1933 Act Registration No. 33-
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[ ] Pre-Effective [ ] Post-Effective
Amendment No. Amendment No.
THE EVERGREEN MUNICIPAL TRUST
(Exact Name of Registrant as Specified in Charter)
Area Code and Telephone Number: (914) 694-2020
2500 Westchester Avenue
Purchase, New York 10577
----------------------------------------------------------------
(Address of Principal Executive Offices)
Joseph J. McBrien
2500 Westchester Avenue
Purchase, New York 10577
(Name and Address of Agent for Service)
Approximate date of proposed public offering: As soon as possible after
the effective date of this Registration Statement.
The Registrant has registered an indefinite amount of securities under
the Securities Act of 1933 pursuant to Section 24(f) under the Investment
Company Act of 1940; accordingly, no fee is payable herewith. A Rule 24f-2
Notice for the Registrant's most recent fiscal year ended August 31, 1994 was
filed with the Commission on or about October 28, 1994.
It is proposed that this filing will become effective on May 3, 1995
pursuant to Rule 488 of the Securities Act of 1933.
THE EVERGREEN MUNICIPAL TRUST
CROSS REFERENCE SHEET
Pursuant to Rule 481(a) under the Securities Act of 1933
Location in Prospectus/Proxy
Item of Part A of Form N-14 Statement
1. Beginning of Cross Reference Sheet; Cover Page
Registration Statement
and Outside Front
Cover Page of
Prospectus
2. Beginning and Outside Table of Contents
Back Cover Page of
Prospectus
3. Synopsis and Risk Cover Page; Summary; Risks
Factors
4. Information about the Summary; Basis for the Board of
Transaction Trustees' Recommendation for
Approval of the Plan; Description
of the Acquisition Agreement;
Information about the
Reorganization; Description of
Shares of the Evergreen High Income
Fund and the ABT Fund; Federal
Income Tax Consequences;
Comparative Information on
Shareholders' Rights
5. Information about the Cover Page; Summary; Comparison of
Registrant Investment Objectives and Policies;
Description of Shares of the
Evergreen High Income Fund and the
ABT Fund; Federal Income Tax
Consequences; Comparative
Information on Shareholders'
Rights; Additional Information
6. Information about the Cover Page; Summary; Comparison of
Company Being Acquired Investment Objectives and Policies;
Description of Shares of the
Evergreen High Income Fund and the
ABT Fund; Federal Income Tax
Consequences; Comparative
Information on Shareholders'
Rights; Additional Information
7. Voting Information Cover Page; Summary; Information
about the Reorganization; Voting
Information
8. Interest of Certain Financial Statements and Experts;
Persons and Experts Legal Matters
9. Additional Information Inapplicable
Required for
Reoffering by Persons
Deemed to be Underwriters
Deemed to be
Item of Part B
Form N-14
================================================================================
10. Cover Page Cover Page
11. Table of Contents Omitted
12. Additional Information Statement of Additional Information
About the Registrant of the Evergreen High Income Fund
dated May 3, 1995
13. Additional Information Statement of Additional Information
about the Company Being of the ABT Fund dated August 29,
Acquired 1994
14. Financial Statements Incorporated by reference; Pro
Forma Financial Statements
Item of Part C of Form N-14
15. Indemnification Incorporated by Reference to Part
A Caption "Comparative Information
on Shareholders' Rights -
Liability and Indemnification of
Trustees"
16. Exhibits Item 16. Exhibits
17. Undertakings Item 17. Undertakings
ABT SOUTHERN MASTER TRUST
ABT FLORIDA HIGH INCOME MUNICIPAL BOND FUND
340 ROYAL PALM WAY
PALM BEACH, FLORIDA 33480
MAY 3, 1995
Dear Shareholder:
On March 3, 1995, I agreed to sell certain of the assets of Palm Beach
Capital Management, Inc. ("PBCM"), currently utilized in its business as
investment adviser, administrator and accounting agent for the ABT Florida High
Income Municipal Bond Fund ("the ABT Fund"), a portfolio of the ABT Southern
Master Trust, to First Union National Bank of North Carolina, a national banking
association ("FUNB"). The Board of Trustees is recommending that you approve the
Agreement and Plan of Reorganization (the "Plan") whereby substantially all of
the assets of the ABT Fund will be purchased by the Evergreen Florida High
Income Municipal Bond Fund (the "Evergreen High Income Fund"), a portfolio of
The Evergreen Municipal Trust, in exchange for Class A Shares of the Evergreen
High Income Fund. Class A Shares will be distributed to you in exchange for your
ABT Fund shares. In the opinion of counsel, the exchange of your shares will be
free from federal income tax to you and the ABT Fund.
The Evergreen High Income Fund is a mutual fund with similar investment
objectives and policies which is advised by the Capital Management Group of
FUNB. As of December 31, 1994, FUNB and its subsidiaries served as investment
adviser to 33 mutual funds with aggregate net assets of approximately $7
billion.
The Plan contains various terms and conditions which must be satisfied
prior to a closing. In addition, the agreement to sell certain assets of PBCM to
FUNB provides as a condition to the closing of the transaction, that
shareholders of the other ABT funds approve similar agreements and plans of
reorganization for the sale of their assets.
If shareholders approve the Plan, upon consummation of the transaction
contemplated in the Plan, you will receive Class A Shares of the Evergreen High
Income Fund with a value equal to the value of your then outstanding shares of
the ABT Fund. As a shareholder of the Evergreen High Income Fund, you will have
the ability to exchange your shares for shares of the other funds in the
Evergreen family of funds comparable to your present right to exchange among the
ABT family of funds.
The Board of Trustees has called a special meeting of shareholders to
be held on June 15, 1995 to consider the Plan. WE STRONGLY URGE YOUR
PARTICIPATION BY ASKING YOU TO REVIEW, COMPLETE AND RETURN YOUR PROXY AS SOON AS
POSSIBLE.
Information about the Plan is contained in the enclosed proxy
statement. I thank you for your participation as a shareholder and urge you,
please, to exercise your right to vote by completing, dating and signing the
enclosed proxy card. A self-addressed, postage-paid envelope has been enclosed
for your convenience.
If you have any questions regarding the proposed transaction, please
call 1-800-553-7838.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED AS SOON
AS POSSIBLE.
Sincerely,
Edward W. Cook, President
ABT Southern Master Trust
<PAGE>
ABT SOUTHERN MASTER TRUST
ABT FLORIDA HIGH INCOME MUNICIPAL BOND FUND
340 ROYAL PALM WAY
PALM BEACH, FLORIDA 33480
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on June 15, 1995
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of ABT Florida High Income Municipal Bond Fund (the "ABT Fund"), a
portfolio of ABT Southern Master Trust (the "Trust"), will be held at the
offices of the Trust, 340 Royal Palm Way, Palm Beach, Florida 33480 on June 15,
1995 at 10:00 a.m. for the following purposes:
1. To consider and act upon the Agreement and Plan of
Reorganization (the "Plan") dated as of March 15, 1995
providing for the acquisition of substantially all of the
assets of the ABT Fund by the Evergreen Florida High Income
Municipal Bond Fund (the "Evergreen High Income Fund"), a
newly formed series of The Evergreen Municipal Trust, in
exchange for Class A Shares of the Evergreen High Income
Fund and the assumption by the Evergreen Fund of certain
identified liabilities of the ABT Fund, and for distribution
of such shares of the Evergreen High Income Fund to
shareholders of the ABT Fund in liquidation of the ABT Fund.
A vote in favor of the Plan is a vote in favor of
liquidation and dissolution of the ABT Fund.
2. To transact any other business which may properly come
before the Meeting or any adjournment or adjournments
thereof.
The Trustees of the Trust have fixed the close of business on April 17,
1995 as the record date for the determination of shareholders of the ABT Fund
entitled to notice of and to vote at this Meeting or any adjournment thereof.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO
NOT EXPECT TO ATTEND IN PERSON ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY
WITHOUT DELAY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE, SO THAT THEIR
SHARES MAY BE REPRESENTED AND VOTED AT THE MEETING. YOUR PROMPT ATTENTION TO THE
ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF FURTHER SOLICITATION.
By order of the Board of Trustees
TIMOTHY COX
Secretary
May 3, 1995
<PAGE>
INSTRUCTIONS FOR EXECUTING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense involved in validating your
vote if you fail to sign your proxy card(s) properly.
1. Individual Accounts: Sign your name exactly as it
appears in the Registration on the proxy card(s).
2. Joint Accounts: Either party may sign, but the name of
the party signing should conform exactly to a name
shown in the Registration on the proxy card(s).
3. All Other Accounts: The capacity of the individual
signing the proxy card(s) should be indicated unless it
is reflected in the form of Registration. For example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Accounts
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr.
UGMA John B. Smith
(2) John B. Smith, Jr. John B. Smith, Jr.
Executor
<PAGE>
SUBJECT TO COMPLETION, PRELIMINARY COPIES
PROSPECTUS/PROXY STATEMENT DATED MAY 3, 1995
Acquisition of Assets of
ABT FLORIDA HIGH INCOME MUNICIPAL BOND FUND
of
ABT SOUTHERN MASTER TRUST
340 ROYAL PALM WAY
PALM BEACH, FLORIDA 33480
1-800-553-7838
By and in Exchange for Shares of
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
OF
THE EVERGREEN MUNICIPAL TRUST
2500 WESTCHESTER AVENUE
PURCHASE, NEW YORK 10577
This Prospectus/Proxy Statement is being furnished to shareholders of
ABT Florida High Income Municipal Bond Fund (the "ABT Fund"), in connection with
a proposed Agreement and Plan of Reorganization (the "Plan"), to be submitted to
shareholders of the Trust for consideration at a Special Meeting of Shareholders
to be held on June 15, 1995 at 10:00 a.m. Eastern Daylight Time, at the offices
of the Trust, 340 Royal Palm Way, Palm Beach, Florida 33480 and any adjournments
thereof (the "Meeting"). The Plan provides for substantially all of the assets
of the ABT Fund to be acquired by the Evergreen Florida High Income Municipal
Bond Fund (the "Evergreen High Income Fund"), a newly formed series of The
Evergreen Municipal Trust in exchange for Class A Shares of the Evergreen High
Income Fund and the assumption by the Evergreen High Income Fund of certain
identified liabilities of the ABT Fund (hereinafter referred to as the
"Reorganization"). Following the Reorganization, Class A Shares of the Evergreen
High Income Fund will be distributed to shareholders of the ABT Fund in
liquidation of the ABT Fund, and the ABT Fund will be terminated. As a result of
the proposed Reorganization, each shareholder of the ABT Fund will receive that
number of Class A Shares of the Evergreen High Income Fund having an aggregate
net asset value equal to the aggregate net asset value of such shareholder's
shares of the ABT Fund, calculated as set forth in the Plan. The Reorganization
is being structured as a tax-free reorganization for federal income tax
purposes.
The Evergreen Municipal Trust is an open-end diversified management
investment company comprised of five portfolios, one of which, the Evergreen
High Income Fund, is a party to the Reorganization.
The Evergreen High Income Fund seeks to provide a high level of current
income exempt from federal income taxes. The Fund will attempt to meet its
objective by investing at least 65% of the value of its total assets in
municipal securities consisting of high yield (i.e. high risk), medium, lower
rated and unrated bonds. Such securities are commonly called junk bonds. Among
these municipal securities, the Evergreen High Income Fund will endeavor to
invest primarily in municipal issuers of Florida.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the Evergreen High Income
Fund that shareholders of the ABT Fund should know before voting on the
Reorganization or investing in the Evergreen High Income Fund. Certain relevant
documents listed below, which have been filed with the Securities and Exchange
Commission ("SEC"), are incorporated in whole or in part by reference. A
Statement of Additional Information dated May 3, 1995, relating to this
Prospectus/Proxy Statement and the Reorganization, incorporating by reference
the financial statements of the ABT Fund dated April 30, 1994, has been filed
with the SEC and is incorporated by reference in its entirety into this
Prospectus/Proxy Statement. A copy of such Statement of Additional Information
is available upon request and without charge by writing to the Evergreen High
Income Fund at the address listed on the cover page of this Prospectus/Proxy
Statement or by calling toll-free 1-800-____________.
1. The Prospectus of the Evergreen High Income Fund dated May 3, 1995
is incorporated by reference herein in its entirety, insofar as it relates to
the Evergreen High Income Fund solely and not to any other fund described
therein, and copies are included for your information. Additional information
about the Evergreen High Income Fund is contained in the Statement of Additional
Information dated May 3, 1995 which has been filed with the SEC and is available
upon request and without charge by writing the Evergreen High Income Fund at the
address listed on the cover page of this Prospectus/Proxy Statement or by
calling toll-free 1-800-______.
2. The Prospectus of the ABT Fund dated August 29, 1994 is incorporated
herein in its entirety by reference. A copy of the Prospectus, a Statement of
Additional Information dated the same date and the Annual Report for the fiscal
year ended April 30, 1994 are available upon request without charge by writing
the ABT Fund at the address listed on the cover page of this Prospectus/Proxy
Statement or by calling toll-free 1-800-553- 7838.
Also accompanying this Prospectus/Proxy Statement as Exhibit A is a
copy of the Plan for the proposed Reorganization.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS
OF FIRST UNION NATIONAL BANK OF NORTH CAROLINA OR ITS SUBSIDIARIES, ARE NOT
ENDORSED OR GUARANTEED BY FIRST UNION OR ITS SUBSIDIARIES, AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY..................................................................... 1
Proposed Reorganization................................................ 1
Tax Consequences....................................................... 2
Investment Objectives and Policies..................................... 2
Total Return Performances of the Funds................................. 2
Management; Advisory Fees and Expense Ratios........................... 2
Comparison of Expenses................................................. 3
Distribution; Sales Charges............................................ 5
Purchase and Redemption Procedures..................................... 6
Exchange Privileges.................................................... 7
Dividend Policy........................................................ 8
RISKS........................................................................ 8
MANAGEMENT OF THE EVERGREEN HIGH INCOME FUND................................. 11
DESCRIPTION OF THE ACQUISITION AGREEMENT..................................... 11
Section 15(f) of the 1940 Act.......................................... 12
INFORMATION ABOUT THE REORGANIZATION......................................... 13
Plan of Reorganization................................................. 13
Capitalization......................................................... 15
BASIS FOR THE BOARD OF TRUSTEES'
RECOMMENDATION FOR APPROVAL OF THE PLAN...................................... 15
DESCRIPTION OF SHARES OF THE EVERGREEN HIGH INCOME
FUND AND THE ABT FUND.................................................. 17
FEDERAL INCOME TAX CONSEQUENCES.............................................. 17
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES............................. 19
Investment Objective................................................... 19
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS...............................21
Form of Organization....................................................21
Capitalization..........................................................22
Shareholder Liability...................................................22
Shareholder Meetings and Voting Rights..................................22
Liquidation or Dissolution..............................................23
Liability and Indemnification of Trustees...............................23
Rights of Inspection....................................................24
ADDITIONAL INFORMATION........................................................24
ABT Fund................................................................24
Evergreen High Income Fund..............................................24
OTHER BUSINESS................................................................25
VOTING INFORMATION............................................................25
Notice to Banks, Broker-Dealers and Voting
Trustees and Their Nominees.............................................27
FINANCIAL STATEMENTS AND EXPERTS..............................................27
LEGAL MATTERS.................................................................27
<PAGE>
SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
ADDITIONAL INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS/PROXY STATEMENT
(INCLUDING THE DOCUMENTS INCORPORATED THEREIN BY REFERENCE), THE PROSPECTUS OF
THE EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND DATED MAY 3, 1995, THE
PROSPECTUS OF THE ABT FLORIDA HIGH INCOME MUNICIPAL BOND FUND DATED AUGUST 29,
1994 AND THE PLAN, A COPY OF WHICH IS ATTACHED TO THIS PROSPECTUS/PROXY
STATEMENT AS EXHIBIT A.
Proposed Reorganization. The Plan provides for the transfer of
substantially all of the assets of ABT Florida High Income Municipal Bond Fund
("the ABT Fund"), a portfolio of ABT Southern Master Trust (the "Trust"), in
exchange for Class A Shares of the Evergreen Florida High Income Municipal Bond
Fund (the "Evergreen High Income Fund"), a portfolio of The Evergreen Municipal
Trust, and the assumption by the Evergreen High Income Fund of certain
identified liabilities of the ABT Fund. The Plan also calls for the distribution
of Class A Shares of the Evergreen High Income Fund to the ABT Fund shareholders
in liquidation of the ABT Fund. (The transaction is referred to in this
Prospectus/Proxy Statement as the "Reorganization.") As a result of the
Reorganization, each shareholder of record of the ABT Fund will become the
record holder of that number of full and fractional Class A Shares of the
Evergreen High Income Fund having an aggregate net asset value equal to the
aggregate net asset value of the shareholder's shares of the ABT Fund,
calculated as set forth in the Plan, as of the close of business on the date
that the ABT Fund's assets are exchanged for shares of the Evergreen High Income
Fund. See "Information About the Reorganization."
The Board of Trustees of the Trust, including the Trustees who are not
"interested persons," as that term is defined in the Investment Company Act of
1940, as amended (the "1940 Act"), has concluded that the interests of the
existing shareholders of the ABT Fund will not be diluted as a result of the
transactions contemplated by the Reorganization, and therefore has submitted the
Plan for the approval of the ABT Fund's shareholders.
The Board of Trustees recommends approval of the Plan effecting the
Reorganization. The Board of Trustees of The Evergreen Municipal Trust has
approved the Plan, and accordingly, the Evergreen High Income Fund's
participation in the Reorganization.
Approval of the Reorganization on the part of the ABT Fund
will require the affirmative vote of more than 50% of the
outstanding voting securities. See "Voting Information."
If the shareholders of the ABT Fund do not vote to approve the
Reorganization, the Trust's Board of Trustees will continue to operate the ABT
Fund under its existing arrangements.
<PAGE>
Tax Consequences. Prior to or at the completion of the Reorganization,
the ABT Fund will have received an opinion of counsel that the Reorganization
has been structured so that no gain or loss will be recognized by the ABT Fund
or its shareholders for federal income tax purposes as a result of the receipt
of shares of the Evergreen High Income Fund in the Reorganization. The holding
period and aggregate tax basis of shares of the Evergreen High Income Fund that
are received by the ABT Fund shareholders will be the same as the holding period
and aggregate tax basis of shares of the ABT Fund previously held by such
shareholders, provided that shares of the ABT Fund are held as capital assets.
In addition, the holding period and tax basis of the assets of the ABT Fund in
the hands of the Evergreen High Income Fund as a result of the Reorganization
will be the same as in the hands of the ABT Fund immediately prior to the
Reorganization.
Investment Objectives and Policies. Both Funds seek to provide a high
level of current income exempt from federal income taxes by investing at least
65% of the value of their total assets in municipal securities consisting of
high yield (i.e. high risk), medium, lower rated and unrated bonds. Such
securities are commonly called junk bonds and are subject to greater market
fluctuations and risk of loss of income and principal than higher rated
securities. Lower quality securities involve a greater risk of default and,
consequently, shares of each Fund may be considered speculative securities.
Under normal market conditions the Evergreen High Income Fund will invest at
least 80% of its assets in municipal obligations, of which at least 90% are
Florida municipal obligations. There is no assurance the investment objective of
either Fund will be achieved.
Total Return Performances of the Funds. Because the Evergreen High
Income Fund is newly organized, there is no separate historical information
available for it. The total return for the ABT Fund for the fiscal year ended
December 31, 1994 was -9.43%. The average annual total return for the period
from commencement of operations (June 17, 1992) through December 31, 1994 was
3.42%. The calculations of total return assume the reinvestment of all dividends
and capital gains distributions on the reinvestment date and the deduction of
all recurring expenses (including sales charges) that were charged to
shareholder's accounts.
Management; Advisory Fees and Expense Ratios. The business
affairs of the ABT Fund are managed by the Board of Trustees of
the Trust and the business affairs of the Evergreen High Income
Fund are managed by the Board of Trustees of The Evergreen
Municipal Trust. Palm Beach Capital Management, Inc. ("PBCM")
serves as the investment adviser for the ABT Fund. The maximum
fee payable to PBCM by the ABT Fund is a total annual rate of
2
<PAGE>
.60% of the ABT Fund's average daily net assets. The Capital Management Group of
First Union National Bank of North Carolina ("FUNB") serves as the investment
adviser to the Evergreen High Income Fund for a maximum annual fee of .60% of
average daily net assets. It is FUNB's intention that, following the
Reorganization, for the foreseeable future, the management fee will not exceed
.30%. PBCM also acts as administrator and fund accounting agent for the ABT Fund
for an annual fee of .08% of average daily net assets. ______________________
acts as administrator for the Evergreen High Income Fund. ___________ receives
from The Evergreen Municipal Trust a fee based on the aggregate daily net assets
of The Evergreen Municipal Trust. Based on the assets of the ABT Fund, which
will be acquired by the Evergreen High Income Fund, it is anticipated that
____________'s fee will be ____% of the Evergreen High Income Fund's average
daily net assets. The ratio of expenses to average daily net assets was 0.14%
for the ABT Fund (fiscal year ended April 30, 1994). Prior to fee waiver and
expense reimbursement by PBCM, the ratio of expenses to average daily net assets
for such period was 1.12%. Comparable information is not available for the
Evergreen High Income Fund because it is newly organized.
Comparison of Expenses:
The following tables show for the ABT Fund and the Evergreen High
Income Fund the anticipated shareholder transaction costs associated with an
investment in Class A Shares of the Evergreen High Income Fund and the shares of
the ABT Fund.
3
<PAGE>
Evergreen High
Income Fund ABT Fund
Shareholder
Transaction Expenses
Maximum Sales Load
Imposed on Purchases
(as a percentage of
offering price) 4.75% 4.75%
Maximum Sales Load
Imposed on Reinvested
Dividends (as a percentage
of offering price) None None
Contingent Deferred
Sales Charge None None
Exchange Fee None None
Redemption Fees None None
Annual Fund Operating Expenses
(as a percentage of average
daily net assets)
Management Fees .30%* ._0%**
12b-1 Fees .25%*** .25%
Other Expenses .33% .26%
Total Fund Operating
Expenses .88% .51%
* The management fee has been reduced to reflect the voluntary waiver by
FUNB. This voluntary waiver may be terminated by FUNB at any time in
its sole discretion. The maximum management fee is .60%. It is FUNB's
intention that following the Reorganization, for the foreseeable
future, the management fee will not exceed .30%.
** During the fiscal year ended April 30, 1994, PBCM waived its fees for
the ABT Fund. PBCM may charge up to .60% of average daily net assets
under the advisory agreement for the ABT Fund.
*** The 12b-1 distribution plan of the Evergreen High Income
Fund permits payments at an annual rate of up to .75% of the
Fund's average daily net assets attributable to Class A Shares. It is
currently intended that annual 12b-1 fees will be limited for the
foreseeable future to .25%.
The foregoing and following tables show for each Fund the annual
operating expenses (as a percentage of average net assets) attributable to the
Class A Shares of the Evergreen High Income Fund and the shares of the ABT Fund,
together with examples of the cumulative effect of such expenses on a $1,000
investment in such shares for the periods specified, assuming (i) a 5% annual
return, and (ii) redemption at the end of such period. In these examples, the
expenses of the Class A Shares of the Evergreen High Income Fund and the shares
of the ABT Fund assume deduction of the 4.75% sales charge at the time of
purchase.
Evergreen High
Income Fund
Class A Shares ABT Fund Shares
After 1 year $56 $ 53
After 3 years $74 $ 63
After 5 years $94 $ 75
After 10 years $151 $108
The purpose of the foregoing tables is to assist an ABT Fund
shareholder in understanding the various costs and expenses that an investor in
the Class A Shares of the Evergreen High Income Fund will bear directly and
indirectly, as compared with the various direct and indirect expenses that would
be borne by an ABT Fund shareholder. The amounts set forth in the foregoing
tables and in the examples with respect to the ABT Fund are based on the
expenses of shares of the ABT Fund for the fiscal year ended April 30, 1994, and
with respect to the Evergreen High Income Fund, are based on the estimated
expenses in its first year of operation. These examples should not be considered
a representation of past or future expenses or annual return. Actual expenses
and annual return may be greater or less than those shown.
Distribution; Sales Charges. Evergreen Funds Distributor, Inc. ("EFD"), a
wholly-owned subsidiary of Furman Selz Incorporated, will act as underwriter of
the Evergreen High Income Fund's shares, which will be issued in three classes:
Class A, Class B, and Class Y Shares. Each class will have separate distribution
arrangements. No class bears the distribution expenses relating to shares of any
other class. Class A Shares, which will be received by the ABT Fund's
shareholders if the Reorganization is approved, are sold with an initial sales
charge ranging from 4.75% to .25%. No sales charge will be imposed on the Class
A Shares to be received by the ABT Fund's shareholders as part of the
Reorganization, but subsequent purchases of the Evergreen High Income Fund's
shares will be subject to any applicable sales charges. For a description of the
Class A and Class B Shares to be issued by the Evergreen High Income Fund see
pages __ and __ of the Evergreen High Income Fund Prospectus. Class Y Shares are
sold without a sales load or distribution fee only to certain eligible investors
as described in a separate Evergreen High Income Fund prospectus. The Class A
Shares are subject to a Rule 12b-1 plan under which the Evergreen High Income
Fund may pay for distribution-related and shareholder servicing-related expenses
relating to the Class A Shares at an annual rate which may not exceed .75% of
aggregate average daily net assets attributable to the Class A Shares. Payments
under the Rule 12b-1 plan with respect to Class A Shares are currently limited
under the Evergreen High Income Fund's distribution agreement to .25% of average
daily net assets attributable to Class A Shares. The level of Rule 12b-1
distribution payments may be increased and the distribution agreement may be
amended by The Evergreen Municipal Trust's Board of Trustees without shareholder
approval. However, FUNB will not, for the foreseeable future, recommend to The
Evergreen Municipal Trust's Board of Trustees that the Evergreen High Income
Fund's 12b-1 fees for the Class A Shares be increased in excess of .25%.
ABT Financial Services, Inc. ("ABT Distributor") acts as underwriter of
ABT Fund shares. There is only one class of shares outstanding. The shares are
sold with an initial sales charge ranging from 4.75% to 1%. The ABT Fund has
adopted a Rule 12b-1 plan under which the Fund may reimburse distribution
expenses incurred by ABT Distributor in amounts up to .25% of aggregate average
daily net assets. Currently, ABT Distributor is reimbursed for
distribution-related expenses of .25% of average daily net assets.
Since the Evergreen High Income Fund's 12b-1 plan is a "compensation"
type plan as compared with the ABT Fund's plan, which is a "reimbursement" type
plan, future 12b-1 fees may permit recovery of unreimbursed expenses by or may
result in a profit to EFD.
Purchase and Redemption Procedures. EFD will distribute the Evergreen High
Income Fund shares through broker-dealers, banks (including FUNB) or other
financial intermediaries, or directly to investors. When the Class A Shares are
sold, EFD will normally pay a portion of the applicable sales charge to a
selling broker-dealer or other financial intermediary and may also pay fees to
banks from sales charges for services performed on behalf of the bank's
customers purchasing the Class A Shares. In addition, EFD may retain a portion
of the sales charge paid. In addition to the compensation at the time of sale,
entities whose clients have purchased Class A Shares may receive a fee equal to
.25% of the average daily net asset value on an annual basis of Class A Shares
held by their clients. This fee will be paid by EFD from 12b-1 fees received
from the Evergreen High Income Fund.
ABT Distributor, as agent for the ABT Fund, sells shares through
broker-dealers having sales agreements with ABT Distributor and retains a
portion of the sales charge.
The minimum initial purchase requirement for the Evergreen High Income
Fund is $1,000, which may be waived in certain situations. The ABT Fund has a
minimum initial purchase requirement of $10,000. The Evergreen High Income Fund
does not have a minimum for subsequent purchases. The minimum subsequent
purchase requirement for the ABT Fund is $100.
Each Fund provides for mail or wire redemption of shares at net asset
value next determined after receipt of the redemption request on each day the
New York Stock Exchange is open for business. The Evergreen High Income Fund
also permits redemptions by telephone (see page __ of the Evergreen High Income
Fund's Prospectus).
The ABT Fund, after prior notice, may involuntarily redeem
shareholders' accounts that have less than $500 of invested funds. The Evergreen
High Income Fund, after prior notice, may involuntarily redeem shareholders'
accounts that have less than $1,000 of invested funds.
Exchange Privileges. Each Fund permits shareholders to exchange shares
of the Evergreen High Income Fund or the ABT Fund for shares of funds in the
Evergreen mutual fund family or other funds in the ABT mutual fund family,
respectively. Holders of shares of a class of the Evergreen High Income Fund
generally may exchange their shares for shares of the same Class of any other
funds of the Evergreen mutual fund family. Accordingly, with respect to shares
of the Evergreen High Income Fund received by ABT Fund shareholders in the
Reorganization, the exchange privilege is limited to the Class A Shares of other
funds in the Evergreen mutual fund family. In addition, exchanges in the
Evergreen mutual fund family may be limited to five exchanges per calendar year,
with a maximum of three per calendar quarter. No sales charge is imposed on an
exchange. An exchange which represents an initial investment in another fund of
the Evergreen family must amount to at least $1,000.
After July 1, 1995 (or as soon thereafter as is reasonably practicable
subject to applicable laws), it is expected, although it cannot be assured, that
shareholders in each of the funds in the Evergreen family and shareholders in
each of the portfolios of the First Union Funds will be permitted to exchange
their shares for shares of the same Class (to the extent available) of all funds
in the Evergreen family and all portfolios of the First Union Funds. Although
there is no present intention to do so, an exchange privilege may be modified or
terminated at any time.
Dividend Policy. For both the ABT Fund and the Evergreen High Income
Fund, income dividends are declared daily and paid monthly. Distributions of any
net realized gains are made at least annually. Income dividends and capital gain
distributions are automatically reinvested in additional shares, unless the
shareholder has made a written request for payment in cash. Shareholders of ABT
Fund that have elected, as of June 15, 1995, to receive dividends and/or
distributions in cash will continue to do so after the Reorganization. After the
Reorganization, former ABT Fund shareholders may change their election with
respect to receipt in cash or reinvestment of dividends or distributions of the
Evergreen High Income Fund.
RISKS
Since the investment objective of each Fund is identical and the
policies and investment restrictions of each Fund are substantially similar,
PBCM believes that there is no significant difference in the risks involved in
investing in each Fund's shares. Municipal securities consisting of high yield
(i.e., high risk), medium, lower rated and unrated bonds, commonly called junk
bonds, are subject to greater market fluctuations and risk of loss of income and
principal than higher rated securities. Lower rated securities involve a greater
risk of default and, consequently, shares of both Funds may be considered
speculative securities.
The market for high yield, high risk debt securities rated in the medium
and lower rated categories or unrated is relatively new and its growth has
paralleled a long economic expansion. Past experience may not, therefore,
provide an accurate indication of future performance of this market,
particularly during periods of economic recession. An economic downturn or
increase in interest rates is likely to have a greater negative effect, on this
market, the value of high yield debt securities in either Fund's portfolio,
either Fund's net asset value and the ability of the bond's issuers to repay
principal and interest, meet projected goals and obtain additional financing,
than on higher rated securities. These circumstances also may result in a higher
incidence of defaults than with respect to higher rated securities. Yields on
medium or lower rated municipal obligations may not currently fully reflect the
higher risk of such bonds. Therefore, the risk of negative effect on their
market value should interest rates increase or credit quality concerns develop
may be higher than has historically been experienced with such investments. An
investment in either Fund may be considered more speculative than an investment
in shares of another fund which invests primarily in higher rated debt
securities.
Prices of high yield debt securities may be more sensitive to adverse
economic changes or corporate developments than higher rated investments. Debt
securities with longer maturities, which may have higher yields, may increase or
decrease in value more than debt securities with shorter maturities. Market
prices of high yield debt securities structured as zero coupon or pay-in- kind
securities are affected to a greater extent by interest rate changes and may be
more volatile than securities which pay interest periodically and in cash. Where
either Fund deems it appropriate and in the best interests of its shareholders,
it may incur additional expenses to seek recovery on a debt security on which
the issuer has defaulted and to pursue litigation to protect the interests of
security holders of its portfolio investments.
Because the market for medium or lower rated securities may be thinner
and less active than the market for higher rated securities, there may be market
price volatility for these securities and limited liquidity in the resale
market. Unrated securities are usually not as attractive to as many buyers as
are rated securities, a factor which may make unrated securities less
marketable. These factors may have the effect of limiting the availability of
the securities for purchase by a fund and may also limit the ability of a fund
to sell such securities at their fair value either to meet redemption requests
or in response to changes in the economy or the financial markets. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of medium or lower rated debt
securities, especially in a thinly traded market. To the extent either Fund owns
or may acquire illiquid or restricted high yield securities, these securities
may involve special registration responsibilities, liabilities and costs, and
liquidity and valuation difficulties. Changes in values of debt securities which
either Fund owns will affect that Fund's net asset value per share. If market
quotations are not readily available for either Fund's lower rated or unrated
securities, these securities will be valued by a method that each Fund's Board
of Trustees believes accurately reflects fair value. Valuation becomes more
difficult and judgment plays a greater role in valuing high yield debt
securities than with respect to securities for which more external sources of
quotations and last sale information are available.
The ability of the Funds to meet their investment objectives is necessarily
subject to the ability of municipal issuers to meet their payment obligations.
In addition, the portfolio of the Funds will be affected by general changes in
interest rates which will result in increases or decreases in the value of the
obligations held by the Funds. Investors should recognize that in periods of
declining interest rates, the yield of the Funds will tend to be somewhat higher
than prevailing market rates, and in periods of rising interest rates, the yield
of the Funds will tend to be somewhat lower. Also, when interest rates are
falling, the inflow of net new money to each Fund from the continuous sale of
its shares will likely be invested in portfolio instruments producing lower
yields than the balance of each Fund's portfolio, thereby reducing the current
yield of the Fund. In periods of rising interest rates, the opposite can be
expected to occur.
Special tax considerations are associated with investing in high yield
debt securities structured as zero coupon or pay-in- kind securities. A fund
investing in such securities accrues income on these securities prior to the
receipt of cash payments. Both Funds must distribute substantially all of their
income to their shareholders to qualify for pass through treatment under the tax
laws and may, therefore, have to dispose of their portfolio securities to
satisfy distribution requirements. While credit ratings are only one factor each
Fund's adviser relies on in evaluating high yield debt securities, certain risks
are associated using credit ratings. Credit ratings evaluate the safety of
principal and interest payments, not market value risk. Credit rating agencies
may fail to change in a timely manner the credit ratings to reflect subsequent
events; however, each Fund's adviser continuously monitors the issuers of high
yield debt securities in the Fund's portfolio in an attempt to determine if the
issuers will have sufficient cash flow and profits to meet required principal
and interest payments.
Achievement of either Fund's investment objective may be more dependent
upon the adviser's credit analysis than is the case for higher quality debt
securities. Credit ratings for individual securities may change from time to
time and either Fund may retain a portfolio security whose rating has been
changed. See the Appendix "C" to the Evergreen High Income Fund Prospectus for a
description of bond and note ratings.
Each Fund's concentration in securities issued by Florida and Florida's
political subdivisions provides a greater level of risk than a fund which is
diversified across numerous states and municipal entities. An expanded
discussion of the risks associated with the purchase of Florida's municipal
bonds is contained in the Evergreen High Income Prospectus. See also "Comparison
of Investment Objectives and Policies" herein for a discussion of the ratings of
municipal obligations which the Funds may purchase including investments in
lower rated obligations. There is no assurance that investment performances will
be positive and that the Funds will meet their investment objectives.
Both Funds also may enter into futures contracts and options on futures
contracts for hedging purposes. For a discussion of the risks involved in
entering into futures contracts and options on futures contracts, see pages __ -
__ of the Evergreen High Income Fund's Prospectus.
MANAGEMENT OF THE EVERGREEN HIGH INCOME FUND
The Capital Management Group of FUNB provides investment advisory
services to the Evergreen High Income Fund. The address of FUNB is One First
Union Center, 301 S. College Street, Charlotte, North Carolina 28288. FUNB is a
subsidiary of First Union Corporation ("First Union"), one of the ten largest
bank holding companies in the United States.
First Union had $77.3 billion in consolidated assets as of December 31,
1994. First Union and its subsidiaries provide a broad range of financial
services to individuals and businesses through offices in 42 states and two
foreign countries. FUNB's Capital Management Group employs an experienced staff
of professional investment analysts, portfolio managers, and traders, and uses
several proprietary computer-based systems in conjunction with fundamental
analysis to identify investment opportunities. The Capital Management Group has
been managing trust assets for over 50 years and currently oversees assets of
more than $51.2 billion. In addition, the Capital Management Group serves as
investment adviser to First Union Funds, which was organized in 1984.
The portfolio manager for the Evergreen High Income Fund is expected to be
Steven P. Eldredge, who has served as portfolio manager of the ABT Fund since
its inception. Mr. Eldredge was a Vice President of Palm Beach Capital
Management, Inc. and is expected to become a Vice President of the Capital
Management Group.
Evergreen Asset Management Corp. ("EAMC"), a wholly-owned subsidiary of
FUNB, together with its predecessors, has served as investment adviser to the
Evergreen family of funds since 1971.
DESCRIPTION OF THE ACQUISITION AGREEMENT
On March 3, 1995, Edward W. Cook ("Cook"), Edward W. Cook Revocable Trust,
dated September 26, 1989 ("Cook Trust"), Cook International, Inc., Palm Beach
Capital Management, Inc., a corporation organized under the laws of the State of
Florida and whose sole shareholder is Cook Trust ("PBCM") entered into an Asset
Purchase Agreement (the "Agreement") with FUNB. The Agreement provides for the
acquisition by FUNB of substantially all of the assets and none of the
liabilities of PBCM, including the right to use the names "Palm Beach Capital
Management, Inc." and "ABT." In exchange for the assets being acquired, FUNB has
agreed to pay PBCM the sum of $9,000,000, subject to certain adjustments.
The Agreement also contemplates that the ABT Fund, along with the ABT
Utility Fund, Inc., ABT Emerging Growth Fund, ABT Florida Tax Free Fund and ABT
Growth and Income Trust will consolidate with certain other investment companies
managed by FUNB or EAMC. The ABT Fund has entered into an Agreement and Plan of
Reorganization in the form attached hereto as Exhibit A. A similar Plan of
Reorganization has also been entered into by each of the ABT Utility Fund, Inc.,
ABT Emerging Growth Fund, ABT Florida Tax Free Fund and ABT Growth and Income
Trust (collectively, the "Other ABT Funds").
The consummation of the reorganizations contemplated by the Agreement
is subject to a number of conditions, which include: (i) the receipt of all
necessary regulatory approvals; (ii) the approval by the shareholders of the ABT
Fund, and the Other ABT Funds, of the reorganizations contemplated in the
Agreement; (iii) the accuracy of the representations and warranties contained in
the Agreement; (iv) the absence of pending or threatened litigation relating to
the reorganizations contemplated by the Agreement; and (v) the receipt of
various legal opinions and accountants' letters. The Agreement may be terminated
under certain circumstances, including the failure of the reorganizations
contemplated thereby to close by July 15, 1995.
Section 15(f) of the 1940 Act. Section 15(f) of the 1940 Act provides
that an investment adviser to a registered investment company may receive any
amount or benefit in connection with a sale of any interest in such adviser
which results in an assignment of an investment advisory contract if two
conditions are satisfied. One condition is that, for a period of three years
after such assignment, at least 75% of the board of directors of the investment
company cannot be "interested persons" (as defined in the 1940 Act) of the new
investment adviser or its predecessor. The second condition is that no "unfair
burden" be imposed on the investment company as a result of the assignment or
any express or implied terms, conditions or understandings applicable thereto.
In connection with the first condition of Section 15(f), FUNB has agreed in
the Agreement that, for a period of three years after the Closing Date, it will
use its reasonable best efforts, and will cause EAMC to use its reasonable best
efforts, (recognizing that the compositions of Boards of Trustees/Directors
remain within the control of Trustees/Directors and shareholders of the First
Union family of funds and the Evergreen family of funds) so that at least 75% of
the trustees/directors of each of the First Union or Evergreen Funds involved in
the consolidations (or any successor thereto by reorganization or otherwise) are
not "interested persons" of FUNB, EAMC or PBCM.
With respect to the second condition of Section 15(f), an "unfair
burden" on an investment company is defined in the 1940 Act to include any
arrangement relating to the transaction during the two-year period after any
such transaction occurs whereby the investment adviser or its predecessor or
successor, or any "interested person" of such adviser, predecessor or successor,
receives or is entitled to receive any compensation of two types, either
directly or indirectly. The first type is compensation from any person in
connection with the purchase or sale of securities or other property to, from or
on behalf of the investment company, other than bona fide ordinary compensation
as principal underwriter for such company. The second type is compensation from
the investment company or its security holders for other than bona fide
investment advisory or other services. In the Agreement, FUNB represents that
there is no express or implied understanding or agreement or intention to impose
an "unfair burden" within the meaning of Section 15(f) on the ABT Fund or the
Other ABT Funds or any of their successors as a result of the transactions
contemplated in the Agreement and from the date of the Agreement to two years
after the consummation of the transactions contemplated thereby it will not take
or recommend any action that would constitute an "unfair burden" [within the
meaning of Section 15(f) on the ABT Fund, any Other ABT Fund, the Evergreen High
Income Fund, any of the First Union or Evergreen Funds involved in the
consolidations or any successor thereto.
INFORMATION ABOUT THE REORGANIZATION
Plan of Reorganization. The following summary of the Plan is qualified in
its entirety by reference to the Plan (Exhibit A hereto). The Plan provides that
the Evergreen High Income Fund will acquire substantially all of the assets of
the ABT Fund in exchange for Class A Shares of the Evergreen High Income Fund
and the assumption by the Evergreen High Income Fund of certain identified
liabilities of the ABT Fund on June 30, 1995 or such later date as may be agreed
upon by the parties (the "Closing Date"). Prior to the Closing Date, the ABT
Fund will endeavor to discharge all of its known liabilities and obligations.
The Evergreen High Income Fund will not assume any liabilities or obligations of
the ABT Fund other than those liabilities reflected in an unaudited statement of
assets and liabilities of the ABT Fund prepared as of the close of regular
trading on the New York Stock Exchange, Inc. (the "NYSE"), currently 4:00 pm.
Eastern Time, on the Closing Date. The number of full and fractional Class A
Shares of the Evergreen High Income Fund to be issued to the ABT Fund's
shareholders will be determined on the basis of the relative net asset values
per share of the Evergreen High Income Fund's Class A Shares and the ABT Fund's
shares, computed as of the close of regular trading on the NYSE on the Closing
Date. The net asset value per share of such shares will be determined by
dividing the respective assets, less liabilities, by the total number of
outstanding shares.
State Street Bank & Trust Company, the custodian for the Evergreen High
Income Fund, will compute the value of each Fund's respective portfolio
securities. The method of valuation employed will be consistent with the
procedures set forth in the Evergreen High Income Fund's Prospectus and
Statement of Additional Information, Rule 22c-1 under the 1940 Act, and with the
interpretations of such rule by the SEC's Division of Investment Management.
At or prior to the Closing Date, the ABT Fund shall have declared a
dividend or dividends and distribution or distributions which, together with all
previous such dividends and distributions, shall have the effect of distributing
to the ABT Fund's shareholders all of the ABT Fund's investment company taxable
income for the taxable year ending on or prior to the Closing Date (computed
without regard to any deduction for dividends paid) and all of its net capital
gains realized in all taxable years ending on or prior to the Closing Date
(after reductions for any capital loss carryforward).
As soon after the Closing Date as conveniently practicable, the ABT
Fund will liquidate and distribute pro rata to shareholders of record as of the
close of business on the Closing Date the full and fractional Class A Shares of
the Evergreen High Income Fund received by the ABT Fund. Such liquidation and
distribution will be accomplished by the establishment of accounts in the names
of the ABT Fund's shareholders on the share records of the Evergreen High Income
Fund's transfer agent. Each account will represent the respective pro rata
number of full and fractional Class A shares of the Evergreen High Income Fund
due to such ABT Fund's shareholders. After such distribution and the winding up
of its affairs, the ABT Fund will be terminated.
The consummation of the Reorganization is subject to the conditions set
forth in the Plan, including approval by the ABT Fund's shareholders, accuracy
of various representations and warranties and receipt of opinions of counsel
including those matters referred to in "Federal Income Tax Consequences."
Notwithstanding approval of the ABT Fund's shareholders, the Plan may be
terminated at any time by the mutual agreement of both parties. In addition,
either party may, at its option, terminate the Plan at or prior to the Closing
Date because (a) of a breach by the other party of any representation, warranty,
or agreement contained therein to be performed at or prior to the Closing Date,
if not cured within 30 days; or (b) a condition to the obligation of the
terminating party cannot be met. FUNB will bear all the expenses of the
Evergreen High Income Fund in connection with the Reorganization. Other than the
fees and expenses of counsel to the ABT Fund and counsel to the independent
Trustees of the Trust (which will be paid by the ABT Fund), the expenses of the
Reorganization (including the cost of any proxy soliciting agents) will be borne
by PBCM and FUNB. No portion of such expenses shall be paid by the Evergreen
High Income Fund. See "Voting Information."
If the Reorganization is not approved by shareholders of the ABT Fund,
the Trust's Board of Trustees will continue to operate the ABT Fund under its
existing arrangements.
Capitalization. The following table shows the capitalization as of
December 31, 1994 of the Evergreen High Income Fund (assuming it was organized
on such date) and the ABT Fund individually and on a pro forma combined basis as
of that date, giving effect to the proposed acquisition of the ABT Fund's net
assets at fair value or market value, as appropriate:
Evergreen Class A Shares
High Income Pro Forma For
Class A Shares ABT Fund Reorganization
Net Assets $ 9.60 $ 65,241,305 $65,241,315
Net Asset Value
per share $ 9.60 $ 9.60 $ 9.60
Shares
outstanding 1 6,797,117 6,797,118
As of April 17, 1995, (the "Record Date"), there were [number of]
outstanding shares of beneficial interest of the ABT Fund.
As of the Record Date, the officers and Trustees of the ABT Fund
beneficially owned as a group less than 1% of the outstanding shares of the ABT
Fund. To the best knowledge of the ABT Fund Trustees, as of the Record Date, no
other shareholder or "group" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934, the ("Exchange Act")) beneficially owned more
than 5% of the ABT Fund's outstanding shares.
BASIS FOR THE BOARD OF TRUSTEES'
RECOMMENDATION FOR APPROVAL OF THE PLAN.
The independent Trustees/Directors of the Board of Trustees/Directors of
the Trust and the Other ABT Funds requested and reviewed extensive information
from FUNB and EAMC in evaluating the effect of the consolidation on the
shareholders of the ABT Fund and the Other ABT Funds. The information described:
performance of FUNB and EAMC managed funds; the extensive investment research,
including credit analysis, available to FUNB and EAMC managed funds; the
expenses of the FUNB and EAMC managed funds in relation to other mutual funds
and to the ABT Fund and the Other ABT Funds; the possibility of a future
reduction in expenses per share as a result of the consolidation; the extensive
marketing channels available to the FUNB and EAMC managed funds; the quality and
variety of administrative services provided FUNB and EAMC managed funds and the
financial condition of the service providers; and the financial size of FUNB
giving it the capital necessary to develop the initiatives and responses
required as financial markets change.
The Trustees/Directors of the Trust and the Other ABT Funds, including
all of the independent Trustees/Directors, visited the offices of FUNB. During
the visit, personnel from FUNB and EAMC were available to discuss operations of
their respective entities and to answer questions concerning the proposed
consolidation. The independent Trustees/Directors of the ABT Fund and the Other
ABT Funds retained independent counsel to advise such Trustees/Directors with
respect to their fiduciary duties in connection with approval of the proposed
consolidation.
The Trustees/Directors evaluated the consolidation for the ABT Fund, as
well as the Other ABT Funds. The Trustees/Directors considered the advantages to
the ABT Fund's and the Other ABT Funds' shareholders from being associated with
a considerably larger mutual fund complex that offers shareholders more depth in
investment management. The Trustees/Directors also considered the benefits to
the ABT Fund's shareholders of being part of a larger group of mutual funds with
significantly greater net assets and more diverse investment objectives. In
particular, the Trustees/Directors noted that shareholders of the ABT Fund will,
after consummation of the Reorganization, enjoy the same exchange privileges
available currently to shareholders of the other mutual funds managed by FUNB.
PBCM has informed the Evergreen High Income Fund that it has advised
the ABT Fund that after the closing, PBCM may pay the independent
Trustees/Directors of the Trust and the Other ABT Funds a fee in return for
which the Trustees/Directors will make themselves available for two years to
consult on former ABT family of funds' matters. PBCM is not obligated to pay
such a fee. If paid, the amount is expected to be at a rate of $10,000 per
year/per Trustee/Director.
The independent Trustees/Directors have voted to retain their ability to
make claims under their existing Officers and Directors insurance policy for a
period of three years following the consummation of the Reorganization. As with
the premium for the policy, the premium for the continuation will be paid by the
ABT Fund and the Other ABT Funds and is expected to be approximately $133,000
($18,806 of which will be paid by the ABT Fund) for the three years.
The Board of Trustees of the Trust recommends that shareholders approve the
Plan to consolidate the ABT Florida High Income Municipal Bond Fund with the
Evergreen Florida High Income Municipal Bond Fund.
DESCRIPTION OF SHARES OF THE EVERGREEN HIGH INCOME FUND AND THE
ABT FUND
Full and fractional Class A Shares of beneficial interest of the
Evergreen High Income Fund will be distributed to the ABT Fund's shareholders in
accordance with the procedures detailed in the Plan. All issued and outstanding
shares of the ABT Fund, including those represented by certificates, if any,
will be canceled. The Evergreen High Income Fund does not intend to issue share
certificates to shareholders. Instead, the transfer agent for the Evergreen High
Income Fund will maintain a share account for each shareholder of record. The
Class A Shares of the Evergreen High Income Fund to be issued will have no
pre-emptive or conversion rights and are transferable without restriction. See
"Summary - Distribution; Sales Charges."
FEDERAL INCOME TAX CONSEQUENCES
The Reorganization is intended to qualify for federal income tax
purposes as a tax-free reorganization under section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"). As a condition to the closing of
the Reorganization, the ABT Fund will receive an opinion of counsel to the
effect that, on the basis of the existing provisions of the Code, U.S. Treasury
regulations issued thereunder, current administrative rules, pronouncements and
court decisions, for federal income tax purposes, upon consummation of the
Reorganization:
(1) The transfer of substantially all of the assets of the
ABT Fund solely in exchange for Class A Shares of the
Evergreen High Income Fund and the assumption by the
Evergreen High Income Fund of certain liabilities,
followed by the distribution of the Evergreen High
Income Fund's Class A Shares by the ABT Fund in
dissolution and liquidation of the ABT Fund, will
constitute a "reorganization" within the meaning of
section 368(a)(1)(F) of the Code, and the Evergreen
High Income Fund and the ABT Fund will each be a
"party to a reorganization" within the meaning of
section 368(b) of the Code;
(2) No gain or loss will be recognized to the ABT Fund on the
transfer of its assets to the Evergreen High Income Fund
(except, possibly, with respect to certain options, futures
and forward contracts included in the assets ("Contracts")),
solely in exchange for the Evergreen High Income Fund's Class
A Shares and the assumption by the Evergreen High Income Fund
of liabilities or upon the distribution (whether actual or
constructive) of the Evergreen High Income Fund's Class A
Shares to the ABT Fund's shareholders in exchange for their
shares of the ABT Fund;
(3) The tax basis of the assets transferred (with the
possible exception of the Contracts) will be the same
to the Evergreen High Income Fund as the tax basis of
such assets to the ABT Fund immediately prior to the
Reorganization, and the holding period of such assets
(with the possible exception of the Contracts) in the
hands of the Evergreen High Income Fund will include
the period during which the assets were held by the
ABT Fund;
(4) No gain or loss will be recognized by the Evergreen High
Income Fund upon the receipt of the assets from the ABT Fund
solely in exchange for the Class A Shares of the Evergreen
High Income Fund and the assumption by the Evergreen High
Income Fund of certain liabilities;
(5) No gain or loss will be recognized by the ABT Fund's
shareholders upon the issuance of the Class A Shares of the
Evergreen High Income Fund to them, provided they receive
solely such Class A Shares (including fractional shares) in
exchange for their shares of the ABT Fund; and
(6) The aggregate tax basis of the Class A Shares of the
Evergreen High Income Fund, including any fractional
shares, received by each of the shareholders of the
ABT Fund pursuant to the Reorganization will be the
same as the aggregate tax basis of the shares of the
ABT Fund held by such shareholder immediately prior to
the Reorganization, and the holding period of the
Class A Shares of the Evergreen High Income Fund,
including fractional shares, received by each such
shareholder will include the period during which the
shares of the ABT Fund exchanged therefor were held by
such shareholder (provided that the shares of the ABT
Fund were held as a capital asset on the date of the
Reorganization).
Opinions of counsel are not binding upon the Internal Revenue Service or
the courts. If the Reorganization is consummated but does not qualify as a
tax-free reorganization under the Code, the consequences described above would
not be applicable. Shareholders of the ABT Fund should consult their tax
advisers regarding the effect, if any, of the proposed Reorganization in light
of their individual circumstances. Since the foregoing discussion only relates
to the federal income tax consequences of the Reorganization, shareholders of
the ABT Fund should also consult their tax advisers as to state and local tax
consequences, if any, of the Reorganization.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion compares the investment objectives, policies
and restrictions of the ABT Fund and the Evergreen High Income Fund. This
discussion is based upon and qualified in its entirety by the respective
investment objectives, policies and restrictions stated in the Prospectuses and
Statements of Additional Information of both Funds. For a full discussion of the
investment objectives, policies and restrictions of the Evergreen High Income
Fund, refer to the Prospectus of the Evergreen Tax Exempt Funds under the
caption "Investment Objectives and Policies" and the Statement of Additional
Information. The Evergreen High Income Fund's Prospectus also offers three
additional funds advised by EAMC. These additional funds' investment objectives,
policies and restrictions are not discussed in this Prospectus/Proxy Statement
as these funds are not involved in the Reorganization, and no offering of shares
of such funds, or other classes of shares of the Evergreen High Income Fund, are
made hereby. For a full discussion of the investment objectives, policies and
restrictions of the ABT Fund, refer to the Prospectus of the ABT Fund under the
caption "Investment of the Fund's Assets."
The Evergreen High Income Fund is a new series of The Evergreen
Municipal Trust established for the purpose of acquiring substantially all of
the assets of the ABT Fund. Accordingly, its investment objective is identical
and its policies and investment restrictions are substantially similar. Both
Funds may use future contracts as a possible means to protect the asset value of
each Fund during changing interest rate markets. It is the policy of the ABT
Fund not to purchase futures or futures options if immediately thereafter more
than 10% of the ABT Fund's total assets would be so invested. This policy is a
fundamental policy of the ABT Fund and cannot be changed without shareholder
approval. The Evergreen High Income Fund will maintain the same policy, but as a
nonfundamental policy, which means that it can be changed by the Evergreen High
Income Fund's adviser without shareholder approval.
Investment Objective. Both Fund's investment objective is to provide a high
level of current income exempt from federal income taxes. Under normal market
conditions, both Funds attempt to meet this objective by investing at least 80%
of their assets in municipal obligations, of which at least 90% are Florida
municipal obligations. Furthermore, under normal market conditions, both Funds
attempt to invest 65% of the value of their total assets in municipal
obligations consisting of high yield (i.e. high risk), medium and lower rated
bonds or, unrated bonds which, in the opinion of the Fund's adviser, are of
comparable quality to municipal obligations rated in these categories. In
assessing the risk of purchasing medium and lower rated and unrated securities,
each Fund's adviser will use nationally recognized statistical rating
organizations and will also rely heavily on credit analysis it develops
internally. To varying degrees, medium and lower rated municipal bonds may be
considered speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligations. Each Fund may for
temporary, defensive purposes, invest up to 100% of its total assets in higher
quality municipal obligations, at times when, for example, yield spreads are
narrow and the higher yields available on lower quality municipal bonds do not
justify the increased risk or when there is a lack of medium and lower quality
issues in which to invest. This may result in yields lower than those available
on medium and lower quality municipal bonds. Under normal circumstances, each
Fund invests in long-term securities and has a dollar-weighted average maturity
of generally 15 years or more, although each Fund may invest in securities of
any maturity. If the adviser of either Fund determines that market conditions
warrant a shorter average maturity, each Fund's investments will be adjusted
accordingly. Medium and lower ratings categories are rated Baa through C by
Moody's Investor Services, Inc. ("Moody's") or BBB through D by Standard and
Poor's Ratings Group ("S&P"). For these purposes, the term "bond" means a debt
instrument. Each Fund will not invest in municipal bonds which are in default,
i.e., securities rated D by S&P.
In addition to the investments described in the foregoing paragraph,
each Fund may invest in certain other types of investments. In addition to
Florida obligations, each Fund may also invest in tax-exempt obligations of the
government of Puerto Rico, the Virgin Islands and Guam to the extent that the
values of these obligations are exempt from the Florida intangibles tax.
Accordingly, the Funds may be adversely affected by local, political and
economic conditions and developments within Puerto Rico, the Virgin Islands and
Guam.
Subject to certain limitations, each Fund may also invest in taxable
short-term obligations and in futures contracts and options on futures contracts
for protective, (i.e., hedging) purposes. Each Fund defines taxable short-term
obligations as those obligations maturing in one year or less from the date of
purchase by the Fund and which are either (i) obligations issued or guaranteed
by the U.S. government or its agencies or instrumentalities; (ii) commercial
paper rated Prime-1 or Prime-2 by Moodys or A-1 or A-2 by S&P; or (iii) bank
obligations, such as certificates of deposit, banker's acceptance and fixed time
deposits issued by domestic banks subject to regulation by the U.S. government
having total assets of at least $1.5 billion.
Each Fund may also invest in municipal and Florida obligations with
demand features, including floating or variable rate demand notes which meet the
quality standards set forth above. Although there may be no active secondary
market with respect to a particular variable rate demand note, either Fund may,
upon notice specified in the note, demand payment in full of the principal of
and accrued interest on the note at any time and may resell the note at any time
to a third party. The absence of an active secondary market could make it
difficult to dispose of the variable rate demand note in the event the issuer of
the note defaulted on its payment obligation.
For the purposes of protecting (i.e., hedging) the value of assets,
each Fund may purchase and sell various kinds of futures contracts and may enter
into closing purchase and sale transactions with respect to such contracts. The
futures contracts may be based on various debt securities (such as U.S.
government), securities indices and other financial instruments.
Each Fund may also purchase and write call and put options on futures
which are traded on an Exchange or Board of Trade and enter into closing
transactions with respect to such options to terminate an existing position. A
futures option gives the purchaser the right and the obligation in return for
the premium paid to assume a position in a futures contract (a long position if
the option is a call and a short position if the option is a put) at a specified
exercise price at any time during the period of the futures option. The purchase
of put futures options is a means of hedging against the risk of rising interest
rates. The purchase of call futures options is a means of hedging against a
market advance when a Fund is not fully invested. Each Fund may use such futures
options only in connection with hedging strategies.
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS
Form of Organization. The Evergreen Municipal Trust and the Trust are
open-end management investment companies registered with the SEC under the 1940
Act which continuously offer to sell shares at their current net asset value
plus any applicable sales loads. Each is organized as a Massachusetts business
trust and is governed by a Declaration of Trust, By-Laws, Board of Trustees, and
applicable Massachusetts law. The ABT Fund is a portfolio of the Trust. The
Evergreen High Income Fund is a newly formed series of The Evergreen Municipal
Trust.
Capitalization. The beneficial interests in the Funds are represented
by shares with $.01 par value per share for the ABT Fund and $.0001 par value
per share for the Evergreen High Income Fund. The Declarations of Trust permit
the respective Board of Trustees to issue an unlimited number of shares of
beneficial interest. The Declaration of Trust of The Evergreen Municipal Trust
permits the Board of Trustees, without shareholder approval, to divide its
shares into an unlimited number of series and classes with the rights of such
series and classes to be determined by the Board of Trustees. The Evergreen High
Income Fund will consist of three classes of shares as described above. See
"Summary-Distribution; Sales Charges." Fractional shares may be issued. Each
Fund's shares have equal voting rights and represent equal proportionate
interests in the assets belonging to each Fund, and are entitled to receive
dividends and other amounts as determined by The Evergreen Municipal Trust's or
Trust's Board of Trustees, except in the case of the Evergreen High Income Fund,
where there are different voting and other rights applicable to different
classes of shares in connection with or as a result of the classes' distribution
and shareholder servicing arrangements.
Shareholder Liability. Under Massachusetts law, shareholders of a
business trust could, under certain circumstances, be held personally liable for
the obligations of the business trust. However, the Declarations of Trust of The
Evergreen Municipal Trust and the Trust disclaim shareholder liability for acts
or obligations of The Evergreen Municipal Trust or the Trust and require that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by The Evergreen Municipal Trust's or the Trust's Board
of Trustees. The Declarations of Trust provide for indemnification out of The
Evergreen Municipal Trust's or the Trust's property for all losses and expenses
of any shareholder held personally liable for the obligations of The Evergreen
Municipal Trust and the Trust. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is considered remote since it
is limited to circumstances in which a disclaimer is inoperative and The
Evergreen Municipal Trust or the Trust itself would be unable to meet its
respective obligations. A substantial number of mutual funds in the United
States are organized as Massachusetts business trusts.
Shareholder Meetings and Voting Rights. Neither The Evergreen Municipal
Trust nor the Trust are required to hold annual meetings of shareholders.
Trustees of The Evergreen Municipal Trust may be removed by a two-thirds vote of
the number of Trustees prior to such removal or by two-thirds vote of the
shareholders at a special meeting. The Evergreen Municipal Trust is required to
call a meeting of shareholders for the purpose of voting upon the question of
removal of a Trustee when requested in writing to do so by the holders of at
least 25% of The Evergreen Municipal Trust's outstanding shares. The Declaration
of Trust of the Trust provides for the removal of a Trustee by a vote of
two-thirds of the outstanding shares. In addition, the Trust and The Evergreen
Municipal Trust are required to call a meeting of shareholders for the purpose
of electing Trustees if, at any time, less than a majority of the Trustees then
holding office were elected by shareholders. If Trustees of the Trust fail or
refuse to call a meeting as required by the Declaration of Trust for a period of
30 days after a request in writing by shareholders holding an aggregate of at
least 10% of the shares outstanding, then shareholders holding 10% may call and
give notice of a shareholders meeting. The Trust and The Evergreen Municipal
Trust currently do not intend to hold regular shareholder meetings. Neither
permits cumulative voting. A majority of shares entitled to vote on a matter
constitutes a quorum for consideration of such matter. In either case, a
majority of the shares present and entitled to vote is sufficient to act on a
matter (unless otherwise specifically required by the applicable governing
documents or other law, including the 1940 Act). All shares of all classes of
each portfolio in The Evergreen Municipal Trust have equal voting rights, except
that in matters affecting only a particular portfolio or class (for example, a
12b-1 plan of that class) only shares of that portfolio or class are entitled to
vote.
Liquidation or Dissolution. In the event of the liquidation of a Fund
the shareholders are entitled to receive, when, and as declared by the Trustees,
the excess of the assets belonging to such Fund over the liabilities belonging
to the Fund. In either case, the assets so distributable to shareholders of the
respective Fund will be distributed among the shareholders pro rata based on the
shares of the Fund held by them and recorded on the books of the Fund.
Liability and Indemnification of Trustees. The By-Laws of The Evergreen
Municipal Trust provide that present and former Trustees or officers generally
are entitled to indemnification against liabilities and expenses with respect to
claims related to their position with The Evergreen Municipal Trust unless, in
the case of any liability to The Evergreen Municipal Trust or its shareholders,
it shall have been determined that such Trustee or officer is liable by reason
of his willful misfeasance, bad faith, gross negligence or reckless disregard of
his duties involved in the conduct of his office.
The Declaration of Trust provides that no Trustee or officer of the Trust
shall be personally liable to any person for any action or failure to act,
except for his own bad faith, willful misfeasance, gross negligence, or reckless
disregard of his duties. The Declaration of Trust provides that a Trustee or
officer is entitled to indemnification against liabilities and expenses with
respect to claims related to his position with the Trust, unless such Trustee or
officer shall have been adjudicated to have acted with bad faith, willful
misfeasance, or gross negligence, or in reckless disregard of his duties, or not
to have acted in good faith in the reasonable belief that his action was in the
best interest of the Trust. The Declaration of Trust of the Trust also provides
that a Trustee or officer is not entitled to indemnification against liabilities
in the event of settlement unless there has been a determination that such
Trustee or officer has engaged in willful misfeasance, bad faith, gross
negligence, or reckless disregard of his duties.
Rights of Inspection. Shareholders of the respective Funds have the
same right to inspect in Massachusetts the governing documents, records of
meetings of shareholders, shareholder lists, share transfer records, accounts
and books of the Fund as are permitted shareholders of a corporation under the
Massachusetts corporation law. The purpose of inspection must be for interests
of shareholders relevant to the affairs of the Fund.
The foregoing is only a summary of certain characteristics of the
operations of the Declarations of Trust and By-Laws of The Evergreen Municipal
Trust and the Trust, and of Massachusetts and federal law. The foregoing is not
a complete description of those documents or laws. Shareholders should refer to
the provisions of the respective Declarations of Trust, By-Laws, and
Massachusetts and federal law directly for more complete information.
ADDITIONAL INFORMATION
ABT Fund. Information about the ABT Fund is included in its current
Prospectus dated August 29, 1994, and in the Statement of Additional Information
of the same date that has been filed with the SEC, both of which are
incorporated herein by reference. A copy of the Prospectus and the Statement of
Additional Information and the Fund's Annual Report dated April 30, 1994 are
available upon request and without charge by writing to the ABT Fund at the
address listed on the cover page of this Prospectus/Proxy Statement or by
calling toll-free 1-800-553- 7838.
Evergreen High Income Fund. Information concerning the operation and
management of the Evergreen High Income Fund is incorporated herein by reference
from the Prospectus dated May 3, 1995, a copy of which is enclosed, and
Statement of Additional Information dated May 3, 1995. A copy of such Statement
of Additional Information is available upon request and without charge by
writing to the Evergreen High Income Fund, at the address listed on the cover
page of this Prospectus/Proxy Statement or by calling toll-free 1-800-_________.
The Trust and The Evergreen Municipal Trust are each subject to the
informational requirements of the Exchange Act and the 1940 Act, and in
accordance therewith files reports and other information including proxy
material, reports and charter documents with the SEC. These items can be
inspected and copies obtained at the Public Reference Facilities maintained by
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's
Regional Offices located at Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois, 60661-2511, and 7 World Trade Center, 13th Floor,
New York, New York 10048. Copies of such material can also be obtained from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates.
OTHER BUSINESS
The Trustees of the Trust do not intend to present any other business
at the Meeting. If, however, any other matters are properly brought before the
Meeting, the persons named in the accompanying form of proxy will vote thereon
in accordance with their judgment.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with a
solicitation of proxies by the Board of Trustees of the Trust to be used at the
Special Meeting of Shareholders of the ABT Fund, a portfolio of the Trust to be
held at 10:00 a.m. June 15, 1995, at 340 Royal Palm Way, Palm Beach, Florida
33480 and at any adjournments thereof. This Prospectus/Proxy Statement, along
with a Notice of the Meeting and a proxy card, is first being mailed to
shareholders on or about May 3, 1995. Only shareholders of record as of the
close of business on the Record Date will be entitled to notice of, and to vote
at, the Meeting or any adjournment thereof. The holders of a majority of the
shares outstanding at the close of business on the Record Date present in person
or represented by proxy will constitute a quorum for the Meeting. If the
enclosed form of proxy is properly executed and returned in time to be voted at
the Meeting, the proxies named therein will vote the shares represented by the
proxy in accordance with the instructions marked thereon. Unmarked proxies will
be voted FOR the proposed Reorganization and FOR any other matters deemed
appropriate. Proxies that reflect abstentions and "broker non-votes" (i.e.,
shares held by brokers or nominees as to which (i) instructions have not been
received from the beneficial owners or the persons entitled to vote or (ii) the
broker or nominee does not have discretionary voting power on a particular
matter) will be counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. Since shares represented by
"broker non-votes" are considered outstanding shares, a "broker non-vote" has
the same effect as a vote against the Reorganization. A proxy may be revoked at
any time at or before the Meeting by written notice to the Secretary of the
Trust, 340 Royal Palm Way, Palm Beach, Florida 33480. Unless revoked, all valid
proxies will be voted in accordance with the specifications thereon or, in the
absence of such specifications, for approval of the Plan and the Reorganization
contemplated thereby.
Approval of the Plan will require the affirmative vote of more than 50%
of the outstanding voting securities of the ABT Fund. Each full share
outstanding is entitled to one vote and each fractional share outstanding is
entitled to a proportionate share of one vote.
If the shareholders do not vote to approve the Reorganization, the
Board of Trustees of the Trust will continue to operate the ABT Fund under
existing arrangements.
Proxy solicitations will be made primarily by mail, but proxy
solicitations may also be made by telephone, telegraph or personal solicitations
conducted by officers and employees of PBCM, its affiliates or other
representatives of the Trust (who will not be paid for their solicitation
activities). PBCM has retained Shareholder Communications Corporation to assist
in the proxy solicitation process.
The ABT Fund will be responsible for the fees and expenses of its
counsel and counsel for the independent Trustees in connection with the
Reorganization, whether or not the Reorganization is consummated. With respect
to the costs of preparing this Prospectus/Proxy Statement and soliciting
shareholders of the ABT Fund, PBCM has agreed to bear such costs and FUNB shall
reimburse PBCM 50% of its costs up to a maximum reimbursement of $85,000.
In the event that sufficient votes to approve the Plan are not received
by June 14, 1995, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. In
determining whether to adjourn the Meeting, the following factors may be
considered: the percentage of votes actually cast, the percentage of negative
votes actually cast, the nature of any further solicitation and the information
to be provided to shareholders with respect to the reasons for the solicitation.
Any such adjournment will require an affirmative vote by the holders of a
majority of the shares present in person or by proxy and entitled to vote at the
Meeting. The persons named as proxies will vote upon such adjournment after
consideration of all circumstances which may bear upon a decision to adjourn the
Meeting.
A shareholder who objects to the proposed transaction will not be
entitled under either Massachusetts law or the Declaration of Trust of the Trust
to demand payment for, or an appraisal of, his or her shares. However,
shareholders should be aware that the Reorganization as proposed is not expected
to result in recognition of gain or loss to shareholders for federal income tax
purposes and that, if the Reorganization is consummated, shareholders will be
free to redeem the Class A Shares of the Evergreen High Income Fund which they
received in the transaction at their then-current net asset value. Shares of the
ABT Fund may be redeemed at any time prior to the consummation of the
Reorganization. ABT Fund shareholders may wish to consult their tax advisers as
to any differing consequences of redeeming ABT Fund shares prior to the
Reorganization or exchanging such shares in the Reorganization.
The Trust does not hold annual shareholder meetings. If the
Reorganization is not approved, shareholders wishing to submit proposals for
consideration for inclusion in a proxy statement for a subsequent shareholder
meeting, if any, should send their written proposals to the Secretary of the
Trust at the address set forth on the cover of this Prospectus/Proxy Statement
such that they will be received by the Trust in a reasonable period of time
prior to any such meeting.
Notice to Banks, Broker-Dealers and Voting Trustees and Their Nominees.
Please advise the Trust whether other persons are beneficial owners of shares
for which proxies are being solicited and, if so, the number of copies of this
Prospectus/Proxy Statement needed to supply copies to the beneficial owners of
the respective shares.
The votes of the shareholders of the Evergreen High Income Fund are not
being solicited by the Prospectus/Proxy Statement and are not required to carry
out the Reorganization.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of ABT Fund as of April 30, 1994 and
the financial highlights for the periods indicated therein, have been
incorporated by reference into this Prospectus/Proxy Statement in reliance on
the reports Tait, Weller & Baker, independent accountants for the ABT Fund,
given on the authority of the firm as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the First
Union Fund will be passed upon by Shereff, Friedman, Hoffman & Goodman, LLP, 919
Third Avenue, New York, New York
10022.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE "NON- INTERESTED"
TRUSTEES, RECOMMENDS APPROVAL OF THE PLAN, AND ANY UNMARKED PROXIES WITHOUT
INSTRUCTIONS TO THE CONTRARY WILL BE VOTED IN FAVOR OF APPROVAL OF THE PLAN.
<PAGE>
--------------------
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of this
15th day of March, 1995, by and between Evergreen Municipal Trust, a
Massachusetts business trust (the "Evergreen Trust"), with its principal place
of business at 2500 Westchester Avenue, Purchase, New York 10577, with respect
to its Evergreen Florida High Income Municipal Bond Fund series (the "Acquiring
Fund"), and ABT Southern Master Trust (the "ABT Trust"), a Massachusetts
business trust, with respect to its ABT Florida High Income Municipal Bond Fund
series, with its principal place of business at 340 Royal Palm Way, Palm Beach,
Florida 33480 (the "Selling Fund").
This Agreement is intended to be and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368 (a)(1)(F) of the United States
Internal Revenue Code of 1986 (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of substantially all of the
assets of the Selling Fund in exchange solely for shares of beneficial interest,
no par value per share, of the Acquiring Fund (the "Acquiring Fund Shares") and
the assumption by the Acquiring Fund of certain stated liabilities of the
Selling Fund and the distribution, after the Closing Date hereinafter referred
to, of the Acquiring Fund Shares to the shareholders of the Selling Fund in
liquidation of the Selling Fund as provided herein, all upon the terms and
conditions hereinafter set forth in this Agreement.
WHEREAS, the Selling Fund and the Acquiring Fund are separate investment series
of open-end, registered investment companies of the management type and the
Selling Fund owns securities which generally are assets of the character in
which the Acquiring Fund is permitted to invest;
WHEREAS, both Funds are authorized to issue their shares of beneficial interest;
WHEREAS, the Trustees of the Evergreen Trust have determined that the exchange
of substantially all of the assets of the Selling Fund for Acquiring Fund Shares
and the assumption of certain stated liabilities by the Acquiring Fund on the
terms and conditions hereinafter set forth is in the best interests of the
Acquiring Fund shareholders and that the interests of the existing shareholders
of the Acquiring Fund will not be diluted as a result of the transactions
contemplated herein;
WHEREAS, the Trustees of the ABT Trust have determined that the Selling Fund
should exchange substantially all of its assets and certain of its liabilities
for Acquiring Fund Shares and that the interests of the existing shareholders of
the Selling Fund will not be diluted as a result of the transactions
contemplated herein;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
TRANSFER OF ASSETS OF THE SELLING FUND IN EXCHANGE FOR THE ACQUIRING FUND SHARES
AND ASSUMPTION OF SELLING FUND LIABILITIES AND LIQUIDATION OF THE SELLING FUND
1.1 The Exchange. Subject to the terms and conditions herein set forth and on
the basis of the representations and warranties contained herein, the Selling
Fund agrees to transfer the Selling Fund's assets as set forth in paragraph 1.2
to the Acquiring Fund, and the Acquiring Fund agrees in exchange therefor (i) to
deliver to the Selling Fund the number of Acquiring Fund Shares, including
fractional Acquiring Fund Shares, determined by dividing the value of the
Selling Fund's net assets computed in the manner and as of the time and date set
forth in paragraph 2.1 by the net asset value of one Acquiring Fund Share
computed in the manner and as of the time and date set forth in paragraph 2.2
and (ii) to assume certain liabilities of the Selling Fund, as set forth in
paragraph 1.3. Such transactions shall take place at the closing provided for in
paragraph 3.1 (the "Closing Date").
1.2 Assets to be Acquired. The assets of the Selling Fund to be acquired by the
Acquiring Fund shall consist of all property, including without limitation all
cash, securities, commodities and futures interests and dividends or interest
receivable, which is owned by the Selling Fund and any deferred or prepaid
expenses shown as an asset on the books of the Selling Fund on the Closing Date.
The Selling Fund has provided the Acquiring Fund with its most recent audited
financial statements which contain a list of all of Selling Fund's assets as of
the date thereof. The Selling Fund hereby represents that as of the date of the
execution of this Agreement there have been no changes in its financial position
as reflected in said financial statements other than those occurring in the
ordinary course of its business in connection with the purchase and sale of
securities and the payment of its normal operating expenses. The Selling Fund
reserves the right to sell any of such securities but will not, without the
prior written approval of the Acquiring Fund, acquire any additional securities
other than securities of the type in which the Acquiring Fund is permitted to
invest. The Acquiring Fund will, within a reasonable time prior to the Closing
Date, furnish the Selling Fund with a statement of the Acquiring Fund's
investment objectives, policies and restrictions and a list of the securities,
if any, on the Selling Fund's list referred to in the second sentence of this
paragraph which do not conform to the Acquiring Fund's investment objectives,
policies, and restrictions. In the event that the Selling Fund holds any
investments which the Acquiring Fund may not hold, the Selling Fund will dispose
of such securities prior to the Closing Date. In addition, if it is determined
that the Selling Fund and the Acquiring Fund portfolios, when aggregated, would
contain investments exceeding certain percentage limitations imposed upon the
Acquiring Fund with respect to such investments, the Selling Fund if requested
by the Acquiring Fund will dispose of a sufficient amount of such investments as
may be necessary to avoid violating such limitations as of the Closing Date.
1.3 Liabilities to be Assumed. The Selling Fund will endeavor to discharge all
of its known liabilities and obligations prior to the Closing Date. The
Acquiring Fund shall assume only those liabilities, expenses, costs, charges and
reserves reflected on a Statement of Assets and Liabilities of the Selling Fund
prepared by Palm Beach Capital Management, Inc., the investment adviser and
administrator of the Selling Fund, as of the Valuation Date (as defined in
paragraph 2.1), in accordance with generally accepted accounting principles
consistently applied from the prior audited period. The Acquiring Fund shall
assume only those liabilities of the Selling Fund reflected in such Statement of
Assets and Liabilities and shall not assume any other liabilities, whether
absolute or contingent, known or unknown, accrued or unaccrued, all of which
shall remain the obligation of the Selling Fund.
1.4 Liquidation and Distribution. As soon after the Closing Date as is
conveniently practicable (the "Liquidation Date"), (a) the Selling Fund will
liquidate and distribute pro rata to the Selling Fund's shareholders of record,
determined as of the close of business on the Closing Date (the "Selling Fund
Shareholders"), the Acquiring Fund Shares received by the Selling Fund pursuant
to paragraph 1.1. and (b) the Selling Fund will thereupon proceed to dissolve as
set forth in paragraph 1.8 below. Such liquidation and distribution will be
accomplished by the transfer of the Acquiring Fund Shares then credited to the
account of the Selling Fund on the books of the Acquiring Fund, to open accounts
on the share records of the Acquiring Fund in the names of the Selling Fund
Shareholders and representing the respective pro rata number of the Acquiring
Fund Shares due such shareholders. All issued and outstanding shares of the
Selling Fund will simultaneously be canceled on the books of the Selling Fund.
The Acquiring Fund shall not issue certificates representing the Acquiring Fund
Shares in connection with such exchange.
1.5 Ownership of Shares. Ownership of Acquiring Fund Shares will be shown on the
books of the Acquiring Fund's transfer agent. Shares of the Acquiring Fund will
be issued in the manner described in the combined Prospectus and Proxy Statement
on Form N-14 to be distributed to shareholders of the Selling Fund as described
in Section 5.
1.6 Transfer Taxes. Any transfer taxes payable upon issuance of the Acquiring
Fund Shares in a name other than the registered holder of the Selling Fund
shares on the books of the Selling Fund as of that time shall, as a condition of
such issuance and transfer, be paid by the person to whom such Acquiring Fund
Shares are to be issued and transferred.
1.7 Reporting Responsibility. Any reporting responsibility of the Selling Fund
is and shall remain the responsibility of the Selling Fund up to and including
the Closing Date and such later date on which the Selling Fund is terminated.
1.8 Termination. The Selling Fund shall be terminated promptly following the
Closing Date and the making of all distributions pursuant to paragraph 1.4.
ARTICLE II
VALUATION
2.1 Valuation of Assets. The value of the Selling Fund's assets to be acquired
by the Acquiring Fund hereunder shall be the value of such assets computed as of
the close of business on the New York Stock Exchange on the business day
immediately preceding the Closing Date (such time and date being hereinafter
called the "Valuation Date"), using the valuation procedures set forth in the
Evergreen Trust's Declaration of Trust and the Acquiring Fund's then current
prospectus and statement of additional information or such other valuation
procedures as shall be mutually agreed upon by the parties.
2.2 Valuation of Shares. The net asset value of an Acquiring Fund Share shall be
the net asset value per share computed as of the close of business on the New
York Stock Exchange on the Valuation Date, using the valuation procedures set
forth in the Evergreen Trust's Declaration of Trust and the Acquiring Fund's
then current prospectus and statement of additional information.
2.3 Shares to be Issued. The number of the Acquiring Fund Shares to be issued
(including fractional shares, if any) in exchange for the Selling Fund's assets
shall be determined by dividing the value of the assets of the Selling Fund
determined using the same valuation procedures referred to in paragraph 2.1 by
the net asset value of an Acquiring Fund Share determined in accordance with
paragraph 2.2.
2.4 Determination of Value. All computations of value shall be made by State
Street Bank and Trust Company in accordance with its regular practice in pricing
the shares and assets of the Acquiring Fund.
<PAGE>
ARTICLE III
CLOSING AND CLOSING DATE
3.1 Closing Date. The Closing Date shall be June 30, 1995 or such later date as
the parties may agree to in writing. All acts taking place at the Closing shall
be deemed to take place simultaneously as of the close of business on the
Closing Date unless otherwise provided. The Closing shall be held as of 3:00
o'clock p.m. at the offices of Evergreen Asset Management Corp., 2500
Westchester Avenue, Purchase, New York 10577, or at such other time and/or place
as the parties may agree.
3.2 Custodian's Certificate. The Bank of New York, as custodian for the Selling
Fund (the "Custodian"), shall deliver at the Closing a certificate of an
authorized officer stating that: (a) the Selling Fund's portfolio securities,
cash, and any other assets shall have been delivered in proper form to the
Acquiring Fund on the Closing Date and (b) all necessary taxes including all
applicable Federal and state stock transfer stamps, if any, shall have been
paid, or provision for payment shall have been made, in conjunction with the
delivery of portfolio securities.
3.3 Effect of Suspension in Trading. In the event that on the Valuation Date (a)
the New York Stock Exchange or another primary trading market for portfolio
securities of the Acquiring Fund or the Selling Fund shall be closed to trading
or trading thereon shall be restricted, or ( b ) trading or the reporting of
trading on said Exchange or elsewhere shall be disrupted so that accurate
appraisal of the value of the net assets of the Acquiring Fund or the Selling
Fund is impracticable, the Closing Date shall be postponed until the first
business day after the day when trading shall have been fully resumed and
reporting shall have been restored.
3.4 Transfer Agent's Certificate. Boston Financial Data Services, Inc., as
transfer agent for each of the Selling Fund and the Acquiring Fund shall deliver
at the Closing a certificate of an authorized officer stating that their records
contain the names and addresses of the Selling Fund Shareholders and the number
and percentage ownership of outstanding shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and deliver a
confirmation evidencing the Acquiring Fund Shares to be credited on the Closing
Date to the Secretary of the ABT Trust , or provide evidence satisfactory to the
Selling Fund that such Acquiring Fund Shares have been credited to the Selling
Fund's account on the books of the Acquiring Fund. At the Closing each party
shall deliver to the other such bills of sale, checks, assignments, share
certificates, if any, receipts and other documents as such other party or its
counsel may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations of the Selling Fund. The Selling Fund represents and
warrants to the Acquiring Fund as follows:
(a) The Selling Fund is a separate investment series of a Massachusetts business
trust duly organized, validly existing and in good standing under the laws of
The Commonwealth of Massachusetts;
(b) The Selling Fund is a separate investment series of a registered investment
company classified as a management company of the open-end type and its
registration with the Securities and Exchange Commission (the "Commission") as
an investment company under the Investment Company Act of 1940 (the "1940 Act")
is in full force and effect;
(c) The current prospectus and statement of additional information of the
Selling Fund conform in all material respects to the applicable requirements of
the Securities Act of 1933, as amended, (the "1933 Act") and the 1940 Act and
the rules and regulations of the Commission thereunder and do not include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not materially misleading;
(d) The Selling Fund is not, and the execution, delivery and performance of this
Agreement (subject to shareholder approval) will not, result in violation of any
provision of the ABT Trust's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Selling Fund is a party or by which it is bound;
(e) The Selling Fund has no material contracts or other commitments (other than
this Agreement) which will be terminated with liability to it prior to the
Closing Date;
(f) Except as otherwise disclosed in writing to and accepted by the Acquiring
Fund, no litigation, administrative proceeding or investigation of or before any
court or governmental body is presently pending or to its knowledge threatened
against the Selling Fund or any of its properties or assets which, if adversely
determined, would materially and adversely affect its financial condition, the
conduct of its business or the ability of the Selling Fund to carry out the
transactions contemplated by this Agreement. The Selling Fund knows of no facts
which might form the basis for the institution of such proceedings and is not a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects its business
or its ability to consummate the transactions herein contemplated;
(g) The financial statements of the Selling Fund at April 30, 1994 have been
audited by Tait, Weller & Baker, certified public accountants, and are in
accordance with generally accepted accounting principles consistently applied,
and such statements (copies of which have been furnished to the Acquiring Fund)
fairly reflect the financial condition of the Selling Fund as of such dates, and
there are no known contingent liabilities of the Selling Fund as of such dates
not disclosed therein;
(h) Since April 30, 1994, there has not been any material adverse change in the
Selling Fund's financial condition, assets, liabilities or business other than
changes occurring in the ordinary course of business, or any incurrence by the
Selling Fund of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and accepted by the
Acquiring Fund. For the purposes of this subparagraph (h), a decline in the net
asset value of the Selling Fund shall not constitute a material adverse change;
(i) At the Closing Date, all Federal and other tax returns and reports of the
Selling Fund required by law to have been filed by such dates shall have been
filed, and all Federal and other taxes shall have been paid so far as due, or
provision shall have been made for the payment thereof and to the best of the
Selling Fund's knowledge no such return is currently under audit and no
assessment has been asserted with respect to such returns;
(j) For each of the preceding six fiscal years of its operation the Selling Fund
has met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and has distributed in each such
year all net investment income and realized capital gains;
(k) All issued and outstanding shares of the Selling Fund are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable by the Selling Fund (except that, under Massachusetts law,
Selling Fund Shareholders could, under certain circumstances be held personally
liable for obligations of the Selling Fund). All of the issued and outstanding
shares of the Selling Fund will, at the time of the Closing Date, be held by the
persons and in the amounts set forth in the records of the transfer agent as
provided in paragraph 3.4. The Selling Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any of the
Selling Fund shares, nor is there outstanding any security convertible into any
of the Selling Fund shares;
(l) At the Closing Date, the Selling Fund will have good and marketable title to
the Selling Fund's assets to be transferred to the Acquiring Fund pursuant to
paragraph 1.2 and full right, power, and authority to sell, assign, transfer and
deliver such assets hereunder, and upon delivery and payment for such assets,
the Acquiring Fund will acquire good and marketable title thereto, subject to no
restrictions on the full transfer thereof, including such restrictions as might
arise under the 1933 Act, other than as disclosed to the Acquiring Fund and
accepted by the Acquiring Fund;
(m) The execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on the part of the Selling Fund and, subject
to approval by the Selling Fund's shareholders, this Agreement constitutes a
valid and binding obligation of the Selling Fund, enforceable in accordance with
its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights and to
general equity principles;
(n) The information to be furnished by the Selling Fund for use in no-action
letters, applications for orders, registration statements, proxy materials and
other documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete in all material respects and
shall comply in all material respects with Federal securities and other laws and
regulations thereunder applicable thereto;
(o) The proxy statement of the Selling Fund to be included in the Registration
Statement referred to in paragraph 5.7 (other than information therein that
relates to the Acquiring Fund) will, on the effective date of the Registration
Statement and on the Closing Date, not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which such statements were made, not misleading.
4.2 Representations of the Acquiring Fund. The Acquiring Fund represents
and warrants to the Selling Fund as follows:
(a) The Acquiring Fund is a separate investment series of a Massachusetts
business trust duly organized, validly existing and in good standing under the
laws of The Commonwealth of Massachusetts.
(b) The Acquiring Fund is a separate investment series of a Massachusetts
business trust that is registered as an investment company classified as a
management company of the open-end type and its registration with the Commission
as an investment company under the 1940 Act is in full force and effect;
(c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable requirements
of the 1933 Act and the 1940 Act and the rules and regulations of the Commission
thereunder and do not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading;
(d) The Acquiring Fund is not, and the execution, delivery and performance of
this Agreement will not, result in violation of Evergreen Trust's Declaration of
Trust or By-Laws or of any agreement, indenture, instrument, contract, lease or
other undertaking to which the Acquiring Fund is a party or by which it is
bound;
(e) Except as otherwise disclosed to the Selling Fund and accepted by the
Selling Fund, no material litigation, administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Acquiring Fund or any of its properties or
assets which, if adversely determined, would materially and adversely affect its
financial condition and the conduct of its business or the ability of the
Acquiring Fund to carry out the transactions contemplated by this Agreement. The
Acquiring Fund knows of no facts which might form the basis for the institution
of such proceedings and is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body which materially and
adversely affects its business or its ability to consummate the transactions
contemplated herein;
(f) Other than actions taken in connection with its designation as an investment
series of Evergreen Trust, the Acquiring Fund has had no operations as of the
date of the Agreement and has no net assets or liabilities;
(g) Since its designation as an investment series of Evergreen Trust, there has
not been any material adverse change in the Acquiring Fund's financial
condition, assets, liabilities or business other than changes occurring in the
ordinary course of business, or any incurrence by the Acquiring Fund of
indebtedness maturing more than one year from the date such indebtedness was
incurred, except as otherwise disclosed to and accepted by the Acquiring Fund.
For the purposes of this subparagraph (g), a decline in the net asset value of
the Acquiring Fund shall not constitute a material adverse change;
(h) At the Closing Date, all Federal and other tax returns and reports of the
Acquiring Fund required by law then to be filed shall have been filed, and all
Federal and other taxes shown due on said returns and reports shall have been
paid or provision shall have been made for the payment thereof and to the best
of the Acquiring Fund's knowledge, no such return is currently under audit and
no assessment has been asserted with respect to such returns;
(i) For each fiscal year of its operation the Acquiring Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company;
(j) All issued and outstanding Acquiring Fund Shares are, and at the Closing
Date will be, duly and validly issued and outstanding, fully paid and
non-assessable (except that, under Massachusetts law, shareholders of the
Acquiring Fund could, under certain circumstances, be held personally liable for
obligations of the Acquiring Fund). The Acquiring Fund does not have outstanding
any options, warrants or other rights to subscribe for or purchase any Acquiring
Fund Shares, nor is there outstanding any security convertible into any
Acquiring Fund Shares;
(k) The execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on the part of the Acquiring Fund, and this
Agreement constitutes a valid and binding obligation of the Acquiring Fund
enforceable in accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(l) The Acquiring Fund Shares to be issued and delivered to the Selling Fund,
for the account of the Selling Fund Shareholders, pursuant to the terms of this
Agreement will at the Closing Date have been duly authorized and, when so issued
and delivered, will be duly and validly issued Acquiring Fund Shares, and will
be fully paid and non-assessable (except that, under Massachusetts law,
shareholders of the Acquiring Fund could, under certain circumstances, be held
personally liable for obligations of the Acquiring Fund);
(m) The information to be furnished by the Acquiring Fund for use in no-action
letters, applications for orders, registration statements, proxy materials and
other documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete in all material respects and
shall comply in all material respects with Federal securities and other laws and
regulations applicable thereto;
(n) The Prospectus and Proxy Statement to be included in the Registration
Statement (only insofar as it relates to the Acquiring Fund ) will, on the
effective date of the Registration Statement and on the Closing Date, not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading; and
(o) The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state Blue Sky or securities laws as it may deem appropriate in order to
continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE SELLING FUND
5. 1 Operation in Ordinary Course. The Acquiring Fund and the Selling Fund each
will operate its business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of business will
include customary dividends and distributions.
5.2 Approval of Shareholders. The ABT Trust will call a meeting of the Selling
Fund Shareholders to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
5.3 Investment Representation. The Selling Fund covenants that the Acquiring
Fund Shares to be issued hereunder are not being acquired for the purpose of
making any distribution thereof other than in accordance with the terms of this
Agreement.
5.4 Additional Information. The Selling Fund will assist the Acquiring Fund in
obtaining such information as the Acquiring Fund reasonably requests concerning
the beneficial ownership of the Selling Fund shares.
5.5 Further Action. Subject to the provisions of this Agreement, the Acquiring
Fund and the Selling Fund will each take, or cause to be taken, all action, and
do or cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including any actions required to be taken after the Closing Date.
5.6 Statement of Earnings and Profits. As promptly as practicable, but in any
case within sixty days after the Closing Date, the Selling Fund shall furnish
the Acquiring Fund, in such form as is reasonably satisfactory to the Acquiring
Fund, a statement of the earnings and profits of the Selling Fund for Federal
income tax purposes which will be carried over by the Acquiring Fund as a result
of Section 381 of the Code, and which will be certified by the ABT Trust's
President, its Treasurer and its independent auditors.
5.7 Preparation of Form N-14 Registration Statement. The Selling Fund will
provide the Acquiring Fund with information reasonably necessary for the
preparation of a prospectus (the "Prospectus and Proxy Statement") which will
include the Prospectus and Proxy Statement, referred to in paragraph 4.1(o), all
to be included in a Registration Statement on Form N-14 of the Acquiring Fund
(the "Registration Statement"), in compliance with the 1933 Act, the Securities
Exchange Act of 1934, as amended, (the "1934 Act") and the 1940 Act in
connection with the meeting of the Selling Fund Shareholders to consider
approval of this Agreement and the transactions contemplated herein.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING FUND
The obligations of the Selling Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions:
6.1 All representations, covenants and warranties of the Acquiring Fund
contained in this Agreement shall be true and correct as of the date hereof and
as of the Closing Date with the same force and effect as if made on and as of
the Closing Date, and the Acquiring Fund shall have delivered to the Selling
Fund a certificate executed in its name by the Evergreen Trust's President or
Vice President and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to the Selling Fund and dated as of the Closing Date, to such
effect and as to such other matters as the Acquiring Fund shall reasonably
request; and
6.2 The Selling Fund shall have received on the Closing Date an opinion from
Shereff, Friedman, Hoffman & Goodman, LLP , counsel to the Acquiring Fund, dated
as of the Closing Date, in a form reasonably satisfactory to the Selling Fund,
covering the following points:
That (a) the Acquiring Fund is a separate investment series of a Massachusetts
business trust duly organized, validly existing and in good standing under the
laws of The Commonwealth of Massachusetts and has the power to own all of its
properties and assets and to carry on its business as presently conducted; (b)
the Agreement has been duly authorized, executed and delivered by the Acquiring
Fund, and, assuming that the Prospectus, Registration Statement and Proxy
Statement comply with the 1933 Act, the 1934 Act and the 1940 Act and the rules
and regulations thereunder and, assuming due authorization, execution and
delivery of the Agreement by the Selling Fund, is a valid and binding obligation
of the Acquiring Fund enforceable against the Acquiring Fund in accordance with
its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and to general equity principles; (c) assuming that a consideration therefor not
less than the net asset value therefor has been paid, the Acquiring Fund Shares
to be issued and delivered to the Selling Fund on behalf of the Selling Fund
Shareholders as provided by this Agreement are duly authorized and upon such
delivery will be legally issued and outstanding and fully paid and
non-assessable (except that, under Massachusetts law, shareholders of the
Acquiring Fund could, under certain circumstances, be held personally liable for
obligations of the Acquiring Fund), and no shareholder of the Acquiring Fund has
any preemptive rights in respect thereof; (d) the execution and delivery of the
Agreement did not, and the consummation of the transactions contemplated hereby
will not, result in a violation of the Evergreen Trust's Declaration of Trust or
By-Laws or any provision of any material agreement, indenture, instrument,
contract, lease or other undertaking (in each case known to such counsel) to
which the Acquiring Fund is a party or by which it or any of its properties may
be bound or to the knowledge of such counsel, result in the acceleration of any
obligation or the imposition of any penalty, under any agreement, judgment, or
decree to which the Acquiring Fund is a party or by which it is bound; (e) to
the knowledge of such counsel, no consent, approval, authorization or order of
any court or governmental authority of the United States or the Commonwealth of
Massachusetts, is required for the consummation by the Acquiring Fund of the
transactions contemplated herein, except such as have been obtained under the
1933 Act, the 1934 Act and the 1940 Act, and such as may be required under state
securities laws; (f) only insofar as they relate to the Acquiring Fund, the
descriptions in the Prospectus and Proxy Statement of statutes, legal and
governmental proceedings and material contracts, if any, are accurate and fairly
present the information required to be shown; (g) such counsel does not know of
any legal or governmental proceedings, only insofar as they relate to the
Acquiring Fund, existing on or before the effective date of the Registration
Statement or the Closing Date required to be described in the Registration
Statement or to be filed as exhibits to the Registration Statement which are not
described as required; (h) the Acquiring Fund is a separate investment series of
a Massachusetts business trust registered as an investment company under the
1940 Act and to such counsel's best knowledge, such registration with the
Commission as an investment company under the 1940 Act is in full force and
effect; and (i) to the knowledge of such counsel, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to the Acquiring Fund or
any of its properties or assets and the Acquiring Fund is not a party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body, which materially and adversely affects its business, other
than as previously disclosed in the Registration Statement. In addition, such
counsel shall also state that they have participated in conferences with
officers and other representatives of the Acquiring Fund at which the contents
of the Prospectus and Proxy Statement and related matters were discussed and,
although they are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Prospectus
and Proxy Statement (except to the extent indicated in paragraph (f) of their
above opinion), on the basis of the foregoing (relying as to materiality to a
large extent upon the opinions of the Evergreen Trust's officers and other
representatives of the Acquiring Fund), no facts have come to their attention
that lead them to believe that the Prospectus and Proxy Statement as of its
date, as of the date of the Selling Fund Shareholders' meeting, and as of the
Closing Date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein regarding the Acquiring Fund
or necessary, in the light of the circumstances under which they were made, to
make the statements therein regarding the Acquiring Fund not misleading. Such
opinion may state that such counsel does not express any opinion or belief as to
the financial statements or any financial or statistical data, or as to the
information relating to the Selling Fund, contained in the Prospectus and Proxy
Statement or Registration Statement, and that such opinion is solely for the
benefit of the ABT Trust and the Selling Fund. Such opinion shall contain such
other assumptions and limitations as shall be in the opinion of Shereff,
Friedman, Hoffman & Goodman, LLP appropriate to render the opinions expressed
therein and shall indicate, with respect to matters of Massachusetts law that as
Shereff, Friedman, Hoffman & Goodman are not admitted to the bar of
Massachusetts, such opinions are based soley upon the review of published
statutes, cases and rules and regulations of the Commonwealth of Massachusetts.
In this paragraph 6.2, references to Prospectus and Proxy Statement include
and relate to only the text of such Prospectus and Proxy Statement and not to
any exhibits or attachments thereto or to any documents incorporated by
reference therein.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance by the
Selling Fund of all the obligations to be performed by it hereunder on or before
the Closing Date and, in addition thereto, the following conditions:
7.1 All representations, covenants and warranties of the Selling Fund contained
in this Agreement shall be true and correct as of the date hereof and as of the
Closing Date with the same force and effect as if made on and as of the Closing
Date, and the Selling Fund shall have delivered to the Acquiring Fund on the
Closing Date a certificate executed in its name by the ABT Trust's President or
Vice President and its Treasurer or Assistant Treasurer, in form and substance
satisfactory to the Acquiring Fund and, dated as of the Closing Date, to such
effect and as to such other matters as the Acquiring Fund shall reasonably
request;
7.2 The Selling Fund shall have delivered to the Acquiring Fund a statement of
the Selling Fund's assets and liabilities, together with a list of the Selling
Fund's portfolio securities showing the tax costs of such securities by lot and
the holding periods of such securities, as of the Closing Date, certified by the
Treasurer of the ABT Trust ; and
7.3 The Acquiring Fund shall have received on the Closing Date an opinion of
Charles Moore, Esq., counsel to the Selling Fund, in a form satisfactory to the
Acquiring Fund covering the following points:
That (a) the Selling Fund is a separate investment series of a Massachusetts
business trust duly organized, validly existing and in good standing under the
laws of The Commonwealth of Massachusetts and has the power to own all of its
properties and assets and to carry on its business as presently conducted; (b)
the Agreement has been duly authorized, executed and delivered by the Selling
Fund, and, assuming that the Prospectus, the Registration Statement and the
Prospectus and Proxy Statement comply with the 1933 Act, the 1934 Act and the
1940 Act and the rules and regulations thereunder and, assuming due
authorization, execution and delivery of the Agreement by the Acquiring Fund, is
a valid and binding obligation of the Selling Fund enforceable against the
Selling Fund in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and to general equity principles; (c) the
execution and delivery of the Agreement did not, and the consummation of the
transactions contemplated hereby will not, result in a violation of the ABT
Trust's Declaration of Trust or By-laws, or any provision of any material
agreement, indenture, instrument, contract, lease or other undertaking (in each
case known to such counsel) to which the Selling Fund is a party or by which it
or any of its properties may be bound or, to the knowledge of such counsel,
result in the acceleration of any obligation or the imposition of any penalty,
under any agreement, judgment, or decree to which the Selling Fund is a party or
by which it is bound; (d) to the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental authority of the
United States, or the Commonwealth of Massachusetts is required for the
consummation by the Selling Fund of the transactions contemplated herein, except
such as have been obtained under the 1933 Act, the 1934 Act and the 1940 Act,
and such as may be required under state securities laws; (e) only insofar as
they relate to the Selling Fund, the descriptions in the Prospectus and Proxy
Statement of statutes, legal and governmental proceedings and material
contracts, if any, are accurate and fairly present the information required to
be shown; (f) such counsel does not know of any legal or governmental
proceedings, only insofar as they relate to the Selling Fund existing on or
before the date of mailing of the Prospectus and Proxy Statement and the Closing
Date, required to be described in the Prospectus and Proxy Statement or to be
filed as an exhibit to the Registration Statement which are not described or
filed as required; (g) the Selling Fund is a separate investment series of a
Massachusetts business trust registered as an investment company under the 1940
Act and to such counsel's best knowledge, such registration with the Commission
as an investment company under the 1940 Act is in full force and effect; (h) to
the knowledge of such counsel, no litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or threatened as to the Selling Fund or any of its respective properties or
assets and the Selling Fund is neither a party to nor subject to the provisions
of any order, decree or judgment of any court or governmental body, which
materially and adversely affects its business other than as previously disclosed
in the Prospectus and Proxy Statement; (i) assuming that a consideration
therefor not less than the net asset value therefor has been paid, and assuming
that such shares were issued in accordance with the terms of the Selling Fund's
registration statement, or any amendment thereto, in effect at the time of such
issuance all issued and outstanding shares of the Selling Fund are legally
issued and fully paid and non-assessable (except that, under Massachusetts law,
Selling Fund Shareholders could, under certain circumstances be held personally
liable for obligations of the Selling Fund). Such counsel shall also state that
they have participated in conferences with officers and other representatives of
the Selling Fund at which the contents of the Prospectus and Proxy Statement and
related matters were discussed and, although they are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus and Proxy Statement (except to the extent
indicated in paragraph (e) of their above opinion ), on the basis of the
foregoing (relying as to materiality to a large extent upon the opinions of the
ABT Trust's officers and other representatives of the Selling Fund ), no facts
have come to their attention that lead them to believe that the Prospectus and
Proxy Statement as of its date, as of the date of the Selling Fund Shareholders'
meeting, and as of the Closing Date, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein regarding
the Selling Fund or necessary, in the light of the circumstances under which
they were made, to make the statements therein regarding the Selling Fund not
misleading. Such opinion may state that such counsel does not express any
opinion or belief as to the financial statements or any financial or statistical
data, or as to the information relating to the Acquiring Fund, contained in the
Prospectus and Proxy Statement or Registration Statement, and that such opinion
is solely for the benefit of the Evergreen Trust and the Acquiring Fund. Such
opinion shall contain such other assumptions and limitations as shall be in the
opinion of Charles Moore, Esq. appropriate to render the opinions expressed
therein and shall indicate.
In this paragraph 7.3, references to Prospectus and Proxy Statement include and
relate to only the text of such Prospectus and Proxy Statement and not to any
exhibits or attachments thereto or to any documents incorporated by reference
therein.
<PAGE>
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING
FUND AND THE SELLING FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Selling Fund or the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of the
Selling Fund in accordance with the provisions of the ABT Trust's Declaration of
Trust and By-Laws and certified copies of the resolutions evidencing such
approval shall have been delivered to the Acquiring Fund. Notwithstanding
anything herein to the contrary, neither the Acquiring Fund nor the Selling Fund
may waive the conditions set forth in this paragraph 8.1;
8.2 On the Closing Date the Commission shall not have issued an unfavorable
report under Section 25(b) of the 1940 Act, nor instituted any proceeding
seeking to enjoin the consummation of the transactions contemplated by this
Agreement under Section 25(c) of the 1940 Act and no action, suit or other
proceeding shall be threatened or pending before any court or governmental
agency in which it is sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions contemplated
herein;
8.3 All required consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities. including any
necessary "no-action" positions of and exemptive orders from such Federal and
state authorities) to permit consummation of the transactions contemplated
hereby shall have been obtained, except where failure to obtain any such
consent, order or permit would not involve a risk of a material adverse effect
on the assets or properties of the Acquiring Fund or the Selling Fund, provided
that either party hereto may for itself waive any of such conditions;
8.4 The Registration Statement shall have become effective under the 1933 Act
and no stop orders suspending the effectiveness thereof shall have been issued
and, to the best knowledge of the parties hereto, no investigation or proceeding
for that purpose shall have been instituted or be pending, threatened or
contemplated under the 1933 Act;
8.5 The Selling Fund shall have declared a dividend or dividends which, together
with all previous such dividends, shall have the effect of distributing to the
Selling Fund Shareholders all of the Selling Fund's investment company taxable
income for all taxable years ending on or prior to the Closing Date (computed
without regard to any deduction for dividends paid) and all of its net capital
gain realized in all taxable years ending on or prior to the Closing Date (after
reduction for any capital loss carryforward);
8.6 The parties shall have received a favorable opinion of Sullivan & Worcester,
addressed to the Acquiring Fund and the Selling Fund substantially to the effect
that for Federal income tax purposes:
(a) The transfer of substantially all of the Selling Fund assets in exchange for
the Acquiring Fund Shares and the assumption by the Acquiring Fund of certain
identified liabilities of the Selling Fund followed by the distribution of the
Acquiring Fund's shares to the Selling Fund in dissolution and liquidation of
the Selling Fund, will constitute a "reorganization" within the meaning of
Section 368(a)(1)(F) of the Code and the Acquiring Fund and the Selling Fund
will each be a "party to a reorganization" within the meaning of Section 368(b)
of the Code; (b) no gain or loss will be recognized by the Acquiring Fund upon
the receipt of the assets of the Selling Fund solely in exchange for the
Acquiring Fund Shares and the assumption by the Acquiring Fund of certain
identified liabilities of the Selling Fund; (c) no gain or loss will be
recognized by the Selling Fund upon the transfer of the Selling Fund assets to
the Acquiring Fund in exchange for the Acquiring Fund Shares and the assumption
by the Acquiring Fund of certain identified liabilities of the Selling Fund or
upon the distribution ( whether actual or constructive ) of the Acquiring Fund
Shares to Selling Fund Shareholders in exchange for their shares of the Selling
Fund; (d) no gain or loss will be recognized by Selling Fund Shareholders upon
the exchange of their Selling Fund shares for the Acquiring Fund Shares in
liquidation of the Selling Fund; (e) the aggregate tax basis for the Acquiring
Fund Shares received by each Selling Fund Shareholder pursuant to the
Reorganization will be the same as the aggregate tax basis of the Selling Fund
shares held by such shareholder immediately prior to the Reorganization, and the
holding period of the Acquiring Fund Shares to be received by each Selling Fund
Shareholder will include the period during which the Selling Fund shares
exchanged therefor were held by such shareholder (provided the Selling Fund
shares were held as capital assets on the date of the Reorganization ); and (f)
the tax basis of the Selling Fund assets acquired by the Acquiring Fund will be
the same as the tax basis of such assets to the Selling Fund immediately prior
to the Reorganization, and the holding period of the assets of the Selling Fund
in the hands of the Acquiring Fund will include the period during which those
assets were held by the Selling Fund. Notwithstanding anything herein to the
contrary, neither the Acquiring Fund nor the Selling Fund may waive the
conditions set forth in this paragraph 8.6.
8.7 The Acquiring Fund shall have received from Tait, Weller & Baker a letter
addressed to the Acquiring Fund dated on the Closing Date, in form and substance
satisfactory to the Acquiring Fund, to the effect that (i) they are independent
certified public accountants with respect to the Selling Fund within the meaning
of the 1933 Act and the applicable published rules and regulations thereunder;
(ii) in their opinion, the audited financial statements and the per share data
and ratios contained in the section entitled Financial Highlights and provided
in accordance with Item 3 of Form N-1A (the "Per Share Data") of the Selling
Fund included in or incorporated by reference into the Registration Statement
and Prospectus and Proxy Statement and previously reported on by them comply as
to form in all material respects with the applicable accounting requirements of
the l933 Act and the published rules and regulations thereunder; (iii) on the
basis of limited procedures agreed upon by the Acquiring Fund and described in
such letter (but not an examination in accordance with generally accepted
auditing standards) consisting of a reading of any unaudited pro forma financial
statements included in the Registration Statement and Prospectus and Proxy
Statement, and inquiries of appropriate officials of the ABT Trust responsible
for financial and accounting matters, nothing came to their attention which
caused them to believe that (A) such unaudited pro forma financial statements do
not comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the published rules and regulations thereunder,
or (B) said unaudited pro forma financial statements are not fairly presented in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements; (iv) on
the basis of limited procedures agreed upon by the Acquiring Fund and described
in such letter ( but not an examination in accordance with generally accepted
auditing standards), the Capitalization Table appearing in the Registration
Statement and Prospectus and Proxy Statement, has been obtained from and is
consistent with the accounting records of the Selling Fund; and (v) on the basis
of limited procedures agreed upon by the Acquiring Fund and described in such
letter (but not an examination in accordance with generally accepted auditing
standards), the pro forma financial statements which are included in the
Registration Statement and Prospectus and Proxy Statement, were prepared based
on the valuation of the Selling Fund's assets in accordance with the Evergreen
Trust's Declaration of Trust and the Acquiring Fund's then current prospectus
and statement of additional information pursuant to procedures customarily
utilized by the Acquiring Fund in valuing its own assets (such procedures having
been previously described to Tait, Weller & Baker in writing by the Acquiring
Fund).
In addition, the Acquiring Fund shall have received from Tait, Weller & Baker a
letter addressed to the Acquiring Fund dated on the Closing Date, in form and
substance satisfactory to the Acquiring Fund, to the effect that on the basis of
limited procedures agreed upon by the Acquiring Fund (but not an examination in
accordance with generally accepted auditing standards) (i) the data utilized in
the calculations of the projected expense ratio appearing in the Registration
Statement and Prospectus and Proxy Statement agree with underlying accounting
records of the Selling Fund or to written estimates by Selling Fund's management
and were found to be mathematically correct; and (ii) the calculation of net
asset value per share of the Selling Fund as of the Valuation Date was
determined in accordance with generally accepted accounting practices and the
portfolio valuation practices of the Acquiring Fund.
8.8 The Selling Fund shall have received from Price Waterhouse LLP a letter
addressed to the Selling Fund dated on the Closing Date, in form and substance
satisfactory to the Selling Fund, to the effect that (i) they are independent
certified public accountants with respect to the Acquiring Fund within the
meaning of the 1933 Act and the applicable published rules and regulations
thereunder; (ii) in their opinion, the audited financial statements and the per
share data and ratios contained in the section entitled Financial Highlights and
provided in accordance with Item 3 of Form N-1A (the "Per Share Data") of the
Acquiring Fund included in or incorporated by reference into the Registration
Statement and Prospectus and Proxy Statement and previously reported on by them
comply as to form in all material respects with the applicable accounting
requirements of the l933 Act and the published rules and regulations thereunder;
(iii) on the basis of limited procedures agreed upon by the Selling Fund and
described in such letter (but not an examination in accordance with generally
accepted auditing standards) consisting of a reading of any unaudited pro forma
financial statements included in the Registration Statement and Prospectus and
Proxy Statement, and inquiries of appropriate officials of the Evergreen Trust
responsible for financial and accounting matters, nothing came to their
attention which caused them to believe that (A) such unaudited pro forma
financial statements do not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the published rules and
regulations thereunder, or (B) said unaudited pro forma financial statements are
not fairly presented in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial
statements; and(iv) on the basis of limited procedures agreed upon by the
Selling Fund and described in such letter (but not an examination in accordance
with generally accepted auditing standards), the Capitalization Table appearing
in the Registration Statement and Prospectus and Proxy Statement, has been
obtained from and is consistent with the accounting records of the Acquiring
Fund.
In addition, the Selling Fund shall have received from Price Waterhouse LLP a
letter addressed to the Selling Fund dated on the Closing Date, in form and
substance satisfactory to the Selling Fund, to the effect that on the basis of
limited procedures agreed upon by the Selling Fund (but not an examination in
accordance with generally accepted auditing standards) the data utilized in the
calculations of the projected expense ratio appearing in the Registration
Statement and Prospectus and Proxy Statement agree with underlying accounting
records of the Acquiring Fund and the Selling Fund or to written estimates by
each Fund's management and were found to be mathematically correct.
8.9 The Acquiring Fund and the Selling Fund shall also have received from Tait,
Weller & Baker a letter addressed to the Acquiring Fund and the Selling Fund,
dated on the Closing Date in form and substance satisfactory to the Funds,
setting forth the Federal income tax implications relating to Capital Loss
Carryforwards (if any) of the Selling Fund and the related impact, if any, of
the proposed transfer of all or substantially all of the assets of the Selling
Fund to the Acquiring Fund and the ultimate dissolution of the Selling Fund,
upon the shareholders of the Selling Fund.
ARTICLE IX
BROKERAGE FEES AND EXPENSES
9.1 The Acquiring Fund and the Selling Fund each represents and warrants to the
other that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
9.2 (a) Except as otherwise provided for herein, all expenses of the
transactions contemplated by this Agreement incurred by the Acquiring Fund will
be borne by First Union National Bank of North Carolina ("FUNB"). The Selling
Fund will bear the expense of its own counsel and counsel to its Trustees in
connection with the transactions contemplated by this Agreement. All other
expenses of the transactions contemplated by this Agreement incurred by the
Selling Fund will be borne by Palm Beach Capital Management, Inc., subject to
the undertaking of FUNB to reimburse up to $85,000 of such expenses incurred by
Palm Beach Capital Management, Inc. in connection with this and all other
related transactions between investment companies for which it serves as
investment adviser and investment companies for which FUNB or its affiliates
serve as investment adviser. Such expenses include, without limitation, (i)
expenses incurred in connection with the entering into and the carrying out of
the provisions of this Agreement; (ii) expenses associated with the preparation
and filing of the Registration Statement under the 1933 Act covering the
Acquiring Fund Shares to be issued pursuant to the provisions of this Agreement;
(iii) registration or qualification fees and expenses of preparing and filing
such forms as are necessary under applicable state securities laws to qualify
the Acquiring Fund Shares to be issued in connection herewith in each state in
which the Selling Fund Shareholders are resident as of the date of the mailing
of the Prospectus and Proxy Statement to such shareholders; (iv) postage; (v)
printing; (vi) accounting fees; (vii) legal fees; and (viii) solicitation cost
of the transactions. (b) Consistent with the provisions of paragraph 1.3, the
Selling Fund, prior to the Closing Date, shall pay for or include in the audited
statement of assets and liabilities prepared pursuant to paragraph 1.3 all of
its known and reasonably estimated expenses associated with the transactions
contemplated by this Agreement
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Fund and the Selling Fund agree that neither party has made
any representation, warranty or covenant not set forth herein and that the
Agreement constitutes the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in this Agreement
or in any document delivered pursuant hereto or in connection herewith shall
survive the consummation of the transactions contemplated hereunder.
<PAGE>
ARTICLE XI
TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the Acquiring
Fund and the Selling Fund. In addition, either the Acquiring Fund or the Selling
Fund may at its option terminate this Agreement at or prior to the Closing Date
because:
(a) of a breach by the other of any representation, warranty or agreement
contained herein to be performed at or prior to the Closing Date, if not cured
within 30 days; or
(b) a condition herein expressed to be precedent to the obligations of the
terminating party has not been met and it reasonably appears that it will not or
cannot be met.
11.2 In the event of any such termination, in the absence of willful default,
there shall be no liability for damages on the part of either the Acquiring Fund
or the Selling Fund, the Evergreen Trust or the ABT Trust or their respective
Trustees or officers, to the other party or its, Trustees or officers, but each
shall bear the expenses incurred by it incidental to the preparation and
carrying out of this Agreement as provided in paragraph 9.2.
ARTICLE XII
AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Selling Fund and the Acquiring Fund: provided, however, that following the
meeting of the Selling Fund Shareholders called by the ABT Trust pursuant to
paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of the Acquiring Fund Shares
to be issued to the Selling Fund Shareholders under this Agreement to the
detriment of such shareholders without their further approval.
ARTICLE XIII
NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy, overnight courier or certified mail addressed to
the Acquiring Fund
Evergreen Municipal Trust
2500 Westchester Avenue
Purchase, New York 10577
Attention: Joseph J. McBrien, Esq.
<PAGE>
or to the Selling Fund
ABT Southern Master Trust
340 Royal Palm Way
Palm Beach, Florida
Attention: Timothy Cox, Esq.
ARTICLE XIV
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
14.1 The Article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts.
14.4 This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, but no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by any party
without the written consent of the other party. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
14.5 It is expressly agreed to that the obligations of the Selling Fund and the
Acquiring Fund hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents, or employees of the Evergreen Trust or
the ABT Trust, personally, but bind only the trust property of the Selling Fund
and the Acquiring Fund, as provided in the Declarations of Trust of the
Evergreen Trust and the ABT Trust. The execution and delivery of this Agreement
have been authorized by the Trustees of the Evergreen Trust and the ABT Trust on
behalf of the Acquiring Fund and the Selling Fund, respectively, and signed by
authorized officers of the Selling Fund and the Acquiring Fund, acting as such,
and neither such authorization by such Trustees nor such execution and delivery
by such officers shall be deemed to have been made by any of them individually
or to impose any liability on any of them personally, but shall bind only the
trust property of the Evergreen Trust and the ABT Trust as provided in their
Declarations of Trust.
IN WITNESS WHEREOF, the parties have duly executed and sealed
this Agreement, all as of the date first written above.
EVERGREEN MUNICIPAL TRUST
on behalf of Evergreen Florida High Income Municipal Bond Fund
By:/s/ John J. Pileggi
Name: John J. Pileggi
Title: President
(Seal)
ABT SOUTHERN MASTER TRUST
on behalf of ABT Florida High Income Municipal Bond Fund
By: /s/ Edward W. Cook
Name: Edward W. Cook
Title: President
(Seal)
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION DATED MAY 3, 1995
Acquisition of the Assets of
ABT FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
of
ABT Southern Master Trust
340 Royal Palm Way
Palm Beach, Florida 33480
1-800-553-7838
By and in Exchange for Shares of
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
of
The Evergreen Municipal Trust
2500 Westchester Avenue
Purchase, New York 10577
1-800-________]
This Statement of Additional Information, relating specifically to the
proposed transfer of the assets of the ABT Florida High Income Municipal Bond
Fund, a portfolio of ABT Southern Master Trust, in exchange for Class A
Investment Shares of the Evergreen Florida High Income Municipal Bond Fund, a
series of The Evergreen Municipal Trust, and the assumption by the Evergreen
Florida High Income Municipal Bond Fund of certain identified liabilities of the
ABT Florida High Income Municipal Bond Fund, is not a prospectus. A
Prospectus/Proxy Statement dated May 3, 1995 relating to the above-referenced
matter may be obtained from The Evergreen Municipal Trust, 2500 Westchester
Avenue, Purchase, New York 10577. This Statement of Additional Information
relates to and should be read in conjunction with such Prospectus/Proxy
Statement.
This Statement of Additional Information incorporates by reference the
following documents, a copy of each of which accompanies this Statement of
Additional Information:
1. The Prospectus of the Evergreen Florida High Income
Municipal Bond Fund, dated May 3, 1995.
2. The Statement of Additional Information of the
Evergreen Florida High Income Municipal Bond Fund,
dated May 3, 1995.
3. The Prospectus of the ABT Florida High Income Municipal
Bond Fund, dated August 29, 1994.
<PAGE>
4. The Statement of Additional Information of the ABT
Florida High Income Municipal Bond Fund, dated August
29, 1994.
5. The Annual Report of the ABT Florida High Income Fund
Fund, dated April 30, 1994.
The following pro forma financial information relates to the ABT
Florida High Income Municipal Bond Fund and the Evergreen Florida High Income
Municipal Bond Fund:
<PAGE>
PRO FORMA COMBINING PORTFOLIOS OF INVESTMENTS OF
EVERGREEN FLORIDA HIGH INCOME FUND AND
ABT FLORIDA HIGH INCOME MUNICIPAL BOND FUND
DECEMBER 31, 1994
(unaudited)
<TABLE>
<CAPTION>
ABT ABT
EVERGREEN FLORIDA EVERGREEN FLORIDA
FLORIDA HIGH FLORIDA HIGH
HIGH INCOME HIGH INCOME
INCOME MUNICIPAL PRO FORMA INCOME MUNICIPAL PRO FORMA
FUND BOND FUND COMBINED FUND BOND FUND COMBINED
- ----------------------------------------------------------------- INTEREST MATURITY ------------------------------------
PRINCIPAL AMOUNT MUNICIPAL BONDS RATE* DATE VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ $ 500,000 $ 500,000 Alachua County Health 6.000% 11/15/09 $ $ 428,125 $ 428,125
Facilities Authority Rev.
(Santa Fe Healthcare)
660,000 660,000 Alachua County Health 7.600 11/15/13 663,300 663,300
Facilities Authority Rev.
(Santa Fe Healthcare)
1,000,000 1,000,000 Bay County Hospital System 8.000 10/01/12 1,006,250 1,006,250
Rev. (Bay Medical Center
Project)
400,000 400,000 Baytree Community Development 8.750 05/01/12 398,500 398,500
District Rev.
1,875,000 1,875,000 Brevard County Health 7.500 11/15/12 1,755,469 1,755,469
Facilities Authority Rev.
(Coutney Springs Village)
3,500,000 3,500,000 Brevard County Tourist 6.875 03/01/13 3,198,125 3,198,125
Development Tax Rev.
(Marlins Spring Training
Project)
250,000 250,000 Broward County Educ. 7.500 04/01/17 275,312 275,312
Facilities Authority Rev.
(Nova University)
120,000 120,000 Broward County HFA, 7.350 03/01/11 123,000 123,000
Home Mortgage Rev.,
GNMA Collateralized
1,000,000 1,000,000 Broward County HFA, 7.350 03/01/23 1,021,250 1,021,250
Home Mortgage Rev.,
GNMA/FNMA Collateralized
650,000 650,000 Charlotte County Health 7.559 08/30/27 502,937 502,937
Facilities Authority Rev.,
RIBS, (Bon Secours Hospital)
-- FSA +
500,000 500,000 City of Atlantis 6.500 09/01/22 464,375 464,375
Water & Sewer Rev.
1,545,000 1,545,000 City of Hialeah Gardens 7.875 12/01/07 1,463,888 1,463,888
IDR (The Waterford
Convalescent Project)
1,000,000 1,000,000 City of Largo Health 6.200 03/01/13 840,000 840,000
System Rev. (Suncoast
Hospital)
3,000,000 3,000,000 City of Tampa Rev. 7.750 05/01/27 2,966,250 2,966,250
(The Florida Aquarium Inc.
Project)
1,695,000 1,695,000 Collier County Special 5.375 11/01/07 1,502,194 1,502,194
Assessment Rev. (Pine Ridge
Industrial Park & Naples
Production Park)
925,000 925,000 Collier County Special 5.600 11/01/13 778,156 778,156
Assessment Rev. (Pine
Ridge Industrial Park &
Naples Production Park)
1,125,000 1,125,000 Crossing at Fleming Island 7.375 10/01/19 1,008,281 1,008,281
Community Development
District Rev.
535,000 535,000 Escambia County Health 9.250 01/01/06 555,731 555,731
Facilities Authority Rev.
(Azalea Trace Inc.)
75,000 75,000 Escambia County Health 9.250 01/01/12 78,562 78,562
Facilities Authority Rev.
(Azalea Trace Inc.)
350,000 350,000 Escambia County Health 8.500 01/01/19 357,438 357,438
Facilities Authority Rev.
(Azalea Trace Inc.)
250,000 250,000 Escambia County Health 6.750 10/01/14 230,000 230,000
Facilities Authority Rev.
(Baptist Hospital and Baptist
Manor, Inc.)
3,000,000 3,000,000 Escambia County Health 6.000 10/01/14 2,520,000 2,520,000
Facilities Authority Rev.
(Baptist Hospital and Baptist
Manor, Inc.).
150,000 150,000 Escambia County Health 13.250 01/15/15 155,055 155,055
Facilities Authority Rev.
(Baptist Manor Inc.)
1,000,000 1,000,000 Hillsborough County Aviation 6.800 01/01/24 875,000 875,000
Authority Rev. (Delta Airlines)
1,150,000 1,150,000 Hillsborough County Capital 6.750 07/01/22 1,145,688 1,145,688
Improvement Rev.
3,500,000 3,500,000 Homestead IDR (Community 7.950 11/01/18 3,154,375 3,154,375
Rehabilitation Providers
Program)
750,000 750,000 Jacksonville Health 7.000 12/01/14 690,000 690,000
Facilities Authority Rev.
(Cypress Village Project)
1,000,000 1,000,000 Jacksonville Health 7.000 12/01/22 897,500 897,500
Facilities Authority Rev.
(Cypress Village Project)
2,965,000 2,965,000 Leon County Educ. Facilities 8.250% 05/01/14 2,853,813 2,853,813
Authority Rev (Student Housing)
675,000 675,000 Martin County IDR Rev. 7.875% 12/15/25 680,906 680,906
(Indiantown Cogeneration PJ-A)
400,000 400,000 Nassau County PCR, (ITT 6.250 06/01/10 375,000 375,000
Rayonier Inc. Project)
500,000 500,000 North Palm Beach Water 6.875 11/01/13 477,500 477,500
Control District Project 2
500,000 500,000 North Palm Beach Water 7.000 08/01/15 478,750 478,750
Control District Rev. #3A-1
1,310,000 1,310,000 North Springs IMPT Water 8.200 05/01/24 1,311,637 1,311,637
Management
500,000 500,000 Pace Property Finance 6.250 09/01/13 453,125 453,125
Authority Utility Rev.
1,500,000 1,500,000 Palm Beach County Health 6.200 10/01/11 1,331,250 1,331,250
Facilities Authority Rev.
(Good Samaritan Hospital)
1,000,000 1,000,000 Palm Beach County Health 6.300 10/01/22 862,500 862,500
Facilities Authority Rev.
(Good Samaritan Hospital)
2,000,000 2,000,000 Palm Beach County IDA Rev. 6.850 02/15/21 1,760,000 1,760,000
(Okeelanta Power Ltd
Partnership Project)
2,000,000 2,000,000 Palm Beach County IDA Rev. 6.950 01/01/22 1,780,000 1,780,000
(Osceola Power Ltd
Partnership Project)
400,000 400,000 Palm Beach Health 7.750 10/01/15 382,000 382,000
Facilities Authority Rev.
(The Waterford Project)
500,000 500,000 Pinellas County Educ. 6.600 08/01/18 448,750 448,750
Facilities Authority Rev.
(Eckerd College)
685,000 685,000 Pinellas County Educ. 7.750 07/01/14 717,538 717,538
Facilities Authority Rev.
(Eckerd College)
600,000 600,000 Pinellas County Educ. 6.500 08/01/13 538,500 538,500
Facilities Authority Rev.
(Eckerd College)
</TABLE>
<PAGE>
PRO FORMA COMBINING PORTFOLIOS OF INVESTMENTS OF
EVERGREEN FLORIDA HIGH INCOME FUND AND
ABT FLORIDA HIGH INCOME MUNICIPAL BOND FUND
DECEMBER 31, 1994
(unaudited)
<TABLE>
<CAPTION>
ABT ABT
EVERGREEN FLORIDA EVERGREEN FLORIDA
FLORIDA HIGH FLORIDA HIGH
HIGH INCOME HIGH INCOME
INCOME MUNICIPAL PRO FORMA INCOME MUNICIPAL PRO FORMA
FUND BOND FUND COMBINED FUND BOND FUND COMBINED
- ----------------------------------------------------------------- INTEREST MATURITY ------------------------------------
PRINCIPAL AMOUNT MUNICIPAL BONDS RATE* DATE VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 370,000 $ 370,000 Plantation Health 7.625% 12/01/12 $ $ 357,050 $ 357,050
Facilities Authority Rev.
(Covenant Retirement
Communities Inc.)
5,000,000 5,000,000 Polk County IDA 7.525 01/01/15 4,956,250 4,956,250
(IMC Global, Inc.)
1,000,000 1,000,000 Port Everglades Authority 7.500 09/01012 1,022,500 1,022,500
Rev.
1,800,000 1,800,000 Quantum Community 7.750 03/01/14 1,689,750 1,689,750
Development District Rev.
2,100,000 2,100,000 Riverwood Community 7.750 10/01/14 1,945,125 1,945,125
Development District Rev.
3,500,000 3,500,000 South Indian River Water 7.500 11/01/18 3,285,625 3,285,625
Control District Rev. #15
1,000,000 1,000,000 St. John's IDA (Vicar's 6.570 02/15/12 915,000 915,000
Landing Project)
350,000 350,000 St. Lucie County Water and 7.500 10/01/22 329,875 329,875
Sewer Authority Rev.
2,510,000 2,510,000 Tampa Capital Improvement 8.375 10/01/18 2,604,125 2,604,125
Program Rev.
1,000,000 1,000,000 Tarpon Springs Health 7.500 05/01/11 955,000 955,000
Facilities Authority Rev.
(Helen Ellis Hospital)
2,000,000 2,000,000 Virgin Islands Water and 7.600 12/31/07 2,032,500 2,032,500
Sewer Authority Rev.
250,000 250,000 Winter Haven Housing 7.000 07/01/12 252,812 252,812
Authority MFHR, FHA Insured
250,000 250,000 Winter Haven Housing 7.000 07/01/24 251,250 251,250
Authority MFHR, FHA Insured
------------------------------------
TOTAL INVESTMENTS (Cost $68,518,035) $ - $64,102,892 $64,102,892
------------------------------------
<FN>
*The interest rates shown are the rates in effect at December 31,
1994.
+ RIBS -- inverse floating rate security whose coupon is based on
receiving twice the underlying bond coupon less a floating interest
rate. As the floating interest rate moves higher, the income received
on the RIB decreases. If the floating interest rate were to go high
enough, the coupon rate on the RIB could be zero or negative. The rate
shown represents the RIB rate at December 31, 1994.
ABBREVIATIONS
FHA -- Federal Housing Authority
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
HFA -- Housing Financial Authority
IDA -- Industrial Development Authority
IDR -- Industrial Development Revenue
MFHR -- Multifamily Housing Revenue
PCR -- Pollution Control Revenue
</FN>
</TABLE>
See notes to pro forma financial statements
<PAGE>
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES OF
EVERGREEN FLORIDA HIGH INCOME FUND AND
ABT FLORIDA HIGH INCOME MUNICIPAL BOND FUND
DECEMBER 31, 1994
(unaudited)
<TABLE>
<CAPTION>
EVERGREEN ABT FLORIDA
FLORIDA HIGH INCOME
HIGH INCOME MUNICIPAL PRO FORMA
FUND BOND FUND ADJUSTMENTS COMBINED
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments in securities at value
(cost $0; $68,518,035; and
$68,518,035, respectively) $ $64,102,892 $64,102,892
Cash 10 1,382,492 1,382,502
Receivables:
Fund shares sold 371,149 371,149
Interest 1,390,384 1,390,384
Other 12,500 12,500
Deferred organization costs 12,500 (12,500) -
Prepaid expenses 15,752 15,752
------------ ----------- ----------- -----------
Total assets 10 67,275,169 - 67,275,179
------------ ----------- ----------- -----------
LIABILITIES
Payables:
Investment securities purchased 1,318,355 1,318,355
Fund shares redeemed 291,274 291,274
Dividends 372,503 372,503
Accrued expenses 51,732 51,732
------------ ----------- ----------- -----------
Total liabilities - 2,033,864 2,033,864
------------ ----------- ----------- -----------
Net assets $ 10 $65,241,305 $ - $65,241,315
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
Shares outstanding 1 6,797,117 - 6,797,118*
------------ ----------- ----------- -----------
Net asset value (total net assets DIVIDED BY
shares outstanding) $9.60 $9.60 - $9.60
------------ ----------- ----------- -----------
<FN>
*Class A Investment Shares.
</FN>
</TABLE>
See notes to pro forma financial statements
<PAGE>
PRO FORMA COMBINING STATEMENT OF OPERATIONS OF
EVERGREEN FLORIDA HIGH INCOME FUND AND
ABT FLORIDA HIGH INCOME MUNICIPAL BOND FUND
FOR THE YEAR ENDED DECEMBER 31, 1994
(unaudited)
<TABLE>
<CAPTION>
EVERGREEN ABT FLORIDA
FLORIDA HIGH INCOME
HIGH INCOME MUNICIPAL PRO FORMA
FUND BOND FUND ADJUSTMENTS COMBINED
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest $ - $ 4,991,576 $ 4,991,576
------------ ----------- ----------- -----------
Expenses:
Investment Advisory fees 433,952 433,952
Distribution fees 180,894 180,894
Transfer agent fees 70,851 (10,000) (1) 60,851
Administrative fees 48,958 48,958
Accounting fees 47,878 (5,000) (1) 42,878
Custodian fees 7,065 7,065
Registration fees and expenses 22,762 22,762
Directors' fees and expenses 3,516 3,516
Insurance 9,753 9,753
Audit fees and expenses 12,743 12,743
Printing and shareholder communications 8,226 3,700 (1) 11,926
Legal fees and expenses 12,351 12,351
Amortization of organization expense 5,080 5,080
Other 1,620 1,620
------------ ----------- ----------- -----------
Total expenses - 865,649 (11,300) 854,349
Less expenses reimbursed (497,908) 280,985 (2) (216,923)
------------ ----------- ----------- -----------
Net expense - 367,741 269,685 637,426
------------ ----------- ----------- -----------
Net investment income - 4,623,835 (269,685) 4,354,150
------------ ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments (1,350,149) (1,350,149)
Change in unrealized appreciation (6,750,867) (6,750,867)
------------ ----------- ----------- -----------
Net realized and unrealized gain (loss) on investments - (8,101,016) - (8,101,016)
------------ ----------- ----------- -----------
Net change in net assets resulting from operations $ - $(3,477,181) $(269,685) $(3,746,866)
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
<FN>
(1) Reflects adjustments to fees based on the fee schedules to be in effect for
Evergreen Florida High Income Fund.
(2) Reflects reduction in waiver of investment advisory fees and reimbursement
of other Fund expenses based upon the voluntary agreement by Evergreen to limit
investment advisory fees to 0.30% of average net assets.
</FN>
</TABLE>
See notes to pro forma financial statements
<PAGE>
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS OF
EVERGREEN FLORIDA HIGH INCOME FUND AND
ABT FLORIDA HIGH INCOME MUNICIPAL BOND FUND
DECEMBER 31, 1994
(unaudited)
1. BASIS OF COMBINATION
The Pro Forma Combining Portfolio of Investments and Pro Forma Combining
Statement of Assets and Liabilities reflect the accounts of Evergreen Florida
High Income Fund (Evergreen) and ABT Florida High Income Municipal Bond Fund
(ABT) at December 31, 1994. The Pro Forma Combining Statement of Operations
reflects the accounts of Evergreen and ABT for the year ended December 31, 1994.
Evergreen was organized as a separate series of Evergreen Municipal Trust on
March 15, 1995, for the sole purpose of merging with ABT. Evergreen did not
have any assets or operations as of the date of these pro forma statements, and
will not have any assets or operations until the merger with ABT. These
statements have been derived from ABT's books and records utilized in
calculating daily net asset value at December 31, 1994.
The pro forma statements give effect to the proposed transfer of the assets
and stated liabilities of ABT in exchange for Class A investment shares of
Evergreen under generally accepted accounting principles. The historical cost
of investment securities will be carried forward to the surviving entity and the
results of operations of Evergreen for pre-combination periods will not be
restated. The pro forma statements do not reflect the expenses of either fund
in carrying out its obligations under the Agreement and Plan of Reorganization.
The actual fiscal year of the combined Fund will be August 31, the fiscal year
end of Evergreen.
The Pro Forma Combining Portfolio of Investments, the Pro Forma Combining
Statement of Assets and Liabilities and the Pro Forma Combining Statement of Net
Investment Income should be read in conjunction with the historical financial
statements of ABT included or incorporated by reference in the Statement of
Additional Information.
2. SHARES OF BENEFICIAL INTEREST
The pro forma net asset value per share assumes the issuance of shares of
Evergreen Class A investment stock, which would have been issued at December 31,
1994, in connection with the proposed reorganization.
3. PRO FORMA OPERATIONS
The Pro Forma Statement of Operations assumes the same rate of gross
investment income for the investments of ABT. Pro forma operation expenses
include the actual expenses of ABT and the combined Fund with certain expenses
adjusted to reflect the expected expenses of the combined Fund.
<PAGE>
THE EVERGREEN MUNICIPAL TRUST
PART C
OTHER INFORMATION
Item 15. Indemnification
The response to this item is incorporated by reference to "Liability and
Indemnification of Trustees" under the caption "Comparative Information on
Shareholders' Rights" in Part A of this Registration Statement.
Item 16. Exhibits:
1(a)Declaration of Trust. Incorporated by reference to the Registrant's
Registration Statement on Form N-1A filed on July 18, 1988 -- Registration
No. ("Form N-1A Registration Statement").
1(b)Certificate of Amendment to Declaration of Trust. Incorporated by reference
to Post-Effective Amendment No. 16 to the Registrant's Form N-1A
Registration Statement filed on January 3, 1995.
1(c)Instrument providing for the Establishment and Designation of Classes.
Incorporated by reference to Post-Effective Amendment No. 16 to the
Registrant's Form N-1A Registration Statement filed on January 3, 1995 and
to Post-Effective Amendment No. 17 to the Registrant's Form N-1A
Registration Statement filed on April 3, 1995.
2(a) By-Laws. Incorporated by reference to the Form N-1A Registration Statement.
3 Not applicable.
4 Agreement and Plan of Reorganization. Exhibit A to Prospectus contained in
Part A of this Registration Statement.
5 Not applicable.
6 Form of Investment Advisory Agreement between First Union National Bank of
North Carolina and the Registrant. Incorporated by reference to Post-
Effective Amendment No. 17 to the Registrant's Form N-1A Registration
Statement filed on April 3, 1995.
7 Distribution Agreement between Evergreen Funds Distributor, Inc. and the
Registrant. Incorporated by reference to Post-Effective Amendment No. 16 to
the Registrant's Form N-1A Registration Statement filed on January 3, 1995.
8 Not applicable.
9 Custody Agreement between State Street Bank and Trust Company and
Registrant. Incorporated by reference to Pre- Effective Amendment No. 2 to
the Registrant's Form N-1A Registration Statement filed on September 15,
1988.
10 Form of Distribution Plan (relating to Class A Shares). Incorporated by
reference to Post-Effective Amendment No. 17 to the Registrant's Form N-1A
Registration Statement filed on March 31, 1995.
11 Opinion and consent of Shereff, Friedman, Hoffman & Goodman, LLP. Filed
herewith.
12 Tax opinion and consent of Sullivan & Worcester. Filed herewith.
13 Form of Administration Agreement. Incorporated by reference to Post-
Effective Amendment No. 17 to the Registrant's Form N-1A Registration
Statement filed on April 3, 1995.
14 Consent of Tait, Weller & Baker, independent accountants, as to the use of
their report dated June 3, 1994 covering the financial statements of the ABT
Florida High Income Municipal Bond Fund for the fiscal year ended April 30,
1994. Filed herewith.
15 Not applicable.
16 Not applicable.
17(a) Form of Proxy Card. Filed herewith.
17(b) Registrant's Rule 24f-2 Declaration. Filed herewith.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is a part of
this Registration Statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of 1933,
the reoffering prospectus will contain the information called for by the
applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities Act
of 1933, each post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and the offering
of the securities at that time shall be deemed to be the initial bona fide
offering of them.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant, in the City of New York and State of New
York, on the 3rd day of April, 1995.
Registrant: Evergreen Trust
By: /s/ John J. Pileggi
----------------------------------
Name: John J. Pileggi
Title: President
Each person whose signature appears below hereby authorizes John J.
Pileggi, Joan V. Fiore and Joseph J. McBrien, as attorney-in-fact, to sign on
his behalf, any amendments to this Registration Statement and to file the same,
with all exhibits thereto, with the Securities and Exchange Commission and any
state securities commission.
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature Title Date
/s/ John J. Pileggi President (Principal April 3, 1995
- -----------------------
John J. Pileggi Executive Officer) and
Treasurer (Principal
Financial and Accounting
Officer)
/s/ Laurence B. Ashkin Trustee April 3, 1995
- -----------------------
Laurence B. Ashkin
/s/ Foster Bam Trustee April 3, 1995
- -----------------------
Foster Bam
/s/ Robert J. Jefferies Trustee April 3, 1995
- -----------------------
Robert J. Jefferies
/s/ James Howell Trustee April 3, 1995
- ----------------------
James Howell
/s/ Gerald McDonnell Trustee April 3, 1995
- ----------------------
Gerald McDonnell
/s/ Thomas L. McVerry Trustee April 3, 1995
- -----------------------
Thomas L. McVerry
/s/ William W. Pettit Trustee April 3, 1995
- -----------------------
William W. Pettit
/s/ Russell A. Salton, III Trustee April 3, 1995
- --------------------------
Russell A. Salton, III
/s/ Michael S. Scofield Trustee April 3, 1995
- -----------------------
Michael S. Scofield
<PAGE>
EXHIBIT INDEX
Exhibit Page
No. Description of Exhibit No.
11. Opinion and consent of
Shereff, Friedman, Hoffman &
Goodman, LLP.
12. Tax opinion and consent of
Sullivan & Worcester.
14. Consent of Tait, Weller &
Baker, independent
accountants.
17(a). Form of Proxy Card.
17(b). Registrant's Rule 24f-2
Declaration.
SHEREFF, FRIEDMAN, HOFFMAN & GOODMAN, LLP
919 Third Avenue
New York, New York 10022
March 31, 1995
The Evergreen Municipal Trust
2500 Westchester Avenue
Purchase, New York 10577
Ladies and Gentlemen:
We have acted as counsel to The Evergreen Municipal Trust (the
"Trust") in connection with the proposed reorganization (the "Reorganization")
of the ABT Florida High Income Municipal Bond Fund (the "ABT Fund"), a portfolio
of ABT Southern Master Trust. Pursuant to the proposed Reorganization,
substantially all of the assets and certain identified liabilities of the ABT
Fund will be transferred to Evergreen Florida High Income Municipal Bond Fund
(the "Evergreen Fund"), a newly formed series of the Trust, in exchange for
Class A shares of the Evergreen Fund.
The shares of the Evergreen Fund being issued in connection
with the Reorganization are being registered with the Securities and Exchange
Commission pursuant to a registration statement on Form N-14 (the "Registration
Statement").
In connection with the foregoing, we have examined, among
other things, the Declaration of Trust and By-Laws of the Trust; the draft of
the Prospectus/Proxy Statement that is contained in the Registration Statement;
and such other records and documents as we have deemed necessary in order to
enable us to express the opinion set forth below. In our examination, we have
assumed the genuineness of all signatures, the authority of all signatories
other than on behalf of the Trust, the authenticity of all documents submitted
to us as originals and the conformity to original documents of all documents
submitted to us as certified or photostatic copies.
Subject to the effectiveness of the Registration Statement and
compliance with the applicable provisions of the Declaration of Trust and
By-Laws of the Trust as well as applicable state securities laws, and based on
and subject to the foregoing examination and assumptions and assuming that the
sale and issuance thereof is made in the manner contemplated in the
Prospectus/Proxy Statement contained in the Registration Statement, it is our
opinion that upon payment of a consideration therefor not less than the greater
of net asset value or par value per share, the shares of beneficial interest of
the Evergreen Fund which are being registered in the Registration Statement and
will be issued to the ABT Fund in the Reorganization, will be, when sold,
legally issued, fully paid and non-assessable. However, we note that as set
forth in the Registration Statement, shareholders of the Evergreen Fund might,
under certain circumstances, be liable for transactions effected by the
Evergreen Fund.
We are members of the Bar of the State of New York and do not
hold ourselves out as being conversant with the laws of any jurisdiction other
than those of the United States of America and the State of New York. We note
that we are not licensed to practice law in the Commonwealth of Massachusetts,
and to the extent that any opinion herein involves the law of Massachusetts,
such opinion should be understood to be based solely upon our review of the
documents referred to above, the published statutes of that Commonwealth and,
where applicable, published cases, rules or regulations of regulatory bodies of
that Commonwealth.
We hereby consent to the filing of this opinion with the
Securities and Exchange Commission as part of the Registration Statement and
with any state securities commission where such filing is required.
Very truly yours,
/s/Shereff, Friedman, Hoffman & Goodman, LLP
Shereff, Friedman, Hoffman & Goodman, LLP
SULLIVAN & WORCESTER
ONE POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109
(617) 338-2800
TELECOPIER NO. 617-338-2880
TWX: 710-321-1976
IN WASHINGTON, D.C. IN NEW YORK CITY
1025 CONNECTICUT AVENUE. N.W. 767 THIRD AVENUE
WASHINGTON, D.C. 20038 NEW YORK, NEW YORK 10017
(202) 775-8190 (212) 486-8200
TELECOPIER NO. 202-293-2275 TELECOPIER NO. 212-756-2151
April 3, 1995
ABT Florida High Income Municipal Bond Fund
340 Royal Palm Way
Palm Beach, Florida 33480
Evergreen Florida High Income Municipal Bond Fund
2500 Westchester Avenue
Purchase, New York 10577
Re: Acquisition of Assets of ABT Florida High Income
Municipal Bond Fund
Ladies and Gentlemen:
You have asked for our opinion as to certain tax consequences of the
proposed acquisition of assets of ABT Florida High Income Municipal Bond Fund
("Selling Fund"), a series of ABT Southern Master Trust, a Massachusetts
business trust, by Evergreen Florida High Income Municipal Bond Fund ("Acquiring
Fund"), a new portfolio of The Evergreen Municipal Trust, a Massachusetts
business trust, in exchange for voting shares of Acquiring Fund (the
"Reorganization").
In rendering our opinion, we have reviewed and relied upon the form of
Agreement and Plan of Reorganization dated March 15, 1995 (the "Reorganization
Agreement") between ABT Investment Series, Inc. on behalf of Selling Fund and
The Evergreen Municipal Trust on behalf of Acquiring Fund and the related
preliminary Prospectus/Proxy Statement dated April 3, 1995. We have relied,
without independent verification, upon the factual statements made therein, and
assume that there will be no change in material facts disclosed therein between
the date of this letter and the date of closing of the Reorganization. We
further assume that the Reorganization will be carried out in accordance with
the Reorganization Agreement. We have also relied upon the following
representations, each of which has been made to us by officers of ABT Southern
Master Trust on behalf of Selling Fund or of The Evergreen Municipal Trust on
behalf of Acquiring Fund:
A. Selling Fund has not redeemed and will not redeem the
shares of any of its shareholders in connection with the
Reorganization except to the extent necessary to comply with its
legal obligation to redeem its shares.
<PAGE>
ABT Florida High Income Municipal Bond Fund
Evergreen Florida High Income Municipal Bond Fund
April 3, 1995
Page 2
B. The management of Acquiring Fund has no plan or intention to redeem
or reacquire any of the Acquiring Fund shares to be received by Selling Fund
shareholders in connection with the Reorganization, except to the extent
necessary to comply with its legal obligation to redeem its shares.
C. The management of Acquiring Fund has no plan or intention to sell or
dispose of any of the assets of Selling Fund which will be acquired by Acquiring
Fund in the Reorganization, except for dispositions made in the ordinary course
of business, and to the extent necessary to enable Acquiring Fund to comply with
its legal obligation to redeem its shares.
D. Following the Reorganization, Acquiring Fund will continue the
historic business of Selling Fund in a substantially unchanged manner as part of
the regulated investment company business of Acquiring Fund, or will use a
significant portion of Selling Fund's historic business assets in a business.
E. Acquiring Fund will not make any payment of cash or of
property other than shares to Selling Fund or to any shareholder
of Selling Fund in connection with the Reorganization.
F. To the best knowledge of management of Selling Fund, there is no
plan or intention on the part of the holders of shares of Selling Fund to sell,
exchange or otherwise dispose of any of the shares of Acquiring Fund received in
the transaction.
G. Immediately following consummation of the transaction, Acquiring
Fund will possess the same assets and liabilities, except for assets used to pay
expenses incurred in connection with the transaction, as those possessed by
Selling Fund immediately prior to the transaction.
H. Neither Selling Fund nor Acquiring Fund expects to
issue additional shares other than in the ordinary course of its
business as a regulated investment company.
I. The foregoing representations are true on the date of
this letter and will be true on the date of closing of the
Reorganization.
Based on and subject to the foregoing, and our examination of the legal
authority we have deemed to be relevant, it is our opinion that for federal
income tax purposes:
1. The acquisition by Acquiring Fund of substantially all of the assets
of Selling Fund solely in exchange for voting shares of Acquiring Fund followed
by the distribution by Selling Fund of said Acquiring Fund shares to the
shareholders of Selling Fund in exchange for their Selling Fund shares will
constitute a
<PAGE>
ABT Florida High Income Municipal Bond Fund
Evergreen Florida High Income Municipal Bond Fund
April 3, 1995
Page 3
reorganization within the meaning of ss. 368(a)(1)(F) of the Code, and Acquiring
Fund and Selling Fund will each be "a party to a reorganization" within the
meaning of ss. 368(b) of the Code.
2. No gain or loss will be recognized to Selling Fund upon the transfer
of substantially all of its assets to Acquiring Fund solely in exchange for
Acquiring Fund voting shares and assumption by Acquiring Fund of any liabilities
of Selling Fund, or upon the distribution of such Acquiring Fund voting shares
to the shareholders of Selling Fund in exchange for all of their Selling Fund
shares.
3. No gain or loss will be recognized by Acquiring Fund upon the
receipt of the assets of Selling Fund (including any cash retained initially by
Selling Fund to pay liabilities but later transferred) solely in exchange for
Acquiring Fund voting shares and assumption by Acquiring Fund of any liabilities
of Selling Fund.
4. The basis of the assets of Selling Fund acquired by Acquiring Fund
will be the same as the basis of those assets in the hands of Selling Fund
immediately prior to the transfer, and the holding period of the assets of
Selling Fund in the hands of Acquiring Fund will include the period during which
those assets were held by Selling Fund.
5. The shareholders of Selling Fund will recognize no gain or loss upon
the exchange of all of their Selling Fund shares solely for Acquiring Fund
voting shares. Gain, if any, will be realized by Selling Fund shareholders who
in exchange for their Selling Fund shares receive other property or money in
addition to Acquiring Fund shares, and will be recognized, but not in excess of
the amount of cash and the value of such other property received. If the
exchange has the effect of the distribution of a dividend, then the amount of
gain recognized that is not in excess of the ratable share of undistributed
earnings and profits of Selling Fund will be treated as a dividend.
6. The basis of the Acquiring Fund voting shares to be received by the
Selling Fund shareholders will be the same as the basis of the Selling Fund
shares surrendered in exchange therefor.
7. The holding period of the Acquiring Fund voting shares to be
received by the Selling Fund shareholders will include the period during which
the Selling Fund shares surrendered in exchange therefor were held, provided the
Selling Fund shares were held as a capital asset on the date of the exchange.
This opinion letter is delivered to you in satisfaction of the
requirements of Section 8.6 of the Reorganization Agreement.
<PAGE>
ABT Florida High Income Municipal Bond Fund
Evergreen Florida High Income Municipal Bond Fund
April 3, 1995
Page 4
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form N-14 and to use of our name and any reference to
our firm in the Registration Statement or in the Prospectus/Proxy Statement
constituting a part thereof. In giving such consent, we do not thereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Sullivan & Worcester
SULLIVAN & WORCESTER
<PAGE>
March 31, 1995
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of The Evergreen Municipal Trust of our report dated June 3, 1994 to the
Shareholders and Board of Directors of ABT Southern Master Trust, which report
is included in the Annual Report to Shareholders for the year ended April 30,
1994 which is incorporated by reference in the Registration Statement.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
March 29, 1995
VOTE THIS PROXY CARD TODAY
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
................................................................
ABT SOUTHERN MASTER TRUST
SPECIAL MEETING OF
SHAREHOLDERS -- JUNE 15,1995
The undersigned hereby appoints Edward W. Cook, Timothy W. Cox and Steven
Eldridge and each of them, attorneys and proxies for the undersigned, with full
powers of substitution and revocation, to represent the undersigned and to vote
on behalf of the undersigned all shares of the ABT Florida High Income Municipal
Bond Fund (the "Fund"), a portfolio of ABT Southern Master Trust (the "Trust"),
which the undersigned is entitled to vote at a Meeting of Shareholders of the
Fund to be held at 340 Royal Palm Way, Palm Beach, Florida 33480 on June 15,
1995, at 10:00 a.m. and any adjournments thereof (the "Meeting"). The
undersigned hereby acknowledges receipt of the Notice of Meeting and
Prospectus/Proxy Statement, and hereby instructs said attorneys and proxies to
vote said shares as indicated hereon. In their discretion, the proxies are
authorized to vote upon such other matters as may properly come before the
Meeting. A majority of the proxies present and acting at the Meeting in person
or by substitute (or, if only one shall be so present, then that one) shall have
and may exercise all of the powers and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
NOTE: Please sign exactly as your name appears on this Proxy. If joint owners,
EITHER may sign this Proxy. When signing as attorney, executor, administrator,
trustee, guardian, or corporate officer, please give your full title.
DATE:______________, 1995 _____________________________
------------------------------
Signature(s)
------------------------------
Title(s), if applicable
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
<PAGE>
PLEASE INDICATE YOUR VOTE BY AN "X" IN THE APPROPRIATE BOX BELOW. THIS PROXY
WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE TAKEN ON THE
FOLLOWING PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION, THIS PROXY WILL BE
VOTED IN FAVOR OF THE PROPOSALS.
1. To approve the proposed Agreement and Plan of Reorganization
with the Evergreen Florida High Income Municipal Bond Fund.
o YES o NO o ABSTAIN
2. To consider and vote upon such other matters as may properly
come before said meeting or any adjournments thereof.
o YES o NO o ABSTAIN
These items are discussed in greater detail in the attached
Prospectus/Proxy Statement. The Board of Trustees of the Fund has fixed the
close of business on April 17, 1995, as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE
REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED
ENVELOPE WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. INSTRUCTIONS FOR
THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON THE INSIDE COVER.
Timothy W. Cox
Secretary
May 3, 1995
In their discretion, the Proxies, and each of them, are authorized to
vote upon any other business that may properly come before the meeting, or any
adjournment(s) thereof, including any adjournment(s) necessary to obtain the
requisite quorums and for approvals.
File No.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-lA
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 1
Post-Effective Amendment No.
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 1
THE EVERGREEN MUNICIPAL TRUST
(Exact name of Registrant as specified in Charter)
550 Mamaroneck Avenue
Harrison, New York 10528
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code:
(914) 698-5711
JOSEPH J. MCBRIEN, Esg.
550 Mamaroneck Avenue
Harrison, New York 10528
(Name and Address of Agent for Service)
Copies to:
Stanley J. Friedman, Esg.
Shereff, Friedman, Hoffman & Goodman
919 Third Avenue
New York, New York 10022
Approximate date of proposed public offering: As soon as practicable after
this Registration Statement becomes effective.
Registrant has elected to register an indefinite number of shares of beneficial
interest, par value $.0001 per share, pursuant to Rule 24f-2 under the
Investment Company Act of 1940. The registration fee of $500.00 was paid with
the filing of the Registration Statement.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which Specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as theCommission, acting pursuant to Section 8(a), may
determine.
