-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QRMdFbOLFZFA6avle07XMUnlnHcRvPgRJqOjOYg0giAd+E/xMvwBYMM3RsMm+Kdl PQVupNhAyEUTsYBMSMQ58A== 0000820636-95-000034.txt : 19951012 0000820636-95-000034.hdr.sgml : 19951012 ACCESSION NUMBER: 0000820636-95-000034 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19951011 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN INVESTMENT TRUST CENTRAL INDEX KEY: 0000757440 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046599663 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 002-94560 FILM NUMBER: 95579951 BUSINESS ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9146412305 MAIL ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION FUNDS/ DATE OF NAME CHANGE: 19940628 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION HIGH GRADE TAX FREE PORT DATE OF NAME CHANGE: 19940519 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION FUNDS DATE OF NAME CHANGE: 19921230 497 1 STATEMENT OF ADDITIONAL INFORMATION STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 25, 1995 Acquisition of the Assets of SELECT VALUE FUND OF THE FFB LEXICON FUND 2 Oliver Street Boston, Massachusetts 02109 1-800-833-8974 By and in Exchange for Shares of EVERGREEN VALUE FUND OF EVERGREEN INVESTMENT TRUST 2500 Westchester Avenue Purchase, NY 10577 1-800-807-2940 This Statement of Additional Information, relating specifically to the proposed transfer of the assets of the Select Value Fund, a series of The FFB Lexicon Fund, in exchange for Class Y shares of Evergreen Value Fund, a series of Evergreen Investment Trust, and the assumption by Evergreen Value Fund of certain identified liabilities of the Select Value Fund, is not a prospectus. A Prospectus/Proxy Statement dated September 25, 1995 relating to the above-referenced matter may be obtained from Evergreen Value Fund, 2500 Westchester Avenue, Purchase, New York 10577 or by calling toll-free 1-800-807-2940. This Statement of Additional Information relates to and should be read in conjunction with such Prospectus/Proxy Statement. This Statement of Additional Information incorporates by reference the following documents, a copy of each of which accompanies this Statement of Additional Information: 1. The Prospectus of the Evergreen Value Fund dated July 7, 1995. 2. The Statement of Additional Information of the Evergreen Value Fund dated July 7, 1995. 3. The Annual Report of the First Union Value Fund (now known as Evergreen Value Fund) dated December 31, 1994. 4. The Semi-Annual Report of the First Union Value Fund (now known as Evergreen Value Fund) dated June 30, 1995. 5. The Prospectus of the Select Value Fund dated December 30, 1994. 6. The Statement of Additional Information of the Select Value Fund dated December 30, 1994. 7. The Annual Report of the Select Value Fund dated August 31, 1994. 8. The Semi-Annual Report of the Select Value Fund dated February 28, 1995. The following pro forma financial information relates to the Select Value Fund and the Evergreen Value Fund: EVERGREEN VALUE FUND Pro Forma Combining Financial Statements - June 30, 1995
Evergreen Lexicon FFB Equity Adjustments Pro-Forma Value Fund Select Value Fund Combined 6/30/95 6/30/95 6/30/95 6/30/95 Security Description Shares Value Shares Value Shares Value Shares Value Common Stocks (90.6%) Banking & Finance (7.1%) American Intl. Grp. 20,000 $2,280,000 20,000 $2,280,000 Baybanks Inc. 15,000 $1,188,750 15,000 1,188,750 Boatmen's Bancshrs. Inc. 410,000 14,452,500 410,000 14,452,500 Central Fidelity Banks, 541,200 16,506,600 541,200 16,506,600 Chemical Banking Corp. 49,700 2,348,325 49,700 2,348,325 Citicorp 55,800 3,229,425 5,000 $289,375 60,800 3,518,800 Dun & Bradstreet 20,000 1,050,000 20,000 1,050,000 Equifax Inc. 60,000 2,002,500 60,000 2,002,500 First Tennessee Nat. 337,700 15,660,838 337,700 15,660,838 Loews Corp. 6,200 750,200 6,200 750,200 National City Corp. 510,000 14,981,250 510,000 14,981,250 NationsBank Corp. 2,500 134,062 2,500 134,062 Pacificorp 103,300 1,936,875 103,300 1,936,875 Salomon Incorporated 89,750 3,601,219 89,750 3,601,219 UJB Financial Corp. 33,000 1,002,375 33,000 1,002,375 Wells Fargo and Comp. 10,950 1,973,738 10,950 1,973,738 66,933,688 16,030,907 423,437 83,388,032 Chemicals /Plastics (7.2%) Air Products & Chemicals, Inc. 605,600 33,762,200 605,600 33,762,200 duPont (EI) deNemours 5,000 343,750 5,000 343,750 FMC Corp. 230,000 15,467,500 230,000 15,467,500 Monsanto Company 22,600 2,036,825 22,600 2,036,825 Rohm & Haas Co. 255,000 13,993,125 255,000 13,993,125 Tenneco Inc. 310,000 14,260,000 310,000 14,260,000 Union Carbide Corp. 68,000 2,269,500 74,800 2,496,450 142,800 4,765,950 79,752,325 4,533,275 343,750 0 1,571,000 84,629,350 Consumer Prod. (6.9%) American Brands, Inc. 804,400 31,974,900 804,400 31,974,900 Chiquita Brands International Inc. 121,000 1,694,000 121,000 1,694,000 Eastman Kodak Co. 35,000 2,121,875 35,000 2,121,875 Philip Morris Cos., Inc. 500,500 37,215,650 48,900 3,636,938 7,000 520,625 556,400 41,373,213 Universal Corporation-Virginia 103,500 2,173,500 103,500 2,173,500 VF Corporation 24,000 1,290,000 24,000 1,290,000 71,312,425 8,794,438 520,625 0 80,627,488 Cosmetics/Healthcare/ Pharmaceuticals (4.3%) Amgen Inc. 2,000 160,875 2,000 160,875 Avon Products Inc. 25,000 1,675,000 25,000 1,675,000 Bristol Meyers Squibb Co 243,200 16,568,000 243,200 16,568,000 Colgate-Palmolive Co. 4,000 292,500 4,000 292,500 Gillette Company 3,000 133,875 3,000 133,875 Mallinckrodt Group Inc. 40,000 1,420,000 40,000 1,420,000 Merck & Co. 7,000 343,000 7,000 343,000 Schering-Plough Corp. 320,000 14,120,000 320,000 14,120,000 Warner Lambert Co. 180,000 15,547,500 180,000 15,547,500 49,330,500 0 930,250 0 50,260,750 Durable Goods (3.7%) Advanced Micro Devices Incorporated 24,200 880,275 24,200 880,275 American Financial Group 59,397 1,544,322 59,397 1,544,322 Attwoods Contingent PLC 40,382 0 40,382 0 Banyan Systems Inc. 156,200 2,147,750 156,200 2,147,750 Comdisco Inc. 110,500 3,356,438 110,500 3,356,438 Comsat Corp. 164,100 3,220,463 164,100 3,220,463 Ford Motor Company 535,000 15,916,250 111,100 3,305,225 646,100 19,221,475 McDonnell Douglas Corp. 21,600 1,657,800 3,000 230,250 24,600 1,888,050 Motorola Inc. 30,000 2,013,750 30,000 2,013,750 Potash Corp. of Saskatchewan, Inc. 46,400 2,592,600 46,400 2,592,600 Sun Healthcare Group Inc 217,300 3,422,475 217,300 3,422,475 YPF Sociedad Anonima ADR 156,800 2,959,600 156,800 2,959,600 15,916,250 27,100,698 230,250 0 43,247,198 Electrical Equipment (3.2%) Emerson Electric Co. 38,000 2,717,000 38,000 2,717,000 General Electric Co. 528,000 29,766,000 5,000 281,875 533,000 30,047,875 Phillips Electronics ADR 93,100 3,980,025 3,000 128,250 96,100 4,108,275 Texas Instruments 1,000 133,875 1,000 133,875 32,483,000 3,980,025 544,000 0 37,007,025 Energy-Oil/Gas, Metals, & Mining (9.4%) Amoco Corp. 2,500 166,563 2,500 166,563 Amoco Corporation 27,100 1,805,538 27,100 1,805,538 Atlantic Richfield Co. 267,600 29,369,100 267,600 29,369,100 Barrick Gold Co. 45,000 1,136,250 45,000 1,136,250 British Petroleum 2,250 192,656 2,250 192,656 Chevron Corp. 575,000 26,809,375 575,000 26,809,375 Cyprus Amax Minerals Company 20,000 570,000 26,000 741,000 46,000 1,311,000 Exxon Corp. 200,000 14,125,000 2,000 141,250 202,000 14,266,250 Mobil Corp. 2,500 240,000 2,500 240,000 Mobil Corporation 15,500 1,488,000 15,500 1,488,000 Peco Energy Co. 50,000 1,381,250 50,000 1,381,250 Royal Dutch Petro.-NY 1,500 182,813 1,500 182,813 Texaco Inc. 444,900 29,196,563 444,900 29,196,563 Unocal Corp. 48,000 1,326,000 48,000 1,326,000 YPF Sociedad Anonima ADS class D 20,000 377,500 20,000 377,500 103,913,538 4,034,538 1,300,782 109,248,858 Entertainment Walt Disney Co. 4,000 222,500 4,000 222,500 0 0 0 0 222,500 0 222,500 Food & Beverages (4.0%) Anheuser Busch Cos., Inc. 545,600 31,031,000 545,600 31,031,000 Campbell Soup Co. 3,000 147,000 3,000 147,000 Coca-Cola Co. 4,000 255,000 4,000 255,000 Kellogg Co. 2,000 142,750 2,000 142,750 McCormick & Co. Inc. 637,500 13,706,250 637,500 13,706,250 Wendy's Interntl. Inc. 90,000 1,608,750 90,000 1,608,750 46,346,000 0 0 544,750 0 46,890,750 Industrial (3.2%) Avery Dennison Corp. 35,000 1,409,000 35,000 1,409,000 Ball Corp. 450,000 15,693,750 450,000 15,693,750 Chemed Corp. 40,000 1,390,000 40,000 1,390,000 ITT Corp. 139,800 16,426,500 2,000 235,000 141,800 16,661,500 Kennametal Inc. 30,000 1,057,500 30,000 1,057,500 Wellman Inc. 25,200 689,850 25,200 689,850 36,666,600 0 0 235,000 0 36,901,600 Insurance Serv. (5.9%) Aflac Inc. 4,000 175,000 4,000 175,000 American General Corp. 1,050,000 35,437,500 1,050,000 35,437,500 Providian Corp. 878,400 31,842,000 878,400 31,842,000 Reliastar Fin. Corp. 10,000 382,500 10,000 382,500 U.S. Healthcare Inc. 30,000 918,750 5,000 153,125 35,000 1,071,875 68,198,250 0 0 710,625 0 68,908,875 Machinery- Diversified (0.0%) Caterpillar Inc. 2,000 128,500 2,000 128,500 Deere & Co. 3,000 256,875 3,000 256,875 0 0 0 0 385,375 0 385,375 Retail (12.2%) American Stores Co. 1,143,000 32,146,875 1,143,000 32,146,875 Dayton Hudson Corp. 187,500 13,453,125 187,500 13,453,125 Dillard Department Stores, Inc. 565,000 16,596,875 565,000 16,596,875 Lowe's Companies 9,000 268,875 9,000 268,875 Mattel, Inc. 9,000 234,000 9,000 234,000 May Department Stores Co. 660,000 27,472,500 660,000 27,472,500 Melville Corp. 428,200 14,665,850 428,200 14,665,850 Penney JC, Inc. 34,000 1,632,000 34,000 1,632,000 Pitney Bowes, Inc. 885,100 33,965,743 885,100 33,965,743 Sears Roebuck & Co. 25,000 1,496,875 25,000 1,496,875 St John Knits 10,000 448,750 10,000 448,750 Wal-Mart Stores, Inc. 9,000 240,750 9,000 240,750 141,878,593 0 0 743,625 0 142,622,218 Technology (2.7%) Applied Materials 2,500 216,652 2,500 216,652 Automatic Data Processing 13,000 817,375 13,000 817,375 Boeing Co. 336,800 21,092,108 336,800 21,092,108 Cisco Systems Inc. 5,000 252,812 5,000 252,812 Compaq Computer Corp. 15,000 680,625 15,000 680,625 DSC Comm. Corp. 5,000 232,500 5,000 232,500 EMC Corp. 25,000 606,250 25,000 606,250 50,000 1,212,500 Intel Corp. 25,000 1,582,813 5,000 316,562 30,000 1,899,375 International Business Machines 35,000 3,360,000 35,000 3,360,000 LSI Logic Corp. 5,000 195,625 5,000 195,625 Medtronic Inc. 2,500 192,813 2,500 192,813 Micron Technology Inc. 5,000 274,375 5,000 274,375 Oracle Systems 6,000 231,750 6,000 231,750 Three Com Corp. 4,000 268,000 4,000 268,000 26,556,358 1,582,813 2,787,339 0 30,926,510 Telecommun. (0.8%) Harris Corp. 150,000 7,743,750 150,000 7,743,750 MCI Communications 25,000 550,000 25,000 550,000 Telefonos de Mexico 'L' ADR 9,000 266,625 9,000 266,625 U.S. Robotics 2,000 218,000 2,000 218,000 7,743,750 0 0 1,034,625 0 8,778,375 Transport (2.7%) Atlantic Southeast Air. 10,000 301,250 10,000 301,250 Norfolk Southern Corp. 470,000 31,666,250 470,000 31,666,250 31,666,250 0 0 301,250 0 31,967,500 Utilities (11.5%) BCF Incorporated 23,000 738,875 23,000 738,875 Carolina Power & Lights Co. 480,000 14,520,000 480,000 14,520,000 Ericcson L M Telephone Co. ADR 104,000 2,080,000 104,000 2,080,000 General Public Utilities Corp. 1,088,400 32,379,900 1,088,400 32,379,900 GTE Corp. 865,000 29,518,125 865,000 29,518,125 Houston Ind. Inc. 12,500 526,562 12,500 526,562 Montana Power Co. 94,700 2,178,100 94,700 2,178,100 NICOR, Inc. 1,215,700 32,671,938 1,215,700 32,671,938 PacifiCorp 8,000 150,000 8,000 150,000 PECO Energy Co. 5,000 138,035 5,000 138,035 Southern Co. 710,000 15,886,250 710,000 15,886,250 Telefonos de Mexico, Class L Spons. ADR 100,500 2,977,309 100,500 2,977,309 Ohio Edison Co. 20,000 452,500 20,000 452,500 125,428,713 8,500,846 288,035 134,217,594 Miscellaneous- (5.8%) AMP Inc. 20,000 845,000 20,000 845,000 Comerica Inc. 10,000 321,250 10,000 321,250 Cantor Fitzgerald 1,185,934 1,185,934 1,185,934 1,185,934 Florida Progress Corp. 15,000 468,750 15,000 468,750 Hanson PLC ADR 80,000 1,410,000 80,000 1,410,000 Houston Industries 50,000 2,106,250 50,000 2,106,250 Omnicon Group Inc. 20,000 1,212,500 1,212,500 Miscellaneous Briggs & Stratton Corp. 300,000 10,350,000 300,000 10,350,000 Emprfsas Ica ADR 105,000 1,076,250 105,000 1,076,250 Nucor Corp. 10,000 535,000 10,000 535,000 Pittson Ser. Grp. 30,000 720,000 30,000 720,000 Raytheon Co. 431,200 33,471,900 431,200 33,471,900 Reuters Holdings PLC-ADR 3,500 175,438 3,500 175,438 Textron, Inc. 235,000 13,659,375 235,000 13,659,375 65,030,959 1,796,250 710,438 0 67,537,647 Total Common Stocks (Cost $923,918,738) 969,157,199 76,353,790 12,256,656 1,057,767,645 Convertible Preferred Stocks (0.4%) Glendale Federal Pfd. Series E Conv. 60,000 2,040,000 60,000 2,040,000 AK Steel Holding Pfd. 45,000 1,293,750 45,000 1,293,750 Reynolds Metals Co. CVTP 20,000 965,000 20,000 965,000 Total Convertible Preferred Stocks (Cost $3,937,061) $4,298,750 0 0 0 0 0 125,00 4,298,750 U.S. Treasury Obligations (0.9%) U.S. Treas. Bill 9/14/95 475,000 469,808 475,000 469,808 U.S. Treas. Bill 5/30/96 5,000 4,750 5,000 4,750 U.S. Treas. Notes 6.5% 11/30/96 10,000,000 10,096,860 10,000,000 10,096,860 Total U.S. Treasury Obligations (Cost $10,359,530) 10,096,860 0 0 474,558 0 10,571,418 Repurchase Agreements (7.8%) Donaldson, Lufkin, and Jenrette Securities Corp. 6.0% dated 6/30/95, due 7/3/95 82,166,000 82,166,000 82,166,00 82,166,000 J.P. Morgan Securities 6.2% 7/3/95 6,210,704 6,210,704 6,210,704 6,210,704 Total Repurchase Agreements (Cost $88,376,704)* 82,166,000 6,210,704 0 0 0 88,376,704 Total Investments (Cost - $1,026,592,033)**(99.4%) 1,065,718,809 82,564,494 12,731,214 1,161,014,517 Other Assets & Liabilities (0.6%) 6,359,538 (56,978) 206,650 6,509,210 Total Net Assets (100.0%) $1,072,078,347 $82,507,516 $12,937,864 $1,167,523,727
* The repurchase agreements are fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. ** Also represents cost for federal tax purposes. (See Notes which are an integral part of the Pro-Forma Financial Statements)
Lexicon Evergreen Select Value FFB Equity Pro Forma Value Fund Fund Fund Adjustments Combined ASSETS: Investments in securities, at value (Cost $ 1,026,592,033) $1,065,718,809 $82,564,494 $12,731,214 $1,161,014,517 Cash 0 14,329 247,408 261,737 Interest receivable 69,344 0 0 69,344 Dividends receivable 2,568,213 92,744 18,844 2,679,801 Receivable for investment securities sold 5,416,799 0 264,159 5,680,958 Receivable for fund shares sold 1,053,305 0 0 1,053,305 Prepaid expenses 0 0 152 152 TOTAL ASSETS 1,074,826,470 82,671,567 13,261,777 1,170,759,814 LIABILITIES: Payable for investment securities purchased 1,160,924 85,993 309,416 1,556,333 Due to custodian bank 751,891 0 0 751,891 Payable for fund shares repurchased 597,153 0 0 597,153 Accrued advisory fee 144,913 50,011 14,497 209,421 Accrued expenses 93,242 28,047 0 121,289 TOTAL LIABILITIES 2,748,123 164,051 323,913 3,236,087 NET ASSETS 1,072,078,347 82,507,516 12,937,864 1,167,523,727 NET ASSETS CONSIST OF: Paid in capital 925,498,906 68,326,919 10,773,908 1,004,599,733 Undistributed net investment income (664,108) 1,896 42,862 (619,350) Accumulated realized gain on investments 23,262,949 5,658,527 199,384 29,120,860 Net unrealized appreciation of investments 123,980,600 8,520,174 1,921,710 134,422,484 NET ASSETS 1,072,078,347 82,507,516 12,937,864 1,167,523,727 Net asset value and offering price per share: Class A $19.26 - - $19.26 Maximum offering price (4.75% sales charge) $20.22 - - $20.22 Class B $19.26 - - $19.26 Class C $19.24 - - $19.24 Class Y $19.26 13.40 13.10 $19.26 Net Assets: Class A 273,746,370 273,746,370 Class B 121,178,524 121,178,524 Class C 626,156 626,156 Class Y 676,527,297 82,507,516 12,937,864 771,972,677 Shares outstanding: Class A 14,214,559 14,214,559 Class B 6,292,129 6,292,129 Class C 32,541 32,541 Class Y 35,134,028 6,156,989 987,253 (2,188,615) 40,089,655
(See Notes which are an integral part of the Pro Forma Financial Statements)
Lexicon FFB Equity Evergreen Select Value Fund Value Fund Fund INVESTMENT INCOME Interest income $34,420,099 $1,895,529 $163,370 EXPENSES: Investment advisory fee 4,595,210 453,283 34,228 Trustees' fees 13,630 2,402 6,340 Administrative personnel and service fees 765,514 102,744 17,114 Custodian and portfolio accounting fees 252,644 1,888 9,843 Transfer and dividend disbursing agent 513,913 140 9,958 fees 12B-1 Distribution & Servicing Fees: Class "A" 832,981 0 0 Class "B" 387,870 0 0 Class "C" 299,902 0 0 Class "Y" 2,099 0 0 Fund share registration costs 106,589 10,189 3,776 Professional fees 23,313 19,343 9,467 Printing and postage 13,542 14,126 13,615 Insurance premiums 17,766 867 198 Miscellaneous 6,666 2,682 9,141 TOTAL EXPENSES 7,831,639 607,664 113,680 Less fee waiver and expense reimbursements 0 (153,332) (51,342) NET EXPENSES 7,831,639 454,332 62,338 NET INVESTMENT INCOME 26,588,460 1,441,197 101,032 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investments 37,097,646 6,467,067 157,896 Net increase (decrease) in unrealized appreciation of investments 111,438,800 8,645,928 2,006,657 Net gain (loss) on investments 148,536,446 15,112,995 2,164,553 Net increase in net assets resulting from operations 175,124,906 16,554,192 2,265,585 Pro Forma Adjustments Combined $0 $36,478,998 (159,280)(1) 4,923,441 (8,742)(2) 13,630 (469,243)(1) 416,129 (35,536)(3) 228,839 (68,359)(2) 455,652 0 832,981 0 387,870 (180)(4) 299,722 (2,099)(4) 0 (26,704)(2) 93,850 (22,982)(2) 29,141 (25,638)(5) 15,645 1,935 (5) 20,766 (11,028)(5) 7,461 (827,856) 7,725,127 204,674 (6) 0 (623,182) 7,725,127 623,182 28,753,871 0 43,722,609 122,091,385 0 165,813,994 738,691 194,567,865
(See Notes which are an integral part of the Pro Forma Financial Statements) (1)Reflects an decrease in investment advisory fee and a decrease in administrative personnel and service fees based on the surviving Fund's fee schedul (2)Reflects elimination of duplicate service fees. (3)Based on surviving Fund's contract in effect for custodian and portfolio accounting services (4)Reflects a decrease in distribution service fees shares based on the surviving Fund's fee schedule. (5)Adjustment reflects the expected cost savings when the funds combine. (6)Reflects an adjustment in waiver of investment advisory fee based on the surviving Fund's voluntary advisory fee waiver in effect for the year ended June 30, 1995 Evergreen Value Fund Notes to Pro Forma Combining Financial Statements (Unaudited) June 30, 1995 1. Basis of Combination - The Pro forma Statement of Assets and Liabilities, including the Pro Forma Portfolio of Investments, and the related Pro forma Statement of Operations ("Pro forma Statements") reflect the accounts of Evergreen Value Fund ( Evergreen ), FFB Equity Fund ( FFB Equity ) and Lexicon Select Value Fund ("Lexicon") at June 30, 1995 and for the year then ended. The Pro forma Statements give effect to the proposed transfer of all assets and liabilities of FFB Equity and Lexicon Value Fund shares in exchange for shares of Evergreen. The Pro forma Statements do not reflect the expense of each Fund in carrying out its obligations under the Agreement and Plan of Reorganization. The actual fiscal year end of the combined Fund will be December 31, the fiscal year end of Evergreen. The Reorganization will be accomplished through a series of acquisitions of substantially all of the assets of the aforementioned funds by Evergreen, and in addition assume certain identified liabilities of the same. Thereafter there will be a distribution of such shares of Evergreen to shareholders of the aforementioned funds in liquidation and subsequent termination thereof. The information contained herein is based on the experience of each fund for the year ended June 30, 1995 and is designed to permit shareholders of the consolidating mutual funds to evaluate the financial effect of the proposed Reorganization. The expenses of Evergreen, FFB and Lexicon in connection with the Reorganization (including the cost of any proxy soliciting agents), will be borne by First Union National Bank of North Carolina. The amounts for Evergreen Value Fund include the operations for the ABT Growth and Income Fund, which combined with the Evergreen Value Fund on June 30, 1995. The Pro forma Statements should be read in conjunction with the historical financial statements of each Fund incorporated by reference in the Statement of Additional Information. 2. Shares of Beneficial Interest - The pro forma net asset value per share assumes the issuance of additional shares of Evergreen Class Y which would have been issued at June 30, 1995 in connection with the proposed reorganization. The amount of additional shares assumed to be issued was calculated based on the net assets of the funds as of June 30, 1995 of $82,507,516 and $12,937,864 for Lexicon and FFB respectively, and the net asset value per share of the respective share class of Evergreen of $19.26. Additional shares issued were converted and distributed among the aformentioned funds according to their relative share value conversion ratio. The pro forma shares outstanding of 14,214,559 Class A, 6,292,129 Class B, 32,541 Class C, and 40,089,655 Class Y consist of 4,955,627 additional shares of Class Y to be issued in the proposed reorganization, as calculated above, in addition to shares of Evergreen outstanding as of June 30, 1995. 3. Pro Forma Operations - The Pro Forma Statement of Operations assumes similar rates of gross investment income for the investments of each Fund. Accordingly, the combined gross investment income is equal to the sum of each Fund's gross investment income. Pro forma operating expenses include the actual expenses of the Funds and the combined Fund, with certain expenses adjusted to reflect the expected expenses of the combined entity. The investment advisory, administrative personnel and service fees and distribution service fees have been charged to the combined Fund based on the fee schedule in effect for Evergreen at the combined level of average net assets for the year ended June 30, 1995. -----END PRIVACY-ENHANCED MESSAGE-----