-----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, HNcBLeDExse4mANon8e8koUo29m28IAEbgUS2ChkDGZtaZAah/NpO2r5R1hRFwpb cZtYyEtrG5S8uIAEkzZRGw== 0000907244-98-000015.txt : 19980107 0000907244-98-000015.hdr.sgml : 19980107 ACCESSION NUMBER: 0000907244-98-000015 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19980106 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN MUNICIPAL TRUST /DE/ CENTRAL INDEX KEY: 0001046399 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 497 SEC ACT: SEC FILE NUMBER: 333-36033 FILM NUMBER: 98501683 BUSINESS ADDRESS: STREET 1: 200 BERKELEY ST CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 8003432898 MAIL ADDRESS: STREET 1: 200 BERKELEY STREET CITY: BOSTON STATE: MA ZIP: 02116 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: 0831 FILING VALUES: FORM TYPE: 497 SEC ACT: SEC FILE NUMBER: 002-94560 FILM NUMBER: 98501684 BUSINESS ADDRESS: STREET 1: 200 BERKELEY ST CITY: BOSTON E STATE: MA ZIP: 02116 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 EVERGREEN MUNICIPAL TRUST/DE SUPPLEMENT TO THE CLASS A AND B PROSPECTUS OF EVERGREEN STATE SPECIFIC TAX-FREE FUNDS THE CLASS A AND B PROSPECTUS OF THE FUNDS IS HEREBY SUPPLEMENTED AS FOLLOWS: Evergreen New Jersey Tax-Free Income Fund is no longer offered through this Prospectus. The Fund is now offered through a prospectus dated July 21, 1997, as amended from time to time. At a joint special meeting of shareholders held on December 15, 1997, the shareholders approved each Fund's reorganization as a separate series of the Evergreen Municipal Trust, which was organized on September 17, 1997. In connection with the reorganization, the investment objective(s) of each Fund is now "nonfundamental" (i.e., changeable by vote of the Board of Trustees without a shareholder vote). In addition, each Fund is now subject to certain standardized investment restrictions as set forth in the Funds' Statement of Additional Information. EXPENSE INFORMATION The "Expense Information" section is replaced entirely by the following: The tables below summarize the shareholder transaction costs, which are fees paid directly from your account when you buy or sell shares of a Fund, associated with an investment in Class A and Class B shares of each Fund. For further information see "Purchase and Redemption of Fund Shares" and "General Information -- Other Classes of Shares".
SHAREHOLDER TRANSACTION EXPENSES Class A Shares Class B Shares --------------- --------------------------------------------- Maximum Sales Charge Imposed on Purchases 4.75%(1) None (as a % of offering price) Contingent Deferred Sales Charge (as a % of original purchase None 5.00%(2)(3) price or redemption proceeds, whichever is lower)
(1) The Funds do not charge a front-end sales charge on purchase of $1 million or more, but they do charge a contingent deferred sales charge of 1.00% if you redeem those shares within one year after your purchase. (2) The deferred sales charge on Class B shares declines from 5.00% to 1.00% of amounts redeemed within six years after the month of purchase. The Funds do not charge a contingent deferred sales charge on redemptions made after that. See "Shareholder Information" for more information. (3) Long-term shareholders may pay more than the economic equivalent front-end sales charges permitted by the National Association of Securities Dealers, Inc. See "Purchase and Redemption of Shares" for more information. Annual operating expenses reflect the normal operating expenses of a Fund, and include costs such as management, distribution and other fees. The tables below show each Fund's actual annual operating expenses for the fiscal year ended August 31, 1997. The example shows what you would pay if you invested $1,000 over periods indicated. The example assumes that you reinvest all of your dividends and that each Fund's average annual return will be 5%. THE EXAMPLES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR ANNUAL RETURN. EACH FUND'S ACTUAL EXPENSES AND RETURNS WILL VARY. For a more complete description of the various costs and expenses borne by each Fund see "Purchase and Redemption of Shares" and "General Information -- Other Classes of Shares." 1 EVERGREEN FLORIDA MUNICIPAL BOND FUND
EXAMPLES -------------------------------- ANNUAL OPERATING Assuming Assuming EXPENSES(2) Redemption no (AFTER REIMBURSEMENTS) at End of Period Redemption --------------------------- ------------------ ---------- Class A Class B Class A Class B Class B ------- ------- ------- ------- ---------- Management Fees 0.45% 0.45% After 1 Year $ 55 $ 67 $ 17 12b-1 Fees(1) 0.08% 1.00% After 3 Years $ 70 $ 82 $ 52 Other Expenses 0.21% 0.21% After 5 Years $ 87 $ 110 $ 90 ------- ------- After 10 Years $ 135 $ 160 $160 Total 0.74% 1.66% ------- ------- ------- -------
EVERGREEN GEORGIA MUNICIPAL BOND FUND
EXAMPLES -------------------------------- ANNUAL OPERATING Assuming Assuming EXPENSES(2) Redemption no (AFTER REIMBURSEMENTS) at End of Period Redemption --------------------------- ------------------ ---------- Class A Class B Class A Class B Class B ------- ------- ------- ------- ---------- Management Fees 0.00% 0.00% After 1 Year $ 57 $ 67 $ 17 12b-1 Fees(1) 0.25% 1.00% After 3 Years $ 76 $ 83 $ 53 Other Expenses 0.70% 0.70% After 5 Years $ 98 $ 112 $ 92 ------- ------- After 10 Years $ 159 $ 171 $171 Total 0.95% 1.70% ------- ------- ------- -------
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
EXAMPLES -------------------------------- Assuming Assuming Redemption no ANNUAL OPERATING EXPENSES at End of Period Redemption --------------------------- ------------------ ---------- Class A Class B Class A Class B Class B ------- ------- ------- ------- ---------- Management Fees 0.50% 0.50% .50% After 1 Year $ 58 $ 69 $ 19 12b-1 Fees 0.25% 1.00% After 3 Years $ 81 $ 88 $ 58 Other Expenses 0.36% 0.36% After 5 Years $ 106 $ 121 $101 ------- ------- After 10 Years $ 176 $ 189 $189 Total 1.11% 1.86% ------- ------- ------- -------
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
EXAMPLES -------------------------------- ANNUAL OPERATING Assuming Assuming EXPENSES(2) Redemption no (AFTER REIMBURSEMENTS) at End of Period Redemption --------------------------- ------------------ ---------- Class A Class B Class A Class B Class B ------- ------- ------- ------- ---------- Management Fees 0.00% 0.00% After 1 Year $ 57 $ 68 $ 18 12b-1 Fees(1) 0.25% 1.00% After 3 Years $ 77 $ 84 $ 54 Other Expenses 0.73% 0.73% After 5 Years $ 99 $ 114 $ 94 ------- ------- After 10 Years $ 162 $ 175 $175 Total 0.98% 1.73% ------- ------- ------- -------
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
EXAMPLES -------------------------------- ANNUAL OPERATING Assuming Assuming EXPENSES(2) Redemption no (AFTER REIMBURSEMENTS) at End of Period Redemption --------------------------- ------------------ ---------- Class A Class B Class A Class B Class B ------- ------- ------- ------- ---------- Management Fees 0.00% 0.00% After 1 Year $ 58 $ 68 $ 18 12b-1 Fees(1) 0.25% 1.00% After 3 Years $ 79 $ 86 $ 56 Other Expenses 0.78% 0.78% After 5 Years $ 102 $ 117 $ 97 ------- ------- After 10 Years $ 167 $ 179 $179 Total 1.03% 1.78% ------- ------- ------- -------
2 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
EXAMPLES -------------------------------- ANNUAL OPERATING Assuming Assuming EXPENSES(2) Redemption no (AFTER REIMBURSEMENTS) at End of Period Redemption --------------------------- ------------------ ---------- Class A Class B Class A Class B Class B ------- ------- ------- ------- ---------- Management Fees 0.36% 0.36% After 1 Year $ 56 $ 67 $ 17 12b-1 Fees(1) 0.25% 1.00% After 3 Years $ 74 $ 81 $ 51 Other Expenses 0.27% 0.27% After 5 Years $ 94 $ 109 $ 89 ------- ------- After 10 Years $ 151 $ 163 $163 Total 0.88% 1.63% ------- ------- ------- -------
(1) Although Class A shares can pay up to 0.75% of average net assets as a 12b-1 fee, for the foreseeable future such fees have been limited to 0.25% of average net assets. For Class B shares, a portion of the 12b-1 fees equivalent to 0.25% of average annual assets will be shareholder servicing-related. Distribution-related 12b-1 fees will be limited to 0.75% of average annual assets as permitted under the rules of the National Association of Securities Dealers, Inc. ("NASD"). In addition, a portion of FLORIDA MUNICIPAL BOND FUND'S 12b-1 fees are currently being waived. Absent such waivers, the Fund's 12b-1 fees would have been 0.25%. (2) First Union National Bank ("FUNB") has agreed to reimburse each Fund to the extent that each Fund's aggregate annual operating expenses exceed 1.00% of average net assets for any fiscal year. FUNB may cease these voluntary expense reimbursements at any time. For the fiscal year ended August 31, 1997, FUNB reimbursed and/or waived certain other expenses and/or management fees of the Funds. Absent such reimbursements and/or waivers, each Fund would have paid the expenses equal to the following percentages of net assets:
OTHER EXPENSES TOTAL FUND OPERATING (WITHOUT WAIVERS EXPENSES (WITHOUT MANAGEMENT FEES AND/OR WAIVERS AND/OR FUND (WITHOUT WAIVER) REIMBURSEMENT) REIMBURSEMENT) ----- ---------------- ---------------- -------------------- Evergreen Florida Municipal Bond Fund Class A........................................................ 0.50% -- 0.96% Class B........................................................ 0.50% -- 1.71% Evergreen Georgia Municipal Bond Fund Class A........................................................ 0.50% 1.08% 1.83% Class B........................................................ 0.50% 1.08% 2.58% Evergreen South Carolina Municipal Bond Fund Class A........................................................ 0.50% 1.41% 2.16% Class B........................................................ 0.50% 1.41% 2.91% Evergreen Virginia Municipal Bond Fund Class A........................................................ 0.50% 1.09% 1.84% Class B........................................................ 0.50% 1.09% 2.59% Evergreen Florida High Income Municipal Bond Fund Class A........................................................ 0.60% -- 1.12% Class B........................................................ 0.60% -- 1.87%
FINANCIAL HIGHLIGHTS The "Financial Highlights" section is replaced entirely by the following: The tables on the following pages present, for each Fund, financial highlights for a share outstanding throughout each period indicated. The information in the tables for the ten most recent fiscal years or the life of the Fund if shorter for EVERGREEN GEORGIA MUNICIPAL BOND FUND, EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND and EVERGREEN VIRGINIA MUNICIPAL BOND FUND has been audited by KPMG Peat Marwick LLP, each Fund's independent auditors. The information in the tables for EVERGREEN FLORIDA MUNICIPAL BOND FUND for the periods ended August 31, 1997, August 31, 1996 and August 31, 1995 has been audited by KPMG Peat Marwick LLP, the Fund's current independent auditors. The information in the tables for each of the years in the three-year period ended April 30, 1995 was audited by the Fund's prior independent auditors. The information in the tables for EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND for each of the periods from May 1, 1995 through August 31, 1997 has been audited by Price Waterhouse LLP, the Fund's current independent auditors. The information in the tables for EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND for each of the years in the two-year period ended April 30, 1995 and for the period June 17, 1992 (commencement of operations) through April 30, 1993 was audited by the Fund's prior independent auditors. A report of KPMG Peat Marwick LLP or Price Waterhouse LLP, as the case may be, on the audited information with respect to each Fund is incorporated by reference in the Funds' Statement of Additional Information. The following information for each Fund should be read in conjunction with the financial statements and related notes which are incorporated by reference in the Funds' Statement of Additional Information. Further information about each Fund's performance is contained in the Funds' Annual Report to shareholders, which may be obtained without charge. 3 EVERGREEN FLORIDA MUNICIPAL BOND FUND -- CLASS A SHARES
YEAR ENDED AUGUST 31, FOUR MONTHS YEAR ENDED APRIL 30, -------------------- ENDED ----------------------- 1997 1996 AUGUST 31, 1995 (C)* 1995 (C) 1994 (C) -------- -------- -------------------- -------- -------- PER SHARE DATA: Net asset value beginning of year....................... $9.70 $9.74 $9.61 $9.52 $9.95 -------- -------- -------------------- -------- -------- Income from investment operations: Net investment income................................... 0.51 0.54 0.19 0.54 0.56 Net realized and unrealized gain (loss) on investments........................................... 0.35 (0.04) 0.22 0.11 (0.36) -------- -------- -------------------- -------- -------- Total from investment operations...................... 0.86 0.50 0.41 0.65 0.20 -------- -------- -------------------- -------- -------- Less distributions from: Net investment income................................... (0.52) (0.54) (0.19) (0.54) (0.56) Distributions in excess of net investment income........ 0 0 (0.03) 0 0 Net realized gains on investments....................... (0.06) 0 (0.06) (0.02) (0.07) Paid-in capital......................................... 0 0 0 0 0 -------- -------- -------------------- -------- -------- Total distributions................................... (0.58) (0.54) (0.28) (0.56) (0.63) -------- -------- -------------------- -------- -------- Net asset value end of year........................... $9.98 $9.70 $9.74 $9.61 $9.52 -------- -------- -------------------- -------- -------- -------- -------- -------------------- -------- -------- TOTAL RETURN (B)........................................ 9.06% 5.15% 4.20% 7.05% 1.87% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses........................................ 0.74% 0.63% 0.82%(a) 0.61% 0.56% Total expenses excluding indirectly paid expenses..... 0.74% -- -- -- -- Total expenses excluding waivers and reimbursements... 0.91% 0.95% 1.05%(a) -- -- Net investment income................................. 5.22% 5.46% 4.89%(a) 5.73% 5.37% Portfolio turnover rate................................. 41% 30% 29% 53% 32% Net assets end of year (thousands)...................... $105,673 $115,723 $136,449 $168,542 $199,612
MAY 11, 1988 (COMMENCEMENT OF CLASS OPERATIONS) YEAR ENDED APRIL 30, THROUGH -------------------------------------------- APRIL 30, 1989 1993 (C) 1992 (C) 1991 (C) 1990 (C) (C) -------- -------- -------- -------- ---------------- PER SHARE DATA: Net asset value beginning of year............................ $9.35 $9.21 $8.80 $9.09 $8.82 -------- -------- -------- -------- ------- Income from investment operations: Net investment income........................................ 0.56 0.61 0.66 0.58 0.47 Net realized and unrealized gain (loss) on investments....... 0.67 0.22 0.43 (0.24) 0.22 -------- -------- -------- -------- ------- Total from investment operations........................... 1.23 0.83 1.09 0.34 0.69 -------- -------- -------- -------- ------- Less distributions from: Net investment income........................................ (0.56) (0.61) (0.68 ) (0.59) (0.42) Distributions in excess of net investment income............. 0 0 0 0 0 Net realized gains on investments............................ (0.07) (0.04) 0 (0.04) 0 Paid-in capital.............................................. 0 (0.04) 0 0 0 -------- -------- -------- -------- ------- Total distributions........................................ (0.63) (0.69) (0.68 ) (0.63) (0.42) -------- -------- -------- -------- ------- Net asset value end of year................................ $9.95 $9.35 $9.21 $8.80 $9.09 -------- -------- -------- -------- ------- -------- -------- -------- -------- ------- TOTAL RETURN (B)............................................. 13.63% 9.30% 12.87% 3.74% 9.16% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses............................................. 0.58% 0.41% 0.10% 0.10% 0.30%(a) Total expenses excluding indirectly paid expenses.......... -- -- -- -- -- Total expenses excluding waivers and reimbursements........ -- 0.68% 0.88% 5.14% 20.40%(a) Net investment income...................................... 5.66% 6.12% 6.55% 6.15% 5.30%(a) Portfolio turnover rate...................................... 24% 24% 66% 82% 30% Net assets end of year (thousands)........................... $198,286 $147,996 $75,791 $7,286 $717
- ------------- * The Fund changed its fiscal year end from April 30 to August 31. (a) Annualized. (b) Excluding applicable sales charges. (c) On June 30, 1995, ABT Florida Tax-Free Fund sold substantially all of its net assets to Evergreen Florida Municipal Bond Fund. As ABT Florida Tax-Free Fund is the accounting survivor, its basis of accounting for assets and liabilities and its operating results for periods prior to June 30, 1995 have been carried forward in these financial highlights. 4 EVERGREEN FLORIDA MUNICIPAL BOND FUND -- CLASS B SHARES
JUNE 30, 1995 (COMMENCEMENT OF CLASS YEAR ENDED AUGUST 31, OPERATIONS) ----------------------- THROUGH 1997 1996 AUGUST 31, 1995 ------- ------- ---------------- PER SHARE DATA: Net asset value beginning of year............................................... $9.70 $9.74 $9.67 ------- ------- -------- Income from investment operations: Net investment income........................................................... 0.42 0.44 0.07 Net realized and unrealized gain (loss) on investments.......................... 0.35 (0.04) 0.10 ------- ------- -------- Total from investment operations.............................................. 0.77 0.40 0.17 ------- ------- -------- Less distributions from: Net investment income........................................................... (0.43) (0.44) (0.07) Net realized gains on investments............................................... (0.06) 0 (0.03) ------- ------- -------- Total distributions........................................................... (0.49) (0.44) (0.10) ------- ------- -------- Net asset value end of year................................................... $9.98 $9.70 $9.74 ------- ------- -------- ------- ------- -------- TOTAL RETURN (B)................................................................ 8.06% 4.17% 1.49% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses................................................................ 1.66% 1.56% 1.44%(a) Total expenses excluding indirectly paid expenses............................. 1.66% -- -- Total expenses excluding waivers and reimbursements........................... 1.84% 1.76% 1.64%(a) Net investment income......................................................... 4.29% 4.52% 3.22%(a) Portfolio turnover rate......................................................... 41% 30% 29% Net assets end of year (thousands).............................................. $31,281 $28,849 $27,351
- ------------- (a) Annualized. (b) Excluding applicable sales charges. 5 EVERGREEN GEORGIA MUNICIPAL BOND FUND -- CLASS A AND B SHARES
JULY 2, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 ------ ------ ---------------- ----------------- ---------------- PER SHARE DATA: Net asset value beginning of year............... $9.57 $9.47 $8.74 $10.19 $10.00 ------ ------ ------- ------- ------- Income from investment operations: Net investment income........................... 0.49 0.48 0.33 0.48 0.20 Net realized and unrealized gain (loss) on investments................................... 0.33 0.10 0.73 (1.45) 0.19 ------ ------ ------- ------- ------- Total from investment operations.............. 0.82 0.58 1.06 (0.97) 0.39 ------ ------ ------- ------- ------- Less distributions from net investment income... (0.49) (0.48) (0.33) (0.48) (0.20) ------ ------ ------- ------- ------- Net asset value end of year................... $9.90 $9.57 $9.47 $8.74 $10.19 ------ ------ ------- ------- ------- ------ ------ ------- ------- ------- TOTAL RETURN (B)................................ 8.73% 6.22% 12.28% (9.64%) 3.96% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses................................ 0.94% 0.88% 0.71%(a) 0.53% 0.25%(a) Total expenses excluding indirectly paid expenses.................................... 0.94% -- -- -- -- Total expenses excluding waivers and reimbursements.............................. 1.83% 2.82% 2.83%(a) 3.61% 6.82%(a) Net investment income......................... 5.00% 4.96% 5.39%(a) 5.26% 4.71%(a) Portfolio turnover rate......................... 32% 21% 91% 147% 15% Net assets end of year (thousands).............. $2,201 $1,954 $2,098 $1,387 $817
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges.
JULY 2, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ----------------- ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 ------- ------ ---------------- ----------------- ---------------- PER SHARE DATA: Net asset value beginning of year............ $9.57 $9.47 $8.74 $10.19 $10.00 ------- ------ ------- ------- ------- Income from investment operations: Net investment income........................ 0.41 0.41 0.28 0.43 0.18 Net realized and unrealized gain (loss) on investments................................ 0.33 0.10 0.73 (1.45) 0.19 ------- ------ ------- ------- ------- Total from investment operations........... 0.74 0.51 1.01 (1.02) 0.37 ------- ------ ------- ------- ------- Less distributions from net investment income..................................... (0.41) (0.41) (0.28) (0.43) (0.18) ------- ------ ------- ------- ------- Net asset value end of year................ $9.90 $9.57 $9.47 $8.74 $10.19 ------- ------ ------- ------- ------- ------- ------ ------- ------- ------- TOTAL RETURN (B)............................. 7.93% 5.44% 11.72% (10.15%) 3.74% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses............................. 1.69% 1.63% 1.46%(a) 1.13% 0.75%(a) Total expenses excluding indirectly paid expenses................................. 1.69% -- -- -- -- Total expenses excluding waivers and reimbursements........................... 2.58% 3.54% 3.58%(a) 4.21% 7.32%(a) Net investment income...................... 4.25% 4.21% 4.64%(a) 4.66% 4.15%(a) Portfolio turnover rate...................... 32% 21% 91% 147% 15% Net assets end of year (thousands)........... $10,870 $9,271 $7,538 $ 6,912 $3,692
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges. 6 EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND -- CLASS A AND B SHARES
JANUARY 11, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------------- ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 ------ ------ ---------------- ----------------- ---------------- PER SHARE DATA: Net asset value beginning of year....... $9.98 $9.95 $9.16 $10.61 $10.00 ------ ------ ------- ------- -------- Income from investment operations: Net investment income................... 0.49 0.49 0.33 0.49 0.46 Net realized and unrealized gain (loss) on investments........................ 0.40 0.02 0.79 (1.45) 0.64 ------ ------ ------- ------- -------- Total from investment operations...... 0.89 0.51 1.12 (0.96) 1.10 ------ ------ ------- ------- -------- Less distributions from: Net investment income................... (0.50) (0.48) (0.33) (0.49) (0.46) Net realized gains on investments....... 0 0 0 0 (0.03) ------ ------ ------- ------- -------- Total distributions................... (0.50) (0.48) (0.33) (0.49) (0.49) ------ ------ ------- ------- -------- Net asset value end of year........... $10.37 $9.98 $9.95 $9.16 $10.61 ------ ------ ------- ------- -------- ------ ------ ------- ------- -------- TOTAL RETURN (B)........................ 9.11% 5.21% 12.34% (9.12%) 11.28% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses........................ 1.11% 1.08% 0.92%(a) 0.79% 0.32%(a) Total expenses excluding indirectly paid expenses....................... 1.11% -- -- -- -- Total expenses excluding waivers and reimbursements...................... 1.11% 1.35% 1.27%(a) 1.18% 1.25%(a) Net investment income................. 4.77% 4.81% 5.09%(a) 5.11% 4.91%(a) Portfolio turnover rate................. 50% 86% 117% 126% 57% Net assets end of year (thousands)...... $8,115 $7,989 $8,279 $ 7,979 $ 12,739
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges.
JANUARY 11, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ------------------------ ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 ------- ------- ---------------- ----------------- ---------------- PER SHARE DATA: Net asset value beginning of year..... $9.98 $9.95 $9.16 $10.61 $10.00 ------- ------- -------- -------- -------- Income from investment operations: Net investment income................. 0.41 0.42 0.28 0.44 0.42 Net realized and unrealized gain (loss) on investments............... 0.40 0.02 0.79 (1.45) 0.64 ------- ------- -------- -------- -------- Total from investment operations.... 0.81 0.44 1.07 (1.01) 1.06 ------- ------- -------- -------- -------- Less distributions from: Net investment income................. (0.42) (0.41) (0.28) (0.44) (0.42) Net realized gains on investments..... 0 0 0 0 (0.03) ------- ------- -------- -------- -------- Total distributions................. (0.42) (0.41) (0.28) (0.44) (0.45) ------- ------- -------- -------- -------- Net asset value end of year......... $10.37 $9.98 $9.95 $9.16 $10.61 ------- ------- -------- -------- -------- ------- ------- -------- -------- -------- TOTAL RETURN (B)...................... 8.30% 4.42% 11.78% (9.64%) 10.80% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses...................... 1.86% 1.83% 1.67%(a) 1.37% 0.79%(a) Total expenses excluding indirectly paid expenses..................... 1.86% -- -- -- -- Total expenses excluding waivers and reimbursements.................... 1.86% 2.10% 2.02%(a) 1.76% 1.74%(a) Net investment income............... 4.02% 4.06% 4.34%(a) 4.53% 4.47%(a) Portfolio turnover rate............... 50% 86% 117% 126% 57% Net assets end of year (thousands).... $48,198 $49,382 $ 49,040 $44,616 $ 45,168
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges. 7 EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND -- CLASS A AND B SHARES
JANUARY 3, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH --------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 ------ ----- ---------------- ---------------- PER SHARE DATA: Net asset value beginning of year................................... $9.69 $9.59 $8.62 $10.00 ------ ----- ------- ------- Income from investment operations: Net investment income............................................... 0.48 0.49 0.34 0.46 Net realized and unrealized gain (loss) on investments.............. 0.40 0.10 0.97 (1.38) ------ ----- ------- ------- Total from investment operations.................................. 0.88 0.59 1.31 (0.92) ------ ----- ------- ------- Less distributions from: Net investment income............................................... (0.48) (0.49) (0.34) (0.46) Net realized gains on investments................................... (0.01) 0 0 0 ------ ----- ------- ------- Total distributions............................................... (0.49) (0.49) (0.34) (0.46) ------ ----- ------- ------- Net asset value end of year....................................... $10.08 $9.69 $ 9.59 $ 8.62 ------ ----- ------- ------- ------ ----- ------- ------- TOTAL RETURN (B).................................................... 9.33% 6.23% 15.35% (9.32%) RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses.................................................... 0.98% 0.86% 0.53%(a) 0.25%(a) Total expenses excluding indirectly paid expenses................. 0.98% -- -- -- Total expenses excluding waivers and reimbursements............... 2.16% 4.00% 6.50%(a) 10.71%(a) Net investment income............................................. 4.87% 4.98% 5.41%(a) 5.57%(a) Portfolio turnover rate............................................. 62% 37% 66% 23% Net assets end of year (thousands).................................. $1,025 $841 $610 $312
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges.
JANUARY 3, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 ------ ------ ---------------- ---------------- PER SHARE DATA: Net asset value beginning of year.................................. $9.69 $9.59 $8.62 $10.00 ------ ------ ------- ------- Income from investment operations: Net investment income.............................................. 0.41 0.41 0.29 0.41 Net realized and unrealized gain (loss) on investments............. 0.40 0.10 0.97 (1.38) ------ ------ ------- ------- Total from investment operations................................. 0.81 0.51 1.26 (0.97) ------ ------ ------- ------- Less distributions from: Net investment income.............................................. (0.41) (0.41) (0.29) (0.41) Net realized gains on investments.................................. (0.01) 0 0 0 ------ ------ ------- ------- Total distributions.............................................. (0.42) (0.41) (0.29) (0.41) ------ ------ ------- ------- Net asset value end of year...................................... $10.08 $9.69 $9.59 $8.62 ------ ------ ------- ------- ------ ------ ------- ------- TOTAL RETURN (B)................................................... 8.52% 5.43% 14.77% (9.83%) RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses................................................... 1.73% 1.61% 1.28%(a) 0.87%(a) Total expenses excluding indirectly paid expenses................ 1.73% -- -- -- Total expenses excluding waivers and reimbursements.............. 2.91% 4.76% 7.25%(a) 11.33%(a) Net investment income............................................ 4.13% 4.23% 4.66%(a) 4.88%(a) Portfolio turnover rate............................................ 62% 37% 66% 23% Net assets end of year (thousands)................................. $4,734 $4,282 $3,542 $2,456
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges. 8 EVERGREEN VIRGINIA MUNICIPAL BOND FUND -- CLASS A AND B SHARES
JULY 2, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 ------ ------ ---------------- ----------------- ---------------- PER SHARE DATA: Net asset value beginning of year............. $9.68 $9.67 $8.85 $10.19 $10.00 ------ ------ ------- ------- ------- Income from investment operations: Net investment income......................... 0.50 0.48 0.33 0.47 0.20 Net realized and unrealized gain (loss) on investments................................. 0.37 0.01 0.82 (1.34) 0.19 ------ ------ ------- ------- ------- Total from investment operations............ 0.87 0.49 1.15 (0.87) 0.39 ------ ------ ------- ------- ------- Less distributions from net investment income...................................... (0.50) (0.48) (0.33) (0.47) (0.20) ------ ------ ------- ------- ------- Net asset value end of year................. $10.05 $9.68 $9.67 $8.85 $10.19 ------ ------ ------- ------- ------- ------ ------ ------- ------- ------- TOTAL RETURN (B).............................. 9.05% 5.12% 13.09% (8.60%) 3.89% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses.............................. 1.03% 0.93% 0.72%(a) 0.53% 0.25%(a) Total expenses excluding indirectly paid expenses.................................. 1.02% -- -- -- -- Total expenses excluding waivers and reimbursements............................ 1.84% 3.47% 3.83%(a) 5.14% 7.75%(a) Net investment income....................... 4.95% 4.83% 5.17%(a) 5.11% 4.64%(a) Portfolio turnover rate....................... 72% 68% 87% 59% 0% Net assets end of year (thousands)............ $2,934 $2,892 $1,983 $ 1,606 $1,306
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges.
JULY 2, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 ------ ------ ---------------- ----------------- ---------------- PER SHARE DATA: Net asset value beginning of year............. $9.68 $9.67 $8.85 $10.19 $10.00 ------ ------ ------- ------- ------- Income from investment operations: Net investment income......................... 0.41 0.41 0.28 0.42 0.17 Net realized and unrealized gain (loss) on investments................................. 0.37 0.01 0.82 (1.34) 0.19 ------ ------ ------- ------- ------- Total from investment operations............ 0.78 0.42 1.10 (0.92) 0.36 ------ ------ ------- ------- ------- Less distributions from net investment income...................................... (0.41) (0.41) (0.28) (0.42) (0.17) ------ ------ ------- ------- ------- Net asset value end of year................. $10.05 $ 9.68 $ 9.67 $ 8.85 $10.19 ------ ------ ------- ------- ------- ------ ------ ------- ------- ------- TOTAL RETURN (B).............................. 8.24% 4.34% 12.53% (9.13%) 3.66% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses.............................. 1.79% 1.68% 1.47%(a) 1.12% 0.75%(a) Total expenses excluding indirectly paid expenses.................................. 1.78% -- -- -- -- Total expenses excluding waivers and reimbursements............................ 2.59% 4.23% 4.58%(a) 5.73% 8.25%(a) Net investment income....................... 4.21% 4.09% 4.42%(a) 4.54% 4.25%(a) Portfolio turnover rate....................... 72% 68% 87% 59% 0% Net assets end of year (thousands)............ $6,695 $5,963 $5,083 $ 3,817 $2,235
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges. 9 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND -- CLASS A AND B SHARES
JUNE 17, 1992 (COMMENCEMENT OF CLASS YEAR ENDED AUGUST 31, FOUR MONTHS YEAR ENDED APRIL 30, OPERATIONS) ----------------------- ENDED ----------------------- THROUGH 1997 1996 AUGUST 31, 1995* 1995 1994 APRIL 30, 1993 -------- ------- ---------------- ------- ------- ---------------- PER SHARE DATA: Net asset value beginning of year.... $10.42 $10.40 $10.16 $10.08 $10.36 $10.00 -------- ------- -------- ------- ------- -------- Income from investment operations: Net investment income................ 0.62 0.63 0.21 0.65 0.68 0.61 Net realized and unrealized gain (loss) on investments.............. 0.47 0.02 0.24 0.08 (0.26) 0.39 -------- ------- -------- ------- ------- -------- Total from investment operations... 1.09 0.65 0.45 0.73 0.42 1.00 -------- ------- -------- ------- ------- -------- Less distributions from: Net investment income................ (0.62) (0.63) (0.21) (0.65) (0.68) (0.61) Net realized gains on investments.... 0 0 0 0 (0.02) (0.03) -------- ------- -------- ------- ------- -------- Total distributions................ (0.62) (0.63) (0.21) (0.65) (0.70) (0.64) -------- ------- -------- ------- ------- -------- Net asset value end of year........ $10.89 $10.42 $10.40 $10.16 $10.08 $10.36 -------- ------- -------- ------- ------- -------- -------- ------- -------- ------- ------- -------- TOTAL RETURN (B)..................... 10.77% 6.42% 4.43% 7.56% 3.94% 10.33% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses..................... 0.88% 0.85% 1.07%(a) 0.60% 0.14% 0.00%(a) Total expenses excluding indirectly paid expenses.................... 0.87% -- -- -- -- -- Total expenses excluding waivers and reimbursements............... 1.12% 1.15% 1.42%(a) 1.26% 1.12% 1.12%(a) Net investment income.............. 5.86% 6.02% 5.92%(a) 6.52% 6.16% 5.92%(a) Portfolio turnover rate.............. 32% 42% 14% 28% 31% 50% Net assets end of year (thousands)... $119,942 $76,267 $ 59,551 $65,043 $72,683 $ 33,541
- ------------- * The Fund changed its fiscal year end from April 30 to August 31. (a) Annualized. (b) Excluding applicable sales charges.
JULY 10, 1995 (COMMENCEMENT OF CLASS YEAR ENDED AUGUST 31, OPERATIONS) ----------------------- THROUGH 1997 1996 AUGUST 31, 1995 ------- ------- ---------------- PER SHARE DATA: Net asset value beginning of year............................................ $10.42 $10.40 $10.41 ------- ------- ------- Income from investment operations: Net investment income........................................................ 0.54 0.55 0.08 Net realized and unrealized gain (loss) on investments....................... 0.47 0.02 (0.01) ------- ------- ------- Total from investment operations........................................... 1.01 0.57 0.07 Less distributions from net investment income................................ (0.54) (0.55) (0.08) ------- ------- ------- Net asset value end of year................................................ $10.89 $10.42 $10.40 ------- ------- ------- ------- ------- ------- TOTAL RETURN (B)............................................................. 9.95% 5.63% 0.64% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses............................................................. 1.63% 1.59% 1.09%(a) Total expenses excluding indirectly paid expenses.......................... 1.63% -- -- Total expenses excluding waivers and reimbursements........................ 1.87% 1.89% -- Net investment income...................................................... 5.09% 5.27% 3.40%(a) Portfolio turnover rate...................................................... 32% 42% 14% Net assets end of year (thousands)........................................... $63,475 $19,219 $3,137
- ------------- (a) Annualized. (b) Excluding applicable sales charges. 10 NAME CHANGES The name of the distributor of the Funds has been changed to Evergreen Distributor, Inc.; the name of the administrator has been changed to Evergreen Investment Services, Inc.; and the name of the transfer agent for the Funds has been changed to Evergreen Service Company. INVESTMENT OBJECTIVES AND POLICIES The Funds are permitted to make taxable investments, and may from time to time generate income subject to federal regular income tax. Each Fund will invest at least 80% of its assets in bonds that, at the date of investment, are rated within the four highest categories by Standard & Poor's Rating Group ("S&P") (AAA, AA, A and BBB) or, if not rated or rated under a different system, are of comparable quality to obligations so rated as determined by another nationally recognized statistical ratings organization (an "SRO") or by the Fund's investment adviser. A Fund may invest the remaining 20% of its assets in lower rated bonds, but it will not invest in bonds rated below B. A Fund is not required to sell or otherwise dispose of any security that loses its rating or has its rating reduced after the Fund has purchased it. During the fiscal year ended August 31, 1997, EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND'S holdings had the following average credit quality characteristics:
Percent of Rating Net Assets - ---------- ---------- Aaa or AAA 11.10% Aa or AA 2.00% A 2.50% Baa or BBB 16.70% Ba or BB 1.20% B 0.40% Non-rated 66.10% Total 100.00%
PORTFOLIO MANAGERS The portfolio manager for EVERGREEN GEORGIA MUNICIPAL BOND FUND and EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND is Charles E. Jeanne. Since joining First Union in 1993, Mr. Jeanne has been an Assistant Vice President and Portfolio Manager. In addition to the Fund, Mr. Jeanne also manages the Evergreen Virginia Municipal Bond Fund. Prior to joining First Union, Mr. Jeanne served as a trader/portfolio manager for First American Bank. Richard K. Marrone is the portfolio manager for EVERGREEN FLORIDA MUNICIPAL BOND FUND. Since joining First Union in 1993, Mr. Marrone has been a Vice President and Senior Fixed Income Portfolio Manager, with over 15 years of investment and market experience. Prior to joining First Union, Mr. Marrone was employed at Woodbridge Capital Management where he served as a portfolio manager for mutual and common trust funds from 1982-1993. INVESTMENT ADVISER Disclosure regarding the Funds' subadministrator is hereby deleted. 11 EXCHANGE PRIVILEGES You may exchange shares of a Fund for shares of another Evergreen fund by calling or writing to Evergreen Service Company or by using the Evergreen Express Line. If the shares being tendered for exchange are still subject to a contingent deferred sales charge or are eligible for conversion in a specified time, such remaining charge or remaining time will carry over to the shares being acquired in the exchange transaction. PERFORMANCE INFORMATION The Funds may quote their "total return" or "yield" for specified periods in advertisements, reports, or other communications to shareholders. Total return and yield are computed separately for each Class of shares. Performance data for one or more classes may be included in any advertisement or sales literature using performance data of a Fund. January 1, 1998 536336-SK98 12 SUPPLEMENT TO THE CLASS Y PROSPECTUS OF EVERGREEN STATE SPECIFIC TAX-FREE FUNDS THE CLASS Y PROSPECTUS OF THE FUNDS IS HEREBY SUPPLEMENTED AS FOLLOWS: Evergreen New Jersey Tax-Free Income Fund is no longer offered through this Prospectus. The Fund is now offered through a prospectus dated July 21, 1997, as amended from time to time. At a joint special meeting of shareholders held on December 15, 1997, the shareholders approved each Fund's reorganization as a separate series of the Evergreen Municipal Trust, which was organized on September 17, 1997. In connection with the reorganization, the investment objective(s) of each Fund is now "nonfundamental" (i.e., changeable by vote of the Board of Trustees without a shareholder vote). In addition, each Fund is now subject to certain standardized investment restrictions as set forth in the Funds' Statement of Additional Information. EXPENSE INFORMATION The "Expense Information" section is replaced entirely by the following: The tables below are designed to help you understand the various expenses that you will bear, directly or indirectly, when you invest in a Fund. Shareholder transaction expenses are fees paid directly from your account when you buy or sell shares. THERE ARE NO SHAREHOLDER TRANSACTION EXPENSES. Annual operating expenses reflect the normal operating expenses of a Fund, and include costs such as management, distribution and other fees. The tables below show each Fund's actual annual operating expenses for the fiscal year ended August 31, 1997. The example shows what you would pay if you invested $1,000 over periods indicated. The example assumes that you reinvest all of your dividends and that each Fund's average annual return will be 5%. THE EXAMPLES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR ANNUAL RETURN. EACH FUND'S ACTUAL EXPENSES AND RETURNS WILL VARY. For a more complete description of the various costs and expenses borne by each Fund see "Purchase and Redemption of Shares" and "General Information -- Other Classes of Shares." EVERGREEN FLORIDA MUNICIPAL BOND FUND
ANNUAL OPERATING EXAMPLE EXPENSES(1) ------- (AFTER REIMBURSEMENTS) Class Y ---------------------- ------- Management Fees 0.45% After 1 Year $ 7 12b-1 Fees -- After 3 Years $ 21 Other Expenses 0.21% After 5 Years $ 37 ------ After 10 Years $ 83 Total 0.66% ------ ------
EVERGREEN GEORGIA MUNICIPAL BOND FUND
ANNUAL OPERATING EXAMPLE EXPENSES(1) ------- (AFTER REIMBURSEMENTS) Class Y ---------------------- ------- Management Fees 0.00% After 1 Year $ 7 12b-1 Fees -- After 3 Years $ 22 Other Expenses 0.70% After 5 Years $ 38 ------ After 10 Years $ 86 Total 0.70% ------ ------
1 EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
EXAMPLE ANNUAL OPERATING ------- EXPENSES Class Y ---------------- ------- Management Fees 0.50% After 1 Year $ 9 12b-1 Fees -- After 3 Years $ 27 Other Expenses 0.36% After 5 Years $ 48 ------ After 10 Years $ 106 Total 0.86% ------ ------
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
ANNUAL OPERATING EXAMPLE EXPENSES(1) ------- (AFTER REIMBURSEMENTS) Class Y ---------------------- ------- Management Fees 0.00% After 1 Year $ 7 12b-1 Fees -- After 3 Years $ 23 Other Expenses 0.73% After 5 Years $ 41 ------ After 10 Years $ 91 Total 0.73% ------ ------
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
ANNUAL OPERATING EXAMPLE EXPENSES(1) ------- (AFTER REIMBURSEMENTS) Class Y ---------------------- ------- Management Fees 0.00% After 1 Year $ 8 12b-1 Fees -- After 3 Years $ 25 Other Expenses 0.78% After 5 Years $ 44 ------ After 10 Years $ 98 Total 0.78% ------ ------
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
ANNUAL OPERATING EXAMPLE EXPENSES(1) ------- (AFTER REIMBURSEMENTS) Class Y ---------------------- ------- Management Fees 0.36% After 1 Year $ 6 12b-1 Fees -- After 3 Years $ 20 Other Expenses 0.27% After 5 Years $ 35 ------ After 10 Years $ 79 Total 0.63% ------ ------
(1) First Union National Bank ("FUNB") has agreed to reimburse each Fund to the extent that each Fund's aggregate annual operating expenses exceed 1.00% of average net assets for any fiscal year. FUNB may cease these voluntary expense reimbursements at any time. For the fiscal year ended August 31, 1997, FUNB reimbursed and/or waived certain other expenses and/or management fees of the Funds. Absent such reimbursements and/or waivers, each Fund would have paid the expenses equal to the following percentages of net assets:
MANAGEMENT OTHER EXPENSES TOTAL FUND OPERATING FEES (WITHOUT WAIVERS EXPENSES (WITHOUT (WITHOUT AND/OR WAIVERS AND/OR FUND WAIVER) REIMBURSEMENT) REIMBURSEMENT) - ----------------------------------------------------------------- ---------- ---------------- -------------------- Evergreen Florida Municipal Bond Fund Class Y........................................................ 0.50% -- 0.71% Evergreen Georgia Municipal Bond Fund Class Y........................................................ 0.50% 1.08% 1.58% Evergreen South Carolina Municipal Bond Fund Class Y........................................................ 0.50% 1.41% 1.91% Evergreen Virginia Municipal Bond Fund Class Y........................................................ 0.50% 1.09% 1.59% Evergreen Florida High Income Municipal Bond Fund Class Y........................................................ 0.60% -- 0.87%
2 FINANCIAL HIGHLIGHTS The "Financial Highlights" section is replaced entirely by the following: The tables on the following pages present, for each Fund, financial highlights for a Class Y share outstanding throughout each period indicated. The information in the tables for the ten most recent fiscal years or the life of the Fund if shorter for EVERGREEN GEORGIA MUNICIPAL BOND FUND, EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND and EVERGREEN VIRGINIA MUNICIPAL BOND FUND has been audited by KPMG Peat Marwick LLP, each Fund's independent auditors. The information in the tables for EVERGREEN FLORIDA MUNICIPAL BOND FUND for the periods ended August 31, 1997, August 31, 1996 and August 31, 1995 has been audited by KPMG Peat Marwick LLP, the Fund's current independent auditors. The information in the tables for each of the years in the three-year period ended April 30, 1995 was audited by the Fund's prior independent auditors. The information in the tables for EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND for each of the periods from May 1, 1995 through August 31, 1997 has been audited by Price Waterhouse LLP, the Fund's current independent auditors. The information in the tables for EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND for each of the years in the two-year period ended April 30, 1995 and for the period June 17, 1992 (commencement of operations) through April 30, 1993 was audited by the Fund's prior independent auditors. A report of KPMG Peat Marwick LLP or Price Waterhouse LLP, as the case may be on the audited information with respect to each Fund is incorporated by reference in the Funds' Statement of Additional Information. The following information for each Fund should be read in conjunction with the financial statements and related notes which are incorporated by reference in the Funds' Statement of Additional Information. Further information about each Fund's performance is contained in the Fund's Annual Report to shareholders, which may be obtained without charge. EVERGREEN FLORIDA MUNICIPAL BOND FUND -- CLASS Y SHARES
JUNE 30, 1995 (COMMENCEMENT OF CLASS YEAR ENDED AUGUST 31, OPERATIONS) ------------------------ THROUGH 1997 1996 AUGUST 31, 1995 ------- ------- ---------------- PER SHARE DATA: Net asset value beginning of year............................................. $9.70 $9.74 $9.67 ------- ------- ------- Income from investment operations: Net investment income......................................................... 0.52 0.53 0.09 Net realized and unrealized gain (loss) on investments........................ 0.35 (0.03) 0.10 ------- ------- ------- Total from investment operations............................................ 0.87 0.50 0.19 ------- ------- ------- Less distributions from: Net investment income......................................................... (0.53) (0.54) (0.09) Net realized gains on investments............................................. (0.06) 0 (0.03) ------- ------- ------- Total distributions......................................................... (0.59) (0.54) (0.12) ------- ------- ------- Net asset value end of year................................................. $9.98 $9.70 $9.74 ------- ------- ------- ------- ------- ------- TOTAL RETURN.................................................................. 9.14% 5.22% 1.67% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses.............................................................. 0.67% 0.57% 0.59%(a) Total expenses excluding indirectly paid expenses........................... 0.67% -- -- Total expenses excluding waivers and reimbursements......................... 0.84% 0.77% 0.79%(a) Net investment income....................................................... 5.27% 5.55% 4.93%(a) Portfolio turnover rate....................................................... 41% 30% 29% Net assets end of year (thousands)............................................ $24,850 $12,259 $3,602
- ------------- (a) Annualized. 3 EVERGREEN GEORGIA MUNICIPAL BOND FUND -- CLASS Y SHARES
FEBRUARY 28, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 ------ ------ ---------------- ---------------- PER SHARE DATA: Net asset value beginning of year.................................. $9.57 $9.47 $8.74 $9.83 ------ ------ ------- ------ Income from investment operations: Net investment income.............................................. 0.51 0.50 0.35 0.42 Net realized and unrealized gain (loss) on investments............. 0.33 0.10 0.73 (1.09) ------ ------ ------- ------ Total from investment operations................................. 0.84 0.60 1.08 (0.67) ------ ------ ------- ------ Less distributions from net investment income...................... (0.51) (0.50) (0.35) (0.42) ------ ------ ------- ------ Net asset value end of year...................................... $9.90 $9.57 $9.47 $8.74 ------ ------ ------- ------ ------ ------ ------- ------ TOTAL RETURN....................................................... 9.00% 6.48% 12.47% (6.86%) RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses................................................... 0.69% 0.63% 0.46%(a) 0.31%(a) Total expenses excluding indirectly paid expenses................ 0.69% -- -- -- Total expenses excluding waivers and reimbursements.............. 1.58% 2.51% 2.58%(a) 3.39%(a) Net investment income............................................ 5.25% 5.21% 5.64%(a) 5.68%(a) Portfolio turnover rate............................................ 32% 21% 91% 147% Net assets end of year (thousands)................................. $1,180 $1,620 $1,339 $284
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND -- CLASS Y SHARES
FEBRUARY 28, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 ------ ------ ---------------- ---------------- PER SHARE DATA: Net asset value beginning of year.................................. $9.98 $9.95 $9.16 $10.31 ------ ------ ------- ------- Income from investment operations: Net investment income.............................................. 0.51 0.51 0.35 0.43 Net realized and unrealized gain (loss) on investments............. 0.41 0.03 0.79 (1.15) ------ ------ ------- ------- Total from investment operations................................. 0.92 0.54 1.14 (0.72) ------ ------ ------- ------- Less distributions from net investment income...................... (0.53) (0.51) (0.35) (0.43) ------ ------ ------- ------- Net asset value end of year...................................... $10.37 $9.98 $9.95 $9.16 ------ ------ ------- ------- ------ ------ ------- ------- TOTAL RETURN....................................................... 9.39% 5.47% 12.52% (7.01%) RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses................................................... 0.86% 0.84% 0.67%(a) 0.59%(a) Total expenses excluding indirectly paid expenses................ 0.86% -- -- -- Total expenses excluding waivers and reimbursements.............. 0.86% 1.07% 1.02%(a) 0.98%(a) Net investment income............................................ 5.02% 5.05% 5.34%(a) 5.58%(a) Portfolio turnover rate............................................ 50% 86% 117% 126% Net assets end of year (thousands)................................. $4,042 $3,771 $1,006 $642
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. 4 EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND -- CLASS Y SHARES
FEBRUARY 28, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 ------ ------ ---------------- ---------------- PER SHARE DATA: Net asset value beginning of year.................................. $9.69 $9.59 $8.62 $9.74 ------ ------ ------- ------- Income from investment operations: Net investment income.............................................. 0.51 0.51 0.35 0.43 Net realized and unrealized gain (loss) on investments............. 0.40 0.10 0.97 (1.12) ------ ------ ------- ------- Total from investment operations................................. 0.91 0.61 1.32 (0.69) ------ ------ ------- ------- Less distributions from: Net investment income.............................................. (0.51) (0.51) (0.35) (0.43) Net realized gains on investments.................................. (0.01) 0 0 0 ------ ------ ------- ------- Total distributions.............................................. (0.52) (0.51) (0.35) (0.43) ------ ------ ------- ------- Net asset value end of year...................................... $10.08 $9.69 $9.59 $8.62 ------ ------ ------- ------- ------ ------ ------- ------- TOTAL RETURN....................................................... 9.60% 6.49% 15.54% (7.12%) RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses................................................... 0.73% 0.62% 0.28%(a) 0.00%(a) Total expenses excluding indirectly paid expenses................ 0.73% -- -- -- Total expenses excluding waivers and reimbursements.............. 1.91% 3.70% 6.25%(a) 10.46%(a) Net investment income............................................ 5.12% 5.22% 5.66%(a) 5.92%(a) Portfolio turnover rate............................................ 62% 37% 66% 23% Net assets end of year (thousands)................................. $7,012 $4,555 $1,673 $92
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. EVERGREEN VIRGINIA MUNICIPAL BOND FUND -- CLASS Y SHARES
FEBRUARY 28, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 ------ ------ ---------------- ---------------- PER SHARE DATA: Net asset value beginning of year.................................. $9.68 $9.67 $8.85 $9.83 ------ ------ ------- ------- Income from investment operations: Net investment income.............................................. 0.51 0.50 0.34 0.41 Net realized and unrealized gain (loss) on investments............. 0.37 0.01 0.82 (0.98) ------ ------ ------- ------- Total from investment operations................................. 0.88 0.51 1.16 (0.57) ------ ------ ------- ------- Less distributions from net investment income...................... (0.51) (0.50) (0.34) (0.41) ------ ------ ------- ------- Net asset value end of year...................................... $10.05 $9.68 $9.67 $8.85 ------ ------ ------- ------- ------ ------ ------- ------- TOTAL RETURN....................................................... 9.32% 5.38% 13.28% (5.80%) RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses................................................... 0.79% 0.70% 0.47%(a) 0.28%(a) Total expenses excluding indirectly paid expenses................ 0.78% -- -- -- Total expenses excluding waivers and reimbursements.............. 1.60% 3.24% 3.58%(a) 4.89%(a) Net investment income............................................ 5.27% 5.05% 5.42%(a) 5.54%(a) Portfolio turnover rate............................................ 72% 68% 87% 59% Net assets end of year (thousands)................................. $6,195 $4,266 $965 $344
- ------------- * The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. 5 EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND -- CLASS Y SHARES
SEPTEMBER 20, 1995 (COMMENCEMENT OF CLASS OPERATIONS) YEAR ENDED THROUGH AUGUST 31, 1997 AUGUST 31, 1996 --------------- ------------------ PER SHARE DATA: Net asset value beginning of year.................................................. $10.42 $10.48 --------------- ------- Income from investment operations: Net investment income.............................................................. 0.65 0.63 Net realized and unrealized gain (loss) on investments............................. 0.47 (0.06) --------------- ------- Total from investment operations................................................. 1.12 0.57 Less distributions from net investment income...................................... (0.65) (0.63) --------------- ------- Net asset value end of year...................................................... $10.89 $10.42 --------------- ------- --------------- ------- TOTAL RETURN....................................................................... 11.04% 5.54% RATIOS/SUPPLEMENTAL DATA Ratios to average net assets: Total expenses................................................................... 0.63% 0.59%(a) Total expenses excluding indirectly paid expenses................................ 0.63% -- Total expenses excluding waivers and reimbursements.............................. 0.87% 0.89%(a) Net investment income............................................................ 6.08% 6.27%(a) Portfolio turnover rate............................................................ 32% 42% Net assets end of year (thousands)................................................. $6,326 $1,970
- ------------- (a) Annualized. NAME CHANGES The name of the distributor of the Funds has been changed to Evergreen Distributor, Inc.; the name of the administrator has been changed to Evergreen Investment Services, Inc.; and the name of the transfer agent for the Funds has been changed to Evergreen Service Company. INVESTMENT OBJECTIVES AND POLICIES The Funds are permitted to make taxable investments, and may from time to time generate income subject to federal regular income tax. Each Fund will invest at least 80% of its assets in bonds that, at the date of investment, are rated within the four highest categories by Standard & Poor's Rating Group ("S&P") (AAA, AA, A and BBB) or, if not rated or rated under a different system, are of comparable quality to obligations so rated as determined by another nationally recognized statistical ratings organization (an "SRO") or by the Fund's investment adviser. A Fund may invest the remaining 20% of its assets in lower rated bonds, but it will not invest in bonds rated below B. A Fund is not required to sell or otherwise dispose of any security that loses its rating or has its rating reduced after the Fund has purchased it. 6 During the fiscal year ended August 31, 1997, EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND'S holdings had the following average credit quality characteristics:
Percent of Rating Net Assets - ---------- ---------- Aaa or AAA 11.10% Aa or AA 2.00% A 2.50% Baa or BBB 16.70% Ba or BB 1.20% B 0.40% Non-rated 66.10% Total 100.00%
PORTFOLIO MANAGERS The portfolio manager for EVERGREEN GEORGIA MUNICIPAL BOND FUND EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND is Charles E. Jeanne. Since joining First Union in 1993, Mr. Jeanne has been an Assistant Vice President and Portfolio Manager. In addition to the Fund, Mr. Jeanne also manages the Evergreen Virginia Municipal Bond Fund. Prior to joining First Union, Mr. Jeanne served as a trader/portfolio manager for First American Bank. Richard K. Marrone is the portfolio manager for EVERGREEN FLORIDA MUNICIPAL BOND FUND. Since joining First Union in 1993, Mr. Marrone has been a Vice President and Senior Fixed Income Portfolio Manager, with over 15 years of investment and market experience. Prior to joining First Union, Mr. Marrone was employed at Woodbridge Capital Management where he served as a portfolio manager for mutual and common trust funds from 1982-1993. INVESTMENT ADVISER Disclosure regarding the Funds' subadministrator is hereby deleted. EXCHANGE PRIVILEGES You may exchange shares of a Fund for shares of another Evergreen fund identified above by calling or writing to Evergreen Service Company or by using the Evergreen Express Line. If the shares being tendered for exchange are still subject to a contingent deferred sales charge or are eligible for conversion in a specified time, such remaining charge or remaining time will carry over to the shares being acquired in the exchange transaction. PERFORMANCE INFORMATION The Funds may quote their "total return" or "yield" for specified periods in advertisements, reports, or other communications to shareholders. Total return and yield are computed separately for each Class of shares. Performance data for one or more classes may be included in any advertisement or sales literature using performance data of a Fund. January 1, 1998 7 SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION OF EVERGREEN FLORIDA MUNICIPAL BOND FUND (THE "FLORIDA FUND"), EVERGREEN GEORGIA MUNICIPAL BOND FUND (THE "GEORGIA FUND"), EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND (THE "NORTH CAROLINA FUND"), EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND (THE "SOUTH CAROLINA FUND"), EVERGREEN VIRGINIA MUNICIPAL BOND FUND (THE "VIRGINIA FUND"), EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND (THE "FLORIDA HIGH INCOME FUND") (EACH A "FUND"; TOGETHER, THE "FUNDS") The Statement of Additional Information of each of the Funds is hereby supplemented as follows: FINANCIAL INFORMATION Expenses The table below shows the total dollar amounts paid by each Fund for services rendered during the fiscal periods specified. For more information on specific expenses, see "Investment Advisory and Other Services," "Distribution Plans and Agreements," "Principal Underwriter" and "Purchase, Redemption and Pricing of Shares."
Aggregate Dollar Aggregate Amount of Dollar Underwriting Amount of Commissions Advisory Class A Class B Underwriting Retained by Fees 12b-1 Fees 12b-1 Fees Commissions EIS or EDI ====================== ============ ============ ============ ============= ============== 1997 FUND EXPENSES Florida $791,322 $275,983* $298,114 $236,607 $22,335 Georgia $66,245 $5,499 $96,055 $22,854 $2,488 North Carolina $305,634 $20,523 $490,164 $35,137 $2,377 South Carolina $58,299 $2,271 $45,393 $5,744 $710 Virginia $70,972 $7,230 $61,471 $14,653 $1,596 Florida High Income $813,790 $235,662 $383,197 $757,824 $34,454 - ---------------------- 1996 FUND EXPENSES - ---------------------- Florida $803,741 $240,978 $287,825 $49,589 $5,996 Georgia $63,102 $5,047 $84,596 $7,300 $875 North Carolina $306,892 $20,833 $500,469 $16,557 $154 South Carolina $40,781 $1,917 $39,896 $1,447 $2,228 Virginia $51,952 $6,048 $57,906 $20,400 $2,033 Florida High Income $477,128 $169,651 $106,733 $276,615 $29,467 - ---------------------- 1995 FUND EXPENSES - ---------------------- Florida $243,413 $59,721 $37,405 $87,755 $4,301 Georgia $32,646 $2,856 $49,968 $56,210 $4,220 North Carolina $190,284 $13,739 $319,719 $123,175 $7,843 South Carolina $13,154 $788 $20,125 $35,241 $3,595 Virginia $23,156 $3,127 $30,267 $45,713 $2,320 Florida High Income $123,320 $41,690 $2,087 $196,614 $24,672 ====================== ============ ============ ============ ============= ==============
*Of this amount, $191,541 was waived by the Distributor. Advisory Fee Waivers In accordance with voluntary expense limitations in effect during the fiscal year or period ended August 31, 1997, CMG voluntarily reimbursed or waived advisory fees, as follows: Florida $81,274 Georgia $66,245 North Carolina $0 South Carolina $58,299 Virginia $70,972 Florida High Income $330,629 ===================== ========== Brokerage Commissions The Funds paid no brokerage commissions during the fiscal year or period ended August 31, 1997, 1996 and 1995. Total Return Total return quotations for a class of shares of a Fund as they may appear from time to time in advertisements are calculated by finding the average annual compounded rates of return over one, five and ten year periods, or the time periods for which such class of shares has been effective, whichever is relevant, on a hypothetical $1,000 investment that would equate the initial amount invested in the class to the ending redeemable value. To the initial investment all dividends and distributions are added, and all recurring fees charged to all shareholder accounts are deducted. The ending redeemable value assumes a complete redemption at the end of the relevant periods. The annual total returns for each class of shares of the Funds (including applicable sales charges) are as follows:
ONE YEAR THREE YEARS FIVE YEARS SINCE INCEPTION INCEPTION DATE FLORIDA Class A 3.88% 5.81% 5.92% 7.47% 5/11/88 Class B 3.06% - - 5.03% 6/30/95 Class Y 9.14% - - 7.38% 6/30/95 GEORGIA Class A 3.57% 5.78% - 3.63% 7/2/93 Class B 2.93% 5.83% - 3.73% 7/2/93 Class Y 9.00% 7.78% - 5.73% 2/28/94 NORTH CAROLINA Class A 3.93% 6.03% - 4.79% 1/11/93 Class B 3.30% 6.08% - 4.85% 1/11/93 Class Y 9.39% 8.03% - 5.51% 2/28/94 SOUTH CAROLINA Class A 4.14% 7.05% - 4.06% 1/3/94 Class B 3.52% 7.12% - 3.99% 1/3/94 Class Y 9.60% 9.07% - 6.62% 2/28/94 VIRGINIA Class A 3.87% 6.08% - 3.90% 7/2/93 Class B 3.24% 6.14% - 3.98% 7/2/93 Class Y 9.32% 8.08% - 6.06% 2/28/94 FLORIDA HIGH INCOME Class A 5.51% 6.96% 7.33% 7.34% 6/17/92 Class B 4.95% - - 6.24% 7/10/95 Class Y 11.04% - - 8.47% 9/20/95 ==================== ========= ======== ========= ============= ==============
Current and Tax Equivalent Yields Current yield quotations as they may appear from time to time in advertisements will consist of a quotation based on a 30-day period ended on the date of the most recent balance sheet of a Fund, computed by dividing the net investment income per share earned during the period by the maximum offering price per share on the last day of the base period. Such yield will include income from sources other than municipal obligations, if any. Tax equivalent yield is, in general, the current yield divided by a factor equal to one minus a stated income tax rate and reflects the yield a taxable investment would have to achieve in order to equal on an after-tax basis a tax-exempt yield. For the 30-day period ended August 31, 1997, the current and tax-equivalent yields of the Funds are shown below. Any given yield or total return quotation should not be considered representative of the Fund's yield or total return for any future period.
30-DAY YIELD TAX-EQUIVALENT YIELD ================================= ============================================ ============================================ FUND COMBINED CLASS A CLASS B CLASS Y CLASS A CLASS B CLASS Y FEDERAL & STATE TAX RATE (1) ================== ============= ============ =========== =========== =========== =========== ============== Florida 28% 4.94% 4.02% 5.02% 6.86% 5.58% 6.97% Georgia 34% 4.80% 4.04% 5.05% 7.27% 6.12% 7.65% North Carolina 28% 4.67% 3.92% 4.92% 6.49% 5.44% 6.83% South Carolina 35% 4.65% 3.90% 4.90% 7.15% 6.00% 7.54% Virginia 33.25% 4.78% 4.03% 5.03% 7.16% 6.04% 7.54% Florida High 28% 5.48% 4.73% 5.73% 7.61% 6.57% 7.96% Income ================== ============= ============= =========== =============== ============ ============ ============== (1) Assumed for purposes of this chart. Your tax may vary.
Method of Computing Offering Price for Class A Shares Class A shares are sold at the NAV plus a sales charge. Below is an example of the method of computing the offering price of the Class A shares of each Fund. The example assumes a purchase of Class A shares of each Fund aggregating less than $100,000 based upon the NAV of each Fund's Class A shares at the end of each Fund's latest fiscal period.
FUND DATE NET ASSET VALUE PER SHARE SALES OFFERING PRICE PER CHARGE SHARE Florida 8/31/97 $9.98 4.75% $10.48 Georgia 8/31/97 $9.90 4.75% $10.39 North Carolina 8/31/97 $10.37 4.75% $10.89 South Carolina 8/31/97 $10.08 4.75% $10.58 Virginia 8/31/97 $10.05 4.75% $10.55 Florida High Income 8/31/97 $10.89 4.75% $11.43
Trustee Compensation Listed below is the Trustee compensation for the fiscal year ended August 31, 1997. TRUSTEE COMPENSATION FROM COMPENSATION FROM TRUST TRUST AND FUND COMPLEX Laurence B. Ashkin $3,176 $56,200 Charles A.Austin III * -0- $48,200 K. Dun Gifford* -0- $39,600 James S. Howell $3,979 $89,229 Leroy Keith Jr.* -0- $45,200 Gerald M. McDonnell $3,154 $81,001 Thomas L. McVerry $3,820 $81,468 William Walt Pettit $3,483 $79,009 David M. Richardson* -0- $48,200 Russell A. Salton,III $3,501 $81,601 Michael S. Scofield $5,572 $77,501 Richard J. Shima $4,180 $58,667 *Not a Trustee of the Trust during the relevant fiscal period. PRINCIPAL HOLDERS OF FUND SHARES As of the date of this SAI, the officers and Trustees of the Trust owned as a group less than 1% of the outstanding of any class of each Fund. As of the same date, no person, to any Fund's knowledge, owned beneficially or of record more than 5% of a class of a Fund's outstanding shares. Set forth below is information with respect to each person who, to each Fund's knowledge, owned beneficially or of record more than 5% of a class of a Fund's outstanding shares as of November 30, 1997. FLORIDA FUND CLASS A None FLORIDA FUND CLASS B None FLORIDA FUND CLASS Y First Union National Bank 98.79% Trust Accounts Attn: Ginny Batten 11th Floor CMG-1151 301 S. Tryon St. Charlotte, NC 28288-0002 FLORIDA HIGH INCOME FUND CLASS A MLPF&S 9.63% Attn: Fund Administration 4800 Deer Lake Dr. E 3rd Fl Jacksonville, FL 32246-6484 FLORIDA HIGH INCOME FUND CLASS B MLPF&S 10.31% Attn: Fund Administration 4800 Deer Lake Dr. E 3rd Fl Jacksonville, FL 32246-6484 FLORIDA HIGH INCOME FUND CLASS Y First Union National Bank 68.58% Trust Accounts Attn: Ginny Batten 11th Floor CMG-1151 301 S. Tryon St. Charlotte, NC 28288-0002 First Union National Bank 19.69% Trust Accounts Attn: Ginny Batten 11th Floor CMG-1151 301 S. Tryon St. Charlotte, NC 28288-0002 GEORGIA FUND CLASS A FUBS & Co. FEBO 10.09% Lee R. Meadows and Mary Lee Meadows 1270 Hicks Cir SW Conyers, GA 30207-4221 FUBS & Co. FEBO 6.03% William F. Hill Jr. and Marvin Hill P O Box 554 Silver Creek, GA 30173-0554 FUBS & Co. FEBO 5.46% Samuel A Barber Velma H Barber 4852 Banner Elk Drive Stone Mountain, GA 30083 FUBS & Co. FEBO 5.18% Larry N Merritt Ann C Merritt 310 Chinquapin Drive Marietta, GA 30064-3506 FUBS & Co. FEBO 5.13% Raiden W Dellinger 710 River Ave. Rome, GA 30161-4773 GEORGIA FUND CLASS B None GEORGIA FUND CLASS Y First Union National Bank 98.61% Trust Accounts Attn: Ginny Batten 11th Floor CMG-1151 301 S. Tryon St. Charlotte, NC 28288-0002 NORTH CAROLINA FUND CLASS A None NORTH CAROLINA FUND CLASS B None NORTH CAROLINA FUND CLASS Y First Union National Bank 99.64% Trust Accounts Attn: Ginny Batten 11th Floor CMG-1151 301 S. Tryon St. Charlotte, NC 28288-0002 SOUTH CAROLINA FUND CLASS A FUBS & Co. FEBO 21.96% Charles W. Lombard Trust Charlotte Lombard and Warren Prout Co-tees U/A/D 5/4/94 Boone, NC 28607 FUBS & Co. FEBO 11.87% Warren A. Ransom Jr. Laurie P. Ransom 1162 East Parkview Place Mount Pleasant, SC 29464-7909 First Union Brokerage Services 10.82% Ann D. Schwab A/C 7448-7777 2189 Windy Oaks Rd. Ft. Mills, SC 29715 FUBS & Co. FEBO 6.91% Charles Dean Turner 103 Carolina Club Drive Spartanburg, SC 29306-6601 FUBS & Co. FEBO 5.79% Virginia C. Thomas 330 Concord St. No 7G Charleston, SC 29401-2731 FUBS & Co. FEBO 5.05% Virginia S. Herring Oren L. Herring Jr. JTWROS 107 Bennett Street Mt. Pleasant, SC 29464-4382 SOUTH CAROLINA FUND CLASS B FUBS & Co. FEBO 5.99% Ruby B. Motsinger and Joseph G. Motsinger JTTENCOM 550 Brandon Rd. Clover, SC 29710-9667 SOUTH CAROLINA FUND CLASS Y First Union National Bank 93.13% Trust Accounts Attn: Ginny Batten 11th Floor CMG-1151 301 S. Tryon St. Charlotte, NC 28288-0002 First Union National Bank 6.16% Trust Accounts Attn: Ginny Batten 11th Floor CMG-1151 301 S. Tryon St. Charlotte, NC 28288-0002 VIRGINIA FUND CLASS A Duff M Green 7.97% 638 Kings Highway Fredericksburg, VA 22405-3156 FUBS & Co. FEBO 6.34% David A. Hetzer and Iris L. Hetzer 5009 Laburch Lane Annandale, VA 22003-6019 VIRGINIA FUND CLASS B FUBS & Co. FEBO 6.13% Patsy B. Williams and Harry S. Williams P O Box 888 Marion, VA 24354 VIRGINIA FUND CLASS Y First Union National Bank 98.34% Trust Accounts Attn: Ginny Batten 11th Floor CMG-1151 301 S. Tryon St. Charlotte, NC 28288-0002 Financial Statements The audited financial statements and the reports thereon are hereby incorporated by reference to each Fund's Annual Report, a copy of which may be obtained without charge from ESC, P.O. Box 2121, Boston, Massachusetts 02106-2121. January 1, 1998 -----END PRIVACY-ENHANCED MESSAGE-----