SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the Appropriate Box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)) [ ]
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Evergreen Variable Annuity Trust
(Name of Registrant as Specified in Its Charter)
Evergreen Variable Annuity Trust
(Name of Person Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
______________________________________________________________
(2) Aggregate number of securities to which transaction applies:
______________________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
______________________________________________________________
(4) Proposed maximum aggregate value of transaction:
______________________________________________________________
(5) Total fee paid:
______________________________________________________________
[ ] Fee paid previously with preliminary material
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ________________________
(2) Form, Schedule or Registration Statement No.: _________
(3) Filing Party: _________________________________________
(4) Date Filed: ___________________________________________
<PAGE>
EVERGREEN INTERNATIONAL TRUST
EVERGREEN VARIABLE ANNUITY TRUST
(each a Trust, collectively the "Trusts")
200 Berkeley Street
Boston, Massachusetts 02116
January 9, 2001
Dear Shareholder:
I am writing to shareholders of Evergreen Perpetual Global Fund,
Evergreen Perpetual International Fund and Evergreen VA Perpetual International
Fund (collectively, the "Funds") to let you know about a Special Meeting of
Shareholders to be held on February 16, 2001. Before that meeting, I would like
your vote on two important proposals described in the accompanying Notice of
Special Meeting of Shareholders and Proxy Statement. The proposals relate to the
acquisition of Perpetual, plc, parent of each Fund's sub-advisor and 50% owner
of each Fund's advisor, by AMVESCAP, plc.
The first proposal would authorize the Funds to enter into new
investment advisory agreements with Mentor Perpetual Advisors, LLC ("Mentor
Perpetual") under which Mentor Perpetual would continue to be responsible for
overseeing the day-to-day management of each Fund, subject to the overall
supervision of the Board of Trustees of each Trust.
The second proposal would authorize Mentor Perpetual to enter into new
sub-advisory agreements with Perpetual Portfolio Management Limited ("PPM")
under which PPM would continue to be responsible for the day-to-day investment
and reinvestment of each Fund's securities, subject to the overall supervision
of Mentor Perpetual and the Board of Trustees of each Trust.
The Board of Trustees of each Trust has unanimously approved each of
the proposals and recommends that you vote FOR each proposal.
I realize that this Proxy Statement will take time to review, but your
vote is very important. Please take the time to familiarize yourself with the
Proposals and to sign and return your proxy card in the enclosed postage-paid
envelope today. Instructions on how to complete the proxy card are included
immediately after the Notice of Special Meeting. If your investment includes
Evergreen VA Perpetual International Fund ("VA Perpetual Fund"), you have the
right to instruct The Hartford Life Insurance Company or American Scandia Life
Insurance Company how to vote the VA Perpetual Fund shares they hold under your
annuity contract.
If you have any questions about the proposals or the proxy card,
please call Shareholder Communications Corporation at 800-645-8640. You may
record your vote by telephone, FAX your completed and signed proxy card (both
front and back sides) or if you own shares of Evergreen Perpetual Global Fund or
Perpetual International Fund, you may vote on the Internet by following the
voting instructions as outlined on your proxy card.
Thank you for taking this matter seriously and participating in this
important process.
Sincerely,
William M. Ennis
President
Evergreen Funds
<PAGE>
EVERGREEN PERPETUAL GLOBAL FUND
EVERGREEN PERPETUAL INTERNATIONAL FUND
EVERGREEN VA PERPETUAL INTERNATIONAL FUND
200 Berkeley Street
Boston, Massachusetts 02116
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 16, 2001
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the Shareholders of
Evergreen Perpetual Global Fund, Evergreen Perpetual International Fund, both
series of Evergreen International Trust, and Evergreen VA Perpetual
International Fund, a series of Evergreen Variable Annuity Trust, (collectively,
the "Funds") will be held at the offices of the Evergreen Funds, 200 Berkeley
Street, Boston, Massachusetts 02116 on February 16, 2001 at 10:00 a.m. Eastern
Time and any adjournments thereof (collectively, the "Special Meeting") for the
following purposes:
1. To approve a new investment advisory agreement between each Fund and
Mentor Perpetual Advisors, LLC.
2. To approve a new investment sub-advisory agreement between Mentor
Perpetual Advisors, LLC and Perpetual Portfolio Management Limited with
respect to each Fund.
3. To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
The Boards of Trustees of Evergreen International Trust and Evergreen
Variable Annuity Trust have fixed the close of business on November 30, 2000 as
the record date for determination of shareholders entitled to notice of and to
vote at the Special Meeting.
By order of the Board of Trustees
Michael H. Koonce
Secretary
January 9, 2001
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE SPECIAL MEETING ARE URGED WITHOUT DELAY TO COMPLETE, SIGN,
DATE AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH
NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. INSTRUCTIONS FOR THE PROPER
EXECUTION OF THE PROXY CARD ARE SET FORTH ON THE INSIDE COVER OF THIS NOTICE.
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense to the Trust involved in
validating your vote if you fail to sign your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in
the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the
party signing should conform exactly to the name shown in the
registration on the proxy card.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the
proxy card should be indicated unless it is reflected in the
form of registration. For example:
<TABLE>
REGISTRATION VALID SIGNATURE
<S> <C>
CORPORATE ACCOUNTS
(1) ABC Corp ABC Corp.
(2) ABC Corp John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/28/78 Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. f/b/o John B. Smith, Jr. UGMA John B. Smith
(2) Estate of John B. Smith John B. Smith, Jr., Executor
[After completing your proxy card, return it in the enclosed postage paid envelope.]
OTHER WAYS TO VOTE YOUR PROXY
VOTE BY TELEPHONE:
1. Read the proxy statement and have your proxy card at hand.
2. Call the toll-free number found on your proxy card.
3. Enter the 12-digit control number found on your proxy card.
4. Follow the simple recorded instructions.
VOTE BY FAX:
1. Read the proxy statement and have your completed proxy card at hand.
2. Fax both front and back sides of your proxy card by calling the
number indicated on your proxy card and following the voting
instructions.
VOTE BY INTERNET (Evergreen Perpetual Global Fund and Evergreen Perpetual International Fund only):
1. Read the proxy statement and have your proxy card at hand.
2. Go to the website indicated on your proxy card and follow the voting instructions.
The above methods of voting are generally available 24 hours a day. Do not mail the proxy card if you are voting by
telephone, fax or the Internet.
If you have any questions about the proxy card, please call Shareholder
Communications Corporation at 800-645-8640.
</TABLE>
SPECIAL INSTRUCTIONS FOR EVERGREEN VA PERPETUAL INTERNATIONAL FUND SHAREHOLDERS
If your investment includes Evergreen VA Perpetual International Fund
("VA Perpetual Fund"), you have the right to instruct The Hartford Life
Insurance Company ("The Hartford") or American Scandia Life Insurance Company
("American Scandia") how to vote the VA Perpetual Fund shares they hold under
your annuity contract. [You can do so by mail or telephone] Just follow the
instructions on the enclosed proxy card. The Hartford and American Scandia will
vote any Fund shares for which they do not receive voting instructions in
proportionately the same manner -either For, Against or Abstain - as shares for
which they do receive instructions. For purposes of this proxy statement,
annuity contract owner is referred to as "shareholder" and voting instruction
form is referred to as "proxy card."
<PAGE>
EVERGREEN PERPETUAL GLOBAL FUND
EVERGREEN PERPETUAL INTERNATIONAL FUND
EVERGREEN VA PERPETUAL INTERNATIONAL FUND
200 Berkeley Street
Boston, Massachusetts 02116
SPECIAL MEETING OF SHAREHOLDERS
February 16, 2001
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Trustees of Evergreen International Trust and
Evergreen Variable Annuity Trust (the "Trusts"), for use at a Special Meeting of
Shareholders of Evergreen Perpetual Global Fund, Evergreen Perpetual
International Fund, both series of the Evergreen International Trust, and
Evergreen VA Perpetual International Fund, a series of the Evergreen Variable
Annuity Trust, (collectively, the "Funds") to be held at 10:00 a.m. Eastern Time
on February 16, 2001 at the offices of the Evergreen Funds, 200 Berkeley Street,
Boston, Massachusetts 02116, and any adjournments thereof (collectively, the
"Special Meeting"). A notice of the Special Meeting and a proxy card accompany
this Proxy Statement. This Proxy Statement and the accompanying Notice of
Special Meeting and proxy card are first being mailed to shareholders on or
about January 9, 2001. The costs incurred in connection with preparing this
Proxy Statement and its enclosures will be paid by Perpetual plc. Each Fund's
most recent annual report is available upon request without charge by writing or
calling the Trusts at 800-252-0064.
If the enclosed proxy is properly executed and returned in time to be
voted at the Special Meeting, the shares of beneficial interest ("Shares")
represented by the proxy will be voted in accordance with the instructions
marked therein. Unless instructions to the contrary are marked on the proxy, it
will be voted FOR the matters listed in the accompanying Notice of Special
Meeting of Shareholders. Any shareholder who has given a proxy has the right to
revoke it at any time prior to its exercise either by attending the Special
Meeting and voting his or her Shares in person, or by submitting a letter of
revocation or a later-dated proxy to the Trust at the above address prior to the
date of the Special Meeting.
If a quorum is not present at the Special Meeting, or if a quorum is
present but sufficient votes to approve each proposal are not received, the
persons named as proxies on the enclosed proxy card may propose one or more
adjournments of the Special Meeting to permit further solicitation of proxies.
In determining whether to adjourn the Special Meeting, the following factors may
be considered: the nature of the proposals that are the subject of the Special
Meeting, the percentage of votes actually cast, the percentage of negative votes
actually cast, the nature of any further solicitation and the information to be
provided to shareholders with respect to the reasons for the solicitation. Any
adjournment will require the affirmative vote of a majority of those Shares
represented at the Special Meeting in person or by proxy. A shareholder vote may
be taken on one or more of the proposals in this Proxy Statement prior to any
such adjournment if sufficient votes have been received for approval. Under each
Trust's Agreement and Declaration of Trusts dated September 18, 1997 (the
"Declaration of Trust"), a quorum of shareholders is constituted by the presence
in person or by proxy of the holders of a majority of the outstanding Shares of
the Fund entitled to vote at the Special Meeting.
In order that your Shares may be represented at the Special Meeting,
you are requested to:
-- indicate your instructions on the enclosed proxy card;
-- date and sign the proxy card;
-- mail the proxy card promptly in the enclosed envelope, which
requires no postage if mailed in the United States; and
-- allow sufficient time for the proxy card to be received on or
before 10:00 a.m. Eastern Time on February 16, 2001.
INTRODUCTION
Each Fund has been advised since 1995 by Mentor Perpetual Advisors, LLC
("Mentor Perpetual") under various investment advisory agreements and
sub-advised by Perpetual Portfolio Management Limited ("PPM") under interim
sub-advisory agreements since September 22, 2000. PPM is a whollyowned
subsidiary of Perpetual, plc ("Perpetual") and Mentor Perpetual is 50% owned
by Perpetual. As announced on December 7, 2000, AMVESCAP, plc, acquired more
than 90% of the outstanding voting securities of Perpetual (the
"Acquisition"). This resulted in a change of control of both Mentor Perpetual
and PPM. . AMVESCAP is a publicly traded English company and is one of the
world's largest independent management firms with offices in more than 25
countries worldwide and over $400 billion under management as of September 30,
2000. AMVESCAP is the parent of the investment advisors to the AIM and INVESCO
fund families. The Acquisition has caused the "assignment" (as defined in the
Investment Company Act of 1940 (the "1940 Act")) of each Fund's existing
advisory agreement with Mentor Perpetual and each Fund's existing sub-advisory
agreement with PPM. As required by the 1940 Act, each existing advisory and
sub-advisory agreement provides for its automatic termination in the event of
an assignment.
In anticipation of the impending Acquisition, on November 27, 2000 the
Board of Trustees of the Trusts, including all of the Disinterested Trustees
that are not "interested persons," as defined in the 1940 Act (the
"Disinterested Trustees"), approved Interim Advisory Agreements with Mentor
Perpetual on behalf of each Fund and Interim Sub-Advisory Agreements with PPM
on behalf of each Fund (collectively, the "Interim Agreements") pursuant to
Rule 15a-4 of the 1940 Act. Each of these Interim Agreements will remain in
effect from the earlier of 150 days from the date of Acquisition or until the
new Investment Advisory and Management Agreement and Sub-Advisory Agreements
(collectively, the "New Agreements") can be approved by the shareholders of
each Fund as required by the 1940 Act. During the period in which the Interim
Agreements are in effect, all advisory fees payable by the Funds will be put
into escrow. If the New Agreements are approved by shareholders, the escrow
agent will release the fees to Mentor Perpetual. If the New Agreements are not
approved, Mentor Perpetual will receive the lesser of its costs for providing
services under the Interim Agreement or the escrow amount. The proposals below
describe the New Agreements which you are being asked to approve.
PROPOSAL 1
TO APPROVE NEW INVESTMENT ADVISORY AGREEMENTS WITH
MENTOR PERPETUAL ADVISORS, LLC.
SUMMARY OF PROPOSAL
Mentor Perpetual has served as investment advisor to Evergreen
Perpetual International Fund and Evergreen VA Perpetual International Fund since
their inception and to Evergreen Perpetual Global Fund since 1995 . Created in
1995, Mentor Perpetual is a joint venture between Mentor Investment Group, LLC
("Mentor"), a subsidiary of First Union Corporation, and Perpetual for the
purpose of providing advisory and administrative services to the Funds. First
Union Corporation, located at 301 South College Street, Charlotte, North
Carolina 28288-0013, is a publicly held bank holding company The strength of the
joint venture was determined then to be the combination of Perpetual's
investment management expertise and Mentor's administrative skills and
distribution force. Recently, Mentor joined the larger Evergreen family of
funds, thereby, enhancing the strength of the services it provides to the Funds.
For these reasons and based on an analysis of factors described below,
the Trustees of each Trust have, subject to shareholder approval, unanimously
approved the execution of new Investment Advisory and Management Agreements
("New Advisory Agreements") with Mentor Perpetual. Under the New Advisory
Agreements, Mentor Perpetual would continue to be responsible for overseeing the
day-to-day management of each Fund's assets, subject to the overall supervision
of the Board of Trustees. Each Fund pays a fee to Mentor Perpetual for its
services as described below. There will be no change in the fees paid by each
Fund to Mentor Perpetual under the New Advisory Agreements.
Pursuant to Section 15 of the 1940 Act, the New Advisory Agreements
will not become effective unless approved by shareholders of each Fund.
EVALUATION BY THE TRUSTEES
The Trustees requested, received and considered such information as
they deemed reasonably necessary to enable them to evaluate the New Advisory
Agreements. On December 15, 2000, the Trustees, including all of the Independent
Trustees (as defined under the 1940 Act), voted to approve the New Advisory
Agreements and to submit the proposed New Advisory Agreements to the
shareholders of each Fund.
The material factors considered by the Trustees were: the nature and
quality of services to be provided by Mentor Perpetual particularly in light of
the Acquisition; the amount of fees that have been, and are expected to be paid;
Mentor Perpetual's financial strength and insurance coverage; and its
administrative support services.
The factor that the Trustees considered most significant was that,
under the New Advisory Agreements, the Funds' investments would continue to be
managed by the same individuals who currently manage each Fund's investments
under the Interim Advisory Agreements, at no increase in the fees paid by each
Fund for such services. The Trustees were also satisfied that Mentor Perpetual
(1) was knowledgeable and experienced in the operations of the relevant
financial markets and in the laws that are applicable to such operations insofar
as they might affect the Funds, and (2) had the personnel and financial
resources to enable it to discharge its duties under the New Advisory Agreements
adequately. After careful consideration, the Trustees believe that the best
interests of the shareholders of the Funds would be served if the New Advisory
Agreements are approved.
TRANSFERS OF CONTROL OF AN INVESTMENT ADVISER
UNDER THE 1940 ACT
Section 15(f) of the 1940 Act provides that an investment adviser to a
registered investment company, and the affiliates of such adviser, may receive
any amount or benefit in connection with a sale of any interest in such
investment adviser which results in an assignment of an investment advisory
contract if the following two conditions are satisfied: (1) for a period of
three years after such assignment, at least 75% of the board of trustees of the
investment company cannot be "interested persons" (within the meaning of Section
2(a)(19) of the 1940 Act) of a new investment adviser or its predecessor, and
(2) an unfair burden may not be imposed on the investment company as a result of
the assignment or any express or implied terms, conditions or understandings
applicable thereto.
With respect to the second condition of Section 15(f), an unfair burden
on an investment company is defined in the 1940 Act to include any arrangement
during the two-year period after any such transaction occurs whereby a manager
or an investment adviser or its predecessor or successor, or any interested
person of such adviser, predecessor or successor, receives or is entitled to
receive any compensation from the investment company of two types, either
directly or indirectly. The first type is compensation from any person in
connection with the purchase or sale of securities or other property to, from or
on behalf of the investment company, other than bona fide ordinary compensation
as principal underwriter for such company. The second type is compensation from
the investment company or its security holders for other than bona fide
investment advisory or other services.
Mentor Perpetual has agreed as part of the Acquisition that, for a
period of three years after the closing of the Acquisition, it will not take or
recommend any action that would cause more than 25% of the Trust's trustees to
be interested persons of any entity affiliated with Mentor Perpetual or PPM.
Mentor Perpetual has also agreed not to take or recommend any action that would
constitute an unfair burden on the Trusts or the Funds within the meaning of
Section 15(f).
TERMS OF THE NEW ADVISORY AGREEMENTS
The following description of the New Advisory Agreements is qualified
entirely by reference to the Form of Advisory Agreement, which is attached as
Exhibit A. The New Advisory Agreements are substantially identical to the
existing advisory agreements, except for the dates of execution, term of the
Agreement, and notice provisions. The New Advisory Agreement provide in
substance (1) that each Fund will pay Mentor Perpetual fees for services
provided at the annual rates under the section entitled "Fees Paid Under
Advisory Agreement" below; (2) that it will continue for a period of two years
from its effective date and thereafter, from year to year, if approved at least
annually by a majority vote of the outstanding shares of the Fund or by a
majority of the Trustees and a majority of the Disinterested Trustees; (3) that
it may be terminated, without penalty, by Mentor Perpetual, by the Trustees or
by majority vote of the outstanding shares of each Fund upon 60 days prior
written notice; (4) that it may be terminated by Mentor Perpetual on 60 days
prior written notice to the Trust; and (5) that it will terminate automatically
in the event of its "assignment" as such term is defined in the 1940 Act. The
New Advisory Agreements also provide that Mentor Perpetual is not liable to the
Trust for any act or omissions under the Advisory Agreement, but that Mentor
Perpetual is not protected against liability arising out of its own willful
misfeasance, bad faith, gross negligence or reckless disregard in the
performance of its duties.
Fees Paid Under Advisory Agreement
Each Fund pays Mentor Perpetual at the annual rates listed below:
Evergreen Perpetual Global Fund:
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Average Daily Net Assets Fee
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First $75 million 1.10%
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Over $75 million 1.00%
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Evergreen Perpetual International Fund:
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Average Daily Net Assets of the Fund 1.00%
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Evergreen Perpetual VA International Fund:
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Average Daily Net Assets of the Fund 1.00%
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There will be no changes to advisory fees paid under the New Advisory
Agreements.
REQUIRED VOTE
Approval of the New Advisory Agreements requires the vote of a majority
of the outstanding Shares of each Fund. A majority of the outstanding Shares is
defined in the 1940 Act as the lesser of (a) 67% of the Shares of the Fund
present at the Special Meeting if more than 50% of the outstanding Shares are
present in person or by proxy at the Special Meeting; or (b) more than 50% of
the outstanding Shares of the Fund ("Majority Vote"). Under this standard,
abstentions will have the same effect as a vote "Against" the proposal. Because
it is anticipated that this will be treated as a routine item, the Funds do not
expect to recognize broker non-votes. If the New Advisory Agreements are not
approved by the shareholders of each Fund, the Trustees will consider other
possible courses of action which are in the best interests of shareholders.
EACH BOARD OF TRUSTEES, INCLUDING ALL OF THE DISINTERESTEDTRUSTEES,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" APPROVAL OF EACH NEW INVESTMENT
ADVISORY AGREEMENT.
PROPOSAL 2
TO APPROVE NEW INVESTMENT SUB-ADVISORY AGREEMENT WITH
PERPETUAL PORTFOLIO MANAGEMENT LIMITED
SUMMARY OF PROPOSAL
For the reasons and based on an analysis of factors described below and
upon the recommendation of Mentor Perpetual, the Trustees of the Trusts have,
subject to shareholder approval, unanimously approved Mentor Perpetual's
execution of new Sub-Advisory Agreements (the "New Sub-Advisory Agreements")
with PPM. Under the New Sub-Advisory Agreements, PPM would continue to be
responsible for the day-to-day investment and reinvestment of each Fund's
securities, subject to the supervision of Mentor Perpetual and the Board of
Trustees. Mentor Perpetual would pay PPM fees under the New Sub-Advisory
Agreements, and there would be no change in the fees paid by each Fund to Mentor
Perpetual.
Pursuant to Section 15 of the 1940 Act, the New Sub-Advisory Agreements
will not become effective unless approved by shareholders of each Fund.
EVALUATION BY THE TRUSTEES
The Trustees requested, received and considered such information as
they deemed reasonably necessary to enable them to evaluate the New Sub-Advisory
Agreements. On December 15, 2000, the Trustees, including all of the Independent
Trustees, voted to approve the New Sub-Advisory Agreements and to submit the
proposed New Sub-Advisory Agreements to the shareholders of each Fund.
The material factors considered by the Trustees were: the nature and
quality of services to be provided by PPM particularly in light of the
Acquisition; the amount of fees that have been and are expected to be paid;
PPM's financial strength and insurance coverage; and the investment advisory
experience and reputation of the personnel of PPM.
The factor that the Trustees considered most significant was that,
under the New Sub-Advisory Agreements, the Funds' investments would continue to
be managed by the same individuals who currently manage each Fund's investments
under the Interim Agreements, at no increase in the fees paid by each Fund for
such services. The Trustees were also satisfied that PPM (1) was knowledgeable
and experienced in the operations of the relevant financial markets and in the
laws that are applicable to such operations insofar as they might affect the
Funds, and (2) had the personnel and financial resources to enable it to
discharge its duties under the New Sub-Advisory Agreements adequately. After
careful consideration, the Trustees believe that the best interests of the
shareholders of the Funds would be served if the New Sub-Advisory Agreements are
approved.
TERMS OF THE NEW SUB-ADVISORY AGREEMENTS
The following description of the New Sub-Advisory Agreements is
qualified entirely by reference to the Form of Sub-Advisory Agreement, which is
attached as Exhibit B. The New Sub-Advisory Agreements are substantially
identical to the existing sub-advisory agreements, except for the dates of
execution, term of the Agreement, and notice provisions. The New Sub-Advisory
Agreements provide in substance (1) that Mentor Perpetual will pay PPM fees for
its services as further described below; (2) that it will continue for a period
of two years from its effective date and thereafter from year to year if
approved at least annually by a majority vote of the outstanding shares of each
Fund or by a majority of the Trustees and a majority of the Disinterested
Trustees; (3) that it may be terminated, without penalty, by Mentor Perpetual,
by the Trustees or by majority vote of the outstanding shares of each Fund upon
60 days prior written notice; (4) that it may be terminated by PPM on 60 days
prior written notice to Mentor Perpetual, or upon shorter notice as may be
mutually agreed upon; and (5) that it will terminate automatically in the event
of its "assignment" as such term is defined in the 1940 Act. The New
Sub-Advisory Agreements also provide that PPM is not liable to the Trust or to
Mentor Perpetual for any act or omissions under the New Sub-Advisory Agreements,
and that PPM is not protected against liability arising out of its own willful
misfeasance, bad faith, gross negligence or reckless disregard in the
performance of its duties.
Fees Paid Under Sub-Advisory Agreement
As noted above, the Funds pay an advisory fee to Mentor Perpetual.
Under the Operating Agreement dated June 21, 1995 between Mentor and Perpetual
(the "Operating Agreement"), Mentor and Perpetual each receive 50% of the income
earned by Mentor Perpetual after the payment of all expenses charged to Mentor
Perpetual. In full consideration of the services rendered pursuant to the New
Sub-Advisory Agreements, PPM has agreed to accept as payment 85% of the portion
of the fees received by Perpetual under the Operating Agreement.
Portfolio Transactions
Subject to the supervision and control of Mentor Perpetual and the
Trustees of the Trusts, PPM will be responsible for decisions to buy and sell
securities for each Fund and for the placement of its portfolio business and the
negotiation of commissions, if any, paid on such transactions. Brokerage
commissions are paid on transactions in equity securities traded on a securities
exchange and on options, futures contracts and options thereon. Fixed income
securities and certain equity securities in which the Fund invests are traded in
the over-the-counter market. These securities are generally traded on a net
basis with dealers acting as principal for their own account without a stated
commission, although prices of such securities usually include a profit to the
dealer. In over-the-counter transactions, orders are placed directly with a
principal market maker unless a better price and execution can be obtained by
using a broker. In underwritten offerings, securities are usually purchased at a
fixed price which includes an amount of compensation to the underwriter
generally referred to as the underwriter's concession or discount. Certain money
market securities may be purchased directly from an issuer, in which case no
commissions or discounts are paid. U.S. government securities are generally
purchased from underwriters or dealers, although certain newly-issued U.S.
government securities may be purchased directly from the U.S. Treasury or from
the issuing agency or instrumentality. PPM will be responsible for effecting
each Fund's portfolio transactions and will do so in a manner deemed fair and
reasonable to each Fund and not according to any formula. The primary
consideration in all portfolio transactions will be prompt execution of orders
in an efficient manner at a favorable price. In selecting broker-dealers and
negotiating commissions, PPM will consider the firm's reliability, the quality
of its execution services on a continuing basis and its financial condition.
When more than one firm is believed to meet these criteria, preference may be
given to brokers that provide a Fund or PPM with brokerage and research services
within the meaning of Section 28(e) of the Securities Exchange Act of 1934. PPM
is of the opinion that, because this material must be analyzed and reviewed, its
receipt and use will not tend to reduce expenses but may benefit the Fund by
supplementing PPM's research. In seeking the most favorable price and execution
available, PPM may, if permitted by law, consider sales of the Funds' shares a
factor in the selection of broker-dealers.
PPM may effect portfolio transactions for other investment companies
and advisory accounts. Research services furnished by broker-dealers through
which a Fund effects its securities transactions may be used by PPM in servicing
all of its accounts; not all such services may be used in connection with a
Fund. In the opinion of PPM, it is not possible to measure separately the
benefits from research services to each of its accounts, including a Fund.
Whenever concurrent decisions are made to purchase or sell securities by a Fund
and another account, PPM will attempt to allocate equitably portfolio
transactions among the Fund and other accounts. In making such allocations
between a Fund and other accounts, the main factors to be considered are the
respective investment objectives, the relative size of portfolio holdings of the
same or comparable securities, the availability of cash for investment, the size
of investment commitments generally held, and the opinions of the persons
responsible for recommending investments to the Fund and the other accounts. In
some cases this procedure could have an adverse effect on the Fund. In the
opinion of PPM, however, the results of such procedures will, on the whole, be
in the best interest of each of the accounts.
PPM may execute portfolio transactions through certain of its
affiliated brokers, acting as agent in accordance with procedures established by
the Trust's Board of Trustees, but will not purchase any securities from or sell
any securities to any such affiliate acting as principal for its own account.
REQUIRED VOTE
Approval of the New Sub-Advisory Agreements requires the vote of a
majority of the shareholders of each Fund. A majority is defined in the 1940 Act
as the lesser of (a) 67% of the Shares of the Fund present at the Special
Meeting if more than 50% of the outstanding Shares are present in person or by
proxy at the Special Meeting; or (b) more than 50% of the outstanding Shares of
the Fund ("Majority Vote"). If the New Sub-Advisory Agreements are not approved
by the shareholders of each Fund, the Trustees will consider other possible
courses of action which are in the best interests of shareholders.
EACH BOARD OF TRUSTEES, INCLUDING ALL OF THE DISINTERESTED TRUSTEES,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" APPROVAL OF EACH NEW SUB-ADVISORY
AGREEMENT.
SHAREHOLDER INFORMATION
Each Board of Trustees has fixed the close of business on November 30,
2000 as the record date (the "Record Date") for the determination of
shareholders of the Funds entitled to notice of and to vote at the Special
Meeting. All shareholders of record on the Record Date will be entitled to one
vote for each dollar of net asset value held on that date. As of the Record
Date, the following number of each class of Shares of beneficial interest of
each Fund was outstanding:
<TABLE>
------------------------ ---------------------------- ---------------------------------- =============================
Class of Shares Perpetual Global Fund Perpetual International Fund VA Perpetual International
<S> <C> <C> <C>
Fund
------------------------ ---------------------------- ---------------------------------- =============================
------------------------ ---------------------------- ---------------------------------- =============================
Class A 3,852,174.649 6,360,379,168 N/A
------------------------ ---------------------------- ---------------------------------- =============================
------------------------ ---------------------------- ---------------------------------- =============================
Class B 202,684.548 340,987.069 N/A
------------------------ ---------------------------- ---------------------------------- =============================
------------------------ ---------------------------- ---------------------------------- =============================
Class C 6,711,246.101 4,826,139.316 N/A
------------------------ ---------------------------- ---------------------------------- =============================
------------------------ ---------------------------- ---------------------------------- =============================
Class Y 1,260.672 216,030.338 N/A
------------------------ ---------------------------- ---------------------------------- =============================
------------------------ ---------------------------- ---------------------------------- =============================
VA N/A N/A 1,671,564.901
------------------------ ---------------------------- ---------------------------------- =============================
</TABLE>
As of November 30, 2000, the officers and the Trustees of the Trusts as
a group beneficially owned less than 1% of the Shares of the Funds. To each
Trusts' knowledge, the following persons owned beneficially or of record more
than 5% of each class of each Fund's outstanding Shares as of the Record Date:
<PAGE>
<TABLE>
----------------------------- --------------------------------------------------- --------------------------- --------------------
Class Name and Address Number of Shares Percentage of Class
<S> <C> <C> <C>
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
Charles Schwab & Co. Inc.
Perpetual Global Fund Class Special Custody for the 375,427.113 9.753%
A Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
First Clearing Corporation
MCV Phys Global Account 6.962%
Carl Gattuso Executive Director
P.O. Box 980510
Richmond, VA 23298-0510
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
Perpetual Global Fund Class None
B
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
None
Perpetual Global Fund Class
C
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
Terry A. Prince
Perpetual Global Fund Class John H. Prince, Jr. 394.304 31.277%
Y 6708 Hollow Oak Drive
Mint Hill, NC 28227
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
Paul E. Sedory
P.O. Box 118 364.241 28.893%
2250 AC Voorschoten
Netherlands
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
First Clearing Corporation
Kristina R. Schvejda 246.185 19.528%
40 Marilyn Street
North Haledon, NJ 07508
---------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
State Street Bank and Trust Company
Sydney B. Stephan 188.005 14.913%
22200 Meadowbrook Avenue
Scandia, MN 55073
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
Daniel J. Ludeman
5105 Stratford Crescent 67.937 5.389%
Richmond, VA 23226-1615
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
Charles Schwab & Co. Inc.
Perpetual International Special Custody For the 920,834.582 14.669%
Fund Class A Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
Key Trust Company Trustee
Attn: Martin Currie 341,999.627 5.448%
P.O. Box 94871
Cleveland, OH 44101-4871
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
None
Perpetual International
Fund Class B
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
None
Perpetual International
Fund Class C
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
Stanley Picheny
Perpetual International 322 Central Park West 99,665.266 46.135%
Fund Class Y New York, NY 10025-7629
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
First Clearing Corporation
The Gladys & Franklin Clark 51,826.817 23.991%
Foundation
C/o Gilbert A. Bartlett
809 Richmond Road
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
Williamsburg Landing Inc.
Attn: Nancy Evans 49,619.433 22.969%
5700 Williamsburg Landing Drive
Williamsburg, VA 23185-3775
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
First Clearing Corporation
Adrian Mathew Picheny 11,611.292 5.375%
1994 Trust
248 Club Drive
San Carlos, CA 94070-1617
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
Hartford Life Insurance Company
VA Perpetual International Attn: Carol Lewis 1,528,439.396 91.438%
Fund 200 Hopemeadow Street
Simsbury, CT 06089-9625
----------------------------- --------------------------------------------------- --------------------------- --------------------
----------------------------- --------------------------------------------------- --------------------------- --------------------
Hartford Life & Annuity Insurance Co.
Attn: Carol Lewis 111,378.454 6.663%
200 Hopemeadow Street
Simsbury, CT 06089-9625
----------------------------- --------------------------------------------------- --------------------------- --------------------
</TABLE>
OTHER MATTERS
Submission of Shareholder Proposals
The Trusts are not generally required to hold annual or special
meetings of shareholders. Shareholders wishing to submit proposals for inclusion
in a proxy statement for a subsequent shareholders' meeting should send their
written proposals to the Secretary of the Trusts at 200 Berkeley Street, Boston,
MA 02116.
Shareholders' Request for Special Meeting
Shareholders holding at least 10% of a Trust's outstanding voting
securities (as defined in the 1940 Act) may require the calling of a meeting of
the Trust's shareholders for the purpose of voting on the removal of any Board
member. Meetings of a Trust's shareholders for any other purpose will also be
called by the Board when requested in writing by shareholders holding at least
10% of the Shares then outstanding or, if the Board members shall fail to call
or give notice of any meeting of shareholders for a period of 30 days after such
application, shareholders holding at least 10% of the Shares then outstanding
may call and give notice of such meeting.
Other Matters to Come Before the Meeting
Each Board of Trustees does not intend to present any other business at
the Special Meeting other than as described in this Proxy Statement, nor is
either Board aware that any shareholder intends to do so. If, however, any other
matters are properly brought before the Special Meeting, the persons named in
the accompanying proxy card will vote, or withhold their vote, thereon in
accordance with their judgment.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE, AND
RETURN THE PROXY AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE PAID ENVELOPE.
January 9, 2001
<PAGE>
EXHIBIT A
FORM OF
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
AGREEMENT made the _____ day of ________ 2001, by and between
[EVERGREEN (INTERNATIONAL TRUST OR EVERGREEN VARIABLE ANNUITY TRUST], a Delaware
business trust (the "Trust") and MENTOR PERPETUAL ADVISORS, LLC, a Virginia
limited liability company (the "Adviser").
WHEREAS, the Trust and the Adviser wish to enter into an Agreement
setting forth the terms on which the Adviser will perform certain services for
the Trust, its series of shares as listed on Schedule 1 to this agreement and
each series of shares subsequently issued by the Trust and added to Schedule 1
(each singly a "Fund" or collectively the "Funds").
THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, the Trust and the Adviser agree as follows:
1(a). The Trust hereby employs the Adviser to manage and administer the
operation of the Trust and each of its Funds, to supervise the provision of the
services to the Trust and each of its Funds by others, and to manage the
investment and reinvestment of the assets of each Fund of the Trust in
conformity with such Fund's investment objectives and restrictions as may be set
forth from time to time in the Fund's then current prospectus and statement of
additional information, if any, and other governing documents, all subject to
the supervision of the Board of Trustees of the Trust, for the period and on the
terms set forth in this Agreement. The Adviser hereby accepts such employment
and agrees during such period, at its own expense, to render the services and to
assume the obligations set forth herein, for the compensation provided herein.
The Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
(b). In the event that the Trust establishes one or more Funds, in
addition to the Funds list on Schedule 1, for which it wishes the Adviser in
writing. If the adviser is willing to render such services, it shall notify the
Trust in writing and such Fund shall become a Fund hereunder and the
compensation payable to the Adviser by the new Fund will be as agreed in writing
at the time.
2. The Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of each Fund with broker-dealers selected
by the Adviser. In executing portfolio transactions and selecting
broker-dealers, the Adviser will use its best efforts to seek best execution on
behalf of each Fund. In assessing the best execution available for any
transaction, the Adviser shall consider all factors it deems relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker-dealer, and the
reasonableness of the commission, if any (all for the specific transaction and
on a continuing basis). In evaluating the best execution available, and in
selecting the broker-dealer to execute a particular transaction, the Adviser may
also consider the brokerage and research services (as those terms are used in
Section 28(e) of the Securities Exchange Act of 1934 (the "1934 Act")) provided
to a Fund and/or other accounts over which the Adviser or an affiliate of the
Adviser exercises investment discretion.
<PAGE>
The Adviser is authorized to pay a broker-dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for a Fund which is in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction if, but only if,
the Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer viewed in terms of that particular transaction or in terms of all
of the accounts over which investment discretion is so exercised.
3. The Adviser, at its own expense, shall furnish to the Trust office
space in the offices of the Adviser or in such other place as may be agreed upon
by the parties from time to time, all necessary office facilities, equipment and
personnel in connection with its services hereunder, and shall arrange, if
desired by the Trust, for members of the Adviser's organization to serve without
salaries from the Trust as officers or, as may be agreed from time to time, as
agents of the Trust. The Adviser assumes and shall pay or reimburse the Trust
for:
(a) the compensation (if any) of the Trustees of the Trust who are
affiliated with the Adviser or with its affiliates, or with any adviser retained
by the Adviser, and of all officers of the Trust as such; and
(b) all expenses of the Adviser incurred in connection with its
services hereunder.
The Trust assumes and shall pay all other expenses of the Trust and its
Funds, including, without limitation:
(a) all charges and expenses of any custodian or depository appointed
by the Trust for the safekeeping of the cash, securities and other property of
any of its Funds;
(b) all charges and expenses for bookkeeping and auditors;
(c) all charges and expenses of any transfer agents and registrars
appointed by the Trust;
(d) all fees of all Trustees of the Trust who are not affiliated with
the Adviser or any of its affiliates, or with any adviser retained by the
Adviser;
(e) all brokers' fees, expenses, and commissions and issue and transfer
taxes chargeable to a Fund in connection with transactions involving securities
and other property to which the Fund is a party;
(f) all costs and expenses of distribution of shares of the Funds
incurred pursuant to Plans of Distribution adopted under Rule 12b-1 under the
Investment Company Act of 1940 ("1940 Act");
(g) all taxes and trust fees payable by the Trust or its Funds to
Federal, state, or other governmental agencies;
(h) all costs of certificates representing shares of the Trust or its
Funds;
(i) all fees and expenses involved in registering and maintaining
registrations of the Trust, its Funds and of their shares with the Securities
and Exchange Commission (the "Commission") and registering or qualifying the
Funds' shares under state or other securities laws, including, without
limitation, the preparation and printing of registration statements,
prospectuses, and statements of additional information for filing with the
Commission and other authorities;
(j) expenses of preparing, printing, and mailing prospectuses and
statements of additional information to shareholders of each Fund of the Trust;
(k) all expenses of shareholders' and Trustees' meetings and of
preparing, printing, and mailing notices, reports, and proxy materials to
shareholders of the Funds;
(l) all charges and expenses of legal counsel for the Trust and its
Funds and for Trustees of the Trust in connection with legal matters relating to
the Trust and its Funds, including, without limitation, legal services rendered
in connection with the Trust and its Funds' existence, organizational and
financial structure, relations with its shareholders, registrations and
qualifications of securities under Federal, state, and other laws, issues of
securities, expenses which the Trust and its Funds herein assumed, whether
customary or not, and extraordinary matters, including, without limitation, any
litigation involving the Trust and its Funds, its Trustees, officers, employees,
or agents;
(m) all charges and expenses of filing annual and other reports with
the Commission and other authorities; and
(n) all extraordinary expenses and charges of the Trust and its Funds.
In the event that the Adviser provides any of these services or pays
any of these expenses, the Trust and any affected Fund will promptly reimburse
the Adviser therefor.
The services of the Adviser to the Trust and its Funds hereunder are
not to be deemed exclusive, and the Adviser shall be free to render similar
services to others.
4. As compensation for the Adviser's services to the Trust with respect
to each Fund during the period of this Agreement, the Trust will pay to the
Adviser a fee at the annual rate set forth on Schedule 2 for such Fund.
The Adviser's fee is computed as of the close of business on each
business day.
A pro rata portion of the Trust's fee with respect to a Fund shall be
payable in arrears at the end of each day or calendar month as the Adviser may
from time to time specify to the Trust. If and when this Agreement terminates,
any compensation payable hereunder for the period ending with the date of such
termination shall be payable upon such termination. Amounts payable hereunder
shall be promptly paid when due.
5. The Adviser may enter into an agreement to retain, at its own
expense, a firm or firms ("Sub-adviser") to provide the Trust with respect to
all or any of its Funds all of the services to be provided by the Adviser
hereunder, if such agreement is approved as required by law. Such agreement may
delegate to such Sub-adviser all of Adviser's rights, obligations, and duties
hereunder.
6. The Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust or any of its Funds in connection
with the performance of this Agreement, except a loss resulting from the
Adviser's willful misfeasance, bad faith, gross negligence, or from reckless
disregard by it of its obligations and duties under this Agreement. Any person,
even though also an officer, Director, partner, employee, or agent of the
Adviser, who may be or become an officer, Trustee, employee, or agent of the
Trust, shall be deemed, when rendering services to the Trust or any of its Funds
or acting on any business of the Trust or any of its Funds (other than services
or business in connection with the Adviser's duties hereunder), to be rendering
such services to or acting solely for the Trust or any of its Funds and not as
an officer, Director, partner, employee, or agent or one under the control or
direction of the Adviser even though paid by it.
7. The Trust shall cause the books and accounts of each of its Funds to
be audited at least once each year by a reputable independent public accountant
or organization of public accountants who shall render a report to the Trust.
8. Subject to and in accordance with the Declaration of Trust of the
Trust, the governing documents of the Adviser and the governing documents of any
Sub-adviser, it is understood that Trustees, Directors, officers, agents and
shareholders of the Trust or any Adviser are or may be interested in the Adviser
(or any successor thereof) as Directors and officers of the Adviser or its
affiliates, as stockholders of First Union Corporation or otherwise; that
Directors, officers and agents of the Adviser and its affiliates or stockholders
of First Union Corporation are or may be interested in the Trust or any Adviser
as Trustees, Directors, officers, shareholders or otherwise; that the Adviser
(or any such successor) is or may be interested in the Trust or any Sub-adviser
as shareholder, or otherwise; and that the effect of any such adverse interests
shall be governed by the Declaration of Trust of the Trust, governing documents
of the Adviser and governing documents of any Sub-adviser.
9. This Agreement shall continue in effect for two years from the date set
forth above and shall continue after such date only if (a) such continuance is
specifically approved at least annually by the Board of Trustees of the Trust or
by a vote of a majority of the outstanding voting securities of the Trust and,
(b) such renewal has been approved by the vote of the majority of the Trustees
of the Trust who are not interested persons, as that term is defined in the 1940
Act, of the Adviser or of the Trust, cast in person at a meeting called for the
purpose of voting on such approval.
10. On sixty days written notice to the Adviser, this Agreement may be
terminated at any time without the payment of any penalty by the Board of
Trustees of the Trust or by vote of the holders of a majority of the outstanding
voting securities of the affected Funds; and on sixty days written notice to the
Trust, this Agreement may be terminated at any time without the payment of any
penalty by the Adviser. This Agreement shall automatically terminate upon its
assignment (as that term is defined in the 1940 Act). Any notice under this
Agreement shall be given in writing, addressed and delivered, or mailed postage
prepaid, to the other party at the main office of such party.
11. This Agreement may be amended at any time by an instrument in
writing executed by both parties hereto or their respective successors, provided
that with regard to amendments of substance such execution by the Trust shall
have been first approved by the vote of the holders of a majority of the
outstanding voting securities of the affected Funds and by the vote of a
majority of Trustees of the Trust who are not interested persons (as that term
is defined in the 1940 Act) of the Adviser, any predecessor of the Adviser, or
of the Trust, cast in person at a meeting called for the purpose of voting on
such approval. A "majority of the outstanding voting securities" of the Trust or
the affected Funds shall have, for all purposes of this Agreement, the meaning
provided therefor in the 1940 Act.
12. Any compensation payable to the Adviser hereunder for any period
other than a full year shall be proportionately adjusted.
13. The provisions of this Agreement shall be governed, construed, and enforced
in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EVERGREEN [INTERNATIONAL TRUST OR
EVERGREEN VARIABLE ANNUITY TRUST]
By: _________________________________
Name:
Title:
MENTOR PERPETUAL ADVISORS, LLC
By: _________________________________
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF
SUB-ADVISORY AGREEMENT
AGREEMENT made this _____ day of ________, 2001, by and between Mentor
Perpetual Advisors, LLC, (the "Adviser"), and Perpetual Portfolio Management
Limited (the "Sub- adviser").
WHEREAS, the Adviser serves as investment adviser of the [Evergreen
Perpetual Global Fund or Evergreen Perpetual International Fund or Evergreen VA
Perpetual International Fund] (the "Fund"), a series of [Evergreen International
Trust or Evergreen Variable Annuity Trust] (the "Trust"), a Delaware business
trust which has filed a registration statement under the Investment Company Act
of 1940, as amended (the "1940 Act") and the Securities Act of 1933 (the
ARegistration Statement"); and
WHEREAS, the Trust is comprised of several separate investment
portfolios, one of which is the Fund; and
WHEREAS, the Adviser desires to avail itself of the services, advice
and assistance of the Sub-adviser to assist the Adviser in providing investment
advisory services to the Fund; and
WHEREAS, the Sub-adviser is registered under the Investment Advisers
Act of 1940, as amended (the "Advisers Act"), is engaged in the business of
rendering investment advisory services to investment companies and other
institutional clients and desires to provide such services to the Adviser.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follow:
1. Employment of the Sub-adviser. The Adviser hereby employs the
Sub-adviser to manage the investment and reinvestment of the Fund's assets,
subject to the control and direction of the Trust's Board of Trustees, for the
period and on the terms hereinafter set forth. The Sub-adviser hereby accepts
such employment and agrees during such period to render the services and to
assume the obligations herein set forth for the compensation herein provided.
The Sub-adviser shall for all purposes herein be deemed to be an independent
contractor and shall, except as expressly provided or authorized (whether herein
or otherwise), have no authority to act for or represent the Adviser, the Fund
or the Trust in any way. The Sub-adviser may execute Fund documentation,
agreements, contracts and other documents requested by brokers, dealers,
counterparties and other persons in connection with its providing advisory
services to the Fund.
<PAGE>
2. Obligations of Services to be provided by the Sub-adviser. The
Sub-adviser undertakes to provide the following services and to assume the
following obligations:
a. The Sub-adviser shall manage the investment and
reinvestment of the portfolio assets of the Fund, all without prior
consultation with the Adviser, subject to and in accordance with (i)
the investment objective and policies of the Fund set forth in the
Fund's Prospectus and Statement of Additional Information as from time
to time in effect (the "Governing Documents"), (ii) the requirements
applicable to registered investment companies under applicable laws,
including without limitation the 1940 Act and Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code") and (iii) any
written instructions which the Adviser or the Trust's Board of Trustees
may issue from time-to-time. The Sub-adviser also agrees to conduct its
activities hereunder in accordance with any applicable procedures or
policies adopted by the Trust's Board of Trustees as from time to time
in effect (the "Procedures"). The Adviser has provided to the
Sub-adviser copies of all Governing Documents, Instructions, if any,
and Procedures currently in effect. The Adviser agrees to provide any
amendments or supplements to the Governing Documents, Instructions and
Procedures within 30 days of their issuance and further agrees that the
Sub-Adviser will not be bound by such amendments or supplements until
received by the Sub-Adviser. Subject to and in pursuance of the
foregoing, the Sub-adviser shall make all determinations with respect
to the purchase and sale of portfolio securities and shall take such
action necessary to implement the same. The Sub-adviser shall render
such reports concerning the investment activities of the Fund to the
Trust's Board of Trustees and the Adviser as they may reasonably
request. Unless the Adviser gives the Sub-adviser written instructions
to the contrary, the Sub-adviser shall, in good faith and in a manner
which it reasonably believes best serves the interests of the Fund's
shareholders, direct the Fund's custodian as to how to vote such
proxies as may be necessary or advisable in connection with any matters
submitted to a vote of shareholders of securities held in the Fund.
b. Absent instructions of the Adviser to the contrary, the
Sub-adviser shall, in the name of the Fund, place orders for the
execution of portfolio transactions with or through such brokers,
dealers or other financial institutions as it may select. The
Sub-adviser shall use its best efforts to obtain "best execution" on
all portfolio transactions executed on behalf of the Fund, provided
that, so long as the Sub-adviser has complied with Section 28(e) of the
Securities Exchange Act of 1934, the Sub-adviser may cause the Fund to
pay a commission on a transaction in excess of the amount of commission
another broker-dealer would have charged.
c. In connection with the placement of orders for the
execution of the portfolio transactions of the Fund, the Sub-adviser
shall create and maintain all records pertaining to the purchase and
sale of securities by the Sub-adviser on behalf of the Fund required by
Rule 31a-1(b)(5) and (9) under the 1940 Act. All such records shall be
the property of the Trust and shall be available for inspection and use
by the Securities and Exchange Commission ("SEC"), the Trust, the
Adviser or any person retained by the Trust at all reasonable times.
Where applicable, such records shall be maintained by the Sub-adviser
for the periods and in the places required by Rule 31a-2 under the 1940
Act.
d. The Sub-adviser shall bear its expenses of providing
services pursuant to this Agreement.
3. Compensation of the Sub-adviser. In full consideration of the
services rendered pursuant to this Agreement, the Sub-adviser agrees to accept
as payment 85% of the portion of the fees received by Perpetual plc.
("Perpetual") under the Adviser's Operating Agreement dated June 21, 1995,
between Mentor Investment Group, LLC ("Mentor") and Perpetual, as amended from
time to time (the "Operating Agreement"). Under the Operating Agreement, Mentor
and Perpetual each receive 50% of the income earned by the Adviser after the
payment of all expenses charged to the Adviser.
4. Other Activities of the Sub-adviser. The services of the Sub-adviser
hereunder are not to be deemed exclusive, and the Sub-adviser shall be free to
render similar services to others and to engage in other activities, so long as
the services rendered hereunder are not impaired.
5. Use of Names. The Adviser shall not use the name of the Sub-adviser
or any of its affiliates in any prospectus, sales literature or other material
relating to the Trust or the Fund in any manner not approved prior thereto by
the Sub-adviser; provided, however, that the Adviser may use the name of the
Sub-adviser and its affiliates in any such material that merely refers in
accurate terms to the Sub-adviser's appointment hereunder. The Sub-adviser shall
not use the name of the Trust or the Adviser in any material relating to the
Sub-adviser in any manner not approved prior thereto by the Adviser; provided,
however, that the Sub-adviser may use the name of the Adviser or the Trust in
any material that merely refers in accurate terms to the appointment of the
Sub-adviser hereunder. Neither the Adviser nor the Trust shall use or refer in
any way to the name of the Sub-Adviser following termination of this agreement
without the Sub-adviser's consent except as may be required by law.
6. Liability of the Sub-adviser. Absent willful misfeasance, bad faith,
gross negligence, or reckless disregard of obligations or duties hereunder on
the part of the Sub-adviser, the Sub-adviser shall not be liable for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security. Subject to the foregoing, nothing herein shall constitute a waiver of
any rights or remedies that the Trust may have under any federal or state
securities laws.
7. Limitation of Trust's Liability. The Sub-adviser acknowledges that
it has received notice of and accepts the limitations upon the Trust's liability
set forth in its Agreement and Declaration of Trust. The Sub-adviser agrees that
any of the Trust's obligations shall be limited to the assets of the Fund and
that the Sub-adviser shall not seek satisfaction of any such obligation from the
shareholders of the Trust nor from any Trust officer, employee or agent of the
Trust.
8. Renewal, Termination and Amendment. This Agreement shall continue in
effect, unless sooner terminated as hereinafter provided, for a period of two
years from the date hereof and shall continue in full force and effect for
successive periods of one year thereafter, but only so long as each such
continuance is specifically approved at least annually by vote of the holders of
a majority of the outstanding voting securities of the Fund or by vote of a
majority of the Trustees, including those Trustees who are not "interested
persons," as defined in the 1940 Act, who are not parties to this Agreement or
interested persons of any such party, cast in accordance with the provisions of
the 1940 Act. This Agreement may be terminated at any time without payment of
any penalty, by the Trust's Board of Trustees, or by a vote of a majority of the
outstanding voting securities of the Fund upon 60 days prior written notice to
the Sub-adviser or by the Sub-adviser upon 60 days prior written notice to the
Adviser, or upon such shorter notice as may be mutually agreed upon. This
Agreement shall terminate automatically and immediately upon termination of the
Management Agreement between the Adviser and the Trust. This Agreement shall
terminate automatically and immediately in the event of its assignment. The
terms "assignment" and Avote of a majority of the outstanding voting securities"
shall have the meaning set forth for such terms in the 1940 Act. This Agreement
may be amended at any time by the Sub-adviser and the Adviser, subject to
approval by the Trust's Board of Trustees and, if required by the 1940 Act or
applicable SEC rules and regulations, a vote of a majority of the Fund's
outstanding voting securities.
9. Confidential Relationship. Any information and advice furnished by
either party to this Agreement to the other shall be treated as confidential and
shall not be disclosed to third parties without the consent of the other party
hereto except as required by law, rule or regulation. The Adviser hereby
consents to the disclosure to third parties of investment results and other data
of the Fund in connection with providing composite investment results and
related information of the Sub-adviser.
10. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
11. Miscellaneous. Each party agrees to perform such further actions
and execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of The Commonwealth of Massachusetts. The captions in this
Agreement are included for convenience only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in several counterparts, all of which together shall
for all purposes constitute one Agreement, binding on the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
MENTOR PERPETUAL ADVISORS, LLC
By: _______________________________
Authorized Officer
PERPETUAL PORTFOLIO MANAGEMENT LIMITED
By: _______________________________
Authorized Officer
<PAGE>
EVERGREEN PERPETUAL GLOBAL FUND
EVERGREEN PERPETUAL INTERNATIONAL FUND
EVERGREEN VA PERPETUAL INTERNATIONAL FUND
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
Please detach at perforation before mailing.
SPECIAL MEETING OF SHAREHOLDERS - FEBRUARY 16, 2001
The undersigned hereby appoints Catherine E. Foley, Sally E. Ganem, Michael H.
Koonce and Maureen E. Towle and each of them, attorneys and proxies for the
undersigned, with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of Evergreen
Perpetual Global Fund, Evergreen Perpetual International Fund, both series of
Evergreen International Trust, and Evergreen VA Perpetual International Fund, a
series of Evergreen Variable Annuity Trust (collectively, the "Funds"), which
the undersigned is entitled to vote at a Meeting of Shareholders of the Funds to
be held at the offices of the Evergreen Funds at 200 Berkeley Street, Boston,
Massachusetts 02116 on February 16, 2001, at 10:00 a.m. and any adjournments
thereof (the "Meeting"). The undersigned hereby acknowledges receipt of the
Notice of Meeting and Proxy Statement, and hereby instructs said attorneys and
proxies to vote said shares as indicated hereon. Unless indicated to the
contrary, this proxy shall be deemed to grant authority to vote "FOR" all
proposals relating to the Funds. In their discretion, the proxies are authorized
to vote upon such other matters as may properly come before the Meeting. A
majority of the proxies present and acting at the meeting in person or by
substitute (or, if only one shall be so present, then that one) shall have and
may exercise all of the powers and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
NOTE: PLEASE SIGN EXACTLY AS YOUR
NAME(S) APPEAR ON THIS PROXY. If
joint owners, EITHER may sign this
Proxy. When signing as attorney,
executor, administrator, trustee,
guardian, or custodian for a minor,
please give your full title. When
signing on behalf of a corporation
or as a partner for a partnership,
please give the full corporate or
partnership name and your full
title.
Date:
Signature(s)
Title(s), if applicable
<PAGE>
EVERGREEN PERPETUAL GLOBAL FUND
EVERGREEN PERPETUAL INTERNATIONAL FUND
EVERGREEN VA PERPETUAL INTERNATIONAL FUND
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF EVERGREEN
INTERNATIONAL TRUST AND EVERGREEN VARIABLE ANNUITY TRUST. PLEASE INDICATE YOUR
VOTE BY PLACING AN "x" IN THE APPROPRIATE BOX BELOW. THIS PROXY WILL BE VOTED AS
SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE TAKEN ON THE FOLLOWING
PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION, THIS PROXY WILL BE VOTED IN
FAVOR OF THE PROPOSALS.
<TABLE>
For Against Abstain
<S> <C> <C> <C>
1. To approve new investment advisory agreements between [ ] [ ] [ ]
the Funds and Mentor Perpetual Advisors, LLC
2. To approve new investment sub-advisory agreements [ ] [ ] [ ]
between Mentor Perpetual Advisors, LLC and Perpetual
Portfolio Management Limited.
3. To transact such other business as may properly [ ] [ ] [ ]
come before the Special Meeting or any adjournment
thereof.
</TABLE>
