EVERGREEN VARIABLE TRUST /OH, 497, 1997-10-30

EVERGREEN VARIABLE TRUST /OH
497, 1997-10-30

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PROSPECTUS March 3, 1997
as supplemented October 22, 1997

EVERGREEN VARIABLE TRUST (Evergreen Tree Symbol appears here)

EVERGREEN VA FUND
EVERGREEN VA GROWTH AND INCOME FUND
EVERGREEN VA FOUNDATION FUND
EVERGREEN VA GLOBAL LEADERS FUND
EVERGREEN VA STRATEGIC INCOME FUND
EVERGREEN VA AGGRESSIVE GROWTH FUND

The Evergreen Variable Trust (the "Trust") is designed to provide
investors with a selection of investment alternatives which seek to provide
capital growth, income and diversification through its six investment
series (the "Funds"). The Trust is an open-end management investment
company. This Prospectus sets forth concise information about the Trust and
the Funds that a prospective investor should know before investing. Shares
of the Funds are only sold to (a) separate accounts funding variable
annuity and variable life insurance contracts issued by life insurance
companies; and (b) qualified pension and retirement plans. The address of
the Trust is 200 Berkeley Street, Boston, Massachusetts 02116.

A Statement of Additional Information for the Trust dated March 3,
1997 has been filed with the Securities and Exchange Commission and is
incorporated by reference herein. The Statement of Additional Information
provides information regarding certain matters discussed in this Prospectus
and other matters which may be of interest to investors, and may be
obtained without charge by calling the Trust at (800)321-9332. There can be
no assurance that the investment objective of any Fund will be achieved.
Investors are advised to read this Prospectus carefully.

THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
ANY BANK OR ANY SUBSIDIARIES OF A BANK, ARE NOT ENDORSED OR GUARANTEED BY
ANY BANK, AND ARE NOT INSURED OR OTHERWISE PROTECTED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER GOVERNMENT AGENCY AND INVOLVE RISK, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

KEEP THIS PROSPECTUS FOR FUTURE REFERENCE

<PAGE>
TABLE OF CONTENTS

<TABLE>
<S> <C>
OVERVIEW OF THE FUNDS 2
FINANCIAL HIGHLIGHTS 3
DESCRIPTION OF THE FUNDS 6
Investment Objectives and Policies 6
Investment Practices and Restrictions 10
MANAGEMENT OF THE FUNDS 17
Investment Advisers 17
Sub-Adviser 19
SALE AND REDEMPTION OF SHARES 19
Participating Insurance Companies 19
Purchases 19
Redemptions 20
Dividends 20
Tax Status 20
Effect of Banking Laws 20
GENERAL INFORMATION 21
Custodian, and Transfer and Dividend
Paying Agent 21
Expenses of the Trust 21
Shareholder Rights 21
Description of Shares 22
Performance 22
General 24
</TABLE>

OVERVIEW OF THE FUNDS

The following summary is qualified in its entirety by the more detailed
information contained elsewhere in this Prospectus. See "Description of the
Funds" and "Management of the Funds".

The investment adviser to the EVERGREEN VA FUND, EVERGREEN VA FOUNDATION
FUND, EVERGREEN VA GROWTH AND INCOME FUND and EVERGREEN VA GLOBAL LEADERS FUND
is Evergreen Asset Management Corp. ("Evergreen Asset") which, with its
predecessors, has served as investment adviser to the Evergreen group of mutual
funds since 1971. Evergreen Asset is a wholly-owned subsidiary of First Union
National Bank ("FUNB"), which in turn is a subsidiary of First Union
Corporation, the sixth largest bank holding company in the United States. Lieber
& Company, which is also a wholly-owned subsidiary of FUNB, furnishes Evergreen
Asset with information, investment recommendations, advice and assistance to
augment its investment advisory services. The Capital Management Group of FUNB
serves as investment adviser to EVERGREEN VA AGGRESSIVE GROWTH FUND. The
investment adviser to the EVERGREEN VA STRATEGIC INCOME FUND is Keystone
Investment Management Company ("Keystone") which, along with its predecessors,
has provided investment advisory and management services since 1932. Keystone is
a wholly-owned subsidiary of FUNB.

EVERGREEN VA FUND seeks to achieve capital appreciation by investing in
the securities of little-known or relatively small companies, or companies
undergoing changes which the Fund's investment adviser believes will have
favorable consequences. Income will not be a factor in the selection of
portfolio investments.

EVERGREEN VA GROWTH AND INCOME FUND seeks to achieve a return composed of
capital appreciation in the value of its shares and current income. The Fund
will attempt to meet its objective by investing in the securities of companies
which are undervalued in the marketplace relative to those companies' assets,
breakup value, earnings, or potential earnings growth.

EVERGREEN VA FOUNDATION FUND seeks, in order of priority, reasonable
income, conservation of capital and capital appreciation. The Fund invests
principally in income-producing common and preferred stocks, securities
convertible into or exchangeable for common stocks and fixed income securities.

EVERGREEN VA GLOBAL LEADERS FUND seeks to achieve capital appreciation by
investing primarily in a diversified portfolio of U.S. and non-U.S. equity
securities of companies located in the world's major industrialized countries.
The Fund's investment adviser will attempt to screen the largest companies in
the world's major industrialized countries and cause the Fund to invest, in the
opinion of the Fund's investment adviser, in the 100 best based on certain
qualitative and quantitative criteria.

EVERGREEN VA STRATEGIC INCOME FUND seeks high current income from
interest on debt securities and, secondarily, considers potential for growth of
capital in selecting securities.

EVERGREEN AGGRESSIVE GROWTH FUND seeks long-term capital appreciation by
investing primarily in common stocks of emerging growth companies and in larger,
more well established companies, all of which are viewed by the Fund's
investment adviser as having above average appreciation potential.

<PAGE>
The tables on the following pages present, for EVERGREEN VA FUND,
EVERGREEN VA FOUNDATION FUND and EVERGREEN VA GROWTH AND INCOME FUND, financial
highlights for a share outstanding throughout each period presented. The
information in the tables has been audited by KPMG Peat Marwick LLP. A report of
KPMG Peat Marwick LLP with respect to each Fund is incorporated by reference in
the Fund's Statement of Additional Information. The following information for
each Fund should be read in conjunction with the financial statements and
related notes which are incorporated by reference in the Fund's Statement of
Additional Information.

The offering of shares of the EVERGREEN VA GLOBAL LEADERS FUND, EVERGREEN
VA STRATEGIC INCOME FUND and EVERGREEN VA AGGRESSIVE GROWTH FUND is expected to
commence on or about the date of this Prospectus. Accordingly, no comparable
data is available for shares of these Funds.

Further information about a Fund's performance is contained in the Fund's
annual report to shareholders, which may be obtained without charge.

FINANCIAL HIGHLIGHTS

EVERGREEN VA FUND

<TABLE>
<CAPTION>
March 1, 1996*
through
December 31, 1996
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period.................................................................... $10.00
Income from investment operations:
Net investment income................................................................................. .05
Net realized and unrealized gain on investments....................................................... 1.44
Total income from investment operations............................................................. 1.49
Less distributions to shareholders from:
Net investment income................................................................................. (.05)
Net realized gain on investments...................................................................... (.03)
Total distributions................................................................................. (.08)
Net asset value, end of period.......................................................................... $11.41
TOTAL RETURN+........................................................................................... 14.9%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................................................... $ 10,862
Ratios to average net assets:
Expenses.............................................................................................. 1.00%#
Net investment income................................................................................. .87%#
Portfolio turnover rate................................................................................. 6%
Average commission rate paid per share.................................................................. $.0661
</TABLE>

* Commencement of operations.
+ Total return is calculated on net asset value per share for the period
indicated and is not annualized.
# Annualized and net of expense waivers and reimbursement. If the Fund had borne
all expenses that were assumed or waived by the investment advisor, the
annualized ratios of expenses and net investment loss to average net assets
would have been the following:

<TABLE>
<CAPTION>
March 1, 1996*
through
December 31, 1996
<S> <C>
Expenses.......................................................... 2.38%
Net investment loss............................................... (.51%)
</TABLE>

<PAGE>
EVERGREEN VA FOUNDATION FUND

<TABLE>
<CAPTION>
March 1, 1996*
through
December 31, 1996
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period.................................................................... $10.00
Income from investment operations:
Net investment income................................................................................. .16
Net realized and unrealized gain on investments....................................................... 1.37
Total income from investment operations............................................................. 1.53
Less distributions to shareholders from:
Net investment income................................................................................. (.16)
Net realized gain on investments...................................................................... (.06)
Total distributions................................................................................. (.22)
Net asset value, end of period.......................................................................... $11.31
TOTAL RETURN+........................................................................................... 15.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................................................... $ 15,812
Ratios to average net assets:
Expenses.............................................................................................. 1.00%#
Net investment income................................................................................. 2.70%#
Portfolio turnover rate................................................................................. 12%
Average commission rate paid per share.................................................................. $.0675
</TABLE>

* Commencement of operations.
+ Total return is calculated on net asset value per share for the period
indicated and is not annualized.
# Annualized and net of expense waivers and reimbursement. If the Fund had borne
all expenses that were assumed or waived by the investment advisor, the
annualized ratios of expenses and net investment income to average net assets,
would have been the following:

<TABLE>
<CAPTION>
March 1, 1996*
through
December 31, 1996
<S> <C>
Expenses.......................................................... 1.72%
Net investment income............................................. 1.98%
</TABLE>

<PAGE>
EVERGREEN VA GROWTH AND INCOME FUND

<TABLE>
<CAPTION>
March 1, 1996*
through
December 31, 1996
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period.................................................................... $10.00
Income from investment operations:
Net investment income................................................................................. .06
Net realized and unrealized gain on investments....................................................... 1.84
Total income from investment operations............................................................. 1.90
Less distributions to shareholders from:
Net investment income................................................................................. (.06)
Net realized gain on investments...................................................................... (.01)
Total distributions................................................................................. (.07)
Net asset value, end of period.......................................................................... $11.83
TOTAL RETURN+........................................................................................... 19.0%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................................................... $ 14,484
Ratios to average net assets:
Expenses.............................................................................................. 1.00%#
Net investment income................................................................................. 1.00%#
Portfolio turnover rate................................................................................. 2%
Average commission rate per share....................................................................... $.0579
</TABLE>

<TABLE>
<CAPTION>
March 1, 1996*
through
December 31, 1996
<S> <C>
Expenses.......................................................... 2.05%
Net investment loss............................................... (.05%)
</TABLE>

<PAGE>
DESCRIPTION OF THE FUNDS

INVESTMENT OBJECTIVES AND POLICIES

Each Fund's investment objective is fundamental and cannot be changed
without shareholder approval. In addition to the investment policies detailed
below, each Fund may employ certain additional investment strategies which are
discussed in "Investment Practices and Restrictions" and may be subject to
certain risks discussed under "Special Risk Considerations". There can be no
assurance that a Fund's investment objective will be achieved.

EVERGREEN VA FUND

The EVERGREEN VA FUND seeks to achieve its investment objective of
capital appreciation principally through investments in common stock and
securities convertible into or exchangeable for common stock of companies which
are little-known, relatively small or represent special situations which, in the
opinion of the Fund's investment adviser, offer potential for capital
appreciation. A "little-known" company means one whose business is limited to a
regional market or whose securities are closely held with only a small
proportion traded publicly. A "relatively small" company means one which has a
small share of the market for its products or services in comparison with other
companies in its field, or which provides goods or services for a limited
market. A "special situation" company is one which offers potential for capital
appreciation because of a recent or anticipated change in structure, management,
products or services. In addition to the securities described above, the Fund
may invest in securities of relatively well-known and large companies with
potential for capital appreciation. Investments may also be made to a limited
degree in non-convertible debt securities and preferred stocks which offer an
opportunity for capital appreciation. Short-term investments may also be made if
the Fund's investment adviser believes that such action will benefit the Fund.

EVERGREEN VA GROWTH AND INCOME FUND

The investment objective of the EVERGREEN VA GROWTH AND INCOME FUND is to
achieve a return composed of capital appreciation in the value of its shares and
current income.

The Fund seeks to achieve its investment objective by investing in the
securities of companies which are undervalued in the marketplace relative to
those companies' assets, breakup value, earnings or potential earnings growth.
These companies are often found among those which have had a record of financial
success but are currently in disfavor in the marketplace for reasons the Fund's
investment adviser perceives as temporary or erroneous.

Such investments when successfully timed are expected to be the means for
achieving the Fund's investment objective. This inherently contrarian approach
may require greater reliance upon the analytical and research capabilities of
the Fund's investment adviser than an investment in certain other equity funds.
Consequently, an investment in the Fund may involve more risk than other equity
funds.

The Fund will use the "value timing" approach as a process for purchasing
securities when events indicate that fundamental investment values are being
ignored in the marketplace. Fundamental investment value is based on one or more
of the following: assets -- tangible and intangible (examples of the latter
include brand names or licenses), capitalization of earnings, cash flow or
potential earnings growth. A discrepancy between market valuation and
fundamental value often arises due to the presence of unrecognized assets or
business opportunities, or as a result of incorrectly perceived or short-term
negative factors. Changes in regulations, basic economic or monetary shifts and
legal action (including the initiation of bankruptcy proceedings) are some of
the factors that create these capital appreciation opportunities. If the
securities in which the Fund invests never reach their perceived potential or
the valuation of such securities in the marketplace does not in fact reflect
significant undervaluation, there may be little or no appreciation or a
depreciation in the value of such securities.

The Fund will invest primarily in common stocks and securities
convertible into or exchangeable for common stock. It is anticipated that the
Fund's investments in these securities will contribute to the Fund's return
primarily through capital appreciation. In addition, the Fund will invest in
nonconvertible preferred stocks and debt securities. It is anticipated that the
Fund's investments in these securities will also produce capital appreciation
but the current income component of return will be a more significant factor in
their selection. However, the Fund will

<PAGE>
invest in nonconvertible preferred stock and debt securities only if the
anticipated capital appreciation plus income from such investments is equivalent
to that anticipated from investments in equity or equity-related securities. The
Fund may invest up to 5% of its total assets in debt securities which are rated
below investment grade, commonly known as "junk bonds". Investments of this type
are subject to greater risk of loss of principal and interest. The Fund may
invest up to 25% of its assets in foreign securities. See "Special Risk
Considerations".

EVERGREEN VA FOUNDATION FUND

The investment objectives of the EVERGREEN VA FOUNDATION FUND, in order
of priority, are reasonable income, conservation of capital and capital
appreciation. The Fund seeks to achieve these objectives by investing in a
combination of common stocks, preferred stocks, securities convertible into or
exchangeable for common stocks, corporate and U.S. Government debt obligations,
and short-term debt instruments, such as commercial paper. The Fund's common
stock investments will include those which (at the time of purchase) pay
dividends and in the view of the Fund's investment adviser have potential for
capital enhancement. The Fund may also invest up to 25% of its assets in foreign
securities. See "Special Risk Considerations".

The Fund may make investments in securities regardless of whether or not
such securities are traded on a national securities exchange. Securities not
traded on a national securities exchange are generally traded on a "net" basis
with dealers acting as principals for their own accounts without stated
commissions, although the price of the securities usually includes profits to
the dealers. While the Fund's investment adviser generally seeks reasonably
competitive spreads or commissions, the Fund will not necessarily be paying the
lowest spread or commission available. Also the market for such securities may
not be as liquid as those traded on a national securities exchange.

While income will be a factor in the selection of equity securities, the
Fund's investment adviser will attempt to identify securities that offer
potential for long term capital appreciation, but that do not exhibit any
speculative characteristics. The Fund will not make equity investments with a
view toward realizing short-term gains. The value of portfolio securities and
their yields are expected to fluctuate over time because of varying general
economic and market conditions. Accordingly, there can be no assurance that the
Fund's investment objectives will be achieved.

The Fund's asset allocation will vary from time to time in accordance
with changing economic and market conditions, including: inflation rates,
business cycle trends, business regulations and tax law impacts on the
investment markets. The composition of its portfolio will be largely
unrestricted and subject to the discretion of the Fund's investment adviser.
Under normal circumstances, the Fund anticipates that at least 25% of its net
assets will consist of fixed income securities. The balance will be invested in
equity securities (including securities convertible into equity securities).

In selecting fixed income securities for the Fund's portfolio, emphasis
will be placed on issues expected to fluctuate little in value other than as a
result of changes in prevailing interest rates. The market value of the debt
obligations in the Fund's portfolio can be expected to vary inversely to changes
in prevailing interest rates. The Fund may at times emphasize the generation of
interest income by investing in high-yielding debt securities, with short,
medium or long-term maturities. While fixed income investments will generally be
made for the purpose of generating interest income, investments in medium to
long-term debt securities (i.e., those with maturities from five to ten years
and those with maturities over ten years, respectively) may be made with a view
to realizing capital appreciation when the Fund's investment adviser believes
changes in interest rates will lead to an increase in the value of such
securities. The fixed income portion of the Fund's portfolio may include:

1. Marketable obligations of, or guaranteed by, the United States
Government, its agencies or instrumentalities, including issues of the United
States Treasury, such as bills, certificates of indebtedness, notes and bonds,
and issues of agencies and instrumentalities established under the authority of
an act of Congress. Some of these securities are supported by the full faith and
credit of the United States Government, and others are supported only by the
credit of the agency or instrumentality. Agencies or instrumentalities whose
securities are supported by the full faith and credit of the United States
include, but are not limited to, the Federal Housing Administration, Farmers
Home Administration, Export-Import Bank of the United States, Small Business
Administration and Government National Mortgage Association. Agencies or
instrumentalities whose securities are supported only by the credit of the
agency or instrumentality include the Interamerican Development Bank and the
International Bank for Reconstruction and Development. These obligations are
supported by appropriated but unpaid commitments of their member countries.
There are no assurances that the commitments will be fulfilled in the future.

<PAGE>
2. Corporate obligations rated no lower than A by Moody's Investors
Service, Inc. ("Moody's") or A-2 by Standard & Poor's Ratings Group ("S&P").

3. Obligations of banks or banking institutions having total assets of
more than $2 billion which are members of the Federal Deposit Insurance
Corporation.

4. Commercial paper of high quality (rated no lower than A-2 by S&P or
Prime-2 by Moody's or, if not rated, issued by companies which have an
outstanding long-term debt issue rated AAA or AA by S&P or Aaa or Aa by
Moody's).

Certain obligations may be entitled to the benefit of standby letters of
credit or similar commitments issued by banks and, in such instances, the Fund's
investment adviser will take into account the obligation of the bank in
assessing the quality of such security. For a description of the ratings set
forth above, see the Statement of Additional Information.

EVERGREEN VA GLOBAL LEADERS FUND

The investment objective of the EVERGREEN VA GLOBAL LEADERS FUND is to
provide long-term capital growth. It will attempt to achieve its objective by
investing primarily in a diversified portfolio of U.S. and non-U.S. equity
securities of companies located in the world's major industrialized countries.
There can be no assurance that the Fund will be able to achieve its investment
objective. Under normal conditions at least 65% of the Fund's total assets will
consist of global equity securities. The Fund will make investments in no less
than three countries, which may include the United States. In addition to the
United States, the countries in which the Fund may invest include, but are not
limited to, Australia, Austria, Belgium, Canada, Denmark, Finland, France,
Germany, Hong Kong, Italy, Japan, Malaysia, Netherlands, New Zealand, Norway,
Singapore, Spain, Sweden, Switzerland and the United Kingdom.

Evergreen Asset, the Fund's investment adviser, will attempt to screen
the largest companies in these and other major industrialized countries and
cause the Fund to invest, in the opinion of the Fund's investment adviser, in
the 100 best based on certain qualitative and quantitative criteria. Such
companies may include those with the highest return on equity and consistent
earnings growth. They may also include companies with an established market
presence, or which operate in industries or sectors that have, in the opinion of
the Fund's investment adviser, significant growth prospects. The criteria will
be reviewed and evaluated on an ongoing basis by the Fund's investment adviser.

In determining what constitutes a major industrialized country, the
Fund's investment adviser will look to classifications set forth in the Morgan
Stanley Capital International ("MSCI") Index and the various reports on this
subject disseminated by the World Bank. The Fund's investment adviser will
utilize a series of weighing techniques to insure adequate diversification by
country and industry and attempt to identify the largest companies in each
market, primarily by reference to the market capitalizations published in the
MSCI Index.

Although, as stated above, the Fund expects that investments will be made
in no less than three countries including the United States, the Fund may invest
more than 25% of its total assets in one country. To the extent that the Fund
invests more than 25% of its total assets in the securities of issuers located
in one country, the value of the Fund's shares may be subject to greater
fluctuations due to the lesser degree of diversification across countries such a
policy affords, and the fact that the securities markets of certain countries
may be subject to greater risks and volatility than that which exists in the
United States. See "Special Risk Considerations".

EVERGREEN VA STRATEGIC INCOME FUND

EVERGREEN VA STRATEGIC INCOME FUND seeks high current income from
interest on debt securities. Secondarily, the Fund considers potential for
growth of capital in selecting securities. The Fund allocates its assets
principally between eligible domestic high yield, high risk bonds and debt
securities of foreign governments and foreign corporations. In addition, the
Fund will, from time to time, allocate a portion of its assets to U.S.
Government securities. This allocation will be made on the basis of the
assessment by the Fund's investment adviser of global opportunities for high
income. From time to time, the Fund may invest 100% of its assets in U.S. or
foreign securities.

The Fund may invest principally in domestic debt obligations, including
zero coupon bonds and payment-in-kind securities ("PIKs"), debentures,
convertible debentures, fixed, increasing and adjustable rate bonds, stripped
bonds, mortgage bonds, mortgage-backed securities, corporate notes (including
convertible notes) with

<PAGE>
maturities at the date of issue of at least five years (which may be senior or
junior to other bonds), equipment trust certificates, and units consisting of
bonds with stock or warrants to buy stock attached.

The Fund may also invest in debt obligations issued or guaranteed by
foreign corporations, certain supranational entities (such as the World Bank)
and foreign governments, their agencies and instrumentalities, and debt
obligations issued by U.S. corporations denominated in non-U.S. currencies. The
Fund may also invest in debt instruments issued or guaranteed by the U.S.
Government, its agencies or instrumentalities ("U.S. Government securities").
Certain of these obligations, including U.S. Treasury notes and bonds and
Government National Mortgage Association debentures, are issued by, or
guaranteed with respect to both principal and interest by, the full faith and
credit of the U.S.Government. Certain other U.S. Government securities, issued
or guaranteed by federal agencies or government-sponsored enterprises, are not
supported by the full faith and credit of the U.S. Government. These latter
securities may include obligations supported by the right of the issuer to
borrow from the U.S. Treasury, such as obligations of the Federal Home Loan
Mortgage Corporation, and obligations supported by the credit of the
instrumentality such as Federal National Mortgage Association bonds. U.S.
Government securities in which the Fund may invest include zero coupon U.S.
Treasury securities, mortgage-backed securities and money market instruments.

While the Fund may invest in securities of any maturity, it is currently
expected that the Fund will not invest in securities with maturities of more
than 30 years.

The level of income sought by the Fund is ordinarily associated with high
yield, high risk bonds and similar securities in the lower rating categories of
the recognized rating agencies or with securities that are unrated. Such bonds
generally involve greater volatility of price and risk of principal and income
than bonds in the higher rating categories and are, on balance, considered
predominantly speculative. See "Special Risk Considerations." The Fund's
investment adviser considers the ratings of Moody's and S&P assigned to various
securities, but does not rely solely on these ratings because (1) Moody's and
S&P assigned ratings are based largely on historical financial data and may not
accurately reflect the current financial outlook of companies; and (2) there can
be large differences among the current financial conditions of issuers within
the same rating category.

Since the Fund takes an aggressive approach to investing, the Fund's
investment adviser tries to maximize the return by controlling risk through
diversification, credit analysis, review of sector and industry trends, interest
rate forecasts and economic analysis. The analysis by the Fund's investment
adviser of securities focuses on factors such as interest or dividend coverage,
asset values, earnings prospects and the quality of management of the issuer. In
making investment recommendations, the Fund's investment adviser also considers
current income, potential for capital appreciation, maturity structure, quality
guidelines, coupon structure, average yield, percentage of zero coupon bonds and
PIKs, percentage of non-accruing items and yield to maturity.

The Fund may also invest in preferred stocks, including adjustable rate
preferred stocks and convertible preferred stocks, common stocks and other
equity securities, including convertible securities and warrants, which may be
used to create other permissible investments. Such investments must be
consistent with the Fund's primary objective of seeking a high level of current
income or be acquired as part of a unit combining income and equity securities.
In addition, the Fund may invest in limited partnerships, including master
limited partnerships.

The Fund may also invest in the following types of money market
securities: (1) obligations issued or guaranteed by the U.S. Government or by
any agency or instrumentality of the U.S. Government; (2) commercial paper,
including master demand notes, that at the date of investment is rated A-1 by
S&P, Prime-1 by Moody's, or, if not rated by such services, is issued by a
company that at the date of investment has an outstanding issue rated A or
better by S&P or Moody's; (3) obligations, including certificates of deposit and
bankers' acceptances, of banks or savings and loan associations having at least
$1 billion in assets as of the date of their most recently published financial
statements that are members of the Federal Deposit Insurance Corporation,
including U.S. branches of foreign banks and foreign branches of U.S. banks; and
(4) obligations of U.S. corporations that at the date of investment are rated A
or better by S&P or Moody's. For a description of the ratings set forth above,
see the Statement of Additional Information.

EVERGREEN VA AGGRESSIVE GROWTH FUND

The EVERGREEN VA AGGRESSIVE GROWTH FUND'S investment objective is to
achieve long-term capital appreciation by investing primarily in common stocks
of emerging growth companies and larger, more well established companies, all of
which are viewed by the Fund's investment adviser as having above-average
appreciation potential. Under normal circumstances, the Fund intends to invest
at least 65% of its net assets in

<PAGE>
common stocks or securities convertible into common stocks. The Fund's
investment adviser considers an emerging growth company to be one which is still
in the developmental stage, yet has demonstrated, or is expected to achieve,
growth of earnings over various major business cycles. Important qualities of
any emerging growth company include sound management and a good product with
growing market opportunities. To the extent that its assets are not invested in
common stocks or securities convertible into common stocks, the Fund also may
invest its assets in, or enter into repurchase agreements with banks or
broker-dealers with respect to, investment grade corporate bonds, U.S.
Government securities, commercial paper and certificates of deposit of domestic
banks.

Consistent with its investment objective, the Fund also may invest in
equity securities of seasoned, established companies which its investment
adviser believes have above-average appreciation potential similar to that of
companies in the developmental stage. This may be due, for example, to
management change, new technology, new product or service developments, changes
in demand, or other factors. Investments in stocks of emerging growth companies
may involve special risks. Securities of lesser-known, relatively small and
special situation companies tend to be speculative and volatile. Therefore, the
current net asset value of the Fund's shares may vary significantly.
Accordingly, the Fund should not be considered suitable for investors who are
unable or unwilling to assume the risks of loss inherent in such a program, nor
should investment in the Fund be considered a balanced or complete investment
program.

INVESTMENT PRACTICES AND RESTRICTIONS

In addition to making the investments described above, each of the Funds
(except as stated herein) may invest in cash and cash equivalents and short-term
debt securities, write covered put and call options, purchase put and call
options, engage in transactions in futures contracts and related options, engage
in forward foreign currency exchange transactions, enter into repurchase
agreements, lend portfolio securities, enter into transactions on a "when
issued" or delayed settlement basis, enter into forward commitments, invest in
the securities of other investment companies and borrow funds under certain
limited circumstances. These investment strategies and instruments referred to
above and the risks related to them are discussed below and certain of these
strategies and instruments are described in more detail in the Statement of
Additional Information.

Defensive Investments. The Funds may invest without limitation in high quality
money market instruments, such as notes, certificates of deposit or bankers'
acceptances, or U.S. Government securities if, in the opinion of the Funds'
investment advisers, market conditions warrant a temporary defensive investment
strategy.

Portfolio Turnover and Brokerage. It is anticipated that the annual portfolio
turnover rate for EVERGREEN VA FUND, EVERGREEN VA GROWTH AND INCOME FUND,
EVERGREEN VA STRATEGIC INCOME FUND and EVERGREEN AGGRESSIVE GROWTH FUND may
exceed 100%. A portfolio turnover rate of 100% would occur if all of a Fund's
portfolio securities were replaced in one year. The annual turnover rate for the
fixed income portion of the EVERGREEN VA FOUNDATION FUND generally will not
exceed 200%. A 200% turnover rate is greater than that of most other investment
companies. The portfolio turnover rate experienced by a Fund directly affects
brokerage commissions and other transaction costs which the Fund bears directly.
A high rate of portfolio turnover will increase such costs. It is contemplated
that Lieber & Company, an affiliate of Evergreen Asset and a member of the New
York and American Stock Exchanges, will to the extent practicable effect
substantially all of the portfolio transactions for the Funds managed by
Evergreen Asset effected on those exchanges. See the Statement of Additional
Information for further information regarding the brokerage allocation practices
of the Funds.

Borrowing. As a matter of fundamental policy, the Funds may not borrow money
except from banks as a temporary measure for extraordinary or emergency
purposes. The proceeds from borrowings may be used to facilitate redemption
requests which might otherwise require the untimely disposition of portfolio
securities. The specific limits and other terms applicable to borrowing by each
Fund are set forth in the Statement of Additional Information.

Lending of Portfolio Securities. In order to generate income and to offset
expenses, the Funds may lend portfolio securities to brokers, dealers and other
financial institutions. Each Fund's investment adviser will monitor the
creditworthiness of such borrowers. Loans of securities by the Funds, if and
when made, may not exceed 30% (15% in the case of EVERGREEN VA STRATEGIC INCOME
FUND) of the value of a Fund's total assets and must be collateralized by cash
or U.S. Government securities that are maintained at all times in an amount
equal to at least 100% of the current market value of the securities loaned,
including accrued interest. While such securities are on loan, the borrower will
pay a Fund any income accruing thereon, and the Fund may invest the cash
collateral in portfolio securities, thereby increasing its return. Any gain or
loss in the market price of the loaned securities which occurs during the term
of the loan would affect a Fund and its investors. A Fund has the right to call
a loan and

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obtain the securities loaned at any time on notice of not more than five
business days. A Fund may pay reasonable fees in connection with such loans.
Lending portfolio securities involves risks of delay in recovery of the loaned
securities or, in some cases, loss of rights in the collateral should the
borrower fail financially.

Illiquid Securities. The Funds may invest up to 15% of their net assets in
illiquid securities and other securities which are not readily marketable,
including repurchase agreements with maturities longer than seven days.
Securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933, which have been determined to be liquid, will not be considered by each
Fund's investment adviser to be illiquid or not readily marketable and,
therefore, are not subject to the aforementioned 15% limit. The inability of a
Fund to dispose of illiquid or not readily marketable investments readily or at
a reasonable price could impair the Fund's ability to raise cash for redemptions
or other purposes. The liquidity of securities purchased by a Fund which are
eligible for resale be monitored by each Fund's investment adviser, on an
ongoing basis, subject to the oversight of the Trustees. In the event that such
a security is deemed to be no longer liquid, a Fund's holdings will be reviewed
to determine what action, if any, is required to ensure that the retention of
such security does not result in a Fund having more than 15% of its assets
invested in illiquid or not readily marketable securities.

Repurchase Agreements. Each Fund may enter into repurchase agreements with
member banks of the Federal Reserve System, including a Fund's custodian or
primary dealers in U.S. Government securities. A repurchase agreement is an
arrangement pursuant to which a buyer purchases a security and simultaneously
agrees to resell it to the vendor at a price that results in an agreed-upon
market rate of return which is effective for the period of time (which is
normally one to seven days, but may be longer) the buyer's money is invested in
the security. The arrangement results in a fixed rate of return that is not
subject to market fluctuations during the holding period. A Fund requires
continued maintenance of collateral with its custodian in an amount at least
equal to the repurchase price (including accrued interest). In the event a
vendor defaults on its repurchase obligation, a Fund might suffer a loss to the
extent that the proceeds from the sale of the collateral were less than the
repurchase price. If the vendor becomes the subject of bankruptcy proceedings, a
Fund might be delayed in selling the collateral. Each Fund's investment adviser
will review and continually monitor the creditworthiness of each institution
with which a Fund enters into a repurchase agreement to evaluate these risks.

Reverse Repurchase Agreements. Each Fund may borrow money by entering into a
"reverse repurchase agreement" by which it agrees to sell portfolio securities
to financial institutions such as banks and broker-dealers, and to repurchase
them at a mutually agreed upon date and price, for temporary or emergency
purposes. At the time a Fund enters into a reverse repurchase agreement, it will
place in a segregated custodial account cash, U.S. Government securities or
liquid high grade debt obligations having a value at least equal to the
repurchase price (including accrued interest) and will subsequently monitor the
account to ensure that such equivalent value is maintained. Reverse repurchase
agreements involve the risk that the market value of the securities sold by the
Fund may decline below the repurchase price of those securities. EVERGREEN VA
FOUNDATION FUND, EVERGREEN VA FUND, EVERGREEN VA GROWTH AND INCOME FUND,
EVERGREEN VA GLOBAL LEADERS FUND and EVERGREEN VA AGGRESSIVE GROWTH FUND will
not enter into reverse repurchase agreements exceeding 5% of the value of their
total net assets, and EVERGREEN VA STRATEGIC INCOME FUND will not enter into
reverse repurchase agreements exceeding 33 1/3% of the value of its total net
assets.

When-Issued Securities. Each Fund may purchase securities on a when-issued
basis. In the event securities are purchased on a "when-issued" basis (i.e., for
delivery beyond the normal settlement date at a stated price and yield), a Fund
generally would not pay for such securities or start earning interest on them
until they are received. However, when a Fund purchases securities on a
when-issued basis, it assumes the risks of ownership at the time of purchase,
not at the time of receipt. Failure of the issuer to deliver a security
purchased on a when-issued basis may result in the Fund incurring a loss or
missing an opportunity to make an alternative investment. Commitments to
purchase when-issued securities will not exceed 25% of a Fund's total assets. A
Fund will maintain cash or liquid high grade debt obligations in a segregated
account with its custodian in an amount equal to such commitments. No Fund will
purchase when-issued securities for speculative purposes, but only in
furtherance of its investment objectives. EVERGREEN VA STRATEGIC INCOME FUND
currently does not intend to invest more than 5% of its total assets in
when-issued transactions.

Securities of Other Investment Companies. Each Fund may invest in the securities
of other open-end investment companies that have investment objectives and
policies similar to its own or which are, in the opinion of each Fund's
investment adviser, suitable short-term investment vehicles. Each Fund's
investment adviser will waive its investment advisory fee on assets invested by
a Fund in securities of other open-end investment companies. Any

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investment by a Fund in the securities of other investment companies will be
subject to the limitations on such investments contained in the Investment
Company Act of 1940, as amended ("1940 Act").

American and European Depositary Receipts. All Funds except EVERGREEN VA FUND
may purchase foreign securities in the form of American Depositary Receipts
("ADRs"), European Depositary Receipts ("EDRs") or other securities convertible
into securities of corporations in which the Funds are permitted to invest
pursuant to their respective investment objectives and policies. These
securities may not necessarily be denominated in the same currency into which
they may be converted. ADRs are receipts typically issued by a United States
bank or trust company which evidence ownership of underlying securities issued
by a foreign corporation. EDRs are receipts issued in Europe by banks or
depositories which evidence a similar ownership arrangement. Generally, ADRs, in
registered form, are designed for use in United States securities markets and
EDRs, in bearer form, are designed for use in European securities markets.

Forward Commitments. Each Fund may make contracts to purchase securities for a
fixed price at a future date beyond customary settlement time ("forward
commitments") if it holds, and maintains until the settlement date in a
segregated account, cash or high-grade debt obligations in an amount sufficient
to meet the purchase price, or if it enters into offsetting contracts for the
forward sale of other securities it owns. Forward commitments may be considered
securities in themselves and involve a risk of loss if the value of the security
to be purchased declines prior to the settlement date, which risk is in addition
to the risk of decline in value of the Fund's other assets. Where such purchases
are made through dealers, the Fund relies on the dealer to consummate the sale.
The dealer's failure to do so may result in the loss to the Fund of an
advantageous yield or price.

HEDGING TECHNIQUES

In addition to making investments directly in securities, the Funds may
write covered put and call options and hedge their investments by purchasing
options and engaging in transactions in futures contracts and related options.
The investment adviser to the EVERGREEN VA FUND, EVERGREEN VA GROWTH AND INCOME
FUND and EVERGREEN VA FOUNDATION FUND does not currently intend to write covered
put options, purchase options or engage in transactions in futures contracts and
related options, but may do so in the future. The Funds may engage in foreign
currency exchange transactions to protect against changes in future exchange
rates.

Writing Options. Each Fund may write covered call and put options on certain
portfolio securities in an attempt to earn income and realize a higher return on
their portfolios. A call option gives the purchaser of the option the right to
buy a security from the writer at the exercise price at any time during the
option period. An option may not be written if, afterwards, securities
comprising more than 5% of the market value of a Fund's equity securities would
be subject to call options. A Fund realizes income from the premium paid to it
in exchange for writing the call option. Once it has written a call option on a
portfolio security and until the expiration of such option, a Fund forgoes the
opportunity to profit from increases in the market price of such security in
excess of the exercise price of the call option. Should the price of the
security on which a call has been written decline, a Fund bears the risk of
loss, which would be offset to the extent the Fund has received premium income.
A Fund will only write "covered" options traded on recognized securities
exchanges. An option will be deemed covered when a Fund either owns the security
(or securities convertible into such security) on which the option has been
written in an amount sufficient to satisfy the obligations arising under a call
option; or (ii) in the case of call and put options, the Fund's custodian
maintains cash or high-grade liquid debt securities belonging to the Fund in an
amount not less that the amount needed to satisfy the Fund's obligations with
respect to options written on securities it does not own. A "closing purchase
transaction" may be entered into with respect to a call option written by a Fund
for the purpose of closing its position. The Fund will realize a profit (or
loss) from such transaction if the cost of such transaction is less (or more)
than the premium received from the writing of the option. Because increases in
the market price of a call option will generally reflect increases in the market
price of the underlying security, any loss resulting from the repurchase of a
call option may be offset in whole or in part by unrealized appreciation of the
underlying security owned by the Fund.

Purchasing Put and Call Options on Securities. Each Fund may purchase put
options to protect its portfolio holdings in an underlying security against a
decline in market value. This protection is provided during the life of the put
option since the Fund, as holder of the put, is able to sell the underlying
security at the exercise price regardless of any decline in the underlying
security's market price. For the purchase of a put option to be profitable, the
market price of the underlying security must decline sufficiently below the
exercise price to cover the premium and transaction costs. By using put options
in this manner, any profit which the Fund might otherwise have realized on the
underlying security will be reduced by the premium paid for the put option and
by transaction costs.

<PAGE>
A Fund may also purchase a call option to hedge against an increase in
price of a security that it intends to purchase. This protection is provided
during the life of the call option since the Fund, as holder of the call, is
able to buy the underlying security at the exercise price regardless of any
increase in the underlying security's market price. For the purchase of a call
option to be profitable, the market price of the underlying security must rise
sufficiently above the exercise price to cover the premium and transaction
costs. By using call options in this manner, any profit which the Fund might
have realized had it bought the underlying security at the time it purchased the
call option will be reduced by the premium paid for the call option and by
transaction costs.

Futures, Options and Other Derivative Instruments. In addition to writing
covered call and put options, a Fund may purchase and sell various financial
instruments ("Derivative Instruments") such as financial futures contracts
(including interest rate, index and foreign currency futures contracts), options
(such as options on securities, indices, foreign currencies and futures
contracts), forward currency contracts and interest rate, equity index and
currency swaps, caps, collars and floors. The index Derivative Instruments the
Fund may use may be based on indices of U.S. or foreign equity or debt
securities. These Derivative Instruments may be used, for example, to preserve a
return or spread, to lock in unrealized market value gains or losses, to
facilitate or substitute for the sale or purchase of securities, to manage the
duration of securities, to alter the exposure of a particular investment or
portion of the Fund's portfolio to fluctuations in interest rates or currency
rates, to uncap a capped security or to convert a fixed rate security into a
variable rate security or a variable rate security into a fixed rate security.

A Fund's ability to use these instruments may be limited by market
conditions, regulatory limits and tax considerations. A Fund might not use any
of these strategies and there can be no assurance that any strategy that is used
will succeed. See the Statement of Additional Information for more information
regarding these instruments and the risks relating thereto.

Risks of Derivative Instruments. The use of Derivative Instruments, including
written put and call options, involves special risks, including: (1) the lack
of, or imperfect, correlation between price movements of the Fund's current or
proposed portfolio investments that are the subject of the transactions as well
as price movements of the Derivative Instruments involved in the transaction;
(2) possible lack of a liquid secondary market for any particular Derivative
Instrument at a particular time; (3) the need for additional portfolio
management skills and techniques; (4) losses due to unanticipated market price
movements; (5) the fact that, while such strategies can reduce the risk of loss,
they can also reduce the opportunity for gain, or even result in losses, by
offsetting favorable price movements in portfolio investments; (6) incorrect
forecasts by a Fund's investment adviser concerning interest or currency
exchange rates or direction of price fluctuations of the investment that is the
subject of the transaction, which may result in the strategy being ineffective;
(7) loss of premiums paid by the Fund on options it purchases; and (8) the
possible inability of the Fund to purchase or sell a portfolio security at a
time when it would otherwise be favorable for it to do so, or the need to sell a
portfolio security at a disadvantageous time, due to the need for the Fund to
maintain "cover" or to segregate securities in connection with such transactions
and the possible inability of the Fund to close out or liquidate its positions.

A Fund's investment adviser may use Derivative Instruments, including
written put and call options, for hedging purposes (i.e. by paying a premium or
foregoing the opportunity for profit in return for protection against downturns
in markets generally or the prices of individual securities or currencies) and
also may use Derivative Instruments to try to enhance the return characteristics
of a Fund's portfolio of investments (i.e. by receiving premiums in connection
with the writing of options and thereby accepting the risk of downturns in
markets generally or the prices of individual securities or currencies or by
paying premiums with the hope that the underlying Derivative Instruments will
appreciate). The use of Derivative Instruments for hedging purposes or to
enhance a Fund's return characteristics can increase investment risk. If a
Fund's investment adviser judges market conditions incorrectly or employs a
strategy that does not correlate well with the Fund's investments, these
techniques could result in a loss, regardless of whether the intent was to
reduce risk or increase return. These techniques may increase the volatility of
a Fund and may involve a small investment of cash relative to the magnitude of
the risk assumed, resulting in leverage. In addition, these techniques could
result in a loss if the counterparty to the transaction does not perform as
promised or if there is not a liquid secondary market to close out a position
that the Fund has entered into. Options and futures transactions may increase
portfolio turnover rates, which would result in greater commission expenses and
transaction costs.

Foreign Currency Transactions. The Funds will enter into foreign currency
transactions to obtain the necessary currencies to settle securities
transactions. Currency transactions may be conducted either on a spot or cash
basis at prevailing rates or through forward foreign currency exchange contracts
("forward contracts"). A Fund may also enter into forward foreign currency
exchange contracts to protect Fund assets denominated in a foreign currency

<PAGE>
against adverse changes in foreign currency exchange rates or exchange control
regulations. Such changes could unfavorably affect the value of Fund assets
which are denominated in foreign currencies, such as foreign securities or funds
deposited in foreign banks, as measured in U.S. dollars. The use of forward
contracts for hedging purposes may limit any potential gain that might result
from a relative increase in the value of such currencies and might, in certain
cases, result in losses to the Fund.

Forward Foreign Currency Exchange Contracts. A forward contract is an obligation
to purchase or sell an amount of a particular currency at a specific price and
on a future date agreed upon by the parties. Generally, no commission charges or
deposits are involved. At the time a Fund enters into a forward contract, Fund
assets with a value equal to the Fund's obligation under the forward contract
are segregated and are maintained until the contract has been settled. The Funds
will not enter into a forward contract with a term of more than one year. In
addition to forward contracts entered into for hedging purposes, the Funds will
generally enter into a forward contract to provide the proper currency to settle
a securities transaction at the time the transaction occurs ("trade date"). The
period between trade date and settlement date will vary between 24 hours and 60
days, depending upon local custom.

As described above, a Fund may enter into forward contracts in primarily
two circumstances. First, when a Fund enters into a contract for the purchase or
sale of a security denominated in a foreign currency, it may desire to "lock in"
the U.S. dollar price of the security. By entering into a forward contract for
the purchase or sale, for a fixed amount of dollars, of the amount of foreign
currency involved in the underlying security transaction, the Fund will be able
to protect itself against a possible loss resulting from an adverse change in
the relationship between the U.S. dollar and the subject foreign currency during
the period between the date the security is purchased or sold and the date on
which payment is made or received.

Second, when a Fund's investment adviser believes that the currency of a
particular foreign country may suffer a decline against the U.S. dollar, the
Fund may enter into a forward contract to sell, for a fixed amount of dollars,
the amount of foreign currency approximating the value of some or all of the
Fund's portfolio securities denominated in such foreign currency. The precise
matching of the forward contract amount and the value of such securities
denominated in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. The Funds do not intend to enter into
such forward contracts under this second circumstance on a regular or continuous
basis.

In the second circumstance, a Fund's custodian will segregate cash or
liquid high-grade debt securities belonging to the Fund in an amount not less
than the value of the assets committed to forward foreign currency contracts
entered into under such transactions. If the value of the securities segregated
declines, additional cash or debt securities will be added on a daily basis
(i.e. marked to market) so that the segregated amount will not be less than the
amount of the Fund's commitments with respect to such contracts.

Hedging/Cross Hedging. A cross hedge is accomplished by entering into a forward
contract or other arrangement with respect to one foreign currency for the
purpose of hedging against a possible decline in the value of another foreign
currency in which certain of the Fund's portfolio instruments are denominated.
The Funds' investment advisers may cause a Fund to enter into a cross hedge,
rather than hedge directly, in instances where (i) the rates for forward
contracts, options, futures contract or options on futures contracts relating to
the currency in which the cross hedge is effected are more favorable than rates
for similar instruments denominated in the currency that is to be hedged, and
(ii) there is a high degree of correlation between the two currencies with
respect to their movement against the U.S. dollar. Cross hedges may be effected
using the various hedging instruments described below. A cross hedge cannot
protect against exchange rate risks perfectly, and if a Fund's investment
adviser is incorrect in its judgment of future exchange rate relationships, the
Fund could be in a less advantageous position than if such a hedge had not been
established.

Options on Foreign Currencies. EVERGREEN VA GLOBAL LEADERS FUND, EVERGREEN VA
STRATEGIC INCOME FUND and EVERGREEN VA AGGRESSIVE GROWTH FUND may also purchase
foreign currency put options. A put option gives the holder, upon payment of a
premium, the right to sell a currency at the exercise price until the expiration
of the option and serves to ensure against adverse currency price movements in
the underlying portfolio assets denominated in that currency. Exchange listed
options on seven major currencies are traded in the U.S. In addition, several
major U.S. investment firms make markets in unlisted options on foreign
currencies. Such unlisted options may be available with respect to a wide range
of foreign currencies than listed options and may have more flexible terms.
Unlisted foreign currency options are generally less liquid than listed options
and involve the credit risks associated with the individual issuer. No more than
5% of a Fund's net assets may be represented by premiums paid by the Fund with
respect to options on foreign currencies outstanding at any one time.

<PAGE>
Furthermore, the market value of unlisted options on foreign currencies will be
included with other illiquid assets held by the Fund for purposes of the 15%
limit on such assets.

The Funds may write a call option on a foreign currency only in
conjunction with a purchase of a put option on that currency. A call option
written by a Fund gives the purchaser, upon payment of a premium, the right to
purchase from the Fund a currency at the exercise price until the expiration of
the option. Writing call options in this manner is designed to reduce the cost
of downside currency protection but has the effect of limiting currency
appreciation potential.

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES

Mortgage-Backed Securities. EVERGREEN VA STRATEGIC INCOME FUND may invest in
mortgage-backed securities, which are securities that directly or indirectly
represent a participation in, or are secured by and payable from, mortgage loans
secured by real property. The term mortgage-backed securities includes
adjustable rate mortgage securities and derivative mortgage products such as
collateralized mortgage obligations.

There are currently three basic types of mortgage-backed securities: (i)
those issued or guaranteed by the U.S. Government or one of its agencies or
instrumentalities, such as Government National Mortgage Association ("GNMA"),
Federal National Mortgage Association ("FNMA"), and Federal Home Loan Mortgage
Corporation ("FHLMC") (securities issued by GNMA, but not those issued by FNMA
or FHLMC, are backed by the "full-faith and credit" of the U.S.); (ii) those
issued by private issuers that represent an interest in or are collateralized by
mortgage-backed securities issued or guaranteed by the U.S. Government or one of
its agencies or instrumentalities; and (iii) those issued by private issuers
that represent an interest in or are collateralized by whole mortgage loans or
mortgage-backed securities without a government guarantee but usually having
some form of private credit enhancement.

EVERGREEN VA STRATEGIC INCOME FUND will invest in mortgage pass-through
securities representing participation interests in pools of residential mortgage
loans originated by governmental or private lenders. Such securities, which are
ownership interests in the underlying mortgage loans, differ from conventional
debt securities, which provide for periodic payment of interest in fixed amounts
(usually semi-annually) with principal payments at maturity or on specified call
dates. Mortgage pass-through securities provide for monthly payments that are a
"pass through" of the monthly interest and principal payments (including any
prepayments) made by the individual borrowers on the pooled mortgage loans (net
of any fees paid to the guarantor of such mortgage loans), net of any fees paid
to the guarantor of such securities and the servicers of the underlying mortgage
loans.

EVERGREEN VA STRATEGIC INCOME FUND may also invest in fixed rate and
adjustable rate collateralized mortgage obligations ("CMOs"), including CMOs
with rates that move inversely to market rates that are issued by and guaranteed
as to principal and interest by the U.S. Government, its agencies or
instrumentalities. The principal government issuer of CMOs is FNMA. In addition,
FHLMC issues a significant number of CMOs. The Fund will not invest in CMOs that
are issued by private issuers. CMOs are debt obligations collateralized by
mortgage securities in which the payment of the principal and interest is
supported by the credit of, or guaranteed by, the U.S. Government or an agency
or instrumentality of the U.S. Government. The secondary market for CMOs is
actively traded.

CMOs are structured by redirecting the total payment of principal and
interest on the underlying mortgage securities used as collateral to create
classes with different interest rates, maturities and payment schedules. Instead
of interest and principal payments on the underlying mortgage securities being
passed through or paid pro rata to each holder (e.g., the Fund), each class of a
CMO is paid from and secured by a separate priority payment of the cash flow
generated by the pledged mortgage securities.

In addition to the mortgage-backed securities described above, EVERGREEN
VA STRATEGIC INCOME FUND may invest in asset-backed securities representing
underlying interests in loans or other assets such as credit cards, automobile
loans, leases and industrial plant and equipment. These include equipment trust
certificates, which are a mechanism for financing the purchase of transportation
equipment, such as railroad cars and locomotives, trucks, airplanes and oil
tankers.

SPECIAL RISK CONSIDERATIONS

Fixed Income Investments. Investments by the Funds in fixed income securities
are subject to a number of risks. For example, changes in economic conditions
could result in the weakening of the capacity of the issuers of such securities
to make principal and interest payments, particularly in the case of issuers of
non-investment grade fixed

<PAGE>
income securities. In addition, the market value of fixed-income securities in a
Fund's portfolio can be expected to vary inversely to changes in prevailing
interest rates. In the event there is a downgrading in the rating of a fixed
income security held in a Fund's portfolio, the Fund may continue to hold the
security if such action is deemed to be in the best interests of the Fund and
its shareholders.

Investment in Small Companies. EVERGREEN VA FUND, EVERGREEN VA GROWTH AND INCOME
FUND and EVERGREEN VA FOUNDATION FUND may invest from time to time, and
EVERGREEN VA AGGRESSIVE GROWTH FUND will invest in securities of little-known,
relatively small and special situation companies. Investments in such companies
tend to be speculative and volatile. A lack of management depth in such
companies could increase the risks associated with the loss of key personnel.
Also, the material and financial resources of such companies may be limited,
with the consequence that funds or external financing necessary for growth may
be unavailable. Such companies may also be involved in the development or
marketing of new products or services for which there are no established
markets. If projected markets do not materialize or only regional markets
develop, such companies may be adversely affected or be subject to the
consequences of local events. Moreover, such companies may be insignificant
factors in their industries and may become subject to intense competition from
larger companies. Securities of small and special situation companies in which
the Funds invest will frequently be traded only in the over-the-counter market
or on regional stock exchanges and will often be closely held. Securities of
this type may have limited liquidity and be subject to wide price fluctuations.
As a result of the risk factors described above, the net asset value of each
Fund's shares can be expected to vary significantly.

Investment in Foreign Securities. Investing in non-U.S. securities involves
additional risks not normally associated with domestic investments. In an
attempt to reduce some of these risks, each Fund except EVERGREEN VA FUND may
diversify its investments broadly among foreign countries which may include both
developed and developing countries. With respect to EVERGREEN VA GLOBAL LEADERS
FUND at least three different countries will always be represented.

Foreign securities are denominated or traded in foreign currencies.
Therefore, the value in U.S. dollars of a Fund's assets and income may be
affected by changes in exchange rates and regulations. Although the Funds value
their assets daily in U.S. dollars, they will not convert their holdings of
foreign currencies to U.S. dollars daily. When a Fund converts its holdings to
another currency, it may incur conversion costs. Foreign exchange dealers
realize a profit on the difference between the prices at which such dealers buy
and sell currencies.

EVERGREEN VA STRATEGIC INCOME FUND may also invest in debt obligations
issued or guaranteed by foreign corporations, certain supranational entities
(such as the World Bank) and foreign governments, their agencies and
instrumentalities, and debt obligations issued by U.S. corporations denominated
in non-U.S. currencies.

To the extent that securities purchased by the Funds are denominated in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect the Funds' net asset values; the value of interest earned;
gains and losses realized on the sale of securities; and net investment income
and capital gains, if any, to be distributed to shareholders by a Fund. If the
value of a foreign currency rises against the U.S. dollar, the value of a Fund's
assets denominated in that currency will increase; correspondingly, if the value
of a foreign currency declines against the U.S. dollar, the value of a Fund's
assets denominated in that currency will decrease. The performance of the Funds
will be measured in U.S. dollars, the base currency for the Funds.

Securities markets of foreign countries in which the Fund may invest are
generally not subject to the same degree of regulation as the U.S. markets and
may be more volatile and less liquid than the major U.S. markets. The
differences between investing in foreign and U.S. companies include: (1) less
publicly available information about foreign companies; (2) the lack of uniform
financial accounting standards and practices among countries which could impair
the validity of direct comparisons of valuations measures (such as
price/earnings ratios) for securities in different countries; (3) less readily
available market quotations on foreign companies; (4) differences in government
regulation and supervision of foreign stock exchanges, brokers, listed
companies, and banks; (5) differences in legal systems which may affect the
ability to enforce contractual obligations or obtain court judgments; (6)
generally lower foreign stock market volume; (7) the likelihood that foreign
securities may be less liquid or more volatile, which may affect the Fund's
ability to purchase or sell large blocks of securities and thus obtain the best
price; (8) transactions costs, including brokerage charges and custodian charges
associated with holding foreign securities, may be higher; (9) the settlement
period for foreign securities, which are sometimes longer than those for
securities of U.S. issuers, may affect portfolio liquidity. These different
settlement practices may cause missed purchasing opportunities and/or loss of
interest on money market and debt investments; (10) foreign securities held by a
Fund may be traded on days that the Fund does not value its portfolio
securities,

<PAGE>
such as Saturdays and customary business holidays and, accordingly, the Fund's
net asset value may be significantly affected on days when shareholders do not
have access to the Fund; and (11) political and social instability,
expropriation, and political or financial changes which adversely affect
investment in some countries.

Lower-Rated Securities. EVERGREEN VA GROWTH AND INCOME FUND and EVERGREEN VA
STRATEGIC INCOME FUND may invest a portion of their assets in securities rated
below Baa by Moody's or BBB by S&P (commonly known as "junk bonds").

Lower-rated and comparable unrated securities (collectively referred to
in this section as "lower-rated securities") will likely have some quality and
protective characteristics that, in the judgment of the rating organization, are
out-weighed by large uncertainties or major risk exposures to adverse
conditions; and are predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal in accordance with the terms of the
obligation.

While the market values of lower-rated securities tend to react less to
fluctuations in interest rate levels than the market values of higher rated
securities, the market values of certain lower-rated securities also tend to be
more sensitive to individual corporate developments and changes in economic
conditions than higher-rated securities. In addition, lower-rated securities
generally present a higher degree of credit risk. Issuers of lower- rated
securities are often highly leveraged and may not have more traditional methods
of financing available to them so that their ability to service their debt
obligations during an economic downturn or during sustained periods of rising
interest rates may be impaired. The risk of loss due to default by such issuers
is significantly greater because lower-rated securities generally are unsecured
and frequently are subordinated to the prior payment of senior indebtedness. A
Fund may incur additional expenses to the extent that it is required to seek
recovery upon a default in the payment of principal or interest on its portfolio
holdings. The existence of limited markets for lower-rated securities may
diminish a Fund's ability to obtain accurate market quotations for purposes of
valuing such securities and calculating its net asset value. For additional
information about the possible risks of investing in junk bonds, see "Investment
Objectives and Policies -- Junk Bonds" in the Statement of Additional
Information.

Payment-In-Kind Bonds. EVERGREEN VA STRATEGIC INCOME FUND may invest in
payment-in-kind bonds. Payment-in-kind bonds allow the issuer, at its option, to
make current interest payments on the bonds either in cash or in additional
bonds. The value of payment-in-kind bonds is subject to greater fluctuation in
response to changes in market interest rates than bonds which pay interest in
cash currently. Payment-in-kind bonds allow an issuer to avoid the need to
generate cash to meet current interest payments. Accordingly, such bonds may
involve greater credit risks than bonds paying interest currently. Even though
such bonds do not pay current interest income in cash, the Fund is nonetheless
required to accrue interest income on such investments and to distribute such
amounts at least annually to shareholders. Thus, the Fund could be required, at
times, to liquidate other investments in order to satisfy its distribution
requirements.

Zero-Coupon Bonds. EVERGREEN VA STRATEGIC INCOME FUND may invest in zero-coupon
bonds. Zero-coupon bonds are issued at a significant discount from their
principal amount and pay interest only at maturity rather than at intervals
during the life of the security. The value of zero-coupon bonds is subject to
greater fluctuation in response to changes in market interest rates than bonds
which pay interest in cash currently. Zero-coupon bonds allow an issuer to avoid
the need to generate cash to meet current interest payments. Accordingly, such
bonds may involve greater credit risks than bonds paying interest currently.
Even though such bonds do not pay current interest in cash, the Fund is
nonetheless required to accrue interest income on such investments and to
distribute such amounts at least annually to shareholders. Thus, the Fund could
be required, at times, to liquidate other investments in order to satisfy its
distribution requirements.

MANAGEMENT OF THE FUNDS

INVESTMENT ADVISERS

The management of each Fund is supervised by the Trustees of the Trust.
Evergreen Asset has been retained by the Trust to serve as investment adviser to
EVERGREEN VA FUND, EVERGREEN VA GROWTH AND INCOME FUND, EVERGREEN VA FOUNDATION
FUND and EVERGREEN VA GLOBAL LEADERS FUND. Evergreen Asset, with its
predecessors, has served as investment adviser to the Evergreen mutual funds
since 1971. Evergreen Asset is a wholly-owned subsidiary of FUNB. The address of
Evergreen Asset is 2500 Westchester Avenue, Purchase, New York 10577. FUNB is a
subsidiary of First Union Corporation ("First Union"), the sixth largest bank
holding

<PAGE>
company in the United States. Lieber & Company, as described below, provides
certain subadvisory services to Evergreen Asset in connection with its duties as
investment adviser to the Funds.

Keystone has been retained by the Trust to serve as investment adviser to
EVERGREEN VA STRATEGIC INCOME FUND. Keystone succeeded on December 11, 1996 to
the advisory business of a corporation with the same name, but under different
ownership, which has provided investment advisory and management services to
investment companies and private accounts since it was organized in 1932.
Keystone is an indirect, wholly-owned subsidiary of FUNB.

The Capital Management Group of FUNB ("CMG") serves as investment adviser
to EVERGREEN VA AGGRESSIVE GROWTH FUND.

First Union is headquartered in Charlotte, North Carolina, and had $140
billion in consolidated assets as of December 31, 1996. First Union and its
subsidiaries provide a broad range of financial services to individuals and
businesses throughout the United States. CMG manages or otherwise oversees the
investment of over $42.5 billion in assets belonging to a wide range of clients,
including all the series of Evergreen Investment Trust and certain of the other
Evergreen mutual funds.

Evergreen Asset, Keystone and CMG manage each Fund's investments, provide
various administrative services, and supervise each Fund's daily business
affairs, subject to the authority of the Trustees. Evergreen Asset, as
investment adviser to EVERGREEN VA FUND, EVERGREEN VA GROWTH AND INCOME FUND and
EVERGREEN VA GLOBAL LEADERS FUND is entitled to receive from such Funds an
annual fee equal to .95 of 1% of average daily net assets thereof. As
compensation for its services as investment adviser to EVERGREEN VA FOUNDATION
FUND, Evergreen Asset is entitled to receive an annual fee equal to .825 of 1%
of average daily net assets of such Fund. These fees are higher than the rates
paid by most other investment companies, but are not higher than the fees paid
by many funds with similar investment objectives.

Keystone is entitled to receive a fee for its services as investment
adviser to EVERGREEN VA STRATEGIC INCOME FUND as follows: 2.0% of gross dividend
and interest income earned by the Fund during each fiscal period; plus 0.45% of
average daily net assets up to $100,000,000; 0.40% of the next $100,000,000 of
average daily net assets; 0.35% of the next $100,000,000 of average daily net
assets; 0.30% of the next $100,000,000 of average daily net assets; 0.25% of the
next $100,000,000 of average daily net assets; and 0.20% of average daily net
assets over $500,000,000, computed as of the close of business each business day
and paid daily.

CMG manages investments and supervises the daily business affairs of
EVERGREEN VA AGGRESSIVE GROWTH FUND and, as compensation therefor, is entitled
to receive an annual fee equal to .60 of 1% of average daily net assets of the
Fund.

Evergreen Keystone Investment Services ("EKIS") also serves as
administrator to each Fund and is entitled to receive a fee based on the average
daily net assets of the Fund at a rate based on the total assets of the mutual
funds administered by EKIS for which CMG, or Evergreen Asset or Keystone also
serve as investment adviser, calculated in accordance with the following
schedule: .050% of the first $7 billion; .035% on the next $3 billion; .030% on
the next $5 billion; .020% on the next $10 billion; .015% on the next $5
billion; and .010% on assets in excess of $30 billion. BISYS Fund Services, an
affiliate of Evergreen Keystone Funds Distributor, Inc., distributor for the
Evergreen Keystone group of mutual funds, serves as sub-administrator to the
Funds and is entitled to receive a fee from each Fund calculated on the average
daily net assets of the Fund at a rate based on the total assets of the mutual
funds administered by EKIS for which FUNB affiliates also serve as investment
adviser, calculated in accordance with the following schedule: .0100% of the
first $7 billion; .0075% on the next $3 billion; .0050% on the next $15 billion;
and .0040% on assets in excess of $25 billion. The total assets of the mutual
funds administered by EKIS for which FUNB affiliates serve as investment adviser
were approximately $28.8 billion as of February 28, 1997.

The portfolio manager for EVERGREEN VA FUND and EVERGREEN VA FOUNDATION
FUND is Stephen A. Lieber, who is Chairman and Co-Chief Executive Officer of
Evergreen Asset and has been associated with Evergreen Asset and its predecessor
since 1969. Mr. Lieber has served as the portfolio manager of Evergreen
Foundation Fund since its inception in 1990 and as the portfolio manager of
Evergreen Fund since its inception in 1970. The portfolio managers for EVERGREEN
VA GROWTH and INCOME FUND are Stephen A. Lieber (described above) and Gary R.
Buesser. Mr. Buesser joined Lieber & Company in 1996 as an analyst. Previously,
he was a portfolio manager/analyst with Cowen Asset Management and Shearson
Lehman Brothers. The portfolio of EVERGREEN VA GLOBAL LEADERS FUND is managed by
a committee composed of portfolio management and

<PAGE>
analytical personnel employed by Evergreen Asset. The members of this committee
include Stephen A. Lieber and Edwin A. Miska, who has been an analyst with
Evergreen Asset and its predecessor since 1989. Mr. Lieber and Mr. Miska are
responsible for the day to day operations of the Fund and the Evergreen Global
Leaders Fund which commenced operations in 1995.

Prescott B. Crocker is the portfolio manager of EVERGREEN VA STRATEGIC
INCOME FUND. Mr. Crocker is a Senior Vice President, Senior Portfolio Manager
and Head of the High Yield Bond Team at Keystone. Mr. Crocker joined Keystone in
1997. From 1993 until he joined Keystone, Mr. Crocker held various positions at
Boston Security Counsellors, including President and Chief Investment Officer,
and was Managing Director and Portfolio Manager at Northstar Investment
Management. Prior to 1993, Mr. Crocker held various fund management positions at
Colonial Group, Inc. Mr. Crocker has 25 years of experience in fixed income
investment management.

The portfolio manager for EVERGREEN VA AGGRESSIVE GROWTH FUND is Harold
J. Ireland, Jr., a Vice President of CMG who has been associated with CMG since
1995. Prior to that, Mr. Ireland was a Vice President of Palm Beach Capital
Management, Inc. and served as portfolio manager of Evergreen Aggressive Growth
Fund and such Fund's predecessor, ABT Emerging Growth Fund, since 1985.

SUB-ADVISER

Evergreen Asset has entered into sub-advisory agreements with Lieber &
Company with respect to EVERGREEN VA FUND, EVERGREEN VA GROWTH AND INCOME FUND,
EVERGREEN VA FOUNDATION FUND and EVERGREEN VA GLOBAL LEADERS FUND which provide
that Lieber & Company's research department and staff will furnish Evergreen
Asset with information, investment recommendations, advice and assistance, and
will be generally available for consultation on each Fund's portfolio. Lieber &
Company will be reimbursed by Evergreen Asset in connection with the rendering
of services on the basis of the direct and indirect costs of performing such
services. There is no additional charge to the Funds for the services provided
by Lieber & Company. It is contemplated that Lieber & Company will, to the
extent practicable, effect substantially all of the portfolio transactions for
these Funds on the New York and American Stock Exchanges. The address of Lieber
& Company is 2500 Westchester Avenue, Purchase, New York 10577. Lieber & Company
is an indirect, wholly-owned, subsidiary of First Union.

SALE AND REDEMPTION OF SHARES

PARTICIPATING INSURANCE COMPANIES

The Funds were organized to serve as investment vehicles for (a) separate
accounts funding variable annuity ("VA") and variable life insurance ("VLI")
contracts issued by certain life insurance companies ("Participating Insurance
Companies"); and (b) qualified pension and retirement plans. The Trust does not
currently foresee any disadvantages to the holders of VA and VLI contracts
arising from the fact that the interests of holders of VA and VLI contracts may
differ due to the difference of tax treatment and other considerations.

Nevertheless, the Trustees will establish procedures for the purpose of
identifying any irreconcilable material conflicts that may arise and to
determine what action, if any, would be taken in response thereto. The VA and
VLI contracts are described in the separate prospectuses issued by the
Participating Insurance Companies. The Trust assumes no responsibility for such
prospectuses.

PURCHASES

Shares of each Fund are sold at net asset value to the separate accounts
of Participating Insurance Companies and to qualified pension and retirement
plans. All investments in the Trust are credited to the shareholder's account in
the form of full or fractional shares of the designated Fund (rounded to the
nearest 1/1000 of a share). The Trust does not issue share certificates. Initial
and subsequent purchase payments allocated to a specific Fund are subject to the
limits described in the separate prospectuses issued by the Participating
Insurance Companies or in pension and retirement plan documents.

How the Funds Value Their Shares. The net asset value of shares of a Fund is
calculated by dividing the value of the amount of the Fund's net assets by the
number of outstanding shares. Shares are valued each day the New York Stock
Exchange (the "Exchange") is open as of the close of regular trading (currently
4:00 p.m. Eastern time). The securities in a Fund are valued at their current
market value determined on the basis of market quotations or, if

<PAGE>
such quotations are not readily available, such other methods as the Trustees
believe would accurately reflect fair value. Non-dollar denominated securities
will be valued as of the close of the Exchange at the closing price of such
securities in their principal trading market.

REDEMPTION

The separate accounts of Participating Insurance Companies redeem shares
to make benefit or surrender payments under the terms of the VA or VLI contract
and qualified pension and retirement plans may redeem shares pursuant to the
provisions of the plan documents. Redemptions are processed on any day on which
the Trust is open for business and are effected at net asset value next
determined after the redemption order, in proper form, is received by the Trust
or its agent. The net asset value per share of each Fund is determined once
daily, as of 4:00 p.m. Eastern time on each business day the Exchange is open
and on such other days as the Trustees determine, and on any other day during
which there is a sufficient degree of trading in a Fund's portfolio securities
that the net asset value of the Fund is materially affected by changes in the
value of portfolio securities.

The Trust may suspend the right of redemption only under the following
unusual circumstances: (1) when the Exchange is closed (other than weekends and
holidays) or trading is restricted; (2) when an emergency exists, making
disposal of portfolio securities or the valuation of net assets not reasonably
practicable; or (3) during any period when the Securities and Exchange
Commission ("SEC") has by order permitted a suspension of redemptions for the
protection of shareholders.

DIVIDENDS

All dividends payable by a Fund are distributed at least annually to the
separate accounts of Participating Insurance Companies and will be automatically
reinvested in additional shares of such Fund. Dividends and other distributions
made by the Funds to such separate account are taxable, if at all, to the
Participating Insurance Companies; they are not currently taxable to the VA or
VLI owners.

TAX STATUS

Each Fund is treated as a separate entity for Federal income tax purposes
and is not combined with the Trust's other Funds. It is the intention of each
Fund to qualify as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), and meet all other
requirements necessary for it to be relieved of Federal income taxes on that
part of its net investment income and net capital gains distributed to its
shareholders. Each Fund intends to distribute all of its net investment income
and net capital gains to its shareholders.

For a discussion of the tax consequences of VA or VLI contracts, refer to
the prospectus of the VLI or VA contract offered by the Participating Insurance
Company. VA or VLI contracts purchased through insurance company separate
accounts provide for the accumulation of all earnings from interest, dividends,
and capital appreciation without current Federal income tax liability for the
owner. Depending on the VA or VLI contract, distributions from the contract may
be subject to ordinary income tax and, in addition, a 10% penalty tax on
distributions before age 59 1/2. Only the portion of a distribution attributable
to income on the investment in the contract is subject to Federal income tax.
Investors should consult with competent tax advisers for a more complete
discussion of possible tax consequences in a particular situation.

Section 817(h) of the Code provides that investments of a separate
account underlying a VA or VLI contract (or the investments of a mutual fund,
the shares of which are owned by the VA or VLI separate account) must be
"adequately diversified" in order for the VA or VLI contract to be treated as an
annuity for tax purposes. The Treasury Department has issued regulations
prescribing these diversification requirements. Each Fund intends to comply with
these requirements. If a separate account underlying a VA or VLI contract were
not adequately diversified, the owner of such VA or VLI contract would be
immediately subject to tax on the earnings allocable to the contract. Additional
information about the tax status of the Funds is provided in the Statement of
Additional Information.

EFFECT OF BANKING LAWS

The Glass-Steagall Act and other banking laws and regulations presently
prohibit member banks of the Federal Reserve System ("Member Banks") or their
non-bank affiliates from sponsoring, organizing, controlling, or distributing
the shares of registered open-end investment companies such as the Funds. Such
laws and regulations also prohibit banks from issuing, underwriting or
distributing securities in general. However, under the

<PAGE>
Glass-Steagall Act and such other laws and regulations, a Member Bank or an
affiliate thereof may act as investment adviser, transfer agent or custodian to
a registered open-end investment company and may also act as agent in connection
with the purchase of shares of such an investment company upon the order of
their customer. Evergreen Asset and Keystone, since they are subsidiaries of
FUNB and CMG, are subject to and in compliance with the aforementioned laws and
regulations.

Changes to applicable laws and regulations or future judicial or
administrative decisions could result in Evergreen Asset, CMG and Keystone being
prevented from continuing to perform the services required under the investment
advisory contract or from acting as agent in connection with the purchase of
shares of a Fund by its customers. If Evergreen Asset, CMG or Keystone were
prevented from continuing to provide the services called for under the
investment advisory agreement, it is expected that the Trustees would identify,
and call upon each Fund's shareholders to approve, a new investment adviser. If
this were to occur, it is not anticipated that the shareholders of any Fund
would suffer any adverse financial consequences.

GENERAL INFORMATION

CUSTODIAN, AND TRANSFER AND DIVIDEND PAYING AGENT

State Street Bank and Trust Company (the "Custodian") acts as custodian
of the assets to the Trust. Boston Financial Data Services, Inc. ("BFDS") acts
as the transfer agent and dividend disbursing agent for the Trust and in doing
so performs certain bookkeeping, data processing and administrative services for
the Trust and each Fund.

EXPENSES OF THE TRUST

Each Fund bears all expenses of its operations other than those incurred
by Evergreen Asset, CMG and Keystone under their respective Advisory Agreements,
and EKIS under its Administration Agreement with the Trust. In particular, the
Funds pay investment advisory fees, administrative fees, custodian fees and
expenses, legal, accounting and auditing fees, brokerage fees, interest and
taxes, registration fees and expenses, expenses of the transfer and dividend
disbursing agent, the compensation and expenses of Trustees who are not
otherwise affiliated with the Trust, Evergreen Asset, CMG, Keystone or any of
their affiliates, expenses of printing and mailing reports and notices and proxy
material to beneficial shareholders of the Trust, and any extraordinary
expenses. Expenses incurred jointly by the Funds are allocated among the Funds
in a manner determined by the Trustees to be fair and equitable. The
organizational expenses of each of the Funds have been capitalized and will be
amortized during the first five years of the Funds' operations. Such
amortization will reduce the amount of income available for payment as
dividends.

SHAREHOLDER RIGHTS

Pursuant to current interpretations of the "1940 Act", each Participating
Insurance Company will solicit voting instructions from VA or VLI contract
owners with respect to any matters that are presented to a vote of shareholders.
On any matter submitted to a vote of shareholders, all the shares of the Trust
then issued and outstanding and entitled to vote shall be voted in the aggregate
and not by Fund except for matters concerning only a specific Fund. Certain
matters approved by a vote of shareholders of one Fund of the Trust may not be
binding on a Fund whose shareholders have not approved such matters. The holder
of each share of the Trust shall be entitled to one vote for each full share and
a fractional vote for each fractional share. Shares of one Fund may not bear the
same economic relationship to the Trust as shares of another Fund.

The Trust is not required to hold annual meetings of shareholders and
does not plan to do so. The Trustees may call special meetings of shareholders
for action by shareholder vote as may be required by the 1940 Act or the Trust's
Declaration of Trust. The Declaration of Trust provides that shareholders can
remove Trustees by a vote of two-thirds of the vote of the outstanding shares
and the Declaration of Trust sets out the procedures to be followed. The
Trustees will be a self-perpetuating body until fewer than 50% of the Trustees,
then serving as Trustees, are Trustees who were elected by shareholders. At that
time a meeting of shareholders will be called to elect additional Trustees.

The Declaration of Trust may be amended by a vote of a majority of the
Trustees; provided, if any such amendment materially adversely affects the
rights of any shares of any series or any class with respect to matters to which
such amendment is applicable, such amendment shall be subject to approval by
holders of a majority of

<PAGE>
the outstanding voting securities, as that term is defined in the 1940 Act, of
such series or class. Shares have no pre-emptive or conversion rights and are
fully paid and nonassessable. When a majority is required, it means the lesser
of 67% or more of the shares present at a meeting when the holders of more than
50% of the outstanding shares are present or represented by proxy, or more than
50% of the outstanding shares.

DESCRIPTION OF SHARES

The Declaration of Trust permits the Trustees to establish and designate
series or classes in addition to the Funds. Each share of any series or class
represents an equal proportionate share in the net assets of that series or
class with each other share of that series or class. The Trustees may divide or
combine the shares of any series or class into a greater or lesser number of
shares of that series or class without thereby changing the proportionate
interests in the assets of that series or class. Upon liquidation of a
particular series or class, the shareholders of that series or class shall be
entitled to share pro rata in the net assets of such series or class available
for distribution to shareholders.

Any inquiries regarding the Trust should be directed to the Trust at the
telephone number or address shown on the cover page of this Prospectus. All
inquiries regarding the VA or VLI contracts should be directed to the
Participating Insurance Company, as indicated in the VA or VLI prospectus
accompanying this Prospectus.

PERFORMANCE

From time to time, the Trust may advertise the "average annual or
cumulative total return" of the Funds and may compare the performance of the
Funds with that of other mutual funds with similar investment objectives as
listed in rankings prepared by Lipper Analytical Services, Inc., or similar
independent services monitoring mutual fund performance, and with appropriate
securities or other relevant indices. The "average annual total return" of a
Fund refers to the average annual compounded rate of return over the stated
period that would equate an initial investment in that Fund at the beginning of
the period to its ending redeemable value, assuming reinvestment of all
dividends and distributions and deduction of all recurring charges. Figures will
be given for the recent one, five and ten year periods and for the life of the
Fund if it has not been in existence for such periods. When considering "average
annual total return" figures for periods longer than one year it is important to
note that a Fund's annual total return for any given year might have been
greater or less than its average for the entire period. "Cumulative total
return" represents the total change in value of an investment in a Fund for a
specified period (again reflecting changes in a Fund's share price and assuming
reinvestment of Fund distributions).

The performance of each Fund will vary from time to time in response to
fluctuations in market conditions, interest rates, the composition of the Fund's
investments and expenses. Consequently, a Fund's performance figures are
historical and should not be considered representative of the performance of the
Fund for any future period.

Evergreen Asset is the investment adviser to Evergreen Fund, Evergreen
Foundation Fund, Evergreen Growth and Income Fund and Evergreen Global Leaders
Fund, which are substantially similar to the Trust's EVERGREEN VA FUND,
EVERGREEN VA FOUNDATION FUND, EVERGREEN VA GROWTH AND INCOME FUND and EVERGREEN
VA GLOBAL LEADERS FUND, in that each has the same investment objective and each
is managed using substantially the same investment strategies and techniques.
CMG is the investment adviser to Evergreen Aggressive Growth Fund, which is
substantially similar to EVERGREEN VA AGGRESSIVE GROWTH FUND in that it has the
same investment objective and is managed using the same investment strategies
and techniques. Keystone is the investment adviser to Keystone Strategic Income
Fund, which is substantially similar to EVERGREEN VA STRATEGIC INCOME FUND in
that it has the same investment objective and is managed using the same
investment strategies and techniques. See "Investment Objectives and Policies".

As of the date of this Prospectus, the EVERGREEN VA GLOBAL LEADERS FUND,
EVERGREEN VA STRATEGIC INCOME FUND and EVERGREEN VA AGGRESSIVE GROWTH FUND had
not commenced operations, and the EVERGREEN VA FUND, EVERGREEN VA FOUNDATION
FUND and EVERGREEN VA GROWTH AND INCOME FUND commenced operations on March 1,
1996. Since the Funds lack any substantial operating history, along with actual
Fund performance information, if any, information has been included regarding
the historical performance of Evergreen Asset, CMG and Keystone in managing
comparable funds. Set forth below is certain performance information regarding
the Evergreen Fund, Evergreen Foundation Fund, Evergreen Growth and Income Fund,
Evergreen Global Leaders Fund, Evergreen Aggressive Growth Fund and Keystone
Strategic Income Fund which has been obtained from Evergreen Asset, CMG and
Keystone and is set forth in the current prospectuses and statements of

<PAGE>
additional information of each fund. Investors should not rely on the following
financial information as an indication of the future performance of the Funds.

AVERAGE ANNUAL TOTAL RETURN OF COMPARABLE FUNDS

The average annual compounded total return for the Class Y shares offered
by the Evergreen Fund, Evergreen Foundation Fund, Evergreen Growth and Income
Fund, Evergreen Aggressive Growth Fund and Evergreen Global Leaders Fund for the
most recently completed one, five and ten year fiscal periods, or the period
from inception through each Fund's fiscal year-end, is set forth in the table
below:

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
Ended Ended Ended
Evergreen Fund 9/30/96 9/30/96 9/30/96
<S> <C> <C> <C>
18.43% 14.20% 11.63%
</TABLE>

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
Ended Ended Ended
Evergreen Growth and Income Fund 12/31/96 12/31/96 12/31/96
<S> <C> <C> <C>
23.82% 16.87% 14.63%
</TABLE>

<TABLE>
<CAPTION>
1 Year 5 Years From 1/21/90
Ended Ended (inception)
Evergreen Foundation Fund 12/31/96 12/31/96 to 12/31/96
<S> <C> <C> <C>
11.53% 14.71% 16.34%
</TABLE>

<TABLE>
<CAPTION>
From 11/1/95
(inception)
Evergreen Global Leaders Fund to 10/31/96
<S> <C>
19.57%
</TABLE>

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
Ended Ended Ended
Evergreen Aggressive Growth Fund 9/30/96 9/30/96 9/30/96
<S> <C> <C> <C>
25.34% 18.72% 15.36%
</TABLE>

The average annual compounded total return for Class A shares offered by
Keystone Strategic Income Fund for the most recently completed one and five year
fiscal periods and the period from inception of investment operations through
July 31, 1996 is set forth in the table below.

<TABLE>
<CAPTION>
1 Year 5 Years 4/14/87
Ended Ended (inception)
Keystone Strategic Income Fund 7/31/96 7/31/96 to 7/31/96
<S> <C> <C> <C>
6.84% 12.36% 7.24%
</TABLE>

HISTORICAL AVERAGE ANNUAL RETURN

The total return for the shares offered by EVERGREEN VA FUND, EVERGREEN
VA GROWTH AND INCOME FUND and EVERGREEN VA FOUNDATION FUND for the period March
1, 1996 (commencement of operations) through December 31, 1996 is set forth in
the following table:

<TABLE>
<S> <C>
EVERGREEN VA FUND........................................................................................ 14.9%
EVERGREEN VA GROWTH AND INCOME FUND...................................................................... 19.0%
EVERGREEN VA FOUNDATION FUND............................................................................. 15.3%
</TABLE>

(1) Reflects waiver of advisory fees and reimbursement of other expenses.
Without such waivers and reimbursements, the average annual total return
during this period would have been lower.

<PAGE>
The calculations of total return assume the reinvestment of all dividends
and capital gains distributions on the reinvestment dates during the period and
the deduction of all recurring expenses that were charged to shareholders
accounts. The above tables do not reflect charges and deductions which are, or
may be, imposed under the VA or VLI contracts.

GENERAL

Independent Auditors. KPMG Peat Marwick LLP, One Mellon Bank Center, Pittsburgh,
Pennsylvania 15219, serves as the independent public accountants of the Trust.

Legal Counsel. Sullivan & Worcester LLP, 1025 Connecticut Avenue, N.W.,
Washington, D.C. 20036, acts as counsel for the Trust.

Liability Under Massachusetts Law. Under Massachusetts law, Trustees and
shareholders of a business trust may, in certain circumstances, be held
personally liable for its obligations. The Declaration of Trust under which the
Funds operate provide that no Trustee or shareholder will be personally liable
for the obligations of the Trust and that every written contract made by the
Trust contain a provision to that effect. If any Trustee or shareholder were
required to pay any liability of the Trust, that person would be entitled to
reimbursement from the general assets of the Trust.

Additional Information. This Prospectus and the Statement of Additional
Information, which has been incorporated by reference herein, do not contain all
the information set forth in the Registration Statement filed by the Trust with
the SEC under the Securities Act of 1933. Copies of the Registration Statement
may be obtained at a reasonable charge from the SEC or may be examined, without
charge, at the offices of the SEC in Washington, D.C.

<PAGE>
INVESTMENT ADVISERS
Evergreen Asset Management Corp., 2500 Westchester Avenue, Purchase, New York
10577
EVERGREEN VA FUND
EVERGREEN VA GROWTH AND INCOME FUND
EVERGREEN VA FOUNDATION FUND
EVERGREEN VA GLOBAL LEADERS FUND

Capital Management Group of First Union National Bank, 210 South College
Street, Charlotte, North Carolina 28288
EVERGREEN VA AGGRESSIVE GROWTH FUND

Keystone Investment Management Company, 200 Berkeley Street, Boston,
Massachusetts 02116-5034
EVERGREEN VA STRATEGIC INCOME FUND

CUSTODIAN & TRANSFER AGENT
State Street Bank and Trust Company, Box 9021, Boston, Massachusetts
02205-9827

LEGAL COUNSEL
Sullivan & Worcester LLP, 1025 Connecticut Avenue, N.W., Washington, D.C.
20036

INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, One Mellon Bank Center, Pittsburgh, Pennsylvania 15219