LOGO

                         SUPPLEMENT TO THE PROSPECTUSES
                           DATED DECEMBER 15, 1998 OF
                                  MENTOR FUNDS
                      (Each a "Fund", together the "Funds")

         Subject to shareholder  approval at a meeting to be held on October 15,
1999, each of the Funds listed below will be converted to a separate series of a
Delaware business trust. The name of each Trust and new Fund is set forth below.


                                                                     

  Name of Fund                        Name of Trust                   New Fund Name
Mentor Balanced Portfolio             Evergreen Equity Trust          Evergreen Capital Balanced Fund
Mentor Growth Portfolio               Evergreen Equity Trust          Evergreen Growth Fund
Mentor Short-Duration Income          Evergreen Fixed Income Trust    Evergreen Short-Duration Income Fund
   Portfolio
Mentor Capital Growth Portfolio       Evergreen Equity Trust          Evergreen Capital Growth Fund
Mentor Municipal Income               Evergreen Municipal Trust       Evergreen Municipal Income Fund
   Portfolio
Mentor Quality Income Portfolio       Evergreen Fixed Income Trust    Evergreen Quality Income Fund
Mentor Income and Growth              Evergreen Equity Trust          Evergreen Capital Income and Growth Fund
   Portfolio
Mentor Perpetual Global               Evergreen International Trust   Evergreen Perpetual Global Fund
   Portfolio
Mentor High Income Portfolio          Evergreen Fixed Income Trust    Evergreen High Income Fund


         Subsequent  to the  conversion,  Mentor  Class A,  Class B and  Class Y
shares will no longer be offered. Instead,  Evergreen Class A, Class C and Class
Y will  be  offered.  In the  conversion,  Class  B  shares  of a Fund  will  be
designated as Class C shares of the successor Evergreen Fund. However, only with
respect  to the  Class B Mentor  Fund  shares  that  convert,  the  schedule  of
contingent  deferred  sales charges  ("CDSCs")  applicable to the Class B Mentor
Fund  shares will carry over to the Class C Evergreen  Fund  shares.  No further
sales of  Evergreen  Class C shares with the Mentor CDSC  schedule  will be sold
subsequent to the  conversion.  Only standard  Evergreen  Class C shares will be
offered.

         Information  regarding  Class A, Class C and Class Y Evergreen  shares,
their respective  distribution plans and agreements,  how to purchase and redeem
Evergreen  shares,  exchange  privileges  and  services  available  to Evergreen
shareholders is set forth below.


DISTRIBUTION PLANS AND AGREEMENTS

Distribution Plans. Each Evergreen Fund's Class A and Class C shares pay for the
expenses  associated  with  the  distribution  of  its  shares  according  to  a
distribution  plan that it has adopted pursuant to Rule 12b-1 under the 1940 Act
(each a "Plan" or  collectively  the  "Plans").  Under the Plans,  each Fund may
incur distribution-related and shareholder  servicing-related expenses which are
based upon a maximum  annual rate as a percentage  of each Fund's  average daily
net assets attributable to the Class, as follows:

            Class A shares....  0.75% (currently limited to 0.25%)
            Class C shares....  1.00%

         Of the amount that each Class may pay under its respective  Plan, up to
0.25% may constitute a service fee to be used to compensate organizations, which
may include each Fund's  investment  advisor or their  affiliates,  for personal
services  rendered  to  shareholders   and/or  the  maintenance  of  shareholder
accounts.  The Funds may not pay any  distribution  or service  fees  during any
fiscal  period in excess of the amounts set forth above.  Amounts paid under the
Plans are used to compensate the Fund's distributor pursuant to the distribution
agreements entered into by each Fund.

Distribution  Agreements.  Each  Fund  has  also  entered  into  a  distribution
agreement (each a "Distribution  Agreement" or  collectively  the  "Distribution
Agreements") with EDI. Pursuant to the Distribution  Agreements,  each Fund will
compensate  EDI for its services as  distributor  based upon the maximum  annual
rate as a percentage of each Fund's average daily net assets attributable to the
Class, as follows:

            Class A shares....     0.25%
            Class C shares....     1.00%

         The Distribution  Agreements provide that EDI will use the distribution
fee received  from each Fund for payments (1) to  compensate  broker-dealers  or
other  persons  for  distributing  shares  of a  Fund,  including  interest  and
principal  payments made in respect of amounts paid to  broker-dealers  or other
persons  that  have  been  financed  (EDI  may  assign  its  rights  to  receive
compensation  under the  Plans to  secure  such  financings),  (2) to  otherwise
promote  the sale of shares  of a Fund,  and (3) to  compensate  broker-dealers,
depository  institutions  and  other  financial   intermediaries  for  providing
administrative,   accounting  and  other  services  with  respect  to  a  Fund's
shareholders.  FUNB or its  affiliates  may finance the payments  made by EDI to
compensate broker-dealers or other persons for distributing shares of the Fund.

         In the  event  a Fund  acquires  the  assets  of  other  mutual  funds,
compensation paid to EDI under the Distribution Agreements may be paid by EDI to
the distributors of the acquired funds or their predecessors.

         Since  EDI's  compensation  under the  Distribution  Agreements  is not
directly  tied to the  expenses  incurred  by EDI,  the  amount of  compensation
received by it under the Distribution  Agreements during any year may be more or
less than its actual  expenses  and may result in a profit to EDI.  Distribution
expenses  incurred  by  EDI  in  one  fiscal  year  that  exceed  the  level  of
compensation  paid to EDI for  that  year  may be paid  from  distribution  fees
received from a Fund in subsequent fiscal years.

         The Plans are in  compliance  with the  Conduct  Rules of the  National
Association  of Securities  Dealers,  Inc.  which  effectively  limit the annual
asset-based sales charges and service fees that a mutual fund may pay on a class
of shares to an annual  rate of 0.75% and 0.25%,  respectively,  of the  average
aggregate annual net assets attributable to that class. The rules also limit the
aggregate of all front-end,  deferred and asset-based sales charges imposed with
respect to a class of shares by a mutual fund that also charges a service fee to
6.25% of  cumulative  gross sales of shares of that class,  plus interest on the
unpaid amount at the prime rate plus 1% per annum.


HOW TO BUY SHARES

         You  may  purchase  shares  of  any  of  the  Evergreen  Funds  through
broker-dealers,  banks or other financial  intermediaries,  or directly  through
EDI. In addition, you may purchase shares of any of the Funds by mailing to that
Fund a  completed  application  and a  check  payable  to the  applicable  Fund.
Subsequent  investments  in any amount may be made by check,  by wiring  federal
funds, by direct deposit or by an electronic funds transfer.

         The  minimum  initial  investment  is  $1,000,  which  may be waived in
certain  situations.  There is no  minimum  amount for  subsequent  investments.
Investments of $50 or more are allowed under the Systematic Investment Plan.

Class A  Shares--Front-End  Sales Charge  Alternative.  You may purchase Class A
shares of each Fund at net asset value plus an initial sales charge on purchases
under $1,000,000.  You may purchase $1,000,000 or more of Class A shares without
a  front-end  sales  charge;  however,  a CDSC  equal to the lesser of 1% of the
purchase price or the redemption value will be imposed on shares redeemed during
the month of purchase and the 12-month  period  following the month of purchase.
In general, the schedule of charges for Class A shares is as follows:




                              Initial Sales Charge

                          As a % of the        As a % of            Commission to Dealer/Agent
Amount of Purchase        Net Amount           the Offering         as a % of Offering Price
                          Invested             Price
                                                                  
Less than    $ 50,000...             4.99%        4.75%                    4.25%
$ 50,000--$ 99,999.......             4.71%        4.50%                    4.25%
$100,000--$249,999.......             3.90%        3.75%                    3.25%
$250,000--$499,999.......             2.56%        2.50%                    2.00%
$500,000--$999,999.......             2.04%        2.00%                    1.75%
$1,000,000 or more......              None         None        1.00% of the amount invested
                                                           up to $2,999,999; 0.50% of the amount
                                                        invested over $2,999,999, up to $4,999,999;
                                                          and 0.25% of the excess over $4,999,999

         No front-end  sales charges are imposed on Class A shares  purchased by
(a)  institutional  investors,  which may  include  bank trust  departments  and
registered  investment  advisors;   (b)  investment  advisors,   consultants  or
financial  planners  who place  trades for their own accounts or the accounts of
their clients and who charge such clients a management,  consulting, advisory or
other fee; (c) clients of  investment  advisors or financial  planners who place
trades for their own accounts if the  accounts are linked to the master  account
of  such  investment  advisors  or  financial  planners  on  the  books  of  the
broker-dealer  through whom shares are purchased;  (d) institutional  clients of
broker-dealers,  including  retirement and deferred  compensation  plans and the
trusts used to fund these plans,  which place trades through an omnibus  account
maintained  with a Fund by the  broker-dealer;  (e)  shareholders  of  record on
October 12, 1990 in any series of  Evergreen  Investment  Trust in  existence on
that date, and the members of their immediate families;  (f) current and retired
employees of First Union National Bank ("FUNB") and its affiliates,  EDI and any
broker-dealer  with whom EDI has entered into an agreement to sell shares of the
Funds, and members of the immediate families of such employees; and (g) and upon
the initial purchase of an Evergreen Fund by investors  reinvesting the proceeds
from a  redemption  within the  preceding  thirty days of shares of other mutual
funds,  provided such shares were  initially  purchased  with a front-end  sales
charge  or  subject  to  a  CDSC.  Certain  broker-dealers  or  other  financial
institutions may impose a fee on transactions in shares of the Funds.

         Class  A  shares  may  also  be  purchased  at  net  asset  value  by a
corporation  or  certain  other  qualified  retirement  plan or a  non-qualified
deferred  compensation  plan,  or a Title I tax  sheltered  annuity  or TSA plan
sponsored by an  organization  having 100 or more eligible  employees,  or a TSA
plan  sponsored  by a public  education  entity  having  5,000 or more  eligible
employees.

         In  connection  with sales made to plans of the type  described  in the
preceding  sentence EDI will pay  broker-dealers  and others  concessions at the
rate of 0.50% of the net asset value of the shares purchased. These payments are
subject to reclaim in the event the shares are  redeemed  within  twelve  months
after purchase.

         Certain  employer-sponsored  retirement  or  savings  plans,  including
eligible  401(k) plans,  may purchase Class A shares at net asset value provided
that such plans meet a certain required minimum number of eligible  employees or
required amount of assets.
Additional  information  concerning  the waiver of sales charges is set forth in
the SAI.

         When Class A shares are sold, EDI will normally retain a portion of the
applicable  sales  charge  and pay the  balance  to the  broker-dealer  or other
financial  intermediary through whom the sale was made. EDI may also pay fees to
banks from sales  charges for services  performed on behalf of the  customers of
such banks in connection  with the purchase of shares of the Funds.  In addition
to compensation paid at the time of sale,  entities whose clients have purchased
Class A shares may  receive a service  fee equal to 0.25% of the  average  daily
value  on an  annual  basis of Class A  shares  held by their  clients.  Certain
purchases of Class A shares may qualify for reduced  sales charges in accordance
with a Fund's Concurrent  Purchases,  Rights of Accumulation,  Letter of Intent,
certain Retirement Plans and Reinstatement Privilege.

Class C Shares--Level-Load  Alternative. Class C shares are only offered through
broker-dealers  who have  special  distribution  agreements  with  EDI.  You may
purchase Class C shares at net asset value without any initial sales charge and,
therefore,  the full amount of your  investment  will be used to  purchase  Fund
shares. However, you will pay a 1.00% CDSC if you redeem shares during the month
of purchase and the 12-month period following the month of purchase.  No CDSC is
imposed on amounts redeemed thereafter. Class C shares incur higher distribution
and/or  shareholder  service  fees than Class A shares and do not convert to any
other class of shares of a Fund. The higher fees mean a higher expense ratio, so
Class C shares  pay  correspondingly  lower  dividends  and may have a lower net
asset value than Class A shares. The Funds will not normally accept any purchase
of Class C shares in the amount of $500,000 or more.  No CDSC will be imposed on
Class C shares purchased by institutional investors and through employee benefit
and savings  plans  eligible for the  exemption  from  front-end  sales  charges
described  under "Class A  Shares-Front  End Sales Charge  Alternative,"  above.
Broker-dealers and other financial  intermediaries  whose clients have purchased
Class C shares may receive a trailing  commission  equal to 0.75% of the average
daily net asset  value of such shares on an annual  basis held by their  clients
more  than  one year  from the date of  purchase.  Service  fees  will  commence
immediately with respect to shares eligible for exemption from the CDSC normally
applicable to Class C shares.

Contingent  Deferred  Sales Charge.  Certain shares with respect to which a Fund
did not pay a commission on issuance, including shares obtained from dividend or
distribution reinvestment,  are not subject to a CDSC. Any CDSC imposed upon the
redemption of Class A or Class C shares is a percentage of the lesser of (1) the
net asset value of the shares redeemed or (2) the net asset value at the time of
purchase of such shares.

         No CDSC is imposed on a redemption  of shares of a Fund in the event of
(1) death or disability of the shareholder;  (2) a lump-sum  distribution from a
401(k) plan or other benefit plan qualified under the Employee Retirement Income
Security Act of 1974 ("ERISA");  (3) automatic  withdrawals  from ERISA plans if
the  shareholder  is at least 591/2 years old; (4)  involuntary  redemptions  of
accounts having an aggregate net asset value of less than $1,000;  (5) automatic
withdrawals under the Systematic Withdrawal Plan of up to 1.00% per month of the
shareholder's  initial  account  balance;  (6)  withdrawals  consisting  of loan
proceeds to a retirement plan participant;  (7) financial  hardship  withdrawals
made by a retirement plan participant;  or (8) withdrawals consisting of returns
of excess  contributions  or excess  deferral  amounts made to a retirement plan
participant.

         The Funds may also  sell  Class A or Class C shares at net asset  value
without  any  initial  sales  charge or a CDSC to certain  Directors,  Trustees,
officers and employees of the Funds,  FUNB, EDI and certain of their affiliates,
and to  members  of the  immediate  families  of  such  persons,  to  registered
representatives of firms with dealer agreements with EDI, and to a bank or trust
company acting as a trustee for a single account.

Class Y  Shares.  Class Y shares  are  offered  at net  asset  value  without  a
front-end sales charge or a contingent deferred sales charge. Class Y shares are
only offered to (1) persons who at or prior to December 31, 1994 owned shares in
a  mutual  fund  advised  by  Evergreen  Asset  Management  Corp.;  (2)  certain
institutional  investors;  and (3) investment  advisory clients of FUNB or their
affiliates.

         Eligible  investors  may  purchase  Class Y  shares  of a Fund  through
broker-dealers,  banks or other financial  intermediaries,  or directly  through
EDI. The minimum  initial  investment is $1,000,  which may be waived in certain
situations. Subsequent investments in any amount may be made by check, by wiring
federal funds, by direct deposit or by an electronic funds transfer.

         There is no minimum amount for subsequent  investments.  Investments of
$50 or more are allowed under the Systematic Investment Plan.


HOW TO REDEEM SHARES

         You may  "redeem"  ( i.e.,  sell)  your  shares  for  cash,  at the net
redemption value on any day the Exchange is open,  either directly by writing to
the Fund,  c/o Evergreen  Service  Company  ("ESC"),  or through your  financial
intermediary.  The amount you will  receive is the net asset value  adjusted for
fractions  of a cent (less any  applicable  CDSC) next  calculated  after a Fund
receives  your request in proper form.  Proceeds  generally  will be sent to you
within seven days. However,  for shares recently purchased by check, a Fund will
not send  proceeds  until it is  reasonably  satisfied  that the  check has been
collected  (which may take up to 15 days).  Once a  redemption  request has been
telephoned or mailed, it is irrevocable and may not be modified or canceled.

Redeeming  Shares  Through  Your  Financial  Intermediary.  A Fund must  receive
instructions  from your financial  intermediary  before 4:00 p.m. (eastern time)
for you to receive that day's net asset value (less any applicable  CDSC).  Your
financial intermediary is responsible for furnishing all necessary documentation
to a Fund and may charge you for this service.  Certain financial intermediaries
may require that you give instructions earlier than 4:00 p.m. (eastern time).

Redeeming  Shares  Directly  by Mail or  Telephone.  You may  redeem  by mail by
sending a signed letter of  instruction or stock power form to the Fund, c/o ESC
(the  registrar,  transfer agent and  dividend-disbursing  agent for each Fund.)
Stock power forms are available from your financial intermediary,  ESC, and many
commercial banks. Additional documentation is required for the sale of shares by
corporations, financial intermediaries,  fiduciaries and surviving joint owners.
Signature  guarantees are required for all redemption requests for shares with a
value of more than $50,000. Currently, the requirement for a signature guarantee
has been waived on  redemptions  of $50,000 or less when the account  address of
record  has been the same for a  minimum  period  of 30 days.  Each Fund and ESC
reserve the right to withdraw  this  waiver at any time.  A signature  guarantee
must be provided by a bank or trust company (not a Notary Public), a member firm
of a domestic stock exchange or by other financial institutions whose guarantees
are acceptable under the Securities Exchange Act of 1934 and ESC's policies.

         Shareholders  may redeem amounts of $1,000 or more (up to $50,000) from
their  accounts  by calling  ESC  between  the hours of 8:00 a.m.  and 6:00 p.m.
(eastern time) each business day (i.e.,  any weekday  exclusive of days on which
the Exchange or ESC's offices are closed).  The Exchange is closed on New Year's
Day, Martin Luther King, Jr. Day,  Presidents'  Day, Good Friday,  Memorial Day,
Independence  Day, Labor Day,  Thanksgiving  Day and Christmas  Day.  Redemption
requests received after 4:00 p.m. (eastern time) will be processed using the net
asset value  determined on the next business day. Such redemption  requests must
include the  shareholder's  account  name, as  registered  with a Fund,  and the
account  number.   During  periods  of  drastic   economic  or  market  changes,
shareholders may experience  difficulty in effecting telephone  redemptions.  If
you cannot  reach a Fund by  telephone,  you should  follow the  procedures  for
redeeming by mail or through a broker-dealer as set forth herein.  The telephone
redemption  service  is  not  made  available  to  shareholders   automatically.
Shareholders  wishing to use the telephone  redemption service must complete the
appropriate  sections on the application and choose how the redemption  proceeds
are to be paid.  Redemption  proceeds  will either (1) be mailed by check to the
shareholder at the address in which the account is registered or (2) be wired to
an account with the same registration as the shareholder's  account in a Fund at
a designated commercial bank.

         In order to insure that  instructions  received by ESC are genuine when
you  initiate  a  telephone  transaction,  you will be asked to  verify  certain
criteria  specific to your account.  At the conclusion of the  transaction,  you
will be  given  a  transaction  number  confirming  your  request,  and  written
confirmation  of your  transaction  will be mailed the next  business  day. Your
telephone  instructions  will be recorded.  Redemptions by telephone are allowed
only if the address and bank  account of record have been the same for a minimum
period  of 30 days.  Each  Fund  reserves  the  right at any time to  terminate,
suspend,  or  change  the  terms  of any  redemption  method  described  in this
prospectus, except redemption by mail, and to impose fees.

         Except as  otherwise  noted,  the  Funds,  ESC and EDI will not  assume
responsibility for the authenticity of any instructions  received by any of them
from a  shareholder  in writing,  over the  Evergreen  Express  Line  (described
below), or by telephone.  ESC will employ reasonable  procedures to confirm that
instructions  received  over the  Evergreen  Express  Line or by  telephone  are
genuine.  The Funds, ESC and EDI will not be liable when following  instructions
received over the  Evergreen  Express Line or by telephone  that ESC  reasonably
believes are genuine.

Evergreen  Express  Line.  The  Evergreen  Express Line offers you specific fund
account  information and price and yield quotations as well as the ability to do
account transactions,  including investments, exchanges and redemptions. You may
access the  Evergreen  Express Line by dialing toll free  1-800-346-3858  on any
touch-tone telephone, 24 hours a day, seven days a week.

General.  The sale of shares is a taxable  transaction  for  federal  income tax
purposes.  The Funds may  temporarily  suspend the right to redeem  their shares
when (1) the  Exchange  is closed,  other than  customary  weekend  and  holiday
closings; (2) trading on the Exchange is restricted; (3) an emergency exists and
the Funds cannot dispose of their  investments or fairly  determine their value;
or (4) the Securities and Exchange  Commission so orders.  The Funds reserve the
right to close an account  that through  redemption  has fallen below $1,000 and
has remained so for 30 days.  Shareholders  will receive 60 days' written notice
to increase the account  value to at least $1,000  before the account is closed.
The Funds have elected to be governed by Rule 18f-1 under the Investment Company
Act of 1940  pursuant to which each Fund is obligated to redeem shares solely in
cash,  up to the lesser of $250,000 or 1% of a Fund's  total net assets,  during
any 90-day period for any one shareholder.


EXCHANGE PRIVILEGE

How to Exchange  Shares.  You may exchange some or all of your shares for shares
of the same class in other Evergreen  Funds through your financial  intermediary
by  calling  or  writing  to ESC,  or by using  the  Evergreen  Express  Line as
described above.  Once an exchange request has been telephoned or mailed,  it is
irrevocable  and may not be modified or canceled.  Exchanges will be made on the
basis of the relative net asset values of the shares  exchanged next  determined
after an exchange  request is received.  An exchange which represents an initial
investment in another  Evergreen  Fund is subject to the minimum  investment and
suitability requirements of each Fund.

         Each of the Evergreen  Funds has different  investment  objectives  and
policies. For more information,  a prospectus of the fund into which an exchange
will be made should be read prior to the exchange. An exchange order must comply
with the requirement  for a redemption or repurchase  order and must specify the
dollar  value or number of shares to be  exchanged.  An  exchange is treated for
federal  income tax  purposes  as a  redemption  and  purchase of shares and may
result in the realization of a capital gain or loss. Shareholders are limited to
five exchanges per calendar year, with a maximum of three per calendar  quarter.
This exchange  privilege may be modified or  discontinued  at any time by a Fund
upon 60 days' notice to  shareholders  and is only  available in states in which
shares of a fund being acquired may lawfully be sold.

         No CDSC will be imposed in the event shares are exchanged for shares of
the  same  class  of other  Evergreen  Funds.  If you  redeem  shares,  the CDSC
applicable to the shares of the Evergreen Fund originally  purchased for cash is
applied. Also, Class C shares will continue to age following an exchange for the
purpose of determining the amount of the applicable CDSC.

Exchanges  Through Your  Financial  Intermediary.  A Fund must receive  exchange
instructions  from your financial  intermediary  before 4:00 p.m. (eastern time)
for you to receive that day's net asset value.  Your financial  intermediary  is
responsible for furnishing all necessary  documentation to a Fund and may charge
you for this service.

Exchanges By Telephone And Mail. Exchange requests received by a Fund after 4:00
p.m.  (eastern time) will be processed  using the net asset value  determined at
the close of the next business day. During periods of drastic economic or market
changes,   shareholders  may  experience   difficulty  in  effecting   telephone
exchanges. You should follow the procedures outlined below for exchanges by mail
if you are unable to reach ESC by  telephone.  If you wish to use the  telephone
exchange  service you should indicate this on the  application.  As noted above,
each Fund will employ reasonable procedures to confirm that instructions for the
redemption  or exchange of shares  communicated  by  telephone  are  genuine.  A
telephone  exchange may be refused by a Fund or ESC if it is believed  advisable
to do so.  Procedures for exchanging Fund shares by telephone may be modified or
terminated at any time.  Written  requests for exchanges  should follow the same
procedures outlined for written redemption requests in the section entitled "How
to Redeem Shares;" however, no signature guarantee is required.


SHAREHOLDER SERVICES

         The Funds offer the following shareholder services.

Systematic  Investment Plan. Under a Systematic  Investment Plan, you may invest
as little as $50 per month to purchase  shares of a Fund with no minimum initial
investment required.

Telephone  Investment  Plan. You may make  investments  into an existing account
electronically  in  amounts  of not less  than  $100 or more  than  $10,000  per
investment.  Telephone  investment requests received by 4:00 p.m. (Eastern time)
will be credited to a shareholder's account the day the request is received.

Systematic Withdrawal Plan. When an account of $10,000 or more is opened or when
an existing  account  reaches  that size,  you may  participate  in a Systematic
Withdrawal Plan (the  "Withdrawal  Plan") by filling out the appropriate part of
the  application.  Under this  Withdrawal  Plan, you may receive (or designate a
third party to  receive) a monthly or  quarterly  fixed-withdrawal  payment in a
stated amount of at least $75, and as much as 1.0% per month or 3.0% per quarter
of the total net asset value of fund shares in your account when the  Withdrawal
Plan was opened.  Fund shares will be redeemed as necessary  to meet  withdrawal
payments.  All participants  must elect to have their dividends and capital gain
distributions reinvested automatically.  Any applicable CDSC will be waived with
respect to redemptions  occurring under a Withdrawal Plan during a calendar year
to the extent that such  redemptions  do not exceed 12% of (1) the initial value
of the account plus (2) the value,  at the time of purchase,  of any  subsequent
investments.

Investments  Through Employee Benefit and Savings Plans (not available for Class
Y shares).  Certain  qualified and  non-qualified  employee  benefit and savings
plans may make shares of the Funds and other  Evergreen Funds available to their
participants. Investments made by such employee benefit plans may be exempt from
front-end  sales  charges if they meet the  criteria  set forth  under  "Class A
Shares-Front End Sales Charge  Alternative."  FUNB or its affiliates may provide
compensation  to  organizations   providing   administrative  and  recordkeeping
services to plans which make shares of the  Evergreen  Funds  available to their
participants.

Automatic Reinvestment Plan. For the convenience of investors, all dividends and
distributions  are  automatically  reinvested in full and fractional shares of a
Fund at the net asset  value per share at the close of  business  on the  record
date,  unless otherwise  requested by a shareholder in writing.  If the transfer
agent  does not  receive a  written  request  for  subsequent  dividends  and/or
distributions  to be paid in cash at least three full  business  days prior to a
given  record  date,  the  dividends  and/or  distributions  to  be  paid  to  a
shareholder will be reinvested.

Dollar Cost  Averaging.  Through  dollar cost  averaging  you can invest a fixed
dollar amount each month or each quarter in any Evergreen  Fund. This results in
more  shares  being  purchased  when the  selected  fund's  net  asset  value is
relatively low and fewer shares being  purchased when the fund's net asset value
is relatively  high and may result in a lower average cost per share than a less
systematic investment approach.

         Prior to participating in dollar cost averaging,  you must establish an
account in an Evergreen  Fund. You should  designate on the  application (1) the
dollar amount of each monthly or quarterly  investment  you wish to make and (2)
the fund in which the investment is to be made. Thereafter,  on the first day of
the  designated  month,  an amount equal to the  specified  monthly or quarterly
investment will automatically be redeemed from your initial account and invested
in shares of the designated fund.

Two  Dimensional  Investing.  You may elect to have  income  and  capital  gains
distributions  from any Evergreen Fund shares you own automatically  invested to
purchase the same class of shares of any other  Evergreen  Fund.  You may select
this service on your  application and indicate the Evergreen  Fund(s) into which
distributions are to be invested.

Tax  Sheltered  Retirement  Plans.  The  Funds  have  various  retirement  plans
available  to  eligible  investors,  including  Individual  Retirement  Accounts
(IRAs);   Rollover  IRAs;  Simplified  Employee  Pension  Plans  (SEPs);  Salary
Incentive  Match Plan for  Employees  (SIMPLEs);  Tax Sheltered  Annuity  Plans;
403(b)(7)  Plans;  401(k)  Plans;  Keogh Plans;  Profit-Sharing  Plans;  Medical
Savings Accounts; Pension and Target Benefit and Money Purchase Plans.


August 27, 1999