by reference Post-Effective Amendment
No. 7 Filed on April 1, 1999

(j)(2) Consent of KPMG Peat Marwick, LLP. Incororated by reference Post-Effective Amendment
No. 7 Filed on April 1, 1999

(k) Not applicable

(l) Not applicable

(m)(1) 12b-1 Distribution Plan for Class A Post-Effective Amendment No. 4

(m)(2) 12b-1 Distribution Plan for Class B Post-Effective Amendment No. 4
(Evergreen)

(m)(3) 12b-1 Distribution Plan for Class C Post-Effective Amendment No. 4

(n) Financial Data Schedules. Filed herewith

(o) Multiple Class Plan. Incorporated by reference to Post-Effective Amendment
No. 7 filed on April 1, 1999.

</TABLE>

Item 24. Persons Controlled by or Under Common Control with Registrant.

None

Item 25. Indemnification.

Registrant has obtained from a major insurance carrier a trustees and
officers liability policy covering certain types of errors and ommissions.
Provisions for the indemnification of the Registrant's Trustees and
officers are also contained in the Registrant's Declaration of Trust.

Provisions for the indemnification of the Registrant's Investment
Advisors are contained in their respective Investment Advisory and Management
Agreements.

Provisions for the indemnification of Evergreen Distributor, Inc., the
Registrant's principal underwriter, are contained in the Principal Underwriting
Agreement between Evergreen Distributor, Inc. and the Registrant.

Provisions for the indemnification of Evergreen Service Company, the
Registrant's transfer agent, are contained in the Master Transfer and
Recordkeeping Agreement between Evergreen Service Company and the Registrant.

Provisions for the indemnification of State Street Bank and Trust Co., the
Registrant's custodian, are contained in the Custodian Agreement between State
Street Bank and Trust Co., and the Registrant.

Item 26. Business or Other Connections of Investment Adviser.

The Directors and principal executive officers of First Union National Bank
are:

Edward E. Crutchfield, Jr. Chairman and Chief Executive Officer,
First Union Corporation; Chief Executive
Officer and Chairman, First Union National
Bank

Anthony Terracciano President, First Union Corporation;
President, First Union National Bank

John R. Georgius Vice Chairman, First Union Corporation;
Vice Chairman, First Union National Bank

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, First Union National Bank

All of the above persons are located at the following address: First Union
National Bank, One First Union Center, Charlotte, NC 28288.

Item 27. Principal Underwriters.

Evergreen Distributor, Inc. acts as principal underwriter for each
registered investment company or series thereof that is a part of the Evergreen
"fund Complex" as such term is defined in Item 22(a) of Schedule 14A under the
Securities Exchange Act of 1934.

The Directors and principal executive officers of Evergreen Distributor,
Inc. are:

Lynn C. Mangum Director, Chairman and Chief Executive
Officer

Dennis Sheehan Director, Chief Financial Officer

J. David Huber President

Kevin J. Dell Vice President, General Counsel and Secretary

All of the above persons are located at the following address: Evergreen
Distributor, Inc., 90 Park Avenue, New York, New York 10016.

The Registrant has not paid, directly or indirectly, any commissions or
other compensation to the principal underwriter in the last fiscal year.

Item 28. Location of Accounts and Records.

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:

Evergreen Investment Services, Inc., Evergreen Service Company and 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 29. Management Services.

Not Applicable

Item 30. Undertakings.

The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.